Oral Answers to Questions
Kevin Hollinrake Excerpts(3 days, 14 hours ago)
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The Minister of State, Department for Business and Trade (Kevin Hollinrake)
On Monday, the House agreed a Government amendment to the Horizon exoneration Bill—the Post Office (Horizon System) Offences Bill—to include convictions in Northern Ireland. The Northern Ireland Executive faced unique challenges in delivering their own legislation in a timely manner. Including Northern Ireland in the Bill ensures that postmasters there are not left behind, and receive exoneration and access to compensation on a UK-wide basis.
Jim Shannon
First, let me put on record my thanks to the Minister, who has been an industrious, assiduous and great champion for the postmasters and postmistresses across this United Kingdom. There is not a person in the House who does not have great respect for him.
Further to Monday’s business in the House regarding that Northern Ireland provision in the Horizon Bill, which was brought forward by my hon. Friend the Member for North Antrim (Ian Paisley) and my right hon. Friend the Member for East Antrim (Sammy Wilson), will the Minister outline a timeline so that postmasters and postmistresses across all of Northern Ireland can see an end to the reputational and financial damage, and the heartache caused by the disgraceful operation of the Horizon scheme?
Kevin Hollinrake
I thank the hon. Gentleman for his kinds words. It is always a pleasure to work with him and his colleagues. It is our intention that the legislation will clear both Houses by July, although obviously not all of these things are within our gift. Should that be the case, as we fully expect it to be, the convictions will be quashed in July and compensation redress will be paid from August.
Sir Desmond Swayne (New Forest West) (Con)
Rob Butler (Aylesbury) (Con)
The Minister of State, Department for Business and Trade (Kevin Hollinrake)
I thank my hon. Friend for his question and for his work as one of our trade envoys to the Kingdom of Morocco—I know he is a true diplomat and the soul of discretion. We recently announced that we were raising the monetary thresholds that determine company size, reducing burdens on smaller businesses and removing low-value and overlapping reporting requirements. Around 13,000 medium-sized companies will be reclassified as small companies, and 100,000 small companies will be reclassified as micro-companies. This will save small and medium-sized companies around £145 million a year.
Rob Butler
I visit many small businesses in my Aylesbury constituency, and I am always incredibly impressed by their spirit of entrepreneurship and the huge effort and hard work that they put in to succeed. They want to be able to devote as much of their skill and time as possible to finding new customers, selling more of their products and creating jobs, not to bureaucracy, admin and onerous regulation. As the true party of business, our Government have already made great progress supporting business, as the Minister has just outlined, but what more can his Department do to help the small and micro-firms that are the engine of our economy?
Kevin Hollinrake
My hon. Friend is a real champion of small business, and we meet often talk about these matters. This Government’s policies have pushed the UK to third place in the OECD rankings for start-ups—third out of 39 countries—and we have a suite of programmes to help small businesses. Most importantly, we offer access to finance, with our Start-Up Loans Company, growth guarantee scheme and equity investment schemes, the seed enterprise investment scheme and the enterprise investment scheme. We offer supportive advice through our Help to Grow management suite, including our newly launched “Help to Grow: Management Essentials” course, which is two hours’ free online training for small businesses. We are also removing barriers through non-financial reporting. As well as the monetary size thresholds, we are consulting on increasing the employee size thresholds from 250 employees for a medium-sized company to 500, which will save medium-sized companies a further £150 million a year.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Alongside the despair and financial pressures faced by small businesses, the British Poultry Council recently reported that unreciprocated EU border checks have unfairly saddled UK exporters with £55 million a year in extra costs, while their EU counterparts pay absolutely nothing. Does the Minister agree that this Government’s failure to negotiate a fair sanitary and phytosanitary agreement with the EU has directly undermined British businesses and exposed our exporters to severe competitive disadvantages?
Kevin Hollinrake
I am surprised that the hon. Gentleman’s question is put that way. We are trying to make sure that we have a fair and level playing field for UK exporters and EU exporters. Of course we need checks on the borders on that basis—it would not be fair to UK producers if that was not the case—but what he is pushing for in a sanitary and phytosanitary agreement is what his hon. Friend the hon. Member for Harrow West (Gareth Thomas) was pushing for: dynamic alignment with the EU, which would lock us into EU rules permanently. We do not believe in that. We believe we have a bright future outside the European Union. He would lock us back into the customs union and the single market.
Patrick Grady (Glasgow North) (SNP)
The Minister of State, Department for Business and Trade (Kevin Hollinrake)
The 568 ml pint quantity is one of several changes to pre-packed wine sizes that are expected to come into force on 19 September 2024, supporting the thriving UK wine sector by providing opportunities for innovation and greater choice. In light of those changes, Wine GB—which represents producers—said:
“We welcome the chance to be able to harmonise still and sparkling bottle sizes and we are happy to raise a glass to the greater choice that allows UK producers for domestic sales.”
Patrick Grady
That answer is nowhere near as definitive as the press release that the Minister’s Department put out on 27 December last year—which is still on the Government website—with the headline
“‘Pints’ of wine stocked on Britain’s shelves for the first time ever”.
That headline did not say “will be stocked”, “might be stocked” “could be stocked”, or “to be stocked”; it implied that pints of wine were, and are, available to buy right now in shops across the UK. Will the Government admit that the reality is that there has been little to no demand for, or interest in, that supposedly glorious Brexit benefit, and that in fact it is entirely possible that pints of wine will never be stocked on UK shelves?
Kevin Hollinrake
It is never difficult to distinguish the hon. Gentleman from a ray of sunshine, is it? Our wine industry is thriving, with over 900 vineyards across Great Britain. The UK wine industry produced 12.2 million bottles of wine in 2022, and our new post-Brexit powers provide us with new options. Those include new legislation that aligns existing sizes across still and sparking pre-packed wine so that both can be sold in 200 ml and 500 ml quantities, for which we know there is good demand.
Wera Hobhouse (Bath) (LD)
Dr Thérèse Coffey (Suffolk Coastal) (Con)
The Minister of State, Department for Business and Trade (Kevin Hollinrake)
I thank my right hon. Friend for her work on this, and she raised this important matter with me at meetings last month. We allocate £50 million for the uncommercial part of the network, and part of that should help the services in her constituency. I know she is disappointed at the closure of the outreach service in Kelsale, but there is an alternative permanent post office branch in Saxmundham, 1.3 miles away. I am happy to continue the conversation between her and the post office to make sure that she gets the services she needs in her constituency.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Shoplifting cost UK retailers £1.8 billion in 2023, the highest figure on record. The Government’s £200 shoplifting threshold has effectively decriminalised this offence, which is costing businesses dear. What discussions has the Minister had with the Home Secretary about scrapping it, as Labour plans to do, so retailers and customers are protected and high street businesses can thrive?
Kevin Hollinrake
It is not true to say that we have decriminalised thefts under £200. The hon. lady needs to speak to police officers and her local chief constable to make sure she understands how this works. I have worked very closely with the Home Office and the Policing Minister to make sure we have a retail crime action plan, which includes a vexatious offence with more severe sentences for people who assault shop workers. We have got an action plan together and it is working well with retailers, and I am very keen to see her support that plan.
Rushanara Ali
Well, it is not working, and the Minister and the Secretary of State should take this seriously, because it is damaging our high streets and causing huge concern up and down the country. He and the Secretary of State should go and meet those businesses, and hear from them directly.
Turning to another issue, we have seen 14 years of Conservative under-investment in public infrastructure, a failure to provide certainty and a failure to get a grip on the economy. Business investment has also suffered. Had it matched the average investment levels of France, Germany and the US, our GDP would be nearly 4% higher today, and wages would have been boosted by £1,250 a year. Can the Secretary of State outline how she plans to fix this crippling investment gap, and what will she do to make sure businesses get the support they need so that we can get the economic growth this country desperately needs after 14 years of under-investment?
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
Are Ministers as concerned as I am about continued reports that Royal Mail is determined to move away from a six-day service? In a large rural constituency such as mine, with an older population, people continue to rely on the Royal Mail for important communications. Can the Minister make clear that that is not the direction of travel the Government want Royal Mail to go in?
Kevin Hollinrake
We absolutely agree with that point, and we have been clear with Royal Mail and the regulator Ofcom that we want a continued six-day service. Royal Mail and hopefully Ofcom will have heard what my right hon. Friend and I are saying today: the six-day service must continue.
Jim Shannon (Strangford) (DUP)
Christine Jardine (Edinburgh West) (LD)
The village of Kirkliston in my community recently became the latest to lose its post office—there have been a whole series of closures. That community is not isolated, but it is not in the centre of Edinburgh, and there is no alternative. As I say, it is one of a series, so can the Minister tell us what the Government are going to try to do to halt this decline in post offices?
Kevin Hollinrake
As I said in response to an earlier question, we put in £50 million to support the uncommercial parts of the network. I am sorry that the post office that the hon. Lady mentions has closed. I am happy to meet her to see what we can do to ensure that there is a local post office. There are network access requirements on the Post Office, and 99% of the population must be within 3 miles of a post office. If that is not the case in her area, I am happy to do what I can to ensure that that is rectified.
Kevin Brennan (Cardiff West) (Lab)
When the Minister for Trade Policy, the right hon. Member for Chelsea and Fulham (Greg Hands), bragged to my hon. Friend the Member for Rhondda (Sir Chris Bryant) earlier that his trade envoys had to have a qualification of “diplomacy and discretion”, did he have in mind the former trade envoy to Colombia, the hon. Member for Fylde (Mark Menzies)?
Mrs Pauline Latham (Mid Derbyshire) (Con)
Could the Secretary of State explain what she is doing to help businesses in my constituency that have difficulties because we do not have the skills to increase the business—they cannot expand because they lack some skills? Could she explain what she is doing to help with that skills shortage?
Kevin Hollinrake
I thank my hon. Friend for championing businesses in her constituency. We are putting £3.8 billion into skills training for people who work for businesses, which is important. We are also improving skills for entrepreneurs and business owners through our help to grow management programme—it can be found on the help to grow webpage—a 12-week mini-MBA, which is 90% funded by the Government. We also have “Help to Grow: Management Essentials”, which offers two hours of totally free online training for aspirant new business owners.
Nick Smith (Blaenau Gwent) (Lab)
Can the Secretary of State tell us about the UK’s supply of cyber-security professionals and whether a lot of that work is now being offshored?
Digital Markets, Competition and Consumers Bill
Kevin Hollinrake ExcerptsTuesday 30th April 2024
(5 days, 14 hours ago)
Commons ChamberRead Full debate Digital Markets, Competition and Consumers Bill 2022-23 View all Digital Markets, Competition and Consumers Bill 2022-23 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Amendments as at 30 April 2024 - (30 Apr 2024)
The Minister of State, Department for Business and Trade (Kevin Hollinrake)
I beg to move, That this House disagrees with Lords amendment 9.
Mr Deputy Speaker
With this it will be convenient to discuss:
Lords amendment 12, and Government motion to disagree.
Lords amendment 13, and Government motion to disagree.
Lords amendment 19, and Government motion to disagree.
Lords amendment 26, and Government motion to disagree.
Lords amendment 27, and Government motion to disagree.
Lords amendment 28, and Government motion to disagree.
Lords amendment 31, and Government motion to disagree.
Lords amendment 32, and Government motion to disagree.
Lords amendment 38, Government motion to disagree, and Government amendment (a) in lieu.
Lords amendment 104, and Government motion to disagree.
Lords amendments 1 to 8, 10, 11, 14 to 18, 20 to 25, 29 to 30, 33 to 37, 39 to 103 and 105 to 148.
Kevin Hollinrake
It is a pleasure to bring this groundbreaking Bill back to the House. It will drive innovation and deliver better outcomes for consumers across the UK by addressing barriers to competition in digital markets and tackling consumer rip-offs. We believe it strikes the right balance, not deterring investment from big tech while encouraging investment from challenger tech. I thank Members of both Houses for their careful scrutiny and I commend the collaborative cross-party approach taken during the Bill’s passage to date.
I will start with the amendments that the Government made in the other place. They add vital new provisions to the Bill and I hope hon. Members will agree to them. Part 1 of the Bill establishes a new pro-competition regime for digital markets, which will be overseen and enforced by the Competition and Markets Authority’s digital markets unit. Following engagement with Members in the other place, we have bolstered transparency provisions to require the CMA to publish more of the notices provided to firms designated with strategic market status, or SMS.
All interested parties will now be able to access the information contained in those notices, ensuring that there is greater clarity on the DMU’s decisions relating to SMS designation, conduct requirements and pro-competition interventions. A number of hon. Members have called for provisions addressing asymmetry of information to be introduced to the Bill, so we hope this change will be welcomed.
On part 2 of the Bill, which deals with wider competition reforms, hon. Members will recall that on Report the Government added a provision on litigation funding, whose purpose was to restore the previously held understanding of the status of litigation funding agreements under the Competition Act 1998. Those provisions were important in providing a route to justice for groups with limited resources—for example, our sub-postmasters.
That step was taken in response to an earlier Supreme Court judgment that had made litigation funding agreements unenforceable. The Government have since acted by introducing the Litigation Funding Agreements (Enforceability) Bill, which will deliver on our commitment to addressing the impacts of that judgment in all types of proceedings. Consequently, the provisions in this Bill have been removed, as they are no longer required.
We also introduced new measures to part 2 to address concerns about the potential ownership of UK newspapers and news magazines by foreign states, as we heard very recently from the Secretary of State for Culture, Media and Sport. The Government know that we cannot overstate the importance of those publications to our democracy and have therefore taken decisive action to preserve the freedom of the press. By establishing a new regime within the Enterprise Act 2002, the Bill will prevent foreign states from having ownership of, or control or influence over, a UK newspaper or news magazine.
The Government are extremely grateful for the support offered by Members of both Houses in the development of these new measures. In particular, we thank Baroness Stowell of Beeston and Lord Forsyth of Drumlean for their engagement, and my hon. Friend the Member for Rutland and Melton (Alicia Kearns), who first secured a debate on the issue in January.
Parts 3 and 4 make important updates and improvements to UK consumer law. Having consulted on a series of reforms at the end of last year, the Government amended the Bill in the other place to introduce new measures that address fake reviews and drip pricing. Many hon. Members called for the Government to address those harms through the Bill, and I am pleased to say that we have been able to do so, following our public consultation.
We have also made amendments to further strengthen the ability of public bodies to enforce consumer law. We did so by extending so-called take-down powers to a wider range of enforcers. There has been a healthy debate in both Houses about the measures in the Bill aimed at tackling subscription traps. We listened carefully to the concerns expressed in the other place about the potential impact of those measures on charities and their ability to claim gift aid. In response, the Government amended the Bill to enable the Treasury to update gift aid rules. That mitigates any concerns about the Bill’s impact on charities. We are grateful to Lord Mendoza for highlighting the issue and for his engagement.
We also made a series of amendments to provide greater assurance and clarity for businesses about the new subscription measures, including addressing concerns about exiting contracts, cancellations, reminder notices and cooling-off periods. I hope that hon. Members agree that the amendments improve the Bill.
Sarah Olney (Richmond Park) (LD)
The Liberal Democrats welcome the fact that the Government are finally acting on the CMA’s recommendation, but will the Government support amendment 104, which is backed by the Liberal Democrats? It is about imposing requirements on secondary ticket sites. Often, people purchasing tickets from the sites do so at huge mark-ups on the face value of the ticket, and the ticket in question does not actually exist. The amendment would address those issues, reducing the risk of fraud by requiring proof of purchase. Does the Minister agree that we must do everything we can to ensure that this legislation is as robust as possible, to crack down on this type of fraud?
Kevin Hollinrake
I thank the hon. Lady for her intervention and for the amendment, which I will speak to in a moment. The Government have agreed to undertake a review of both primary and secondary markets, and I will deal with those issues later in my remarks. [Interruption.] I hear from the shadow Front-Bench spokespeople, but I think that is something that Labour proposed in earlier amendments, so obviously they have changed their position on that issue—not for the first time.
Finally, the Government made a number of minor amendments to the Bill in the other place. The majority are tidying-up measures, or otherwise small tweaks to the Bill, to ensure that it achieves its policy intent as effectively as possible.
I will now set out the Government’s position on the 11 non-Government amendments that were made to the Bill in the other place. The majority of the amendments seek to reverse or alter amendments made to the digital markets part of the Bill on Report in this House. There were three aims behind the Government’s package of amendments on Report in the Commons: first, to provide greater clarity to parties interacting with the regime; secondly, to strengthen the regime’s safeguards for the extensive new regulatory powers; and thirdly, to enhance the accountability of the regulator. The Government tabled the amendments following careful consideration of the views expressed by hon. Members across the House. We remain convinced that our amendments struck the right balance between the accountability of the CMA’s regulatory decisions and the flexibility to allow for targeted and proportionate action that tackles the unique competition challenges in digital markets.
Sir Robert Buckland (South Swindon) (Con)
My hon. Friend is right that the amendments that were agreed on Report in this House struck the right balance, and I am afraid that on this occasion I wholly disagree with the way their lordships characterised the matter in their debate. We are not arguing for a wholesale replication of the telecoms regime; we are simply making sure that, particularly with regard to penalties, which will be pretty onerous—and rightly so—there is proper discretion to allow a reviewing tribunal and reviewing court to consider the matter carefully, in a way that balances out the need for rigour and for temper when it comes to the power of the regulator.
Kevin Hollinrake
I thank my right hon. and learned Friend for his intervention and his earlier engagement, when he made his position on that point clear. He is right to say that penalties can be significant—up to 10% of global turnover—so it is fair that we allow organisations to challenge penalties on the merits of the case, but maintain the ability to impose pro-competition interventions and conduct requirements on platforms. The amendments made in the other place risk undermining that careful balance. For example, amendments to revert the appeals standard for fines to judicial review principles, to which my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) referred, would remove a valuable safeguard on the significant new powers that the Bill gives the CMA, as would the removal of the requirement on the CMA to act proportionately. Meanwhile, amendments to the countervailing benefits exemption risk making the exemption less clear for stakeholders. Consequently, the Government have tabled a motion to disagree with those amendments.
Damian Collins (Folkestone and Hythe) (Con)
The point about a “proportionate” response is relevant. In the original drafting of the Bill, the word used was “appropriate.” The Government changed that to “proportionate” on Report in this House, and the Lords have sought to reverse that change. What does the Minister think was disproportionate, if you like, about the word “appropriate”? What about it struck the wrong balance? Ministers keep saying that they think things strike the right balance, but they never really explain why.
Kevin Hollinrake
We have engaged significantly, throughout the Bill’s passage and before it was introduced, with large tech and challenger tech. Our understanding is that all those cohorts are happy with where the Bill is today. Certainly, during that engagement, concerns were raised about the term “appropriate,” but the clear position that we expressed to those who raised that concern was, “Of course, there is a requirement on the CMA to act proportionately.” Putting that in the Bill does not undermine its basic principles. In fact, we understand from the situation in the European Court of Human Rights, and the property rights emanating from it, that all those things are baked in anyway, so we do not feel that the wording weakens the legislation at all, but it does strike the right balance between those two different courts.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
It is clearly important that we understand what “proportionate” means in this context. Is the Government’s position that proportionality implies that there is more for the CMA to think about than just how effectively the imposition of a conduct requirement would fulfil the CMA’s requirements? If so, what can the Government do to make that clear, so that courts and tribunals that consider such cases do not fill in the gaps themselves? The words “appropriate” and “proportionate” could be interpreted quite widely if the Government are not clear about what they mean by them.
Kevin Hollinrake
My right hon. and learned Friend will know from his legal background that the term “proportionate” is well established in law. Of course, the courts play an important part here. We do not prescribe everything in our legislation; there is quite rightly the opportunity for people to challenge certain decisions by the CMA. Clearly, we are trying to reduce the ability of large tech to prevent investment from smaller tech. That is the balance that we are striking, but we do not want to discourage investment from big tech, so the requirement for the CMA to act proportionately is reasonable.
Sir John Whittingdale (Maldon) (Con)
The Minister suggested that stakeholders were now satisfied with the Bill. I can tell him that there is concern about the change from “appropriate” to “proportionate.” The fear is that it will enable the courts to look more broadly, and will allow more scope for challenge than was intended when the term “appropriate” was used. Can he confirm that that is not the Government’s intention?
Kevin Hollinrake
It is not our intention. Our intention is to strike a balance. As I have said, the courts’ approach to proportionality was set out by the Supreme Court in Bank Mellat v. Her Majesty’s Treasury (No. 2), when the Court described the elements to be considered, including, most notably,
“whether a less intrusive measure could have been used”
and whether there is a fair balance between the intended objectives of the measure and the effects on the business that the measure applies to. That is a sensible balance to strike. Of course, some stakeholders want to go further in certain directions, while others do not want us to go as far, and we are trying to strike that balance. We welcome big tech’s investment in the UK, but we also welcome investment by challenger tech, and through this groundbreaking Bill—the only one of its kind in the world—we are striking that balance.
We have listened carefully to arguments relating to the Secretary of State’s approval of CMA guidance. Lords amendment 38, which was tabled by Lord Lansley, adds a timeline for the Secretary of State approving CMA guidance relating to the new regime. In response, we have tabled amendment (a) in lieu, which would achieve a similar effect by introducing a statutory 30-working-day timeline for the Secretary of State to approve the necessary guidance. We believe that that addresses concerns about the ability of the digital markets regime to start tackling competition problems without delay. We hope that hon. Members will support amendment (a).
On secondary ticketing, a non-Government amendment —to which the hon. Member for Richmond Park (Sarah Olney) referred—was made in the other place to the consumer part of the Bill. Amendment 104, which was tabled by Lord Moynihan, seeks to introduce additional regulatory requirements on ticket resale sites. Those requirements would cover proof of purchase, ticket limits and the visibility of certain required information, such as the face value of a ticket. Both Lord Moynihan and the hon. Member for Washington and Sunderland West (Mrs Hodgson) have spoken passionately on that topic during proceedings on the Bill. We are hugely grateful for their work highlighting the malpractice in the resale market.
To be clear, the Government are absolutely committed to protecting consumers from fraudulent activity in the secondary ticketing market. However, it is our view that protections for consumers are already provided by existing consumer law. The law imposes specific information requirements in relation to secondary ticketing that go above and beyond those in general consumer law. That includes the requirement for all resellers—be they traders or consumers—and secondary ticketing platforms to inform a buyer about the face value of a ticket and the restrictions on its use. The Government’s position is therefore that the secondary ticketing market is already suitably regulated. That said, we recognise the strength of feeling on this matter, which has been expressed by Members of the other place and in certain quarters of this House, so we commit today to undertaking a review of ticketing practices and how they impact on consumers. The review will look at both primary and secondary markets—in other words, sellers and resellers. We believe it important to consider both markets together.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
I am very grateful to the Minister for giving way. I know that we have debated this point before, and I will discuss it further in my contribution, but I make the point again that there may be legislation, but it is not working. There have been only two prosecutions in all the time since the Consumer Rights Act 2015 was passed. If further legislation was not needed, why did we bring in legislation to protect tickets for the Olympics?
Kevin Hollinrake
I will just finish this answer. There have been two sentences. Two people got a £6.1 million fine. There were four more successful prosecutions in Leeds Crown court only very recently, and sentence is due to be imposed on those individuals. The hon. Lady raises important points, and did great work on the all-party parliamentary group, and I will always listen to her. We are undertaking a review looking at primary and secondary markets, and she will have every chance to give her input to that review, just as anybody else will. I look forward to hearing her representations.
Barbara Keeley (Worsley and Eccles South) (Lab)
The Government claim that they are doing enough, but that is just not the case. Here is an example for the Minister: on secondary ticketing sites, three tickets for the Taylor Swift show on 21 June are going for £72,000. They had a face value of £170 each. How is the market working?
Kevin Hollinrake
I agree that some of the examples are shocking. The key question is what measures we will put in place to address them. Ireland, for example, completely banned secondary sales, yet the prices seen on the internet are equivalent to what the hon. Lady describes, so there is no perfect solution that has already been tried. However, we are very happy to look at the evidence, look at what might be done, and do something that is effective, rather than crowd-pleasing. That is what we are committed to doing.
The reality is that some organisers are simply much more successful than others at preventing large-scale unauthorised resales. The ticket market is clearly evolving rapidly. Our review will therefore consider evidence from businesses and platforms operating in ticketing and resale markets, as well as venues, artists, enforcers and consumers. The Government intend the review to take place over nine months, after which we will consider any appropriate further action. [Hon. Members: “You won’t be there.”] Members who are commenting from a sedentary position should beware of overconfidence.
I very much hope that hon. Members will support the Government’s position today. I especially hope that Members in both Houses will note our movement in two important areas: the Secretary of State’s approval of CMA guidance for the new digital markets regime, and secondary ticketing. These changes are considered and balanced, and I urge Members in the other place to consider their position on the other amendments that our motions today seek to reject. Throughout the Bill’s passage, the Government have listened carefully to the arguments presented, and in response, we have made a series of significant changes where we recognise that improvements could be made. It is important that we now reach full consensus on the Bill’s final form, so that it reaches the statute book without further delay.
Sir Chris Bryant (Rhondda) (Lab)
First, I pay tribute to my much-loved neighbour, my hon. Friend the Member for Pontypridd (Alex Davies-Jones), who led for Labour during the last round of proceedings on the Bill, and to my hon. Friend the Member for Feltham and Heston (Seema Malhotra), who led for us when the Bill was introduced.
Might I say a few words about the Minister? I do love the Minister. Members sitting on the Government Back Benches will not have been able to see the little wry smile playing on his face as he made his speech. Unfortunately, Hansard is not able to record that element of the way he presented his case. I will let the House into a secret: there are two versions of the Minister, or rather the Member. There is the Back-Bench Member, who I passionately agree with on nearly everything, and then there is the Government Minister, who has the Back-Bench Member sitting inside him somewhere, but has managed to lose him while taking on corporate and shared responsibility on the Government Front Benches. I bet that if he were in the Parliament that follows the next general election, and we debated these matters all over again, he would be articulating what I am about to say almost word for word, but today, he has articulated the Government position.
Sir Chris Bryant
Well, we have moved on and it is about time the Government moved on—in fact I look forward to the day when the Minister moves on from Government Benches to here on the Opposition Benches. The idea of a review at the dog end of a Parliament and at the end of the regime is absolutely pathetic, and I am glad the Minister is laughing at himself for even presenting the suggestion today.
Let me end with an area of agreement. We were glad that the Government, under pressure, tabled Lords amendment 117 on mergers involving newspaper enterprises and foreign powers along the lines of measures that we and others, including a large number of Conservative MPs and peers, had called for. Of course the UK must remain an open economy; we welcome foreign investment in many sectors in the UK. But we agree that in this limited area, the state ownership of UK newspaper and media companies must be a matter for concern, which is why we support the Lords amendment. We will need to make sure in future years that it is adequate to the situation we find, not least bearing in mind many of the comments made earlier by Members on both sides of the House regarding the rather fluid world we are moving into, where newspapers are a rather outdated concept and social media and other forms of online media are far more significant. We will keep that under review, therefore, but we welcome the amendment the Government have tabled.
This long-delayed Bill could go forward with strong, unanimous support if the Government abandoned their tilt towards the few potentially monopolistic companies and set aside their objections to the Lords amendments. Those objections are either completely otiose or they are dangerous. The Minister says they make no difference, I say they do, but on either grounds they should go, so we support their lordships in their amendments.
John Penrose (Weston-super-Mare) (Con)
May I start by saying that this was and still is a good Bill? It does an enormous number of very important things and I am glad to see that it has broad acceptance and agreement on both sides of the House, although with some minor points of disagreement. It contains many of the measures that I personally called for in my Government-commissioned review of competition policy called “Power to the people” a little while ago, and it definitely updates and makes some much-needed changes to our competition and consumer laws. However, I share some of the concerns raised today about the Government’s opposition to four of the amendments that have come back from the Lords.
I do not have worries about the Lords amendments themselves because, as we have just heard from the Opposition Front-Bench spokesperson the hon. Member for Rhondda (Sir Chris Bryant), they mainly seek to restore the effect of clauses that were in the Bill when it originally came to this House. What worries me is that the wrong people are clapping. The changes that the Government have made, in many cases by seeking to resist Lords amendments, seem to many people to be on the side of the big tech firms rather than on the side of consumers, of sharper competition, of more consumer choice and of standing up for the man and woman in the street. I therefore earnestly hope that the Minister will be able to channel his historical zeal for these things in his closing remarks and reassure me, and I am sure others as well, that that is not the Government’s intention and that they remain committed to those things—that the fire still burns brightly in his eyes to make them happen.
I start by saying that the Government have already done some of that work with amendment (a) in lieu of Lords amendment 38—they have replaced the Lansley amendment with a version of their own—dealing with the amount of time that the Secretary of State can take in dealing with guidance put forward by the CMA to make sure it is not unduly delayed. That is extremely welcome and a very good measure, and I enthusiastically support it. However, we have already heard about two other things in particular. One is the role of judicial review in dealing with penalties. I share the concern that in moving away from a judicial review standard for penalties to a full merits review we may get bleed-across—that clever lawyers working for big tech firms may effectively be able to broaden the scope through clever use of legal techniques to prolong their attempts to walk backwards slowly and prevent justice from being done. I therefore devoutly hope that my good friend the Minister will be able to clarify that he expects to be able to show to us—either from the Dispatch Box now, or in guidance or another kind of clarification in due course—that it will not be possible for bleed-across to happen and he will be able to take any steps that may be needed.
Kevin Hollinrake
I am very happy to make that commitment. We believe the Bill draws a clear distinction between infringement decisions and penalty decisions. After taking legal advice on this matter and looking at previous competition case law considering similar issues, the Government consider that neither the Competition Appeal Tribunal nor the higher courts will have any trouble making that distinction for digital markets appeals. We have clarified that in the explanatory notes, which I hope provides reassurance that there is little risk of bleed-back from the merits appeal standard for penalty appeals to appeals on other types of decisions.
John Penrose
I thank the Minister for that intervention and, emboldened by my success so far in getting him to front up, I move on to my second point, which has similar concerns around it: the issue of countervailing benefits. We have heard from the Opposition spokesman about that, so I will not go through it all again, but it would be enormously helpful if, either now in a further intervention or in his closing remarks, the Minister could be clear about the new wording, which we have already heard about in his speech. I hope he will make it clear—again, either through clarifications now or in guidance—that it is not intended to be in any way a lower standard than what we had before when this Bill first came to the House, and that it is either the same or tougher. I am pausing just briefly to see whether he wants to intervene.
Kevin Hollinrake
The revised wording did not change the effects of the clause. Strategic market status firms will still have to prove that there is no other reasonable and practicable way to achieve the same benefits for consumers with less competitive effect.
John Penrose
We are making marvellous progress and ending up with changes being confirmed on the Floor of the House in a way I do not think I have seen before, so let us keep going.
John Penrose
I am sure the Minister will grab that opportunity in his closing remarks, if he so wishes. At least he has taken the opportunity to stand up and give us public reassurances on the record about the standard that is intended. It is clear that it is no lower than it originally was, which is an important change.
Kevin Hollinrake
The shadow Minister and I are having this debate vicariously, but I just note that the wording in the explanatory notes has not changed.
John Penrose
I am on a roll here.
The final of the four issues in question is proportionality. We have had the debate already, so I do not propose to repeat the concerns, but it would be helpful if the Minister, either now or in his closing remarks, clarified that the new and amended standard that is to be applied is no lower. I think he said something to that effect earlier to the former Attorney General, my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright), but it would be helpful just to nail that one down and drive the nail home, if the Minister can. It is important for everybody to understand whether that new standard is any lower at all; it should be the same or higher.
John Penrose
The Minister is nodding, but I do not know whether he intends to intervene again.
John Penrose
We will have to preserve our souls in patience for the Minister’s closing remarks. I will declare victory very shortly. It has been a helpful set of interventions, and I thank him for that.
My final point is not related to these Lords amendments, but to a commitment that the Minister made at the Dispatch Box on Report in response to an amendment on better regulation that I had tabled with the support of a great number of parliamentary colleagues. He made a commitment that a set of conclusions, matching a set of standards whose wording he and I had agreed in advance, would be in place before the Bill receives Royal Assent. Clearly we are getting close to that date—I hope very close—and I understand that a Government White Paper may be in the offing, but I am not sure whether that will arrive before Royal Assent. My point is intended not to delay Royal Assent, but to bring forward the White Paper or whatever document the Government may be thinking of.
Based on conversations I have had so far, I am also concerned that not all the commitments the Minister made from the Dispatch Box may be in that White Paper. I therefore urge him to make sure that between now and Royal Assent, he works assiduously with his fellow Ministers to make sure they have got the memo that should gone round after he made those commitments.
Kevin Hollinrake
With the leave of the House, I will respond to some of the points raised in this fruitful, constructive debate. I reassure the shadow Minister that I have lost none of my mojo or ambition to ensure a fair and level playing field for businesses. That is a vital part of this legislation. At times I may smile when I am at the Dispatch Box and there are a couple of reasons for that; not only am I generally a happy guy but I am pleased to see this groundbreaking legislation being brought into effect. It is probably one of only two major pieces of legislation around the world that does what it does. We should welcome that and the fair and level playing field that will result from it.
I do not accept what the shadow Minister says about the Government having caved in and weakened some of the Bill’s provisions. It is fair to say that some of the platforms would like us to have changed the Bill radically from how it was when it was presented to Parliament. We think we have very much held the line on its provisions and how it will ensure that consumers and smaller businesses get a better deal. We do not accept that it will bring about “bleed back”, as he puts it, between the on-the-merits provisions of penalties and other regulatory decisions. We have been clear on that and our legal advice is of the same mind.
Secondary ticketing is a key part of the debate, having been raised by various Members. We absolutely see that there is good practice in some primary markets, where there is control as to resales. We should learn from best practice, such as ID requirements on the resale of tickets. That is within the gift of those in the primary markets, so we are keen to develop the review to ensure that we look at both the primary and secondary markets, as the Opposition called for in an amendment tabled earlier in the Bill’s progress.
Sir Chris Bryant
I am grateful to the Cheshire cat for giving way. Does he oppose the Lords amendment on ticket touts because of the proposed new subsection stating that there needs to be “proof of purchase” for secondary ticket marketing, or because details of the “face value” of the ticket have to be provided? It is difficult to determine why the Minister opposes the Lords amendment other than because it is an inconvenience to government.
Kevin Hollinrake
We believe that those measures, such as on the face value of the ticket, are already covered by the current legislation and enforcement. The Government have certainly gone a lot further than previous regimes have: we strengthened the terms and guidance in 2017; we banned ticketing bots—the hon. Gentleman mentioned that but did not seem to understand that it had been outlawed in 2018; and we improved enforcement action by the regulators, as we have seen six successful prosecutions under the new regime. I remind him that where other jurisdictions have supposedly gone further in banning resale, such as in Ireland, no prosecutions have taken place. We are trying to ensure that we have a balance and that our provisions work well.
Kevin Hollinrake
I will address the hon. Lady’s points in a moment, as I am keen to respond to some of them.
Sir Chris Bryant
If the Minister goes to the Viagogo website and tries to buy a ticket, he will see on the first page that it says the ticket is £420 or whatever. Can he see the original value of the ticket? No. Can he see whether it is a validly purchased ticket? No. That is the problem that the amendment would solve. It would be simple for the Government to agree to the amendment and then we can get the Bill through.
Kevin Hollinrake
We believe those provisions are already there. I have quite happily used Viagogo on many occasions, as other people have when reselling tickets. Of course we will keep looking at the primary and secondary markets, and at the interaction between the two, so that we can develop the right way to regulate the market, in a future Parliament.
Kevin Hollinrake
I will come to the hon. Lady’s points in a moment.
On the things we are doing to hold big tech to account, I can assure my hon. Friend the Member for Weston-super-Mare (John Penrose) that the fire burns brightly in me. I do not think we have moved away in any material way from ensuring that this legislation is fit for purpose and does what it sets out to do. As I said in response to his earlier intervention, we do not believe there is any bleed-across between the merits-based approach to penalties and other regulatory interventions. The revised wording about the countervailing benefits exemption did not change the effects of the clause and did not change the guidance in the explanatory notes.
As my hon. Friend is aware, we are doing a lot of work on regulation. We have engaged on regular occasions to ensure that gets to where he wants. On costs and benefits, he will have noticed we brought forward the growth duty for our economic regulators quite recently, as well as the smart data road map. I know he waits with bated breath for the White Paper that will come forward shortly.
I thank the hon. Member for Gordon (Richard Thomson) for his support for the legislation. We do not think the change from conduct is indispensable to the benefits; benefits could not be realised without the conduct materially changing the position in any way.
My hon. Friend the Member for Folkestone and Hythe (Damian Collins) said that we had moved to a different balance. I do not think I said that; I am happy to clarify my remarks about proportionality. We have provided more certainty and clarity around that position, which we always thought was part of the way the CMA would make its decisions. He made points about how the regulator would view, for example, the significant charges made across the Xbox platforms, which both charge 30% to the people who have e-commerce through those payment systems. As he said, businesses might not think that is too much, but we both know that it is not businesses that pay that ultimately, but consumers. The requirement for the CMA to make interventions for the benefit of consumers is in its very DNA, so I think it would act in those situations.
The hon. Member for Worsley and Eccles South (Barbara Keeley) talked about the secondary ticketing position. I hear her points, and the points raised by the hon. Member for Washington and Sunderland West (Mrs Hodgson), very clearly.
Barbara Keeley
I counsel the Minister against what he is doing. As his colleague in the Department for Culture, Media and Sport team did recently at oral questions, he is repeating the arguments that the platforms use. It is sad to hear Ministers repeating the same lines that a global chief officer of Viagogo came out with when they were over here. In Ireland, fraud activity has not increased—because the legislation is working., and that is why there are no prosecutions in Ireland. We would be in that situation if we had that legislation. As my hon. Friend the Member for Washington and Sunderland West probably wants to point out, it is alright to say that the use of bots is illegal, but nobody is being prosecuted for the illegal use of bots to wholesale-buy tickets; it is happening, so I counsel the Minister and his ministerial colleagues’ against their constant repetitions, which are not plausible to anybody outside.
Kevin Hollinrake
The hon. Lady is right to say that there is a difference between legislation and enforcement. We urge the authorities that have responsibility to enforce those provisions to make use of them. In Ireland, where the resale of tickets has been banned, inflated prices are still a feature of the ticket markets. Tickets for Taylor Swift’s Dublin shows are selling well in excess of their face price on the internet in Ireland, but no prosecutions have been made.
Kevin Hollinrake
May I make it clear that I was not accusing the hon. Member for Worsley and Eccles South of crowd pleasing? As I said in my earlier remarks, and as I will say to the hon. Member for Washington and Sunderland West before she intervenes, we should not simply take measures that are crowd pleasing in the hope they will work but they are ineffective. That is not to say that we do not think further measures are required.
Mrs Hodgson
On the point about Taylor Swift and whether any of her tickets have been sold on the secondary market in Ireland, I challenge the Minister to take another look at that rather than taking the word of his officials or whoever has told him. I have been told that no Taylor Swift tickets are on sale on Viagogo in Ireland. She has stated that her tickets will not be valid if they are resold on a secondary platform, so they will not be found on a secondary platform in Ireland.
Kevin Hollinrake
Yes, I have just googled sellers of tickets in Dublin, and people can buy tickets well in excess of face value on the platform. I could not find them on Viagogo, but other platforms are selling those tickets. We are trying to do something that is effective. I am very happy to continue to engage with the hon. Lady, as she makes a very compelling case. I shall continue to look at what she says and continue to engage with her. I am very keen to ensure that we get to the right place, so that we protect consumers, but allow a fair, free market to work properly.
Andrew Gwynne
I am very grateful to the Minister for giving way. I want to take him back to his comment that what was needed was not new legislation, but better enforcement. The enforcement authorities would presumably be trading standards. What is the reason there are not the prosecutions that we would all like to see? Is it because trading standards has been run into the ground and does not have the capacity to do the job that he is expecting it to do? Is it because of the complexity of the market? And which trading standards is responsible: the one where the platforms are based, the one where the person who bought the ticked is based, or the one where the concert is being held? That makes enforcing this measure really difficult.
Kevin Hollinrake
I thank the hon. Member for his points. I said not that legislation was not needed, but that there was no point in having legislation without enforcement. There have been six successful prosecutions by trading standards, but is he saying that he wants to fund trading standards to a greater degree? I understand some of the pressures on local authorities across the country; there are pressures on the public finances generally. If he has a solution to that and can provide lots more money to local authorities, he should have a word with his Front-Bench team, because that has not been Labour’s policy.
Gen Kitchen (Wellingborough) (Lab)
Unlike with trading standards, many cash-strapped families and young people fall for online scams, because they are on the hunt for bargains on Facebook Marketplace and, to a lesser extent, on eBay and Vinted. They are often at the mercy of being ripped off with very little protection and little to no help from local trading standards because of that confusion over whether it is where the buyer is or where the seller is. In particular, that is because they are for more casual and lower-value transactions. Can the Minister confirm whether that will be in the review as well?
Kevin Hollinrake
I thank the hon. Lady for her intervention. She makes a very good point. I am happy to look at the concerns that she raises. We will look at the concerns raised by all stakeholders, Members of this House and people further afield to ensure that, when we carry out this review, we get to the right place.
The hon. Member for Pontypridd (Alex Davies-Jones) seems to think EU legislation is stronger than ours. Let me point out that appeal standards consider the merits across the piece in the European Union; they do not in the UK, as they are confined to a very small element of it.
Finally, I am pleased that the hon. Member for West Ham (Ms Brown) supports the Bill and very pleased that she supports freedom of speech. Digital inclusion is very important. The Under-Secretary of State for Science, Innovation and Technology, my hon. Friend the Member for Meriden (Saqib Bhatti) is working very hard on social inclusion and social tariffs of broadband through the cross-ministerial group. We are very keen to ensure that reminder notices for subscriptions are very clear for all our consumers.
To conclude, I urge all Members on both sides of the House to carefully consider the amendment that I have proposed in lieu of those made in the other place. I hope that all Members will feel able to support our position.
Mr Deputy Speaker (Mr Nigel Evans)
Taylor Swift seems to be everywhere, even in the House of Commons, doesn’t she?
Question put, That this House disagrees with Lords amendment 9.
Post Office (Horizon System) Offences Bill
Kevin Hollinrake ExcerptsMonday 29th April 2024
(6 days, 14 hours ago)
Commons ChamberRead Full debate Post Office (Horizon System) Offences Bill 2023-24 View all Post Office (Horizon System) Offences Bill 2023-24 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 29 April 2024 - (29 Apr 2024)
The Minister of State, Department for Business and Trade (Kevin Hollinrake)
I beg to move amendment 25, page 1, line 6, at end insert—
“(za) the conviction took place before the coming into force of this Act,”.
This amendment makes it clear that clause 1(1) will quash only convictions occurring before the coming into force of the Act.
The First Deputy Chairman
With this it will be convenient to discuss the following:
Amendment 1, page 1, line 9, leave out paragraph (b).
Government amendments 27 to 28.
Clause 1 stand part.
Government amendments 29 to 33.
Clause 2 stand part.
Government amendment 34.
Clause 3 stand part.
Government amendments 35 to 41.
Amendment 3, in clause 4, page 3, line 34, at end insert—
“(4A) Notification under subsection (4) must include a written summary of—
(a) the compensation schemes available to a relevant person following a quashed conviction under section 1(1);
(b) the relevant heads of loss under which a relevant person may claim compensation; and
(c) a tariff of compensation available relating to each of the heads of loss mentioned in paragraph (b).”
Amendment 4, page 3, line 34, at end insert—
“(4A) Notification under subsection (4) must include a written commitment from the Secretary of State that—
(a) the period of time between a full and valid claim for compensation and an offer of compensation will not exceed four weeks; and
(b) if the offer is not made within the four week period mentioned in paragraph (a), a fixed penalty amount will be added to the ultimate compensation sum for each day by which the four week period is exceeded.”
Amendment 5, page 3, line 34, at end insert—
“(4A) Notification under subsection (4) must include a written commitment from the Secretary of State to use reasonable endeavours to ensure that the period of time between a full and valid claim for compensation and an offer of compensation will not exceed four weeks.”
Government amendments 42 to 44.
Clause 4 stand part.
Government amendments 45 and 46.
Amendment 6, in clause 5, page 4, line 18, at end insert—
“(3A) Notification under subsection (3) must include a written summary of—
(a) the compensation schemes available to a relevant person following a direction to delete a caution under section 5(1);
(b) the relevant heads of loss under which a relevant person may claim compensation; and
(c) a tariff of compensation available relating to each of the heads of loss mentioned in paragraph (b).”
Amendment 7, page 4, line 18, at end insert—
“(3A) Notification under subsection (3) must include a written commitment from the Secretary of State that—
(a) the period of time between a full and valid claim for compensation and an offer of compensation will not exceed four weeks; and
(b) if the offer is not made within the four week period mentioned in paragraph (a), a fixed penalty amount will be added to the ultimate compensation sum for each day by which the four week period is exceeded.”
Amendment 8, page 4, line 18, at end insert—
“(3A) Notification under subsection (3) must include a written commitment from the Secretary of State to use reasonable endeavours to ensure that the period of time between a full and valid claim for compensation and an offer of compensation will not exceed four weeks.”
Government amendment 47.
Clauses 5 and 6 stand part.
Government amendments 48 to 51.
Clause 7 stand part.
Government amendments 52 and 53.
Amendment 70, page 5, line 39, after “as” insert “Pathway,”.
This amendment would provide additional clarity by ensuring that the application called Pathway, which was rolled out as a pilot version of Horizon, is explicitly referenced as a Horizon system for the purposes of the Bill.
Government amendments 54 and 55.
Clause 8 stand part.
Government amendment 56.
Amendment 71, page 6, line 26, at end insert—
“(3) This Act expires at the end of the period of 2 years beginning with the day on which it is passed.”
Clauses 9 and 10 stand part.
Government new clauses 2 and 3.
New clause 1—Provision relating to Northern Ireland—
“(1) The Secretary of State must consult the First Minister and deputy First Minister about making provision for quashing any conviction in Northern Ireland for an equivalent “relevant offence” (see section 2) alleged to have been committed in Northern Ireland.
(2) The Secretary of State may make regulations to apply the provisions of this Act, with any necessary modifications to take account of the law and legal system in Northern Ireland, to secure the quashing of any conviction in Northern Ireland for an equivalent “relevant offence” (see section 2).
(3) Unless the First Minister and deputy First Minister acting jointly advise to the contrary, the Secretary of State must lay before Parliament a draft of regulations to be made under subsection (2) no later than one week after the day on which this Act is passed.
(4) Regulations under this section are to be made by statutory instrument and may not be made unless a draft of the instrument has been laid before, and approved by resolution of, each House of Parliament.
(5) Subject to subsection (4) of this section, section 7 of this Act applies to other regulations made under this section.”
This skeleton clause would require comparable provision to be made to quash convictions in Northern Ireland on the same basis as in England and Wales.
New clause 6—Statement on quashing convictions relating to Capture software—
“The Secretary of State must, no later than 30 days after the day on which this Act is passed, make a written statement to Parliament outlining action the Government intends to take to secure the quashing of convictions of persons carrying on a Post Office business while using the Capture software from 1992 onwards.”
Government amendments 23 and 24.
Kevin Hollinrake
It is a pleasure to serve with you in the Chair, Dame Rosie. Given the nature of this debate, in moving the Government amendments, I will also use my speech to discuss the other amendments that have been tabled.
First, I will address the Government amendments in the name of the Secretary of State relating to Northern Ireland: 23 and 24, 26 to 44, and 46 to 56, as well as new clauses 1 to 3. I am grateful to the House for agreeing to the Government’s instruction motion to enable debate on these important amendments. The Government have listened carefully to representations across the House regarding the extension of the Bill to Northern Ireland. We recognise the unique challenges faced by the Northern Ireland Executive in bringing forward legislation to quash convictions to a similar timeframe as the rest of the UK.
Gavin Robinson (Belfast East) (DUP)
I just want to put on record, in Committee, the Democratic Unionist party’s sincere and personal appreciation of the Minister for how he has engaged with us, the pragmatic way he has approached these issues, and the can-do attitude he has extended to Northern Ireland. We have met on a number of occasions. He has received the thorough representations of my right hon. Friend the Member for East Antrim (Sammy Wilson) and colleagues across the House, not least Ministers in the Northern Ireland Executive. We are indebted to him. We recognise that this is a huge step forward for the sub-postmasters in Northern Ireland who felt there would not be light at the end of the tunnel. He has extended the Bill very purposefully for all those affected in Northern Ireland, and we thank him for it.
Kevin Hollinrake
I am very grateful to the right hon. Gentleman for his kind words. It is a pleasure to work with him and his colleagues from Northern Ireland. We were always sympathetic to his arguments and are delighted to have been able to move forward as we have.
Jim Shannon (Strangford) (DUP)
Following on from my right hon. Friend the Member for Belfast East (Gavin Robinson), it is fair to say that a week ago or even a month ago, the 23 sub-postmasters and sub-postmistresses in Northern Ireland had little hope. Today, they have hope and that is due to the Minister’s endeavours on their behalf, pushing this issue and the Government’s acceptance. On behalf of the 23, we would like to say a big thank you to the Minister and the Government.
Kevin Hollinrake
I am very grateful. The hon. Gentleman is right to address the point about the 23 sub-postmasters. They are why we are here and why we are keen to act in this way. We recognise that there were specific circumstances in Northern Ireland that would have delayed the exoneration and compensation to those individuals, and that is why we are acting as we are today. It is always a pleasure to work with him, as I have on many different issues over the years.
Issues include the Executive’s recent restoration and additional public consultation requirements, which the House debated on Second Reading. In deciding to take this step, the Government recognised the extent of cross-community support for the extension of the Bill to Northern Ireland. For those reasons, we have decided to put forward Government amendments which would extend the scope of the Bill to Northern Ireland. I am very grateful to have cross-party support from Members representing Northern Ireland constituencies in co-signing Government amendments, specifically the right hon. Members for Belfast East (Gavin Robinson) and for East Antrim (Sammy Wilson), and the hon. Members for East Londonderry (Mr Campbell), for Strangford (Jim Shannon), for North Antrim (Ian Paisley), for North Down (Stephen Farry), for South Antrim (Paul Girvan), for Upper Bann (Carla Lockhart) and for Belfast South (Claire Hanna).
The amendments, which have been drafted in consultation with the Northern Ireland Executive, empower the Northern Ireland Department of Justice to implement the legislation in the same way as the Secretary of State will in England and Wales. The amendments would modify the criteria for the convictions which are overturned to ensure that the relevant convictions from Northern Ireland are captured within its scope. Specifically, they would add those secured by the Public Prosecution Service for Northern Ireland and refer to distinct Northern Ireland offences. Additionally, this group of amendments would ensure that the relevant cautions will be deleted in Northern Ireland, as they will be in England and Wales. The amendments have the same intent as new clause 1, tabled by the hon. Member for North Antrim, so I hope he will be happy to withdraw it on that basis.
On amendment 1, in the name of the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), I thank him for his continued engagement on the Bill and on wider Horizon matters. It is vital that we stay true to our objective of bringing justice to wrongly convicted postmasters, but it is also important to keep in mind the constitutionally sensitive nature of the Bill. We should legislate in a way that respects the separation of powers and the independence of the judiciary. This amendment would widen the scope of the Bill to include convictions that have been upheld by the Court of Appeal. It would automatically quash such convictions, thereby overriding decisions taken by the senior judiciary. These cases are excluded from the Bill because the Government believe that it should tread very carefully where judges in the senior appellate courts have considered a case on its merits. We do not consider it appropriate for Parliament to interfere with such decisions.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
I am grateful to the Minister for giving way on this point and, indeed, for the way he is approaching it. The Chairman of the Justice Committee sent him an excellent letter last week in which he underlined that almost all the witnesses before his Committee agreed that it was unfair for the Bill to take a restrictive approach, in the way the Minister has, while taking a rather expansive approach elsewhere. I know the Minister has written back to the Chairman of the Justice Committee, but his letter did not touch on this point. I wonder whether he will take the opportunity to wrap that up for us.
Kevin Hollinrake
I thank the right hon. Gentleman and my hon. and learned Friend the Member for Bromley and Chislehurst (Sir Robert Neill) for their work. We take these matters and the independence of the judiciary very seriously. Where the Court of Appeal has upheld a conviction and declared it safe, we think that is a material concern. There will always be different opinions in these areas, but we think we are striking the right balance between overturning convictions that we believe to be unsafe in the main and ones that have been before a senior judge.
Sir Robert Neill (Bromley and Chislehurst) (Con)
I, too, pay tribute to the Minister for the extremely constructive way in which he has engaged with everybody on this matter. My initial position was entirely supportive of the Government, but I must say that the evidence given to the Justice Committee causes me to think again. It is usually right to be very wary indeed about trespassing on decisions made by the courts. However, we have chosen to do that because it is thought desirable for the greater good in respect of the bulk of convictions.
The point that needs to be emphasised is that we have perhaps not appreciated that, in cases where convictions were upheld by the Court of Appeal, it applied a narrower test to the relevance of the Horizon evidence. In Hamilton and related cases, it said that the test was whether the Horizon evidence was essential to the conviction. We do not apply that test as a result of a policy decision. That could lead to a bizarre situation whereby someone who did not get to the Court of Appeal because the Criminal Cases Review Commission did not refer the case would have their conviction quashed, whereas someone who the commission thought had an arguable case and who went to the Court of Appeal but who was rejected on a narrower test than Parliament is now creating would not benefit from having their conviction quashed. That is the unfairness that we need to think a little more about, and it is the thrust of what the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) is getting at.
Kevin Hollinrake
There will, of course, always be different legal opinions on these matters. As my hon. and learned Friend expressed, he has had two different opinions on what we should do in this regard, and I know that his view is based on further submissions of evidence that he has received. Of course, we consider these matters very carefully. My right hon. and learned Friend the Justice Secretary is here and listening to my hon. and learned Friend’s comments. We will always continue to reflect on this legislation to make sure that we are getting to the right place, but I understand the points that he raises.
Sir Robert Neill
There were certainly differences of opinion as to the appropriateness of the measure as a whole, with Dr Quirk being in a minority of three who took a different view, but there was not a difference of opinion on the factual point that the test applied by the Court of Appeal in Hamilton is different from that which is in statute. That was a matter of unanimity.
Kevin Hollinrake
I understand and accept that point, but a decision has to be taken on whether to include these cases. There is definitely a difference of legal opinion on that point, because I have had different representations made to me.
We recognise that this approach may leave a small number of individuals concerned about the way forward for their cases. In cases where the Court of Appeal has upheld a conviction, the usual routes of appeal remain available to them. Those affected can apply to the Criminal Cases Review Commission, which can review their cases.
Mr Kevan Jones (North Durham) (Lab)
The Minister knows that we on the advisory board have discussed this issue at length. Given what has come out of the inquiry over the last few weeks, does he agree that there is evidence that may have a bearing on some of these cases? I accept why he does not want to include them in this Bill, but we need to look at some of these cases to see whether there are grounds for appeal.
Kevin Hollinrake
Of course, and I am listening intently to the evidence before the inquiry. It is true to say there are some shocking revelations. As the right hon. Gentleman illustrated in his work with the advisory board, there was a maliciousness about some of the prosecutions, which is of great concern, as is the flawed Horizon system. Part of the reason why we are legislating as we are reflects that, but we will continue to look at the evidence that emerges.
Liam Byrne
If that is the approach that the Minister is going to take, could he tell the House a bit more about how his Department will support individuals who find themselves in this egregious position? As my right hon. Friend the Member for North Durham (Mr Jones) said, evidence will now have come to light that was not available to the Court of Appeal or, indeed, to courts that may have refused leave to appeal. Those individuals will be in a terrible state now. What can his Department do, and on what timetable, to support them through the process that he proposes they take?
Kevin Hollinrake
The right hon. Gentleman makes the point himself: as more evidence emerges, it may be that the CCRC takes a different view of cases that are brought forward. People who have presented their cases can revisit them by making an application to the Criminal Cases Review Commission, which can make recommendations as it sees fit. Clearly, we are happy to provide any information that we possess, and the Post Office will do the same. As I say, the inquiry’s revelations may bring information that would help in some cases. The CCRC may refer cases to the Court of Appeal if it considers that there is a real possibility that convictions would not be upheld. With the constitutional sensitivities in mind, I hope the right hon. Member will agree to withdraw his amendment.
I turn now to amendments 3 and 6, tabled in the name of the right hon. Member for Birmingham, Hodge Hill. These amendments would require the Secretary of State to include details of available financial redress in notifications to people who have had their convictions quashed, or cautions deleted, by this Bill. The amendments come as part of a number of recommendations by the Business and Trade Committee, to which the Government have since provided our response. I can reassure the right hon. Gentleman and the whole Committee that we will include information about redress in the notifications that we send to postmasters when their convictions are overturned. Our aim is that the redress process will follow seamlessly from the process of overturning convictions—there is no need to legislate for this. Those with cautions may have already sought financial redress via the Horizon shortfall scheme or the group litigation order scheme. We will provide them with the necessary guidance to identify the appropriate route to claim financial redress, if they have not done so already.
Liam Byrne
I am grateful to the Minister for clarifying these points as we go along. He will know that many sub-postmasters have not applied for the full extent of their potential claim because they are unsure about the case law involved, and I understand that the Department is using some guidance in making judgments—for example, the Dyson judgment, which is not publicly available, for perfectly good reasons. There is a bit of creativity going into how we solve this problem. The Post Office wrote to me last night to say that, on the Horizon scheme, it is recording the heads of loss and the averages of claims that are being agreed, which could be one of the ways in which sub-postmasters are given a sense of what the tariff is. Could the Minister say a bit more about how we absolutely guarantee in the notification that we maximise the chance of sub-postmasters claiming the maximum possible amount that they should be entitled to?
Kevin Hollinrake
We have tried to design the schemes in conjunction with the legal firms that are advising most of the claimants on claiming redress. We will continue to work with them, as we do with the advisory board, and there are different mechanisms that we can use to make this process simpler, more transparent and easier to navigate. Clearly, cases will differ, despite similarities, so if we go down the full assessment route, it is important that all claims be assessed individually, which obviously takes time. If there are mechanisms that we can use—for example, the tariffs that the right hon. Gentleman describes—to expedite the process, we would be happy to look at them. We will continue to work with the advisory board on that.
Vicky Ford (Chelmsford) (Con)
I had hoped that my hon. Friend was going to speak to amendment 70 as well. I just so pleased that we are going through the legislation today, because it is so important for so many people. I have written to him about my constituent who came to see me about her husband, who was a sub-postmaster. He had been written to by the Post Office, who had told him about his exceptional bookkeeping. He then discovered an unexplained loss in the amounts. He called the auditors; they came in, and they locked him out of his business. They searched his home. They did not find any evidence, but they took away his business, his home, his livelihood and his reputation. We have heard that so many times. The only difference is that this happened in 1992, under the precursor system to Horizon. Amendment 70 mentioned the Pathway system. My constituent was using something called Capture. Fortunately the case was dropped before it got to criminal court. I know that the Minister is looking at whether there were more of these Capture cases. When the legislation comes before the other place, can we make sure that, if needed, it can also quash any criminal convictions due to Capture, or other precursor systems, as well as Horizon?
Kevin Hollinrake
I will speak to amendment 70. I wrote back to my right hon. Friend about her case, and we are looking at this. I am sure that the right hon. Member for North Durham (Mr Jones) will have something to say about this issue. We have agreed to instigate an independent review of that software. There are some fundamental differences. For example, it is not networked, so no remote access is possible, whereas that is a major feature of the issues with Horizon. I am happy to continue to engage with my right hon. Friend on the issue, and I congratulate her on the way she has dealt with it on behalf of her constituent.
My hon. and learned Friend the Member for Bromley and Chislehurst’s amendment 71 would also sunset other parts of the Bill. This would not give victims of the scandal the justice that they deserve. We are clear—there has been agreement across this House on this—that this exceptional legislation does not set a precedent, and I hope, especially with the reassurance provided by Government amendments 25 and 45, that he will withdraw amendment 71.
Sir Robert Neill
I understand where the Minister is coming from, and of course he has provided a deal of reassurance, but I want to test this a little. Are we really assuming that it will be necessary to leave open-ended people’s ability to come forward to have their conviction quashed? After all, if they cannot reasonably be traced, there is provision for the Secretary of State to notify an appropriate person. For example, if we cannot find the person—or their next of kin, if they are dead—there is a catch-all provision about notifying an appropriate person. Why could that not include the criminal records bodies? Would they not be notified anyway? I just wonder why we have to leave the provision open-ended to that extent. There will come a point when the provision has been exhausted. Also, I am interested in how my hon. Friend envisages a process working through which people can get a document that shows that their conviction is quashed—for example, if they need a visa or work permit, or have to undergo Disclosure and Barring Service checks.
Kevin Hollinrake
As I said, the legislation expires on the day that the provision is brought into effect. My hon. and learned Friend is talking about the ongoing marking of the records of people who may come forward at a future date. We do not know what that date would be. I am happy to have a conversation with him about what the cut-off would be, but the effect of this legislation, in terms of quashing convictions, expires on the day it receives Royal Assent.
Sir Robert Neill
I understand that, and I can see my hon. Friend’s point, hence the two amendments. My point is that he is praying in aid, as another reason for not having a sunset clause, the provisions for notifying people about applying to have their convictions quashed. What is the mechanism to make sure that does not hang around indefinitely? We will eventually want to bring things to a conclusion—not only getting convictions quashed, but, quite separately, paying out the compensation fund. One day, all the compensation that can be claimed will have been claimed. What do we do then? How do we wrap up the process? That is what it comes down to.
Kevin Hollinrake
As I said, I am happy to have a continuing conversation with my hon. and learned Friend on that point. I feel that it would be a serious injustice if we set, say, a three year cut-off period and somebody came along a day later. Those are the challenges that we have to meet.
Liam Byrne
In a way, this is the core of the debate about where the four corners of the Bill should stretch to. The hon. and learned Member for Bromley and Chislehurst (Sir Robert Neill) makes a very good point: at some point, there should be a sunset on such unprecedented legislation. At the moment, there are no limits to its expansiveness in terms of time, but the Minister has set a limit on its expansiveness in terms of the individuals involved, because he is ruling out those who have gone through the Court of Appeal. The Bill would benefit from further discussion, perhaps in the other place, about precisely where the four corners should be pinned down.
Kevin Hollinrake
I would welcome that discussion, and I will follow it closely in the other place.
The controversial element of this unprecedented, exceptional legislation is the overturning of the convictions, because we are interfering with the courts by legislating in this way. The convictions expire on day one. All that happens further on from that is the marking of the records, which is not the controversial part. The controversial part is the interference with the courts. Again, I am happy to have a continuing conversation with the right hon. Gentleman.
New clause 7, in the name of the right hon. Member for Orkney and Shetland (Mr Carmichael), would require the establishment of an independent intermediary body to administer financial redress to individuals whose convictions are quashed by the Bill. I also acknowledge the Business and Trade Committee’s recommendation on a similar point.
I assure the Committee that we are building independence into the process of making financial redress. Final decisions will, if necessary, be made by an independent panel comprising a King’s counsel, an accountant and a retail expert. The panel will have a case manager, who will ensure that cases are settled fairly, swiftly and in a non-adversarial manner. I have been clear throughout my work that we should put the victims of the scandal back in the position that they would have been in, and that we should move as quickly as possible. We feel that it would take months to set up an independent intermediary, and that it would add additional steps to the process and risk creating unnecessary bureaucracy.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
If my new clause had been selected for debate, I would probably not seek to press it. I am not in a position to do anything more, but I thank the Minister for his assurances on independence.
The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
As the new clause was not selected, we probably should not be discussing it.
Kevin Hollinrake
My apologies, Dame Rosie. I will move on with pleasure.
Penultimately, I turn to new clause 6. I thank the right hon. Member for North Durham for all his work seeking justice for the former sub-postmasters and, indeed, on the Horizon compensation advisory board. My officials have been working closely with him, as have I, and he will be aware that we have set in train the process of appointing an independent forensic investigator to look into the Capture software, now that the Post Office has addressed concerns about it. Obviously, this relates to my right hon. Friend the Member for Chelmsford (Vicky Ford), who is no longer in her place.
This follows on from the useful meeting that the right hon. Member for North Durham and I had with a sub-postmaster and his wife who wanted to talk to me about his experiences. My officials have spoken to other affected sub-postmasters, too. New clause 6 would require the Secretary of State to make a statement within 30 days of Royal Assent. As the Committee knows, we aim to complete the Bill’s passage very quickly, so a statement may be due quite soon. In practice, we feel it would be too soon, and time is needed to identify and appoint the right person for this role, and for the investigator to complete their work and offer an independent conclusion.
Mr Kevan Jones
Clause 2(2) mentions 23 September 1996. Is the Minister saying that any ICL Pathway system installed in post offices, even prior to that date, will be captured by the Bill?
Kevin Hollinrake
Certainly, if we regard it as a pilot system of Horizon, that would be the case, as drafted.
Mr Kevan Jones
So is the date irrelevant? I have spoken to one person whose prosecution might have been 1996, but there is evidence that the Pathway system was in place before that date in 1996.
Kevin Hollinrake
That is not what we understand from the Post Office, but I am happy to continue our discussions, as I always do, to make sure that every relevant person affected by Horizon or its pilot systems is covered.
Several hon. Members rose—
Kevin Hollinrake
I will tackle the points that have been made as briefly as possible. The Chair of the Business and Trade Committee, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), is right to say that £196 million has been paid out so far. This legislation will open the door to a lot more compensation, and it should go out rapidly to victims of prosecutions. Also, we expect that number to rise significantly with the introduction of the fixed-sum award of £75,000 for Horizon shortfall scheme claimants. To be clear, around 70% of claims submitted in time have been settled, following the final settlement for those individuals, so we are making progress, but we are determined to make more. Certainly, we are working with the Horizon compensation advisory board to ensure that that is the case. We are very happy to get into the weeds and nitty-gritty of this; we do that daily. The right hon. Gentleman said that, for whatever reason, I may not always be the Minister with this brief. I am very happy to help whoever takes over the brief when that happens, should more help be needed.
Yes, we are keen to accelerate the timescales right across the piece for the GLO scheme. As I say, we are hitting our target of making 90% of first offers within 40 days, but we will come forward with more service-level agreements for other schemes. I am very happy to work alongside the right hon. Member for Birmingham, Hodge Hill on that.
Liam Byrne
I am grateful for that reassurance. Does the Minister think that he will have the service-level agreements for the overturned convictions scheme on the table before the Bill is sent for Royal Assent?
Kevin Hollinrake
Yes. The right hon. Gentleman asked about tariffs. We are keen to do whatever we can to make the process quicker, easier, clearer and more transparent. We are taking that away and looking at it right now.
Of course, legal advice is available prior to the submission of a claim to the Horizon overturned convictions and compensation scheme, as it is in the GLO. It is only in the HSS, which was seen as non-adversarial, that that does not apply prior to the offer being made, but legal advice is available after that point.
We are obviously keen to continue discussing the cases that are before the Court of Appeal. We will certainly respond in due course to the letter from the Chair of the Justice Committee, my hon. and learned Friend the Member for Bromley and Chislehurst (Sir Robert Neill).
Liam Byrne
I am grateful to the Minister for taking a final intervention. It is maybe a non-adversarial process, but it is none the less an intimidating one that involves a complicated 16-page form that takes several hours to fill in. That is the equivalent of several thousand pounds-worth of legal assistance. At the moment, such assistance is being provided pro bono by those with some experience, but I hope that the Minister will look at the matter again.
Kevin Hollinrake
I am happy to look at that. I should point out that a lot of the 16-page form is legalese. Only about four pages of it is actually stuff that needs to be filled in, but I understand the right hon. Gentleman’s point, and the advisory board has made a recommendation for an independent appeals process for this scheme as well, which we are looking at.
I thank my hon. and learned Friend the Member for Bromley and Chislehurst for his work on the issue with the Justice Committee. I agree that what is before us is the least worst option, and I am glad that the legal fraternity is coming to the same opinion. We will respond to his letter of 24 April, particularly on the Court of Appeal cases. There are 13 cases—seven before the Court of Appeal, and six that have been refused leave to appeal—and I am very happy to look at them, and to continue our conversations. I understand the potential injustices around those cases. We will also have a look at his point about subsection (4)(b) of clause 2, to make sure that there are no unintended consequences from the legislation.
I thank the right hon. Member for North Durham (Mr Jones) for all his work on the advisory board. He has talked about my persuasive powers; I think the ITV series was far more persuasive than I was in moving things on and getting us to where we are today, but certainly, following his recommendations, which were made before the series aired, we were looking at ways to expedite the overturning of convictions, and some of the Bill is based on those recommendations. As I say, we are looking at the Capture software through the independent review. We have both met with Mr and Mrs Marston, and their story, like many others, was compelling.
The right hon. Gentleman raised the issue of the date range, which is dealt with in subsection (2)(a) of clause 2, under which the offence has to have taken place between 23 December 1996 and the later date. If an offence was committed at an earlier date, it would be excluded under the legislation. We need a conversation with the right hon. Gentleman about that, but the independent review should inform our debate going forward. It is easier to include Horizon than other things that were not directly connected to Horizon, as the court has found convictions unsafe on the basis of Horizon evidence. That is why we are able to legislate in this way.
I thank the hon. Member for North Antrim (Ian Paisley) for his kind words. It is important to recognise that all of us are here to do the right thing, and it is a pleasure to have the opportunity to do so in this way, on a cross-party basis. We are very pleased to be able to agree with the DUP’s wishes that Northern Ireland be included in the legislation, particularly for the sake of the 23 postmasters in Northern Ireland who have suffered as a result of Post Office actions.
I also thank the shadow Minister, the hon. Member for Bethnal Green and Bow (Rushanara Ali), and her Front-Bench colleagues for their support. We are very keen to make sure that Fujitsu contributes—it has agreed to do so, and has a moral obligation to do so. My Secretary of State, who has been massively supportive of all my work on these issues, has met Fujitsu’s global chief executive officer, and we expect to provide more news to the House in due course.
With that, I commend the Government amendments to the House.
Amendment 25 agreed to.
Amendments made: 27, page 1, line 9, after “Appeal” insert “in England and Wales.”
This amendment is consequential on amendment 26.
Amendment 26, page 1, line 9, at end insert—
“(2A) This Act also applies to a conviction in Northern Ireland for a relevant offence where—
(a) the conviction took place before the coming into force of this Act,
(b) the offence was prosecuted by the Police Service of Northern Ireland, the Director of Public Prosecutions for Northern Ireland or the Public Prosecution Service for Northern Ireland, and
(c) the conviction has not been considered by the Court of Appeal in Northern Ireland.”
This amendment provides for convictions in Northern Ireland for relevant offences to be quashed.
Amendment 28, page 1, line 12, at end insert
“in England and Wales or in Northern Ireland.”—(Kevin Hollinrake.)
This amendment is consequential on amendment 26.
Clause 1, as amended, ordered to stand part of the Bill.
Clause 2
Meaning of “relevant offence”
Amendments made: 29, page 2, line 32, at end insert
“or section 17 of the Theft Act (Northern Ireland) 1969;”.
This amendment, and amendments 30 to 33, add the equivalent offences for Northern Ireland to the list in clause 2(3).
Amendment 30, page 2, line 35, after “1968” insert
“or section 15 or 15A of the Theft Act (Northern Ireland) 1969”.
See the explanatory statement for amendment 29.
Amendment 31, page 2, line 37, leave out “that Act” and insert
“the Theft Act 1968 or section 19(1) or (2) of the Theft Act (Northern Ireland) 1969”.
See the explanatory statement for amendment 29.
Amendment 32, page 2, line 41, at end insert
“or section 21 of the Theft Act (Northern Ireland) 1969;”.
See the explanatory statement for amendment 29.
Amendment 33, page 3, line 1, at end insert
“or section 1(1) of the Theft Act (Northern Ireland) 1969.”—(Kevin Hollinrake.)
See the explanatory statement for amendment 29.
Clause 2, as amended, ordered to stand part of the Bill.
Clause 3
Determining when a conviction has been considered by Court of Appeal
Amendment made: 34, page 3, line 15, at end insert—
“(6) In this section “the Court of Appeal” means—
(a) in the case of a conviction in England and Wales, the Court of Appeal in England and Wales;
(b) in the case of a conviction in Northern Ireland, the Court of Appeal in Northern Ireland.”—(Kevin Hollinrake.)
This amendment is consequential on the extension of the Bill to Northern Ireland.
Clause 3, as amended, ordered to stand part of the Bill.
Clause 4
Identification and notification of quashed convictions
Amendments made: 35, page 3, line 17, leave out “Secretary of State” and insert “appropriate authority”.
This amendment, and amendments 36 to 43, provide for the functions of the Secretary of State under clause 4 to be exercisable in Northern Ireland by the Department of Justice in Northern Ireland.
Amendment 36, page 3, line 18, at end insert—
“(1A) In this section “the appropriate authority” means—
(a) in the case of convictions in England and Wales, the Secretary of State;
(b) in the case of convictions in Northern Ireland, the Department of Justice in Northern Ireland.”
See the explanatory statement for amendment 35.
Amendment 37, page 3, line 19, leave out “Secretary of State” and insert “appropriate authority”.
See the explanatory statement for amendment 35.
Amendment 38, page 3, line 20, leave out “Secretary of State” and insert “authority”.
See the explanatory statement for amendment 35.
Amendment 39, page 3, line 25, leave out “Secretary of State” and insert “appropriate authority”.
See the explanatory statement for amendment 35.
Amendment 40, page 3, line 26, leave out “Secretary of State” and insert “authority”.
See the explanatory statement for amendment 35.
Amendment 41, page 3, line 32, leave out “Secretary of State” and insert “authority”.
See the explanatory statement for amendment 35.
Amendment 42, page 3, line 36, leave out “Secretary of State” and insert “appropriate authority”.
See the explanatory statement for amendment 35.
Amendment 43, page 3, line 37, leave out “Secretary of State” and insert “authority”.
See the explanatory statement for amendment 35.
Amendment 44, page 3, line 37, leave out “in England and Wales”.—(Kevin Hollinrake.)
This amendment is consequential on the extension of the Bill to Northern Ireland.
Clause 4, as amended, ordered to stand part of the Bill.
Clause 5
Deletion of cautions for relevant offences
Amendments made: 45, page 4, line 3, after “has” insert
“before the coming into force of this Act”.
This amendment makes it clear that clause 5 applies only in relation to cautions given before the coming into force of the Act.
Amendment 46, page 4, line 5, before “criminal” insert “UK”.
This amendment is consequential on amendment NC2.
Amendment 47, page 4, line 27, before “criminal” insert “UK”.—(Kevin Hollinrake.)
This amendment is consequential on amendment NC2.
Clause 5, as amended, ordered to stand part of the Bill.
Clause 6 ordered to stand part of the Bill.
Clause 7
Power to make further consequential provision
Amendments made: 48, page 5, line 7, leave out
“an Act of Parliament passed”
and insert
“primary legislation passed or made”.
This amendment is consequential on the extension of the Bill to Northern Ireland.
Amendment 49, page 5, line 8, at end insert—
“(2A) But regulations under this section may not make any provision which is transferred Northern Ireland provision for the purposes of section (Power of Department of Justice to make further consequential provision).”
This amendment is consequential on amendment NC3.
Amendment 50, page 5, line 15, leave out “an Act of Parliament” and insert “primary legislation”.
This amendment is consequential on the extension of the Bill to Northern Ireland.
Amendment 51, page 5, line 20, at end insert—
“(6) In this section “primary legislation” means—
(a) an Act of Parliament, or
(b) Northern Ireland legislation.”—(Kevin Hollinrake.)
This amendment is consequential on the extension of the Bill to Northern Ireland.
Clause 7, as amended, ordered to stand part of the Bill.
Clause 8
Interpretation
Amendments made: 52, page 5, line 23, at end insert—
“(a) in the case of England and Wales—”.
This amendment is consequential on amendment 53.
Amendment 53, page 5, line 30, at end insert—
“(b) in the case of Northern Ireland, any caution (including a restorative caution) given to a person in Northern Ireland in respect of an offence which, at the time the caution is given, the person has admitted;”.
This amendment makes provision about the meaning of “caution” in relation to Northern Ireland.
Amendment 54, page 6, line 9, after “Wales” insert “or Northern Ireland”.
This amendment is consequential on the extension of the Bill to Northern Ireland.
Amendment 55, page 6, line 21, at end insert—
“(c) Article 6 of the Criminal Justice (Northern Ireland) Order 1996 (S.I. 1996/3160 (N.I. 24)).”—(Kevin Hollinrake.)
This amendment is consequential on the extension of the Bill to Northern Ireland.
Clause 8, as amended, ordered to stand part of the Bill.
Clause 9
Extent and commencement
Amendment made: 56, page 6, line 25, leave out “only” and insert “and Northern Ireland”.—(Kevin Hollinrake.)
This amendment provides for the Bill to extend to Northern Ireland (as well as to England and Wales).
Clause 9, as amended, ordered to stand part of the Bill.
Clause 10 ordered to stand part of the Bill.
New Clause 2
Deletion of cautions for relevant offences: Northern Ireland
“(1) If it appears to the Department of Justice in Northern Ireland (“the Department”) that a person has before the coming into force of this Act been cautioned in Northern Ireland for a relevant offence, the Department must direct the Chief Constable to delete details, contained in relevant criminal records, of the caution.
(2) As soon as is reasonably practicable after receiving a direction under subsection (1), the Chief Constable must delete the details of the caution.
(3) Where the Department gives a direction under subsection (1) in relation to a person’s caution, the Department—
(a) must take all reasonable steps to notify the person, or, if the person is no longer alive, the person’s personal representatives, that the direction has been given, or
(b) if it is not reasonably practicable to give a notification under paragraph (a), must take all reasonable steps to—
(i) identify some other person whom the Department considers it is appropriate to notify, and
(ii) notify that person that the direction has been given.
(4) For the purposes of this section, the Department must, in particular, consider any representations made to it which claim that a person has been cautioned in Northern Ireland for a relevant offence, whether or not made by that person.
(5) In this section—
“the Chief Constable” means the Chief Constable of the Police Service of Northern Ireland;
“the Northern Ireland criminal records database” means the names database maintained by the Department for the purpose of recording convictions and cautions;
“relevant criminal records” means—
(a) the Northern Ireland criminal records database, and
(b) the UK criminal records database;
“the UK criminal records database” means the names database held by the Secretary of State for the use of constables.”—(Kevin Hollinrake.)
This new clause makes provision for Northern Ireland corresponding to that made by clause 5.
Brought up, read the First and Second time, and added to the Bill.
New Clause 3
Power of Department of Justice to make further consequential provision
“(1) The Department of Justice in Northern Ireland may by regulations make provision that—
(a) is consequential on any provision made by this Act, and
(b) is transferred Northern Ireland provision.
(2) For the purposes of this section “transferred Northern Ireland provision” means provision that—
(a) would be within the legislative competence of the Northern Ireland Assembly if it were contained in an Act of that Assembly, and
(b) would not, if it were contained in a Bill in the Northern Ireland Assembly, result in the Bill requiring the consent of the Secretary of State under section 8 of the Northern Ireland Act 1998.
(3) The power to make regulations under this section may, in particular, be exercised by amending or modifying any provision made by or under primary legislation passed or made before, or in the same session of Parliament as, this Act.
(4) Regulations under this section—
(a) may make different provision for different purposes;
(b) may contain supplementary, incidental, consequential, transitional or saving provision.
(5) The power to make regulations under this section is exercisable by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)).
(6) Regulations under this section that amend any provision of primary legislation may not be made unless a draft of the regulations has been laid before, and approved by a resolution of, the Northern Ireland Assembly.
(7) Any other regulations under this section are subject to negative resolution within the meaning given by section 41(6) of the Interpretation Act (Northern Ireland) 1954.
(8) In this section “primary legislation” has the same meaning as in section 7.”—(Kevin Hollinrake.)
This new clause confers power on the Department of Justice in Northern Ireland to make consequential provision as a result of the Bill.
Brought up, read the First and Second time, and added to the Bill.
Title
Amendments made: 23, line 1, after “Wales” insert “and Northern Ireland”.
This amendment is consequential on the extension of the Bill to Northern Ireland.
Amendment 24, line 4, after “Wales” insert “or Northern Ireland”.—(Kevin Hollinrake.)
This amendment is consequential on the extension of the Bill to Northern Ireland.
The Deputy Speaker resumed the Chair.
Bill, as amended, reported.
Bill, as amended in the Committee, considered.
Third Reading
Post Office (Horizon System) Offences Bill (Instructions)
Kevin Hollinrake Excerpts(6 days, 14 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Marion Fellows
Yes. I was appalled, upset and disturbed by the fact that the Scottish Government had been trying to contact Westminster Ministers to get this Bill to cover Scotland as well, and there was no comeback and no correspondence—nobody bothered. One afternoon, within a two-hour period, the Minister—who I greatly admire, as he knows; I have a very good working relationship with him—was able to phone the Northern Irish First Minister, Deputy First Minister and Justice Minister.
The Minister of State, Department for Business and Trade (Kevin Hollinrake)
I thank the hon. Lady for giving way. I have met the Scottish justice Minister twice online; the reason I met the Northern Ireland Ministers physically is that they came here to Parliament to meet us.
May I push back on something that the hon. Lady said a few moments ago? She said that this Parliament is sovereign. Absolutely, it is sovereign, but on these matters, her Parliament is also sovereign. [Interruption.] Clearly, as she said earlier in her remarks, there is legal controversy on these matters—she has admitted that herself. This Parliament is taking the legal risk in that area, but is the hon. Lady aware of her Lord Advocate’s position on this particular matter? These are her actual words:
“It is important to recognise that, in Scotland, there is an established route of appeal in circumstances such as this…and that due process must be followed.”—[Scottish Parliament Official Report, 16 January 2024; c. 14.]
Does the hon. Lady not believe that in that situation, her Parliament should act to overturn these convictions?
Madam Deputy Speaker (Dame Rosie Winterton)
I am quite anxious that we do not have too many long interventions so that, if hon. Members want to catch my eye, there is plenty of time for debate.
Marion Fellows
I thank my hon. Friend for that intervention. I heard the Minister chuntering from a sedentary position that Scottish Ministers should take responsibility for this.
Marion Fellows
They will, but they did not cause the need for this Bill. This is a Westminster issue and should be sorted out here.
Madam Deputy Speaker, I am incensed—people may have realised that. This is not fake anger: this is a real issue for those men who came down here today. They were representative of the 100 sub-postmasters and mistresses in Scotland, and we have not even started to talk about the effect on their families and those who have died. Two years it took Robert Thomson to go through court, during which time his mother died, and it is the same story right across all the postmasters who have lost family members, and postmasters have committed suicide. This has to be sorted.
I go back to my original point. Scottish postmasters will be behind the curve when it comes to applying for the due compensation they are entitled to if they are not exonerated at the same time as the rest of the postmasters in the UK. This is a piece of nonsense. Get it done for Scotland. The Government have done it for Northern Ireland. Get it done for Scotland.
The Minister of State, Department for Business and Trade (Kevin Hollinrake)
I thank the hon. Member for Motherwell and Wishaw (Marion Fellows) for her remarks and her engagement. It has always been a pleasure to work with her both in the Chamber and in other areas. Yes, we have worked cross-party, and I have been very keen to do that all the way through on these matters, but that does not of course mean we always agree.
I was very grateful to have the opportunity to meet the hon. Lady earlier with the Scottish postmasters she referred to. I am sorry that they have not been able to attend this debate. However, at that point I was able to explain to those postmasters why the Government oppose this motion, as our position remains unchanged that this Bill should not be amended to include Scotland.
Marion Fellows
I just want to ask the Minister: what did the Scottish postmasters say to you—
Marion Fellows
I beg your pardon, Madam Deputy Speaker. What did the Scottish sub-postmasters say to the Minister this afternoon? Were they pleased, were they happy and did they feel they were getting justice through this action?
Kevin Hollinrake
I listened to the postmasters very carefully, and of course they would prefer us to legislate in the way the hon. Lady describes. I set out very clearly the reasons why we would not do so, and I think they heard the concerns we raised about how we think we should proceed.
Scotland has a historically separate legal jurisdiction, and the Lord Advocate and the Crown Office and Procurator Fiscal Service have a unique role in prosecutions in Scotland. We feel it is more appropriate for the Scottish Government to bring forward proposals to address prosecutions on this matter in Scotland, and for those to be scrutinised by the Scottish Parliament. The First Minister has previously made public comments suggesting that the UK Government’s approach to the criteria in our legislation was too broad in relation to the convictions it would quash. He is reported, in The National on 27 March, to have said that he wanted
“to make sure that people who have genuinely committed a crime…do not then have access to…compensation.”
We have been clear from the start that there is a real risk of that happening with our approach.
Joanna Cherry
Has the Minister taken the time to read the evidence taken at the Justice Committee when Professor Chalmers said that the purpose of the Bill is to make sure convictions can be quashed so that innocent people can be compensated? The scandal originated with a faulty computer system and dubious investigatory procedures within a UK-wide institution. The scheme for compensation is to be UK-wide, so the paving legislation should be UK-wide, too. That is the opinion of the regius professor of criminal law at the University of Glasgow. Has the Minister given that any thought, and can he tell me why it is wrong?
Kevin Hollinrake
I thank the hon. and learned Member for her point, and I heard the points she raised earlier. It is very clear that all that is required for someone to access the compensation is the overturning of a conviction, and that can be done by means chosen by the Scottish Parliament or the means that have been chosen by the UK Parliament. There will be identical access to the compensation schemes: it makes no difference by whatever mechanism those convictions are overturned.
As I said earlier, the Lord Advocate has said very clearly that
“It is important to recognise that in Scotland, there is an established route of appeal in circumstances such as this…and that due process must be followed.”—[Scottish Parliament Official Report, 16 January 2024; c. 14.]
She is of course entitled to that view. These are difficult political choices, which we have taken in defining the cohort criteria, and it is right that responsible Ministers remain accountable for those decisions. The buck stops here, and it must also stop with the Scottish Government.
Chris Stephens
I am confused at the inconsistency here, so perhaps the Minister could help us. The Government are putting through a Criminal Justice Bill that impacts on Scotland, which has required the Scottish Parliament to pass a legislative consent motion for that Bill. So if it is good enough for the Criminal Justice Bill going through this place, why is it not good enough for this Bill to go through this place?
Kevin Hollinrake
As I said earlier, Scottish Ministers have the responsibility and the means to be able to form this legislation. We think it is important that they take responsibility for their decisions in this area, given the nature of these issues.
Kevin Hollinrake
I will make some progress, if I may.
I note that the First Minister stated on Thursday 18 April that the Scottish Government are prepared to introduce legislation to the Scottish Parliament to overturn convictions—I understand from the hon. Member for Motherwell and Wishaw that that legislation has actually been drafted—and I believe it is possible and necessary for the Scottish Government to do so swiftly. Our position on Scotland’s inclusion in the Bill is very clear. The Government made a statement on 22 February to that effect, and I have written to the Scottish Government on this point. Indeed, the First Minister’s comments, together with the proposed draft amendment to the UK Bill that the Scottish Government have published, suggest that they should be in a position to do so.
The UK Government remain committed to supporting the Scottish Government to progress their own approach to their legislation. I have met Scottish Government Ministers multiple times since this Bill was introduced, and officials at the Department for Business and Trade and the Ministry of Justice hold weekly meetings with officials in the Scottish Government to discuss these issues.
In conclusion, I remain of the view that the Scottish Government should introduce their own legislation to quash convictions in their jurisdiction. As such, the Government oppose this motion.
Sammy Wilson
I will not, because I just want to make two more points. First, the Minister has said, “It can be done quickly through the Parliament in Scotland.” The Scottish Parliament cannot start the process until the law has gone through here. I think I can say this, although some SNP Members might not be able to: the situation in Scotland at the moment does not look good for getting legislation through quickly for any reason, because of the uncertainty around the leadership, what will happen and what support there will be. There is a parallel with the situation we had in Northern Ireland. One of the arguments we made was over special circumstances, with the Assembly just being set up again and the delay that might cause. The Minister’s argument could mean further delay in getting justice for postmasters and postmistresses in Scotland.
Kevin Hollinrake
May I just point out that the legislation apparently has already been drafted for Scotland? There is no requirement for Scotland’s legislation to mirror our legislation; that would be up to the Scottish Parliament, and it is clear that is the case. Will the right hon. Gentleman accept that it is not just the Lord Advocate who is against what we are doing? The First Minister himself said, as I said earlier, that people with safe convictions should not have access to compensation. We are clear that the route we are taking raises that likelihood. It is therefore only right that the Scottish Parliament takes this decision.
Sammy Wilson
That has been the Minister’s position throughout the discussions we had earlier. I am still arguing for including Scotland, on the basis of consistency, fairness, speed and the political signal we should be sending to people in Scotland. No SNP Member will make this point, but I will. We have already heard in this debate that this is more of a political decision. The Scottish National party feels that it is being got at—sometimes it deserves to be got at—but my point is this: when there is a mechanism to avoid it, why create a sense of victimhood? People feel they have been got at and have been treated differently when they could have been treated in the same way as the rest of the United Kingdom. I do not think there is any political merit in excluding Scotland from this legislation. For the people who have been wronged in the Horizon scandal, for the people who have had their reputations damaged, and for the picture of this Parliament as a fair Parliament, dealing with people right across the United Kingdom who have been affected by a United Kingdom problem, I believe this motion should be passed today and Scotland should be included along with Northern Ireland.
Paternity Leave (Bereavement) Bill
Kevin Hollinrake ExcerptsFriday 26th April 2024
(1 week, 2 days ago)
Commons ChamberRead Full debate Paternity Leave (Bereavement) Bill 2023-24 View all Paternity Leave (Bereavement) Bill 2023-24 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 20 March 2024 - (20 Mar 2024)
The Minister of State, Department for Business and Trade (Kevin Hollinrake)
May I first express my thanks to the hon. Member for Ogmore (Chris Elmore) for bringing forward this important Bill and for his collaborative efforts all the way through. He is an absolute pleasure to work with and has always displayed a real Whip’s pragmatism in making sure we got this Bill to the right place so that it could proceed as smoothly as possible. It is great to see so much cross-party support for it.
I also thank my hon. Friend the Member for Broxtowe (Darren Henry), who has long campaigned on this issue and brought it to my attention. In 2022, one of the first meetings I had in my ministerial role was with him. He joined me with Aaron, who is in the Gallery today, and his son Tim. We express our very best wishes to them for their campaigning. My hon. Friend mentioned the power that people such as Aaron have to influence thinking in this place, but that power has to be channelled through a willing and capable Member of Parliament—he will be a Minister in due course, I am sure—and he has displayed that throughout. He has been persistent and his arguments have always been compelling, and persistence is important in this space. He has always engaged with me, trying to find the best way to bring this legislation forward, and he has found it. I am grateful for his efforts, and so many parents will be, too, so I thank him very much for his work.
The hon. Member for Ogmore said—I think profoundly—that there is no politics in bereavement, and that is absolutely right; there should not be. It is always a pleasure for any Member to bring forward a private Member’s Bill, and these things are always team efforts. I was delighted to have that opportunity a couple of times myself as a Back Bencher with the Guardianship (Missing Persons) Act 2017 and the Parental Bereavement (Leave and Pay) Act 2018, which was first promoted by my hon. Friend the Member for Colchester (Will Quince). I picked that up on the back of his persuasion when I was drawn high in the ballot. It is always a pleasure to say you have achieved significant change in this place, and both Members who have contributed today and made the largest contribution to bringing forward this Bill have done that in no uncertain terms.
Unlike entitlement to maternity leave, which starts on the first day of a woman’s employment, there is currently no day one leave entitlement for employed fathers and partners. As such, if a mother dies in the first year of a child’s life, a father or partner who has not met continuity of service requirements for paternity or shared parental leave will not have the statutory right to take leave so that they can care for their child. In those tragic, but thankfully rare, circumstances, they need to rely on the compassion of their employer to provide them with adequate leave and job security. It was good to note that Aaron’s employer did show compassion, but that cannot be relied on as a matter of course. As my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) said, we decided to use the paternity leave elements of our framework to deliver this legislation, which covers more circumstances. The new statutory entitlement will offer day one leave for fathers and partners in the event of the mother’s death in the first year after the child’s birth. Those are tragic circumstances, and it was very moving to hear my hon. Friend the Member for Hyndburn (Sara Britcliffe) talk about her constituent who is in that situation.
Members have asked in the past for the entitlement to be a paid right. In line with other entitlements, such as statutory parental pay, and for consistency of approach, the Government believe statutory pay should be available only to employees who meet continuity of service and minimum earnings tests. Other than in the case of small employers, employers are required to contribute towards the costs of statutory parental pay and meet the costs associated with their employees’ absence from work. Those requirements reflect the relationship between employer and employee, and are designed to ensure a parent has made a reasonable contribution to their employer’s business before that employer is required to administer statutory parental payments.
On the number of people the measure should apply to, as the hon. Member for Ogmore stated, there are about 180 maternal deaths within 12 months of childbirth per annum. For a variety of reasons, we cautiously assume that 50% of those eligible will take up the leave entitlement. For example, it is highly likely that those who are eligible for shared parental leave and pay will take that paid entitlement instead, and some employers may provide paid bereavement, compassionate or special leave. Although the numbers may be small—we estimate fewer than 100 per annum—we are committed to ensuring parents in that position have a dedicated leave entitlement.
Once in force, the Bill will give bereaved parents the support and protection they need during one of the most devastating periods of their lives. It will be available to employees, regardless of how long they have been working for their employer, provided they fulfil other eligibility criteria. Although we estimate that the number affected by those circumstances is low, the emotional strain and physical toll of caring for a new child while grieving the loss of a partner is unimaginable.
I am pleased that the Government can support this vital piece of legislation through the Houses. On Second Reading and in Committee, its ambition gained cross-party support. We continue to discuss our plans for the Bill with stakeholders, including the Federation of Small Businesses, the Institute of Directors, the Confederation of British Industry and charitable organisations such as Working Families and Pregnant Then Screwed, and we look forward to working with them further to develop this legislation.
Losing a partner is a truly horrific experience for anyone, and combining that terrible grief with the challenges of caring for a new baby must be incredibly hard. I very much echo the sentiment expressed by the hon. Member for Ogmore: I sympathise with anyone who finds themselves in that terrible situation.
The United Kingdom has a range of generous entitlements and protections designed to help parents balance their family and work commitments and maintain their place in the labour market. For example, the UK has one of the most generous maternity leave entitlements in the OECD. We also offer paternity leave and pay to fathers and partners, and enable a mother to share her maternity entitlement through shared parental leave and pay. We are also on track to deliver neonatal care leave and pay for those parents who need to take time to be with their baby when they are receiving neonatal care, with up to 12 weeks’ entitlement.
In all, there are seven new private Members’ Bills that expand entitlements in the workplace, and they include: this Bill; the neonatal care legislation; the right to request flexible working; the tipping Bill; carer’s leave, which entitles those with a dependant with long-term care needs to take up to a week’s care leave per year; the right to request predictable terms and conditions—predictable hours, if you like, Mr Deputy Speaker—and protection from redundancy for parents who are pregnant or on maternity leave when they return to work.
Nickie Aiken (Cities of London and Westminster) (Con)
My hon. Friend is making a good point about the private Members’ Bills that have been coming through the House to help with employment rights in the workplace. He will recall that I had my own Fertility Treatment (Employment Rights) Bill. Does he agree that it is important that we do as much as we can to support people going through fertility treatment to get paid time off work?
Kevin Hollinrake
My hon. Friend is a doughty campaigner and has approached the issue in absolutely the right way. I know that she was keen for us to legislate in that area. We have made so many different improvements to workplace entitlements that we did not feel there was parliamentary time available for that, but I know that she will keep campaigning. In the background, prior to legislation happening, she has worked closely with many employers to ensure that they offer that support on a voluntary basis. She is setting the right standard in showing what can be achieved even without legislation in this place, and I very much support her efforts.
The shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders), asked whether we are considering greater protections against redundancy in certain circumstances. We are, and I am happy to have a continued conversation with him on that.
When in force, the Bill will ensure that a parent who is already grieving the loss of their partner does not have to worry about whether they will get the necessary leave from work to care for their child. As I stated in Committee, the Government wholeheartedly supported the amendments tabled by the hon. Member for Ogmore, which are crucial to ensuring the Bill’s effectiveness, fairness and inclusivity, and support the Government’s commitment to bolster the participation of parents in the workplace.
As with most family leave and pay entitlements, much of the detail will be delivered through secondary legislation, which will come before the House in due course. By introducing this change to the legislative framework, we will ensure that employees who lose their partner in the time surrounding childbirth or adoption have access to a period of leave to care for their new child. This change means that bereaved partners need not rely on the good will of their employer to take time off work—and, importantly, they can stay connected to the labour market until they can return to work.
I thank hon. Members for their valuable contributions to the debate. The Bill is an important extension of the support and protection that we already provide to parents; in this case, it is for when they face one of the most challenging situations of their lives. As such, the Government take pride in endorsing this private Member’s Bill. I again thank my hon. Friend the Member for Broxtowe, other hon. Members who made contributions and, finally, the hon. Member for Ogmore for continuing to work with me to develop the Bill into a piece of legislation that will work effectively for parents and businesses alike. I also thank the officials, who have done such a fantastic job. As I said, it is not just this legislation, because we have six other private Members’ Bills. They have worked under huge pressure this year and done a fantastic job. I very much appreciate their efforts. I hope that the Bill will progress rapidly to the next stage in Parliament.
Draft Accounting Standards (Prescribed Bodies) (United States of America and Japan) (Amendment) Regulations 2024
Kevin Hollinrake Excerpts(1 week, 4 days ago)
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The Minister of State, Department for Business and Trade (Kevin Hollinrake)
I beg to move,
That the Committee has considered the draft Accounting Standards (Prescribed Bodies) (United States of America and Japan) (Amendment) Regulations 2024.
It is a pleasure to serve with you in the Chair, Mr Hollobone.
The regulations were laid before the House in draft on 21 February, and were debated and agreed under the affirmative resolution procedure in the Grand Committee of the House of Lords on Tuesday 26 March. The Accounting Standards (Prescribed Bodies) (United States of America and Japan) Regulations 2015 provide a regulatory easement of the UK’s company reporting rules for US or Japanese-listed parent companies that have chosen to re-domicile in the UK. The easement was originally introduced in 2012, and was extended in 2015 and 2022. It provides qualifying companies with extra time to transition from their national accounting practices to UK-recognised accounting standards.
Parent companies listed in the US or Japan may take up to four financial years, following UK incorporation, in which to make the transition, in order to prepare their group accounts in line with UK accounting principles. When originally introduced in 2012, this was deemed especially helpful for companies using US or Japanese accounting standards, which might otherwise have struggled to adapt to UK domestic standards when domiciling to the UK. By providing this exemption, the regulations make the UK a more attractive place for companies in those jurisdictions to re-domicile into.
In 2023, the Department published a post-implementation review of the 2015 regulations. The review took evidence from a small number of previously US or Japanese-listed, now UK-domiciled, firms about their cost savings from the easement. The survey responses confirmed that the regulatory easement provides flexibility and enables cost savings for the businesses using it. Businesses that responded to the survey reported that the easement reduced their conversion costs significantly. One company also said that the regulations allowed it to submit accounts in the “most prudent and efficient” way while listed in the US.
Having conducted the post-implementation review, the Government decided to extend the regulations, which we believe make a small but useful contribution to a pro-growth regulatory regime that supports inward investment. To give effect to that decision, the Government laid the Accounting Standards (Prescribed Bodies) (United States of America and Japan) (Amendment) Regulations 2023 before the House on 6 September 2023. Those regulations extended the easement in recognition of its evident benefit to businesses that have used it so far. The easement would have expired without those regulations, thereby requiring newly domiciled US and Japanese companies to immediately convert accounting practice when filing their first set of UK accounts.
Although the post-implementation review found that the regulations are a helpful feature of the UK’s regulatory environment, it also identified a small risk of abuse or misunderstanding. The review noted that more could be done to improve the understanding that the easement is a transitional, time-limited concession, not a permanent exemption from the UK’s company reporting rules. In particular, the 2015 regulations did not require companies to indicate when their four-year period ends, which made it difficult to determine whether a company had exceeded the easement period. That would leave the door open for companies to use the easement for longer than permitted and make it difficult to monitor that risk.
The Government did not find any specific evidence of that abuse; none the less, we chose to take a proactive measure to prevent it. Regulation 4 of the 2023 regulations introduced an obligation on companies using the easement to include a note in their accounts stating when the easement ceases to apply. This additional requirement on companies was deemed to be a simple and proportional mechanism to reduce the potential risk of abuse. Regrettably, in making the provision to require a note in the accounts, the Department for Business and Trade made an error of parliamentary procedure by using the negative resolution procedure, rather than correctly using the affirmative resolution procedure.
The new statutory instrument is intended to correct the error. It removes regulation 4 of the 2023 amending regulations and substitutes a new regulation 5A in the 2015 regulations, doing this through the correct, affirmative resolution procedure. The rest of the 2023 amending regulations were made correctly, but the Government are grateful to the Joint Committee on Statutory Instruments for drawing their attention to the procedural error.
Driving growth in the UK economy requires attracting inward investment. The regulations are just one example of how we can make it easier for overseas companies to incorporate in the UK and create jobs in the UK economy. I urge the Committee to approve them.
Kevin Hollinrake
The prescribed bodies regulations provide an easement of the UK’s company reporting rules to support US and Japanese-listed parent companies that have chosen to domicile in the UK. I very much appreciate the shadow Minister’s support for the measures. For some larger companies, the savings can be in the millions of pounds. Helping companies to more easily move their incorporation to the UK, by reducing the costs of the switch, is the right thing to do for our economy and helps to ensure that the UK remains attractive and open for business. The Government now propose to correct the procedural error in making regulation 4 of the 2023 regulations, by means of this affirmative statutory instrument. I commend the regulations to the Committee.
Question put and agreed to.
Draft Economic Growth (Regulatory Functions) (Amendment) Order 2024
Draft Growth Duty: Statutory Guidance Refresh
Kevin Hollinrake Excerpts(1 week, 5 days ago)
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The Minister of State, Department for Business and Trade (Kevin Hollinrake)
I beg to move,
That the Committee has considered the draft Economic Growth (Regulatory Functions) (Amendment) Order 2024.
The Chair
With this it will be convenient to consider the draft Growth Duty: Statutory Guidance Refresh.
Kevin Hollinrake
It is a pleasure to speak with you in the Chair, Mr Paisley. The draft order and the draft guidance issued under section 110(1) of the Deregulation Act 2015 were laid before the House on 6 March 2024.
I am pleased to initiate this debate, and I emphasise the Government’s commitment to upholding rigorous parliamentary scrutiny for statutory instruments that impact the UK’s independent regulators. The draft statutory instrument and guidance we are debating relate to the growth duty, a duty that requires specified regulators to have regard to the desirability of promoting economic growth when exercising certain regulatory functions. Regulators within the scope of this duty need to consider the potential impact of their activities and their decisions on economic growth, and ensure that any regulatory action they take is necessary and proportionate.
The growth duty applies to more than 50 regulators and came into statutory effect on 29 March 2017 under the Deregulation Act 2015. The regulators already covered include the Environment Agency, the Care and Quality Commission and the Gambling Commission. At present, the growth duty does not apply to the utilities regulators, which are the Office of Communications, also known as Ofcom, the Office of Gas and Electricity Markets or Ofgem, and the Water Services Regulation Authority or Ofwat. The draft instrument will extend the growth duty to those regulators, which oversee industry sectors accounting for 13% of annual private UK investment and about 4% of UK GDP. By extending the growth duty, we will ensure that those critical regulators have regard to the need to promote economic growth.
The Department for Business and Trade has also prepared refreshed related statutory guidance to provide greater clarity to support regulators in their application of, and reporting against, the growth duty. The draft refreshed guidance identifies drivers of growth and behaviours of smarter regulation to assist regulators better to ensure proportional regulation and support sustainable economic growth.
Regulators play a vital role in shaping the UK economy through the way in which they regulate. It is therefore critical that regulation is cognisant of the requirements of growth. A good regulatory environment emerging from the attentive and responsive stewardship of an effective regulator can create the conditions for business confidence and investment, sensible risk taking, and innovation. Together, the extension of the growth duty and the revised guidance will support a positive shift in how regulation is delivered, driving growth and paving the way for businesses to start and grow.
Peter Grant (Glenrothes) (SNP)
We have discussed the actions of other regulators under the Minister’s remit on a number of occasion. Can he give us some examples of when actions of the water or energy regulators under the existing system have been detrimental to economic growth? The views I get from the public are that that is not where the biggest failing in the regulatory system is.
Kevin Hollinrake
I think it is about ensuring that regulators are proportionate in their decision making and take into account the needs for economic growth. For example, speed of decision making is pretty important to someone who is investing in our economy—they want to ensure that there is a consistent framework and that, where changes are made, they are done quickly and with the input of businesses. The feedback we are hearing is that that is not always the case. As I said, from 2017 this regime was implemented for 50 other regulators, and the sky has not fallen in yet on those sectors when any changes have been made to the system.
I understand there is a perception that the growth duty may conflict with environmental duties or enforcement of protections. That is absolutely not the case. The draft refreshed growth duty statutory guidance sets out in the opening paragraph the importance of ensuring
“adequate protections for consumers and the environment.”
The growth duty does not and will not legitimise non-compliance with other duties or objectives, and its purpose is not to achieve or pursue economic growth at the expense of necessary protections. The guidance also identifies environmental sustainability as one of the seven drivers of economic growth. We set out in the guidance that natural capital and the ecosystems in which we live are fundamental to economic growth and therefore need to be safeguarded for economic growth to be sustained.
The draft SI will ensure that economic growth can form part of regulators’ decision making and purpose, thus supporting the change in behaviour being sought. By requiring the regulators to consider the growth duty, they will be empowered to consider areas that may not be reflected or may be only partly reflected in their duties, such as promoting innovation or trade growth.
The growth duty is not prescriptive and does not mandate particular actions, nor does it create a hierarchy over existing regulatory duties. The draft refreshed guidance is clear that regulators, as independent and experienced bodies, are best placed to balance their own decision making in that regard. The Government have also committed to review the impact of the extension of the SI within the related impact assessment, and will consider the impact and effectiveness of the growth duty on investment, growth, the environment and other factors in detail at the committed review point.
The draft refreshed guidance outlines drivers of sustainable economic growth supported by case studies, examples to provide clarity to regulators within scope of the duty and to help them promote growth. The guidance also identifies behaviours that contribute to good regulatory decision making and smarter regulation. The purpose of the guidance is to assist regulators to give appropriate consideration to the potential impact of their decisions on economic growth. The revised guidance encourages transparency and accountability for growth across regulators, with the aim of attracting investment and creating jobs.
The proposals are necessary to ensure that the energy, water and communications sectors strive for maximum efficiency over a sustained period. The draft refreshed guidance makes it clear that regulators should work with businesses on, among other things, the environment, trade, investment and skills to ensure sustainable medium to long-term economic growth. That will ensure that current-day economic growth can be achieved without undermining the ability of future growth. The refreshed growth duty guidance will support regulators in their application of, and reporting against, the growth duty. The Secretary of State’s overarching priority is to support businesses and grow the economy, which is what this draft instrument and supporting guidance seek to achieve today. I commend them to the Committee.
Kevin Hollinrake
I thank hon. Members for their contributions. The shadow Minister raised a number of important points about environmental protections. The new duty does not override the requirements of water companies or the regulator to ensure that environmental protections are put in place.
I would gently point out that there are two reasons why we are seeing such difficulties with our water suppliers now compared with the progressive change we have seen over recent years. First, we increased the monitoring of those dangerous parts of our system from 7% to 100% in 2010 so that we can see what is actually happening on the ground. We are also experiencing much higher rainfall, which is adding problems. To tackle this, the water companies have committed £96 billion for the period of 2025 to 2030. That is a 63% uplift on previous levels. Even before that, they were investing £6 billion annually, which is double the amount invested in capital infrastructure prior to privatisation. Work is being undertaken, but we accept that more needs to be done.
The hon. Member for Bethnal Green and Bow raised concerns about takeovers. Clearly we have a number of different vehicles we can use to mitigate those concerns, whatever sector they may relate to. We have the National Security and Investment Act 2021 and, for issues on public interest grounds, the Enterprise Act 2002. She also spoke about sluggish growth. I suggest that she checks the figures on GDP growth since 2010 or 2016 or pre-pandemic levels. We are third in the G7 and are growing faster than anywhere else except—[Interruption.] Well these are the facts. The hon. Lady can choose her own opinion, but she cannot choose her own facts. The only countries that have grown faster than us since then are the US and Canada. That is an absolute fact, so she should check the figures before saying that there has been sluggish growth.
On the question of “Why now?”, when we included the 50 regulators in 2017, we thought that the growth duty to be applied to Ofgem, Ofwat and Ofcom required further consideration, because they are economic regulators responsible for markets where operators are deemed to have monopoly or near-monopoly market power. More recently, we decided to include them within the various requirements of the growth duty.
My right hon. Friend the Member for Maldon asked about conflict. To reiterate, there is no hierarchy here. The requirements for the environment remain and are not replaced by this measure. In terms of prices, the regulator has an affordability duty as one of the requirements, so that should not override the price-setting role that is naturally played by a regulator in what is pretty much a monopoly sector.
The hon. Member for Glenrothes talked about the requirements and why we are introducing this measure. I point him to some very important stakeholders, including the Federation of Small Businesses, that have welcomed this new duty. He asks about a sovereign wealth fund, which is one of the Government’s plans—we have already announced a plan to introduce one. I would say to him that this is about growth, and point to the facts about growth in the UK, particularly in Scotland. Over the 10 years from 2011 to 2021, England’s GDP growth was 14.9%. The UK’s as a whole was 12.9% and Scotland’s was 7.2%. Growth is important. We cannot deliver the revenue that allows us to set up something like a sovereign wealth fund without economic growth. That is what this is about, so he should welcome it.
Peter Grant
The Minister’s statistics are very interesting. Can he give us the equivalent figure for England without the City of London?
Kevin Hollinrake
The hon. Gentleman can easily find the figures through the House of Commons Library, as I did. Is he envious of the City of London? We should be proud of this great city. Scotland has great cities too. I am a big fan of Edinburgh, Glasgow and other cities. What I am saying is that growth is important. The hon. Gentleman seems to think that it is not. I would ask him to think again about that perspective.
I thank hon. Members for their contributions. To conclude, by extending the growth duty to Ofgem, Ofcom and Ofwat, we will ensure that the regulators have regard to the need to promote economic growth. An economy that promotes growth is an economy that is better able to attract businesses to our shores, innovate, serve households and deliver prosperity across our nations.
Rushanara Ali
I asked the Minister about the primary and secondary objectives, and whether he sees any parallels in how these changes are thought of—I know this is about having due
“regard to the desirability of promoting economic growth”.
Does he think there is a parallel with the way that the competitive duty has been applied?
There is a potential tension to be managed in how regulators think about the importance of sector regulation and the Government imperative to promote growth. When regulatory officials think about our priorities, they might err on one side or the other, and that tension could be a problem. Does he feel that more work is needed to emphasise how the measures are applied, so that consumers do not suffer while we try to promote growth?
We need to do these things in tandem, so that we do not end up with a false economy, where damage is done to the economy through protections and standards that then cost the taxpayer a significant amount. That would leave us in the worst of all worlds, and is surely something that all different parties want to avoid.
Kevin Hollinrake
I do not disagree with anything the hon. Lady says. This is a parallel objective, not one that should replace the current objectives. It is a consideration for regulators. It is about not just obviating the risk, but looking at other factors. Investment is hugely important for our consumers and our citizens. This draft order is not about one thing or the other—for example, it will not replace the environmental duties of Ofwat. Indeed, the Environment Agency, which has had this duty since 2017, has issued about £150 million in fines to 60 different companies, so this is not about backing off on environmental protections. The hon. Lady raises an important point, however, and we have committed to reviewing how these measures will affect the general regulatory regime to ensure that there are no unintended consequences, although we do not feel that there will be, as long as the right balance is struck.
Of course, regulation must be used only where absolutely necessary, and must be implemented in a way that provides the right foundations for our economy to thrive. The purpose of the duty is to ensure that the specified regulators give appropriate consideration to the potential impact of their activities and decisions on economic growth, alongside their consideration of other statutory duties. It does not create a hierarchy over existing protections.
With that, I believe I have addressed all the questions posed by right hon. and hon. Members, and look forward to the Committee’s support and commendation of the order.
Smart Data Road Map
Kevin Hollinrake Excerpts(2 weeks, 3 days ago)
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The Minister of State, Department for Business and Trade (Kevin Hollinrake)
The Government have today published a road map which sets out what action they will take over the coming year to progress a smart data economy as a result of the new powers in the Data Protection and Digital Information Bill.
The data economy is a large and growing part of the economy. Smart data unlocks data for individuals and businesses that is currently held and underutilised in a small number of existing companies. It allows businesses to easily access this data, with consumers’ consent, to provide new services that drive investment, productivity, competitive outcomes and, ultimately, economic growth.
The Data Protection and Digital Information Bill was introduced to the House of Commons in March 2023 and passed Second Reading in the House of Lords on 19 December 2023. The Bill will provide the Government with the powers we need to deliver the benefits and safeguards required for a smart data economy, including the ability to mandate industry involvement in smart data schemes.
The road map sets out how the Government will use these powers over the coming year by identifying the opportunities and challenges in implementing smart data schemes in seven sectors: energy, banking, finance, retail, homebuying, transport and telecoms. This will help business and interested groups plan for and benefit from action in this area.
This delivers on the commitment made at autumn statement 2023 to kickstart the smart data big bang.
A copy of the road map will be deposited in the Library of the House.
[HCWS416]
Draft Post Office Network Subsidy Scheme (Amendment) Order 2024
Kevin Hollinrake Excerpts(2 weeks, 4 days ago)
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The Minister of State, Department for Business and Trade (Kevin Hollinrake)
I beg to move,
That the Committee has considered the draft Post Office Network Subsidy Scheme (Amendment) Order 2024.
It is a pleasure to speak with you in the Chair, Ms Vaz. The draft order was laid before this House on 11 December. Under section 103 of the Postal Services Act 2000 the Secretary of State for Business and Trade has the power make payments to support the provision of the post office network. The power is subject to conditions, one of which includes the cap on the total amount of funding that can be given to the Post Office in any given financial year. The current cap, set in 2011, is £500 million and we propose to increase that to £750 million. Raising the cap on funding that can be provided to the Post Office does not reflect a funding commitment. It is simply an enabling power to allow the Government to provide appropriate funding to the Post Office when needed.
The rationale for the increased cap is simple: we must avoid a situation where the Government cannot legally provide the funding that the Post Office needs for its essential activities. As all Members will be aware, there are important areas where the Government currently provide funding to the Post Office to enable it to maintain its delivery of key services across the UK.
First, there is funding for providing redress for the victims of the Horizon scandal, one of the biggest miscarriages of justice in living history. The victims must get the justice and redress they deserve. There are a number of redress schemes to which the Government are contributing funding, as well as funding associated with delivering redress schemes. It is essential that the process is not held up at any stage.
Secondly, the Government provide significant and vital funding to support the post office network. Post offices are, of course, the beating heart of our communities. Through the network of over 11,500 branches, post offices deliver essential services across the United Kingdom. There are currently over 6,000 rural branches—54% of the total network. Over 3,000 of those are described as the last shop in the village, providing vital retail, mail, parcel and banking services in one place, helping to sustain thousands of rural communities.
Such services are hugely valuable to individuals and small and medium-sized businesses in urban and rural areas across the United Kingdom. It came as no surprise to see that in the most recent Local Shop Report from the Association of Convenience Stores, post offices are identified as a type of service considered by the public to have the “most positive impact” on a local area. The Government have provided significant financial support to sustain a nationwide network—more than £2.5 billion in funding to support the network in the past decade alone. The Government remain steadfast in their support of the network and have committed to maintain the annual £50 million subsidy to safeguard services in the uncommercial parts of the network until 2025. Without that funding, many post office branches would be unsustainable.
Shailesh Vara (North West Cambridgeshire) (Con)
The Minister is making a powerful case for increasing the cap to make sure that Post Office Ltd continues with the very valuable service it provides for the community. He mentioned the Horizon scandal at the start of his speech. Is it the case that the cap we are debating today is for additional services for the Post Office to maintain the standards it has at the moment, or will some of that money go to victims caught up in the Horizon scandal? Is it a bit of both or will there be separate funding exclusively for the Horizon scandal? If all the money in compensation were taken up by the increased cap amount, there will not be enough money left over to maintain the standards of Post Office Ltd.
Kevin Hollinrake
It is, in my right hon. Friend’s words, a bit of both. It is about maintaining services, including rural services. On improving the technology, of course we need to replace the current system. It is also about compensation, and the means of delivery—the administration—of the compensation. It is important to note that not all the compensation provided—we have set a maximum budget of £1 billion for compensation—is provided through these means. There are separate means, through the group litigation order process and the new compensation process for the newly overturned convictions, which we anticipate overturning by July. They can be funded through separate means, so it is not all through this particular process, but some of it certainly is.
The Government will provide targeted investment funding to the Post Office, as the retail sector faces challenging conditions. It is still feeling the effects of changing consumer behaviour arising from covid-19, and the impact of cost of living pressures on consumer confidence arising from a range of factors, including inflation and high energy and supply chain costs, in a fiercely competitive market. As such, the Post Office is experiencing pressures as the business attempts to operate in this challenging commercial environment while meeting the cost to right the wrongs of the past.
Further pressures have also arisen through work to replace the outdated Horizon IT system. While this is a Post Office-led programme, it is essential for the future of the company and the network, and the Government have already committed to providing £103 million to support the development of the replacement system and to ensure the Horizon system is maintained before the replacement is rolled out. We provided funding to meet the company’s immediate needs for the programme and we are working closely with the Post Office to understand what funding may be required beyond this. These three areas are critical to the Post Office’s future and the current cap risks Government not being able to provide the Post Office with the funding it needs for essential activities. Having taken into account the Post Office’s current forecasts and the inflationary context since the previous cap was set in 2011, the Government considers a new cap of £750 million to be reasonable, sensible and proportionate.
Kevin Hollinrake
I thank Members for their important contributions, all of which I shall cover, if I think I can.
The hon. Member for Bethnal Green and Bow asked how the money is being allocated. As I said, this is a cautionary raising of the cap, rather than money specifically going out today. She also asked how the 2025 funding package is being spent. There is the £50 million annual subsidy for uncommercial parts of the network and £190 million to meet the costs of participating in the Post Office Horizon IT inquiry and delivering redress to postmasters. Some £103 million helps the development of a replacement for the Horizon IT system, but she might be reassured to hear that there are zero pounds for bonuses.
On our engagement with the Post Office, I meet monthly with the chief exec and other members of the board. I met today with the National Federation of SubPostmasters in one of its meetings to constructively challenge the Post Office management, which I attend on a monthly basis. I also meet the board itself—I did so recently—including the non-executive postmasters on it. I meet postmaster victims, as I did today. I was delighted to host Lee Castleton and others in Parliament today, where they met the Prime Minister and the Leader of the Opposition. It is important that those meetings are held, such as the one I did last week at Fenny Compton for a BBC programme.
The engagement is about not only righting the wrongs of the past, but the future. The post office network has a bright future, with revenue opportunities that are very much around access to cash and how the banking framework can bring more revenue into post offices. It is crucial not only to increase revenue, but to reduce costs at the centre. It is important that the Post Office itself reduces central costs so that more of the money that flows into the organisation as a whole goes to the postmasters themselves to create more profitable businesses.
The shadow Minister referred to governance. We decided to part company with Henry Staunton and the Secretary of State was absolutely right to do what she did. We hope to see improved governance with a new chair, whom we hope to appoint shortly.
We have been clear, certainly for the past 14 or 15 months in which I have been in this post, that Fujitsu has not only a moral responsibility—it accepts that, as it said before the Select Committee—to own up to how it contributed to what happened, but a financial responsibility. It will contribute significantly to the compensation bill, and we have already had conversations about when that will happen. The right approach is for the inquiry to hear all the evidence, after which we can decide how blame is apportioned and who is culpable.
The inquiry’s evidence sessions are due to be concluded by the end of this year, with the report published early next year. By that point, we will know the full extent of the compensation bill, and that is the right time for final conversations with Fujitsu about how much it should contribute. I appreciate the cross-party support for those conversations. We will have ample opportunities in debates such as this, as well as those on the Floor of the House as we debate the convictions legislation, to press the case publicly with Fujitsu that we expect a significant contribution to be made. I thank the hon. Member for Bethnal Green and Bow for her support and kind words.
The SNP spokesman, the hon. Member for Gordon, talked about the reduction in services at post offices. He was right: there is no doubt that there has been a significant reduction in the amount of money generated at the post office level compared with 10 or 15 years ago. Letter volumes are a part of that, as are Government services, driving licences and passports, but what has happened is largely due to consumer behaviour, not our interventions. We do not think it is right for us to dictate to our citizens how they should access Government services.
I am sure the hon. Member for Gordon and other members of the Committee do not go to a post office when they renew their passport or driving licence; they probably renew online. It is far more convenient for people to do that, so we should not dictate to our citizens how they access vital public services. It is very important, of course, that we find other sources of revenue for the Post Office, which I will talk about again in a second.
The hon. Member asked whether the cap would impede delivery if there was a flood of new applications for redress. No, absolutely not. This is just one of the mechanisms by which we deliver compensation. The other mechanisms are through the Horizon convictions redress scheme, which is separate, and the GLO scheme. We do not feel that the cap, as a separate means of delivering compensation, will in any way prevent the right money going to the right people.
I thank my right hon. Friend the Member for Suffolk Coastal for her engagement on the matters important to her. She is right to point out that the subsidy for the uncommercial parts of the network is £50 million. We are trying to make sure that the uncommercial parts become more commercial, to deliver more services—particularly around parcels. The Post Office is moving to parcel hubs. I think 8,000 post offices up and down the country offer their customers at least three different options for sending parcels—Royal Mail, Evri or DPD —and that number is increasing. A range of different parcel carriers can provide services, and those are all revenue opportunities for post offices.
Banking is a lucrative source of revenue for the Post Office and is getting more lucrative. As my right hon. Friend said, bank closures have saved banks around £2.5 billion a year, and that number is increasing, so it is only right that a significant proportion of that saving should go into the Post Office network and improve remuneration through the banking framework. The hon. Member for Brighton, Kemptown said that the banks should be more generous in their negotiations with the Post Office. Those conversations are progressing reasonably well, but we are keen to make sure there is a better deal for the Post Office and that significant amounts of revenue flow into post offices through that source.
Additionally, Government legislation on access to cash means that banks are forced to leave behind in the communities they abandon banking facilities that include post offices and banking hubs. There will be between 500 and 1,000 banking hubs rolled out over the next few years. There are 40 already, but another 60-odd are in the pipeline, so there will be significant numbers of banking hubs around the country, which represent opportunities for postmasters, who tend to get the first bite of the cherry to operate those hubs.
Lloyd Russell-Moyle
The banking hubs are particularly good where banks are leaving, but communities already bereft of their bank have not had the opportunity for the post office to come in, so there is still work to be done. Does the Minister agree?
Kevin Hollinrake
Yes, I do. There can be timing differences, and we urge the banks to put those facilities in place before they leave those communities. Banks are separate commercial entities, and we have legislated to say that they must provide services such as access to cash in those communities. We have made those steps, and they are resulting in significant numbers of banking hubs being rolled out across the country, which are opportunities for our communities and our postmasters.
My right hon. Friend the Member for Suffolk Coastal mentioned the Kelsale outreach branch, which we have met about. We are keen to support her campaign to ensure those communities are still well served. She is right to point out that there should be transparency around where that money goes. A £50 million annual subsidy is going into the Post Office every year, some of which, potentially, will be provided through the raising of this cap. It is also about the Horizon IT inquiry and redress, and the IT system. The key message we have for Post Office Ltd is that it should be reducing costs at the centre to ensure that more of that subsidy, and more of the income resulting from the services provided by post offices, is going to the postmasters to make those post offices more financially viable, so that we see fewer closures.
The hon. Member for Brighton, Kemptown asked about what criteria we apply when talking about which post offices to put where. There are clear criteria. There are around 11,700 post offices across the country, and 99% of the population should be within three miles of a post office. The hon. Member mentioned a 10-minute drive; three miles in 10 minutes is probably on the same page, depending on where we are talking about—sometimes in north Yorkshire it takes longer than that. Those access criteria were set in 2007-08, during a previous Administration.
The hon. Member for Brighton, Kemptown wants to increase the subsidy. I hear what he says, but I do not know where he is going to find the money—perhaps he could talk to the shadow Chancellor about that. As far as the Government are concerned, we are providing a significant amount of money to the Post Office to ensure that it is sustainable. However, we want it to be independently viable, and that is about driving revenue while reducing costs at the centre. That is our clear strategy. The hon. Member also asked whether all the money for all the schemes is coming through the raising of the cap. No, it is not. There are other schemes and methods of getting money into payments of redress: the GLO scheme and the Horizon convictions redress schemes.
In conclusion, the Government are committed to ensuring the long-term sustainability of the Post Office, and are working closely with it to ensure that the company receives the funding it needs. The Post Office needs to continue righting the wrongs of the past from the Horizon scandal, to go on providing essential services across the UK, and to invest in the future through programmes such as the replacement for the Horizon IT system.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Post Office Network Subsidy Scheme (Amendment) Order 2024.
Draft Code of Practice on Dismissal and Re-Engagement
Kevin Hollinrake Excerpts(2 weeks, 6 days ago)
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The Minister of State, Department for Business and Trade (Kevin Hollinrake)
I beg to move,
That the Committee has considered the draft Code of Practice on Dismissal and Re-Engagement.
It is a pleasure to serve with you in the Chair, Sir Graham. The code of practice, which I will refer to as “the code” for the remainder of the debate, will give legal force to accepted standards about how employers should act when seeking to change employees’ terms and conditions.
The Government have been clear that threats of dismissal and re-engagement should not be used as a negotiation tactic by employers. When the covid-19 pandemic led to cases of dismissal and re-engagement, the Government asked ACAS to conduct an evidence-gathering exercise to help us better understand the issue. Its report was published in June 2021. The Government then went further, asking ACAS to produce new guidance to ensure that employers are clear on their responsibilities when considering making changes to employment contracts. The guidance was published in November 2021. ACAS has also published guidance for employees.
The Government are now going even further to address the use of dismissal and re-engagement by introducing the code, with the aim of ensuring that the practice is only ever used as a last resort and that employees are properly consulted and treated fairly. The code seeks to ensure that where an employer wants to make changes to an employee’s terms and conditions, the employer engages in meaningful consultation with a view to reaching agreement with employees or their representatives in good faith. The code will apply to all employers, regardless of their size, and we expect all employers in relevant scenarios to adhere to what it sets out. Employment tribunals will have the power to apply an uplift of up to 25% of an employee’s compensation if an employer unreasonably fails to comply.
In accordance with the Trade Union and Labour Relations (Consolidation) Act 1992, the Secretary of State consulted with ACAS on a draft statutory code before publishing it. Between January and April 2023, the Government publicly consulted on a draft code, enabling trade unions, employers and other interested parties to contribute their views. Careful consideration was given to those views, and changes were made to the draft code as a result. The Government are grateful to all respondents to the consultation for their considered and helpful responses. An updated draft code was laid in Parliament on 19 February. The Government response to the consultation was also published on 19 February.
There are calls to ban the practice of dismissal and re-engagement, and suggestions that we should legislate to restrict its use in a manner that would amount to an effective ban. The Government believe, however, that we must preserve companies’ flexibility to manage their workforce in times of crisis. The UK’s flexible labour market is key to economic growth and helping businesses to thrive. Therefore, it is right that we have mechanisms to enable us to save as many jobs as possible.
The code is a proportionate response to dealing with controversial fire and rehire practices, balancing protections for employees with business flexibility. The vast majority of employers want to do the right thing by their employees. For most employers, decisions to change terms and conditions are not taken lightly, and nor is the choice to let members of their workforce go.
The UK is a great place to start and grow a business and has a strong labour market. Its success is underpinned by balancing labour market flexibility and worker protections. It is vital that we continue to strike the right balance while clamping down on poor practice. If the code is approved by the House, it will be issued and brought into effect by the Secretary of State in accordance with the procedure set out in section 204 of the 1992 Act. The Government’s intention is for the code to be in effect by summer. I hope that Members will support it.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to see you in the Chair this afternoon, Sir Graham.
I thank the Minister for his introduction of the code of practice. It has taken more than two years, but we are finally here debating the action promised by the Government on dismissal and re-engagement. When the Government committed to introducing this code, there was a moment of consensus across the political spectrum that the situation we saw with P&O Ferries, which summarily sacked almost 800 workers over Zoom, could not happen again. The Business Secretary at the time, the right hon. Member for Welwyn Hatfield (Grant Shapps), said that
“we will not allow this to happen again…where new laws are needed, we will create them…where legal loopholes are cynically exploited, we will close them, and...where employment rights are too weak, we will strengthen them.”—[Official Report, 30 March 2022; Vol. 711, c. 840.]
Well, I am sorry to say that those legal loopholes remain as open today as they did two years ago, and there is absolutely nothing to stop the outrage of P&O happening again. Why do I say that? It is there in black and white in paragraph 12.3 of the explanatory memorandum to the code of practice, which says that
“the Code does not impose any new legal obligations and operates within the current legal framework”.
That, in the final analysis, is why this code of practice is such a let-down—another promise broken, another capitulation to the bad bosses and another reason why it is time for change.
It has taken two years to get to this point. In those two years, P&O has still been benefiting from Government contracts, and all the while, fire and rehire continues to pollute the country’s industrial relations landscape. While the P&O Ferries case was not wholly a fire and rehire situation, I will return to it later, because it bore many hallmarks of the practice and exposed the gaps in our laws designed to protect workers, where employers with deep enough pockets could use fire and rehire to disregard our laws.
In the wake of the pandemic, there has been a jump in the number of employers using fire and rehire. Research by the Chartered Institute of Personnel and Development found that between 2021 and 2023, the proportion of firms using fire and rehire had almost doubled. Many well-regarded household names attempted to do so, including Tesco, Clarks and British Airways. What was once a seldom-used device has become a mainstream practice and part of a wider pattern of growing insecurity at work. In short, it has become a first choice rather than a last resort.
Kevin Hollinrake
The hon. Gentleman raises P&O, which I must point out is specifically not a case of fire and rehire. What is the Labour party proposing to stop another P&O situation happening in future?
Justin Madders
I thank the Minister for his intervention, but we have been down this road before where he keeps asking what Labour’s policies are. My answer is, “Call a general election and we’ll have a debate about these things.”
Justin Madders
The Minister knows perfectly well where our policies can be found. The new deal for working people has been well advertised and well covered in the press. As he knows, there is a lot of support for our proposals to end fire and rehire.
As a TUC investigation recently found out, around 38,000 employers were using fire and rehire as a tactic. In that context, we need to scrutinise the draft code of practice and consider whether it will end the commonplace use of those tactics. I am afraid that, despite having had two years to get this right, we are no closer to ending the scourge of fire and rehire. The code of practice is vague, it is weak and in its final analysis, it will not prevent another case as egregious as P&O. On that basis, the Government have failed to keep the promise they made two years ago.
Let us take the element that many people found most offensive about P&O: the fact that at the outset, its management were able to look at the sanctions that they were potentially liable for and decide whether they wanted to break the law. The cost of breaking the law was considered as just another business overhead to be factored in when making decisions and, as we saw, P&O decided that the sanctions were not a strong enough deterrent to prevent rule breaking.
It is welcome that the code of practice gives an indication to unscrupulous employers that they cannot get away scot-free with breaking the law. However, we have concerns that the 25% uplift on awards at tribunals for employers who have been found to have unreasonably failed to comply with the code will not be strong enough to deter bad employers.
First, we have concerns about the inclusion of an award cap in the code of practice. As I have mentioned, it was particularly concerning that P&O was able to look at the options and perform a cost-benefit analysis of whether to conform with the law. It knew the maximum penalty it would face in compensation for each employee, which it then priced into its decision. In effect, it was able to treat the law on compensation—a law that is in place to protect workers’ jobs and their dignity—as optional. What the code of practice means, in effect, is that breaking the law remains an option, though it is now slightly more expensive than it used to be.
Laws are only as strong as their enforcement, so we believe that sanctions should reflect the egregiousness of the transgression. If an employer decides to break the law, their sanction should not be capped but should instead be decided on the basis of the facts. That way, any employer tempted to brazenly flout their legal requirements would no longer be able to calculate the costs of doing so, because in the most serious cases that cost would not be knowable and they would have to take their chances in court. Smaller transgressions would be treated by a tribunal. As it stands, the most egregious cases still have a ceiling, which means that those who act with ill intent can still price in the cost of acting unlawfully.
The code of practice therefore retains the status quo, whereby an employer can look at the maximum fixed penalty associated with breaking the law and, in effect, choose whether they will abide by it. It is workers who suffer the consequences. Some bad employers might see consultation requirements as burdensome, but there is a reason why the law requires consultation.
The consultation process is a vital opportunity for the voices of workers and their representatives to be heard, and for alternative proposals to be put forward to save jobs and protect conditions. When consultation works best and is meaningful, it can benefit employers and employees. There are, thankfully, many good employers who understand that and work collaboratively with trade unions. We commend those employers, and we know that they already go above and beyond their legal requirements. However, this code of practice needs to be set in a robust framework for bad employers, who sadly are out there. Frankly, there is no evidence that the 25% uplift will act as a deterrent.
I would like to hear what the Minister has to say about that, because I do not know how he can confidently assert that a 25% uplift will actually prove to be a deterrent. In response to my written question about the use of compensatory uplifts by employment tribunals, he said:
“Data on the use of compensatory uplifts by Employment Tribunals is not collected.”
That means that the Government do not know how much the compensatory uplift is used in other areas of employment law where there is a similar code of practice. That gives rise to the question: on what basis has it been decided that this measure is effective in preventing employers from failing to follow the code of practice? Does the Minister have evidence of its effectiveness that he can share with us today?
It is also worth reminding Members that this deterrent will not come into force straightaway. As the Minister indicated, secondary legislation is required to amend section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992. He said that that will be introduced this summer. Will he confirm whether that means before the recess or at a later date over the summer? It would be useful to get a date for the introduction of that secondary legislation.
It must also be pointed out that under the current drafting of the code, the sanctions can be awarded only if an employee has been found to have been unfairly dismissed. We know how easy it is for an employer to dismiss a worker in the modern economy. Of course, generally speaking, those with less than two years of continuous service cannot be considered to be unfairly dismissed. Some may sign settlement agreements that offer them their statutory entitlement, but a hard-nosed employer may say, “Well, if you want to argue for an extra 25%, take your chances at a tribunal,” where the cost to the employee might be more than the potential sum to be gained.
On top of that, the code of practice protects only “employees”, meaning that some of the most insecure workers in the labour market will not benefit one jot. To add icing to the cake, or salt to the wound, the Government intend to reintroduce employment tribunal fees, which we know from experience have a significant impact on people’s ability to enforce their rights. Will the Minister provide an assessment of how many people will benefit from this code of practice, and how many employers he believes will not use fire and rehire as a result of it?
Paragraph 14 of the code refers to a 25% reduction in compensation where the employee—not the employer —unreasonably fails to comply. Is it the Government’s intention to give tribunals the power to reduce employees’ compensation in fire and rehire cases, and if so, what element of the P&O case led the Minister to conclude that that was necessary? As the TUC pointed out, the uplift does not cover redundancy situations. As we know, P&O was in part a redundancy situation, where surely the same sanctions should apply. Will the code apply where workers are replaced with agency staff?
Turning to the substance of the guidance, I have made the general point that, as is clear from the explanatory memorandum, the code creates no new legal obligations. That is sadly reflected in the number of times that the code says that an employer “should” rather than “must” do something. I will not list every example—I appreciate that people have other places to be—but there are some important instances where “should” comes in, such as paragraph 16, which says that the employer “should” consult in good faith. Paragraph 23 says that
“the employer should consider what information could be provided about…the proposed changes”.
Paragraph 28 says that the employer
“should genuinely consider the points that are put forward”,
and paragraph 31 says that
“a threat of dismissal should not be used as a negotiating tactic”.
On the last of those, why not say that the threat of fire and rehire “must” not be used as a negotiating tactic? I am pretty clear that that is what Ministers had in mind when they made those promises two years ago. Why is it a requirement only that an employer “should” consult in good faith? Surely we want every employer to consult in good faith; there should be a legal requirement for them to do so.
Justin Madders
Employers should do, yes—and that should be enforced in law.
There is a similar issue with the guidance offered in the code on the provision of information and how to conduct consultation with workers. Instead of clearly and unambiguously stating what information employers ought to provide, the code relies on the phrase “as reasonably possible” on numerous occasions. Instead of providing concrete guidance on the timeline of providing information, paragraph 21, for example, simply states:
“Information should be provided as early as reasonably possible.”
Similarly, paragraph 22 states that
“employers should share as much information regarding the proposals as reasonably possible”
in order for employees and their representatives to understand the plans and ask questions. Section D on consultation states that an employer should
“genuinely consider any reasonable alternative proposals”
and should
“consult for as long as reasonably possible in good faith, with a view to reaching an agreed outcome”.
Those statements are not really anything other than restatements of the existing legal principles on consultation, and the repeated references to “should” rather than “must” mean that in reality, the code does not strengthen protection for workers at all.
Insomuch as there is concrete guidance about the provision of information, I suggest that it is insufficient. Paragraph 23 lists the information that could be provided, such as the proposed changes, who will be affected, the business reasons for the changes, the timeframe, any other options considered, and next steps, but those are not the only pieces of information that unions or other representatives will require to propose truly viable alternatives to fire and rehire. It is unclear why the Government have chosen not to be more prescriptive with the types of documentation that could be provided. The TUC recommended that the list be expanded to include information similar to that set out in paragraph 11 of the ACAS code of practice on the disclosure of information to trade unions for collective bargaining purposes. That would mean that unions and other representatives could get sight of more information about a number of elements relating to staff, including productivity and efficiency data.
Perhaps most importantly, financial information would also be available—cost structures, profits, assets, liabilities and forecasts—which would help to formulate a credible alternative plan. In particular, financial information would help those representing the workforce to determine whether the financial position of the company was such that some sort of action was justified, as opposed to the situation that we often see in fire and rehire, where the company is making a healthy profit on the face of it but refers to vague and sometimes intangible reasons for the proposed changes. It may even refer to something as vague as
“the strategic direction of the business”,
which is mentioned in the first paragraph of the code of practice.
Choosing not to include that level of prescription in the code will limit the ability of unions and other representatives to suggest ways to avoid fire and rehire. Indeed, what we are presented with in the code of practice is perhaps the exact opposite of what ought to be best practice.
In particular, paragraph 27 of the code gives employers the opportunity to withhold information should they believe it to be commercially sensitive. The employer alone decides what to disclose, so they can hide behind that catch-all paragraph to keep whatever they want private. Yet the sharing of confidential and commercially sensitive information is commonplace in good industrial relations, and it can be the basis of a shared conversation to find a solution, particularly in cases of fire and rehire, when access to documents such as financial forecasts is critical to unions being able to assess the firm’s position and suggest viable alternatives. Instead of encouraging employers to withhold such information, as the code of practice does, it should suggest ways to facilitate the sharing of sensitive information. The code could easily have talked about circumstances in which it would be appropriate to disclose such information to the appropriate reps, perhaps on the condition of confidentiality, but it chooses not to.
Another glaring omission is the lack of clear and concrete guidance as to how to conduct an effective consultation process. There are comments that remind employers to conduct a meaningful negotiation and process, but no guidance on how to actually go about it. In its consultation response last year, the TUC suggested that the relevant section should include practical guidance about how to go about conducting an effective process. It recommended that there should be guidance on the exchange of written information, including responses to demonstrate that employers have actively considered alternative proposals. Those are the standards that we want to see in a good and effective consultation process. Of course, most employers want to do their best, so why shy away from providing that level of detail?
Instead of paying lip service to the idea of conducting a meaningful consultation, more practical guidance could drive up standards and ultimately improve the outcome of the consultation process. That is far beyond what is included in the code of practice. In fact, paragraph 25 states that the provision of information in writing is not even an obligation, but just “good practice”. Are the Government really saying that the information in consultation exercises does not have to be provided in writing? That sums up the failings evident in the section of the code of practice that deals with information and consultation. It is vague, it is weak and it does not encourage employers to make the most of the opportunities to avoid imposing changes on their workforce.
I want to say a few words about the advice in the code of practice that fire and rehire should be used only as a last resort. The code of practice is clear that it does not mean a last resort in the sense that there is no alternative to the action other than insolvency or redundancies, for example; rather, the suggestion is that it can be used as a last resort if negotiations are not successful. In practice, that means that employers can, as they do now, use the most spurious of reasons for proposing fire and rehire, but as long as they can show that they have attempted some consultation, they can still do it.
That brings me to the question of what an employer will be expected to produce to show that it considers its decision to fire and rehire as a last-resort measure when consulting unions and, indeed, when the matter is taken to a tribunal. Will that include anything to do with the disclosure of financial records, business forecasts or accountancy advice? In the absence of such information, how will unions be able to differentiate between employers considering dismissal and re-engagement as a genuine last resort and those that use it as a scare tactic? These fundamental points should have been addressed in the code of practice.
The original code of practice contained a whole paragraph that stated that, before making the decision to dismiss workers,
“the employer should take some time to reassess its analysis and consider carefully again”.
It listed conditions such as whether it was “truly necessary” to impose the new terms, whether any
“alternative options…could achieve those same objectives”,
and whether the changes would impact those with protected characteristics. In other words, it set out a much more thorough process than we have ended up with in the final version of the code of practice.
The removal of those requirements can be seen only as a capitulation to the interests of bad employers who disliked the idea of having to re-examine their business case to make sure that the imposition of changes was absolutely necessary. The consultation response notes:
“Some respondents indicated that re-examination would be overly burdensome for employers, suggesting a lighter-touch approach with employers reviewing only specific proposals, rather than their entire business strategy.”
I do not think that language sends out the message that fire and rehire is a last resort. It would be helpful if the Minister took the opportunity to explain why the decision was taken to water down the requirements in the original draft code of practice.
It seems clear to me that the changes reflect more of an intent to reduce concerns about the code being burdensome on business than an intent to protect workers from having new terms and conditions imposed on them. I suggest that those are not the actions of a Government intent on curbing the use of fire and rehire. We were clear that the original draft would fail to do so, but now that the draft has been further watered down it seems even more ill-equipped to deal with the scourge of fire and rehire.
Finally, the Minister will be aware that the P&O case led to a report and recommendations by the International Labour Organisation’s committee on freedom of association. That report came out at the end of last year. Can the Minister update us on what actions the Government have taken in response, and whether they intend to implement all the ILO’s recommendations?
What we have before us is a code of practice that fails to deal with the fundamental reason for its creation, which is to stop another case as egregious as that of P&O. It has taken two years to get to this point, yet we are no closer to the protections that workers in this country deserve. The code of practice represents a missed opportunity to right the very real wrongs that we have seen up and down this country for far too long.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
It is a pleasure to see you in the Chair, Sir Graham; I suspect that this Committee sitting is a lot more sedate than some others that you have chaired recently. It is also a pleasure to follow the Labour spokesperson, the hon. Member for Ellesmere Port and Neston, whose speech I agreed with in its entirety.
The Minister said that most employers want to do the right thing by their employees. I think most of us would probably agree, but too many employers do not. Sadly, that includes some of the UK’s biggest and best-known companies. The draft code is largely useless; it is a lamentable waste of parliamentary time, and I dread to think how many civil service hours were wasted on its drafting. Other than the possible—I stress “possible”—increase of up to 25% in any successful employment tribunal claim following an incident of fire and rehire, the 3,819 words in this document can be distilled to nine: “Please don’t fire and rehire…unless you have to.”
Further to the point that the Labour spokesperson made, paragraph 12 states:
“A failure to follow the Code does not, in itself, make a person or organisation liable to proceedings.”
All it does is potentially beef up the amount awarded to an employee when a tribunal finds that their employer acted outwith the law. That is no comfort whatever to someone who has just been brutally sacked, paid off and forced to claim the pittance of jobseeker’s allowance that the Government like to pretend is enough to live on.
According to the latest figures, it takes nearly a year from the employment tribunal receiving a claim to the first hearing. The 25% premium that breaching the code of practice might add to an award will be welcomed by a successful claimant, of course, but they will have had to wait longer than a year to get it. They will have been forced into alternative employment in the meantime, if they are lucky. It is toothless and a missed opportunity, to say the very least.
As the hon. Member for Ellesmere Port and Neston noted, paragraph 15 states:
“Where this Code states that a party ‘must’ or must not do something, this indicates that that party is subject to a legal requirement. Where this Code states that a party ‘should’ or should not do something, this indicates a recommendation”.
Other than in paragraph 15 itself, the word “must” is used 10 times in the code, of which nine uses reflect existing legal obligations; the only use of the word “must” in relation to the code itself is in the provision stating that tribunals must take the code into account in relevant proceedings. On the other hand, “should” is used another 38 times.
The truth is that the code is little more than a wish list—a tick-box exercise so that it can be said that something has been done about fire and rehire. Moreover, as has been alluded to, a code of practice will have little effect on the likes of P&O Ferries. It, and future employers, will simply factor in the 25% increase in employment tribunal awards into the costs of doing business.
I was at the joint meeting of the Select Committees on Transport and on Business, Energy and Industrial Strategy when we had the chief executive of P&O Ferries, Peter Hebblethwaite, in front of us. Many will remember his contemptible attitude to the law as it stood: he happily admitted that his company willingly and knowingly broke the law when it sacked 800 workers with no notice and no consultation. At the same time that P&O Ferries was evicting staff from ships and shoving their belongings into binbags on the quayside, its parent company DP World was forking over tens of millions to sponsor golf tournaments and was shoving $378 million into the pockets of shareholders, so the Minister will forgive me for being sceptical about the idea that a slightly beefed-up code of practice will make the next Peter Hebblethwaite think twice before dumping hundreds more workers in the skip to save the company a few bob.
When British Airways’ parent company, International Airlines Group, pulled the trigger on a fire and rehire action aimed at tens of thousands of staff in 2020, it could only do so in the UK. In Ireland and Spain, it was precluded from taking similar action because those countries have employee protections that stop employers treating their staff like chattels.
I welcome any action or progress that improves the lot of workers, particularly given the removal of so many of their bargaining rights over the past four and a half decades and the attempted defenestration of trades unions in this country—policies that have undoubtedly contributed to the UK falling further and further behind our European neighbours economically and socially—but the Government’s draft proposals are basically a sop to those of us across the House who have highlighted the egregious practices of fire and rehire and pushed for real action. This is not real action; it is a press release that will do nothing to stop the perpetrators carrying on as before.
Many of the provisions of the Trade Union and Labour Relations (Consolidation) Act 1992 that this draft code hangs on to provide for criminal offences where the Act is breached. Perhaps it is time to bring the actions of the likes of P&O Ferries and the issue detailed in the draft code under those kinds of auspices. After all, it seems only fair that employers should be subject to the same potential consequences as employees. Mr Hebblethwaite’s attitude a couple of years back may have been somewhat less arrogant and cocky if he knew that his actions would result in him facing some time at His Majesty’s pleasure in Belmarsh.
Kevin Hollinrake
I am aware that the hon. Gentleman has a private Member’s Bill that would ban fire and rehire—that is the position that he has adopted, and I respect it—but with P&O it was not fire and rehire; it was simply fire. What further measures is he suggesting that the Scottish Government or UK Government put in place to stop that happening in the future? P&O already broke the law. Is he proposing criminal sanctions connected to employment law?
Gavin Newlands
Of course I would suggest criminal sanctions to end such practices. The Minister is right to say that P&O did not use fire and rehire in the strictest sense, but there were elements relating to fire and rehire. In a sense, it was fire and replace. Those staff members were replaced by cheaper foreign workers. That is the truth: the jobs were not redundant. If I were to bring forward another law, I would ensure fire and replace were also made illegal in circumstances such as those at P&O. As it happens, fire and replace is not new; it was actually proposed back in 2002 by one Tony Blair during the firefighters’ pay dispute.
We have a real problem around employment rights in the UK. The balance has been tipped over the last four and a half decades far too far towards employers and away from ordinary women and men who need the protection of the law against what is thankfully the minority of unscrupulous employers. Forty-five years of continual assault on workers’ rights has left millions essentially at the mercy of bad bosses, or subject to the gig economy and classed as “contractors” by multinational corporations desperate to avoid taking any responsibility for them and their or anyone else’s welfare.
Those lost decades need to be reversed. Sooner or later, the UK parties have to realise that workers’ rights are a fundamental part of building a stronger economy. It is no coincidence that virtually every country in Europe has stronger workers’ rights and better protections for their workers, and also enjoys higher living standards and a more robust, more diverse economy and social infrastructure.
Unfortunately, I do not hold out much hope for an improvement after the next general election. I know that there are many, many good people in the Labour party—including in this room—but the Leader of the Opposition has shown little interest in workers’ rights. I am still waiting for a response to my letter asking for his support of my Bill to ban fire and rehire, and the slew of shadow Ministers proclaiming their admiration for Margaret Thatcher do not inspire much confidence that they will roll back her and her descendants’ attacks on workers’ rights.
Kevin Hollinrake
I thank the hon. Members for Ellesmere Port and Neston and for Paisley and Renfrewshire North for their contributions. I will start with P&O because that has dominated most of the debate, despite the fact that it was not a case of fire and rehire. It was a disgraceful case and it broke the law. I am interested to understand what Members are proposing when we already have a law against this. The SNP spokesperson, the hon. Member for Paisley and Renfrewshire North, said that he would criminalise employment law. His proposal to criminalise some of this stuff might send a shiver up the spine of many employers in this country.
P&O Ferries broke the law, dismissing its workers without warning, which is completely inappropriate, and brought in agency staff to replace them. We have taken action in response, including legislating through the Seafarers Wages Act 2023, and there is an ongoing live investigation by the Insolvency Service into P&O’s conduct.
Gavin Newlands
The Minister talks about criminalising employment law or being aghast at the potential for criminalising employment law. I think there are certainly aspects that perhaps should be. How would he describe a business leader who knowingly and willingly broke the law to sack 800 workers and said he would do so again? Does the Minister not think that that person should face a criminal sanction?
Kevin Hollinrake
What that business leader did was disgraceful. We impose criminal sanctions on employers very cautiously because we want people to invest in our economy. That is hugely important. We make changes in employment law at our peril. It needs to be balanced between the needs of employers and employees.
Kevin Hollinrake
Perhaps the shadow Minister will answer this question as part of his intervention. In The Telegraph, Archie Norman, one of the foremost business people in this country, who has done tremendous work in making sure that people have good employment opportunities, described Labour’s potential package in the area of employment law and the changes the party intends to make. He said that the changes would reduce flexibility, make it more costly to hire people, deter people from entering the workplace and deter investment. Perhaps the shadow Minister will address Archie Norman’s criticisms when he intervenes.
Justin Madders
I could, but I fear that Sir Graham might say I am out of order. It comes as no surprise that a former Conservative MP would want to prevent the extension and strengthening of workers’ rights. The Minister said that there is no room for criminal law, but is it not the case that his Government referred the matter of P&O Ferries to the Insolvency Service for potential criminal proceedings?
Kevin Hollinrake
Yes, corporate criminal proceedings, not individual criminal proceedings. I think that what the hon. Member for Paisley and Renfrewshire North refers to is individual criminal sanctions, which would be disproportionate. If the hon. Member for Ellesmere Port and Neston thinks that a Conservative politician is only on the side of the employer, I do not think he has met Archie Norman. Perhaps he might benefit from a meeting with him. He is a very considerate employer who understands the need to treat employees right as well as make sure the framework is right for business in this country.
The hon. Member for Ellesmere Port and Neston asked why the 25% uplift would prove a sufficient deterrent. Clearly, it is a deterrent, because it is more than an employer would have to pay if they go through the simple process of consulting their workforce. I might describe it as bleeding obvious. The actual impact remains to be seen, but we certainly think it is a significant deterrent. The hon. Gentleman asked whether it will be implemented before, within or after the summer recess; we are intending to do so before the summer recess.
The hon. Member for Ellesmere Port and Neston also asked about these provisions applying only to employees with two years’ service. He is right to say that generally, unfair dismissal rights are around only after the first two years, unless there is something like discrimination, for example. I know the Opposition are seeking to change this in their proposals, which we think is disproportionate and wrong. In a collective situation, however, there are circumstances where people who have been in the workplace for less than two years are covered.
On the point about “should” and “must”, we are dealing here with provisions that will be heard before a court. A court can make the judgment, of course, on whether somebody has done the right thing. I think “should” is the right kind of phrase to use in that situation, because a judgment is made and the tribunal can award up to 25% on top of the normal financial requirements if an employer unreasonably fails to comply with the code. That joins the circle, in terms of making sure that this code is effective when people go before a tribunal.
The hon. Gentleman asked about the ILO. We are carefully considering the committee on freedom of association’s recommendations, and will provide information to the ILO in due course.
The hon. Gentleman also asked about some of the changes and said that they have been watered down, but that is not the case at all. We did make changes following consultation, and did some reordering to make it more straightforward, which was based on feedback we received. We also made changes suggested by trade unions, including saying that employers have to speak to ACAS before raising fire and rehire, and adding the award to claims that can attract 25% uplift for non-compliance.
Justin Madders
In the Government response to the consultation, there are some lovely pie charts showing the responses.
Justin Madders
I am glad the Minister has been looking at the artwork. A large proportion of responses —sometimes as high as 40%—to the question, “Do you agree?” are categorised as “unspecified”. Is the Minister able to explain what that covers?
Kevin Hollinrake
Not off the top of my head, but I am happy to confirm it via separate means.
The hon. Gentleman also said that the code should be more detailed in specifying exactly how a consultation might take place. We think that would be the wrong approach, and that the employer is the right person to determine that, in terms of how he or she consults members of their team. We did not want to get a very lengthy code that would naturally result in being too specific about exactly how that consultation should take place. I think I have covered all the points raised by the hon. Gentleman; he can intervene on me if I have missed anything.
Justin Madders
I have just one small point. The code of practice referred to compensation being reduced by 25% for employees not compliant with the code. Is the Minister able to confirm whether it is the intention for that to apply in this case?
Kevin Hollinrake
I do not quite understand the hon. Gentleman’s question. Perhaps we can have a discussion about that afterwards.
To conclude, we are taking robust and appropriate action in this area. We believe that a statutory code of practice is a proportionate response to dealing with controversial fire and rehire practices. The code will address the practice of fire and rehire, aiming to ensure it is only ever used as a last resort, and that employees are properly consulted and treated fairly. It clarifies and gives legal force to accepted standards about how employers should behave when seeking to change employees’ terms and conditions. Employment tribunals will have the power to apply an uplift of up to 25% of an employee’s compensation if an employer unreasonably fails to comply with the code where it applies. Subject to approval by this House, the code will be in force later this summer, prior to recess, and I hope Members will support it.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Code of Practice on Dismissal and Re-Engagement.