Draft Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026
Draft Financial Services and Markets Act 2023 (Addition of Relevant Enactments) Regulations 2026
(1 day, 6 hours ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Economic Secretary to the Treasury (Lucy Rigby)
I beg to move,
That the Committee has considered the draft Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026.
The Chair
With this it will be convenient to consider the draft Financial Services and Markets Act 2023 (Addition of Relevant Enactments) Regulations 2026.
I will now call the Minister to move the first motion and speak to both instruments. At the end of the debate, I will put the question on the first motion and then ask the Minister to move the second motion formally.
Lucy Rigby
These two instruments serve a common purpose. They make targeted practical changes to relevant regulatory frameworks and support innovation in our financial services sector while, very importantly, maintaining appropriate protections for consumers and markets. We want the UK to maintain its position as a world-leading financial centre as new technologies reshape payments and our financial markets. That requires clear rules, proportionate regulation and the ability to remove barriers as markets develop.
Earlier this year, as hon. Members know, we legislated to establish a financial services regulatory framework for cryptoassets, including stablecoins, with the aim of giving firms greater certainty to invest and innovate in the UK and, importantly, protecting consumers. The regime comes into force in October next year. The first draft instrument does not replace or seek to reopen the comprehensive framework we introduced. It simply makes targeted refinements to ensure that the regime works as intended, remains proportionate, and supports a competitive market here in the UK. Its principal effect is on UK-issued qualifying stablecoins.
Appropriately regulated stablecoins could play an important role in both retail and wholesale payments. We consulted widely on the wider reforms to payments regulation, including the treatment of tokenised payments such as stablecoins. Without the amendments before us today, firms using UK-issued qualifying stablecoins and payment chains could be caught by the cryptoasset requirements designed primarily for trading activities. Following continued engagement with the sector and with some really helpful input from hon. Members, we have concluded that that outcome would not be proportionate.
The first instrument therefore excludes UK-issued qualifying stablecoins from the cryptoasset dealing and arranging activities. It also excludes their temporary holding from the safeguarding activity where that holding is in connection with the payments transaction. It is very clearly not about removing stablecoins from regulation entirely. Issuing qualifying stablecoins in the UK will remain regulated. Lending and borrowing activities will remain in scope, and overseas-issued stablecoins will continue to be in scope of the cryptoassets activities.
Turning to the second SI, as hon. Members know, FSMA 2023 allows us to establish financial market infrastructure sandboxes. In those sandboxes, firms can test use of new innovations and technologies in a live environment in relation to financial services markets. Each FMI sandbox provides a modified legislative framework to enable that to happen where existing requirements might otherwise impede innovation. The power in FSMA 2023 was designed with flexibility in mind. When the power was created, it was not possible to know at that time every provision of legislation that might need to be modified as technologies developed. Section 17 of the Act therefore allowed further legislation to be added to the “relevant enactment” list, which defines which pieces of legislation can be modified using the sandbox powers. The second instrument before us today adds a further 10 enactments to that list.
The new enactments relate to areas such as debt issuance, company law, payment services and the rehabilitation of offenders. Certain areas of legislation were identified through our work to prepare for the issuance of the Government’s digital gilt instrument, DIGIT, which will be the first digital gilt issuance in the G7, putting us ahead of other countries in our agenda to push forward digital assets. These additions will allow the digital securities sandbox to operate more effectively and provide the legislative flexibility needed to enable DIGIT to be issued through a platform operating within the DSS. I should make it clear that the second instrument does not modify the enactments that are listed; it only brings them within scope of the existing FMI sandbox powers, so that necessary modifications can then be made through the sandbox framework.
These instruments are practical steps within our wider programme of work to modernise UK financial markets, and I hope they provide regulatory clarity. They seek to remove barriers, where that is sensible and proportionate, and they allow new technology to be tested responsibly and in a way that continues to protect people. I hope that the Committee feels able to support both instruments.
Mark Garnier (Wyre Forest) (Con)
I begin by thanking the Economic Secretary to the Treasury for her enthusiasm to engage after we debated this topic in January this year. A problem highlighted at the time was the confusion between what is a cryptoasset and what is part of a payment system. Something like Bitcoin is effectively dematerialised gold, so there needs to be regulated investment advice for people who have invested in it, whereas a stablecoin such as Tether is actually part of the payment system. It was incredibly thoughtful of the Minister to engage with me and others to resolve the difference between those two things.
I would particularly like to thank two people for giving me advice on that issue—Mike Ringer and Professor Sarah Green. They are far cleverer than me, and they came in and highlighted the problem. To my way of thinking, having been here for 16 years, it is incredibly good that Parliament works so effectively when we get together and sort out a problem such as this. I thank the Minister and all her officials for their engagement.
The second instrument relates to the City of London and the UK remaining at the forefront of financial innovation. We are delighted that this measure is coming through, and I thank the Minister once again. Mrs Harris, you have chaired an afternoon of unanimity and enthusiasm towards the Government.
Question put and agreed to.
DRAFT FINANCIAL SERVICES AND MARKETS ACT 2023 (ADDITION OF RELEVANT ENACTMENTS) REGULATIONS 2026
Resolved,
That the Committee has considered the draft Financial Services and Markets Act 2023 (Addition of Relevant Enactments) Regulations 2026.—(Lucy Rigby.)
Draft Employment Rights Act 2025 (Unfair Dismissal) (Removal of Limit on Compensation) (Consequential Amendments) Regulations 2026
(1 day, 6 hours ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 10 / Noes: 4 - Question accordingly agreed to.
The Minister for the Future of Work (Kate Dearden)
I beg to move,
That the Committee has considered the draft Employment Rights Act 2025 (Unfair Dismissal) (Removal of Limit on Compensation) (Consequential Amendments) Regulations 2026.
It is a pleasure to serve under your chairmanship, Sir Alec. The draft regulations, which were laid before the House on 12 October, will make necessary consequential amendments arising from the Employment Rights Act 2025. Commencement regulations have been signed to confirm that, from 1 January 2027, the statutory cap on compensation awards for unfair dismissal will be removed. A number of other employment law provisions do not contain their own stand-alone compensation limits; instead, they cross-refer to the unfair dismissal cap. Once it is removed, those references would no longer operate as intended. The draft regulations therefore replace or remove them where necessary.
At present, compensatory awards for unfair dismissal are capped at the lower of £123,543 or 52 weeks’ gross pay. The 2025 Act removes the statutory cap by repealing section 124 of the Employment Rights Act 1996. Removing the compensatory award cap forms part of a wider package of reforms to strengthen unfair dismissal protections, which will reduce the qualifying period from two years to six months. Together, the changes will give more than 6 million employees greater security at work while ensuring that employers retain the flexibility to assess and, where appropriate, dismiss new recruits during the first months of employment.
Steve Barclay (North East Cambridgeshire) (Con)
Will the consequence of these provisions be felt more keenly in the public sector than the private sector, given the interaction of the regulations with final salary schemes, which are more generous in the public sector?
Kate Dearden
We do not think there will necessarily be a significant impact on employers. We are removing the cap—I will come on to the engagement we have had, and am happy to update the right hon. Gentleman on it—but a process will still be in place for unfair dismissal claims to be handled in an established, known way by judges.
Let me continue with the provisions affected by this statutory instrument. It will replace references to section 124 of the 1996 Act with references to section 123 of that Act. That means that tribunals will continue to determine compensatory awards based on what is
“just and equitable in all the circumstances”.
Compensation will remain based on evidence of actual and projected losses sustained by the claimant. In practice, most awards are expected to remain modest, reflecting the continued application of these well-established legal principles, as I have said. That is important, because most of these provisions concern claims for detriment brought by workers when that detriment consists of their contract being terminated.
Steve Barclay
The Minister just said that she thinks the implication of the provisions will be modest, but is it not the case that higher-paid potential claimants have been deterred by the cap, that removing the cap will open the door to many more higher-paid claimants, and that therefore their claims will not be modest, particularly, as per my previous intervention, when they relate to final salary pension schemes, such as those in the NHS?
Kate Dearden
As I have said, this change does not reset how tribunals calculate awards. Tribunals have well-established ways to calculate compensation that might be awarded for particular losses, and they will continue to base those awards on evidenced actual and projected financial losses. We are committed to ensuring that all employees receive fair compensation when they have been unfairly dismissed. We are talking about unfair dismissal here.
As I have said, the provisions concern claims for detriment brought by workers. Our long-standing approach is that such workers should receive neither more nor less compensation than they would have received as employees for bringing an unfair dismissal claim. These amendments preserve that alignment after the statutory cap is removed.
The regulations also amend section 140 of the Trade Union and Labour Relations (Consolidation) Act 1992. That provision concerns compensation where a person is refused employment or the services of an employment agency for reasons related to trade union membership. The amendment ensures that compensation in those cases continues to be aligned with the unfair dismissal compensation.
We are taking a different approach to sections 67 and 176 of the 1992 Act. Those provisions cover compensation payable by trade unions when members or former members have been unjustifiably disciplined, excluded or expelled. Parliament removed the compensation cap for unfair dismissal, but it did not intend to increase compensation limits for trade union discipline and expulsion cases. The regulations therefore preserve the existing limits in those provisions.
The regulations preserve the existing position by replacing the reference to section 124 with the fixed amount of £123,543, which is the current cap on unfair dismissal compensation. That amount will continue to be uprated annually in line with inflation using the retail prices index, and the additional limit based on 30 weeks’ pay will remain. That ensures that removing the unfair dismissal cap does not change the existing compensation limits that apply in these cases.
Finally, the regulations amend the ACAS Arbitration Scheme (Great Britain) Order 2004. They remove references to section 124 so that, following the removal of the unfair dismissal compensation cap, an arbitrator’s powers to award compensation continue to align with those of an employment tribunal.
The regulations are an important and necessary step in implementing the unfair dismissal reforms that Parliament has already agreed. They are necessary so that, when the unfair dismissal compensatory award cap is removed on 1 January, the wider statute book continues to work as intended. They preserve existing policy where appropriate, and ensure that related compensation provisions remain effective. I commend the regulations to the Committee.
Bradley Thomas (Bromsgrove) (Con)
It is a pleasure to serve under your chairmanship, Sir Alec. Removing the statutory cap on unfair dismissal compensation demonstrates yet again just how little this Government understand business. Insurance and legal specialists have warned that the removal of a legal limit on payouts, coupled with increasing the time limit for employment tribunal claims from three to six months, will trigger a substantial number of insurance claims. That will likely force insurance companies to pay higher rates to their own reinsurance, which ultimately will drive up prices for business customers.
Furthermore, it has been highlighted that as employment practices liability risks accelerate, speciality solutions will become increasingly valuable. This is yet another cost of employment, encompassing both direct financial expenditures and high-risk liabilities, which the Government expect employers to absorb without regard for the economic consequences. The domino effect of this policy is easy to predict: employers will become more risk averse and employment opportunities will decrease. When it becomes more expensive to hire, fewer people are employed. Furthermore, as there is no doubt that this policy will open the floodgates to claims, the already overstretched employment tribunal system will become all the more overwhelmed, inevitably leading to higher defence costs being incurred. That is good for lawyers; it is not good for businesses.
To be clear, we know the vital importance of employment rights, and we unequivocally support having comprehensive protection for workers, but the point we continue to emphasise, and that the Government keep dismissing, is that in order to have secure employment rights, there has to be secure employment in the first place. The Government continue inaccurately to imply that we do not care about workers and their rights, yet the Conservatives are the only ones fighting for policies that will actually protect jobs and get more people into work.
The removal of this cap will only deter employers further, push unemployment higher and compound the pressure on a tribunal system that is already over-extended. It is for those reasons that we will vote against it. To truly support the workforce, the Government must start listening to the businesses encountering the very hurdles that the Government continue to introduce. Creating an economic environment where businesses can thrive is the only way to drive hiring and sustain long-term job growth.
Sarah Olney (Richmond Park) (LD)
It is a pleasure to serve under your chairmanship, Sir Alec. The Liberal Democrats voted against plans to remove the compensation cap as the legislation made its way through the House, and we will oppose the SI today. The removal of the limit on compensation was a Government amendment at a very late stage in the progress of the Bill and was something that took a lot of people by surprise, which was why we were not able to support it on that occasion. We will continue to oppose it now.
The Minister said in her opening remarks that she would expect compensation payout awards to remain modest. I would challenge her on that point, because I do not know on what basis we can expect claims to remain modest if we remove a compensation cap. There will undoubtedly be an increase in claims from people who would now expect to receive an award above the cap, and that will not only increase the backlog, which is already immense in the tribunals and causing a huge amount of detriment to my constituents, and I am sure hers as well. It will contribute to increasing that backlog, and it will create massive disruption for employers. I am particularly concerned that where employers currently take out insurance and pay premiums to cover the cost of employment tribunals, those premium costs will either go up enormously, or some employers will find that their costs are simply uninsurable. That will create a knock-on impact so that some of these jobs will simply not be available. It will be too great a risk for employers to take people on.
Jo Stevens (Cardiff East) (Lab)
The easiest way to look at this is: if you do not dismiss somebody unfairly, you do not carry the risk of having to make a payout in compensation.
Sarah Olney
The whole point about a tribunal is to assess whether somebody has been dismissed unfairly. It will undoubtedly be the employer’s point of view that it is not an unfair dismissal, but the employee’s view that it has been. That is the point of a tribunal. The employer will not have been intending in any way to dismiss somebody unfairly. Nobody intends to dismiss unfairly. [Interruption.] The point of the tribunal is to test whether an unfair dismissal has taken place.
My final point to the Minister is this: as we go through this process, there is a fundamental shift at the moment between what humans will continue to do in the workplace versus what will be taken on by AI or other innovative tech. The changes will make it more difficult and more expensive for employers to take on human beings to do the work, which will undoubtedly accelerate the shift that is already taking place. For that reason, the Liberal Democrats will oppose this SI.
Steve Barclay
I am sure the hon. Member for Richmond Park will agree that it is quite rare for her and me to agree, but she is right to pick up on the Minister’s opening remarks and the oddity of the comments that claims will be modest, because, if claims are modest, why the need to remove the cap? The removal of the cap is because some claims will not be modest. It seems self-evident that a consequence of the regulations will be an increase in claims, and therefore an increase in the risk to employers and a deterrent to employers to hire, which is the point that my hon. Friend the Member for Bromsgrove made from the Opposition Front Bench.
First, it seems odd to suggest that claims will be modest while bringing forward the removal of a cap, which provides scope for unlimited claims moving forward. As I tried to suggest in my intervention, in the NHS, for example, some consultants at a senior level will be well paid. They will have final salary schemes and their claim could be quite significant. Indeed, some NHS managers are on salaries of several hundred thousand pounds and a claim in that instance could be significant. That brings me on, following the point from the hon. Member for Richmond Park, to a second consequence of the regulations. Not only will the quantum of claims increase, but the quantity of claims will increase. Currently, particularly for senior salaries, people might pursue other routes and not make a claim because the cap is such that it creates a deterrent. However, the removal of the cap acts as a pull factor because it is an incentive for those on the highest salaries, and that does not just apply to areas such as the NHS. If we think about financial services firms, some very large claims could flow from the removal, and someone in a modest role in such a firm will feel a sense of unfairness when they see the mega-payments that might come as a consequence, so the quantity of claims will increase.
Thirdly, I was a little surprised by the Minister’s opening remarks, because the draft regulations were not set in the wider context of the other changes that the Government are making, such as giving trade unions greater access to employers, making it easier to come in and harvest or encourage claims, or to create a grievance where there may not be one. The draft regulations should not be seen in isolation: they need to be seen alongside the other changes that the Government are making.
To respond to the right hon. Member for Cardiff East, surely the answer is not to have unfair dismissal. She has had a very respected legal career in this field— I think it was in this field, but she certainly has a lot of experience in this area—and no one wants to see claims or action by employers that justify an unfair dismissal claim. However, an employer is not guilty until proven innocent, and some people will be incentivised to bring claims that may not be justified. Therefore, there will be instances—although not all—where claims that are not valid are incentivised by the removal of the cap. Ultimately, that will be a further cost to employers, in addition to the many other costs that they face at a time of rising inflation and growing regulation.
That is why I find myself in the uncharacteristic position of agreeing with the hon. Member for Richmond Park. The quantum will increase, and the quantity will increase. This also sits alongside other changes that the Government are making, and it speaks to a Government who do not trust employers or back businesses, but who are happy to see additional costs on those businesses. They then seem surprised when youth unemployment, in particular, continues to rise as a direct consequence of the decisions they make, including the decision they are making today.
Kate Dearden
It was disappointing to hear what the Opposition said, as voting against the draft regulations does not mean that the removal of the compensation cap will not happen—that is already in place. What we are debating today is about keeping the statute book neat, and I hope I made that clear in my opening remarks. We discussed this issue at length during the passage of the Bill—I am old enough to remember last year—and today we are talking about keeping the statute book neat. I want to reflect on a few points, and I apologise if this is repetitive.
Sarah Olney
I want to challenge what the Minister said about us debating this measure at length. It was not introduced until a very late stage, so there was not a lengthy debate about removing the compensation cap.
Kate Dearden
I fondly remember debating it on the Floor of the House, and it was of course debated in the Lords too.
I will address some of the points made by Opposition Members. As I have said, employers will continue to comply with the law and will not be directly affected by these changes, so the impact on businesses will be limited. The vast majority of unfair dismissal awards are well below the existing cap, and tribunals rarely award compensation at the maximum level.
Removing the cap does not mean that large awards will become routine. In 2023-24, there were 646 awards for unfair dismissal from employment tribunals, and the median award was £6,746. Lifting the cap does not mean that compensatory awards will become impossible to anticipate. As I said in my opening remarks, tribunals follow well-established principles when calculating the compensation that might be awarded for particular types of losses resulting from unfair dismissal. I am glad that Opposition Members mentioned employment tribunals, because, under the Conservatives’ watch, unlawful fees were introduced. They presided over a substantial reduction in tribunal funding during austerity and left the tribunal system facing significant capacity and workload pressures. Yet again, we are trying to get the support and fix and improve the system.
That is why I have spoken at length with the shadow Minister, the hon. Member for Bromsgrove, about the really important work we are doing with colleagues in the Ministry of Justice to make the system more resilient and make sure that people get access to justice. This is about fairness and security and employees knowing that they can get the justice they absolutely deserve. The Conservatives made it harder for workers to access justice; we are strengthening the rights to make justice possible. I am going to choose not to bite on our wider approach on employment rights, because I could spend however long we have left talking about why that legislation is important and why I am proud that this Government are leading on it.
As I have explained, the decision to remove the unfair dismissal compensation cap has already been made by Parliament. These regulations make the consequential amendments needed to ensure the related compensation provisions continue to operate correctly once the statutory cap on unfair dismissal compensation is removed. They are necessary to maintain consistency across the statute book and preserve existing policy where appropriate. I therefore commend the regulations to the Committee.
Question put.
Draft Licensing Act 2003 (Permitted Temporary Activities) (Amendment) Order 2026
(1 day, 6 hours ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for the Home Department (Jo White)
I beg to move,
That the Committee has considered the draft Licensing Act 2003 (Permitted Temporary Activities) (Amendment) Order 2026.
It is a pleasure to serve with you in the Chair, Ms Jardine. The purpose of this instrument, laid before the House on 10 September, is simple. It will increase the number of temporary event notices that may be given in respect of a single premises from 15 to 20 in each calendar year. It will also increase the maximum number of days on which temporary events may take place at those premises from 21 to 26. Subject to Parliament’s approval, the new limits will come into force on 1usb January 2027, when the annual entitlements are reset.
Temporary event notices, or TENs, are a means of authorising licensable activities on a temporary basis without the need to obtain or permanently vary a premises licence. Those activities may include the sale or supply of alcohol, regulated entertainment or the provision of late-night refreshments. TENs can also be used by premises that already hold a licence but wish temporarily to undertake an activity or operate at a time that is not covered by their existing licence. The system is used by a wide variety of businesses, individuals and community organisations. A TEN might allow a pub or restaurant to hold an additional event, but equally it could support an event at a school, a community centre, a church hall, a wedding venue, a market or a small festival.
Under the changes before the Committee, responsible organisers will be given additional flexibility to respond to local demand and hold more well-run events. The order will support local economic activity, provide new opportunities for communities to come together and remove an unnecessary constraint on business. I am sure that all of us here recognise the contribution made by the hospitality sector, not only to our economy but to our high streets and communities. I do not suggest that this targeted measure will address every pressure facing the sector. However, it is a sensible and proportionate step that will give businesses greater flexibility without requiring a fundamental change to the licensing system.
The limits proposed in this instrument are not untested. Higher thresholds of 20 TENs and 26 days applied temporarily during 2022 and 2023 as part of the response to the economic effects of the covid-19 pandemic. Information available to the Home Office did not identify a significant increase in adverse impacts linked to those higher limits.
The Government have carefully considered the differing views expressed in a call for evidence on licensing reform. Hospitality businesses and trade bodies generally supported greater flexibility. Some local authorities, public health organisations, residents and community groups raised concerns about public nuisance, crime and disorder, public health and additional pressure on local services. We have taken those concerns most seriously. The instrument makes a modest adjustment to the annual limits while keeping the safeguards at the heart of the Licensing Act 2003 firmly in place.
The four licensing objectives—the prevention of crime and disorder; public safety; the prevention of public nuisance; and the protection of children from harm—will continue to apply. The police and environmental health authorities will continue to receive temporary event notices, and they may object where they consider that a proposed event would undermine one or more of those objectives. Where objections cannot be resolved, the licensing authority may, where appropriate, impose conditions on a TEN or issue a counter-notice preventing the event from proceeding. Licensing authorities will still be required to issue a counter-notice where the statutory limits are exceeded.
We should be clear about the limited nature of this change. The instrument does not alter the limits that apply to an individual premises user, whether or not that person holds a personal licence, nor does it change how individual notices or event days are counted. It simply increases the annual premises-level limits by five notices and five days. The instrument applies in England and Wales and makes the necessary consequential amendments to the prescribed TEN forms. The statutory guidance issued under section 182 of the Licensing Act will also be updated to reflect the new limits when the order comes into force. In designing those changes, we have been acutely aware of the need to balance support for businesses with protection of residents and local communities. The order strikes that balance. I commend it to the Committee.
Matt Vickers (Stockton West) (Con)
It is a pleasure to serve under your chairmanship, Ms Jardine. On Armistice Day, I begin by remembering all those who served. Many of the community events that this order helps, in Royal British Legion branches, social clubs and village halls, are where our communities come together to remember.
At the outset, I declare an interest as a regular patron of Stockton West’s pubs. We have some of the best—in fact the best—pubs in the country, and they will welcome anything that lets them put on another event and get more customers through the door. So let me be clear: the Opposition support this order. Giving licensed venues, and particularly our pubs, greater flexibility is exactly what the last Conservative Government did when we raised the limits in 2022 and 2023 to help the sector recover from the pandemic. It worked then, and I am glad the Government have recognised that. It is no surprise that a significant majority of hospitality and leisure venues backed the increase in the call for evidence. For a publican planning a beer festival, a charity quiz night or a Christmas market, five more notices and five more days a year really matter.
Of course, there must be safeguards. As shadow Policing Minister, I know how important it is that the police and environmental health authorities can scrutinise notices and step in where an event risks crime, antisocial behaviour or serious nuisance for neighbours, but that has to be balanced against the evidence. When these higher limits applied before, there was no significant increase in adverse impacts and, overall, police forces did not oppose this change in the call for evidence. It is right that we back it, but the order cannot be seen in isolation from what our pubs and hospitality businesses have been through.
In Stockton West our pubs are part of the fabric of the community, from a night out in Yarm to the locals served in Eaglescliffe, Ingleby Barwick, Stockton, Thornaby and our villages. Like a number of hon. Members, I host my own pub awards, and places like the Myton House Farm in Ingleby Barwick show what a pub can mean to a community. They provide local jobs—often a young person’s very first job—support local charities and other local businesses, and bring people together. When a pub struggles, the impact goes well beyond the landlord, and pubs are struggling.
Every week, I hear from businesses that are being absolutely battered. They are paying more to employ people after the rise in employer national insurance. They are paying the price for more red tape introduced by the Employment Rights Act 2025. They are paying more in business rates because the Government cut the relief for retail, hospitality and leisure. In 2023, I led a campaign backed by more than 40 colleagues. It called on the then Chancellor to extend the 75% relief. He did, and this Government cut it.
I know the Minister may point to last month’s Budget. I welcome the 20% cut to pubs’ business rates, but that goes nowhere near far enough to undo the damage already done. The Government’s own figures suggest that only around 10% of pubs would pay no business rates, and what the Chancellor gave with one hand he took back with the other by adding 2p to the price of every pint.
The industry’s own trade body, UKHospitality, says that the sector has lost more than 100,000 jobs in the past two years. That is almost half of all the jobs lost across the entire economy. Those are not just statistics; they are bar staff, chefs and young people losing their first rung on the employment ladder, in a sector that provides almost a third of first-time jobs for 16 to 24-year-olds. The economic note for the order, although based on older data, estimates that each additional temporary event notice generates an average profit of £119, with a range of £105 to £143. That is welcome when margins are this tight, but it does not take an experienced publican to recognise that a few extra events will not pay the additional bills landing on the doormat.
I have two brief questions for the Minister. First, will she publish the evidence from 2022 and 2023 showing that the higher limits did not lead to more crime or nuisance, so that residents and licensing authorities can have confidence in the change? Secondly, will she confirm that the police and environmental health authorities keep every one of their existing powers to make reasonable objections? We support the increased flexibility, but our pubs need more support than five extra events a year. I hope the Minister will keep looking for practical ways in which licensing policy can help pubs, and that she will make the case across Government for tackling the costs that put their futures at risk.
Max Wilkinson (Cheltenham) (LD)
It is a pleasure to serve with you in the Chair, Ms Jardine. It is right that the Government are making this change to support our hospitality sector. We hope that it will prevent the absurdity that happened this summer, when the England team played late at night and the Government were required to make a one-off order to allow venues to stay open late. Will the Minister confirm that the order will give some extra flexibility, so that we do not have a repeat of the scenario we experienced before the Mexico game in the summer?
There are, however, general concerns about the application of TENs. They are annually used in my constituency to circumvent licensing laws to allow pop-up sexual entertainment venues. In particular, that happens during Cheltenham race week. If councillors on the local authority reject sexual entertainment venue applications, it is well known that the venues will open anyway, perhaps even in the same place, under TENs exemptions. Those venues then operate to a lower standard of regulation and represent a risk to women—the performers.
The TENs regulations, as they stand, undermine SEV licensing regulations, but Ministers in this Government and the previous one have repeatedly refused to engage. Will the Minister look at how she can amend legislation to close that loophole and to address the gaping hole in licensing regulations, particularly given the ongoing debate about the need to tackle threats and violence against women and girls in general? Will she and her officials meet me to discuss the matter at the very least, to prove that the Government are as good as their word on VAWG?
Ms Julie Minns (Carlisle) (Lab)
I will speak briefly in support of the order, particularly with regard to rural communities like mine in north Cumbria, where it is not that a pub may have closed but that a pub never existed in the first place, so the centre of the community is the village hall. I put on the record my thanks to the village hall committees of Nicholforest, Roadhead and Stapleton, which each run an amazing number of community events throughout the year. This order will be a big boost for them.
I also give credit to the Crossings and the Black Lion, which are more than pubs for the two villages they serve. When there are storms and power cuts, which are sadly too frequent, they are hubs for the community. I very much welcome the order, which is crucial to sparsely populated areas such as north Cumbria. Gathering at a function at the village hall or local pub gives people the opportunity to meet their neighbours.
Jo White
I am grateful for the contributions and comments from hon. Members. I agree with the hon. Member for Stockton West that this order will give our armed services personnel and those who want to participate in Remembrance events greater opportunities to meet together.
Hospitality businesses play an important role in strengthening communities and creating places where people can come together. That is why the Government have delivered permanently lower business rates for more than 750,000 eligible retail, hospitality and leisure properties. We have also provided targeted support for pubs, clubs and live music venues, and are reviewing pub and hotel valuations to ensure that the system is fairer, more transparent and more predictable. We have also invested £10 million through the new hospitality grant scheme to support growth, boost resilience, create jobs and strengthen local economies.
Hospitality businesses continue to face significant cost pressures, and the Government want to provide practical measures that support growth, high streets and local communities. The increase in the number and availability of TENs is a low-burden change that provides additional flexibility without requiring businesses to go through the process of obtaining a full premises licence variation. On the issue raised by the hon. Member for Cheltenham, strip clubs are regulated under different legislation—the Local Government Act 2003—but I will take his point back to the Home Office and ensure that the Policing Minister follows up with him.
I once again thank hon. Members for their thoughtful contributions to this debate. As I have set out, this sensible and proportionate measure will support our hospitality sector while maintaining the important checks and balances that underpin the licensing regime. With that, I commend the order to the Committee.
Question put and agreed to.