Draft Recognition of Professional Qualifications and Implementation of International Recognition Agreements (Amendment) Regulations 2023
Kevin Hollinrake Excerpts(5 months, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
I beg to move,
That the Committee has considered the draft Recognition of Professional Qualifications and Implementation of International Recognition Agreements (Amendment) Regulations 2023.
It is a pleasure to serve with you in the Chair, Sir Mark. This statutory instrument, which was laid before the House on 17 October 2023, will implement the recognition of professional qualifications provisions contained in the UK’s free trade agreement with Norway, Iceland and Liechtenstein—the European economic area European Free Trade Association states.
The regulations place a duty on UK regulators to recognise comparable professional qualifications obtained in Norway, Iceland and Liechtenstein. They provide certainty for professionals with qualifications from those countries who want to be recognised by UK regulators and work in the UK. UK professionals also benefit from reduced barriers when having their qualifications recognised in Norway, Iceland and Liechtenstein. This is good for business and good for jobs.
First, I will give the background. The UK signed a free trade agreement with Norway, Iceland and Liechtenstein in July 2021. Chapter 12 of the agreement outlines a comprehensive system for the recognition of professional qualifications between the parties. Under the agreement, UK regulators are required to recognise comparable professional qualifications obtained in Norway, Iceland and Liechtenstein, and regulators in Norway, Iceland and Liechtenstein are required to recognise comparable professional qualifications obtained in the UK. The UK must meet the terms of the agreement by 1 December 2023.
When negotiating the agreement, the Government sought to strike a balance between providing continuity with the previous EU-derived arrangements and minimising the burden on regulators. These provisions, on recognition of professional qualifications, are important for boosting trade in professional services and for supporting professionals to enter the UK labour market.
The regulations will implement the terms of the agreement into domestic law, and place a duty on UK regulators to recognise comparable professional qualifications obtained in Norway, Iceland and Liechtenstein. To do this, the Government are using powers contained in section 3 of the Professional Qualifications Act 2022, and this is the first use of those powers. Enshrining the system in legislation is necessary to ensure that the UK fulfils its obligations under international law. Without the regulations, some regulators will not have the necessary legal powers to meet the requirements of the agreement.
The regulations will come into force at the same time that the EU-derived system for recognition of professional qualifications ends. Separate commencement regulations were recently made to revoke the previous system, and those come into effect on 1 December. That will ensure clarity and a smooth transition from the old system to the new for regulators and professionals.
Turning to the specifics of the regulations, they place a duty on all regulators of professions across the UK to recognise comparable professional qualifications obtained in Norway, Iceland and Liechtenstein. They also give regulators the powers to recognise those qualifications. Regulators will be required to treat qualifications from Norway, Iceland and Liechtenstein in accordance with the system set out in the regulations.
That system does four things: it requires regulators to recognise comparable professional qualifications; it enables regulators to refuse to recognise comparable professional qualifications, where certain conditions are met; it prescribes compensatory measures that regulators can require a professional to take in certain circumstances; and, finally, it prescribes a procedure for applications to obtain recognition. Taken together, that means that professionals benefiting from the agreement will have a clear, predictable and timely route to practise a profession in the UK.
I should also note that the regulations contain amendments to UK and devolved legislation. Those tidy up the UK statute book by removing references to related EU-derived legislation. I should inform the House that after the regulations were laid on 17 October, a correction slip was issued to address a minor formatting issue in regulation 3(1): the definition of “medical regulator” started at paragraph (d) instead of (a). That has been corrected and the corrections have been incorporated into the HTML version on legislation.gov.uk.
Regardless of those requirements, it remains the responsibility of individual regulators to set standards for their professions and decide who meets the standards. I want to assure the Committee that the Government are continuing to protect regulators’ autonomy, as prescribed by the Professional Qualifications Act. Regulators remain the experts for their professions under the regulations.
In January 2023, the former Department for Business, Energy and Industrial Strategy ran a targeted consultation with regulators covered by the agreement, fulfilling the requirements under the Professional Qualifications Act. My Department sought regulators’ views on the implementation approach and draft regulations. Respondents were generally supportive. My officials engage extensively with regulators on their feedback. Some regulators indicated that their existing sectoral legislation was insufficient to enable them to comply with the agreement. We have therefore included amendments to sectoral legislation in the regulations for a small number of professions.
This is a UK-wide SI. The Government are using concurrent powers in the Professional Qualifications Act to implement the agreement in areas of devolved competence. This approach has been taken after careful consideration and extensive engagement with the devolved Governments over the past year.
It is necessary for the regulations to cover all of the UK for two reasons. First, all regulators across the UK must be covered by legislation for the UK to be compliant with the agreement. Secondly, UK-wide legislation ensures that all regulators have the necessary legal powers to put the new system in place. That approach means that the experience of professionals with qualifications from Norway, Iceland and Liechtenstein seeking recognition in the UK will be predictable and consistent across the four nations. Importantly, it also means that those professionals will have legal recourse if a regulator fails to comply with the agreement.
In June 2023, the Department for Business and Trade ran a consultation with the devolved Governments. The consultation sought views on the implementation approach and regulations. We published the report on the consultation on 13 October 2023, as required by the Professional Qualifications Act. Amendments submitted by the devolved Governments were incorporated into the regulations. In their responses, the Scottish and Welsh Governments opposed the UK Government exercising the concurrent powers in the Professional Qualifications Act without their consent. Although our preferred approach has always been to secure the agreement of the devolved Governments, we decided to proceed without their full agreement to the instrument.
When the UK’s free trade agreement with Norway, Iceland and Liechtenstein was signed in 2021, it was clear that it contained provisions that would provide legal certainty and continued market access for professionals. The regulations bring into force the recognition of professional qualification systems contained within this agreement, meeting our obligations under international law. I commend the draft regulations to the House.
Kevin Hollinrake
I thank hon. Members for their remarks. Several points have been made, and I will try to answer them to the best of my ability. As I set out, the instrument implements the provisions of the UK’s free trade agreement with Norway, Iceland and Liechtenstein relating to the recognition of professional qualifications.
On the shadow Minister’s points, it is clearly up to employers to decide where their skills gaps are, and the provisions of the agreement can be used to fill those positions. Certainly, she can check the list of professions covered in the agreement on gov.uk. My hon. Friend the Member for Gloucester is right that the regulations relate to a range of professionals—they are not just limited to the NHS, education or anything else—but, as I say, it is up to employers to determine their skills needs and how they fill those gaps. Our points-based immigration system will be unaffected by these provisions.
On costs, as the hon. Member for Croydon Central is aware, regulators already have a requirement to recognise professional qualifications from the EU, so there should not be any further cost burdens. According to the work we have undertaken, the costs will be minimal. We did a de minimis impact assessment, and it showed no significant impact on business or public bodies.
I apologise to my right hon. Friend the Member for Hereford and South Herefordshire. F-gas stands for fluorinated gas. He is quite right that we should avoid abbreviations wherever possible to make the documents we put in front of the Committee as accessible as possible.
The UK-wide application of this instrument will ensure that the UK is fully compliant with its international obligations in the free trade agreement. It will also provide consistency across the statute book and clarity for professionals from Norway, Iceland and Liechtenstein wanting to work in the UK, and vice versa. I once again thank Members for their contributions, and I commend the regulations to the House.
Question put and agreed to.
Post Office Services: Edinburgh West
Kevin Hollinrake Excerpts(5 months, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
It is a pleasure to serve under your chairmanship, Madam Deputy Speaker. I congratulate the hon. Member for Edinburgh West (Christine Jardine) on securing this debate. She is right to say how highly valued post offices are to our communities, and to speak up for them in this debate. I promise her that I fully support her perspective, representing a rural constituency myself.
The network of roughly 11,500 branches around the UK that the hon. Member refers to is the largest retail network in the country. As she points out, a recent London Economics report pointed out how post offices not only have economic value in terms of the use of the post office itself—she referred to a gentleman with an envelope looking for a post office for a stamp—but benefit other local shops, cafés and other businesses on our high streets. The knock-on effect adds up to around £3.1 billion a year, according to that report, so we are fully aware of the importance of post offices to communities and to the economy.
I am very keen, and I have been since I took over as Minister for postal affairs about a year ago, among other duties relating to my brief, to challenge the Post Office to make sure that it is doing the right thing by postmasters. The hon. Lady quite rightly points to the level of remuneration that postmasters get. We have to get that right to make the whole network sustainable. I gently point out to her that the Post Office is a commercial business, so it is not something that I direct on a day-to-day basis, but I am keen to take forward challenges on behalf of Members on both sides of the House.
The hon. Lady is aware of the network criteria that 99% of the population must live within three miles of their nearest branch and that—this is relevant to her constituency—95% of the total urban population must live within one mile of their nearest outlet. The network actually is not in decline—more post offices opened than closed over the course of the past year—but we see fluctuations, and it is regrettable that Edinburgh West has seen closures in recent months. I know that is very disappointing for her and her constituents; we know how important the post office is for those communities.
Of course many postmasters are running franchise businesses in their own right, and many of the challenges that postmasters face are faced by many high street businesses. Consumer habits are changing the dynamic and the viability of some postmasters’ businesses, and we need to find ways to make sure that they can run viable businesses that pay them fair remuneration for their work.
The hon. Lady and other hon. Members mentioned relationships such as that with the DVLA. That has been extended until the end of March next year. We want to see a longer-term deal than that, but that is a negotiation between relevant Government agencies and Post Office Ltd.
It is the case that consumer habits are driving down remuneration, and I do not think it is for us to dictate to our citizens how they should access services. Increasingly—I am sure the hon. Lady and other Members have done this—we access services such as passport or driving licence renewal online. That is much more convenient for many people, and it is driving down remuneration significantly. Only a few years ago, some of those Government services were contributing about £500 million annually to the post office network. That is down to a few tens of millions of pounds now, again because of consumer habits, but we are keen to try to make sure that there are other opportunities for postmasters.
Jim Shannon
The hon. Member for Edinburgh West (Christine Jardine) referred to elderly people and those who are isolated in the community and do not have access to online services. Those are the people who tell me they need their post office. There are many of them. I think the Minister would probably agree that there is a duty on the Government to try to encourage the renewal of those contracts come next March, and to ensure that the people we represent are looked after.
Kevin Hollinrake
The hon. Gentleman is absolutely right. I say that both as a Member of Parliament serving a rural area and as postal affairs Minister. We want to make sure that every citizen of this entire nation is served properly. Post offices do an important job in that. We need to make sure that post offices are there, not just due to Government support, but because people use them. There are some things that we are working hard on to try to make sure that the level of remuneration, which lies at the heart of this debate, is improved.
As the hon. Member for Edinburgh West is aware, Duart Crescent and Blackhall post offices have both unfortunately closed in recent months, due to their respective postmasters choosing to resign; they were not closed by the Post Office. The Post Office is advertising those opportunities to local retailers to try to reinstate services.
Christine Jardine
On the Minister’s point about Duart Crescent, yes, the postmaster resigned, but it is proving impossible to get a replacement there and in Blackhall, because the remuneration does not encourage them. Perhaps he will bear in mind another important point: we are all buying things online, and consumers are driving that change, but Royal Mail delivers a lot of them and we often go to the post office to return or collect them.
Kevin Hollinrake
The hon. Lady makes an important point, and I will come to those comments shortly. Remuneration has to be part of the solution.
Barnton post office and Davidson’s Mains post office are both under a mile away respectively from the previous outlets at Duart Crescent and Blackhall, so there are post office services, and I understand that there are public transport routes to those services, although I have not been myself. The Government understand the disruption that the two recent closures will no doubt have caused. In October, Broomhall Drive post office opened, following a local consultation exercise in line with Post Office’s principles of community engagement, after the temporary closure of the St John’s Road post office.
Let me turn to future opportunities. Post office banking services are really important—again, they are important to remuneration—and there have been some issues with deposit limits. The Economic Secretary to the Treasury and I have applied a certain amount of pressure to banks and UK Finance to ensure that that situation is resolved, and it has improved to an extent, which is good news. We have also legislated, through the Financial Services and Markets Act 2023, for access to cash, which is really important. The Financial Conduct Authority is required to ensure that people have access to cash.
Christine Jardine
I thank the Minister for giving way again. Does he agree that, when the contract is up shortly, a longer contract, to ensure stability for post offices with the banks, and the creation of more hubs that involve post offices, will be essential?
Kevin Hollinrake
Absolutely. This is a real opportunity for the network, and not just for a longer-term contract for more stability. It has the banking framework, which forms its relationship with the banks. The banks have made around £2.5 billion of cost savings through the closure of branches. We think that a greater share of those savings should be provided to the post office network to improve remuneration and invest in productivity tools for postmasters, such as cash-counting machines, so that the job of running a post office is more lucrative. We see that as a big opportunity.
In the banking framework, we have been clear with UK Finance and Post Office that they should be ambitious in negotiations and secure extra remuneration for the network. There were some improvements to remuneration in April, but I am aware, as I speak to postmasters all the time, that those improvements have not gone far enough in their view. I work closely with the National Federation of SubPostmasters, and we hear these views all the time, so we are very alive to the difficulties.
The other big opportunity that the hon. Lady implied is in the increasing number of parcels couriered around our country. There has been an exciting development in the parcels market for the Post Office, which has just launched something called Parcels Online. For the first time, Post Office will offer a multi-carrier in-branch proposition: because the exclusive agreement with Royal Mail has ended, a customer can go into a post office and use the services of DPD, Evri and others, which are being sold by postmasters. That is a great opportunity for postmasters and may well lift their revenue. That is the kind of future we see for post offices: providing access to cash and banking services—and getting paid better and more lucratively to do so—and offering parcel hub opportunities. Those are both really important services.
The hon. Lady mentioned banking hubs. That is a slight bone of contention, in my view. At the moment, they have not really been co-located with post offices, and I would like to explore with UK Finance more opportunities for co-location where space allows. It makes little sense to have two different units on the high street when we could have one really sustainable unit. That is something we are looking at too.
On what the Government can do through direct support, we have provided more than £2.5 billion over the past 10 years and will provide £335 million between 2022 and 2025. We have also provided around £50 million through the annual network subsidy for rural post offices, as well as other measures we provide to the general business community, such as rates support worth £13.6 billion. Another £4.3 billion was announced in the autumn statement.
Matt Rodda
Would the Minister reassure me on the interoperability of post office systems with those belonging to building societies? We have talked about that before, given some of the difficulties with accessing cash in my constituency. Will he also pass on my concerns and those of colleagues to Royal Mail about the lack of cover for postal staff when they are off sick? That appears to be driving some of the problems with delivery.
Kevin Hollinrake
The hon. Gentleman is absolutely right to highlight those issues. Through the work that the Economic Secretary to the Treasury and I have done with UK Finance, more clarity has been given to postmasters about the limits for certain banks that have particular problems. The feedback I have got from postmasters is that the situation has improved, but I am very happy to hear feedback from Members of the House, including the hon. Gentleman, if that is not the case.
Of course, Royal Mail and the Post Office are two different things. Royal Mail has recently been fined for its underperformance. It has been affected by many different issues, including, of course, industrial action; it has had its share of issues this year. Hopefully it is putting those issues behind it, but we certainly expect to see a much better performance from Royal Mail going forward.
Like all retailers, post offices are facing very significant challenges at the moment. We have been clear about their value, both socially and economically—for our communities and for our economy. We will continue to work with the Post Office to ensure that both the organisation itself and the network are sustainable and fit for the future. We very much appreciate the work that the hon. Member for Edinburgh West does in this area; she quite rightly challenges me all the time on this. We are very much on the same page when it comes to making sure we have a viable network around the country, not least in our rural areas.
Question put and agreed to.
Draft Code of Practice on Reasonable Steps to be taken by a Trade Union (Minimum Service Levels)
Kevin Hollinrake Excerpts(5 months, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
I beg to move,
That the Committee has considered the draft Code of Practice on Reasonable Steps to be taken by a Trade Union (Minimum Service Levels).
It is a pleasure to serve under your chairmanship, Ms Nokes. It is good to see such a well-attended Delegated Legislation Committee.
The Government firmly believe that the ability to strike is an important part of industrial relations in the UK, and it is rightly protected by law. We understand that an element of disruption is inherent to any strike. However, strike action across our public services over the past year has highlighted the disproportionate impact that strikes can have on the public.
Taking that into account, earlier this year Parliament passed the Strikes (Minimum Service Levels) Act 2023, which seeks to balance the ability of workers to strike with the rights and freedoms of the public to go about their daily lives, including getting to work and accessing key services.
David Linden (Glasgow East) (SNP)
The Minister makes the point that he understands that people have the right to strike, but he says that strikes should not disrupt others. How does he reconcile that view with the fact that under Boris Johnson’s Government, scores of Ministers resigned at once and the Government almost ground to a halt? How does he reconcile that with what he proposes to this Committee?
Kevin Hollinrake
I do apologise, but I did not quite get the hon. Member’s point. Will he repeat it so that I can understand it?
David Linden
Does the Minister not understand that in the dying days of Boris Johnson’s Government, scores of Ministers withdrew their labour from the Government? Why is it one rule for the Tories and one rule for the workers?
Kevin Hollinrake
I cannot speak on behalf of my colleagues, but I kept doing my daily job, as I am sure the hon. Member did.
Kevin Hollinrake
I have not finished responding to the intervention from the hon. Member for Glasgow East. I kept on doing my daily duty, as I am sure the hon. Gentleman did. I will make a little progress, if I can.
The Strikes (Minimum Service Levels) Act 2023 amends the Trade Union and Labour Relations (Consolidation) Act 1992 to enable regulations to be made specifying minimum service levels and the services to which they apply. Where minimum service levels regulations are in force, if a trade union gives an employer a notice of strike action under section 234A of the 1992 Act, the employer may issue the trade union with a work notice that identifies persons who are required to work and the work that they are required to carry out during the strike to secure minimum levels of service.
Chris Stephens
The Minister mentions employers. For reasons that are unclear to me and perhaps beyond my understanding, we are discussing only one piece of delegated legislation today. Where is the code of practice for employers, and when is it likely to come before a Delegated Legislation Committee?
Kevin Hollinrake
We did not think it necessary to develop a statutory code of practice for employers, but we are producing guidance for employers on how they can comply with their regulations and engage with their workforce in such situations.
To comply with section 234E of the 1992 Act, which was inserted by the 2023 Act, trade unions should take reasonable steps to ensure that their members who are identified in a work notice comply with that notice and do not take strike action during the periods in which the work notice requires them to work.
Rachael Maskell (York Central) (Lab/Co-op)
How will the employer be compliant with GDPR requirements in a multi-union environment where lists will be going to different unions and where the employer itself will not know which unions individuals belong to? How will the Minister ensure that the names of employees will not go to unions that do not organise those particular workers?
Kevin Hollinrake
The hon. Lady may be confusing two things. The employer and the unions both have a legitimate interest in the individual they are speaking to. The employer must speak to their workforce, and I am sure the unions will speak to their members. But this is all set out in both the statutory code of practice and guidance for employers. She will see more when she sees the guidance for employers.
Rachael Maskell
I am specifically talking about a multi-union environment. Where a number of trade unions are involved, how will the Minister ensure that GDPR requirements are met?
Kevin Hollinrake
It is not my responsibility to make sure that GDPR requirements are met.
Kevin Hollinrake
Will the hon. Lady listen to my answer? The employer has a relationship with the employee —without doubt, that is a legitimate interest—and the union has a relationship with its members. I am sure we can give the hon. Lady more detail if she would like me to write to her on the point, but I do not think that there is a complicated situation here. I think she will find that it works perfectly well in practice.
Rachel Hopkins (Luton South) (Lab)
Maybe the Opposition can enlighten the Minister about workplaces in which there are multiple unions within the same work unit, representing different members. How can he assure us that the proposals set out in the code will not put employers in jeopardy of breaking the GDPR by sharing information about employees with the “wrong” union?
Kevin Hollinrake
As I say, I do not think that it is a complicated situation. As I set out to the hon. Member for York Central, the employer has a responsibility to contact their employees and union members, but I am happy to give more detail on that if the hon. Member for Luton South wants further clarification.
David Linden
Can I ask the Minister for clarification? As I understand it, the Minister said in response to my hon. Friend the Member for Glasgow South West that there will not be a need for the Government to introduce a code of practice or guidance for employers. But in response to the hon. Member for York Central, the Minister has just said that it will be provided. Which of the two is right?
Kevin Hollinrake
I do not think the hon. Gentleman was listening very carefully. I said that there was no need for a statutory code of practice for employers, but there will be guidance. We are debating the statutory code of practice for this legislation.
During the final stages of the parliamentary passage of the Strikes (Minimum Service Levels) Bill, the Government committed to introduce a statutory code of practice to provide more detail on the reasonable steps that a trade union should take. In accordance with section 204 of the Trade Union and Labour Relations (Consolidation) Act 1992, the Secretary of State consulted ACAS and, on 25 August, published a draft code of practice, enabling trade unions, employers and other interested parties to contribute their views.
Following careful consideration of those views, a number of changes were made to the draft code, and the updated draft code of practice was laid before Parliament on 13 November. It sets out four reasonable steps that a trade union should take to meet the legal requirements under section 234E of the 1992 Act. Although the code does not impose legal obligations, it is admissible in evidence and is taken into account where a court or tribunal considers it relevant.
Richard Burgon (Leeds East) (Lab)
When we strip it down, is this not really about trying to set up a whole series of complicated and uncertain hurdles so that employers or the Government can say that strike action has taken place illegally or unlawfully, and then set about trying to fine trade unions and scupper the democratic right to strike? In the Conservative party, there is a tradition of trying to avoid what it would call heavy-handed state interference in matters. Is the Government’s approach not heavy-handed state interference in the management of independent trade unions? They are trying to determine what picket supervisors and pickets will and will not say to people who have voted for strike action.
Kevin Hollinrake
The answer to the first question is no. The answer to the second question is that the legislation balances the rights of individuals to access vital public services with the rights of people to go on strike. That is the simple balance that we are trying to strike. At times the Government have to step in, and we should always use legislation as a last resort. I totally agree with the hon. Gentleman that that has been our political philosophy, but bearing in mind the hundreds of thousands of hospital appointments that have been cancelled and the billions of pounds in costs for the hospitality sector, particularly over last winter, it is right to have a better balance between the rights of individuals and the rights of workers in this area.
I will summarise the reasonable steps. First, a trade union should identify the workers who are its members in a work notice. That will enable the union to take reasonable steps regarding those workers. Secondly, trade unions should send an individual communication or notice, known as a compliance notice, to each member identified in a work notice to advise them not to strike during the periods in which they are required by the work notice to work, as well as to encourage them to comply with a work notice. Thirdly, trade unions should instruct picket supervisors to use reasonable endeavours to ensure that, so far as is reasonably practicable, picketers avoid trying to persuade members who are identified in a work notice not to cross the picket lines at times when they are required by the work notice to work.
Mick Whitley (Birkenhead) (Lab)
Does the Minister agree that the requirement that a trade union, with perhaps as little as four days’ notice, identify its members that have been issued with work notices in disputes potentially involving hundreds of thousands of workers across hundreds of workplaces is entirely impracticable? It risks exposing even the trade unions that work 24/7 to fulfil their obligations under the code of practice to a disproportionate and unfair penalty.
Kevin Hollinrake
No, we do not agree. The provisions and the code of practice are workable. As I have said, we undertook a consultation to make sure that that was the case, so we believe the proposals are workable.
Richard Burgon
I am sorry to draw a political parallel, but sometimes the parallel between politics and industrial practice is useful. It is the job of the Conservative party, in my area and others, to convince people to cast their vote for the Conservatives; it is the job of the Labour party to persuade local people to cast their vote for the Labour party. Is the requirement for trade unions to write to their members to tell them not to strike the industrial equivalent of requiring the Conservative party, in my constituency or others, to write to their own members telling them to vote Labour, or vice versa? Is it not a perverse interference to change the role of trade unions in a really authoritarian and heavy-handed way? The state interference here on behalf of employers in industrial disputes is quite appalling.
Kevin Hollinrake
More an intervention than a perverse interference, I would say, but the hon. Member is entitled to his view, which I respect. He may decide, as we have done on this subject, that we should agree to disagree.
Finally, once a work notice is received by the union, the trade union should ensure that it does not do other things to undermine the steps that it takes to meet the reasonable steps requirement. Actions taken to undermine the steps could include, for example, communicating with members whom the union knows is identified in a work notice, to induce them to strike. Where the trade union becomes aware of such actions to undermine the steps, the union should take swift action to negate any actions of union officials or members that seek to undermine the steps that the union has taken or will take to comply with the requirement in section 234E of the 1992 Act.
If a trade union failed to take reasonable steps as required by section 234E, that would mean that the strike is not protected under section 219 of the 1992 Act. As I have said, a court or tribunal could take the code into account in deciding whether reasonable steps had been taken. If the union protection is lost, the employer could seek damages from a trade union or an injunction to prevent the unprotected strike. Further, an employee taking part in a strike would lose the automatic protection from unfair dismissal under section 238A of the 1992 Act.
It is important to stress that the underlying requirement for a trade union is to act reasonably. For example, failure by a trade union to identify a small number of members, and the consequent missing out of those members from subsequent steps, may not constitute a failure in carrying out the overall obligation to take reasonable steps, as long as the trade union made a reasonable attempt to identify such members. Similarly, where the union takes steps to send promptly a compliance notice to members identified in a work notice, an accidental failure to reach a small number of identified members is unlikely to be a failure to take reasonable steps. In those scenarios, that would be for a court to determine, based on the facts of each case.
The code of practice under the Committee’s consideration has been designed to balance the objectives and benefits of the 2023 Act with the potential burdens of undertaking the reasonable steps, while providing guidance about a clear recommended route for trade unions to maintain their protections during strike action. It will help to provide clarity to employers and union members on what to expect leading up to, and on the day of, strike action where a work notice has been given to secure a minimum service level. It will also provide a greater level of assurance for trade union members who have been required to work as part of a work notice and will be encouraged to do so by the trade union, and therefore increase the likelihood that minimum service levels will be achieved.
If Parliament approves the code, 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.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Can the Minister give us a ballpark figure for how many trade unions and how many private sector employers have been engaged in the development of the code?
Kevin Hollinrake
I do not have those figures to hand, but perhaps I will be able to give them to the hon. Member by the time of my closing speech. I would imagine that quite a number of trade unions were engaged. [Interruption.] It is quite a controversial piece of legislation, as the hon. Member knows, and it attracted a lot of attention. [Hon. Members: “Ah!”] Is that surprising?
The Government’s intention is for the code to be in effect before the regulations implementing minimum service levels come into force. To achieve that, the Government are planning for the code to come into effect shortly after the commencement order relating to it is laid.
Chris Stephens
The right hon. Gentleman is correct. The Conservative party never forgave the trade union movement for defeating the Heath Government in the ’70s. It still remembers. As my hon. Friend the Member for Glasgow East said, it has not legislated for Government Ministers. When they decided to go on strike—when they all walked out together—they did so without a ballot, let us remember. That was inconveniencing the public, was it not?
Kevin Hollinrake
I just want to point out that there is a difference between going on strike and resigning, though the hon. Gentleman might not understand it. There are no restrictions in the code or anywhere else that stop someone from resigning, which is what those Government Ministers did.
Chris Stephens
I think the Minister will find that it was co-ordinated action and that, unlike trade union action, no ballot was required.
Kevin Hollinrake
The Strikes (Minimum Service Levels) Act balances the ability to strike with the rights of the wider public, ensuring that lives and livelihoods are not put at risk. I will respond to one or two points; I probably will not be able to respond to all the points raised in this debate.
I say to the hon. Member for Bermondsey and Old Southwark that there were 46 responses: 10 from members of the public and 36 from organisations, including trade unions, employers and local government representatives. That includes, on the union side, the TUC, ASLEF, the British Medical Association, the Fire Brigades Union, Unite, the RMT, Unison and the RCN.
The hon. Member for Luton South was absolutely right to mention the cost of living crisis. To respond to her point about why we are legislating at this point in time, it is because industrial action has an impact on other people’s jobs and livelihoods. There have been 4 million days lost through industrial action, 2 million appointments cancelled in the NHS and £3.5 billion in costs to the hospitality sector. That is why we are legislating as we are.
It is right that points were raised about ensuring that both unions and employers are able to identify people who have union membership so that unions can understand who has been named in a work notice. Paragraph 18 clearly sets out the opportunity for unions to engage with employers to establish the rules on how they will identify different individuals, such as using job title, name and place of work. We do not see that it will cause a problem. Employers and unions can go further than that and enter into a data sharing agreement, which is good practice within GDPR rules.
The shadow Minister, the hon. Member for Ellesmere Port and Neston, referred to paragraph 39 and the work notice requirements. We do not feel that it is an onerous practice at all. It is quite clear that the union could communicate with its members not only about work notices but about the strike itself. The rules are set out clearly. He knows the courts very well; I cannot see anybody not being able to understand the rules in a way that would create an opportunity for somebody to challenge them in court. It is not complicated at all, in my view.
On the point about sacking, I am happy to make a clarification in terms of what I said on the Floor of the House at the time. I was quite clear in my opening remarks that protections are removed from disciplinary action against workers who do not comply with a work notice. It is our expectation that nobody would need to lose their job as a result of this legislation. There are other measures that can be taken in terms of disciplinary action. If people comply with this legislation, clearly nobody will lose their job.
Kevin Hollinrake
I am sorry, but I will not have time to conclude the debate if I take interventions, which use up a lot of time during speeches. It is right that I conclude the debate.
If the hon. Member for Glasgow South West checks Hansard, he will see what I said in response to his intervention, which was that there is no need for a statutory code of practice for employers, but guidance has been issued; it was published on 16 November. That is our view. I advise him to check Hansard. On his point about minimum service levels effectively requiring an increase in service levels, if he checks the guidance that we have put together for rail, it clearly stipulates 40% of the normal timetable. We are not expecting an increased level of service; we are just expecting a service.
To help to secure minimum service levels, it is vital that trade unionists take reasonable steps to ensure that their members who are identified in a work notice comply with that notice and do not take strike action during the periods in which it requires them to work. It will help to provide a greater level of assurance that trade union members who are required to work as part of a work notice will be encouraged to do so by the trade union, and therefore increase the likelihood of minimum service levels being achieved.
Ultimately, the code will help all parties to achieve minimum service levels where they are applied, and moderate the disproportionate impact that strike action can have. I commend the code to the Committee.
David Linden
On a point of order, Ms Nokes. I beg to move, That the Committee sit in private.
Autumn Statement Resolutions
Kevin Hollinrake Excerpts(5 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
As someone who was in business myself, starting and scaling up businesses for 30 years prior to entering Parliament, it is a privilege to open this debate on behalf of the Government.
For any ambitious entrepreneur, “growth” is the most exciting word in the lexicon. The Chancellor’s autumn statement contains 110 separate measures to help businesses achieve exactly that. It will help to close the UK’s productivity gap by boosting investment by £20 billion a year in a decade. That is why I am wholly unsurprised by the positive response it has received from some of our most prominent business organisations.
The Federation of Small Businesses described the autumn statement as “game-changing”, adding:
“The Chancellor and his Treasury team deserve credit for driving pro-small business change and…acting to help build future prosperity.”
UK Finance said the autumn statement
“demonstrates a continued commitment to growth”.
And the manufacturing trade body Make UK said:
“This was a bold statement by the Chancellor who has”—
delivered—
“a transformational strategy designed to turbo charge investment.”
As the Chancellor rightly said, this is indeed an autumn statement for growth, but it is also clearly an autumn statement for business. I am very proud that my Department has been at the heart of developing these measures, which will have such a profoundly positive impact on this country. Our autumn statement will enable businesses to confidently invest in their futures. It will cut their costs through lower taxes and strip away burdensome red tape. Any of these measures in isolation would be a reason to be cheerful, but taken together, and alongside measures from the spring, they are expected to permanently increase the size of our economy, raise investment, reduce inflation, increase GDP and get more people into work.
On this side of the House, we know that the best way to grow the UK’s finances is not to embrace big government and high spending, but to boost businesses and boost competition—this is the so-called “supply side” of the economy. We will provide our innovators and risk takers with the right infrastructure, regulations and support, so that they can lead this country to greater prosperity.
As the Chancellor said yesterday, every big business was once a small business. For me, those words could not ring more true. This House will know about my passion for promoting the entrepreneurs, start-ups and independent shop owners that are the life and soul of our communities and economies alike. These businesses need investment so that they can flourish. They need freedom from overly burdensome taxes and regulations so that they can grow.
Paula Barker (Liverpool, Wavertree) (Lab)
I am delighted with the feedback that the Chancellor has received from businesses, but analysis by the Resolution Foundation finds that households will be £1,900 poorer at the end of this Parliament than they were at the start of it. That means people in our communities have less to spend in these businesses. So is it not the case that families are worse off under this Government?
Kevin Hollinrake
There is no doubt that we have had to take some difficult measures because of the hundreds of billions of pounds—about £500 billion—we put into the economy to protect people from the effects of covid and the cost of living. Conservative Members know that money does not grow on trees; that money has to be paid back. We have had to take those difficult decisions but we are improving the lives of the people the hon. Lady mentions—for example, through the national living wage. It has had a record increase this year to a record level of £11.44. That will put about £1,800 annually on the table for some of the people she mentions. That minimum wage is now double what it was in 2010. We are doing many, many things, including raising the personal tax threshold. Along with her colleagues, including the Front Benchers, she has to reflect on what the Labour Front-Bench team are going to do about the tax thresholds—this is the impact she is talking about. Are they going to increase those thresholds? Please say—[Interruption.] It is no good just standing on the sidelines and criticising. You’ve got to say what you’re actually going to do. [Interruption.] The shadow Minister says he is going to do that, which is great. The cost of doing what we are talking about here is £25 billion a year by 2025, so you are going to do that? [Interruption.]
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I am slightly worried that we are getting into a “you”, “you” exchange across the Chamber. As the Members know, they should speak through the Chair and when they say “you”, that means me. I think the Minister is trying to say “the shadow Secretary of State” and so on.
Kevin Hollinrake
I do apologise, Madam Deputy Speaker. Obviously, I am speaking through you—but I apologise. I was getting carried away, because this is such an important point. It is important that if people have different ideas about how we run the economy, they should explain exactly what they are going to do and how they are going to pay for it. The cost of the measures that are being proposed is £25 billion a year, and that comes on top of other spending commitments that the Opposition have made, including £28 billion a year in green investment. Labour Members should be clear about what their plans would be, rather than just objecting.
Lilian Greenwood (Nottingham South) (Lab)
I welcome the Minister’s commitment to being clear—so will he be clear and confirm that over this Parliament living standards are going to fall by 3%? That is the biggest hit to living standards on record. Will he be clear and confirm that that is the case?
Kevin Hollinrake
As I said, there is no doubt that we have been through difficult times, but the hon. Lady should look forward optimistically to the rise in the national living wage and the probability that inflation will be halved again by this time next year, having already been halved. She needs to take a more optimistic view about will happen in the economy next year. I am very optimistic that people will see better times ahead, which is what we all want to see, but the Government are realistic. We have spent £500 billion providing support, saving jobs and businesses, and helping people during covid and the cost of living crisis, but that money has to be paid back. The Opposition need to explain how they are going to do that, if they were ever given charge of the economy.
Small businesses also need protection from late payers, so that they can safeguard their precious time and resources. The measures in the autumn statement seek to achieve all that and more, transforming the fortunes of businesses up and down the country. The statement contains a multitude of measures that will give businesses easier access to investments.
The UK has been something of a start-up miracle—we are second out of the 39 countries in the OECD for start-ups and seventh for scale-ups, which is still a good performance in relative terms but one that we need to improve. Capital holds the key. This Government could not be clearer about that fact and have introduced measures in that regard.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his positive attitude in response to the measures that have been put forward, but I have a request on behalf of my constituents who work in the hospitality sector. Rates and alcohol duties have been frozen for another year, including those on spirits, meaning it will not cost people any more to go out to pubs and other venues in the hospitality sector, but Colin Neill from Hospitality Ulster has expressed concerns about energy prices. Do the Government intend to do anything about them?
Kevin Hollinrake
The hon. Gentleman raises a good point. I chair the Hospitality Sector Council and meet large and small hospitality businesses regularly, so I understand the pressure they are under. The hon. Gentleman has some such businesses in his constituency and I do too, so we know that is a problem. We have put a huge amount into supporting businesses with their energy costs, halving the cost of energy for most businesses. Energy is much more affordable than it was this time last year, which was an incredibly difficult time, but some businesses are locked into expensive energy contracts from the backend of last year, when prices were very high. If the hon. Gentleman has any examples of such businesses, he should bring them to me, as we have commitments from the energy suppliers, so we can challenge them and try to smooth the contracts over a longer period to ease the pain. I am happy to help him with any individual cases in his constituency.
On capital investment, the Prime Minister and the Secretary of State for Business and Trade will host 200 of the world’s leading investors at the Global Investment Summit this weekend and on Monday, which I hope to attend. It will showcase the UK as one of the world’s best places to do business, and drive billions of pounds of new and strategic investment into every corner of the economy.
The autumn statement has a host of innovative measures that will unlock investment and fuel growth. For example, our pension reforms will help unlock an extra £75 billion of financing for high-growth companies, while providing an even better deal for savers. Plans include a new growth fund within the British Business Bank to crowd in pension fund capital to the UK’s most promising businesses.
Another example is our plan for further funding for two British Business Bank programmes, including the long-term investment for technology and science competition. That will make £250 million available to successful bidders to increase investment in key science and technology sectors, with the private sector contributing at least as much again. Not only that—we have made £50 million available to extend the future fund breakthrough scheme, which backs businesses focusing heavily on research and development.
Although the Chancellor did not mention it yesterday, we have also introduced important measures for equity investments, including a 10-year extension to the enterprise investment scheme and the venture capital trust scheme, giving investors and businesses the confidence, certainty and stability to invest, which underpins the system.
Secondly, this autumn statement contains a series of measures that will provide smaller businesses with practical help. As we prepare to mark Small Business Saturday next weekend—I am sure that Members across the House will visit their small businesses on 2 December—it could not be a more timely moment to announce our business rates support package. It will help high streets and protect smaller firms, which are the life blood of our local communities, saving the average independent pub more than £12,000 a year, and the average independent shop over £20,000.
In addition, the autumn statement will include measures to toughen our regulations to tackle late payments. I have seen at first hand how this scourge can crush even the most determined of business owners’ dreams, so it is right that we act.
The Procurement Act 2023 means that the 30-day payment terms, which are already set for public sector contracts, will automatically apply through the subcontract supply chain. From April next year, any company bidding for large Government contracts will have to be able to demonstrate that they pay their own invoices within an average of 55 days and that will reduce progressively to 30 days.
Peter Grant (Glenrothes) (SNP)
I am grateful to the Minister for the steps that he has announced today, but of course the proof of the pudding lies in the enforcement. Sex discrimination at work has been illegal for almost 50 years, but it still happens. The Minister will be aware that, as well as calling for action on late payment generally, I have often raised an issue that we get in the construction and civil engineering sectors, where the main contractor is paid on time but keeps the money for an inordinate length of time. If the main contractor then does a Carillion and goes down, all the money becomes part of its administration and very often the subcontractors get nothing. Can we have legislation, a code of practice or something to protect small business subcontractors from being dragged down when the main contractor goes under?
Kevin Hollinrake
I know that the hon. Gentleman has campaigned on this for some time and I have great regard for the work he does. It is worth him reading the “Payment and Cash Flow Review”, which was published yesterday alongside the autumn statement. It includes some references to retentions, to which he refers. There are other measures from the small business commissioner as well as more transparency on late payments. I am happy to engage with him further on this issue.
Although taxes pay for vital public services, this Government are clear that they must not stifle business owners’ ambitions. Quite simply, our economy relies on those ready to take risks and to innovate. Time and again, these entrepreneurs tell me that a simpler tax system would make life easier for them. This autumn statement will not just reduce tax but reform it, while putting more money into employees’ pockets.
The abolition of class 2 national insurance will save the average self-employed person £192 a year. Alongside the 1% reduction in the rate of class 4 national insurance, some 2 million self-employed people will be saving an average of £350 a year from next April.
In addition, from next year we will merge the existing research and development expenditure credit and the small and medium-sized enterprise R&D scheme. This will allow companies to claim back a proportion of their spending in this area through their tax bill, further simplifying the system and boosting innovation.
Finally, and very significantly, we have unveiled game-changing plans to make full expensing permanent. As the Chancellor set out yesterday, expensing aims to stimulate investment by giving larger companies £250,000 off their tax bill for every £1 million they invest. It was introduced, as hon. Members know, by the Chancellor in the spring and was set to last for three years, but it has been such a success, and the calls for it to continue have been so loud and clear that yesterday the Chancellor made it a permanent policy. This is the largest single tax cut in modern British history. It means that we now have not just the lowest headline corporation tax rate in the G7, but the most generous capital allowances too. That is hugely appealing to any business looking for a home in a global market.
The Office for Budget Responsibility tells us that this move alone will increase annual investment by around £3 billion a year, and by £14 billion over the forecast period. We are able to do this only because we have met our borrowing rules early, have more than halved inflation, and are seeing our debt go down every year.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Going back to the tax regime in general, one of the measures in the autumn statement—line 50 of table 5.1—was entitled “HMRC: Investment in Debt Management Capability”. According to the statement, investment of £160 million into the debt management facility of His Majesty’s Revenue and Customs will somehow unlock £1 billion a year in debt recovery. What is that investment, why was it not undertaken previously and how will it realise an extra £1 billion of income for HMRC?
Kevin Hollinrake
HMRC has a responsibility to be understanding and compassionate when it comes to business difficulties, but if debts are owed to the taxpayer it is only right that we seek to return them. Many more businesses may have that difficulty because of difficulties in recent years, but if the hon. Member is implying that we should not chase debts owed to the taxpayer—
Kevin Hollinrake
Perhaps we should have a conversation offline about that. I think it makes perfect sense to invest in reclaiming debt owed to the taxpayer.
I wish to turn now to another of my Department’s spending measures: the advanced manufacturing plan. The UK is a global advanced manufacturing hub. Recently—this is not a statistic that is often quoted in the media—we overtook France to become the world’s eighth-largest manufacturing nation. What is not to like about that? While we have a strong story to tell, there is fierce global competition. Already my Department has been instrumental in attracting significant global investment to our key future-leaning industries, including Tata’s £4 billion gigafactory and a £600 million investment to build the next generation of electric Minis.
Our £4.5 billion advanced manufacturing plan will help to safeguard the sector’s future and seal our reputation as the best place to start and grow a manufacturing business and to invest in this industry. It includes over £2 billion for the automotive industry—the single biggest Government investment ever in the UK sector—alongside £975 million for aerospace and £960 million for a green industries growth accelerator to support clean energy manufacturing. In short, the plan will ensure that our manufacturing success story can begin its most exciting chapter yet.
This is a Government who know business. We are for business because we are from business. This is a Government who believe in business. This is a Government who back business. Our autumn statement could not be a clearer illustration of those facts. Have no doubt that it will provide our most promising companies with the capital, certainty and support that they need to thrive long into the future. That is why I commend its measures to the House.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Secretary of State.
Jonathan Reynolds
Unsurprisingly, I agree with part of what the hon. Member said. We could have a lengthy and robust debate on the weaknesses of Conservative Governments in the 1980s and the consequences of their short-term decisions. I would—
Jonathan Reynolds
I would simply say to SNP colleagues that their own independence White Paper made the fair case for a UK-wide energy market. That is because, as in many areas of policy, a UK-wide energy market is the best way to deliver for my constituents in England and for the constituents of the hon. Member for Kilmarnock and Loudoun (Alan Brown) in Scotland. That is a reality that I think SNP colleagues do not accept.
I think the Minister would like a second bite, so let us bring him in to see what he has to say.
Kevin Hollinrake
On the point about industrial strategy, can the hon. Gentleman answer a simple question with a yes or no? Will he reinstate the plans for HS2?
Industrial Action: Minimum Service Levels
Kevin Hollinrake Excerpts(6 months ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
Earlier this year Parliament passed the Strikes (Minimum Service Levels) Act 2023. The Act seeks to balance the ability of workers to strike with the rights and freedoms of the public to go about their daily lives, including getting to work and accessing key services.
Most major European countries, such as France, Italy and Spain, have had some form of minimum service level regime for many years, and organisations such as the International Labour Organisation have recognised that such approaches can be an appropriate way of balancing the ability to strike with the rights of the wider public.
Where minimum service level regulations are in place, the Act requires trade unions to take “reasonable steps” to ensure that their members who are identified in a work notice do not take strike action during the periods in which they are required by the work notice to work and comply with the work notice.
During the passage of the Act, the Government committed to bring forward a statutory code of practice setting out more detail on the “reasonable steps” that trade unions should take.
I am pleased to inform the House that yesterday we laid a statutory code of practice on reasonable steps to be taken by a trade union (minimum service levels) in Parliament for approval. This follows a public consultation on the draft code and careful consideration of the feedback received. A Government response to that consultation was also published yesterday.
The code of practice is issued under section 203 of the Trade Union and Labour Relations (Consolidation) Act 1992 and sets out four steps that trade unions should take to meet the legal requirement under the Act:
Step 1: Identification of members—Trade unions should identify those of their members who are identified in a work notice;
Step 2: Encouraging individual members to comply with a work notice—Trade unions should send an individual communication or notice to each member identified in a work notice to advise them not to strike during the periods in which they are required by the work notice to work, as well as to encourage them to comply with the work notice.
Step 3: Picketing—Picket supervisors will be instructed by the trade union to use reasonable endeavours to ensure that picketers avoid, so far as reasonably practicable, trying to persuade members who are identified in a work notice not to cross the picket line at times when they are required by the work notice to work;
Step 4: Assurance—Once a work notice is received by the union, trade unions should ensure that they do not do other things that undermine the steps they take to meet the reasonable steps requirement.
Subject to parliamentary approval, the code 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.
We will also shortly publish separate, non-statutory guidance on the issuing of work notices in relation to minimum service levels.
[HCWS32]
Post Office Ltd: Horizon
Kevin Hollinrake Excerpts(6 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
Post Office Ltd is compensating postmasters for the suffering they have experienced due to the Horizon IT scandal, which arose following the installation of the Horizon software in the late 1990s.
In parallel with this, Post Office Ltd has continued to review its operational processes and policies to ensure that, where any further issues are identified, it takes steps to investigate and address these. Through this work, Post Office has found previous operational issues such as processes and/or policies regarding certain services that impacted postmasters financially. As a result, Post Office is establishing a compensation scheme to provide redress to postmasters affected by these issues. This is separate to its work compensating postmasters for Horizon shortfalls and for those with overturned convictions.
The Government are supportive of Post Office’s programme of reform, putting right the wrongs of the past, and its aim to help rebuild trust with its postmasters. The Government therefore intend to support Post Office’s process review scheme with funding to cover the cost of compensation to postmasters affected by the issues identified.
The compensation will be exempt from income tax, national insurance contributions, capital gains tax and corporation tax.
Post Office will communicate with current and former postmasters and publish details on its website in due course, to outline the scope of the review. The Department for Business and Trade will provide oversight to ensure that this compensation is delivered quickly and effectively to affected postmasters.
This funding is subject to compliance with subsidy control requirements, including referral to the Subsidy Advice Unit (part of the Competition and Markets Authority) under the Subsidy Control Act 2022.
[HCWS8]
Employment Rights Regulations
Kevin Hollinrake Excerpts(6 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
I am pleased to update the House that the Government laid the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 on 7 November.
Under this Government we have seen employment reach near record highs. The number of payroll employees for September 2023 was 30.1 million, 370,000 higher than this time last year and 1.1 million higher than before the pandemic. The UK’s flexible labour market is at the heart of this success. It enables businesses to start up, grow and create jobs and opportunity for people across this country.
To build further on this success the Government have been conducting a comprehensive review of all retained EU law, to ensure that our regulations are tailored to the needs of the UK economy—seizing the benefits of Brexit.
During the passage of the Retained EU Law (Revocation and Reform) Bill, Ministers made it clear that the Government have no intention of abandoning our strong record on workers’ rights, having raised domestic standards over recent years to make them some of the highest in the world. And of course, this SI keeps to that pledge.
We identified and consulted on several areas of retained EU employment law where we saw opportunities for improvements following our exit from the EU. The Government’s response to the REUL employment law consultation, published on 7 November, sets out three areas we believe will benefit from reform to ensure that they are fit for purpose for employers and employees alike:
Record keeping requirements under the Working Time Regulations;
Simplifying annual leave and holiday pay calculations in the Working Time Regulations;
Consultation requirements under the Transfer of Undertakings (Protection of Employment)—or TUPE—Regulations.
These reforms will support businesses as the economy continues its recovery from the impact of the covid-19 pandemic and the impacts of war in Ukraine. For example, reducing time-consuming and disproportionate reporting requirements for businesses on specific elements of the Working Time Regulations could save employers around £1 billion a year.
These changes are made under powers provided by the Retained EU law (Revocation and Reform) 2023 Act—the REUL Act—and are designed to minimise unnecessary bureaucracy for businesses without reducing levels of worker protections.
A core objective of the REUL Act is to remove interpretive effects and thus allow our courts to interpret retained EU law the same way as other domestic law. The Act also provides “restatement” powers to maintain any existing policy effects which we want to keep. The SI therefore restates the following principles to retain existing rights, including:
The right to carry over annual leave where an employee has been unable to take it due to being on maternity or other family related leave or sick leave;
The right to carry over annual leave where the employer has failed to inform the worker of their right to paid annual leave or enable them to take it; and
The rate of pay for annual leave accrued under regulation 13 of the Working Time Regulations.
The SI revokes the European Cooperative Society (Involvement of Employees) Regulations 2006 and the Working Time (Coronavirus) (Amendment) Regulations 2020 as these regulations are no longer necessary.
The scope of the SI is limited to Great Britain, other than the revocation of the European Cooperative Society (Involvement of Employees) Regulations 2006, which extends to Northern Ireland. Employment law in Northern Ireland is a transferred matter. My officials will continue to engage with the territorial offices and the devolved Administrations on the implementation of these reforms.
By ensuring that employment regulations are fit for purpose, entrepreneurial businesses will have more opportunity to innovate, experiment, and capitalise on the UK’s global leadership in areas like clean energy technologies, life sciences and digital services, and important workers’ rights will be protected. This will cement our position as a world-class place both to work and to start and grow a business.
[HCWS2]
Economic Crime and Corporate Transparency Bill
Kevin Hollinrake ExcerptsWednesday 25th October 2023
(6 months, 3 weeks ago)
Commons ChamberRead Full debate Economic Crime and Corporate Transparency Act 2023 View all Economic Crime and Corporate Transparency Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Message as at 25 October 2023 - (25 Oct 2023)
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
I beg to move,
That this House insists on its amendment 151A and disagrees with the Lords in their amendments 151E and 151F.
Mr Speaker
With this it will be convenient to discuss amendment (a), and the following motion:
That this House insists on its Amendment 161A in lieu and disagrees with the Lords in their Amendment 161D in lieu.
Kevin Hollinrake
I am pleased to bring this important Bill back to the House this afternoon, for what I sincerely hope is the last time, given that this will be the third time we have debated and voted on similar issues. I urge Opposition Front-Bench Members and those in the other place not to risk the safe passage of this hugely significant, near-400 page Bill by continuing to press these amendments.
The Government have appreciated the input of right hon. and hon. Members from both sides of the House—including the right hon. Members for Barking (Dame Margaret Hodge) and for Birmingham, Hodge Hill (Liam Byrne), my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) and my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill)—to help change the Bill for the better. We are discussing failure to prevent, together with the identification of doctoring. The Government are taking world-leading measures—I think this is the first time that a major economy such as ours has implemented them—which we should be proud we are implementing through the Bill. Of course, if the elected Chamber expresses its strong will on these remaining issues for the third time, I very much hope that the other place will agree that now is the time for it to accept that position. I think we would all rather have what we have done than see all this good work being in vain by letting the legislation fall.
Let me discuss the two issues in turn. I will keep my remarks brief as the arguments remain the same as on the preceding two times we have discussed them. I will first address Lords amendments 151E and 151F on the “failure to prevent” threshold. I will also address amendment (a), tabled last night by the right hon. Member for Barking, on a Government review of the threshold. While my noble Friend Lord Garnier’s amendment has moved closer yet again to the Government’s position by exempting micro-entities and small organisations from the offence, I am afraid that the Government will not support the lowering of the threshold at this time. Let me repeat the reasons why. It is already an offence to perpetrate fraud. The objective of the new offence is to ensure that there is accountability where fraud occurs in large organisations. There is simply no need to apply any such offence to smaller organisations.
Every time such an offence is introduced, business owners end up distracted from running their businesses by taking time to reassess their compliance risks, which often involves taking professional advice. We assess that the revised threshold proposed by Lord Garnier would cost medium-sized enterprises £300 million in one-off costs and nearly £40 million in annual recurring costs. We should be making it easier for businesses to operate in the UK and only imposing additional regulatory burdens when absolutely necessary. The Government completely reject the notion of using such an offence simply to raise awareness among business owners of the seriousness of the problem of fraud. There would be other, more proportionate ways to do that if necessary.
In response to the amendment tabled by the right hon. Member for Barking, the Government have already future-proofed the Bill by including a delegated power to allow the Government to raise, lower or remove the threshold altogether. Of course, as with all legislation, the Government will keep the threshold under review. I make a personal commitment to do that and to make changes if evidence suggests that they are required. I do not think that a Government review is necessary for that to take place, so I ask the right hon. Member not to move her amendment. We must bear in mind that a review does not guarantee change anyway. What guarantees change is having the right people at the Dispatch Box making changes, whether those are people from her party or my party, and both parties are equally exercised by these concerns. I urge all right hon. and hon. Members to support the Government motion to disagree with the Lords amendments to ensure that we take a proportionate approach and do not impose unnecessary measures on legitimate businesses that would curb our economic growth.
I turn to Lords amendment 161D, tabled by Lord Faulks, on cost protection in civil recovery cases. The Government remain of the view that such an amendment would be a significant departure from a fundamental principle of justice—that the loser pays—and therefore not something that should be rushed into without careful consideration. Furthermore, as I set out when we last debated this issue, we have seen no clear evidence that the amendment would increase the number of cases taken on by law enforcement. However, that is not to say that such an amendment is necessarily a bad idea. That is why we previously added to the Bill a statutory commitment to review the payment of costs in civil recovery cases in England and Wales by enforcement authorities, to publish a report on the findings and to lay that before Parliament within 12 months.
With regard to civil costs reform in England and Wales, the Government would normally look to consult appropriate consultees, including the senior judiciary, the Law Society and the Bar Council. Enacting the reform now without a full review would not allow judges and relevant organisations, or indeed their counterparts in Northern Ireland and Scotland, to comment on how it would be read and applied in practice. We therefore feel it would be irresponsible for us to rush into making such a significant change at the end of a Bill’s passage without full consideration by Government and further scrutiny by Parliament. I very much hope that all right hon. and hon. Members will agree that that is the responsible approach to take and therefore support the Government’s position.
Jim Shannon (Strangford) (DUP)
The Minister said clearly that there has been consultation with Scotland and Northern Ireland. Will he indicate who those discussions have taken place with? Was it banks, or the Departments looking after matters in the absence of a functioning Northern Ireland Assembly? I am keen to know who does the work to ensure that there is accountability for everyone.
Kevin Hollinrake
That is a good point. There are clearly different legal jurisdictions in Northern Ireland and Scotland, with of course the Court of Session in Scotland. From a legal perspective, the counsel in those jurisdictions are the people who discuss this. In wider issues such as failure to prevent, banks and many other stakeholders have people who will consult during the process. I am happy to keep up the conversation with the hon. Gentleman.
Jim Shannon
The reason I asked the question is quite specific, although it might not necessarily relate to the issue directly. The Minister refers to banks. A number of local organisations and community groups back home, which are registered and constituted as community institutions, have had their bank accounts closed. Banks have closed their accounts down because they say they are non-profitable. Is it right that banks should be able to do that? I know the Minister understands the matter—
Mr Speaker
Order. Can I just help a little bit? The hon. Gentleman is very good, but his intervention is very long. Why does he not put down to speak? It might be easier. I have to get other people in as well.
Kevin Hollinrake
The hon. Gentleman raises a very important issue relating to the concerns about de-banking that we have across the economy. The Economic Secretary to the Treasury, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith) is looking at it, as is the Treasury. In future, it is our intention to ensure that when banks close accounts they give a valid reason why, rather than closing them summarily. He is absolutely right to raise the point and I am very happy to engage with him on it, because it affects businesses as well as community groups.
To conclude, I encourage everyone to agree with the Government’s position on these two areas. It is vital that we achieve Royal Assent without delay, so we can proceed to implement the important reforms in the Bill as quickly as possible.
Rushanara Ali (Bethnal Green and Bow) (Lab)
It is an honour to speak on the Bill again. I was hoping that we could conclude the proceedings on the Bill as soon as possible and it is disappointing that the Government are yet to make further compromises. The Bill is welcome in principle, but it should not have taken the war on Ukraine to prompt the Government into action. I am grateful to my right hon. Friends the Members for Barking (Dame Margaret Hodge) and for Birmingham, Hodge Hill (Liam Byrne), and to Members across the House for working together to improve the Bill.
Economic crime poses a threat to our country’s national security, our institutions, our economy, and causes serious harm to our citizens and wider society. Conservative estimates place the cost of economic crime at £290 million a year, according to the National Crime Agency, and the failure to stop criminals benefiting from the proceeds of their crime can fund further criminality. That can include offences such as funding organised crime groups, terrorist activity, drug dealing and people trafficking—this is a very serious issue.
Economic crime, as the Minister knows, has many victims. For too long, the Government have turned a blind eye to corrupt and dirty money, allowing Russian illicit finance to flood into Britain. That lets Putin’s cronies stash ill-gotten gains and even recycle the proceeds of crime into luxury properties. That is well documented and has been highlighted by many Members across the House, as well as in Select Committees. According to analysis by Transparency International, properties to the tune of £6.7 billion have been bought through suspicious wealth. Of those, almost a quarter in value were
“bought by Russians accused of corruption or links to the Kremlin.”
Most are held via secretive offshore companies. That drives up property prices for ordinary people in our country. More than two-thirds of English and Welsh properties held by foreign shell companies do not report their true owners. Research by the London School of Economics and Warwick University shows that the Register of Overseas Entities is not fully effective. For 71% of such properties, essential information about their beneficial owners remains missing or publicly inaccessible, despite the register. That means we still cannot know whether sanctioned individuals, money launderers or other corrupt individuals are benefiting from those properties.
We must not sustain economic growth off the back of dirty money. The Government have already delayed the Bill and these actions for too long. In that time, money has been lost, economic crime has become ingrained and the UK economy has once again lost out. Given that the nature and necessity of the Bill has already been discussed at length, I will focus on addressing the two amendments.
During the passage of the Bill, helpful alterations have been made to ensure that it is robust. The Lords amendments before us today seek to address two omissions. We are very disappointed that the Government are not willing to compromise and not willing to heed the wise and expert input of the Lords. That is deeply disappointing, because a great deal could be achieved if the Minister and his Government took note, including from hon. and learned Members on their own side.
Rushanara Ali
If the Minister is brief, rather than talking the Bill out like he did last time, I will give way.
Kevin Hollinrake
I will be very brief. On the question of compromise, the hon. Lady will have noticed that there was no “failure to prevent” offence when the legislation was first tabled, nor was there an identification doctrine. There has been significant compromise on the Government side. Our preference, clearly, is to move forward in that spirit of compromise. We have achieved a great deal with the Bill, which has moved from under 300 pages to 400 pages. I do not think it is right to say that the Government have not compromised.
Kevin Hollinrake
The right hon. Lady is making very important points. However, the “failure to prevent” offence, as drafted, would not cover that situation, because it covers only situations where the benefit is to the corporation concerned or an officer within it. A situation in which a third party hijacked systems would not be covered, whatever the threshold.
Dame Margaret Hodge
That is an interesting point. The simple response is that, obviously, the drafting of the “failure to prevent” offence needs further improvement to ensure that it covers that sort of instance.
There were similar arguments about the burden on SMEs when we introduced the Bribery Act 2010. In 2015, a survey of SMEs found that nine out of 10 had no concerns or problems with the Act, and 90% also said that it did not affect their ability to export. Although fears are expressed before legislation is introduced, once it is on the statute book people find that it actually helps them. Under the terms of the Bill, SMEs already have an appropriate defence, as the Minister well knows: that they should only take actions that are reasonable in all circumstances. That test of reasonableness would protect microbusinesses and SMEs from having to engage in overly bureaucratic procedures.
Although the argument is overwhelming, the Minister does not agree. We had hoped that the Government would support and accept our amendment. If they were to do so, we would not put all these amendments to the vote. This means that the next Government—a Labour Government, we all hope—will seize the opportunity that the Minister has missed and grasp the issue. Labour will become the anti-corruption champions, saving our country and our economy.
This Bill arrived in a sorry state and we have improved it—I accept that—with the identification doctrine, clauses on strategic lawsuits against public participation, the improvement of accountability with an annual report to Parliament, and the reluctant acceptance that there may be an increase in fees for Companies House. But there are still large gaps. Trusts have not been covered, as they should be, and authorised corporate services providers could end up with a future dud register. Cost caps, which other hon. Members have alluded to, are not in there, the whistleblower regime is not in place, and asset seizure still has to be tackled.
We hear whispers that there is a third economic crime Bill. I am pleased about that, but if we had achieved more with this Bill, we might not have needed another one. After all the work that all of us have done to achieve cross-party consensus, and given the values that we all share, I would hope that the Minister would be bold enough to accept our tiny little compromise and put this Bill to bed so that the proposed legislation could be passed by the time we prorogue.
Liam Byrne
My right hon. Friend is absolutely right. This is a point of cross-party consensus. I know it is a point of cross-party consensus because it was the Minister who used to use precisely the same argument to argue for some of the changes that we see in the Bill.
We all know that our country does well, because, by and large, we have a reputation for clean trade around the world. When companies file and incorporate in this country, that is a credential that does them well around the world. That is a credential that we must do everything in this House to protect, which is why the amendment is so important. We cannot leave a weakness in our armour as crime and fraud multiplies.
The Minister said that the proposal would be a cost to British business that we could not withstand or sustain, but the truth is that, while it might be a cost to some British businesses, it would also be a saving to British business, to the British economy and to British taxpayers, because it is always cheaper and more effective to prevent fraud in the first place than to have to police it or to prosecute fraud after the event. When 64% of businesses—small businesses—in this country are victims of fraud, we can only imagine how widespread that cost of fraud has now become. That average is much higher than international averages and therefore there is an additional argument that we need to go that one step further to make sure that we are doing everything in our power to prevent fraud from arising in the first place.
All we ask in this amendment is for the Minister to face the facts. He should bring the facts together, put them in a report, assess them, analyse them and present some conclusions to the House. How can we have a situation where the Minister is essentially asking for the freedom to look away? That simply cannot be the basis of good policy. I am grateful to my new colleagues on the Business and Trade Committee who agreed yesterday that we will ask representatives of Companies House to come before us for hearings. Frankly, if the Minister is not prepared to put the facts around fraud in one place, I shall ask the Select Committee to do the job for him.
Kevin Hollinrake
With the leave of the House, I wish to thank Members who have contributed to the debate. We have much in common, despite the fact that some small differences still remain. As I said earlier, the Government have come a long way since the original tabling of the legislation. The number of pages have increased by more than 100, so the contents of the Bill now stand at nearly 400, which shows the importance of the legislation that we are debating.
I did not agree with the shadow Minister when she said that the Government have not been willing to compromise—that is not the case at all. The “failure to prevent” offence, particularly the identification doctrine, are key, world-leading measures. In my opening remarks, I made the commitment—and I make it again—that will we keep this matter under review, and that includes, in particular, the threshold. Even if there were a requirement for review in statute, there is no requirement on the Government to make changes following that review, so it is important to maintain the goodwill that we have experienced during the passage of the Bill.
Dame Margaret Hodge
Perhaps the Minister can tell me what he means when he says that he will keep this matter under review. What precisely does that mean?
Kevin Hollinrake
The way that we have legislated here, and the reason for doing so in that way, have always been informed by information that has come from third parties—from Spotlight on Corruption, Transparency International and others—that have been interested in the Bill. The right hon. Lady and I have worked together on this issue in the past in various all-party groups. Those are the kind of bodies that will inform progress as we implement this legislation, which again I say is world leading.
The shadow Minister talked about a level playing field and said that these measures move away from that. I could not disagree more. The key thing is that we do not have a level playing field now. In small companies, it is much easier to identify who is responsible for a fraud. That is why it is more difficult in large companies, which is why we are applying this to large companies. Fraud is fraud whatever the size of the company. This legislation does not allow smaller or medium-sized companies to facilitate fraud—if they are guilty of fraud, they are guilty of fraud and it is far easier to identify the people concerned.
Let me address the comments of my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) and thank him for all the work that he has done on this legislation and on the Justice Committee. I ask him not to doubt my motives; I have not been influenced by the Treasury at all. I am influenced by wanting to do the right thing in terms of both tackling economic crime and making sure that we do not put undue burdens on businesses. I can assure him that, for as long as I am in this role, we will keep this under review and make sure that the threshold is fit for purpose.
My hon. Friend talks about good business, but it is good business to make sure that we do not put undue burdens on business. I can promise him that, from my experience—while I was chief executive of my company—we implemented the rules on bribery and tax evasion, which were significant in our business. These would be significant measures for businesses. I say to him and to my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) that they will have a real impact on businesses and significant costs of implementation. I do not think that they would be proportionate or needed within smaller enterprises, because of the ease of identifying the people responsible if fraud were facilitated in an organisation.
I appreciate the kind words of my right hon. and learned Friend and the work that he has done. I remember lobbying him on this issue when he was the Secretary of State for Justice—and a fine job he did. We have got much further this time than we did at that time, which shows our collegiate way of working all the way through the Bill’s passage.
The hon. Member for Glasgow Central (Alison Thewliss) has also done fantastic work in this area, and I appreciate all her efforts. She says that we do not agree. We have a right to disagree where we disagree, and we honestly disagree about whether this proposal is required. We do not want to put unnecessary burdens on businesses.
I completely understand the strength of feeling of the right hon. Member for Barking (Dame Margaret Hodge) on this matter. I, too, feel strongly about implementing the right measures to tackle economic crime while not putting undue burdens on businesses, so I say to her again, in the spirit of good will that we have operated under for many years, we will keep this under review. If the threshold needs to be changed, we can do that under secondary legislation.
I congratulate the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) on his election as Chair of the Business and Trade Committee. I know that he will do a fine job. He is right that, in that spirit of good will, we have achieved much in the manifesto that we launched just over the road. Again, I hope that he does not doubt my motives in what we are doing to tackle economic crime without putting undue burdens on business.
I urge everyone to support the measures that we have in place already, and I ask those in the other place to respect the clear will of this House.
Question put, That the amendment be made.
Rural Postal Services: Sustainability
Kevin Hollinrake Excerpts(6 months, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
It is a pleasure, Mr Hosie, to speak with you in the Chair. I congratulate the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) on securing this important debate on a subject close to my heart, as a rural MP.
The post office network plays a unique and vital role as part of the UK postal system. Although consumers have more choice than ever when it comes to purchasing postal products, many still turn to bricks-and-mortar post offices. As the hon. Member rightly said, post offices are part of the social fabric of our communities.
There are currently over 6,000 rural branches, which constitute 54% of the total post office network. Over 3,000 of those rural branches are described as the last shop in the village. Recent research highlights how vital these branches are. They enable people to access vital services without needing to drive or use public transport. They are particularly cherished by older people and those who might struggle to travel far to access services. In my constituency we have lots of bus passes but not many buses, so it is very important that those rural post offices exist, as they are also integral to businesses operating in rural areas because of their important role in providing access to cash.
Cash being the word, the Government have provided significant financial support to sustain the network nationally, adding up to more than £2.5 billion over the last 10 years. The Government are providing a further £335 million for the Post Office for the period between 2022 and 2025. As part of that support, the Government have committed to maintaining the annual £50 million subsidy to safeguard services in the uncommercial parts of the network until 2025.
The Government protect the sustainability of the branch network, and the rural network in particular, by providing funding on the basis that the Post Office meets its minimum access criteria, to ensure that across the country 99% of the population live within 3 miles of their nearest post office, as the hon. Member referred to. The Post Office meets its access criteria obligations nationally, making it the largest retail network in the UK with an unrivalled reach, especially in rural areas. Indeed, in 2022 98% of the rural population lived within 3 miles of their nearest branch.
The Government remain committed to the long-term sustainability of the Post Office, but we have to recognise that there is not a bottomless pit of money. Of course, with a network of this size, we are likely to see a fluctuation in the number of branches that are open at any one time. However, the network is certainly not in decline at a national level. As its chief executive officer recently confirmed, the network is as large today as it has been for five years, with around 11,700 branches open.
Marion Fellows
The count of the number of post offices includes drop and go facilities. Those are not in any sense post offices, as all Members here would recognise them. Does the Minister think that is fair?
Kevin Hollinrake
Drop and go branches perform an important service, as do mobile post offices, of course. However, there is no doubt that there are challenges in maintaining the size of the network, which I will come to shortly. Of course this is public money that we are spending, so we must ensure that it is spent well, while being appropriate to the need locally, particularly in rural areas.
The percentage of the network serving rural communities has remained steady at 53% since 2016. We appreciate that it is very challenging for communities that lose their post office service and the Post Office endeavours to restore services as quickly as possible.
Tim Farron
The Minister is a good man; I am very grateful to him for being so generous, indeed super-generous, to my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) earlier.
The thing about individual post offices is that I can think of a couple of villages in Westmorland and Furness —Hawkshead and Shap—that have lost their post office and where Post Office Ltd. is working hard to restore them. Will he pay particular attention to those communities to make sure that we get those replacements over the line, because we are all but done with getting them back on the street and back open?
Kevin Hollinrake
We are very happy to take up any particular issue that Members raise, as we do regularly through correspondence and other measures. Where there are closures of post offices, we will endeavour to reopen them, but that can be challenging. However, if there is a particular issue, I am very happy to meet the hon. Gentleman to discuss it.
Patricia Gibson
Does the Minister think there is a case for giving greater UK Government support to rural post offices, which, by definition, cannot compete on footfall because they serve smaller populations, so that our island and rural communities can keep hold of our post offices, even during these difficult times?
Kevin Hollinrake
As I said earlier, I am bound to stand up for rural areas, just like the hon. Lady and others in this debate, but there is a limit to taxpayers’ money, and we are talking about £2.5 billion over 10 years and significant funding requirements now, in terms of the needs of both the network and the compensation schemes, which I will refer to in a second. We do not have a bottomless pit of money. However, there are other measures we can take, which I will mention, to make the Post Office sustainable and make individual branches profitable, which is the key to this conversation.
Returning to specific branches, I am glad that the hon. Member for Caithness, Sutherland and Easter Ross referenced the Balintore post office, which reopened at the Seaboard Memorial Hall last year, thanks to the efforts of the post office and the hall’s committee, and indeed Maureen, the postmaster. However, we are in no way trying to pretend that the rural network is not facing challenges—not at all. As I have said before, the Post Office works with communities to ensure that services are maintained, and the Government’s access criteria ensure that however the network changes, services remain within local reach of all citizens.
My hon. Friend the Member for Havant (Alan Mak) rightly references post boxes, which are another key part of this matter. Royal Mail is there to ensure that there is a post box within half a mile of the premises of at least 98% of users of postal services. If that is not the case, I am very happy to engage with my hon. Friend to get answers for him and change in his local area.
My hon. Friend the Member for Penrith and The Border (Dr Hudson) challenges the Government on what more we can do to ensure the sustainability of post offices. It is important we take into account that many of the challenges facing post offices are because of the changes in consumer habits—just like the rest of the high street, which is seeing those changes too. That is also related to Government services such as driving licences, passports and other similar services, mentioned by the hon. Member for Motherwell and Wishaw (Marion Fellows), who does a fantastic job as chair of the all-party parliamentary group on post offices. Many consumers now want to access such services online, which can be done very efficiently. I do not think it is for us to dictate to those citizens how they access those kinds of services if they can do so more quickly and efficiently online. That would be the wrong thing to do.
Marion Fellows
The Government will be dictating to our constituents how they access those services if they are withdrawn from post offices, because digitally excluded people will not be able to use them online.
Kevin Hollinrake
If that was what the Government were doing, that would be something the hon. Lady could hold us to account for, but that is not the case. There is a clear negotiation between different Government Departments over the cost of providing those services, with negotiations between the passport service, the DVLA and the post office network itself. I very much hope there is a good commercial relationship that properly remunerates postmasters for the work they do, which is key.
As I say, there has been a diminution of hundreds of millions of pounds in revenue into the post office network because of the change in consumer habits, so we need to find ways to make the network sustainable in its own right. We do not have a bottomless pit of money. We are talking about £2.5 billion over 10 years. This year, the UK economy deficit in terms of public spending, expenditure and income will be about £140 billion.
The hon. Member for Selby and Ainsty (Keir Mather), whom I welcome—this is the first time I have responded to him in a debate—challenges us to do more and provide more funding. There are challenges with that. To govern is to choose, so we have to be careful how we spend taxpayers’ money. Nevertheless, we want to make sure that the post office network is sustainable in its own right, wherever possible, to ease the burden on the taxpayer. We are, of course, determined to retain the network wherever possible and to find ways to do that.
The hon. Member for Westmorland and Lonsdale (Tim Farron) rightly raises the issue of the banking framework. This is a relationship between banks and post offices, in terms of how post offices are renumerated for providing many of the services banks used to provide when they had branch networks across the country. Since 2015, there have been 5,500 bank closures—at the last count—across the network and collectively across the different high street brands. That saves those banks somewhere in the region of £2.5 billion to £3 billion a year.
We are very keen for the Post Office, in its negotiations with the banks via UK Finance or other means of negotiation, to get a better deal and better remuneration from that relationship. Increases in remuneration should go, wherever possible, into the branch network or into automation to make those branches work more efficiently, so that they can be more profitable. A key thing that we would like to see is a fairer relationship, which shares some of the savings banks are making from the closing of their branches with the network that is providing those services since their closure. While we want to see access to post office services retained for our communities, we also want things like access to cash, both in terms of dispensing cash and cash deposits. That is vital, particularly for small and medium-sized enterprises, and for the 2 million people in this country that do not have a bank account and the 8 million people who use cash every single week.
Jamie Stone
At the beginning of my contribution, I outlined the success story that is the work of Councillor Maureen Ross to establish a post office in Balintore. I know from having talked to the good lady that she is thinking of increasing the opening hours and has thoughts on banking, as we have no bank branches in the villages at all. I suggest to the Minister that it might be constructive if perhaps some officials from his Department went up there and talked to Councillor Ross, and saw what a good idea that would be.
Kevin Hollinrake
I would be very happy to visit if I find myself in that part of the world. It is quite a way away from even my constituency, but Maureen obviously does a fantastic job for the hon. Gentleman and his community, and we are keen to support those efforts. I am very happy to facilitate a conversation to ensure that Maureen has the best opportunity to make her business as viable as possible.
The Government are also funding the cost of the replacement of the Horizon IT platform that caused so many difficulties. Again, we hope that will provide new opportunities too, both in terms of efficiency and new services. We see post offices becoming parcel hubs, and the Post Office sees that as an opportunity to be frequented not just by custom from Royal Mail but also DHL, DPD, Amazon and other providers. There are future revenue opportunities that we should encourage to ensure that the network is sustainable.
Briefly on Horizon, last week’s written ministerial statement announced our intention to provide additional financial support to the Post Office as it continues to respond to the Horizon IT scandal. That is further proof of our commitment to the network.
There are certainly challenges ahead, but we continue to work with the Post Office to ensure that it is fit for the future, and we always welcome views from across the House on the network and how we make it sustainable for the future. I therefore once again thank the hon. Member for Caithness, Sutherland and Easter Ross for securing today’s important debate, and thank all other Members for their contributions.
Question put and agreed to.
Regulatory Impact Assessments Bill
Kevin Hollinrake ExcerptsFriday 20th October 2023
(7 months ago)
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Philip Davies
My hon. Friend is absolutely right, and I agree wholeheartedly. That is why, as I say, for the life of me I cannot see why a Minister would not want to do that impact assessment.
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
May I suggest an instance where we might not want to do an impact assessment? My hon. Friend makes a good point, and of course the default position is that we should, but in a situation earlier this year the economy faced being ground to a halt because of industrial action—strikes—across the country. Does he think that sometimes the Government have to legislate quickly and may not have time to go through the processes that he and I would normally like to see?
Philip Davies
The Minister makes a fair point. Perhaps it is one of the reasons that I am perhaps not quite as persuaded as I would normally be by one of the Bills from my hon. Friend the Member for Christchurch. I want to come back to the point made by my right hon. Friend the Member for Tatton.
Philip Davies
My hon. Friend is highlighting how shrewd a politician he is and what shrewd decision-making skills he has. Ultimately, he was successful in getting the project stopped, but I cannot speculate on whether that was due to the number of tunnels. However, perhaps he helped, and more power to his elbow, because in places like Shipley we support the Prime Minister in wanting better connectivity across the north. The bit that works is north to south; it is across the north that it does not work, and the Prime Minister is absolutely right to focus his money on that. Whether it was down to the cost of the tunnels, I do not know, but it cannot have done much harm.
Finally, the other element of the Bill that I am nervous about, even though it is logical, is how much extra power it gives to what my hon. Friend described in a previous debate today as “the blob”. If we were to be, in effect, governed by cost-benefit analyses in the way that he envisages and in the way that I would like things to be done, I do not think that it is beyond anybody’s imagination that the civil service would, if it was particularly keen on the Government adopting a policy, miraculously produce figures that showed a tremendous benefit and not much of a cost. I am pretty sure that it is not beyond people’s imagination to think that, were the blob, as he described it earlier, particularly determined to block a proposal from the Government, its advice to the Government would be that the cost far exceeded the benefit. I am rather nervous about giving civil servants more power over Government decisions than they already have.
Kevin Hollinrake
I think the hon. Member raised that point earlier in his remarks. I am sure that he is aware that whatever figures the Government produce, they are then scrutinised by an independent body, the Regulatory Policy Committee, to make sure that those figures hold water. Is he not reassured by that?
Philip Davies
No, I am not. I know the Minister well—he is a very good man—and I know he would not be swayed by what the blob was trying to tell him to do or not do. He is a man of his own mind and a very talented Minister, and I have no doubts about his decision-making skills. However, I am afraid that the idea that I should be reassured at the Government, in effect, handing over more decision making to some unelected body of the great and the good of the elite, and that I should put all my trust in them, does not give me any reassurance. To be perfectly honest, it somewhat horrifies me that the Government are farming out these things to the great and the good of the establishment.
Justin Madders
I would like to wait and see what the inquiry says about the way that that was handled. An awful lot of evidence has been given about Government decision making at the time, which it makes clear was less than ideal. It is probably best for us to wait and see what comes out of the inquiry on how we as a Parliament can best deal with these issues in future. Hopefully that situation will never repeat itself, but the hon. Member for Shipley (Philip Davies) made the point that the solution to many of these challenges lies in Members robustly challenging Government when opportunities arise.
The House of Lords Committee said that an impact statement
“should not just be treated as an item on a ‘to do’ list but be an integral part of the policy formulation process… One of our major concerns is that IAs which are published late, or that appear to have been scrambled together at the last minute to justify a decision already taken, may undermine the quality of the policy choices that underpin the legislation.”
Again, that theme has been picked up in the debate.
Kevin Hollinrake
Reflecting on that particular statement, does the hon. Gentleman think his party was wrong to call for longer lockdowns on the basis of no evidence in cost-benefit analysis?
Justin Madders
That is a bit rich from a Minister of a Government who did not introduce any impact assessments when they first brought in the lockdowns or various restrictions. I can recall on numerous occasions asking Ministers why people were limited to being in groups of six or why pubs had to close at 10 o’clock. We never got a satisfactory answer to any of those questions, so for the Government to try to put that on us is a little rich.
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
I congratulate my hon. Friend the Member for Christchurch (Sir Christopher Chope) on his important Bill. I very much agree with his sentiments about ensuring that we have good financial justifications for our policies as soon as they are introduced to this House, although—as I said in an intervention on my hon. Friend the Member for Shipley (Philip Davies)—I think there are occasions on which we must be able to set those things aside.
What my hon. Friend the Member for Christchurch seeks to do through his Bill is to formalise a process that should happen anyway, by making impact assessments a statutory requirement as soon as primary or secondary legislation is introduced. Currently, this is a process that happens through collective agreement.
As I always do when speaking in this House, I will try to put myself in the shoes I was in when I was in business. This place is not always that businesslike; I think it should be more businesslike. When someone in business is about to spend some money or invest in a new policy area, they will look at the costs and benefits of the interventions they are likely to make. However, I do not think that any business will simply bind itself to its own process. This legislation is itself a form of regulation, so I think it is right that we look at outcomes rather than processes. The Government are strongly committed to ensuring proper assessment of our policies, assessing the impacts and seeking to ease the burdens. That is the principle behind my hon. Friend’s Bill.
On my travels around the business community, I talk to many businesses. The principal issue raised by small and medium-sized enterprises is access to finance, but for the large businesses operating in our economy, which are clearly hugely important, the principal concerns are about the impact of regulation and sometimes about the slowness of the regulatory framework; I will come on to that point in a second. Importantly, we are making changes right now that I think my hon. Friend will approve of and that will meet his objectives.
There has been much speculation about the role of Parliament. My hon. Friend asked whether we are simply nodding donkeys. He certainly is not one, and neither is anybody who has spoken in this debate. Parliamentarians across the House can always make changes if they can apply enough pressure to the Government of the day. In my seven and a half years on the Back Benches, I certainly did not feel that I was a nodding donkey.
My hon. Friend wants impact assessments to be carried out prior to legislation even being tabled. He is absolutely right. That point feeds into something even more important, which is that we will ensure we introduce only legislation that is fit for purpose and will have a positive effect on our economy. With the better regulation framework we are introducing, our intention is that consideration of the impact assessment and the cost-benefit analysis will happen even before the legislation has been drafted. That is the principle.
Before a Department decides to legislate, it must first consider other routes that would achieve the same end. If it ultimately decides to legislate in a certain area, a key moment is the write-round, which is where a Minister or Secretary of State writes to other Departments to say that they want to legislate. At that point, the impact assessment should be made available to other Ministers. Hopefully, that will prevent unnecessary legislation resulting from other measures being brought forward that would have the same effect.
I think our recent reform to the better regulation framework meets the intent of my hon. Friend’s Bill. I do not want to put words in his mouth, but I am sure he agrees that the intent is to reduce business burdens. Reducing burdens on business means supply-side reform and more competition, and we know that more competition is the best regulator.
We are focusing on three things within the framework. The first is the existing stock of regulation on our statute book; the second is the flow of new regulation and the need to ensure that anything we introduce has the right purpose and the right effect; and the third, which has not really been discussed in today’s debate, is regulatory practice. What do our regulators actually do in practice when they are carrying out their regulatory duties?
On the existing stock of regulation, for the purposes of the Retained EU Law (Revocation and Reform) Act 2023, we have been hunting out bits of regulation that can be removed or amended now that we have the ability to amend what were previously EU requirements. However, the programme covers a wider area than retained EU law; we are looking for other areas in which we can streamline regulation. My right hon. Friend the Member for Gainsborough (Sir Edward Leigh) was right to say that, as a Conservative Government, we should be in favour of low tax and low regulation, and that is certainly our intention. My right hon. Friend referred extensively to his local RAF base, and we have had many discussions about that because we have had similar experiences over the last couple of years. He may be reassured to know that future impact assessments will look beyond purely economic impacts, and may include some of the measures to which he alluded.
We have already reformed or revoked more than 1,000 pieces of legislation, and 1,000 more reforms and revocations are under way. We have, for instance, either reformed or revoked 500 measures in the Financial Services and Markets Act 2023 and the Procurement Bill. We have also consulted on reforming retained EU employment law, such as the working time directive recording requirements and wine sector reforms, and consultations are currently taking place on the product safety review and the fire safety of domestic upholstered furniture. The latter two consultations will future-proof our approach to product regulation, alongside our proposal to extend recognition of the CE mark indefinitely.
A number of observations have been made about the work of parliamentarians and its effect on regulation. I congratulate my right hon. Friends the Members for Chipping Barnet (Theresa Villiers) and for Chingford and Woodford Green (Sir Iain Duncan Smith) on their work on the taskforce on innovation, growth and regulatory reform, which made 69 recommendations for the easing or simplification of regulations. We have already implemented 10 of those recommendations, and are in the process of implementing a further 49. They involve key issues such as grid connections and reform of our clinical trials process.
We have simplified or scrapped many other regulations. Our reform of the nutrient neutrality rules will potentially release 150,000 previously stalled homes into the marketplace. The reform of the GDPR requirements will save businesses about £1 billion, and the reform of the working time directive recording requirements will have similar benefits. There are also pension and Solvency II reforms and changes, the setting aside of the requirement for small and medium-sized enterprises to provide insurance cover and audited accounts when bidding for public sector contracts in advance of those contracts—that should make it much easier for SMEs to secure such contracts—and changes relating to gene editing, holiday requirements and listing rules for the London Stock Exchange. My hon. Friend the Member for Christchurch mentioned the increase in the number of burdens placed on businesses over the last few years. I cannot comment on the figure that he mentioned—I think it was £14 billion—but regulation does, of course, have its purpose at times. We cannot have clean rivers without regulation. However, I am happy to write to my hon. Friend. I thought he might also mention smart meters, which are included in those figures, because I have heard him mention them in the Chamber before. As we know, the roll-out of smart meters is important to reducing energy use. We have also reformed measures on climate-related reporting in large companies, the energy efficiency of buildings and electric vehicle charging, so that we can have charging stations all around the country. I declare my interest here: as an electric vehicle driver for the past six and a half years, I welcome that, because I know all about range anxiety. The telecoms measures relating to national security—that alone was £2.4 billion—resulted from concerns raised in the House the security threat from foreign actors.
To complement the work that we are doing on the existing stock of regulation, we are working on controlling the flow of new regulation. The better regulation framework, about which I will say more shortly, has been reformed to make it more effective at putting a downward pressure on that flow.
Philip Davies
Back in the dim and dark past—when David Cameron was Prime Minister, I think—the Government introduced a “one in, one out” rule for regulations, and then increased that to a “one in, two out” rule. Does that still apply to the Government?
Kevin Hollinrake
No, that does not currently apply to the Government. As I say, there are reasons why we regulate, and I have pointed out some of those reasons; I am very happy to write to my hon. Friend regarding some of the reasons we do need to regulate. That is not necessarily the right way to go about it: looking at costs and benefits across the piece is important. In his speech, which I listened to very carefully, he cast some doubts on our ability to properly analyse costs and benefits, so I think it is right that we look at this issue across the piece. Our policymaking should be more nuanced than that.
I have mentioned the landscape of regulators. The third important part of our smarter regulation agenda relates to ensuring we have a well-functioning landscape of independent regulators. These have a significant footprint on the economy, and it is essential that they work well for the United Kingdom. They should operate in an agile and outcome-driven fashion, helping to drive economic growth while protecting consumers and ensuring that markets work as well as they can.
We have launched a series of consultations aimed at improving the outcomes that independent regulation delivers, including a strategic steer for the Competition and Markets Authority and a strategy and policy statement for energy regulation. We have also published findings of an independent review into the Civil Aviation Authority as part of the Cabinet Office’s public bodies review programme. Most recently, we consulted on extending the existing growth duty to Ofgem, Ofcom and Ofwat.
We have launched a call for evidence on the regulatory landscape as a whole, seeking views from businesses, consumers and regulators on what works well and what could be improved on to deliver for the sectors they serve. That call for evidence also seeks views on any further steps we can take to reform the stock of regulation to remove unnecessary burdens, so I can assure my hon. Friend the Member for Shipley that this Government are completely committed to doing everything possible to keep the impacts on business to an absolute minimum. Those impact assessments play a key role when it comes to controlling the flow of new regulation. They set out the conclusions of evidence-based processes and procedures that assess the economic, social and environmental aspects of public policy for businesses and wider society.
My hon. Friend the Member for Christchurch mentioned some of the legislation that has not necessarily been accompanied by an impact assessment. He may want to ask questions of the different Ministers responsible for the policy areas concerned: net zero, HS2, and renters’ reform. For something as strategic as net zero, for example, it is hugely complex to identify both costs and benefits: there are some things that we simply do not know. While listening to my hon. Friend speak about those issues, a famous quote from the former Chinese Premier Zhou Enlai came to mind: in 1972, he was asked about the impact of the French revolution, and he said, “It’s too early to tell.” There are so many things that we just do not know, which I think was a point raised by my hon. Friend the Member for Shipley. As I used to say in our boardroom, “You can make anything look good on a spreadsheet”, so we have to cast a critical eye over any cost-benefit analysis.
The other thing I would say about more parliamentary scrutiny is that we hear from businesses all the time that they are crying out for us to get on and deliver certain key infrastructure projects, so I do not think it would be helpful to extend the time they take to deliver. One example is the East Anglia pylon project, which is 112 miles of electricity cable going through the east of England. I realise that that project is very controversial, but stopping these things from happening has a cost to business, too. There are different dynamics going on in this conversation.
Impact assessments have evolved into an important and valuable component of the UK’s better regulation system. They have added transparent accountability to the work of supporting policy development. As I have said, independent scrutiny by the Regulatory Policy Committee should offer some reassurance to Ministers, parliamentarians and other stakeholders that the impacts have been considered rigorously. The UK’s approach is already highly regarded internationally, and we continue to score highly in impact assessments and post-implementation reviews compared with the other 38 OECD members. We should be justifiably proud of our world-leading reputation in this area.
The reforms to the better regulation framework deliver on the intent set out in May in the “Smarter regulation to grow the economy” document, and will put downward pressure on the flow of new regulation. The reforms require policymakers across Government to think even more carefully about alternative approaches, before concluding that regulation is the best answer. They will also encourage impact assessments, supporting proposals to focus on a wider range of impacts than was the case under the old system that had a narrow focus on impacts on business. The reforms encourage earlier consideration of how to evaluate whether regulations have achieved what was intended, so they can be revised or removed where they are not working as intended.
To support that, our new approach brings independent scrutiny by the independent advisory body, the RPC, to earlier in the policy cycle. That means that the RPC’s opinion can better inform Ministers’ decisions at an earlier stage on whether proceeding with regulation is the right approach, and whether the impacts are proportionate. All that should further improve the quality and value of the impact assessments that will reach Parliament, and help to ensure that the Government are regulating only where necessary, and designing regulation that is both proportionate and future-proof. We want this to drive the best regulatory environment, and ensure that UK businesses can grow and consumers stay safe.
My right hon. Friend the Member for Tatton (Esther McVey) raised the issue of covid and the Public Health Act, and she is right to say that we must learn from our experiences during that time. There is always a price for acting and a price for not acting, and it is right that we look at policy decisions that were taken to ensure that we make better decisions in future—not that we ever want to suffer from the same experiences again.
My hon. Friend the Member for Shipley spoke about the Government frittering money away, and suggested that both parties do that. I am not saying that money is not wasted sometimes. I come from Yorkshire and that is not something we do on an everyday basis—we are keen to avoid it. However, in my eight and a half years in Parliament, and even though we are guilty of it at times, it has always occurred to me that those on the Opposition Benches have an awful lot of money to spend. Time after time, they have voted for tax cuts, or against tax increases, while at the same time calling for increased spending. It simply does not add up.
To conclude, although the Government are not minded to support the Bill, we recognise the vital role that regulatory impact assessments play both in ensuring that Government consider the need for, and likely impact of, new regulations to support legislative change, and in informing decision making and parliamentary scrutiny. The Government do not think the Bill is necessary because there are already proportionate requirements around impact assessments. The framework has always evolved to target regulatory impact assessments where there is the greatest benefit, and we believe our recent reforms move further in that direction.
In the spirit of smarter regulation, which I trust I have shown I very much care about, we should not create new legislation about impact assessment requirements unless it is essential to do so. Our recent changes to the better regulation framework seek to reinforce the processes used in Government, while removing regulation rather than adding to it. We believe that is the correct approach. I again thank my hon. Friend the Member for Christchurch for his contributions to this debate, as well as everyone who has worked hard to raise awareness of the vital role that regulatory impact assessments play when legislative or policy changes are made.