(6 years, 11 months ago)
Written StatementsThe Government are pleased to accept all of the rate recommendations as set out in the Low Pay Commission’s autumn report 2017. The Low Pay Commission is an internationally renowned independent and expert body which conducts extensive analysis and stakeholder research in order to make its minimum wage rate recommendations.
The Low Pay Commission has recommended that:
The national living wage (for workers aged 25 and over) should increase from £7.50 to £7.83;
The rate for 21 to 24-year-olds should increase from £7.05 to £7.38;
The rate for 18 to 20-year-olds should increase from £5.60 to £5.90;
The rate for 16 to 17-year-olds should increase from £4.05 to £4.20; and
The apprentice rate (for apprentices aged under 19 or in the first year of their apprenticeship) should increase from £3.50 to £3.70.
The Low Pay Commission has also recommended that the accommodation offset increases from the current rate of £6.40 to £7.00 from 1 April 2018.
We welcome the Low Pay Commission’s recommendation of an increase to the national living wage rate such that it remains on path to reach 60% of median earnings by 2020.
Further to this, economic indicators have enabled the Low Pay Commission to be more ambitious when setting the youth rates, within its remit of recommending rates which do not damage the employment prospects of younger workers. Those entitled to the 21-24 age rate will see the fastest percentage increase since 2006. Similarly, those entitled to the 18-20 age rate will see the fastest increase since 2004.
These increases are due to come into effect from April 2018, subject to parliamentary approval. The Government intend to lay implementing regulations before Parliament in due course.
Copies will be available in the Vote Office and the Printed Paper Office and from the BEIS website at www.beis.gov.uk.
[HCWS266]
(6 years, 11 months ago)
General CommitteesI beg to move,
That the Committee has considered the Small Business Commissioner (Scope and Scheme) Regulations 2017.
It is a pleasure to serve under your chairmanship, Mr Sharma. The regulations set out further detail on which small businesses qualify for the Small Business Commissioner’s services, including the complaints scheme. Late payment remains a significant issue; according to Bacs Direct Credit figures, the overall debt owed to small and medium-sized businesses in July 2017 as a result of late payments was £14.2 billion. We all rely on the UK’s 5.5 million small and medium-sized businesses for jobs, goods and services. An unfair payment culture that hurts them has no place in a well-functioning economy, so the Government are taking several steps to tackle late payments. As well as the regulations before the Committee, these steps include the prompt payment code—an industry-led code of conduct that sets out best payment practice—and the payment practices reporting requirement, a statutory transparency measure for large companies.
The Enterprise Act 2016 established the Small Business Commissioner, whose role will be to support small businesses to resolve payment disputes and avoid future issues by encouraging a culture change in the way businesses deal with one another. The commissioner will provide general information and advice; direct small businesses to existing services; consider complaints from small business suppliers about payment issues with their larger business clients; and make relevant recommendations. The Act provides that he can consider only complaints that concern matters that occurred after his appointed start date. We set that date at 6 April 2017 to enable him to accept complaints relating to matters that occurred between 6 April and the formal launch of the complaints service, which will broaden access to the complaints service and help him to build momentum as soon as his office is formally opened. The complaints service will launch as soon as possible after Parliament’s approval of the regulations.
One challenge relating to late payments that I often see—as do other hon. Members, I suspect—is large companies disputing a payment so that it is put to one side. The dispute is often over a minor matter, but it allows those companies to get away with avoiding payment within 30 or 60 days. Will such abuse on the margins be part of the commissioner’s remit?
I thank my hon. Friend for that observation; he has considerable experience in these matters, and I would not be a bit surprised if what he says were the case. I will ask the commissioner to consider that practice and other known dodges—for want of a better word—in the course of his work.
The 2016 Act sets out the broad framework for the Small Business Commissioner. The regulations define “small business” for the purpose of qualification for the commissioner’s services, including the complaints scheme; they also provide further detail about the scheme.
Further to the point made by the hon. Member for Hertford and Stortford, a major issue faced by small businesses is that if they challenge late payments, their customers may simply cease trading with them. Small businesses therefore have to decide between waiting 90 or 120 days to be paid or getting no business at all. Changing the culture so that businesses can make complaints without customers knowing who they are will be crucial to solving this problem, which we have wrestled with for many years.
I agree that confidentiality is often a requirement and that the lack thereof is a disincentive for small businesses to challenge the late payment practices that have been a part of business culture. There is provision for the commissioner to respect the confidentiality of complainants and, indeed, it is his duty to do so unless the complainant gives permission for his or her name, or the company name, to be disclosed. We can discuss that further later in the debate because it is important. I am well aware that in a system that provides for confidentiality, there are occasions when it is impossible to conceal the true identity of the complainant company in reality. The hon. Gentleman raises a difficult issue.
The regulations set out: that a business must have a headcount of fewer than 50 staff on one of the assessment dates or during one of the assessment periods to qualify to use the commissioner’s services; the requirements that must be met before presenting a complaint; the requirements for the form and content of the complaint; the time limit for presenting a complaint; the power for the commissioner to fix and extend time limits and to dismiss complaints; the matters that the commissioner must take into consideration when determining whether an act or omission complained about was fair and reasonable; and factors to be taken into account when deciding whether to identify a respondent in any report of any complaint. They apply to the whole of the United Kingdom.
We consulted between 13 October and 7 December 2016 on how the Small Business Commissioner would handle complaints. We published draft regulations in February and interested parties were invited to comment on them between 24 February and 9 March. The key message from respondents to that consultation was that the regulations should be simple so that the Small Business Commissioner’s services would be as efficient and effective as possible. The regulations will enable the Small Business Commissioner to accept complaints on payment matters from small business suppliers about their larger clients. That is an important part of the Small Business Commissioner’s role in supporting small businesses.
Although the debate is limited to the regulations, I take the opportunity to welcome Mr Paul Uppal to his post as the UK’s first Small Business Commissioner. He competed against many other well-qualified candidates to secure the role. I thank all those who applied for the role and who engaged with the consultations and policy development inside and outside the House.
I thank the shadow Minister for his thoughtful comments and I am grateful for his encouraging words about the choice of Paul Uppal to take up the post. I will do my best to answers the questions he posed about some of the details.
He mentions that the average late payment is 72 days, which was also part of the figures that I gave from Bacs’ data. That is quite unacceptable; it is effectively two and a half months, and if it is the average, we have a lot of work to do. On a more positive note, and as testimony to some of the voluntary work that has already been established through the prompt payment code, there has been a substantial improvement in Bacs’ data. The latest figures show an average of what is owed to small businesses at any one time of around the £14.2 billion mark, as opposed to £26.3 billion the year before. I have chaired roundtables of small businesses around the country and found some enthusiasm for the prompt payment code, and some companies reporting that they have been able to deploy accounts staff in more productive functions than simply chasing up late payment all the time as a result of the improvement that they have seen. As I say, there is clearly still a long way to go, but I think the prompt payment code and other measures the Government have introduced have started a change in culture.
The hon. Gentleman mentioned the Australian model and a more punitive function, and asked me to comment on whether that might be an end point for what we are setting up here today. I do not see it is a logical extension. The business support landscape in Australia is very different from that of the United Kingdom and I think that we can achieve more by trying to bring about a cultural change, rather than introducing hard-hitting measures and fines and going down that route straight away. I would not rule out such an approach if that does not work, but I am quite optimistic that, given the progress we have already made—as well as the progress of interventions in other sectors, such as the Groceries Code Adjudicator—we can achieve more with an approach that tries to take business with us. However, as I say, I would not rule out in the long run something of the sort that the hon. Gentleman described if it became clear that it was needed.
The hon. Gentleman asked about the public sector. There is perhaps a difference between what is required and what is seen as standard, by way of the letter of the law, and what is actually carried out in practice. Under the letter of the law, all public sector contractors are mandated to pay within 30 days and ensure that the 30-day policy applies all the way through the supply chain. I am sceptical about whether that always happens in reality, but that is the goal. The public sector is therefore not incorporated in the regulations.
The Minister says that payment within 30 days is mandated all the way through the supply chain, but that she is sceptical about whether that is really happening. What are she and her colleagues doing to enforce it?
I became aware of the issue only a few months ago, and I have not decided yet whether we need to do more than we are doing already. We fund a mystery shopper service that checks how public sector contracts are complied with, particularly in respect of late payment, and I will look closely at its findings. It is encouraging that payment within 30 days throughout the supply chain is the standard, but I will need to satisfy myself that it is being complied with and adhered to. The mystery shopper service may inform that process.
If the Minister finds that there is still a widespread problem with payment not being passed down the supply chain, is she prepared to take enforcement action? The mystery shopper service may identify the problem, but I am not convinced that it will stop it.
I shall have to return to that question once I have investigated what the service has identified. I cannot prejudge what we will do based on what we find out, so I hope the hon. Gentleman with bear with me to that extent. In answer to his question about the number of complaints on which the system is predicated and the resources at its disposal, the establishment cost of the Small Business Commissioner’s office is £1.1 million and the anticipated running costs are £1.4 million a year, based on an estimate of 70,000 companies referring just under 400,000 disputes, of which 500 result in full-blown complaints.
The hon. Gentleman also asked about construction. Construction is certainly included in the commissioner’s remit, but I would like to go further, because I recognise that there are special problems with late payment in the sector. Two weeks ago, we announced a consultation on the culture of late payment and payment retention in the construction sector. I urge individuals and companies to respond to that consultation, because there is widespread anecdotal evidence of a big problem of unfair treatment of small businesses in the construction sector.
I think I have answered the hon. Gentleman’s questions, so I thank hon. Members for their time and commend the regulations to the Committee.
In a spirit of generosity, and since Mr Sharma has not called time, I give way.
It was only that I asked the Minister how she would raise awareness of the service.
The hon. Gentleman did ask that, and I failed to answer. We will promote the service’s launch heavily through all media, including traditional media—as he mentioned, a lot of businesses are not online. We will also use the routine communications of other Government agencies with businesses to alert them to the importance of this new development.
Question put and agreed to.
(6 years, 11 months ago)
Written StatementsA meeting of the General Affairs Council (Cohesion) was held in Brussels on 15 November 2017. The UK was represented by Rory O’Donnell (Counsellor for Regions, Agriculture and Fisheries) from the UK permanent representation to the European Union.
The General Affairs Council focused on an exchange of views based on the 7th report on economic, social and territorial cohesion; and on updates on the modification of the common provisions regulation.
Modification of the commons provisions regulation
The Estonian presidency provided an update on proposed changes to the common provisions regulation (the overarching EU regulation which governs the European structural and investment funds). These are expected to be in place before our withdrawal from the EU and were proposed by the Commission as part of the mid-term review of the multiannual financial framework (MFF) in order to simplify and harmonise existing regulations.
7th report on economic, social and territorial cohesion
The Council discussed conclusions from the cohesion report, which assesses the EU’s cohesion policy in recent years and recognises the need for greater visibility in its implementation. This report called for further simplification and flexibility in the period beyond 2020. A discussion between member states on the themes raised in the report was held. Member states particularly focused on efforts for simplification and harmonisation, on the principle of national co-financing and on the rule of law.
[HCWS262]
(6 years, 11 months ago)
Commons ChamberI thank my right hon. Friend the Member for Loughborough (Nicky Morgan) for securing tonight’s debate on this very important subject and for the powerful and persuasive speech that she has made in support of her argument.
I recognise that she is seeking to protect the interests of those in the transgender community by ensuring their right to have their private information remain private. I have considerable sympathy with the personal accounts that she has shared in her speech this evening, and I can only conclude that the examples that she gives are backed up by many other people who have not come forward.
This debate highlights a difficult tension between two important principles: the right of an individual to have their private details remain private and not to be exposed against the also important need for transparency of the public register of companies. These rights are not easy to reconcile, but I very much agree with my right hon. Friend that we should make every effort to improve the situation that she described in her speech.
There are some very important reasons why the records of companies must be transparent and available for anyone to inspect. Incorporating a company and getting it registered at Companies House brings with it the benefit of limited liability to the owners and directors charged with running the company. In return for that significant benefit, directors of companies must provide details relating to their identity, residential address information and annual accounts of the company. That process gives anyone the ability to check business records and the trading history of people and businesses that they are dealing with or proposing to enter into business with.
It is only right that anyone should be able to check a director’s previous trading history or directorships, or any past disqualifications and bankruptcies. People might also want to know of their involvement in previous failed or successful businesses as important facts to consider when entering into business agreements.
In many ways, the register of companies is not just a list of companies with directors’ names. Its real purpose is to support the functioning of limited liability and to enable business trading across the economy through the information that it provides. It is that transparency that underpins its value and contribution. The register of companies is one of the most searched and interrogated databases worldwide. There were more than 2 billion searches on the website in 2016. It is also widely used by professional organisations—for example, credit reference agencies in determining whether to loan to prospective businesses, or professional researchers such as those engaged in transparency initiatives.
My right hon. Friend raises important statutory provisions—in particular that section 22 of the Gender Recognition Act 2004 does indeed make it an offence for a person who has acquired protected information in an official capacity to disclose that information. However, as she says, section 22(4) provides a number of exemptions, including section 22(4)(j) which says that
“the disclosure is in accordance with any provision of, or made by virtue of, an enactment other than this section.”
Section 12, together with section 163 of the Companies Act 2006, require directors to disclose their name and any former name to the registrar of companies. Sections 1085 and 1086 of that Act then place a duty on the registrar to make that information and other information delivered to them in relation to companies’ registration and filings available for public inspection. This is about the need for transparency as I mentioned previously.
Section 1087(1)(k) of the Companies Act does prevent the registrar from making certain information available for public inspection if required by another enactment. However, because of the carve-out in the Gender Recognition Act, information such as any previous names of directors, whatever the reason for the change of name, are not included in these exemptions.
The Gender Recognition Act 2004 does not make it an offence, as my right hon. Friend explained, to disclose this information when that disclosure is in accordance with another enactment, which is the case in respect of the Companies Act 2006. This therefore applies where a transgender person who is a company director has changed their name.
My right hon. Friend will know that the current pressures for information relating to companies and their directors is, in many respects, for even more transparency, rather than less. However, I do recognise that the register of companies should look to strike the right balance between the need for transparency and the protection of individuals and their private information. The current legal provisions already allow for certain information to be withheld from public inspection—for example, a director’s private residential addresses, where it is demonstrated that there is a risk of violence or intimidation arising from the activities of the company.
Since the register of companies became freely available online in 2015, however, a number of hon. Members have written to me raising their concerns about the range of private information that is now publicly available and easily accessible. As a result, my Department is considering a number of potential measures related to the integrity of the register of companies and the personal information that is available on it. I will most certainly ensure that the issue raised by my right hon. Friend is considered within that work. Although I can commit to consider the issue further, I would stress that the position of company director carries with it statutory duties and accountabilities. We need to guard against the creation of loopholes that would allow people to evade their responsibilities or to conceal their previous trading history by changing their name on the register.
I thank the Minister for the way in which she is responding to my debate. I welcome the fact that she has talked about the wider consultation, but may I urge and push her just a little further to say that the matters I have raised tonight should be a part of that consultation—at least, the gathering of views to find out the scale of the problem? Will she also consider, again perhaps as part of the consultation, Alex’s comment to me that she is able to protect herself when it comes to her credit profile, her tax profile with Her Majesty’s Revenue and Customs, the Financial Conduct Authority register and the Government Gateway, all of which presumably—certainly the credit profile and tax profile—help in building up the transparent profile of somebody that the Minister has been talking about?
I will certainly consider what my right hon. Friend said; she certainly makes a powerful case. Transparency will remain a high priority for the register of companies, but we must consider her arguments and I will consider what she asked for as part of our review.
As my right hon. Friend mentioned, the Government have committed to publishing a consultation shortly on amendments to the gender recognition process in England and Wales. We also recently launched a national survey on the needs of the LGBT population, which has just completed, receiving more than 100,000 responses. Both these consultations will be of help in shedding light on the issues raised in this debate, and I will consider further what my right hon. Friend has argued for tonight in that process.
Question put and agreed to.
(6 years, 11 months ago)
Written StatementsA meeting of the General Affairs Council (cohesion) will be held in Brussels on 15 November 2017. The UK will be represented by Rory O’Donnell (Counsellor for Regions, Agriculture and Fisheries) from the UK permanent representation to the European Union.
The General Affairs Council is expected to focus on the modification of the common provisions regulation; followed by an exchange of views based on the seventh report on economic, social and territorial cohesion.
Modification of the commons provisions regulation
The Estonian presidency will provide an update on proposed changes to the common provisions regulation (the overarching EU regulation which governs the European structural and investment funds). These are expected to be in place before our withdrawal from the EU and were proposed by the Commission as part of the mid-term review of the multiannual financial framework (MFF) in order to simplify and harmonise existing regulations.
Seventh report on economic, social and territorial cohesion
The Council will discuss conclusions from the cohesion report, which assesses the EU’s cohesion policy in recent years and recognises the need for greater visibility in its implementation. It calls for further simplification and flexibility in the period beyond 2020. A discussion between member states on the themes raised in the report is expected.
[HCWS242]
(6 years, 11 months ago)
Commons ChamberI beg to move,
That, for the purposes of any Act resulting from the Parental Bereavement (Leave and Pay) Bill, it is expedient to authorise:
(1) the payment out of money provided by Parliament of any expenditure incurred under or by virtue of the Act by the Treasury; and
(2) the payment of sums into the Consolidated Fund.
I pay tribute to my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) for his work in getting the Bill to this point, and the effort he has put in to engage with stakeholders and Members to ensure it has cross-party support. I would like to take this opportunity to restate the Government’s commitment to the Bill and their desire to see it succeed. The importance of the Bill is clear from the support for it across the House. We should therefore ensure that its financial element is clearly set out for the House to consider.
(6 years, 11 months ago)
Commons ChamberMy right hon. Friend the Secretary of State has frequent discussions with the Chancellor on a range of matters, including financial regulation. The Financial Conduct Authority has published a summary of Promontory’s skilled persons report, to which I think the right hon. Gentleman refers. The FCA is now considering the report’s conclusions, including whether there is any basis for further action.
Constituents of mine have, in good faith, used Government-based schemes such as the enterprise finance guarantee scheme to grow their businesses, only to find the Royal Bank of Scotland using the very same scheme to close down their businesses. Given that there is a litany of such cases throughout that report, is it not now time that the Minister and the Treasury conducted a proper investigation and perhaps even a judge-led inquiry?
The enterprise finance guarantee scheme was exactly designed to enable businesses to borrow when they lacked collateral, with taxpayer support. If a bank is closing down overdraft facilities to claim on the guarantee—as in the case to which I believe the right hon. Gentleman refers—that would clearly be a gross abuse of the scheme. Any evidence of that will certainly be looked at very carefully by my Department.
Does the Minister not agree that the response to the finding that 92% of the bank’s restructuring group’s small business customers were mistreated has been pathetic and is unworthy of a publicly owned institution?
I suggest that the right hon. Gentleman hold fire until the Financial Conduct Authority has decided on what action it may still take. It is empowered to take action, and I totally agree with the sentiments behind his question.
What happened at RBS’s Global Restructuring Group is a scandal of the highest order. Businesses were ruined; families were torn apart; and people took their own lives. The Minister must know that the FCA cannot deliver justice for the GRG’s victims on its own, because most business banking is unregulated. I have asked Ministers this question six times already, and I will ask it a seventh time: will the Government set up a judge-led inquiry into RBS GRG, or do they have something to hide?
I can assure the hon. Gentleman that we have nothing to hide. I share the concerns about the practices of the Global Restructuring Group at RBS and the devastating impact on people’s businesses, which represent a lifetime’s work for many people. I am sure that we have not yet heard the last of this inquiry.
I have worked closely with ministerial colleagues to implement a national minimum wage enforcement approach that protects the interests of social care workers and vulnerable service users. The Government recognise the financial pressures that some providers face, and we are exploring further options to minimise any impact on the sector. Any intervention would need to be proportionate, and the Government have opened discussions with the European Commission about issues relating to state aid.
I thank the Minister for that answer, but how are the Government supporting individuals with personal budgets who could face bills of thousands of pounds in back-payments?
We recognise that such individuals can be among the most vulnerable in society, and we are working to ensure that that group receives the necessary help and support. We expect local authorities to work with Her Majesty’s Revenue and Customs to ensure the right outcome for such individuals, but it is only fair that the budgets provided to personal budget holders reflect their legal obligations to pay the national minimum wage to workers on sleep-in duty both now and when it comes to any arrears owing.
If enforcement action results in the closure of or disruption to service providers, how will the Government guarantee that vulnerable people will not be left without services?
I would like to reassure the hon. Lady that the new social care compliance scheme will give providers up to a year to identify what they owe to workers and will be supported by advice from HMRC. Employers who identify arrears at the end of the self-review period will have three months to pay workers, so the scheme is designed both to support workers and to ensure the continuation of the crucial services that providers perform.
The Government’s new interim compliance scheme, announced last week, unfortunately adds to the uncertainty facing the social care sector. May I urge the Minister to do all she can to ensure that, as quickly as possible, the Government get back round the table with the sector to find an acceptable long-term solution?
I assure my hon. Friend that we are working very hard across Government with the Department of Health and the Department for Communities and Local Government to continue our discussions with the Treasury about possible solutions to the long-term viability of certain providers.
I welcome the Government’s efforts to try to find a permanent solution to sleep-in shifts. The situation arose from a change in guidance following an employment tribunal in 2014. Would it not be sensible to consider revisiting the legislation in this place simply to return to the pre-tribunal position?
We have made it clear that we expect all employers to pay workers according to the law, including the national minimum wage, for sleep-in duties. It is not uncommon for employment law to be clarified in the courts and tribunals, and this issue has been the subject of a number of cases. Even if we were to do as my hon. Friend suggests—we will certainly not be revisiting the legislation—it would not have any impact on workers’ eligibility for historical back-pay liabilities.
This week is Living Wage Week. Some sectors in the UK are better predisposed than others to paying higher wages, but the rising cost of living applies to all. What will the Minister do to incentivise businesses in all sectors to sign up as living wage employers?
I applaud the work of the national Living Wage Foundation, but we have a crucial role to play in ensuring that Her Majesty’s Revenue and Customs has the resources to enforce the minimum wage, where it needs enforcing. That is our priority, although obviously I respect the work of the Living Wage Foundation.
At last year’s international anti-corruption summit, we committed to introduce a register of beneficial ownership of overseas companies. We published a call for evidence in April, the responses to which are being analysed. We will publish a response that provides for legislation in due course.
Dieter Helm’s recently published “Cost of Energy Review” says that
“the prices of oil, gas and coal have fallen…contrary to the modelling and forecasting of both the Department of Energy & Climate Change…and the Committee on Climate Change”.
He means that however hard they try and however worthy their intentions, mandarins and regulators are rubbish at discovering or predicting energy prices. Does my right hon. Friend agree that the provisions for the draft Bill’s absolute energy price cap, which would require mandarins and regulators to meet twice a year to pick a number, would repeat the same mistakes so should be replaced by something more closely linked to the few competitive energy prices that already exist?
The hon. Gentleman raises an important point about the national minimum wage and seafarers. We are looking into it and I will write to him with the latest position.
This week is Offshore Wind Week. The wind and renewables sector is vital to my constituency. Many young people are training to secure jobs in the industry, as is being highlighted by the apprenticeships event that will begin here shortly. What ongoing support will the Government give to young people entering the industry?
The Government take product safety extremely seriously. We established a working group on product recalls and safety that reported in July, and we will respond shortly. We are already taking action in the areas that have given the hon. Lady cause for concern. Whirlpool has now managed to withdraw or modify more than 2 million of those machines to an unprecedented degree.
The Secretary of State will be aware that Newquay’s bid to be the location of the spaceport is backed by organisations right across Cornwall, including the LEP, the chamber of commerce, the wider business community and the local authority. Will he update the House on what progress has been made in this important development for the UK space sector?
When does the Minister plan to respond to the Matthew Taylor review of employment practices in the modern economy?
We are working on our response to the Taylor review’s recommendations now, and we will publish that response before the year’s end.
(6 years, 12 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
It is a pleasure to serve under your chairmanship, Mrs Main. I congratulate the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) on securing today’s important debate. I know that he has long championed product safety, drawing on his great expertise in fire safety, and it is a matter that he and I have discussed outside debates such as this.
Every injury and fatality in the fires that have happened recently is of course an absolute tragedy for the families and friends of those affected. No one can fail to be moved by the tragic stories of those affected by the fires in Grenfell Tower and in Llanrwst, or by any of the other fires that have been mentioned today. I listened carefully to what the hon. Member for Hammersmith (Andy Slaughter) reported about the three-year inquest into the two tragic deaths at Llanrwst and the critique he made of Whirlpool’s involvement in that inquest. Those are some of the reasons for my commitment to improving the system, so that we have fewer tragic cases such as those we have heard about in today’s debate.
I have picked up on the sense of urgency now required of the Government and I understand the frustration that some hon. Members expressed at the pace of change. I am aware that it is more than a year since I have been the lead Minister in this area and more than a year since the fire in Hammersmith that prompted the latest wave of concern. One of my first actions as Minister was to bring together fire safety experts and stakeholders in the expert working group on product recalls and safety. I am sorry that the recommendations have disappointed the shadow Minister, the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss), but virtually all the organisations—with the exception of Which?—that she said were frustrated by some of the proposals not going far enough are members of the group and have the opportunity to input into the recommendations and the follow-up. Having received the group’s report, we are now at the stage of taking the actions needed to deliver improvement. I have been asked by several hon. Members, not least the hon. Member for Poplar and Limehouse, when we will publish our response. We will do so later this year, hopefully by the end of November or in early December.
However, we are already making improvements that have been recommended by the expert group in a number of key areas. One such improvement is the new code of practice on recalls and corrective actions being developed by the British Standards Institution. That will help manufacturers and enforcers follow best practice on recalls and make them more effective in future. The consultation on those proposals closed last week, and we expect the code to be available by the end of the year. That will provide important clarity to businesses about how we expect them to prepare to deal with incidents involving unsafe goods, and how they should work with trading standards and my Department in the event that a recall or corrective action programme is necessary.
The hon. Member for Poplar and Limehouse and many others who spoke today mentioned Lynn Faulds Wood’s call for a national product safety agency. The working group has also called for more central capacity to support consumers and local trading standards agencies on product safety and recalls—something that the London fire brigade and Which? have also been seeking. We are now actively considering how that can be delivered, and we will address that particular recommendation later in the year in our response to the working group’s report.
With regard to the recalls website and registration, we recognise that consumers need access to the best recalls information to keep their homes safe. We have upgraded the Government recalls website on gov.uk, as urged by hon. Members, to make it easier for consumers to check for recalls and to register their appliances. We know that more can be done, should be done and needs to be done, and we are working to deliver further improvements to the website.
As the hon. Member for Poplar and Limehouse mentioned, the success rate of recalls is thought to be as low as 10% to 20%. We have heard a lot of criticism of Whirlpool’s response to fires, but its success rate is now more than 50%, in terms of machines it has either modified or recalled. I responded to the question asked by the hon. Member for Hammersmith earlier this week by letter, but this morning Whirlpool let us have the most up-to-date figures for its tumble dryer modification programme. Whirlpool has provided the figure of 1.7 million machines that it has now modified or replaced. It has therefore resolved almost all the registrations that have been made, so the numbers are not likely to rise significantly until more consumers register their appliances.
One reason why recalls are not always—virtually never—as effective as they should or could be is the difficulty in contacting owners and getting them to respond. Some people respond very quickly. Some were contacted by Whirlpool up to 10 times and still failed to register their machine or take the necessary next steps.
People can protect themselves by registering their appliances with the manufacturer so that they can be contacted quickly if their products are subsequently subject to any corrective action or recall. We have made that easier by including registration links on the central recalls website. Now, if people register their email address, they can get an automatic notification of any product that has been put on recall since they registered.
Safe homes are not only delivered through effective recalls of electrical products; they are also delivered through planning and building regulations that require buildings to be of a safe design and construction. That involves meeting fire safety regulations that require houses of multiple occupation to fulfil fire safety standards, a product safety system that requires all domestic appliances to be safe when they are sold, and appropriate action to be taken when faults are found.
The right hon. Member for Knowsley (Mr Howarth) made some important points about the cabling of buildings. I will follow up with colleagues in the Department for Communities and Local Government, who have responsibility for building regulations and construction products, and make sure that either they or I write to him in response to his points.
Several hon. Members called for product safety checks in tower blocks, including the hon. Member for Erith and Thamesmead (Teresa Pearce) and the hon. Member for North Ayrshire and Arran (Patricia Gibson). In the aftermath of the Grenfell Tower fire, I asked the working group to advise me on the merits of that approach for tower blocks. The general view of the working group was that there were logistical and technical difficulties. The chair wrote to me and said that there was some interest in the approach, and he reported that a number of members of the expert group
“have been in active discussions with housing associations, community groups and fire and rescue services to consider and identify best practice”
for checks in tower blocks, but there were “logistical and technical challenges” to the approach of mandatory safety checks. He said that,
“most general safety checks of electrical goods…may not pick up a range of potential issues or problems in an appliance. It would be more effective to concentrate any outreach activity of this nature on checking appliances against recall lists, and registering appliances for any future safety alerts.”
Fire and rescue services already have good community safety programmes in place, with more than half a million home visits each year. I will explore with colleagues in the Home Office the possibility of using those visits to provide information and advice about registering appliances and checking against recall lists, as per the advice from the chair of the product safety group. We believe that is likely to be more effective in identifying any potentially unsafe goods than visual checks on them.
There has been some criticism today of standards for electrical appliances, including for fridge-freezers. It is important to remember that standards are not the law; the law requires products to be safe. The standards themselves are updated regularly to ensure that they reflect modern technologies and so that safety can be continually improved.
As hon. Members will know, my Department has been working with the London fire brigade and others, through the British Standards Institution, to improve the international and European standards for fridge-freezers. My officials recently met the Association of Manufacturers of Domestic Appliances to discuss how we can increase levels of fire resistance in those appliances, as well as the director of standards at the BSI, and Which?
The European standard is currently being reviewed and the BSI has submitted proposals for amending the standard to CENELEC, the European standards organisation that is responsible for the current standard. That will be considered at CENELEC’s next meeting later this month. Officials are continuing to seek views from the Government’s chief scientific adviser on revisions to and interpretation of the standard, and recently met the chair of the BSI technical panel for fridge-freezers.
Will the Minister say whether, as part of that investigation, action is likely to be taken to phase out or get rid of fridge-freezers with plastic backs, which is a particular concern raised by Which? and the London fire brigade? I expect the Minister has seen the same videos as we have of the extraordinary spread of fire through plastic-backed rather than metal-backed fridge-freezers.
On fridge-freezers, would the Minister also address the Grenfell point? When does she think we will know the actual cause?
The answer to the question on timing is that the safety inspections have been completed on the particular fridge-freezer that led to the fire. The report on that investigation will be published very shortly; I will ensure the hon. Gentleman has a copy immediately after it comes out. I am sure that the aspect of the capacitor, and the insulation in which the capacitors are often placed, will form a part of the report, as well as of the discussions that the BSI is having at European level.
The hon. Members for North Ayrshire and Arran and for Sheffield, Brightside and Hillsborough talked about Brexit and asked for reassurance on our intentions. I am pleased to be able to reassure Members that our priority is to continue the UK’s strong history of protecting consumers, to ensure that consumers can rely on safe products now and in the future. We will ensure that, as part of our relationship with the European Union post Brexit, we maintain close links with the existing European consumer protection bodies.
As the hon. Member for Poplar and Limehouse recognised in his speech, it is important that we all play our part in keeping people safe in their homes. The Government must get the framework right and ensure that there is appropriate enforcement to support businesses in compliance. Manufacturers and retailers must comply with the law by not placing unsafe products on the market and by taking the proper action if products are found to be unsafe. Consumers also have an important role to play in making sure their homes are safe, following safety advice and registering their domestic appliances so that they can be quickly contacted should a problem be identified.
I am mindful of the challenges presented by second-hand machines. The hon. Member for Swansea East (Carolyn Harris) also raised the issue of counterfeit electrical goods. I accept her invitation to meet manufacturers to hear about their concerns first hand.
I understand the calls to do more and to do it faster. As hon. Members will agree, it is important that the changes we make deliver protections that work, and that we address the concerns as urgently as we can, within the constraints of making sure that they are the right solutions. We know that more needs to be done. I believe the actions that we are now taking will improve safety, and I agree with hon. Members that we definitely need to do more.
(7 years ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I congratulate my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) on securing this important debate about the Post Office’s proposal to franchise its South Woodford branch. He clearly set out his concerns about the plans and about the local consultation process that the Post Office follows. He rightly recognises the crucial community role that post offices play throughout the country.
Between 2010 and 2018, the Government will have provided nearly £2 billion of taxpayers’ money to maintain, modernise and protect a network of at least 11,500 branches across the country. Contrary to the impression that I gained from my right hon. Friend’s remarks, far from closing branches and retreating the Post Office is acting in line with the manifesto commitments given in both 2015 and 2017: to protect the post office network in terms of the loss-making branches in rural and some poorer urban areas.
Today there are more than 11,600 post office branches across the country, and the network is at its most stable for decades. That is because the Post Office is transforming and modernising its network, thanks to investment from the taxpayer and to the hard work and dedication of Post Office staff throughout the country.
Government support has enabled the modernisation and transformation of more than 7,000 branches; more than 4,400 branches are now open on Sundays; and nearly 1 million additional opening hours per month have been added to the network through the modernisation programme. Financial losses reduced from more than £120 million to £24 million by 2015-16, which allowed the Government subsidy to be reduced by more than 60% from its peak in 2012.
That the network is at its most stable in a generation might be one of the reasons why customer satisfaction has remained consistently high. I understand that in my right hon. Friend’s constituency people have benefited from more than 200 additional opening hours per month, and at least one of their branches is now open on a Sunday.
I do not mean to take up much time, but I want to make the point that I made to the management: although they say that only by franchising can they have longer opening hours, there was never any reason why that could not happen in the existing post offices and Crown post offices. Longer opening hours is an illustration of something working right, but it could always have been done through the existing post office network—there was nothing to stop that.
One of the reasons why it is difficult to extend the opening hours in some Crown post office operations is that those branches are already making losses. Extending the hours has an additional cost—even if doing so was possible given existing staff working arrangements in the Crown post offices. There would without doubt have been additional costs, which might have worsened the losses of most of the Crown post offices, including the one we are discussing. Additional hours are open to question.
The Post Office is offering more to customers by having operations in retail premises that are used to working to a model of longer opening hours, including Sundays. That is more efficient for the taxpayer and ensures that post office services remain on our high streets throughout the country.
I fully appreciate that there can be disappointment and uncertainty in communities where a change to post office services is proposed. Those communities can hold strong views and concerns regarding any planned change, as witnessed by the petition mentioned by my right hon. Friend—[Interruption.]
Order. There is another Division, but this will be the final one.
By looking for a franchise partner in South Woodford, the Post Office seeks to ensure continued access to post office services for customers in the area in a way that is sustainable for the long term, keeping post offices on our high streets and in our communities.
My right hon. Friend’s community is not losing its post office service; it will be relocated to the convenience store operated by the proposed new partner, approximately 85 metres from the current location. I understand that the new partner plans to refurbish the premises, and that the Post Office will install a new modern post office in the convenience store. The Post Office recognises the importance of providing good access for all customers, including wide aisles and low-level counters for people with disabilities. It has high standards to ensure that, and that will remain the case in the new branch.
Working with a retail partner really is a sensible response to the challenges facing high street retailers. It has the benefit that overheads, including property and staff costs, can be shared across the combined post office and retail business. The host retailer also benefits from increased footfall and income from Post Office products. The vast majority—more than 97%—of post offices across the UK are operated by independent businesses and retail partners. Moving directly managed Crown post offices to retail partners has proved successful elsewhere and has helped to reduce losses in that part of the network from £45 million of taxpayers’ money per year as recently as four years ago to near break-even today.
Of course, the Post Office needs to continue to take steps to ensure that the network remains sustainable for the future, as it is doing in South Woodford. It does not propose such changes if it does not consider them necessary to secure the long-term sustainability of post office services in communities in my right hon. Friend’s constituency and across the country.
I know that my right hon. Friend has been disappointed by the consultation exercise. The Post Office welcomes and values feedback from customers, which is why it runs local consultation processes. He is absolutely right that such consultations are not designed to elicit views about whether Crown post offices should be franchised, but they generate a lot of data about how they should be franchised and about what services customers are particularly interested in, and the Post Office organises local customers’ forums when proposing relocation, as it did in his constituency.
I know that my right hon. Friend considers that the Post Office should consult on the decision to franchise the current branch before it consults on any potential new location, but it must be for the business to take such commercial decisions, within the parameters set by the Government, to ensure that we protect our valued national network. Post offices operate in a competitive retail environment, and we should allow the business to assess how best to respond to the challenges it faces and to secure post office services for communities for the future.
The Post Office consults, in line with its code of practice, on changes to the network, and that has been agreed with the consumer body. Citizens Advice recently reported that that process has become increasingly effective, and that in most cases improvements are agreed or reassurances provided in response to customer feedback received during the consultation process. That has happened after nine out of 10 of the Post Office’s similar consultations in the past year, demonstrating that the process is effective.
My right hon. Friend rightly mentioned the need for post offices to focus not just on reducing cost but on improving footfall by improving the quality and range of their services. He drew attention to the Cass business school report commissioned by the Communication Workers Union, which I commend for its efforts to assist Post Office to broaden its service offer. The state-backed post bank explored in that paper was actually assessed back in 2010, when the cost of instituting such a bank was put at approximately £2 billion. It was felt at the time that that money would be better invested in badly needed transformation and modernisation of the network, and that was the decision made.
The good news is that banking is now an increasing part of the Post Office’s offer. I am delighted to say that the Post Office announced today that it has secured a deal with Lloyds bank that will enable it to offer a banking service to small and medium-sized enterprises across the country. That service will meet 95% of SMEs’ banking requirements and 99% of retail banking requirements. That really is a step change. The Post Office is also a market leader in identity services; it now has a 40% share of that growing market.
I reassure my right hon. Friend that the Post Office is absolutely not resting on its laurels or just focusing on managing its cost base; it is actively seeking growth in the products and services that it offers. I commend Post Office’s management, and its workers and staff, on the great progress that they are making.
Question put and agreed to.
(7 years ago)
Commons ChamberI congratulate the hon. Member for Penistone and Stocksbridge (Angela Smith) on securing this debate on post office services in Burncross and for the hard work that she has done in trying to secure their continuation. She has clearly set out the importance of post office services to her community and I fully appreciate the concerns that she has raised.
The Government recognise the important social role that post offices play in communities across the country, and that is why we will have provided nearly £2 billion to maintain, modernise and protect a network of at least 11,500 branches across the country, far from all of which are profitable. Today, the 11,600 post office branches in the UK form the most stable network that the Post Office has enjoyed for some time. That is because the Post Office is transforming and modernising its network, thanks to that investment from the taxpayer, which has enabled the modernisation and transformation of more than 7,000 branches.
The network is at its most stable for a generation, and customer satisfaction has remained high. I understand that apart from the critical problem in this particular area, the hon. Lady’s constituency has benefited from four out of its 15 branches now opening on a Sunday and almost 1,000 additional opening hours a month—[Interruption.] I understand that that is no comfort to the particular constituents she has mentioned, and I will come on to address the points that she made about that locality.
Post offices are crucial to the many millions of customers, including hundreds of thousands of small businesses, who use the service daily to access the Post Office’s diverse range of services, including banking services. I completely understand the difficulty and the frustration that communities face if there is a loss of post office services. We of course hope that the loss we are debating tonight is temporary.
The hon. Lady spoke passionately about her concerns for post office services in the Burncross community. I fully understand the points she made about the local area having many older people who would find it difficult to travel to Chapeltown or High Green, particularly given the limited public transport in the local area. I know that the Post Office apologises to its customers and the community for the huge inconvenience caused by what I hope is a temporary closure. Both I and the Post Office recognise the need to restore post office services to her community as soon as possible.
Hon. Members will be aware that the vast majority of post offices in the network are now independent small businesses operating as agents of the Post Office, so while the overall network position is very good, individual small businesses can face problems like any other. These sometimes lead to temporary closures. As the hon. Lady acknowledged, temporary closures are often beyond the direct control of the Post Office. The Post Office has not chosen to close this branch, but local development and the demolition of existing premises has resulted in the current position. The Post Office is working hard to find a solution that will allow it to restore services to the community. I will certainly work with the Post Office and the hon. Lady to redouble efforts to find an alternative site for the post office service her residents deserve. I am aware that the Post Office met the hon. Lady to discuss the matter and that it has also met local councillors.
It is very unfortunate that the Co-op has indicated it no longer wants to take on the post office. I share the hon. Lady’s deep disappointment in the decision made by the Co-op, especially, as she said, considering its founding principles. Unfortunately, the Post Office cannot force a business to take on a post office if, for whatever commercial reasons, it does not wish to do so. However, the Post Office has and will continue to look for willing partners who are keen to take a post office on as a part of their business in her community.
The hon. Lady spoke about the unique public good of the Post Office in communities up and down the country. This is absolutely one of the key points the Post Office makes when it advertises its branches and when it speaks to potential new operators. The strength of its history and social purpose cannot be underestimated, and it can have a very positive impact on a business. It is also taking steps to develop its business offer, with particular reference to banking services, which it is improving all the time. Considering the large numbers of high street bank branches that are closing around the country, this has the potential to sharpen up the offer the Post Office makes not just to its customers and small businesses that patronise its branches, but to the business partners that take on a post office branch or counter. This is also something we must push.
The Association of Convenience Stores recently published the “Local Shop Report 2017”, which ranked post offices first in terms of having a positive impact on their local areas. These are all selling points that we have to make to potential new partners. There are, of course, commercial benefits too. It offers day-to-day banking for 99% of personal account customers, as well as businesses. It is also the UK’s number one for foreign exchange and the leading provider in the mails market. Some 73% of customers say that the post office is their main reason for visiting a partner store and 78% of people using the post office bought something else in the retail outlet that played host to the post office counter.
To keep post offices in our communities or—as in the hon. Lady’s case—to reopen a service, we must ensure that running a post office continues to be an attractive and commercially sustainable proposition. The Government believe that this is the case. More than 90% of branches are now run by independent business operators and retail partners. The success of the network’s transformation programme, which has seen 2,000 new operators taking on and running post office branches, demonstrates that operating a post office continues to be an attractive offer to many independent and retail businesses. I can only assume that she and the Post Office have been unable to get that message across to the Co-op in her constituency.
The Minister has got to the crucial point: the Co-op has refused to listen to the argument that post office services benefit stores such as the one it will soon be operating in Burncross. Its point-blank refusal to accept that it is good for the community and potentially for the itself is incredibly frustrating.
I quite agree with the hon. Lady. Working with a retail partner brings the benefits of shared overheads across the combined post office and retail business, including property and staff costs, while the host retailer also benefits from increased footfall, to which I alluded earlier, and the income from post office products. There is also the evidence in terms of the number of transactions that customers perform in post offices. I think she said that there were 1,200 transactions in her post office per week before it closed. For all these reasons, it makes not just social but huge commercial sense.
I can only assume that the arguments with the Co-op in her constituency have been exhausted and that there is no chance of changing its mind, but if in her view that changes, she must please contact my office immediately, and I personally will do everything I can to augment the arguments she is making to the Co-op. I know that the Post Office will join us in that endeavour.
The Post Office is still advertising the opportunity, and its field team visited the local area last week to explore possible opportunities and further engage with other local businesses. The Post Office will always consider all possible options for replacing a branch and restoring a service to the community. If it concludes that it is not feasible to restore a main-style branch, such as the one run by Costcutter, it will explore other options, such as the possibility of introducing one of its smaller “local plus” models, which actually offer at least 95% of post offices’ most-used products and services. Those opportunities are also in the frame.
The Post Office welcomes and considers applications from any suitable retailer following its advertising process. Post offices across the UK are run successfully in many varied businesses and locations, including farm shops, local authority offices, fish and chip shops, garages, pubs, libraries and community hubs. We need to think outside the box if we are to benefit the hon. Lady’s constituents.
I assure the hon. Lady that the Post Office is committed to finding a solution to restore the services to her community. It does not give up on communities, even if these issues take time to rectify. I will be attending the reopening of a post office service in my constituency, in Quarry Bank, where the post office has been shut now for seven years. I do not think she will have to wait that long to get her service restored, but it is wonderful when a service is restored. It is perfectly doable.
Our commitment to the network and the support that taxpayers and the Government have given it will help to ensure that post office services remain in our communities. I encourage the local Co-op to reconsider the benefits to itself and the community of running a post office. As I have explained, the Post Office works hard to set out all the benefits to potential partners. It has assured me that it will continue to explore possible solutions to restore a service to the hon. Lady’s constituents in Burncross, and I have asked it to keep her informed of any developments. I know that she will keep abreast of any developments anyway, but I also know that Post Office representatives will be happy to continue to work with her. She is fighting for a service which is of great social value to her constituents, and which can be of commercial value to the prospective partner that I truly hope will be found so that a post office service can return to the Burncross community.
Question put and agreed to.