Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [Lords]

Mark Garnier Excerpts

Report stage
Tuesday 19th March 2024 Commons Chamber

[Sir Iain Duncan Smith]

I will come to that in a minute, because it does not, and that is the whole point of the new clause. In the 2023 integrated review refresh, the countries defined as threats were Russia, Iran and North Korea, while China was designated a systemic challenge. The new clause does not directly mention China, but of the eligible countries under the current integrated review, China is the only economy that has applied to join. In fact it is theoretically next on the list to go into the comprehensive and progressive agreement for trans-pacific partnership.

[Mark Garnier (Wyre Forest) (Con)]

I completely understand the point my right hon. Friend is trying to make, but one of the interesting things about being a member of CPTPP is that countries then have a power of veto. That gives us quite a lot of strength to potentially prevent China from joining.

[Sir Iain Duncan Smith]

I enjoy the idea that my hon. Friend puts such trust in Government never to take other arrangements into consideration. We know how that works. It will be fine today with my right hon. Friend the Minister here, but there may be others in charge in future, and I am not sure I would always want to rest my defence in Ministers.

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[Lloyd Russell-Moyle]

It is a pleasure to follow the maiden speech of my hon. Friend the Member for Kingswood (Damien Egan). What a great way of upstaging his sister a week after her wedding—after a by-election is forced, he goes on to win it. But I suspect that it was a happy moment for all the family, and it is a delight to have him here.

I have tabled two new clauses. I have sat on the Public Administration and Constitutional Affairs Committee and, in its previous iteration, the International Trade Committee, when we scrutinised the Bill almost, I felt, to death. The problem with scrutiny without any teeth is that words produced in Parliament all the time are lost in the ether. The reality is that, unless there is debate in the main Chamber, there is not the right body of weight behind those words and those concerns.

It is clear to me that we need to change constitutional make-up of how we do trade deals. I support everything that PACAC has said, of course, but personally I would go further. I think we do need legislative changes to CRaG, despite the fact that we could make some changes through trust—that would be a good start. The reality is that, since we left the European Union—I know we are not meant to go on about that—this House has had less scrutiny over trade deals than we did before. It used to be that consent was required, which would go via the European Scrutiny Committee. That consent was required to be sent to the European Union before a trade deal could be signed off.

We know that in other places around Europe, legislators did hold back inappropriate trade deals. The EU-Canada free trade deal, for example, was held back by the Wallonian Parliament because it failed to address things such as workers’ rights, which my right hon. Friend the Member for Hayes and Harlington (John McDonnell) mentioned. The deal was renegotiated and the Europeans got a better deal. We could have done that at any step of the way when we were in Europe, but now we are out of the EU, we are less able to do so and less able to hold our negotiating person to account. Our negotiating person at that point was the European Commission. Our negotiating people now are our Ministers and civil servants, but we are less able to hold them to account. We cannot set their negotiating mandate or stop a trade deal, as we were able to do before. Yes, we can delay it, and yes, this Minister is fantastic in coming to be held to account through questioning, but the hard stop that means that people listen to you rather than just having a nice debating club with you has now been lost. We need to reflect that changing world.

[Mark Garnier]

I thank the hon. Gentleman for giving way. He and I have discussed this at great length in two Committees that we have both sat on. I am hugely sympathetic to every point that he is making, but there is one counter-argument that has not yet been put forward. The position of our negotiators in striking these deals in the first place could be slightly weakened by the fact that they would then have to check back with the legislature on whether or not it will ratify. Were we to take the final decision away from our negotiators, they would not be able to negotiate such a strong deal. I put that forward not necessarily as a definitive answer, but as a counter-argument.

[Lloyd Russell-Moyle]

The hon. Gentleman is quite right. Some people claim that that would happen, but others claim that it would strengthen our position. When the EU says, “This is our backstop,” we know that it is not bluffing because the backstop has been set by the EU Parliament. Now, negotiators can say, “Well, we know that that is not really the backstop, because you can go away and cajole your Back Benchers to vote this through anyway,” whereas in other systems, they can say, “I’m sorry, but the Senate will not approve this because the committee is holding my feet to the fire.”

However, there are other ways of doing it. As other Members have mentioned, we could allow the matter to have Privy Council status and meet in camera, to allow involvement in negotiations. In multilateral processes, other Governments embed parliamentarians in their negotiating teams. The Norwegians, for example, embed parliamentarians in their WTO negotiating teams in the day-to-day back and forth. Of course, in Norway, the WTO is dealt with by a different department from bilateral treaties, so there is a slightly different way of negotiating different kinds of deals. We can determine what kind of deal it is from the level of negotiation and whether Parliament is involved. If Norway were dealing with the CPTPP, parliamentarians would be embedded in that process, but if it were dealing with the Japan deal, they would not.

There are granularities of parliamentary overview and scrutiny, but almost all systems have developed them over the past 50 years as trade deals have basically become international lawmaking processes rather than dealing just with trade—they deal with all aspects of our life. However, we effectively paused our processes when we joined the European Union, and we have now reverted to where we were before joining. Although I accept that our process are now in the CRaG law, they have not evolved properly.

Let me address my new clause 2. Around 90% of the world’s oil palm trees are grown in just a few islands in Malaysia and Indonesia. Currently, less than 20% of that palm oil has received certification for sustainable palm oil forestry. The CPTPP will remove tariffs from palm oil. Of course, the aim of removing tariffs is to increase trade, so it seems implausible to say that we do not think it will increase the amount of palm oil in the UK that comes from unsustainable forests. The same could be true of tropical woods. Two of the 11 forests that supply our tropical woods and are identified as in danger are in the CPTPP region, but they have no additional protection.

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [Lords]

Mark Garnier Excerpts

2nd reading
Monday 29th January 2024 Commons Chamber

[Kemi Badenoch]

According to the models and estimates, it will be £2 billion a year, but it all depends on which countries choose to accede and how many businesses in the UK choose to take advantage of the agreement. A free trade agreement utilisation programme will therefore be critical to our gaining the greatest possible benefits from the CPTPP.

[Mark Garnier (Wyre Forest) (Con)]

There is a great deal of argument about where the opportunity for UK exporters is. Does my right hon. Friend agree with the prediction that the 10 nations of the Association of Southeast Asian Nations will create a bigger trading bloc and a bigger economic unit than the European Union by 2050, and does she agree that the CPTPP offers the opportunity for countries such as the Kingdom of Thailand, which is not a member, to join in the future? Surely the CPTPP is not about what it is now, but what it will be in the future.

[Kemi Badenoch]

My hon. Friend is absolutely right. This deal is thinking about the future. Of course we have a close trading relationship with the European Union, but the fact is that, as a share of global growth, Europe is shrinking and other parts of the world are growing. This is our opportunity to get in early and help shape the rules for this trading bloc.

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[Anthony Mangnall (Totnes) (Con)]

I would say that it is pleasure to follow the hon. Member for Harrow West (Gareth Thomas), but he is so pessimistic and full of doom and gloom that he makes me think that he is the Goldilocks of international trade. We are always in the same place when we debate these issues with Labour Members, because we cannot sign trade agreements quick enough for them or perhaps we take too long. In fact, we sign trade agreements when they are good for our businesses, our producers and consumers—that is exactly where we must be.

The hon. Gentleman talks about membership of the CPTPP and says that there are no parameters to stop new members, but in her opening remarks the Secretary of State made the point about the Auckland principles and the fact that there has to be a consensual approach to new membership. The Opposition criticise our record on international trade and the agreements we have signed, discounting the fact that we have: an agreement with Australia and New Zealand; three memorandums of understanding with American states; 75 roll-over deals; discussions under way with the Gulf Co-operation Council, Israel and India; and now accession to the CPTPP, if we pass the Bill. The purpose of the Bill is to change our legislative programme to ensure that ratification can take place; that is why we are here and what we are debating.

I am delighted to be a member of the Business and Trade Committee. I welcome that the CPTPP is our accession to the fastest growing region in the world, and that it will give huge geopolitical value to the UK and what we do with our friends and allies around the world. If anyone wants something to send them to sleep, they can read my report, “Looking East”, for the Centre for Policy Studies. We are joining the leading comprehensive free trade agreement, with every forecast pointing to the value that this body will play not just in the next 10 years, but in the next five; we have to recognise those benefits.

As has been said, in nearly every case, forecasts undervalue free trade agreements, not least because of the modelling but also because, as free trade agreements are signed and accessions completed, businesses start to take advantage of the agreements and grow as a result.

[Mark Garnier]

My hon. Friend makes a good point. Does he agree that when a previous Committee—of which we were both members—looked at free trade deals, it found that the very fact of doing a trade deal creates an interest that is not otherwise there? It means that everybody talks about the trade opportunity that presents itself.

[Anthony Mangnall]

I could not agree with my hon. Friend more. That is exactly the reason that we have trade envoys—in his case, he goes to Thailand to enhance the relationship between Thai and UK businesses. It is also for that exact reason that the first line of the gov.uk webpage on CPTPP says: “We will help businesses take advantage of CPTPP. Please keep logging on so you can see how we can help you to take advantage.” Far from stepping back and not helping businesses, we are on the front foot in ensuring that we can support them.

I want to make a couple of points about what I have learned, first on the International Trade Committee and now on the Business and Trade Committee. It is always important for the House to have a say, and to have a debate on the full terms of our free trade agreements. Under the Constitutional Reform and Governance Act 2010, we have 21 sitting days to be able to debate the CPTPP. The Secretary of State appeared before the Business and Trade Committee last week. I hope that we can have a debate, because it is important for all Members of the House to be able to look at the many benefits that the CPTPP will bring them, and their constituents, producers and consumers, and for those benefits to be highlighted on the Floor of the House. CRaG also provides for a voteable motion, which has not been used since its introduction; and it would be useful to have vocal support for our trade agreements, not least to show our friends and allies, with whom we do these deals, that we are behind them.

Within the Bill, I note the changes to the procurement legislative framework. I commend the fact that it is already building on the excellent work in the Procurement Act 2023, which specifically helps small businesses to take advantage of the agreements we have signed; again, the shadow Minister, the hon. Member for Harrow West, could have made reference to that legislation or to the Electronic Trade Documents Act 2023—the list goes on and I could go on to, if he would like me to. Of course, there is also the value placed on intellectual property—setting a minimum standard of protections across patents, geographical indictors, copyrights, trade secrets, trademarks and designs, including enforcement mechanisms. Above all, there is a focus not only on how to remove tariffs, but on how to remove non-tariff and technical barriers to trade. The creation of conformity assessment procedures also ensures that we can help businesses from every walk of life to take advantage of the CPTPP—this fastest growing region.

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[Anthony Mangnall]

I refer the hon. Lady to my previous remarks on the TAC report on CPTPP. She has made a point about Australia, and it is fair to give an answer on that. None the less, the point is that we are still safeguarding ourselves against hormone-injected beef and chlorinated chicken. Yes, there are variable standards around the world; we have to recognise that not all trade deals are Christmas trees on which to hang baubles and everything else. We can lead by example. Our standards are the highest in the world, and there is nothing to say that they are not a key persuader for other countries to follow suit in showing how there can be successful markets on that front.

[Mark Garnier]

rose—

[Anthony Mangnall]

I will give way, probably for the last time.

[Mark Garnier]

I would like to follow on from the point about beef and meat from Australia. We imported it for years and years when we were part of the European Union. This is not brand new; we have been doing it for a long, long time.

[Anthony Mangnall]

That is exactly why we put things such as the Trade and Agriculture Commission on to a statutory footing, so that it could report on these trade agreements. Its opinion is fully weighted with the Government response and comes in during the Constitutional Reform and Governance Act process and allows us in this House to consider it. If the hon. Member for Walthamstow (Stella Creasy) wants to debate this point in a general debate on CPTPP, I would look forward to doing it all over again. Of course, the whole purpose of the process is to give us the chance to take full consideration of the agricultural community’s view.

I have gone on for far too long, Mr Deputy Speaker—[Hon. Members: “Hear, hear!”] Thank you very much! [Hon. Members: “More!”] I believe that that is the first time that anyone in the House has ever told me to carry on, but I am very grateful for it none the less.

We have huge opportunities in the UK to strike new trade agreements to encourage our economy to boom. It is striking that, in his opening remarks, the shadow Minister on the Labour Front Bench did not recognise that, since 2010, the UK’s economy has outperformed that of Portugal, Italy, Spain, Germany and France, to name but a few. This trade agreement signals not just an intent to sign more trade deals in the future, but an approach that we can take if we work together with businesses, financial services, legal services and all industry across this country to bring value to London and to all regions of the United Kingdom. I look forward to seeing its ratification and to this Bill being passed unamended.

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[Richard Thomson]

What a load of absolute codswallop. It may have escaped the hon. Member’s notice that every part of the UK is in deficit. I do not think that a single part of the UK, perhaps not even London or the south-east, raises more in taxation than it receives in public expenditure, so can he please park the patronising trope about England subsidising everywhere else? Scotland creates one of the highest levels of gross value added of any part of the UK outside the vortex of London and the south-east, which suck in every aspect of capital and talent.

[Mark Garnier]

In the spirit of trying to bring the debate back to the fantastic opportunities for Scotland, as the Prime Minister’s trade envoy to Brunei, I was delighted to go to Aberdeen to meet a number of Scottish companies in the incredibly important business of decommissioning and renewal in the oil and gas industry. Brunei has signed a deal worth, I think, £350 million with Scottish business. That is not subject to any controversy.

May I also say that the hon. Member’s contribution to this place is incredibly useful? It is a very good symbol of why members of the SNP and Scottish Members of Parliament are so valuable to the Union, and to debates such as this in the British Parliament. Long may you be welcome here in Britain.

[Richard Thomson]

We seemed to be being pulled back to the topic, but now I am being tempted to go off down another rabbit hole. While I thank the hon. Member for his generous comments, I know exactly what side my bread is buttered on. I am a long-standing supporter of Scottish independence because I have a simple belief that the best people to run Scotland and make decisions about Scotland are those who have chosen to make their life there. With all due respect to this place and its traditions, I think that we could do a far better job from the Parliament in Edinburgh.

I will get back to the purpose of the debate, as entertaining as that no doubt was for all concerned. The SNP retains concerns about the ability to apply investor-state dispute settlements under the CPTPP. A deal for Canada has, for now at least, hit the buffers, but it was concerning that there was no indication from the Government of any side letters about investor-state dispute settlements similar to those applied in respect of the FTAs with Australia and New Zealand. There is real concern that investor-state dispute settlements could have an impact on standards and decisions taken here.

We firmly believe that trade deals done right can channel and create potential to support decent jobs and raise standards, not just domestically but globally. It is therefore worrying that the ethos of the CPTPP means effectively abandoning the precautionary principle, which places the burden of proof on the producer to show that a product is safe. Instead, the burden will be on the regulator to prove that something is a danger before action can be taken. That can only act as a downward pressure on standards. The committee on regulatory coherence will no doubt also become a focus for this issue, whether we are talking about antibiotics in agriculture, the impact of decisions on deforestation, or something as iconic as palm oil; we have already agreed a 12% tariff on imports from Malaysia, irrespective of the impact that that would have.

We have further concerns about the impact on workers’ rights and domestic conditions. There is the risk of being undermined by lower costs elsewhere, resulting from lower standards on labour rights and obligations, or lower regulatory standards more broadly. We are concerned about the impact that that could have on our public services, and our ability to set domestic laws and regulations could come under challenge, either from the economic forces that are unleashed or through the ISDS mechanism.

All things considered, the Government have made a blustery and boosterish contribution, while being very blasé about and dismissive of the concerns raised. As I said earlier, the SNP will not seek to divide the House on the Bill this evening, but we certainly look forward to exploring all those issues further in Committee.

Draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023

Mark Garnier Excerpts

Tuesday 5th December 2023 General Committees

[Stella Creasy (Walthamstow) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Efford, as we discuss a very important piece of legislation—I believe it is the first statutory instrument to come forward under the Retained EU Law (Revocation and Reform) Act 2023. The Minister says that there are countless pieces of bureaucracy retained from our relationship with Europe that the Government want to get rid of. My hon. Friend the Member for Ellesmere Port and Neston has done an admirable job in deconstructing the entirety of this statutory instrument. I have a few simple questions that I suspect my constituents, many of whom will be affected by the draft regulations, because many of them are in low paid, zero-hours, flexible work.

[Mark Garnier (Wyre Forest) (Con)]

I hope the hon. Lady will forgive me for making an obvious point, but while I am delighted to be accompanied by many Government Members, I am wondering whether her Opposition colleagues have better things to do than to come here to discuss this “very important piece of legislation”?

[Stella Creasy]

I wonder about all the hon. Gentleman’s colleagues of the female persuasion, who also appear to be missing from the Committee. That matters because I have some very simple questions for the Minister about the regulations, and it is rather notable that I am the only woman here to speak. The hon. Gentleman wants to play games; I want discuss the practicalities of the legislation and how it will affect the daily lives of our constituents. I hope we all recognise employment protections matter. After all, the reason why we have employment protections is that, although there are some brilliant employers who work very closely with our constituents to make sure they get the best out of them, unfortunately some employers are exploitative and not the kind of people we want to encourage. We have these rules because exploitation does not stop at our borders, and one of the reasons we signed up to common frameworks was our recognition that those bad employers could spread bad practice. Now that we have left the European Union and the protection that came from those frameworks, I have some questions for the Minister.

I welcome what the Minister said about the continuation of the rights under the Moreno Gómez case to do with taking full holiday entitlement outside of one’s maternity period, but he will recognise that that case is relevant to his introduction of rolled up holiday pay. There was a very good reason why that court case ended in the decision that it was not fair to ask employees to take rolled up holiday pay. Women taking maternity leave were particularly affected by that and the impact of having their normal holiday pay calculation being affected by taking maternity pay.

I know the Minister did not talk specifically about that, but could he clarify the provision? There are women who work term-time hours or who are on zero-hours contracts who may now find themselves wondering what it might mean for them if their employer decides to extend rolled up holiday pay. Unfortunately, some employers were still doing this, but it was illegal and therefore people had rights; now, they will not have a right to resist it.

That brings me to my second question for the Minister. The regulations will be brought in from January next year. If our constituents are now being told that they are going to have rolled up holiday pay, what right do they have to challenge that if they feel it is not in their interests? My hon. Friend pointed out this is a transfer of £250 million a year from employees to employers because, frankly, rolling up means missing out on the hours that people are working. That is why the European Court of Justice felt it not fair to enforce the policy. What rights do employees who signed contracts on the basis that they were not going to have rolled up holiday pay and who are now facing it have? Will the Minister set those out?

What legal challenges is the Minister expecting? After all, one of the reasons why good employers do not use rolled up holiday pay is that if they get the calculation wrong, they leave themselves open to legal challenge and having to expend the amount of time and effort and energy that that takes up. It is better to have a process that records people’s entitlements as they go along, even if it is a little bit more complicated, than to be landed with problems further down the line, whether from someone going on maternity leave, or from somebody who ends up working a lot more days than was perhaps intended in their rolled up holiday pay, because they are on a zero-hours contract and something happens—like Christmas. It is a great time of year for the Government to be looking at taking money out of the pockets of employees and putting it back into employers’ pockets. People who work extra hours on zero-hours contracts might find they are entitled to more holiday, but a rolled up holiday pay policy will not cover that. What is the process for resolution?

We have talked a lot about our concerns for employees, but what about employers? If they get it wrong, what protection do they have under the draft regulations? I think that really speaks to the minister’s understanding. Why did the Court come to that decision? It was not that rolled up holiday pay was seen as a terrible European plot; it was recognised that it probably was not in people’s best interests because it created more problems than it resolved. This Government have taken a different approach. Did the Minister read the original judgment and decision? Why does he feel that this is in the better interests of the British public, who will now have to deal with the complexities the policy will introduce and deal with the inequality in power between themselves and their employer? Why does he disagree with the European judges who felt that, overall, this practice was not in the best interests of either employers or employees.

I hope the Minister understands where these questions are coming from. It is our surgeries that people will come into saying, “Hang on a minute! I’ve lost a day or possibly even weeks of holiday pay as a result of changes that you as an MP didn’t really get a chance to vote for.” This is being presented to us as a “like it or lump it” thing. I am sure that my colleagues, male and female, will get used to that, because the retained EU law Act has given the Government sweeping power to do just that and affect our constituents lives in these very practical, and probably not very welcome, ways in the year ahead.

Tackling Rogue Builders

Mark Garnier Excerpts

Tuesday 13th June 2023 Westminster Hall

[Sir Mark Hendrick (in the Chair)]

I will call Mark Garnier to move the motion, and then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates, although there will obviously be opportunities for interventions. I am sure that the Minister will accommodate those.

[Mark Garnier (Wyre Forest) (Con)]

I beg to move,

That this House has considered Government policy on tackling rogue builders.

Thank you very much, Sir Mark. I am conscious that we may have to break off to vote, so I will try to keep my words to the point. I thank my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), who is my constituency neighbour, for stepping into the breach this afternoon. He and I are very good friends. He is an outstanding Minister for International Trade and is replying on behalf of the Minister for Enterprise, Markets and Small Business, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who is held up in a Bill Committee. I appreciate that this Minister may not be able to answer every single issue that I intend to raise.

It was nearly 18 months ago that I first brought my presentation Bill to the House, seeking to require the Government to look into the possibility of a licensing regime for builders operating at the smaller end of the market—servicing those people, for example, seeking domestic repairs or small business repairs. That area is known as the repair, maintenance and improvement sector, and it is the RM&I sector that I will concentrate on today. The Minister—when I refer to the Minister, I am in fact referring to his colleague, the Minister for Enterprise, Markets and Small Business—will be aware that at the time the Government were not minded even to look at the possibility of the sector being regulated.

Since then, of course, we have had several new Prime Ministers and a reorganisation of Government Departments, but the Government appear to be, dare I say it, increasingly less interested in talking about this consumer minefield, not more. The Minister, who I have an immense amount of respect for, and I have chatted informally about that and we agreed to meet, accompanied by the Federation of Master Builders, which is championing the cause of improved experience for consumers. It has been difficult to get a meeting set up, but I am delighted to say that we now have a meeting in the diary for the beginning of July.

The issue of rogue builders in the RM&I sector is not widespread, but it is appalling when it occurs. It is important to set out that the majority of builders in the sector are good and decent people. Last week, I had the pleasure of being a judge for the Federation of Master Builders awards, which will happen later this year. It is refreshing to see just how innovating building companies are when it comes to training staff, ensuring health and safety, in some cases offering medical insurance and training for emergencies. Indeed, some of the building firms up for awards demonstrated to me that their reputation is second to none and that they work tirelessly to ensure the longevity of their business through word of mouth and positive endorsements from customers and clients.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Member for introducing the debate. He is right: most builders are good workmen and do a grand job. That is the case in my constituency, but we also have cases of shoddy workmanship that go unchallenged as people cannot afford costly litigation on small claims, and feel unable to represent themselves. Does he agree that perhaps there should be a role for local authorities—I know that it is different in Northern Ireland than on the UK mainland—to take on the cases of people who have had shoddy workmanship and do not have the wherewithal to chase the case themselves?

[Mark Garnier]

I am grateful for the intervention. To a certain extent, local authorities can step in where builders fail to meet building standards, but the problem is that that does not work. That is what I am worried about. As I unwind my speech, the hon. Member will be able to understand a little of what I am proposing, which may be a solution to the problems in his constituency.

Of course, highly qualified and professional firms are not the target of any control that we may want to bring in, but a lot of those very good quality firms would benefit from a simple regime that demonstrates beyond any doubt that a builder firm is legitimate and that the workers within it are both honest and qualified. Repeated surveys from organisations within the sector reinforce that consumers are put off by stories of rogue builders. The FMB estimated a few years ago that up to £3 billion a year is wiped off building activity by consumers fearful of falling victims to rogues.

More recently, the HomeOwners Alliance conducted a survey of consumer worries: 79% of those surveyed reported obstacles in the way of their project, including 42% reporting that it was difficult to find a reliable builder, 29% a lack of available builders, and 15% a lack of confidence in the system. The problem that I am trying to address, working with the FMB, is that of rogue builders who prey on clients who are wholly inexperienced in this area. The vast majority of people who employ a builder have no idea how to manage them. Most of us will only infrequently need the work of a builder or tradesman.

[Giles Watling (Clacton) (Con)]

I have a constituent, Michelle Thomas, who paid £70,000 for some restoration work to her house, and the house was left untenable. Building regulators said it should be destroyed. She has paid a further £70,000 and had a very honourable builder come and put it all right.

I am amazed that the Government are not minded to regulate the issue, because, as my hon. Friend says, it would be to the benefit of legitimate good builders who work hard and do good work. One of the issues is that we get repeat offenders, who offend time and again. In the case of my constituent, the rogue builder had been involved in six liquidations. That must be addressed in legislation.

[Sir Mark Hendrick (in the Chair)]

Order. Could I ask for interventions to be a bit briefer?

[Mark Garnier]

My hon. Friend raises the most important point. We have had six phoenix companies wind up; what we do not want is another six—another six victims who have to have their homes pulled down. That is why we are trying to come up with a system of regulation that can prevent that.

Most of us will only infrequently need the work of a builder or tradesman. When we do, most of us get lucky—it is important to say that. We hear stories of people who endorse workers and pass on their names, as their work is of good quality. However, when someone gets caught by a rogue builder, their life descends into a nightmare. I know what that is like. In the interests of full transparency, I declare my interest, having found myself in such a position a few years back. It is because of that experience that I am keen to help other victims find a way out of the problem and draw the issue to a close once and for all.

When a problem starts—from poor and potentially dangerous work, as we have heard, through to the other end of the scale, which is fictitious bills—ultimately the only recourse is expensive legal fees. My experience opened my eyes to just how many people are victims of those types of rogue traders in so many different ways.

Rogue builders do not just prey on their clients. Others who lose out are the subcontractors and suppliers who do not get paid, as well as the plant hirers who do not get paid and find their machinery is often stolen. Other building firms do not see business because rogue builders will undercut their prices only to hike them later. All of us lose out through tax fraud, as rogue builders take cash in hand to dodge VAT and corporation tax. Tax fraud distorts the market, with rogues undercutting legitimate builders, creating a false impression of costs. The wider economy also loses out; the Federation of Master Builders has estimated that billions of pounds of building work is not undertaken because consumers fear being ripped off.

After my presentation Bill had its Second Reading, I was contacted by a number of victims of rogue builders. I also appeared on an ITV programme talking about the issue, leading to more victims making contact with me. The Petitions Committee contacted me to let me know that there is not one but four petitions seeking a resolution to the problem. Between them, they have gathered over 4,000 signatures, and I urge anyone who hears this debate who has been a victim, or is interested in resolving the problem, to sign one of those petitions.

It is the stories of victims that crystalises the problem, as we heard earlier. I was contacted by a police officer married to a nurse—two fine public servants. They bought their dream home and engaged a builder to renovate it. The work turned out to be massively substandard: it failed building standards and was deemed so dangerous that they could not move back into their home without remedial work. They contacted trading standards, but the builder is refusing to engage and is hiding behind his solicitor.

Similarly, someone else who contacted me had wanted to improve her home so that her disabled sister could get access. She was so let down by the system that she was motived to get in touch with the FMB, and has now launched one of the petitions I referred to in order to seek a licensing regime. Again, I urge people to go on to the Parliament petitions page and add their name.

The problem is that there is actually little redress for victims of rogue builders. Trading standards will probably have a good go at trying to sort it out, but if the builder holds fast, it can do little more than give the builder a telling off and flag their name for future people. The reality is that the only recourse for everybody is the courts, but the legal process is hopeless. Those are not my words; they are the words of a number of solicitors and barristers who advised that, irrespective of the merits of the case, the risk of prosecuting was way too high, so people should cut their losses. “Cut your losses”—do we really think that is a way for 21st-century Britain to tackle a known problem that keeps repeating itself?

The reality is that rogue builders hold all the cards: they can do whatever they like, and there is no recourse. Anyone can pick up a brick and call themselves a bricklayer, anyone can pick up a plank of wood and call themselves a carpenter, and anyone can pick up a pipe and call themselves a plumber. Ironically, they cannot pick up a gas hob and call themselves a gas fitter; that job requires compulsory certification, so there is an acceptance that regulation can be necessary. When a problem arises, however, the only redress is in the courts.

A consumer can be completely rolled over by a rogue trader, but in order to get redress, they need to put aside up to £150,000 to prosecute a legal case, securing barristers, surveyors, solicitors, court fees and all the rest of it. They may win—in fact, they probably will win—but they then need to recover their costs and damages from the builder, who closes their business and moves on to the next scam, having taken all the money out of the business so that there is no way to recover anything. The next victim is engaged and the circus goes on, but our successful litigant is left facing appalling, unrecoverable costs. Meanwhile, more suppliers, subcontractors, plant hirers and the wider building trade lose a little bit more.

However, the solution is simple. The problem lies in the imbalance of jeopardy between the victim and the perpetrator. The reason why there is so much rogue building going on is because it is an easy way to rip people off. In some ways, it is a basic level of fraud, although proving fraud is incredibly difficult. With no loss to the perpetrator, they can go on and on while the victim bears all the costs. How do we balance the jeopardy between the victim and the rogue builder? The answer must lie in regulation, with something such as a compulsory licence that the builder will lose if he or she falls foul of the rules—rules, by the way, that can and will save lives.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate my hon. Friend on securing the debate. Rogue builders will often go into liquidation to avoid potential litigation or paying out when they have been taken to court and successfully sued, so should we also look at potentially holding the individual responsible in a fiduciary manner, not just the company? That may be a much more effective mechanism for people to be able to chase potential assets that they can then charge against successful litigation.

[Mark Garnier]

My hon. Friend gets to the nub of the point. At the end of the day, individuals have to find some sort of personal liability if rogue builders perpetrate these endless infringements. The point is that they have nothing to lose at the moment. If they run the risk of losing their livelihood, they will think again before acting in such a way. It may be that they go on to another type of criminal activity, but we would at least get them out of the building market.

The Minister and I have had informal conversations about this issue, and I know that he and the Minister who replied to my Bill’s Second Reading in 2021—my hon. Friend the Member for North East Derbyshire (Lee Rowley)—are instinctively against licensing and overregulation. To a certain extent, I can see their point. Why burden an industry that gives opportunities to people who choose to work with their hands and avoid a life of form filling? Indeed, I can see from the Wikipedia page for the Under-Secretary of State for Business and Trade, my hon. Friend for Thirsk and Malton—for whom this Minister is standing in—that he was a very successful estate agent. There is limited regulation around estate agents beyond the Estate Agents Act 1979 and the Consumer Protection from Unfair Trading Regulations 2008.

Conversely, I was an investment banker and investment manager, and I know what it is like to be regulated up to the eyeballs. Having been on the Treasury Committee during the passage of the Financial Services Act 2012, and on the banking commission for the Financial Services (Banking Reform) Act 2013, I can see why people might accuse me of being an instinctive regulator. However, even residential estate agents have to be members of a redress scheme. The estate agency of the Under-Secretary of State for Business and Trade would have been required to be signed up to either the property ombudsman or the property redress scheme. Without membership, I understand that it would not have been allowed to trade under the Consumers, Estate Agents and Redress Act 2007.

When I, the two victims I referred to earlier or any of the millions of people who want to improve their home undertake this momentous challenge—as I have said, they might do that only once or twice in their lives—they start by approaching an architect. They may speak to surveyors, and they may go to their bank or mortgage broker to secure a loan to pay for the improvements. They will apply for planning permission from the local planning authority. They may even seek legal advice, and then they will engage a builder.

The architect is regulated by the Architects Registration Board, established by the Architects Act 1987. The surveyor is required to be a member of the Royal Institute of Chartered Surveyors, set up by royal charter and independent of the Government. The mortgage broker is required to be regulated by the Financial Conduct Authority, which was set up by this Government, and cannot trade without that membership. The local planning authority is subject to the oversight of the local government and social care ombudsman. When our home improver starts to pay the builder, it is done from a bank regulated by both the FCA and the Prudential Regulation Authority, the latter of which is run by the Bank of England. Both were set up by the Financial Services Act 2012. Legal advice is regulated by the Solicitors Regulation Authority.

Our home improver then pays the money—their hard-earned cash—having had to go through umpteen regulatory hoops, to someone with no meaningful regulation. That is ridiculous. Not only is the builder not subject to any meaningful regulation, but they could do something that results in someone being severely injured or even losing their life. It is all very well saying that the builder may then be subject to criminal proceedings, but that is small consolation to the relatives of a dead father or a mother with life-changing injuries.

The only outcome that would be satisfactory would be a scheme that honest and decent builders—the majority—would be both happy to sign up to and of which they would enjoy the benefit through being part of a system of excellence. Meanwhile, rogue builders who either game the system or care not one iota about their customers will have something to lose. Without membership of whatever scheme we come up with, they would never be able to trade again, either as individuals or as businesses.

My appeal to the Minister was originally going to be for a meeting, but I am delighted that he, or someone from his office, has got in touch with me. I have every confidence that nothing will get in the way in the diary to stop that meeting happening. I very much look forward to meeting the Minister in early July. However, this is the really important point: will his Department—I know that it has been working to a certain extent on this—work with us to find a solution to this problem and stop the scourge of rogue builders once and for all? Every one of us who comes to Parliament baulks at unnecessary regulation, but just how long are we prepared to knowingly allow people to be ripped off without any usable form of redress?

--- Later in debate ---

[Nigel Huddleston]

Yes, we are aware of the challenges with the small claims court. Of course, many building works go above £10,000. The Ministry of Justice is also looking at other forms of redress and procedures, and I understand that those are live considerations within Government. I am happy to forward my hon. Friend’s comments to the relevant Ministers, but we do understand the challenges with the small claims court. It works in many circumstances but it is not right for everybody.

We know that consumers would prefer swift, cost-effective and less time-consuming measures to settle their differences with business. That is why, following the recommendations of the independent “Each Home Counts” review in 2016, the Government have worked with the industry to establish the TrustMark scheme. This created the first Government-endorsed quality scheme for homeowners across a range of trades and types of work. TrustMark provides consumers with a single brand to identify schemes run within the industry that require participating firms and tradespeople to demonstrate competence, and which provide for consumer redress.

We are also working with the industry to ensure that high standards of consumer protection are embedded in relation to domestic households.

[Mark Garnier]

The TrustMark scheme is great and is a very good start, but it is not compulsory, which means that a lot of consumers do not necessarily know about it. If they do not know about it, they do not know whether they should be asking for it in the first place. The key point is that we can run on TrustMark, but if that becomes the standard it needs to be made compulsory.

[Nigel Huddleston]

I completely understand the arguments that my hon. Friend makes. He is right: it is not compulsory, but it is an important signal, and a good signal to the industry. It is Government-endorsed, which is also important. We certainly encourage people, when they are seeking such works, to look for that TrustMark, because it is an important indicator.

In this area, and on all the things that my hon. Friend has raised today, the important principle is getting the right balance, as he acknowledged in his speech. That means not overburdening industry and small traders, most of whom operate very effectively and professionally, but we have to make sure that we have systems and processes in place so that when things go wrong, there is appropriate redress.

My hon. Friend mentioned that the temptation, certainly for most of us, is not to overburden businesses with regulation. There will always be an ongoing debate. I appreciate that he has had consistent engagement with the Department and multiple Ministers and that he has brought many other representations from industry to the attention of the Department. We appreciate that, because these are live debates.