Thomas Cook Customers

Andrea Leadsom Excerpts

Tuesday 5th November 2019 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)]

May I first sincerely congratulate you, Mr Speaker, on your new role? I also wish all hon. and right hon. Members who are retiring today every success for their future.

With your permission, Mr Speaker, I would like to make a statement on the Government’s actions to support customers of Thomas Cook. As the House knows, Thomas Cook entered into insolvency proceedings on 23 September. This has been a hugely worrying time for the employees of Thomas Cook and its customers, and the Government have done, and continue to do, all they can to support them. This has included the biggest peacetime repatriation effort ever seen in the UK, with around 140,000 people successfully flown home thanks to the efforts of the Secretary of State for Transport, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps) and his Department, and to the Civil Aviation Authority. In the Department for Business, Energy and Industrial Strategy, we have set up a cross-Government taskforce alongside local stakeholders to support employees and supply chains.

I am sorry to have to inform the House, however, that the official receiver has recently brought to my attention further impacts of Thomas Cook’s insolvency, which I wish to share with the House today. There is an important outstanding matter relating to personal injury claims against Thomas Cook companies, impacting customers who have suffered life-changing injuries, illness or loss of life while on Thomas Cook holidays. Thomas Cook took out insurance cover only for the very largest personal injury claims. For agreed claims below this figure, up to a high aggregate amount, the company decided to self-insure through a provision in its accounts. As Thomas Cook has entered liquidation without ensuring any protection for pending claims, the vast majority of claimants who are not covered by the insurance, including customers who have suffered serious injuries and loss of life, will be treated as unsecured creditors. This means that it is uncertain whether they will receive any of the compensation they would ordinarily have received against their claims. This raises a potentially unacceptable prospect for some Thomas Cook customers, who face significant financial hardship through no fault of their own where Thomas Cook should rightly have provided support. They are customers who have already suffered life-changing injuries or illness and who may face financial hardship as a result of a long-term loss of earnings or significant long-term care needs. This is an extraordinary situation that should never have arisen.

The Government cannot and will not step into the shoes of Thomas Cook, but we intend to develop proposals for a statutory compensation scheme. Any scheme must strike a responsible balance between the moral duty to respond to those in the most serious financial need and our responsibility to the taxpayer. Accordingly, it will be a capped fund that is sufficient to ensure support for those customers facing the most serious hardship as a result of injuries or illness for which UK-based Thomas Cook companies would have been liable. We will develop the scheme to ensure that only genuine claims are provided with support. The scheme will not consider routine claims covering short-term problems. After the election, we intend urgently to bring forward the legislation necessary to establish such a scheme, and I am sure that any new Government would wish to do likewise.

I have also written to the official receiver to ask him to take this serious matter into account as part of his investigation into the conduct of Thomas Cook’s directors relating to the insolvency. I am sure the House will agree that it was important to act quickly today to give reassurance to those individuals and families who would otherwise be left with unfunded serious long-term needs or other financial hardship as a result of injuries or illness sustained abroad, for which Thomas Cook would have been liable. The House will have the opportunity to consider the matter in more detail in the new Parliament.

I want to make it clear to all businesses that the Thomas Cook approach was unacceptable, and that we will take steps to require suitable arrangements to be in place to ensure that this cannot be repeated. I have asked BEIS officials urgently to bring forward proposals for speedy action in the new Parliament. I am grateful to the official receiver for bringing this matter to my attention, and for all his efforts in this case. It is critical that we act to provide support to those who, through no fault of their own, have been severely impacted by the collapse of Thomas Cook. I commend this statement to the House.

[Bill Esterson (Sefton Central) (Lab)]

As your next-door-but-one constituency neighbour, Mr Speaker, may I congratulate you on your election?

I thank the Secretary of State for her statement. She is right to raise these matters today, because they raise serious questions that will need far more attention in the new Parliament, whichever Minister is at the Dispatch Box. I also have some questions today to take this forward.

In her statement, the Secretary of State mentioned a “high aggregate amount”. Can she tell us more about what that is? On the question about audit, to which I will return shortly, will she tell us why no regulation was in place to ensure that this serious weakness did not materialise? I should also like to put on record my thanks to all those involved in bringing 140,000 holiday- makers home.

We welcome the fact that the online services have now been bought, and that shops in the constituencies of Members across the House are being reopened by Hays Travel, but why oh why did Thomas Cook have to close first, and why were the opportunities that were given to the shops and online services not given to the airline? Intervention to ensure the retention of those viable parts of the business would have been a major step towards addressing the serious weaknesses that the Secretary of State identified in her statement. The Government were told at the time that parts of the business were successful, and Hays Travel clearly agreed because it bought the shops. There is also value in the brand, which is why the online business has been recovered. Could the airline have been saved, as the ones in Germany and Scandinavia were, if the liquidation had been delayed?

Why did the Government not listen to those calling for intervention? Why did they not take a stake in the company, so that the shops and digital business could have been transferred while still trading and so that other parts of the business could have been saved? Let us remember that the Turkish and Spanish Governments wanted to step in. They saw the potential value, but our Government did not. Had our Government intervened, the hardship to which the Secretary of State rightly referred could have been identified and possibly avoided. Does she regret her failure to speak to the company and to intervene to protect the jobs and rights of workers? Had the company continued trading, with the Government holding a stake, the rights of workers would have been protected. It is good news that staff will now have jobs with Hays Travel, but will they be paid for the time since Thomas Cook closed? Will their rights from their years of service be protected? Are staff being TUPE-ed over, or not?

What can the Secretary of State tell us about her response to the warnings about auditor conflicts of interest? She mentioned audit responsibility and potential failure in her statement. Auditing conflicts of interest have been repeatedly identified at Carillion, at BHS, in the banks and now at Thomas Cook. Has she read the excellent report from the Business, Energy and Industrial Strategy Committee, and what is her response to its recommendations, including its calls for a new regulator and for the audit profession to be proactive rather than reactive? Why is the Secretary of State so resistant to change? The Competition and Markets Authority wants action; why does not she?

What action is the Secretary of State taking to address the scandalous payment of bonuses to executives who have profited at the expense of workers and customers and who presumably have direct responsibility for the appalling hardship to which she has referred? Analysis by Unite and Syndex shows that £188 million in bridging loans would have prevented the liquidation. That would have allowed profitable parts of the business to be sold while still trading, and for workers’ rights to be protected. This would have supported the wider economy and communities, too.

The Government should be a partner of business, not stand apart from it. That means intervening and providing support where intervention stands a chance of succeeding. The more evidence emerges about the Thomas Cook collapse, the more it appears that the case for intervention was there to be made. If they would not intervene at Thomas Cook, exactly when would the Government intervene?

If the Secretary of State wants to avoid hardship for those covered by insurance, she needs to change her approach and her attitude to intervention. When she referred to a drop in the ocean in responding to a question from the shadow Business Secretary, she demonstrated that she did not agree with her predecessor, who said that reforms were needed to ensure a strong level of consumer protection and value for money for the taxpayer. He was right, was he not?

The Secretary of State said that the Thomas Cook approach was unacceptable and that support must be given to those severely impacted by its closure through no fault of their own. I agree, but the Government have failed Thomas Cook. They sat back and let it fold. Only proper reforms will make sure that catastrophic failures of this type do not happen again.

[Andrea Leadsom]

I am glad that the hon. Gentleman recognises the Government’s efforts, particularly on the repatriation of customers stranded overseas and, of course, in the work, which I know through chairing the Government taskforce, to try to ensure that we get the best possible arrangements for Thomas Cook staff. He asks why the Government did not bail out Thomas Cook. He will be aware that, according to court reports, there was about £1.9 billion of debt on Thomas Cook’s balance sheet. It did approach Government looking for a loan facility of up to £250 million, but it is clear that, had the Government put that significant sum of taxpayers’ money into Thomas Cook, we would have ended up in the same position as we are in today. We would have had to repatriate those customers. We would have to have done exactly as we have done, but the taxpayer would have been £250 million worse off, so it was not an appropriate use of taxpayers’ money. It is very sad that Thomas Cook went bust, but it is not right that Government should just bail out every business. Businesses need to stand on their own two feet.

The hon. Gentleman made some very important points about regulation. I can tell him that I wrote to the Financial Reporting Council asking it to prioritise as a matter of urgency consideration of an investigation into the audit of Thomas Cook’s 2018 accounts, as well as the conduct of its directors. He asked why the Government did not foresee this.

It was never envisaged that a UK tour operator would fail to insure itself fully to cover claims for personal accident or fail to ensure that it had ring fenced the funds to meet those liabilities so that they were safe if the company got into difficulty. The company has a legal obligation to cover personal injury claims arising from package holidays abroad, and that is why I have asked the official receiver to investigate, in particular, this aspect of the conduct of Thomas Cook’s directors.

[Barry Gardiner (Brent North) (Lab)]

Who were the auditors?

[Andrea Leadsom]

The hon. Gentleman asks from a sedentary position who the auditors were. They were EY, and they will be investigated by the official receiver.

The hon. Member for Sefton Central (Bill Esterson) asked how the Insolvency Service supported Thomas Cook employees. It has received over 8,000 claims for unpaid liabilities from former employees and has paid out over £41 million so far to claimants for arrears in pay, compensatory notice pay, holiday pay accrued, holiday pay not taken, notice worked not paid and redundancy pay. The Insolvency Service continues to work to offer, for example, the services of BUPA’s employee assistance programme and the Centre for Crisis Psychology to Thomas Cook employees as a particular request that came from the taskforce. The Government continue to do everything possible to support those affected and we are delighted that Hays has taken over the shops, providing jobs for well over 2,000 of those who lost their jobs under Thomas Cook.

Finally, I am very keen on the BEIS Committee’s report into audit. As I made clear when I appeared before it, I will bring forward fundamental changes to audit. I expect that to be in the first quarter of next year. I am very interested to read its report and, as I also made clear, I want to see Donald Brydon’s report, which I believe he expects to provide to Government by the end of this year.

[Dr Julian Lewis (New Forest East) (Con)]

Thank you, Madam Deputy Speaker. May I congratulate you on your own gallant and good-humoured campaign to be Speaker?

I must congratulate my right hon. Friend the Secretary of State on being so proactive in responding to this shocking discovery that Thomas Cook did not properly insure so many people against injury while being on a Thomas Cook holiday. Am I right in thinking that there would have been no way in which this would have come out but for the collapse of the company? If it turns out to be the case that the company was not breaking any existing rules, regulations or laws by behaving in this totally irresponsible and inhumane way, will it be possible to make a change in the law to ensure that this can never happen again?

[Andrea Leadsom]

I am grateful to my hon. Friend for his recognition of the fact that it felt important to raise this before the House prior to Dissolution. He is absolutely right. In doing so, we seek to provide some sort of reassurance to those who have been profoundly impacted by accidents and illnesses overseas on Thomas Cook holidays. He asked whether there could have been any legitimate expectation that this might have happened. That is not the case. It was never anticipated that a business such as Thomas Cook would not have adequately provided for such claims that were known to them. I am putting on notice today that any future Government––I am sure that the Opposition spokesman has made similar a commitment––will wish to resolve this to ensure that it cannot happen again. BEIS officials will work over the next few weeks to bring forward proposals on how to ensure that this cannot be repeated.

[Christine Jardine (Edinburgh West) (LD)]

I share the Secretary of State’s surprise and horror that Thomas Cook was operating without the necessary insurance. Many of my constituents and, indeed, I myself travelled with Thomas Cook unknowing. We all assume that the safeguards that we see with travel companies through the Association of British Travel Agents and so on ensure that we are travelling safely and that we are protected. Will the Secretary of State assure us that there will be safeguards to ensure not just that we investigate what went wrong at Thomas Cook, but that all travel companies, or anyone offering travel in this country, is properly insured?

[Andrea Leadsom]

The hon. Lady gives me the opportunity to say this again: I call on all similar travel and tour operators to ensure that they covered this and that they have not got a similar arrangement to the one that Thomas Cook had. I can assure her that BEIS officials during the next few weeks will bring forward proposals for ensuring that this does not happen again

[Kate Green (Stretford and Urmston) (Lab)]

It is great pleasure to see you in the Chair, Madam Deputy Speaker.

What the Secretary of State has told us this afternoon is shocking. Can she assure the House that there will be no similar shocks in relation to Thomas Cook’s public liability and employer liability insurance?

[Andrea Leadsom]

There are certain types of public liability and employers’ liability that are required to be insured by law, and there is no expectation that any business would not have provided that kind of insurance. Officials are looking carefully to satisfy themselves, as they do as a routine matter, but I say again in this particular instance, it was a great surprise and shock to see that there was an attempt at self-insurance with no proper provision made for these types of claims.

[Jim Shannon (Strangford) (DUP)]

I thank the Secretary of State for her statement. I have had several people in my office absolutely devastated because the hard-earned holiday that they had saved for has been cancelled. They are asking me when they will have their money back. They have to wait months, by which time their holiday options will have changed. Could the Secretary of State outline what she believes to be the absolute time limit for refunds for holidays and how that will be achieved?

[Andrea Leadsom]

It has been a difficult time for all those affected whether they were customers on holiday, customers who had paid for a holiday but not yet taken it, or employees and those in the supply chain. The Government have sought to tackle all those issues as far as we are able to do so. The hon. Gentleman will be aware that the ATOL scheme is designed to provide refunds and repatriation costs that arise from a failure of a company such as Thomas Cook. Many of those who have suffered financial loss will be able to claim through ATOL or, indeed, through a credit card provider if their holiday has not yet been taken.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

I thank the Secretary of State for her personal energy, commitment and skill in chairing the Government taskforce on the collapse of Thomas Cook. I agree with both Front-Bench spokespeople that the directors did not comport themselves well before, during or after the collapse. With 2.8 million passengers taken out of the equation at Manchester airport, with the huge repatriation event, and with employees still employed on temporary contracts trying to close the company, will she join me in thanking the workers who remain after losing their jobs and the trade union reps at Unite and the Transport Salaried Staffs Association, who have worked so hard to represent them so ably?

[Andrea Leadsom]

I thank the hon. Gentleman for his contribution to the taskforce and join him in thanking all those who have played their part. People from right across Government, from trade unions and from local enterprise partnerships and so on have all sought to find new work. The Department for Work and Pensions rapid action taskforce has been helping people write CVs, and there has been mental health support and so on. It is a great shame and a huge pity to see this long-standing brand collapse, but I am sure we are all glad that its name will survive perhaps as an online travel company. I join the hon. Gentleman in wishing our very best to all those who lost their jobs in finding new work in a similar sector.

[Jeff Smith (Manchester, Withington) (Lab)]

I thank the Secretary of State for her statement. This is clearly a combination of shocking system failure and a failure by the company, but I am unclear whether the Secretary of State thinks that the law has been broken here. If it turns out that the law has been broken by executives, who may well have been taking large bonuses at the time, will she reassure us that the Government will be seeking some redress?

--- Later in debate ---

[Andrea Leadsom]

The hon. Gentleman raises an important point. I have written to the Official Receiver today asking him to take carefully into account in his review the behaviour of directors in the run-up to the insolvency of Thomas Cook and to consider whether this further appearance of failure on their part should require further action with regard to his statutory duties. This will be thoroughly investigated, and if there is wrongdoing, the Official Receiver has the ability to claw back bonuses and, of course, to take further steps through the Insolvency Act 1986.

Audit Reform

Andrea Leadsom Excerpts

Tuesday 5th November 2019 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)]

The Government recognise the role that audit plays in the effective functioning of the UK’s financial markets and broader economy.

To help meet our ambition that the UK should become the best place in the world to work and to grow a business, we must take forward reform of audit. This will include reforming audit, the audit regulator, and the audit market. Change would affect a large number and a wide variety of companies, firms, and interests; but it is clear that there is a need for truly long-lasting and effective change.

I want to see the UK leading the world in the next phase of improvement for corporate governance and audit. In the first quarter of next year—when I have considered Sir Donald Brydon’s recommendations—I intend to bring together all relevant elements of reform in order to take that forward.

I am already working to create the new audit, reporting and governance authority, to replace the Financial Reporting Council. I have started with appointing new leadership at the Financial Reporting Council, who are driving a new vision and culture for the regulator. They are now implementing those recommendations made in Sir John Kingman’s excellent report that are not contingent on legislative change.

Future reform will cover not just the function of the regulator, but also the purpose and function of the audit market, and audit itself. I intend to bring forward an ambitious and coherent programme of change that drives up quality, resilience and choice. It will include proposals on the function and oversight of audit committees and new internal control arrangements within businesses; on the responsibilities of boards and directors; on how both investors and regulators can better hold companies and their auditors to account; and to reduce the reliance on a few large audit firms for the provision of audit.

All of those factors must be and will be assessed and weighed together, so that the whole package is coherent and effective. As recognised by the Business, Energy and Industrial Strategy Committee, whose work on audit I welcome, some reform will require radical action in order to ensure that it is meaningful and enduring, and that it fully addresses the very real concerns that we all share with the current state of the market.

[HCWS102]

Cobham plc Merger

Andrea Leadsom Excerpts

Tuesday 5th November 2019 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)]

On 25 July 2019, the boards of Cobham plc and a subsidiary of funds managed by Advent International, a US private equity firm, announced that they had reached agreement on the terms of a recommended cash acquisition of Cobham for approximately £4 billion.



On 17 September, following advice from relevant Government Departments and agencies, I initiated a public interest intervention under the Enterprise Act 2002 into this merger on the grounds of national security. I required that the Competition and Markets Authority investigate the merger and provide me with a report on the transaction by 29 October, which it has done. The Secretary of State for Defence has also written to me about the national security implications of the merger and the discussions which have taken place with the parties to propose undertakings to address those implications. I am grateful for the advice I have received and the constructive engagement from the parties.

The decision on how to proceed in this case requires further full and proper consideration of the issues. Having received these reports, I will therefore have further discussions with my ministerial colleagues and the parties to the transaction to inform the decision-making process. I will update the House in due course so that hon. Members can scrutinise the Government’s decision. The full legal process will continue to be followed throughout the general election period.

[HCWS86]

Work of the Department

Andrea Leadsom Excerpts

Tuesday 5th November 2019 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)]

I would like to update the house on some of the key achievements of the Department for Business, Energy and the Industrial Strategy since it was created in July 2016.

Leading the world in tackling climate change

Achieving net zero carbon emissions is a key departmental priority and we have set out actions we are taking across the economy to accomplish this.

We committed to set a legally binding target to end the UK’s contribution to climate change to net zero by 2050.

We have set out further actions we are taking across the economy to achieve net zero by 2050. These include adding around 6GW of clean energy to the grid by 2025 through the contracts for difference (CfD) scheme, enough to power over 7 million homes at record low costs.

We announced £200 million of initial funding for a programme which aims to design and build a nuclear fusion plant by 2040, looking to exploit the potential for clean, safe and inexhaustible power.

We announced £27.8 million of Government funding to advance carbon capture, utilisation and storage (CCUS) technologies in the UK, a crucial step towards the UK’s net zero emissions.

We announced investment of up to £1 billion over five years to boost the production of key green technologies in the motor industry, including batteries, electric motors, power electronics and hydrogen fuel cells. This is in addition to £400 million for electric vehicle charging infrastructure.

The UK was nominated to host the COP26 UN climate talks next year in partnership with Italy, recognition by world leaders of our strong global on climate issues.

UK emissions in 2019 were 42% lower than in 1990, while growing the economy by 72%. The UK has delivered fastest decarbonisation in G20 since 2000 according to PWC.

The UK’s fifth carbon budget was passed into law, equivalent to a 57% reduction on 1990 levels by 2032.

We committed £5.8 billion of international climate finance from 2016 to 2021, placing us among the world’s leading providers of climate finance, in addition to the £3.87 billion we provided from 2011 to 2016. The Prime Minister later announced the doubling of international climate finance spend to £11.6 billion.

Our international climate finance programmes are delivering real results on the ground and are catalysing wider change.

Among others, we have built the market for concentrated solar power (CSP) in developing countries.

We have contributed £720 million to the green climate fund, financing projects and programmes in a range of developing countries.

We published the Clean Growth Strategy: Leading the way to a low carbon future policy paper. This set out the strategy for decarbonising all sectors of the UK economy through the 2020s, benefiting the economy while meeting commitments to tackle climate change.

We held the UK’s first green GB week in 2018, a week to celebrate clean growth and raise awareness regarding how the public and businesses can tackle climate change.

We launched the smart export guarantee consultation which proposed that large electricity suppliers must offer small scale generators a price per kWh for the electricity they export to the grid. The scheme came into force in June 2019.

We are taking action to make sure the UK’s energy system has adequate capacity and is diverse and reliable.

We gave the go-ahead agreement to proceed with the first nuclear power station in a generation at Hinkley Point C to ensure future low-carbon energy security. Hinkley will provide 7% of Britain’s electricity needs for 60 years. UK-based businesses will benefit from more than 60% of the £18 billion value of the project, and 26,000 jobs and apprenticeships will be created.

We continued to support the capacity market auctions. The capacity market aims to ensure security of electricity supply by providing a payment for reliable sources of capacity, alongside electricity revenues, to ensure the delivery of electricity when needed.

The Department’s ambition is for the UK to have the lowest energy costs in Europe, for both households and businesses.

The Domestic Gas and Electricity (Tariff Cap) Bill put a requirement on the independent regulator, Ofgem, to cap energy tariffs until 2020. It came into force in January 2019, saving customers on default tariffs around £76 on average and as much as £120 on the most expensive tariffs.

As of March 2019, there were over 14.3 million meters operating under the smart meter programme.

Making the UK the best place to work and grow a business

The Secretary of State has set out her ambition to make the UK the best place in the world to work and grow a business. Creating fairer, inclusive workplaces and unlocking enterprise by cutting the burdens on businesses are two sides of the same coin and both equally important.

We announced that the British Business Bank would expand its venture capital and debt support programmes. A total of 82,000 smaller businesses have been supported by the British Business Bank.

The Brydon review examined the quality and effectiveness of the audit market and looked at what audits should be in the future. It addressed the audit expectation gap: the difference between what people think an audit does and what it actually does. It will also look at the scope of an audit, any changes that may need to be made to it and how it can better serve the public interest.

We consulted on the competition and markets authority’s far-reaching and ambitious recommendations to improve quality, resilience and competition in the statutory audit market. We are committed to acting on the CMA’s findings and will respond as soon as possible.

We established the Office for Product Safety and Standards to enhance consumer protections.

We published the Consumer Green Paper, aimed at responding to the challenges and opportunities of modern consumer markets via a regulatory and competition framework. This was followed by consultation and engagement on the Green Paper.

We carried out a Smart Data Review and proposed a set of measures to ensure consumers’ data is handled with the security they expect, while enabling them to continue to have access to the best deals available.

The Government asked Matthew Taylor to conduct an independent review of employment practices in the modern economy, which was published in July 2017.

We responded to this review with the good work plan. The plan set out proposals to ensure workers know their rights and receive the benefits they are entitled to, and that action is taken against employers who breach those rights. Proposals include:

First-day entitlements to holiday and sick pay;

A new right to payslips for all workers, including casual and zero-hour workers; and

A right for all workers to request a more stable contract, providing more financial security for those on flexible contracts.

As of 1 April 2019 the national minimum wage (NMW) was £7.70, and the national living wage (NLW) was £8.21. The annual earnings of a full-time minimum wage worker have increased by over £2,750 since the introduction of the NLW in April 2016. An estimated 1.8 million workers are expected to benefit from this above inflation increase. By 2020, almost 3 million low wage workers are expected to benefit directly from the NLW, with up to 6 million in total potentially seeing their pay rise as a result of a ripple effect up the earnings distribution.

The Parental Bereavement Act entitles parents who lose a child under the age of 18 to two weeks paid leave, supporting those affected by the tragedy of childhood mortality.

The Department consulted on a number of key employment issues. These include measures to boost workplace participation and to tackle employers misusing flexible working arrangements.

We announced a Tipping Bill, reaffirming our commitment to delivering employment rights reform to ensure our employment practices keep pace with modern ways of working.

Solving the grand challenges facing our society

Our industrial strategy is built to ensure we focus our efforts and resources on solving the grand challenges facing our society. Through this we will increase productivity and improve lives, as well as helping to make the UK a science superpower.

The “Industrial Strategy: building a Britain fit for the future” White Paper set out the Government’s long-term plan to boost the productivity and earning power of people throughout the UK, provide more opportunities for young people to find high-quality, high-skilled work, and spread jobs, prosperity and opportunity around the whole country.

We launched four grand challenges to put the UK at the forefront of the industries of the future:

Growing the artificial intelligence (Al) and data driven economy

Clean Growth

Future of Mobility

Ageing Society

We are pursuing five individual missions related to these grand challenges. Each of the missions focuses on a specific problem, bringing government, businesses and organisations across the country together to make a real difference to people’s lives.

We agreed 11 sector deals, partnerships between the Government and industry to create significant opportunities to maximise the potential of each sector. Each deal will substantially boost the sector’s productivity, through greater investment in innovation and skills

The Space Industry Act created a regulatory framework for the expansion of commercial space activities and the development of the UK space port. It will enable the first commercial space launch from UK soil in history, creating the potential for hundreds of highly-skilled jobs and bringing in billions of pounds for the economy

We launched the AI package for 200 UK doctoral studentships in AI and related disciplines which could help diagnose diseases like cancer earlier and make industries, including aviation and automotive, more sustainable.

The “Future of mobility: urban strategy” outlined the Government’s approach to maximising the benefits from transport innovation in cities and towns, therefore improving choice and the operation of the transport system. The strategy aims to make transport safer, more affordable and accessible to all.

We launched the West Midlands and Greater Manchester local industrial strategies, working with local leaders to boost the productivity and earning power of people throughout these regions. Local industrial strategies will allow places to make the most of their distinctive strengths, helping to inform local choices, prioritise local action and, where appropriate, help to inform decisions at the national level.

We announced funding for strategic priorities fund (SPF) wave 2 programmes on healthy ageing, clean air and productivity. These will help us to fulfil our goal of improving lives and increasing productivity through high-quality research and innovation. Programmes include research into care robots that could make caring responsibilities easier; digitising museum exhibits so they can be seen in peoples’ homes, libraries and schools; research into teenage mental health issues and closing the productivity gap with investment in super computers and a new productivity institute. The SPF Wave 2 total programme funding allocation is £496.8 million.

We set out plans to rewrite the regulation rulebook to ensure the UK leads the tech revolution and empowers consumers. The “Regulation for the Fourth Industrial Revolution White Paper” outlined how the Government will transform the UK’s regulatory system to free up businesses and innovators to test their ideas, make use of the latest technologies and get their products to market quicker, keeping the UK at the forefront of innovation.

We committed to increase investment to 2.4% of GDP by 2027. The Government are increasing spending on R and D by £7 billion over 5 years by 2021-22. This will be the largest increase in nearly 40 years. Within this funding we have:

Allocated £1.7 billion to the industrial strategy challenge fund (ISCF) over two waves of investment; £1billion was announced for wave 1 in Budget 2017, and a further £725 million announced in the industrial strategy White Paper. These challenges have been developed to align with the four grand challenges set out in the White Paper. We have announced nine challenges under the third wave of the ISCF.

Announced investment of £118 million to attract highly skilled researchers to the UK through a new Ernest Rutherford Fund, providing fellowships for early-career and senior researchers.

Committed £900 million to the UK research partnership investment fund over 2012-2021, which will lever double from private sources into R and D collaborations between universities, business and charities.

Committed to developing the UK’s national space capabilities, including:

£1million, matched by industry, for innovative new business ideas that could benefit from a flight to the international space station. These could be anything from medicines and innovative materials developed in the low gravity environment, to space-flown consumer products.

£20 million is being invested to predict severe space weather events by improving systems at the met office space weather operations centre and building the UK’s knowledge on how to forecast and better prepare for space weather.

To support R and D we have also within this funding we have:

Published “Higher Education: Success as a Knowledge Economy” (White Paper, 2016). This document set out a range of reforms to the higher education and research system, aiming to boost competition and choice in higher education, and strengthen the way the sector is regulated, and research is funded.

Passed the Higher Education and Research Act 2017, bringing together the seven research councils, Innovate UK and research functions of HEFCE into a single, strategic agency called UK Research And Innovation (UKRI) to encourage collaborative research across the sciences, and closer co-operation between researchers, innovators and entrepreneurs. UKRI was formally launched in April 2018.

Getting businesses ready for Brexit and the opportunities beyond

Preparing for all scenarios and delivering a Brexit that works for business has been the Government and the Department’s immediate focus.

As part of the Government campaign to ensure people and businesses are ready for Brexit, the Secretary of State hosted nine business roundtables, including five regional events, and visited businesses across the UK, in locations including Belfast, Aberdeen, Cardiff and Manchester. Businesses participating in the roundtables included Tate and Lyle Sugars, JCB, Tesco, Unilever, Laing O’Rourke, Scottish Power and Diageo.

We ran a “Get Ready for Brexit” roadshow, with 30 events over six weeks across the UK, where 3,132 attendees received tailored advice and support on preparing for Brexit. We also produced an online version of the roadshow, which has attracted nearly 6,000 viewers.

The Department launched the business readiness fund to help business representative organisations (BROs) and trade associations to support businesses to be ready for EU Exit. Initially launched as a £10 million fund, a further £5 million has been made available due to the fund’s popularity. So far over £10 million in grants has been issued to support 124 BROs.

We published 28 of the Government’s 106 technical notices to help the public prepare for Brexit, including Horizon 2020, state aid, workplace rights, nuclear research, mergers and trading goods.

The Nuclear Safeguards Act made provisions for nuclear safeguards after the UK leaves Euratom, ensuring the UK meets its international commitments.

[HCWS98]

Shale Gas Exploration

Andrea Leadsom Excerpts

Monday 4th November 2019 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)]

This statement provides an update on the Government’s policy regarding shale gas exploration.

The Government continue to recognise the importance of natural gas as a source of secure and affordable energy as we aim to reach net zero emissions by 2050. The Committee on Climate Change predicts that we will still be consuming almost 70% of the gas we consume today in 2050 under our net zero target as significant reductions across building, industry and power are offset by demand for gas to produce hydrogen. It is therefore critical that the UK continues to have good access to natural gas from both domestic and international markets.

Given shale gas has the potential to provide a new source of domestic energy, the Government have supported the development of the UK shale gas industry. Domestic gas production provides jobs and other economic benefits. The industry is currently in an exploration phase and the Government have always been clear that it will only allow development in a way which is safe and sustainable—both for the environment and local people. We have therefore taken a precautionary, evidence-based approach to exploring this potential, underpinned by world-leading environmental and safety regulations.

Following seismic events in 2011 that were connected to shale gas exploration, the Government introduced regulations to mitigate these risks. A traffic light system was introduced to monitor real-time seismic activity during operations, with a clear framework for stopping operations in the event of specified levels of seismic activity.

The Government also introduced tighter controls over the shale gas industry through the Infrastructure Act 2015. This included the requirement for operators to obtain hydraulic fracturing consent from the Secretary of State which requires careful consideration and detailed scrutiny of the necessary technical and legislative requirements. This consent ensures that all the necessary environmental and health and safety permits have been obtained before activities can commence.

While the regulatory and legal framework for shale gas activities has operated effectively to date, it is right that Government and regulators regularly review whether it remains fit for purpose in light of further evidence from shale gas operations.

Cuadrilla, a private company exploring for onshore oil and gas, obtained hydraulic fracturing consent in 2018 to undertake shale gas exploration activity at their site at Preston New Road, Lancashire. Hydraulic fracturing operations took place in 2018 and 2019. Their operations were tightly controlled by the relevant independent regulators, including the Oil and Gas Authority, who are responsible for regulating the licensing of exploration and development of England’s onshore oil and gas reserves, including shale gas.

Following a seismic event of magnitude 2.9 on 26 August 2019, hydraulic fracturing at Preston New Road was suspended by the Oil and Gas Authority, in accordance with its strict regulatory controls. While seismicity was at a level below that at which we would expect significant damage, seismic activity at this level does impact local communities and was clearly unacceptable. An event of this significance was considered highly unlikely in the detailed plan that Cuadrilla provided to the regulator before their activities began.

In parallel to itsaction following the 26 August 2019 event, the Oil and Gas Authority has been analysing in detail data drawn from Cuadrilla’s earlier operations that took place at Preston New Road last year. This included commissioning a series of expert reports to better understand and learn from the induced seismicity observed in 2018. The Government have recently received these reports and they are being published alongside a summary of their findings by the Oil and Gas Authority today. The Oil and Gas Authority summary report contains a number of findings and interim conclusions and highlights that the causes of seismicity are highly dependent on local geology. While we cannot draw definitive direct comparisons between this site-specific evidence and other prospective shale gas sites, the limitations of current scientific evidence mean it is difficult to predict the probability and maximum magnitude of any seismic events, either in the Fylde or in other locations.

The Government have always been clear that we will take a precautionary approach and only support shale gas exploration if it can be done in a safe and sustainable way, and that we will be led by the science on whether this is indeed possible. It remains our policy to minimise disturbance to those living and working nearby, and to prevent the risk of any damage.

The Oil and Gas Authority intends to commission further research to incorporate new data from Cuadrilla’s more recent operations. The Oil and Gas Authority has made clear that it cannot evaluate with confidence whether a proposal to resume hydraulic fracturing in the Fylde, or to start operations elsewhere, will not cause unacceptable levels of seismicity. The OGA is therefore unlikely to approve future hydraulic fracture plans unless new evidence is presented.

On the basis of the current scientific evidence, Government are confirming today that they will take a presumption against issuing any further hydraulic fracturing consents. This position, an effective moratorium, will be maintained until compelling new evidence is provided which addresses the concerns around the prediction and management of induced seismicity. While future applications for hydraulic fracturing consent will be considered on their own merits by the Secretary of State, in accordance with the law, the shale gas industry should take the Government’s position into account when considering new developments.

Finally, alongside the Secretary of State for Housing, Communities and Local Government, I can confirm that the Government will not be taking forward proposed planning reforms in relation to shale gas that were subject to consultation last year. These include the proposals on the principles of a permitted development right for non-hydraulic exploratory shale gas development; making community pre-application consultation compulsory for shale gas development; and proposals to bring shale production development into the nationally significant infrastructure projects (NSIP) regime. Full Government responses which summarise the responses to these consultations have been published today.

[HCWS68]

Leaving the EU: Workers’ Rights

Andrea Leadsom Excerpts

Tuesday 29th October 2019 Commons Chamber

[Laura Pidcock (North West Durham) (Lab)]

(Urgent question): To ask the Secretary of State for Business, Energy and Industrial Strategy if she will make a statement on the Government’s plans for workers’ rights after the UK leaves the EU.

[The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)]

The UK has a long and proud tradition of leading the way in workers’ rights and for setting the highest standards. The Government have been clear and consistent that the decision to leave the EU does not change that in any way whatever. The Government have absolutely no intention of lowering standards on workers’ rights. To suggest otherwise is scaremongering and is untrue.

The EU has traditionally set minimum standards for workers’ rights and, as all colleagues in this Chamber would expect, the UK already exceeds standards in a wide range of areas, such as maternity and paternity leave and pay. The UK offers 39 weeks of statutory maternity pay, compared with the 14 weeks of paid maternity leave required by the EU’s minimum standards. Because the Government believe in the importance of supporting families in every possible way, we have also given fathers and partners an additional statutory right to leave and pay, something that the EU is only now starting to consider. We are one of the few EU member states to have introduced shared parental leave and we are proud that in the UK we have given all employees with 26 weeks qualifying service a statutory right to request flexible working that enables so many to better balance work and life responsibilities. EU law only allows workers to make such a request if returning from parental leave.

Under the terms of the European Union (Withdrawal) Act 2018, all existing workers’ rights laws will be transferred into domestic law once we have left the EU, making sure there is no gap or lack of clarity in the minimum set of workers’ rights which, as I have already said, the UK exceeds in many areas. We are also including in the Withdrawal Agreement Bill a new requirement that every Bill brought before this place in the future that affects workers’ rights will include a statement by the Government of the day on how it impacts workers’ rights. This will ensure that Parliament always has its say. The Government have also published clauses that will require every Government, now and in the future, to monitor new EU legislation covering employment and workplace health and safety standards, and to report on those changes to Parliament so that Parliament can again have its say.

In direct answer to the hon. Lady’s question, I can absolutely assure her and this House that the Government will not lower standards on workers’ rights when we leave the EU. On the contrary, it is the ambition of this Government to make the United Kingdom the best place to work and to grow a business.

[Laura Pidcock]

Thank you for granting this urgent question, Mr Speaker. I persisted.

The leaked memos reported in the Financial Times over the weekend are both worrying and, at the same time, utterly predictable. They shine a light on the true politics of this Conservative Government and how they are seeking to use the withdrawal agreement Bill, as with their whole Brexit strategy, to sell out workers. The Prime Minister may keep repeating that it is an excellent deal, and no doubt that will be the mantra come a general election, but I would like to get to the truth. I want to start by asking the Secretary of State about the status of the documents, and particularly which Government Departments they were distributed to and when. At what stage was the Secretary of State aware of their existence and their content? If she was not aware, why not?

This issue is critical given that last week the Government gave a number of assurances on this issue to Members in this House, while at the same time they were seemingly discussing the very opposite among themselves. They will use Brexit as a blueprint for rapid deregulation, which will see the vital floor on protections disappear. This Government have proposed a Brexit deal that benefits their pals—the millionaires, the speculators and hedge fund managers—over working people. [Interruption.] Government Members can shout at me all they want, but that is the truth. How can we trust a Prime Minister who stood up and said they would keep the “highest possible standards” on workers’ rights, when the leaks show that the Government view such commitments as “inappropriate” and that negotiators had “successfully resisted” them being included in the legally binding part of the agreement with the EU? These rights are not inappropriate; they include things such as maternity leave, working hours, paid holiday leave—things that make a difference in people’s lives.

The Secretary of State says that the Government do not intend to dilute rights after we leave the EU. May I then ask her very simply: why did they take level playing field obligations out of the legally binding part of their Brexit agreement? Crucially, has the Secretary of State’s Department or the Cabinet Office ever looked at deregulation? If so, why? We need to get to the bottom of this. The Government are relying on the complexity of the legislation to bury their true approach to workers’ rights. Once we expose exactly the consequences of their approach to leaving the EU and what it means for our communities, they know that the Government could never win support of this House and, more importantly, of working people. Rather than resisting workers’ rights, we need a fundamental shift in power from the owners of business to workers. It is only a Labour Government who will ever do that.

[Andrea Leadsom]

Well, Mr Speaker, that was incredibly disappointing. The hon. Lady obviously was not listening to a thing I said. If she will allow me, I will just repeat what I actually said, rather than what she asserts I said. It is this Government’s ambition to make the United Kingdom the best place in the world to work.

I find it extraordinary that the hon. Lady thinks that the only valid protector of UK workers’ rights can be the European Union. Why on earth does she think that her party, my party, the other Opposition parties and our strong trade union tradition in the UK are utterly incapable of building on the superb tradition we already have in the UK of exceeding workers’ rights in the EU in so many areas? Once we have left the European Union, the United Kingdom will not be represented in EU institutions and nor will we have any direct influence on future EU legislation on workers’ rights. Why then should the Government and this Parliament seek to engineer circumstances where we are required to implement legislation over which we have had no say?

As we leave the European Union, we have a unique opportunity to enhance protections for the workforce and tailor them to best support UK workers. It will be for the United Kingdom to create and enhance UK employment rights and to take advantage of the superb opportunities for new UK-wide skills, jobs and prosperity that await us after we have left the European Union.

[Several hon. Members rose—]

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

May I say to my right hon. Friend that the question from the hon. Member for North West Durham (Laura Pidcock) is completely at odds with reality? If Labour Members look very carefully at wanting to remain in the EU, it is the judgments of the European Court of Justice that Professor Mary Davis of Royal Holloway, University of London—a Labour historian—has said will be a thunderclap to the left, because, with imported workers, they put business rights over workers’ rights. So, if this case is exactly what they say it is, they should be wanting to accelerate our departure from the EU to get back full control of workers’ rights to the UK.

[Andrea Leadsom]

My right hon. Friend is absolutely right. He has done so much to promote social justice in the United Kingdom and he deserves respect from right across this place. What I would say to my right hon. Friend is that one of the EU’s own agencies, Eurofound—Opposition Members obviously do not want to hear this, because they are all chatting—ranks the United Kingdom as the second-best country in the EU for workplace wellbeing, second only to Sweden, and the best for work- place performance. That is something to be proud of.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Despite the Secretary of State’s energetic assertions, make no mistake: the Prime Minister’s deal is disastrous for workers’ rights. Scottish workers and industry now face the spectre of Tory trade deals to lower environmental and other vital standards. The Tories can never be trusted with workers’ rights; their record speaks for itself, and anyone who believes otherwise is sorely deluded. The Prime Minister bought off Labour votes for his awful deal by pledging “the highest possible standards”. Days later, that promise, like so many others, lay in tatters.

EU law and courts provide their own backstop against UK workers’ rights being weakened. We know that this Government are planning to diverge on the key regulations post Brexit. Is not it the case that the only way to guarantee workers’ rights and avoid them being watered down is to stay in the EU? As the Scottish Council for Voluntary Organisations has pointed out:

“Loss of oversight from, and recourse to, the European Court of Justice will remove…protection from UK citizens”.

As a minimum, will the Secretary of State agree to undertake an equality impact assessment of the UK Government’s plans for workers’ rights post Brexit? If not, why not?

[Andrea Leadsom]

The hon. Gentleman describes my defence of our ambitions on workers’ rights as energetic. It also happens to be true, which is extremely helpful to workers in the United Kingdom. Let us look at the facts. He asserts that somehow the EU is the only thing that lies between us and the poor house, but in reality there is no minimum wage in the EU, whereas this Government are raising the national minimum wage to £10.50 an hour. UK annual holiday entitlement is 28 days, including our public holidays; in the EU it is 20 days. Our maternity entitlements are nearly three times greater than those in the EU. We have given fathers and partners statutory rights to leave and pay. We have given adoption leave. We have given employees the right to request flexible working. In every single area, the UK far exceeds the European Union. It is absolute and total rubbish to say that the EU is the only protector of UK workers’ rights.

[Simon Hoare (North Dorset) (Con)]

Could we turn to practical matters for a moment? Most of our constituents are in work, have worked or are related to people in work. It would be a pretty eccentric and perverse prospectus to say to our voters, “Please vote for us. We are going to make your working life worse, your standards lower and your environment less safe.” Given the practical, non-ideological politics of Government Members, does my right hon. Friend agree that that would be a very strange political message indeed?

[Andrea Leadsom]

My hon. Friend is absolutely right. To give some further cheery news, 80% of jobs created since 2010 are full-time jobs. The introduction of the national living wage delivered the fastest pay rise in at least 20 years for the lowest earners. [Interruption.] The hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) might like to look at the facts rather than listen to the rhetoric coming from Opposition Members. If people want good work, good workers’ rights and decent wages, they should stick with the Conservatives.

[Ms Angela Eagle (Wallasey) (Lab)]

Asking people to trust the Conservative party is a bit like asking them to trust Dracula with the blood bank. We know what its record is.

Will the right hon. Lady talk about enforcement? We can have all the rights we like on paper, but this Government and their predecessors have slashed enforcement to the bone, which has meant that an awful lot of the so-called rights that people have at work are theoretical and do not exist in practice.

[Andrea Leadsom]

The hon. Lady knows that that is simply not the case. Since 2015 the Government have doubled the budget for enforcement on compliance with the minimum wage. The enforcement activity of Her Majesty’s Revenue and Customs has meant that 200,000 workers could access nearly £25 million in national minimum wage arrears in 2018-19. The employment agency standards inspectorate has received a 50% increase in frontline inspectors. We are investing more than £1 billion in reforming the Courts and Tribunals Service. The hon. Lady is asserting non-facts; I am giving her the facts and she should listen to them.

[Margot James (Stourbridge) (Ind)]

I welcome my right hon. Friend’s commitment to the UK becoming the best place in the world in which to work and grow a business. Does she agree that we need to consider the way in which employment protection and the tribunals system impact on those in low paid and insecure employment in particular?

[Andrea Leadsom]

Yes. My hon. Friend is absolutely right. We have consulted on proposals for a single enforcement body for employment rights. That consultation closed on 6 October and the Government will respond to it. She will know very well that this Government are committed to extending, improving and enforcing some of the best workers’ rights in the world.

[Several hon. Members rose—]

[Alison McGovern (Wirral South) (Lab)]

I am not sure how much of a favour you have done me there, Mr Speaker. The truth is that the reality of our labour market is that lived by my constituents, not the picture being painted from the Dispatch Box. But never mind that: this is about Brexit and what it could do to our economy. The Secretary of State claims the mantle of the person who will defend family rights at work and people’s ability to defend themselves against poor bosses. Will she therefore clarify whether the TUC has recommended that we accept the Government’s deal—yes or no?

[Andrea Leadsom]

The hon. Lady will know better than I the TUC’s view of the Government’s deal. She says that the reality is not the same as what I am saying from the Dispatch Box, but she should recognise that almost 32.7 million people are in work, including a further 280,000 over the past year; that 80% of jobs created since 2010 are full-time jobs; and that we have experienced the fastest growth in real earnings since 2015. The hon. Lady should listen to the facts and not try to scaremonger. This Government are improving and protecting workers’ rights and enhancing enforcement of them.

[Michael Fabricant (Lichfield) (Con)]

Anyone who has travelled in the European Union will know that conditions of employment in the UK are higher, particularly on contracts of employment, as well as the other points made by my right hon. Friend. Does she therefore share my suspicion that this UQ is motivated not by care for people’s employment rights, but more by the fact that we face, possibly, a general election?

[Andrea Leadsom]

I have to say that I completely agree with my hon. Friend, because what I am hearing from Opposition Members does not resemble any of the facts. It is this Conservative Government who are protecting and enhancing the rights of the workforce and ensuring a benign economic situation, which means that more people than ever before are in work, more women are in work, fewer young people are out of work, and wages are rising. We are also ensuring that employment is safe and more secure and that health and safety rules are strong. It is the Opposition who seem to be positioning themselves for a general election.

[Chris Williamson (Derby North) (Ind)]

If the Secretary of State is serious about making Britain the best place in the world to work, will she commit to scrapping the anti-trade union legislation? The undermining of trade unions over the past 10 years or so has led to an explosion of precarious low-paid employment, which is now endemic throughout the land.

[Andrea Leadsom]

The hon. Gentleman will be aware that, in leaving the European Union with the withdrawal agreement negotiated by the Prime Minister, if the European Union makes any changes to workers’ rights and employment legislation, the Government will have the facility to consult businesses and trade unions, and this House will be able to express its view on whether any changes could or should be considered for implementation in the UK. It is really important that it is this House and the United Kingdom’s courts that should judge and measure whether this or any future Government stick to their commitment to maintain the highest standards of workers’ rights.

[Mr Edward Vaizey (Wantage) (Ind)]

One way in which the Government could show that they are not only committed to workers’ rights but innovative in the field of workers’ rights is to look carefully at what rights we might extend to workers in the so-called gig economy, which has emerged from the success of tech in the UK. Will the Secretary of State update the House on the progress in looking at the Taylor report and on her thoughts on this important area of the economy?

[Andrea Leadsom]

My right hon. Friend raises a really important point. In terms of zero-hours contracts and the gig economy, the number of people on zero-hours contracts is falling, and less than 3% of the people in work are employed on them. He mentions the Taylor report. Matthew Taylor said that banning zero-hours contracts would be like using

“a sledgehammer to crack a nut”.

However, it is important that we do everything we can to ensure that workers have the flexibility they need, so we have consulted on one-sided flexibility. That consultation closed on 11 October and we will bring forward our response soon.

[Ann Clwyd (Cynon Valley) (Lab)]

There is no guarantee from this Government that UK employment rights will keep track with EU employment protections. For example, the gig economy was just mentioned, and the European Commission recently launched proposals to introduce transparent and predictable working conditions for gig economy workers, such as those on zero-hours contracts or in domestic employment. It is also planning other additional protections, so will the Secretary of State promise that that will happen here and that we will keep in track with EU developments?

[Andrea Leadsom]

I am grateful to the right hon. Lady for raising that very important point. She is right that the EU has discussed the gig economy and enhancing the rights of working parents. It is true that the EU has introduced proposals in the transparent and predictable working conditions directive, but it is not true that those proposals go further than the good work plan. For example, we brought forward a statutory instrument in March this year under which the right to a written statement on day one for every worker will come into force in April 2020, whereas under the EU’s proposals, if it does introduce that directive, it will not take effect until the summer of 2022, so the UK is bringing forward workers’ rights further and faster than the European Union.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The Prime Minister championed the London living wage and a much higher national living wage. Does that not demonstrate his commitment to increased workers’ rights?

[Andrea Leadsom]

My hon. Friend is absolutely right. This Prime Minister has been extremely keen to ensure that all workers get a fair deal. He has presided over the intention to bring the national minimum wage to £10.50 at a greater speed than was previously envisaged. We will bring forward measures to ensure that that can be put into force as soon as we can.

[Stephen Timms (East Ham) (Lab)]

The level playing field clause would not constrain any improvement in workers’ rights, but it would limit and stop the reduction of workers’ rights, so why did the Prime Minister want that clause to be removed from the legally binding withdrawal agreement?

[Andrea Leadsom]

The right hon. Gentleman is absolutely right: the EU sets minimum workers’ rights that all EU members abide by, and the UK then, like many other member states, improves on that—in the UK’s case, very significantly. Under our withdrawal agreement Bill and in a no-deal situation, all existing workers’ rights will be protected, but the UK does not intend necessarily to dynamically align with all future EU legislation. When I say that, I mean that this House will have the opportunity to look at all measures that come forward, but in many areas the UK will want to do things better than the EU. Dynamic alignment means copy and paste, and we do not want to have to do that. I just gave an example to the right hon. Member for Cynon Valley (Ann Clwyd) of an area in which the UK is introducing the right to a day one statement much faster than the EU. That is an example of our wanting to go further and faster in improving workers’ rights.

[Mr William Wragg (Hazel Grove) (Con)]

The purpose of leaving the European Union is not to have a bonfire of workers’ rights, but to make decisions in this House. Does my right hon. Friend agree that outside the EU, this House of Commons can pass such legislation to improve workers’ rights? We should have the confidence to do so and not leave it to others.

[Andrea Leadsom]

My hon. Friend is exactly right. It is for this House, the UK’s trade unions and the UK’s parliamentarians of all parties to preserve and enhance workforce rights in the UK for everybody within it in a way that is tailored to the extraordinary opportunities that await us as we leave the EU.

[Melanie Onn (Great Grimsby) (Lab)]

Yesterday, I and a number of my colleagues signed early-day motion 57, in the name of my right hon. Friend the Member for Birkenhead (Frank Field), as a public indication of support for the withdrawal agreement Bill through which we would have been able to secure some amendments that would give peace of mind, hopefully to Labour colleagues, that workers’ rights would not be undermined after we leave the EU. Does the Business Secretary share my disappointment that rather than bringing the Bill through this House, enabling us all to talk about these things and trying to get the strongest amendments possible, the Prime Minister has instead chosen to pull his Bill?

[Andrea Leadsom]

I have the greatest respect and regard for the hon. Lady, and I am sorry to say that on this I disagree with her. If Parliament really did intend to provide the opportunity for the withdrawal agreement Bill to have its Third Reading and Royal Assent, this House would also have supported the timetable to do that. Unfortunately, the fact that so few colleagues, on both sides of the House, decided to support the programme motion means that it undermined its own credibility and willingness to bring that Bill to its conclusion.

[Rehman Chishti (Gillingham and Rainham) (Con)]

The Secretary of State will have seen the EU report that says that 90% of economic growth in the next 15 years will be outside the EU. The United Kingdom therefore has to make decisions in line with its national interest that lead to more jobs, opportunities, prosperity and security. That is what we have been seeing for the last nine years that this Conservative Government have been in place.

[Andrea Leadsom]

My hon. Friend is exactly right: a very bright future awaits us as we leave the European Union in all circumstances. From the amazing innovations in areas such as healthier, longer living through our life sciences agenda, to areas such as clean growth through our commitment to net zero, there are massive opportunities for new skills, new jobs and new prosperity across the United Kingdom. This Conservative Government will maintain and enhance workers’ rights for all.

[Stephanie Peacock (Barnsley East) (Lab)]

As one of the Labour MPs who have worked in good faith to find common ground—a compromise, even—over Brexit, I was disappointed to read the leaked documents. Further to the answers that the Minister has given to a number of hon. Members, will she tell us exactly what workplace rights and protections would be introduced to prevent the Government from backtracking on the commitments that they have made?

[Andrea Leadsom]

Again, I have a great deal of respect for the hon. Lady’s position. I absolutely assure her that it is the Government’s intention to maintain all the workers’ rights regulations as we leave the EU and to ensure that Parliament has the opportunity, in every piece of primary legislation that comes forward in future, to understand—with a statement by the Government—how that might impact on workers’ rights, so that it can express its view. At the same time, the Government of the day will consult trade unions and businesses on whether the impact is positive or negative. There will be the opportunity either to align with those changes in legislation and improve on them, as the United Kingdom so often does, or not to implement them if they are not appropriate for the UK, but it should be for this place to make that decision.

[Bim Afolami (Hitchin and Harpenden) (Con)]

Does the Secretary of State agree that if the Prime Minister’s deal, negotiated with the European Union, is ratified by this House, on leaving the EU the UK will have better and stronger workers’ rights than the bare bones provided by the EU?

[Andrea Leadsom]

Yes, my hon. Friend is exactly right.

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

The Tory party talks about protecting workers. Thomas Cook: no say and no pay. Asda: sign or resign. Royal Mail: agreements made but not honoured. Where is the intervention from the Tory Government? They will further weaken workers’ rights after Brexit, including on health and safety. Why is there no legal protection for existing workers’ rights in the withdrawal agreement?

[Andrea Leadsom]

The hon. Gentleman is not correct. There are protections for workers’ rights in UK legislation. As I have explained to many right hon. and hon. Members, the UK’s protections and rights for workers go far beyond any of the EU’s minimum standards. We are proud of that fact and have every intention of further enhancing those rights.

[Andrew Percy (Brigg and Goole) (Con)]

As the Secretary of State pointed out, parties on both sides have expanded workers’ rights far beyond the EU minimums, so will she go further and call out this campaign for what it is—a grubby attempt to divide employees from employers and a deliberate politically motivated campaign of misinformation? Moreover, it is deeply insulting to the British electorate to suggest that they are incapable of electing people to this place who share their aims and intentions in wanting to go further in protecting workers’ rights.

[Andrea Leadsom]

Yes, my hon. Friend is exactly right. It is a great shame when the House has so much to be proud of in our combined record on workers’ rights that Opposition parties are suggesting that the only way to protect workers in the UK is to stay part of the EU. It is blatantly untrue and blatant scaremongering. The Government have a proud record of enhancing workers’ rights and look forward to being able to continue that once we have left the EU.

[Lady Hermon (North Down) (Ind)]

The right hon. Lady will know that responsibility for workers’ rights is a devolved matter for the Northern Ireland Assembly. She will also know that we have not had a functioning Assembly for almost three years. The Secretary of State for Northern Ireland has been dedicated to the restoration of the Assembly and Executive, but his valiant efforts are now being deliberately and wilfully undermined by the Prime Minister’s stunt of an early general election. How on earth does the Business Secretary reconcile the Secretary of State’s efforts to have the institutions restored in Northern Ireland with the Prime Minister’s stunt of an early general election?

[Andrea Leadsom]

My right hon. Friend the Secretary of State is in his place and will have heard the hon. Lady’s comments. The parties in Northern Ireland have had ample opportunity to come together, and the Prime Minister, like his predecessor, has sought at every turn to find an accommodation so that all parties in Northern Ireland can restore the Assembly. It is a top priority for this Parliament, but so too is delivering on the will of the people in the 2016 referendum. It is not acceptable that we have yet to deliver on the decision by the United Kingdom to leave the EU. We must do so.

[Chris Stephens (Glasgow South West) (SNP)]

A speech the Secretary of State gave in 2012 contains this passage about small business:

“I envisage there being absolutely no regulation whatsoever—no minimum wage, no maternity or paternity rights, no unfair dismissal rights, no pension rights”—[Official Report, 10 May 2012; Vol. 545, c. 209.]

It is no wonder we are suspicious on these Benches. If the European Commission provides protections on zero-hours contracts, childcare provision and leave that are stronger than those in the Taylor report, will the UK Government match them or deviate?

[Andrea Leadsom]

In each of the areas the hon. Gentleman has mentioned, the UK already provides enhanced rights to workers. The Government are proud of their record on improving workers’ rights and will seek to continue that record as we leave the EU.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

As a Member who voted for Second Reading of the withdrawal Bill, I say to the Secretary of State that it is at best confused and at worst slightly disingenuous to put more weight on the programme motion vote than on the principle of the Bill going forward, which many of us supported, as a reason for not bringing the Bill back.

On workers’ rights, I welcome the Secretary of State’s ambition, but under this Government the qualifying period for entitlement to a tribunal doubled, tribunal fees were introduced and the Trade Union Act 2016 introduced. If the Government were serious about putting these provisions into law, she would strengthen clause 31 of the withdrawal Bill, ensure a clear role for the TUC and not just workers’ representatives, recognise that the comments of my hon. Friends the Members for Barnsley East (Stephanie Peacock) and for Great Grimsby (Melanie Onn) were aimed at improving the Bill and ultimately give the House the chance to vote on it.

[Andrea Leadsom]

I pay tribute to the hon. Gentleman for his personal efforts to support the resolution of committing to the will of the people in the 2016 referendum. I know it has been difficult for him personally and I sincerely pay tribute to him.

Under the good work plan, the Government are committed to taking forward 51 of Matthew Taylor’s 53 recommendations, including improving the clarity of employment status checks and introducing proposals for a single enforcement body for employment rights and a right to request a more predictable contract. And of course we have introduced a tipping Bill to ensure that employees can keep their hard-earned tips. At every level, the Government show their desire and willingness to enhance workers’ rights. On the hon. Gentleman’s specific point about trade unions, we have given a commitment that when a Bill is introduced that affects employees’ rights, the Government of the day will be required to consult businesses and trade unions, and have to seek Parliament’s view on whether that should be reciprocated in UK law.

[Mr Sam Gyimah (East Surrey) (LD)]

The Secretary of State’s words ring hollow simply because workers’ rights were in the legally binding withdrawal agreement and have now been moved into the political declaration. But her reassurances ring hollow for another reason: the logic of leaving the EU to look for new trade deals is that whatever we want will come at the price of what the other country wants. The desire for a US trade deal as a political trophy would that mean workers’ rights could be traded away. Can she assure us that that will not happen in our pursuit of a US trade deal, if the Prime Minister’s deal were to pass?

[Andrea Leadsom]

I find that intervention from the hon. Gentleman, of all people, quite shameful. As an ex-Conservative Minister, he will be aware of the Government’s proud record of, and commitment to, enhancing workers’ rights and protections. It is disingenuous to suggest otherwise.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I understand what the Secretary of State says about new legislation introduced by the EU, but of course existing rules from the EU are not static and can be interpreted and changed, for example by European Court of Justice judgments. If the ECJ does interpret an existing employment right in a way that is favourable to the employee, will the Government legislate to enhance that in UK law as well?

[Andrea Leadsom]

The hon. Gentleman raises an important point. As I have tried to explain to other right hon. and hon. Members, whenever a new piece of EU legislation is brought into force, the Government will provide a report to the House so that the House can express its opinion on whether it enhances, reduces or changes workers’ rights, and when a Bill is introduced in this place that affects employees’ rights, there will be a requirement to consult businesses and trade unions on any impact, for better or worse, on workers’ rights. It will be for this House to decide what gets taken forward.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

The Secretary of State has repeatedly discussed pay inflation in response to questions. The west midlands TUC has today published pay level analysis. My constituents are currently experiencing the worst pay squeeze in 200 years and are still earning less in real terms than in 2008. We cannot trust the Government on pay, so how can we trust them to deliver the workers’ rights that I, along with other hon. Members, have been trying to deliver with them as part of the withdrawal agreement Bill?

[Andrea Leadsom]

Again, I pay tribute to the hon. Lady for her efforts to get the withdrawal agreement Bill through the House. However, I must disagree with her. It is this Government who are committing to raising the national minimum wage to £10.50. We introduced the national living wage, our changes in the tax free allowance have taken millions of people out of tax altogether, and real wages are rising at their fastest level since 2015. There have been real increases in take-home pay for millions of workers, which is absolutely vital. This Government will always do everything we can to retain and enhance the rights of workers.

[Mr Speaker]

Jim Shannon.

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[Mr Jim Cunningham (Coventry South) (Lab)]

Thank you, Mr Speaker. We now have a situation, under this Government, where we actually have the working poor. We all want to know what the Government’s intentions are regarding workers’ rights. All we have to look at is the Trade Union Bill that one of the Leader of the House’s colleagues tried to take through the House last year. What value or credibility can we give to any of the Government’s commitments on workers’ rights?

[Andrea Leadsom]

The hon. Gentleman talks about the plight of workers. He will know that there are nearly 33 million people in work—an increase of 280,000 since last year—that 80% of jobs created since 2010 are full-time jobs, that real wages are rising, and that the Government are committed to increasing the national living wage to £10.50 an hour. Those are all incredibly important steps to give workers better rights and better conditions.

[Jim Shannon]

Will the Business Secretary confirm the rights of NHS staff who are skilled but do not meet the “highly skilled” threshold?

[Andrea Leadsom]

You have just called two of my favourite Jims in the world, Mr Speaker.

It is absolutely the case that the UK will always ensure that the immigration system is fair to the United Kingdom’s needs for a skilled workforce, but also fair to those around the world who would like to come here to contribute to our economy and to our fantastic NHS.

[Liz McInnes (Heywood and Middleton) (Lab)]

To understand the Government’s real attitude to workers’ rights, we need only look at the treatment of the Interserve workers at the Foreign and Commonwealth Office. Those cooks, cleaners and porters have been engaged in a long-standing dispute over terms and conditions and pay, and over the recognition of their trade union, the Public and Commercial Services Union. The Secretary of State talked about strong trade unions earlier, yet the Foreign and Commonwealth Office will not recognise the PCS. If the Government are really serious about workers’ rights, why have they allowed this dispute to run and run?

[Andrea Leadsom]

I am sure the hon. Lady will be delighted to know that in my own Department there has been a dispute resolution. It is obviously important for trade unions always to represent the workforce, but it is also important for the discussions that take place to be respectful on all sides, and I know that that is the case across Whitehall.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

We have heard plenty of words from the Dispatch Box today but, when it comes to workers’ rights, is it not the case that the British public do not trust a word that the Tories say? Is it not also the case that the Government wish to use this deal to dispose of all those hard-won workers’ rights on the bonfire of a harsh Tory Brexit?

[Andrea Leadsom]

I am afraid that the hon. Gentleman is entirely wrong. The UK has gone beyond EU minimum standards in so many instances, including maternity entitlements, leave and pay for the other parent, shared parental leave, minimum holiday rights and the national minimum wage. One of the EU’s own agencies, EuroCloud, ranks the UK as the second best country in the EU for workplace wellbeing, and that is something of which the Government are extremely proud.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

In the United States, employment contracts are at will. There is no right to union representation, there is two- week holiday pay entitlement, there are no maternity rights, and there is no entitlement to sick pay. Think of that. Is it not the case that the purpose of not making alignment with the European Union legally binding is to align more closely with the United States?

[Andrea Leadsom]

The hon. Lady will know that what she has just said is absolutely not the case. The EU minimum standard is 20 days’ paid holiday; the UK’s is 28. There is no minimum wage in the EU; in the UK, we are moving to £10.50. Moreover, we are introducing a right of transparency from day one for all employees in respect of their employment entitlements. The UK already far exceeds the EU’s minimum standards, and there is no way that, in a free trade deal, the United Kingdom will need to—or agree to—give away anything that we think is in the interests of the UK’s workers. This Government are committed to making the UK the best place in the world in which to work.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

European standards are one thing, but another aspect of European Union law is that, once member states have established enhancements, they cannot row back from those enhancements. Why did the Government seek exemptions from compulsory arbitration if they were not intending to dilute those very enhanced standards to seek a trade deal with the United States?

[Andrea Leadsom]

I am tempted simply to refer the hon. Gentleman to what I have just said to his hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah). The United Kingdom far exceeds EU standards for workers’ rights. We intend to enhance those further, but it is for trade unions in the United Kingdom, for businesses in the United Kingdom and for this Parliament to decide on those enhancements once we have left the European Union.

Capacity Market

Andrea Leadsom Excerpts

Thursday 24th October 2019 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)]

I am pleased to announce that today the European Commission has confirmed its original decision in 2014 to grant state aid approval for the capacity market, enabling this vital tool for electricity security of supply to be restored and payments that have been suspended since November 2018 to be made.

The Commission opened an in-depth investigation to gather more information on certain elements of the capacity market after the General Court of the Court of Justice of the European Union annulled the Commission’s earlier state aid approval of the scheme on procedural grounds on 15 November 2018.

The Commission has now satisfactorily concluded its investigation and has concluded that the capacity market as operated since 2014, including during the investigation, complies with state aid rules. Notably, the Commission did not find any evidence that the capacity market puts demand side response or any other capacity providers at a disadvantage with respect to their participation in the scheme.

The Government welcome the Commission’s decision, which enables the capacity market to resume its important work as Great Britain’s principal tool for ensuring electricity security of supply and provides confidence that its design is fit for purpose.

We are awaiting the Commission’s full decision, but expect that its decision means we will be able to:

Restart the mechanism for making payments to capacity providers, including the c.£1 billion of deferred payments that have been suspended because of the standstill period as well as future capacity payments. The vast majority of the back-payments will reach capacity providers in January 2020;

Invoice suppliers for the supplier charge relating to the standstill period which will be used to fund the deferred capacity payments. The Government have been engaging with suppliers during the standstill period to ensure they have been setting aside funding to meet what will be a substantial post-standstill invoice;

Confirm that the conditional capacity agreements awarded in the replacement T-1 auction, held in July 2019, have become full capacity agreements. This will ensure we have in place all the capacity needed to ensure security of supply this winter; and

Confirm the three capacity auctions scheduled for early 2020 will take place. These will secure the majority of our capacity needs out to 2023-24.

The Commission’s decision also notes that the UK has committed to implementing a number of improvements to the capacity market’s design to reflect recent market and regulatory developments, including those identified through our recent five-year review of the effectiveness of the capacity market. These will ensure the continued compatibility of the capacity market with state aid rules in the future and relate to: (i) the lowering of the minimum capacity threshold for participating in the auctions; (ii) the direct participation of foreign capacity; (iii) the participation rules for new types of capacity; (iv) the access to long-term agreements; (v) the volume of capacity to be secured in the year-ahead auction and (vi) compliance with the new electricity regulation.

My Department will shortly consult on arrangements for implementing these commitments.

I will be writing imminently to our delivery partners responsible for delivering the capacity market—the capacity market delivery body (National Grid Electricity System Operator) and the settlement body (Electricity Settlements Company)—to notify them of the Commission’s approval decision and confirm the occurrence of the deferred capacity payment trigger event and T-1 capacity agreement trigger event (the triggers for the resumption of capacity payments). These bodies will subsequently be required to resume making capacity payments, carry out new duties arising from the triggers, and restart any duties that had been suspended during the standstill period. Our delivery partners have worked closely with my Department to ensure that their systems and processes remain fit for purpose; they stand ready to support the restart process immediately.

[HCWS38]

Oral Answers to Questions

Andrea Leadsom Excerpts

Tuesday 22nd October 2019 Commons Chamber

[Anne Milton (Guildford) (Ind)]

6. What guidance her Department has issued to businesses to help them make more effective use of the apprenticeship levy.

[The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)]

I strongly believe that apprenticeships are a superb option for people to earn and learn. In my Department, we have 154 apprentices, 149 of whom are levy funded. I have taken on a new school leaver apprentice in my office every year since becoming an MP, which has been an excellent experience for them and for my team. Since the introduction of the apprenticeship levy, we have made changes to ensure that businesses can spend up to 25% of it in their supply chain, and I am delighted that the number of people starting higher-level apprenticeships has increased by over 40% since the 2016-17 academic year.

[Sir Desmond Swayne]

Is the 80:20 rule an overhead that is unwelcome to employers who have to provide cover for employees who are learning?

[Andrea Leadsom]

My right hon. Friend makes a really important point, but he will appreciate that off-the-job training is vital for apprentices to develop the knowledge, skills and behaviours they need to succeed at work. The 20% off-the-job training rule is based on standards used by apprenticeship programmes regarded as world class, such as those in Switzerland and Germany, which we have made it our ambition to at least match.

[Mr Campbell]

Employers complain about the inflexibility of the apprenticeship levy. What steps is the Minister taking to ensure that it becomes more flexible, leading to greater dynamism in our local economy?

[Andrea Leadsom]

The hon. Gentleman will be aware that the apprenticeship levy is collected from Northern Ireland businesses, with Northern Ireland subsequently receiving a Barnett consequential of spending on apprenticeships in England, which is funded by the levy. Ensuring that apprenticeship policy in Northern Ireland is delivering for Northern Ireland businesses is just one of a number for reasons why it is so essential that devolved government in Northern Ireland is restored.

[Anne Milton]

In Guildford, 97% of businesses are small businesses. What progress have the Government made on ensuring that they can use the 25% transfer from levy employers to build the skilled workforce that we desperately need in this country?

[Andrea Leadsom]

I pay tribute to my right hon. Friend for her superb work as Minister of State for Skills over the past few years. Under her watch, the importance of technical education has been raised substantially. She will be aware that sectors in all parts of the economy are now creating apprenticeship programmes, from cyber-security to offshore wind, and more than 61% of starts are now on high-quality industry design standards.

[Sir Vince Cable (Twickenham) (LD)]

How does the Secretary of State explain the fact that the Government’s own skill index, which measures the value added from apprenticeships and vocational training, is now 25% below 2012 levels?

[Andrea Leadsom]

The right hon. Gentleman will be aware that in the 2018-19 academic year, despite an overall fall, nearly 60,000 people started higher-level apprenticeships, up nearly 43% on the year before the levy was introduced. It is important that the Government continue to talk to business about how to make use of this, but we are very pleased with progress.

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

A recent report by the Centre for Social Justice showed that in the UK, of those who start entry- level work, only 15%—15%—will ever progress beyond it in their whole life. That is an indictment of the UK under different Governments. Beyond apprenticeships, what plans does my right hon. Friend have to find ways to encourage businesses to do on-the-job training, so that those people can move on and increase their salaries?

[Andrea Leadsom]

My right hon. Friend is right to raise the much bigger challenge of how to get young people not only into an apprenticeship but past it, enabling their skills to develop. We are doing that in a number of different ways. The Government continue to speak with businesses and monitor the impact of the apprenticeship levy on the performance of young people. We are doing a lot to promote start-up businesses for young people through the British Business Bank, but we continue to need to seek ways to ensure that no young person is left behind.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

People are living longer, which is a good thing, but they need care in old age. In Oldham, health and social care is a growing industry, but at the moment it attracts the lowest band of the apprenticeship levy. I saw this week that the Department of Health and Social Care was advertising jobs at just above the minimum wage. Will the Department for Business, Energy and Industrial Strategy work with the Department of Health and Social Care to raise the value of those jobs?

[Andrea Leadsom]

The hon. Gentleman raises a really important point. We want to see young people being attracted to apprenticeships right across the range, and he is right to raise the importance of getting good-quality people into the social care system. I would be delighted to speak with him and others who are interested in that area of future employment.

[David Hanson (Delyn) (Lab)]

2. What recent assessment she has made of trends in the level of executive pay.

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[Giles Watling (Clacton) (Con)]

10. What steps she is taking to enable more women to establish businesses.

[The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)]

We want to make the UK the best place to work and grow a business. We have set the target of an additional 600,000 female entrepreneurs by 2030, and the British Business Bank has delivered over £198 million to women in start-up loans. With my hon. Friend the Exchequer Secretary to the Treasury, we are implementing the initiatives of Alison Rose’s review, including focusing on female entrepreneurs’ access to finance, better enterprise education and launching the investing in women code.

[Giles Watling]

I thank my right hon. Friend for her answer. In my Clacton constituency, I am fortunate to have a group of very powerful businesswomen, with whom I had a very pleasant business lunch recently. In 2018, the BBC reported that women were half as likely to set up a business as men. I am pleased that the Government are doing all that my right hon. Friend said, but that must be in part due to a bias in education, so what more can be done to address this great loss of potential?

[Andrea Leadsom]

My hon. Friend is quite right. We need to go further in addressing education, and that is why one initiative in the Rose review specifically addressed the roll-out of enterprise education in schools and colleges to help in particular with the skills women need for business success at an earlier age. BEIS has also launched the Longitude Explorer prize, which is aimed specifically at 11 to 16-year-olds, to encourage innovative problem solving in our young entrepreneurs.

[Ruth George (High Peak) (Lab)]

Many of the women in business in my constituency are EU nationals, and they were extremely concerned at yesterday’s tabling of the draft Freedom of Establishment and Free Movement of Services (EU Exit) Regulations 2019, which would allow Ministers to remove their rights to own and manage companies or provide services. While we welcome the fact that the Committee was cancelled yesterday, what are the Government’s plans in this regard, because many EU nationals in business are very concerned?

[Andrea Leadsom]

I am sorry that the hon. Lady seeks to lean into the scaremongering. The statutory instrument has a very limited direct policy impact and will not impose additional restrictions on EU nationals or EU-based businesses or on the nationals and businesses of countries with associated agreements after we have left the EU. It is very important that we all take great care not to scaremonger and try to make people think that things are the case that are simply not the case.

[Mrs Anne Main (St Albans) (Con)]

Establishing a business is very difficult, particularly when business rates are so high and online businesses often do not pay their way. Is it not time, particularly for those establishing businesses, that we had a root-and-branch review of the business rates model, which affects so many businesses in St Albans?

[Andrea Leadsom]

I am very sympathetic to my hon. Friend’s point; I know she is a big champion of businesses in St Albans. In my Department, we are helping the British Business Bank to provide greater support to start-up businesses, providing huge support to the UK’s 1.2 million female-led SMEs, and doing everything we can to ensure that there are more incentives and opportunities for women to start businesses than ever before.

[Jim Shannon (Strangford) (DUP)]

If we are to encourage more women into business, it is essential that we tackle the gender pay gap at executive level. What has been done to address that issue?

[Andrea Leadsom]

The hon. Gentleman will know that the gender pay gap is now the smallest it has ever been and that the Government have required reporting of the gender pay gap. Such transparency can partially solve the problem, but we are not resting there: we are doing as much as possible to get more women to become entrepreneurs and to help women to acquire the skills they need to lead some of our fantastic UK businesses.

[James Cartlidge (South Suffolk) (Con)]

11. What support her Department is providing to the offshore wind industry.

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[Julian Sturdy (York Outer) (Con)]

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)]

After two years as a sole trader at this Dispatch Box as Leader of the House, it is a huge pleasure to be here today with such a superb ministerial team. In addition to my Department’s vital work to help businesses to prepare for Brexit, we have set out three key priority areas for BEIS. First, we aim to lead the world in tackling climate change. From the Prime Minister chairing a new Cabinet Committee to our hosting of COP26 in Glasgow next year, our pathway to net zero is well under way. Secondly, we will seek to solve the grand challenges facing our society, from new support for our life sciences sector to developing fusion power to setting out how amazing UK innovations can solve the challenges of low productivity. Thirdly, we aim quite simply to make the UK the best place in the world to work and to grow a business.

[Julian Sturdy]

Will the Secretary of State reassure me that her Department is fully assessing the potential of UK peatlands and peatland restoration in regions such as North Yorkshire, where my constituency lies, in getting us to net zero? Peatlands are a carbon sink that absorb more emissions than the world’s oceans each year.

[Andrea Leadsom]

My hon. Friend is right that peatlands have a vital role to play in delivering net zero. In addition to £10 million to help to restore more than 6,000 hectares of peatland over a three-year period, we are working with Natural England on a number of pilot projects, including one in North Yorkshire, to test our approach for moving all peatlands in England on to a path of recovery and restoration.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

I welcome the Secretary of State to her place for our first BEIS orals together. I know that we will have many a productive exchange.

Nine thousand UK jobs lost and 150,000 holidaymakers repatriated at an estimated cost to the taxpayer £100 million, yet the former chairman of Thomas Cook confirmed that Government financial support would have allowed him to save the company. A report from Unite the Union and Syndex also showed that £188 million in bridging loans would have prevented Thomas Cook’s collapse. With reports that banks and investors were still willing, even on the day of the collapse, to support a deal provided that the Government stepped in, will the Business Secretary explain why she failed to meet with the company in the final days and clarify her rationale for not offering support?

[Andrea Leadsom]

First, I would like to reciprocate by saying that I am delighted to be working with the hon. Lady. I look forward to many exchanges across the Dispatch Box.

The hon. Lady will appreciate that my Department and I were very closely involved in the run-up to Thomas Cook’s insolvency. It is a Department for Transport lead and, as all hon. Members will appreciate, too many cooks can spoil the broth, so I liaised closely with the Secretary of State for Transport who took the lead on this, but BEIS officials were very closely involved.

At the weekend I wrote to the insolvency practitioner about clawback and malus, to ATOL about looking after the insurance for those who booked holidays, and to the banking associations about ensuring that proper restraint is shown to those who sadly lost their jobs in that run-up.

Why did we not bail out Thomas Cook? Simply because it was clear that the £200 million it was asking for was just a drop in the ocean. There was no way the company could realistically be restored, despite the Government seriously considering the prospects for doing so and for making it an ongoing concern.

[Rebecca Long Bailey]

It is interesting that the German Government saw fit to intervene. Not only did our Government refuse, they also failed to take the basic action needed to ensure good corporate behaviour. Today, reports demonstrate a clear conflict of interest for auditing firms that, while signing off on Thomas Cook’s finances, separately advised directors on securing bumper bonuses.

BHS, Carillion and the banks all had similar auditing conflicts. Sir John Kingman officially advised the Government nearly a year ago to create a more robust statutory regulator, but to no avail. Will the Secretary of State confirm if and when she will bring forward reforms to the Financial Reporting Council and the wider auditing sector, as proposed by the Kingman review, Professor Prem Sikka and the Competition and Markets Authority?

[Andrea Leadsom]

First, may I gently say to the hon. Lady that the situation in Germany was extremely different? It was a separate business in Germany. If there had been an opportunity to save Thomas Cook, we would have done so. We looked very carefully at the prospects—[Interruption.] The hon. Lady is just demonstrating a lack of understanding of how UK business works, and I am very sorry to hear that. She really needs to look at the facts here, and not just at trying to make a point. This was a very serious issue, and it was something the Government took very seriously.

We have done everything possible to protect those who sadly lost their jobs. I am delighted, but the hon. Lady did not even mention, that Hays Travel has taken over many Thomas Cook shops, which is fantastic news for many of those employees. She has also not paid any regard to the fact that the Government were able to establish a repatriation on the biggest scale ever in peacetime to bring more than 140,000 people back to the United Kingdom.

[Vicky Ford (Chelmsford) (Con)]

T9. Workers’ rights matter. Given that eight out of 10 mums consider work-family balance before thinking about any new job opportunity, can the Government confirm they remain committed to considering the proposal that employers should make all jobs flexible unless there is a good reason not to do so?

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[Greg Clark (Tunbridge Wells) (Ind)]

I welcome the Secretary of State to the Dispatch Box and hope that she will have distinguished tenure at this important time. She will know that the recommendations of the independent review of the Financial Reporting Council, conducted by Sir John Kingman, were widely endorsed and are urgently required. I was concerned that the statutory implementation of those recommendations was not included in the Queen’s Speech. Can she assure me that she is not going to miss a golden opportunity to make these reforms and give a big boost to our standing in the world?

[Andrea Leadsom]

First, let me pay tribute to my right hon. Friend, my predecessor, who did a fantastic job in this Department. I am delighted to stand by the position that he took as Secretary of State: it is the Government’s plan to legislate for a new regulator with stronger powers, replacing the FRC, as soon as parliamentary time allows. We are planning to progress this work in the first quarter of next year, once we have received Sir Donald Brydon’s review of the quality and effectiveness of audit.

[Karen Lee (Lincoln) (Lab)]

T4. Next month will mark five years since the Government first announced they would undertake an independent review of the UK’s product recall system, and a failure to implement recalls has led to fire services responding to preventable fires due to product failures. Will the Minister today update the House on the review’s progress and whether the single recall register will be up and running this year?

--- Later in debate ---

[Phil Wilson (Sedgefield) (Lab)]

Sedgefield is home to the largest business park in the north-east of England, with 500 companies and 10,000 to 12,000 jobs. More than 50% of the jobs and businesses there rely in some way on trade with the EU. If the Secretary of State has her way and there is no more frictionless trade with the EU, no more customs union and no access to the single market as there is now, does she not have a responsibility to publish an economic assessment on the effects that will have on my constituents’ jobs?

[Andrea Leadsom]

I am delighted that Hitachi in the hon. Gentleman’s constituency is doing so well and that the high value manufacturing catapult that has an operation in his constituency is also doing well—both supported by the Government. We are seeking to get the withdrawal agreement Bill through this House, so that we can move forward with a good free trade deal that works for the United Kingdom, the EU and the many people in his constituency who are employed in manufacturing, which is something in which the UK excels.

Professional Qualifications and the Common Travel Area

Andrea Leadsom Excerpts

Wednesday 16th October 2019 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)]

As set out in the memorandum of understanding signed on 8 May 2019, the common travel area between the UK and Ireland means that British citizens in Ireland and Irish citizens in the UK can work in either country, including on a self-employed basis, without any requirement to obtain permission from the authorities.

Her Majesty’s Government remain committed to ensuring the continuation of adequate and appropriate provisions to enable the recognition of Irish professional qualifications in the UK after Brexit.

We seek to build on the highly effective working relationships that currently exist between the UK and Ireland in this area. Many professional bodies and regulators in the UK and Ireland have close and long-standing links, rooted in mutual trust and familiarity. Some operate as a single body across jurisdictions. The Government will support and encourage continued close collaboration and communication between UK and Irish regulators.

My Department, along with colleagues across Whitehall, have been working closely with UK regulators and professional bodies to ensure that, as far as possible, there are appropriate systems and procedures in place for the recognition of Irish professional qualifications, whether through retained EU legislation or alternative profession-specific pathways. Some individuals will continue to benefit from bilateral arrangements already in place between UK and Irish regulators.

We recognise that it is in our mutual interest to ensure that these routes to recognition are in place to allow Irish professionals to continue in their important participation within the UK economy.

Her Majesty’s Government will continue to encourage UK and Irish regulators to work together to strengthen their relationships and minimise the impact on individuals of any necessary changes after EU exit. By building on long-standing relationships and established good practice we seek to ensure minimal disruption for all stakeholders.

Finally, Her Majesty’s Government would like to reassure professionals with Irish qualifications who have already had those qualifications recognised in the UK under the current EU directives, that their recognition decisions will still stand and they will continue to be recognised.

[HCWS12]

Committee on Climate Change: Government Responses to Annual Progress Reports

Andrea Leadsom Excerpts

Tuesday 15th October 2019 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Andrea Leadsom)]

My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and I wish to inform the House of the laying of the Government responses to the Committee on Climate Change 2019 reports on reducing UK emissions and preparing for climate change.

2019 has been a pivotal year in the fight against climate change. As the scientific evidence of the dangers of global warming continues to mount, and as people of all ages call for urgent action, the message to governments around the world is clear: act, and act now, to protect the future of our planet.

The UK has long been a leader in clean growth, cutting emissions while growing the economy. We were the first to set a long-term emission reduction target in law, under the Climate Change Act (2008), and since 1990 we have reduced emissions by over 40% while growing the economy by more than two thirds. On 27 June, the Government adopted legislation to set a new net zero greenhouse gas emissions target for the UK, to be delivered by 2050. This made the UK the first major economy to set a net zero target in law, ending the UK’s contribution to global warming in three decades.

That target is an immense challenge for the whole of society—but not only is net zero achievable, it can and will be the growth story of the 21st century. We have a thriving low carbon economy, with turnover in the low carbon sector growing more quickly than GDP in 2017, supporting almost 400,000 jobs across the country.

But our success to date is not a reason to delay action, it provides the argument for going further and faster. By taking action to cut emissions we can protect our planet while putting UK businesses at the forefront of the zero carbon revolution, especially as we prepare to embrace the Presidency of COP26 next year.

As well as supporting our emissions reduction efforts, our world-leading Climate Change Act continues to provide a robust framework for strengthening our preparedness to climate change, through our national adaptation programme (NAP).

Today we are also introducing the landmark Environment Bill—the first in over 20 years—which will tackle the twin challenges of climate change and biodiversity loss. The Bill will improve air quality so that our children live longer, restore and recover environmental biodiversity, and move us towards a more circular economy, which will help to ensure Britain can be cleaner and greener for future generations.

Exiting the EU does not change the UK’s commitment to domestic and international efforts to tackle climate change. The new independent office for environmental protection, which this Bill will establish, will work closely with the Committee on Climate Change to ensure climate and environmental legislation is respected once the UK leaves the EU.

In July this year, The Committee on Climate Change (CCC) published their annual Progress Report: “Reducing UK Emissions - 2019 Progress Report to Parliament”; and their biennial “Progress in preparing for climate change”. Today we are publishing Government’s responses to both of these reports, in fulfilment of our requirements under the Climate Change Act.

Government response to “Reducing UK Emissions -2019 Progress Report to Parliament”

The Committee on Climate Change’s (CCC) annual progress report, published in July, recognised the progress that has been made, but also set out some tough messages about the need for further action across the economy. This government have heard that message, from the Committee, from businesses, and from people across the whole country.

The Government response to the CCC’s report sets out the action that is being taken across all sectors of the economy, working through the strong frameworks we have established in the clean growth strategy and the industrial strategy. It also reflects the suite of recent announcements we have made in support of our net zero target. In our response published today, we set out further actions that we will take to deliver net zero, and meet our carbon budgets, including:

Ambitious proposals to improve the energy performance of non-domestic buildings, potentially saving businesses around £1 billion per year in energy costs by 2030;

Development of a new, holistic transport decarbonisation plan to step up the pace of progress towards a cleaner, more sustainable and innovative transport network; and

A proposal to establishing new governance arrangements to drive forward cross-government efforts to deliver the net zero target, potentially including a new cabinet sub-committee on climate change.

This builds on what we have delivered over the last year. Since legislating for net zero emissions in the summer, we have announced around £2 billion to support decarbonisation in a range of sectors, including investment in hydrogen and low carbon technology in industry, electric vehicles and charging infrastructure, and projects to accelerate rollout of carbon capture and storage technology.

We recognise the importance of reducing emissions from industry and we have just set out our detailed proposals for our £315 million industrial energy transformation fund which will support industry to invest in energy efficiency and deep decarbonisation technologies.

The latest contracts for difference auction saw contracts awarded to renewable energy projects that will create enough generating capacity to power around 7 million homes, with the costs of new offshore wind projects falling by a remarkable two thirds between the 2015 and 2019 auctions. This demonstrates the scope for advances in technology to deliver unprecedented cost reduction.

And we will set out further detail on how the UK will make progress towards our net zero target in the national infrastructure strategy this autumn.

In addition to our progress at home, the UK remains at the forefront of international action on climate change. In September, we were formally nominated by our international partners to host the vital COP26 climate negotiations in 2020. We intend to use this role to catalyse ambitious global action to cut emissions further, and harness growing momentum to take us closer to delivering the goals of the Paris Agreement.

At the recent UN climate action summit, the Government announced that the UK will double its international climate finance to £11.6 billion in the period 2021 to 2025. In assisting developing countries, we will draw on the breadth and depth of the UK’s expertise to support the transformational and systemic change needed to deliver a net zero world resilient to the risks from climate change.

Government response to “Progress in preparing for climate change”

In July 2019, the CCC published their third progress report on adaptation, their first on the second national adaptation programme (NAP) detailing action from 2018 to 2023. The progress report contains twelve recommendations for Government spanning four of the key themes of the second NAP, published in 2018; the natural environment; infrastructure; people and the built environment, and business, as well as 33 sectoral progress scores, such as water supply, rail, roads, agricultural productivity, amongst others. The CCC highlights areas of good planning and progress as well as areas where they identify the need for further policy development and evidence to support and monitor the success of adaptation.

The Government response mirrors the CCC’s progress report. The headline message is that we have made progress on adaptation and broadly accept the recommendations made by the CCC. We will build on this progress to ensure the country is well prepared to face the challenges a changing climate brings. The CCC’s recommendations will be addressed in our current and future policies and programmes such as through the 25 year environment plan, the Agriculture Bill and Environment Bill, amongst other policy areas across Departments. In particular the Environment Bill, introduced today, will include ambitious legislative measures to take action to address the biggest environmental priorities of our age, many of which are linked directly to climate change.

At the same time we are demonstrating leadership at a global level on the agenda, driving action as co-lead of the resilience and adaptation theme of this year’s UN climate action summit, where a UK co-led call for action has been endorsed by 112 countries and counting.

We remain grateful to the CCC for their scrutiny, analysis and expert advice, which will be more vital than ever as we set the UK on a firm path to net zero. The challenges of reducing our emissions, and preparing for the changes that climate change will bring, are immense but, the rewards of action will be greater still. This Government have listened to the science and the clear message from across society and we are redoubling our efforts to drive down emissions while seizing the economic opportunities at hand, as we lead the world towards a cleaner, greener, net zero future.

[HCWS3]