Commercial Rent (Coronavirus) Bill

Baroness Blake of Leeds Excerpts

2nd reading
Thursday 27th January 2022 Grand Committee

[Baroness Blake of Leeds (Lab)]

Following the example of the noble Lord, Lord Shipley, I also declare my interest as a vice-president of the LGA, and I thank him for that reminder.

I am very pleased to be able to contribute to this important legislation today. When I think back to this time last year, I was still the leader of Leeds City Council, and the issues that we are talking about today are so real to me—all those horrific debates and discussions with the Cabinet Office and No. 10 about which tier of restrictions we were going into, knowing what the implications of those decisions, often made with less than 24 hours’ notice, would be for local businesses and communities. Of course, there was the perverse situation that, for some businesses, it was better to go into a higher tier, because they would be mandated to close and therefore would get more protection than businesses that were not covered and had to try to make awful decisions about whether to keep trading or struggle on, and all those things.

So I come to this with a very raw, first-hand experience of understanding what businesses and landlords have been through, and the decisions that they have had to take over the past two years. Of course, we are talking about the trauma of financial loss and potential bankruptcy, but we should not underestimate the real personal cost that this has put on individuals responsible not only for their own families but for those of their employees in the decisions that they have made.

I, too, echo the concern expressed in this debate about the future role of local authorities, because they have mostly had responsibility for helping businesses and communities through the past two years—and their knowledge of all the issues that we have raised is going to be invaluable in making sure that we can move this forward. Then there is the whole issue of how we can ensure that decisions made through this process actually contribute to the levelling-up agenda. That needs to all be put together in the round.

All of us who have spoken have recognised and acknowledged the need for fairness in the process, and I think that is going to lead to future scrutiny and challenge as the scheme unfolds. I am sure that we all agree that our aim here today and in the ongoing discussions is to ensure that the proposals are effective and accessible—and we have had some discussions about accessibility and sharing information about availability of support. As I have said, most important is how we fairly balance the interests of all relevant parties.

The main principle must be, as we have heard, that no otherwise viable business should face significant burden from rent arrears without a due arbitration and burden-sharing process. Likewise, commercial landlords must have access to clear mechanisms by which to recoup appropriate levels of arrears. Again, the issue that we are facing is around the long-term interests of British businesses, and some of those judgments and decisions around viability are going to be extremely difficult. But of course, all of us are concerned with protecting livelihoods and employment, acknowledging the real difficulties that have been suffered over the past two years.

I emphasise that we have to recognise the context in which we are working. As well as the impacts we have had over the last two years—it is hard to believe we are almost coming up to the second anniversary of the first lockdown—businesses are facing major challenges in the weeks and months ahead. They include the pressures from inflation, the energy crisis and dramatic increases in fuel costs, the proposed hike in national insurance contributions, and the supply chain crises, to name but a few. That is why we on our side are focusing on additional steps to help businesses and bring forward plans to deal with the long-standing problems facing them, particularly around the vexed issue of business rates, and why we have announced a major package of measures to tackle the mess that surrounds the whole business rates agenda. This matters, and these debates will have a profound influence on how high streets, for example—it is not limited to them alone, although they do get repeated mentions—will be able to emerge on the other side of the recovery.

Debate in the other House specifically on the Bill has sought to achieve greater clarity and fleshing out the detail. As we have heard repeatedly today on the basic definition of “viable” in this context, and to echo the comments from the noble Earl, Lord Lytton, how can we ensure that it is clear and appropriate in scope?

We have stressed a great deal the question of whether we are confident about the basis for the arbitration agreements. How can we ensure that constituency of approach and delivery will be guaranteed, and how will any such inconsistencies be dealt with? How can we be sure that the fees charged are consistent and not excessive? A specific question: will there be a cap on fees? I would welcome the Minister’s comments on that. Another question has been raised repeatedly: is there enough capacity in the sector to cope with the demand and—crucially in this context—to prevent further delays?

The date of retrospectively prohibiting court judgments only from 10 November is a case in point that we have to be mindful of. Evidence from the various interested parties outlines the huge ongoing burden that businesses have been facing. The impact assessment from the Treasury notes that the total amount of deferred rent liabilities could be around £9 billion by March. There has been enough delay, and we recognise the urgency of putting the right provisions in place.

We also recognise a welcome move in that many landlords and businesses have been able to reach agreement and have settled their liabilities. I make reference as well to the code of practice from the Department for Levelling Up, Housing and Communities and to how that has contributed. However, the uncertainty with regard to coronavirus restrictions in the run-up to Christmas—whether there would be any and what they would be—had a further devastating impact for many, especially across retail, hospitality, cultural venues and many more. With debts high as a result, further costs around arbitration become even more relevant. With the levels of uncertainty facing businesses and landlords going forward, surely it would be sensible to have a mechanism to keep progress under review. Is this an area where the Minister could also provide answers for us?

I look forward to the Minister’s closing comments and particularly to hearing where we have scope to add improvements to the Bill.

Copyright, Designs and Patents Act 1988: Sporting Events

Baroness Blake of Leeds Excerpts

Thursday 2nd December 2021 Grand Committee

[Baroness Blake of Leeds (Lab)]

My Lords, I do not feel offended at all by what happened and am very pleased that we can accommodate the noble Lord’s comments and contribution to this debate. As regards our side, he can relax on that matter.

I am very grateful to the noble Viscount, Lord Astor, for bringing this debate forward. It is one of those areas that the more you look into it, the more complicated and complex it gets. Battling with advances in technology is bedevilling us in so many areas, and it has been very illustrative to hear the cases so eloquently put by both the noble Viscount and my noble friend Lord Lipsey. I also pay tribute to the Library for the briefing that it gave us.

On the protections being called for in this area, I think that we are all looking forward to the Minister’s comments on where we have got to in what is a very technical and complicated debate. I want to add from my perspective just how important sport in its broadest context is to local economies as well as national economies. The noble Baroness, Lady Neville-Rolfe, gave an assessment of travelling to the Far East. As a long-suffering Leeds United supporter who has been on trade missions to Malaysia and China, I found the collective memory in those places of how Leeds was a great team incredible—because, until they returned to the Premiership, the length of time that Leeds were out of the top flight was quite significant. I am talking about the direct trade talks I had as leader of the council with significant businesses and how important that contribution was. In my time as leader, I was able to secure the triathlon world series coming to Leeds as the UK venue, the television rights that came with that, and the exposure of the city and the whole region that came through securing the grand départ of the Tour de France. It is very difficult to put a value on the importance of that to the sense of well-being as well as wealth growth in our local communities.

I therefore recognise the World Intellectual Property Organization’s comments about helping to secure the economic value of sport and about how that, in turn, stimulates the growth of the sports economy, enabling sports organisations to finance high-profile sports events and providing the means to promote sports development. It is absolutely critical that we look at this through the lens of sports organisations, and we should of course recognise the benefit that the sale of broadcasting and media rights brings and that it is the biggest source of revenue. We should also consider how those funds can then be used to contribute to the development of sport at grass-roots level. Do the Government have plans to encourage intellectual property revenue being directed into the development of grass-roots organisations?

The Sports Rights Owners Coalition has argued that protection against rights infringements is

“key to a sustainable financing of both professional and grassroots sports”

and, as such, it has called on the Government to

“fully recognise, protect and promote the special nature of sport and sports rights”.

We have heard of course how the UK’s Copyright, Designs and Patents Act 1988 allowed organisations that do not charge admission to show television programmes to the public without permission from the owners of film and broadcast copyright in those programmes. The Act was subject to amendment in 2016, when “film” was removed from the list of exceptions. The Explanatory Note to the regulations stated that this change would ensure that

“Section 72 will only provide a defence against infringement (in the showing or playing of a broadcast) of the rights in a broadcast per se, and will not extend to any film rights in the broadcast”.

Five years on, does the Minister believe this change provided greater clarity, as was intended? What impact has this had on the wider licensing framework? The pertinent question for the debate is this: when will the Government publish the response to their review of these changes? If there is any sense of what options for action could follow, I would be very grateful for an understanding of where this is heading.

Homes: Environmental Standards

Baroness Blake of Leeds Excerpts

Thursday 2nd December 2021 Lords Chamber

[Baroness Blake of Leeds (Lab)]

Housing retrofitting is arguably one of the toughest infrastructure challenges the UK has ever seen. Concerted public sector intervention will be required to have any chance of achieving the legally binding and local net-zero targets. I was pleased to hear that the Minister visited Leeds last week to see schemes that are developing on the ground. However, we had to wait months for the Government’s heat and buildings strategy, and it was a massive letdown when it was published in October. Unfortunately, there was no replacement for the ill-fated Green Homes Grant for home owners. Can the Minister simply explain where the long-term retrofit plan is?

[Lord Callanan (Con)]

The heat and buildings strategy is our long-term retrofit plan. Within that, we announced a number of forthcoming consultations; previous questions have referred to the consultation on the private rented sector. The noble Baroness referenced the visit I made to Leeds last week to look at the local authority installed measures that are going so well. We continue to invest large sums of money in these projects.

Oil and Gas Authority: Remit

Baroness Blake of Leeds Excerpts

Thursday 2nd December 2021 Lords Chamber

[Lord Callanan (Con)]

We have a role in the licensing of future developments, but whether to proceed with them is, of course, a commercial decision for the operators concerned. I am sure they will bear the noble Lord’s comments in mind. I am sure many of the big companies would not wish to end up with stranded assets either.

[Baroness Blake of Leeds (Lab)]

I am sure the Minister will say that it is right that we await the Oil and Gas Authority’s scrutiny report looking into the proposed Cambo oil and gas field. But surely it never made sense for the Government to consider progressing with the plans, especially in the run-up to COP 26 and now post COP. I reiterate: will the Government listen to the science and, starting with Cambo, help workers and industry wind down production of oil and gas in the North Sea?

[Lord Callanan (Con)]

The noble Baroness answers her own question—indeed, I would say, “Let’s wait for the decision of OPRED before we make any final observations about this.” But, as I mentioned to her colleague earlier, at the same time we are proceeding with our ground-breaking North Sea Transition Deal to ensure exactly what she asks: to help workers to transition away from these industries in the future.

Professional Qualifications Bill [HL]

Baroness Blake of Leeds Excerpts

3rd reading
Wednesday 17th November 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend for going the extra mile to put the Bill in the state in which it is. His statement today on his continuing engagement on legislative consent with the devolved Administrations is particularly welcome. In paying tribute to him, his Bill team and my noble friend Lady Bloomfield, I urge him to ensure that we see some fruit from the common frameworks and recognise their importance in implementing what is in not just this piece of legislation but other forthcoming legislation as well. I am personally grateful to him.

I thank the Law Society of Scotland, in particular Michael Clancy, at what has been a very difficult time for him through his illness. I also thank the Faculty of Advocates, of which I am a non-practising member, for its engagement in the round table hosted by my noble friend. I warmly thank my noble friend for all that he has done and I hope that the Bill will have a safe passage through the other place.

[Baroness Blake of Leeds (Lab)]

My Lords, this has been the first Bill I have taken part in since I joined your Lordships’ House. While I originally thought that it was going to be an important, if not straightforward, Bill, the legislation has been much more of an eye-opener than I was expecting. For example, I did not expect that simply asking who the Bill related to would result in such confusion from the Government and months of delay. Securing a list of regulators and professions in scope of the legislation has been important work. I recognise the effort that the Government have put in to compile the list, although I again suggest that perhaps it could have happened before the Bill was published.

It has been fascinating and enjoyable and I am glad that my first Bill has been so important both for British citizens who want to work abroad and for workers who want to bring their expertise to the UK. Our public services would not function without them and our communities are richer when they decide to make the UK their home.

Ultimately, I have seen first-hand how this House can really scrutinise and improve legislation. I am sure that the Minister will agree, as he has stated, that this is a better Bill now than when it was first introduced to Parliament. From the start, we on these Benches said that it should not undermine the independence and autonomy of regulators due to their important function of setting standards and protecting consumers. There was widespread concern from inside and outside the House that Clause 3 in particular could force regulators to lower standards due to what Ministers had agreed in the free trade agreements.

I thank the noble Lords, Lord Lansley and Lord Fox, and the noble Baroness, Lady Noakes, for working cross-party on this important issue. That is why the Government’s amendment to protect regulatory autonomy is such a welcome addition to the Bill. This is a big change and, while not perfect, it should protect domestic standards across 205 regulated professions. I pay tribute to all the regulators which have engaged so constructively with us.

As this was a skeleton Bill, we also pushed the Government repeatedly to consult regulators and devolved authorities on regulations. The Government’s amendment making statutory provision for consultation with regulators, including departments in devolved Administrations, is a good step forward.

Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Baroness Blake of Leeds Excerpts

Wednesday 10th November 2021 Grand Committee

[Baroness Pinnock (LD)]

My Lords, I draw attention to my relevant interests as set out in the register, as a vice-president of the Local Government Association and a member of Kirklees Council.

My noble friend Lady Garden is not able to be here today, due to another commitment over the way, but she asked me to speak briefly on her behalf. My noble friend is especially concerned about the impact on English language schools. It is a significant issue that these and other businesses may not even qualify for the relief or the grants set out by the Government during the pandemic. The criteria for the qualification of grant funding are desperately needed—the noble Lord, Lord Cormack, has just expanded to that effect. This is a concern that I intend to raise when I speak on the second group in more detail, with its amendments in my name and that of my noble friend Lord Fox.

The noble Lord, Lord Hunt, and the noble Earl, Lord Lytton, have made a compelling case for the Government to move—to quote their favourite phrase—“with pace” to respond to the significant concerns raised. The failure of the Government to act swiftly since the announcement of this potential grant funding in May, and then its confirmation a couple of weeks ago, is putting businesses in jeopardy through no fault of their own. I do not think any Member across the House would do other than condemn that situation. These businesses need to be able to apply for the grants, and for rate relief, to enable their businesses to stay afloat. That is the bottom line for all.

I support what has been said regarding Clause 1 standing part, although I also agree with the noble Lord, Lord Hunt, that we want the Bill to succeed and are using this opportunity to raise these serious points. Those are the words that my noble friend Lady Garden would have said.

[Baroness Blake of Leeds (Lab)]

My Lords, I thank noble Lords for drawing attention to the inadequacies of the situation that we are in. Until February this year, I was leader of Leeds City Council and we had the difficult job of working with businesses, when the complexity of the welcome resource that was available was challenging, to decide who was worthy of getting the relief and who was not. The comments made today just highlight the difficulties that local authorities are still having to face. I speak now as a vice-president of the LGA and am mindful of its input to this debate.

I thank my noble friend Lord Hunt for focusing on one specific sector and area, because that helps us to understand just what particular sectors are going through. We know that language schools are not the only area having problems but the noble Earl, Lord Lytton, referred to the loss of expertise, knowledge and experience. All those things add up to what we hope will be viable businesses as we emerge from this. In line with the comments they made, and continued by the noble Lord, Lord Cormack, we are faced with a situation across business and local authorities where there is now a lack of confidence, and concern at the lack of consistency and certainty. I hope that the Minister will be able to put our minds at rest on this.

We have had a good discussion regarding our concerns about how the figure of £1.5 billion was achieved. My concern here is that while we talk in terms of billions, we actually need to drill it down to the cost for businesses. I think what we are looking for collectively in the answers is a recognition of the urgency and the detail, and to hear when and how this is to be brought forward.

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

My Lords, I am grateful to noble Lords for the opportunity to speak to the benefits of Clause 1 of the Bill, which has received broad support throughout its passage. I will shortly come to the particular concerns of the noble Lord, Lord Hunt of Kings Heath, and the noble Earl, Lord Lytton, as well as those of the noble Baroness, Lady Garden of Frognal, so ably put by the noble Baroness, Lady Pinnock. They eloquently set out their objections, wanting to promote a wider debate about the need for clarity around guidance and the urgency of this measure. I will endeavour to respond to those concerns.

Clause 1 provides that coronavirus and the Government’s response to it should not be considered a legitimate basis for a successful material change of circumstance appeal. There are many thousands of these appeals currently in the system; the passage of the Bill will ensure that they do not stand. It is important that we clarify through this legislative measure that the impact of coronavirus will be accounted for at the next revaluation, rather than becoming a legitimate ground for appeal between revaluations. Failing to do so would clog up the courts, undermine local government finances and cause the MCC legislation to be used in a way that was not intended when it was passed. As noble Lords will recall, the provision for MCCs was not intended to reflect market-wide economic effects, which are rightly considered at general revaluations, the next of which will be in 2023.

The Government have received widespread support from parliamentarians in both Houses for this measure. There has been general approval of Clause 1 as a necessary measure to remove a significant source of financial uncertainty from local government, as well as to ensure that the law relating to business rates appeals operates as intended. The noble Lords who tabled this amendment provided by way of explanation that they wish to prompt a wider discussion of the Government’s plans relating to the £1.5 billion of business rates relief that we have promised, on top of the £16 billion of relief already provided to businesses throughout the pandemic.

As the Government have made clear, the £1.5 billion is intended to enable local authorities to provide targeted support to the sectors most affected by the pandemic but which have not benefited from support linked to business rates. Within those sectors, the relief will enable councils to award relief to businesses that they consider the most affected by the pandemic, using their local knowledge and, obviously, having regard to the government guidance. I am confident that it will prove to be a far more effective and faster way of directing support to businesses impacted by the pandemic than the MCC challenge process. That is in part because councils use their local knowledge of their area and ratepayers will ultimately be responsible for decisions on the award of relief. It would not be right for Ministers here to say whether particular ratepayers or types of ratepayers will benefit from the £1.5 billion scheme.

Work is ongoing between my department, the Treasury, the Valuation Office Agency and local authorities to prepare guidance to support the relief process. The shape of the final guidance, and how in practice we will smoothly pass decisions on this relief scheme to local authorities, will need to reflect various factors, including the existing framework of government support, information held by local authorities and their capacity to administer schemes quickly. We will continue to work on the relief fund and prepare the guidance for publication as soon as the Bill receives Royal Assent. We are of course mindful of local authorities’ need for an effective set of parameters within which they can design their local schemes. Local authorities should stand ready to develop and deliver their schemes as soon as they are able.

The noble Earl, Lord Lytton, wanted to know where the £1.5 billion figure came from. It is quite clear that local government made provision, as reported, of almost £1 billion for Covid MCC challenges for 2020-21. That was, in effect, being held in reserve rather than being spent on local public services. This measure enables that £1 billion that is currently provisioned to deal with challenges to go towards the effective delivery of local public services. Of course, it is a matter for local authorities themselves to determine. That certainly gives them the freedom to release that money that is currently tied up if we do not proceed with this piece of legislation.

--- Later in debate ---

[The Earl of Lytton (CB)]

My Lords, it might be of assistance to the Committee if I offer a few words of clarification, because the noble Baroness, Lady Pinnock, has given us some extremely perceptive insights into the whole issue.

With regard to Amendment 1, the issue here is that the Government have chosen to replace what would have been the objectively and judicially managed process of appeals against the assessment of the value of the real estate with what is, in fact, a wholly discretionary sum, with all that that entails, which will, as we heard from the noble Lord, Lord Cormack, be spread thinly across a huge number of non-domestic ratepayers, who will presumably plead some sort of hardship. That seems to transfer a load of administrative activity on to local government and away from what one would normally expect to be the longer-term process.

The Minister made a comment about the pandemic never having been in focus in terms of dealing with material change of circumstances. I am not sure he is entirely right in that interpretation. The acid test is fundamentally one of the perceptions of the longevity of the problem. It is quite clear that this will be a multi- year factor.

The noble Baroness’s second amendment points to the lumpily uneven nature of what has now become the business rates system. She referred to the online retailers, many of which operate out of enormous distribution sheds. Their shop window is a website with a virtual walkaround operation, their stockroom is somewhere between a number of vans on the road and their fulfilment centres, as I believe they are called, and the till is PayPal or the equivalent.

The situation regarding the principle of business rates is that it was always supposed to be the benefit derived from the occupation of those premises. Over the years this has morphed into being, “You’re the owner so you pay up.” That is the principle behind the invidious situation we have now to do with empty rates. I add those who have high street premises that they cannot let; they cannot find an exempt or partially exempt occupier such as a charity to come and occupy it for them. They are stuck with this situation. There is no relief for them. Not surprisingly, they get boarded up and, in street frontage speak, they become a missing tooth in the jaws of a pretty girl, as it was once put to me. That needs to be sorted out.

The fundamental review I referred to earlier is, I think, trying to do the least it possibly can. When I said that I thought we were getting—or had got to—the point of no return, I meant it, because if this is not taken seriously and is not taken in hand, the only show in town will be what I understand is a bit of Labour Party policy, which is to abolish business rates and have some sort of sales tax instead. We know what has happened in the past—I cannot remember if it was the first or the subsequent Government under Mrs Thatcher that was elected partly on the premise that they were going to abolish the unfair ratings system.

If we are not careful, this simply becomes another mantra where, historically, a perfectly good, cheap to run system gets trashed. The Government will rue the day that they allowed this process to continue and allowed the forces within the revenue department to erode the system of fairness and confidence—this will be the net result. It affects everybody—businesses and local authorities—and prospects all round, because doubt, uncertainty and risk are corrosive of the entire process.

I very much take the point that the noble Baroness made in moving this amendment, and I hope that the Minister is taking this on board, because we are pretty much at a tipping point and many people have said to me that it cannot go on like this. I just felt compelled to make that intervention at this stage.

[Baroness Blake of Leeds (Lab)]

Thank you for those contributions. There is no doubt among any of us about the real sense of urgency and the importance of the amendments that we are discussing in this group. Again, it is inevitable that the question of the £1.5 billion comes up, but we also need to keep a very close eye on the economic prospects as we go forward. I have to say, the confidence around that is not as great as perhaps we are being led to believe.

Again, I thank the noble Baroness, Lady Pinnock, for putting her name to Amendments 1 and 2, and for the comments of the noble Earl, Lord Lytton; he really got across that sense of urgency. I can confirm that Labour has called for the longer-term abolition of the current system of business rates, to be replaced by a new system that is better balanced between high-street businesses and the out-of-town online giants, as we have been hearing.

On Amendment 2, does the Minister agree with the assessment that we are in a very lumpy situation, and will he be looking at how the playing field can be levelled out? That is a really important question that we need some certainty on. Again, Labour has called for an increase in small business rate relief next year from the current threshold of £15,000 to £25,000. Does the Minister accept that we need an increase in relief to help small businesses cope?

I turn to the amendment in my name. It is important, at every opportunity that we have in this House, to really spell out the dire situation facing local authorities, particularly regarding the financial position that they are in. This is one reason local authorities are asking for clarity and a sense of urgency. They are also asking that, once the criteria are established, the way that this unfolds is kept under review, and for local authority guidance to be published as soon as possible. We made a very strong case for that at Second Reading.

We know that Covid-19 has had a devastating impact on local authority finances, with a combination of income falling and costs rising. The income element for local authorities, I am afraid, is one which the former Secretary of State would not take into account in terms of the losses that local authorities have been facing. This is on top of the fact that Conservative Governments since 2010 have cut £15 billion from central government funding to local authorities.

We are looking at a situation, according to the LGA, where councils in England will face a funding gap of more than £5 billion by 2024 just to maintain services at current levels. It estimates that the Government will need to find an extra £10.1 billion per year in core funding to local authorities by 2023-24 just to plug the existing funding gap. New research by the BBC, I understand, has shown that UK councils have found a £3 billion black hole in their budgets as they emerge from the pandemic. Put in that context, I think we can all understand why there is so much concern from local authorities about how much is going to be available to them to distribute, to enable businesses in their areas to survive and to continue to pay the rates due to them. Again, I ask whether the guidance can be issued to local authorities as a matter of haste and whether it is possible for us to have an understanding of when that will be.

I was actually in the room when the former Secretary of State told local authority leaders that the Government would provide

“whatever funding is needed for councils to get through this and come out the other side”.

Again, I ask: does the Minister believe that this promise has been kept? I do not think we need a list of all the different resources that have been given to local authorities, welcome though they have been. Unfortunately, they do not match the need and we know from the impact of the pandemic that need in our communities, through a whole raft of measures, is really going through the roof.

In that context, I hope that everyone will recognise the urgency required to resolve these matters but also the enormous challenges facing local authorities in the years ahead.

[Lord Greenhalgh (Con)]

I will start with the new clause proposed by the noble Baroness, Lady Pinnock, and the noble Lord, Lord Fox. This would require the Government to carry out an assessment of whether the business rates measure in the Bill improves the wider system of business rates.

I remind noble Lords that Clause 1 is limited in scope. The Government are making a targeted intervention through the Bill to ensure that the law concerning material changes of circumstances operates as it should do as regards the impact of coronavirus on rateable values. The Government are not, by contrast, offering the Bill as a means of introducing significant reform to the business rates system. Indeed, it would be wrong to do so. The Bill is narrow in its focus precisely so that Parliament can deliver certainty on this issue, with minimal delay, to those that need it, particularly local authorities.

I appreciate that many noble Lords wish to see more substantial changes to the business rates system, as pointed out eloquently by the noble Baroness, Lady Pinnock, and I can provide good news in that regard. Noble Lords will have seen the Chancellor’s Budget Statement and may have read the final report of the Government’s business rates review, published alongside the Budget. The Government have committed to changes to improve the business rates system through delivering more frequent revaluations, starting from the next revaluation in 2023. This answers widespread calls from stakeholders and will help deliver a more timely, and hence fairer, distribution of business rates.

--- Later in debate ---

[Lord Fox (LD)]

My Lords, for the avoidance of doubt, and for the Government Whip, just as the Government have changed Ministers, so we have changed Front-Benchers. I put that on the record. The noble Lord, Lord Cormack, who is no longer in his place, called this a hybrid Bill. Internally, I have called it the “kippers and custard Bill”, because it contains two completely different things, perhaps creating an unpalatable whole.

I also apologise for not being able to speak at Second Reading, for the same reason as most speakers: it was a moving target and most of us were involved in legislation elsewhere. That said, I was grateful to my noble friend Lady Pinnock, who represented my views on the director disqualification part of this Bill very well. I thank her. Noble Lords will be pleased to know that, despite the fact I was not here for Second Reading, I will not do a quasi-Second Reading speech at this point, but I will take a couple of minutes to set out my frame of reference for this group and the next so that it makes more sense.

I read the Hansard report of the Second Reading. As usual, I was struck by the great wisdom shown by your Lordships, but I was a little surprised to see one speech that characterised the whole insolvency and restructuring profession in a universally negative way. Although I am sure there are always examples of bad behaviour, I put on record that that is not my experience. By way of disclosure, I point out that R3, the organisation that represents the profession, has been very helpful in providing technical briefing to me on the Bill.

Businesses, especially smaller ones, rely on these services to get back as much of the money that they are owed as possible. That can be an existential issue for them. As things stand, some creditors are more equal than others. HMRC has always sought priority access to a failed company’s assets. We debated this long and hard during the passage of the Corporate Governance and Insolvency Bill—it seems a lifetime ago—where the Government promoted the interests of the tax authority a little higher. This Bill seeks to introduce powers to enable the Insolvency Service to investigate directors of companies that have been dissolved. Currently, the Insolvency Service can investigate directors of insolvent companies only. We should ask whether it seeks to achieve that on behalf of HMRC at the expense of other creditors. Will the Minister give us a specific assessment of how this new process will affect non-HMRC creditors?

There are accusations that the Government are in danger of not dealing with the loophole to deter fraudulent behaviour because this legislation is so tightly focused on bounce-back loan fraud. While the Government are likely to be a significant creditor in those cases, using this legislation in such a limited way would represent a missed opportunity to tackle the abuse of the company dissolution process more widely. I think that was what the noble Lord, Lord Lea, alluded to. Dissolving a company is a legitimate way of shutting a business down but it is often used to avoid scrutiny, as dissolution does not currently involve examination of the dissolved company’s finances by an external party, such as an insolvency practitioner. The Bill should be a chance to open this issue up.

We broadly support Amendment 3, in the name of the noble Lord, Lord Lea, and Amendment 7, in the name of the noble Baroness, Lady Blake. They both essentially probe when a company moves into dissolution. The noble Lord, Lord Lea, seeks to expose a possible pattern of director behaviour and the noble Baroness, Lady Blake, seeks to gain more data on the possible extent of such abuse through a duty of reporting for the Secretary of State. I do not think any of us would maintain that these amendments on their own would stamp out abuses, but at the very least they would cause a strong light to be shone on them.

I have a couple of other questions for the Minister. What steps will the Government take to ensure that investigations into directors of dissolved companies do not come at the expense of investigations into directors of insolvent companies? How will the Government determine which cases are in the public interest? The Bill’s impact assessment focuses on bounce-back fraud, but there are many other creditors in fraud cases. There is a huge public interest in helping ensure that all creditors are repaid. They are the businesses that contribute to the nation’s economy and without repayment they may become insolvent. This Bill risks becoming a missed opportunity to help this wider body of individuals and business if it is used to recoup government money only. Ensuring that creditors receive their fair share of any assets vested in a company requires the use of the insolvency framework to identify and distribute those assets. At the very least, will the Minister confirm that, where a company’s directors are found to be culpable, dissolved companies will be put through an insolvency process to ensure that returns to creditors can be made?

[Baroness Blake of Leeds (Lab)]

I start by thanking my noble friend Lord Lea for moving his Amendment 3. I know that we will have further discussions on the issues relating to it.

Like the noble Lord, Lord Fox, I do not want to go over the extensive debate that both noble Lords missed at Second Reading. The points made were so pertinent; I think most of us will have received extensive correspondence around the circumstances in which different creditors, in particular, find themselves.

I will limit my comments on my amendment to drawing together all the expressions of concern from the previous discussions about the lack of scrutiny. There is a real sense about a course of action being followed that enables people who should not be practising an opportunity to continue doing so in other ways. Most of all, I ask the Minister to look at whether we could establish an inquiry into unlawful behaviours relating to dissolved companies.

The other question that has come out of these discussions concerns the capacity of the different organisations. Can the Minister confirm what assessment he has made of the Valuation Office Agency’s capacity to deal with non-Covid-related material changes in circumstances? Continuing on the issue of resource, there is real concern about BEIS and the Insolvency Service. We recognise and welcome the requirement for the Secretary of State to report on the resources and powers available to the Secretary of State, BEIS and the Insolvency Service in relation to this Bill.

I understand that support staff at BEIS, represented by the PCS union, recently announced the possibility of strike action. They called for improved working conditions and an end to low pay. Does the Minister expect that further support staff will be required by BEIS in order to undertake the fulfilment of the new responsibilities?

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

I thank all the speakers on this group. I will take the points made in turn, starting with Amendment 3 in the name of the noble Lord, Lord Lea. I get the impression that his amendment intends to expand the information that the court can consider when it hears an application for the disqualification of a former director of a dissolved company to include that person’s conduct in all other insolvent or dissolved companies. If that is the case, I am happy to assure the noble Lord that the court is already able to consider such evidence, whether through the report supporting the disqualification application or through the evidence submitted either in defence of the application or in mitigation by the defendant. It is also possible for the Secretary of State to introduce information provided by third parties, such as regulators, in support of a disqualification application. I hope that the noble Lord will concede that his amendment is unnecessary.

--- Later in debate ---

Moved by

[Baroness Blake of Leeds]

4: After Clause 3, insert the following new Clause—
“Duty to report on directors of dissolved companies
(1) The Secretary of State must lay a report before each House of Parliament no later than three months after the day on which this Act is passed, and during each three month period thereafter. (2) Each report under subsection (1) must include the number of former directors of dissolved companies the Insolvency Service has—(a) investigated, and(b) disqualified both in the three-month period prior to the report being published, and in total since section 1 came into force.”Member’s explanatory statement
This new Clause would place an obligation on the Secretary of State to report the number of former directors of dissolved companies investigated and disqualified by the Insolvency Service.

[Baroness Blake of Leeds (Lab)]

My Lords, in moving Amendment 4, I will also speak to Amendment 5 in my name. In doing so, I am conscious that I will be talking about some issues that we have already discussed as we have gone through the different stages of the Bill.

Amendment 4

“would place an obligation on the Secretary of State to report the number of former directors of dissolved companies investigated and disqualified by the Insolvency Service.”

The purpose of this is to collect data on whether the provisions in Clauses 2 and 3 would work as intended: to help to understand the sufficiency of the Insolvency Service’s funding and resourcing, as we have already highlighted. This relates to Amendment 5, which

“would place an obligation on the Secretary of State to make a statement on the impact of this Act on the financial situation of the Insolvency Service.”

I have tabled these amendments in the hope that the Government will give further information on their plans to fund the Insolvency Service properly and allay our ongoing concerns about its resourcing. At present, the Bill makes no mention of further funding for the Insolvency Service, despite creating new obligations to carry out investigations.

The provisions in the Bill to remove the restoration hurdle mean that the Insolvency Service will now be expected retrospectively to investigate the directors of dissolved companies and then apply to court for a disqualification order to be made against the said directors. Can the Minister estimate how many additional staff will be required to carry out just the retrospective investigations and, separately, how many to apply for the new disqualification orders? I am sure that the Minister would agree that an overstretched Insolvency Service would benefit no one, but there is real concern at the moment around the Government giving new powers to the service without the resources to back it up.

At Second Reading, the Minister responded to these concerns by saying:

“The Insolvency Service’s resources are not limitless.”—[Official Report, 19/10/21; col. GC 55.]


We would certainly not argue that they should be; we are simply asking for a guarantee that the service will be supported to fulfil its new responsibilities. I beg to move.

[Lord Fox (LD)]

My Lords, I fully support the spirit of Amendments 4 and 5 and commend the noble Baroness, Lady Blake, on her presentation. I will speak primarily to Amendment 8, which is in my name and those of my noble friend Lady Pinnock and the noble Lord, Lord Leigh of Hurley, whom I thank. As the noble Baroness, Lady Blake, said, we discussed much of the driving rationale behind these amendments during the previous group. I am not going to repeat that, so the Committee will be relieved to know that my speech will be shorter.

The heart of Amendment 8 is simple. It is a reporting amendment, similar in a sense to those tabled by the noble Baroness, Lady Blake, which is designed to help evaluate the usefulness of the approach as set out by the Government in their Bill. It is also designed to demonstrate whether there are adequate resources. I think the Minister is underplaying the concerns around resources, so I will approach it from the other end. If the Insolvency Service had, let us say, resources to investigate 12 cases and, because of the Covid crisis, 12 new and quite high-profile cases that were in the public interest arrive on the scene, then the 12 other cases that would have been examined would not be. That is the problem the Minister has failed to address. There need to be sufficient resources to cover not just the 12 currently top of the list, but the 12 that would have been had the Covid crisis not happened. The Minister needs to address that point. This amendment is designed to expose, or otherwise, the level of success we are having in that.

The success of this can also be judged by how effectively the tools that are available to recover money are working, so Amendment 8 also requires reporting on the appropriate mechanisms available to prosecute directors of dissolved companies. Finally, the proof of this pudding will be in how much money is recovered for HMRC and the other creditors—this is the important bit. That is why this amendment includes the requirement to report exactly how much money has been returned to creditors, which will demonstrate whether the current toolbox is adequate and whether the legislation is working.

It may also incentivise the Government to use the legislation to prosecute directors of dissolved companies and effectively deal with the firms themselves, so that returns can be made to the creditors. I refer the Minister to my previous point: this returned money is existential to a lot of companies. We see companies go down because their customers have done so. This amendment presents another way of shining light on the process and its effectiveness. The process is still unclear, so perhaps the Minister can take the opportunity of this amendment to set out exactly how the Government intend to prosecute culpable directors once they have been investigated. What existing measures will be employed and are new sanctions being considered?

While supporting the objectives of the Bill, I close where I started. There is evidence that the director disqualification regime will not be sufficient to recoup moneys. It will be too weak to deter rogue directors and compensation orders, in particular, will benefit only one creditor: HMRC. That is why we welcome further debate on this because it is important that the Government consider the impact of this fraudulent behaviour on all creditors, not just on themselves. I look forward to the Minister’s response with a view to pursuing this on Report.

--- Later in debate ---

With that, I thank all noble Lords who have contributed to this debate for their interest in the Bill and their amendments. I hope I have been able to reassure them enough for them to feel able to withdraw or not press their amendments.

[Baroness Blake of Leeds (Lab)]

My Lords, I have learned something this afternoon: if there is any doubt about access to the internet, bring along with you a bag of sweets for the army of people the Minister has behind him to assist him in that cause.

On a serious note, I am grateful for the contributions and insight. I thank the Minister for the answers he has given. However, great strength of feeling has been expressed on these issues—from all sides, to be fair. As I said, the continuing contact, particularly from smaller creditors, means that we will revisit this issue on Report.

Some specific questions have been asked today. I would be grateful if the resources available to the department and the answers on those specific issues could be made available to us in advance of Report, because all of us need the highest level of input possible so that we can have a full debate at that stage.

I thank everyone for their contributions. I recognise that, for many people, there is no clarity or certainty. There is a real sense of grievance that many people are losing, significantly, sometimes their entire wherewithal around employment for themselves and members of their companies. With those comments, I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

Professional Qualifications Bill [HL]

Baroness Blake of Leeds Excerpts

Report stage
Tuesday 9th November 2021 Lords Chamber

Moved by

[Baroness Blake of Leeds]

16: After Clause 15, insert the following new Clause—
“Protection for existing recognised qualifications
Nothing in this Act prevents, qualifies or otherwise affects the ability of those with existing recognised qualifications to continue practising the profession to which the qualifications relate in the United Kingdom or any part of the United Kingdom.”

[Baroness Blake of Leeds (Lab)]

My Lords, as I said in Committee, there is a clear need to give those who already have their professional qualifications recognised in the UK certainty and confidence that this legislation will not affect them negatively, especially because, in many cases, the professionals and people working in these areas already live in our communities, have decided to call the UK their home and are people on whom all of us so often rely, particularly for our vital public services. Amendment 16 seeks only to enshrine the Government’s own central promise from the Explanatory Notes that

“nothing in the Bill prevents, qualifies or otherwise impacts the ability of those with existing recognised qualifications from continuing their areas of practice in the UK”.

The Minister said in Committee says that he completely agrees with

“ensuring that professionals who have already had their qualifications recognised in the UK should be able to continue to rely on those recognition decisions.”

Then why not put it in the Bill? Without this simple amendment, how can the Minister provide the reassurance that these workers so desperately need? He also stated in Committee:

“The regulations which commence Clause 5(1) will include saving and transitional provisions”


to

“ensure that professionals whose qualifications were recognised from the end of the transition period to the point when the 2015 regulations are revoked are unaffected”,

and to

“support a smooth transition to the new framework for recognising overseas qualifications.”—[Official Report, 14/6/21; cols. 1734-35.]

When will we see these regulations, and what does “a smooth transition” actually mean? Will it ensure that no one with qualifications recognised today will lose out on job prospects tomorrow?

We feel strongly about this issue, and I look forward to hearing unequivocal and clear commitments from the Minister tonight

[Lord Purvis of Tweed (LD)]

My Lords, an issue raised in Committee that it would be helpful for the Minister to provide an update on—in writing would be satisfactory to me—concerns those European Union workers who had been providing services, with their qualifications recognised, and had applied for settled status but on the fast-track element, which did not ask them to provide any more information about the qualifications recognition. With Clauses 5 and 6 revoking the previous EU scheme and the move towards the domestic schemes, there is still potentially a grey area for those workers who will have to provide proof of their qualifications recognition if they change employer, or indeed if they seek new rental or property agreements, et cetera.

Previously, the noble Lord, Lord Grimstone, indicated that the Government were aware of this, and he provided assurances. It would be very helpful if the Government could say how many of these workers could be in this position. It emphasises the point made by the noble Baroness, which I agree with, that, even if there are unintended consequences of putting at risk some of these workers, we can ill afford it.

The second element is that it would be helpful to know the Government’s intentions for the timing of the revocation of the EU scheme. Previously, the Minister indicated that it would be when the Government were ready to do so but that they were not in any rush to do it. It will be helpful to know what timeframe we are looking at, because the noble Lord, Lord Frost, in a Statement he provided to the House in September, said that the Government were now carrying out a substantial review of previous European legislation and retained EU law. Are professional qualifications separate from that review or will they be considered as part of it? If the Minister could give some reassurance on that, I would be grateful.

Finally, because this will probably be my last comment on the Bill in this House—which I am sure the noble Baroness, Lady Bloomfield, will be pleased to hear—I want to put on record how she and the noble Lord, Lord Grimstone, have engaged in this process. I have been in this House a number of years, and we hear at the Dispatch Box fairly frequently that the Government value the input and scrutiny from this House and take on board whenever we amend legislation, and we always welcome that. But our amendments quite frequently get buried in the dust in the other House, when all our great counsel and wisdom is turned back.

The benefit of the noble Baroness and the noble Lord listening and then acting by tabling the government amendments is that this is now government policy, and the Bill is now substantially changed. If I understand it correctly, this will be the first time that the autonomy of regulators will be respected in primary legislation. That is a considerable achievement for the parliamentary process of a Bill of which we had been not only sceptical but critical at the early stages, but which we now support. Therefore, I commend both Ministers and their teams for the work they have done. Personally speaking, I think the Bill is in a much better position. For the benefit of our regulators and those who receive services that the professions operate, it is a better Bill as a result.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank the noble Lord, Lord Purvis, for his kind words; I will certainly try to continue to do my best at the Dispatch Box. I also thank the noble Baroness, Lady Blake of Leeds, for her amendment. In Committee, the House sought confirmation that professionals who have already had their qualifications recognised in the UK will be able to continue to rely on those recognition decisions. Indeed, those professionals will be able to continue to do so, provided of course that they meet any ongoing practice requirements. Nothing in the Bill, nor the regulations anticipated under it, will interfere with or reverse such decisions.

Regulations commencing Clause 5 will include saving and transitional provisions to ensure that professionals’ existing recognition will continue to be valid, and applications made before revocation comes into effect by the commencement regulations will continue to be assessed under the relevant retained EU recognition law. It is possible to make similar provisions in regulations under Clause 6.

The noble Baroness, Lady Blake, asked what a smooth transition would look like. It will include regulations which ensure that the UK meets its international obligations under the EU-UK withdrawal agreement, EEA EFTA separation agreement and the UK Swiss citizens’ rights agreement. It includes saving and transitional provisions to ensure that professionals’ existing recognition will continue to be valid, and applications made before revocation has commenced will be assessed under the EU system. Commencement of Clause 5(1) is timed to avoid burdening regulators or creating gaps in their ability to recognise overseas qualifications. The Government took a similar approach when amending retained EU recognition law in 2019 to ensure a smooth transition for businesses and professionals following the UK’s withdrawal from the EU.

The noble Baroness also asked why, if we are so committed to protecting the ability of those with existing recognised qualifications to continue practising, we are not putting this on the face of the Bill. We believe that this matter is best dealt with through saving and transitional provisions in secondary legislation. The UK Government and devolved Administrations took this approach when amending EU legislation on recognition of professional qualifications to prepare for leaving the EU. We see no reason to depart from this approach and enshrine this commitment in the Bill.

The revocation of the general EU-derived system will not impact the ability of professionals with recognition decisions awarded under that system to continue practising in the UK. This applies even where a professional takes a career break and chooses to return to a profession in which they were awarded recognition. The noble Lord, Lord Purvis of Tweed, asked about the fast-tracked settled status of EU citizens. We are unable to provide the House with the precise timetable at present, but we will engage with stakeholders as we go forward.

Professionals who do take a career break should check with their regulator to establish what, if anything, they will need to do to continue practising or to return to practice. This will of course vary between professions. If a profession has a continuing practice requirement, that will also apply for individuals currently practising. For example, where a registered medical professional has a licence to practise, they must revalidate their registration every five years. Similarly, when a professional returns to the UK, their first port of call would be to the relevant regulator in the UK to ascertain requirements for recognition.

The Bill does not make commitments in these areas, because that would be interfering with regulators’ ability to regulate. The main reason that this amendment has been proposed is to protect those with recognition decisions, but there is no threat from this Bill to those decisions. The Professional Qualifications Bill respects existing recognition decisions and any ability a regulator has to set professional standards. I therefore ask the noble Baroness to withdraw this amendment, if I have provided sufficient reassurance.

[Baroness Blake of Leeds (Lab)]

I thank the Minister for her response, and the noble Lord, Lord Purvis, for his comments.

I think I can honestly say that there is still concern. I have heard it particularly from those professionals who are not practising at the moment—so there is a continual need for reassurance. However, I thank the Minister for her comments and beg leave to withdraw the amendment.

Amendment 16 withdrawn.

--- Later in debate ---

[Baroness Noakes (Con)]

My Lords, I think it was in the briefing before Second Reading that I first asked which regulators were covered by the Bill—one of those naive questions where you are often surprised by the answer that you get. My noble friend the Minister said he would write to me, which he duly did, and it was a surprise to other members of the committee when we got the letter—and things sort of went downhill after that. We had another version of the list, with more regulators on, and then a more definitive version that appeared more recently and is on the website.

For me, this struck at the competence with which the Bill was put together, and nothing that has happened has made me change my view that it was not put together in a competent way. But I am satisfied that the Government have done a very considerable amount of work to try to establish the scope of the Bill and to whom it applies, and are committed to keeping an updated list on the website. So I am happy with where we have ended up—but, my goodness, it has been an extraordinary journey.

[Baroness Blake of Leeds (Lab)]

I think we can all congratulate Members on their persistence on this issue and I have to tell noble Lords that my vocabulary has expanded at an enormous rate by being involved in the Bill. I have never heard the expression, “I am not assuaged” quite so often, but it clearly shows that we are moving in the right direction. As we have heard, there are still concerns and, given the lateness of the hour, I just want to add that with Amendment 18 we really feel that we would like to see statutory protection to ensure that the list is regularly maintained and updated. That is the question we have: we have achieved so much through the debate here, but how can we be reassured that the list will be kept updated and maintained, and how often will it happen? Because of our experience, we need a reassurance that the list will not be removed once the Bill has received Royal Assent. I will listen very carefully to the Minister’s reply.

[Lord Fox (LD)]

My Lords, I think no one has had a bigger headache on this list than the Minister himself and the department, but it was a headache, frankly, of their own making.

I am with the noble Baroness, Lady Hayter, on this: I think it should be a separate schedule. We proposed a mechanism in Amendment 19 by which this schedule might be created and maintained. The noble Baroness, Lady Blake, talked about keeping it updated: if it had not been for the scrutiny of your Lordships and the constant harrying of the Ministers, this list would not have been nearly right now. I suspect there are still amendments to go into it. For that reason, we think Parliament should hold on to a regulatory process and, through a statutory instrument, that schedule can be updated.

What we have sought to do in Amendment 19 is not to second-guess where the list is now—because, as the noble Baroness, Lady Hayter, pointed out, that is like catching a knife—but to give the Government a process by which a definitive list may be created, put in a schedule and updated easily and, I would say, flexibly through a statutory instrument. Why? Because this is not just a list of organisations on a website: there are rights and responsibilities that come with being on this list and, indeed, not being on this list. Which professions are going to be scrutinised to see whether demand is met or unmet? This is a really important issue that Parliament should continue to maintain scrutiny over.

The noble Baroness, Lady Hayter, talked about the responsibilities of those organisations, but also the rights—which ones have the autonomy that the Minister’s amendment has granted and which are not part of this list? Furthermore, when the conversations are being had with the devolved authorities, a list gives weight to those discussions and gives a very clear indication of which professions are in and which are not. So, one way or another, putting it in the schedule is really important, as is a way in which that can be flexibly maintained, whereby Parliament maintains its ability to scrutinise that process; because without that scrutiny, where would we be now?

Professional Qualifications Bill [HL]

Baroness Blake of Leeds Excerpts

Tuesday 9th November 2021 Lords Chamber

[Baroness Randerson (LD)]

My Lords, the noble Baroness put her finger on it when she referred to the bad feeling engendered by the internal market Act. That has undermined confidence between the devolved Administrations and the UK Government. But there are also good, practical reasons why they need to be consulted. I support these amendments because it is absolutely crucial that, at the centre of this, the assistance centre truly represents the whole of the UK and can provide accurate information.

The history of this Bill is that the whole thing is a lot more complex than the UK Government originally thought. I think that the Minister would acknowledge that. The noble Baroness has played her part in pointing that out to the Government. It is not just a courtesy to seek consent. Things are different in different parts of the UK. I speak in this debate from the perspective of Wales, where our difference is partly underlined by language issues of significance. If you are looking at the clinical professions, or teaching, language is important in the delivery of those qualifications.

However, there is a key issue here in the interaction between this Bill and the United Kingdom Internal Market Act, which was designed to undercut devolved powers and which, despite some amendments, still has the power to do so. The UK Government deal internationally with what I am sure they see as the interests of the whole of the UK but, to give one example, the international trade deal with New Zealand provoked dismay in Wales because of the impact that it will have on Welsh sheep farmers. That may not be of direct relevance to this Bill, but it underlines the fact that, just because the UK Government are intending that it should benefit the UK, that does not mean that it will actually benefit the whole of the UK. The same applies with professional qualifications and the terms in which there could be an impact from an international trade deal on those qualifications.

The lack of legislative consent Motions is a symptom of the problem. Common frameworks are there and should be there to ensure harmonious working, but those of us speaking in this debate who are members of the Common Frameworks Scrutiny Committee—the noble and learned Lord, Lord Hope, my noble friend Lord Bruce and the noble Lord, Lord Foulkes, who was here earlier—know that common frameworks have been applied so far in a fairly haphazard manner in some situations, and therefore we cannot entirely rely on them yet. I am very pleased to see the amendments that relate to them, because that reinforces their importance in improving relationships between the Governments within the United Kingdom. Therefore, I support these amendments.

[Baroness Blake of Leeds (Lab)]

My Lords, I start by saying a personal thank you to my noble friend Lady Hayter for her wonderful support over the past few months. We go back many years and we have worked on some very difficult issues, so it has been a great pleasure. I thank my noble friend Lord Kennedy for stepping in as a result of the very positive news of my noble friend Lady Hayter moving on to pastures new. I know that she will continue to bring all her enormous knowledge to bear.

I also thank the Minister for his unfailing patience and his recognition of the complexities of this Bill that were not fully appreciated when it first came forward for our consideration. There have been some extraordinary contributions from all sides of the House that exposed the original drafting, which have been incredibly important.

Her Majesty’s Opposition believe that a role for the devolved authorities has been overlooked in the drafting of this Bill and recognise that there is strong concern from them, as we have heard in this debate, about the legislation. Perhaps it is not an enormous surprise, given the Government’s track record, because the experience of the devolved Administrations is that they have been excluded too many times, going right back to the Brexit negotiations, as we have heard, and the United Kingdom Internal Market Bill, with UK powers imposed over devolved competences. The noble Lord, Lord Bruce, said very clearly something which struck home very forcefully: there is a legacy of suspicion. We would all do very well to remember that.

We also remember when it came to light that the devolved authorities only saw this Bill a week before it was published. Either the Government forgot about them or something else was happening, but again that growing suspicion has permeated the discussions that we have had throughout.

The importance of their engagement was underlined in the Government’s factsheets on the Bill, which were published at the end of last week and stated that professional qualifications and experience can vary across the four nations—surely in itself a reason for this concern. As we have heard, the concern is shared across the House, as demonstrated by Amendment 10, tabled by the noble Baroness, Lady McIntosh, the noble and learned Lord, Lord Hope, and the noble Lords, Lord Foulkes and Lord Bruce, which we strongly support.

This was the formula for the engagement of the devolved authorities, which the Government accepted with the United Kingdom Internal Market Bill. It would oblige the Minister to seek the consent of the devolved authorities but would allow them to proceed, albeit with a published explanation if no consent is received within a month. It is not an absolute veto, but it starts on the assumption of working towards consent. Her Majesty’s Opposition recognise the strength of feeling from the devolved authorities and, again, as has been so eloquently expressed by the noble Baroness, Lady Randerson, that is why we have tabled Amendment 14, which would apply this consult, seek and UK Government backstop formula to all regulation-making powers in the Bill.

Why are the Government against taking this approach with this Bill, which they accepted in the United Kingdom Internal Market Bill less than a year ago? Surely at the very least we need some consistency across post-Brexit legislation. Amendment 10A also seeks to ensure that the Bill does not impact on the development of a common framework on this issue. Can the Minister confirm that this will be established and in operation by the end of the year? As I understand it, there is still some confusion about departmental responsibilities on common frameworks post reshuffle, so can he also confirm which Minister and department are now responsible for them? We accept that the mood of the House has, with some exceptions, coalesced around Amendment 10, and we strongly support it, as I have said.

I would like to hear clear commitments from the Minister that the Government remain committed, first, to continuing engagement with the devolved authorities to find a way through on this issue, and, secondly, to amending the Bill as appropriate to reflect the devolved authorities’ concerns. As the Bill starts here in the Lords, the Government have ample time to bring forward amendments in the other place. If the Minister is not able to say this today, I will seek to test the opinion of the House on Amendment 14. I will be listening very closely to his reply.

Non-UK Residents: Property Ownership Register

Baroness Blake of Leeds Excerpts

Tuesday 2nd November 2021 Lords Chamber

[Lord Callanan (Con)]

I totally agree with my noble friend. Just last week in the spending review we committed to new investments of £63 million for Companies House reform and £42 million for tackling money laundering and fraud. This is alongside the economic crime anti-money laundering levy which will provide an additional £100 million funding per year from 2023-24. We are committed to cracking down on money laundering and we will implement this legislation when time allows.

[Baroness Blake of Leeds (Lab)]

My Lords, the UK published a draft Order in Council under the Sanctions and Anti-Money Laundering Act 2018 that required British Overseas Territories to establish a public register of companies’ beneficial owners by 2021. Can the Minister confirm reports that this will not now be required until 2023? If so, can he explain why it has been postponed?

Ethnicity Pay Gap Reporting

Baroness Blake of Leeds Excerpts

Monday 25th October 2021 Lords Chamber

[Baroness Blake of Leeds (Lab)]

My Lords, I join other Members in congratulating my noble friend Lord Boateng on his well-informed and incredibly powerful contribution. I thank him for giving us all the opportunity to make such important contributions; I think we have all learned an incredible amount from the speeches that we have heard thus far. I thank my noble friend Lord Sikka for his. I am sure I am not alone in looking forward to the Minister’s response to his request to answers for his six-point plan.

Only last month it was reported that just 13 of the FTSE 100 companies report their ethnicity pay gap. The lesson learned from gender pay gap reporting, as we have heard, is that until it is mandatory it will not become commonplace. While the ethnicity pay gap is usually considered to be around 2% to 3%, if we delve further we find that there are much wider differences between groups. As we have heard, there are many complex reasons for that. We know that, unfortunately, until mandatory reporting is introduced, we will never have a full picture and full understanding of exactly what is happening, but shamefully, even now, we can recognise the gap in pay between many different ethnic groups, as the noble Baroness, Lady Falkner, so eloquently laid before us. We need better data but most of all we need action.

My noble friend Lord Boateng has rightly made the case for mandatory reporting. He is in good company: the CBI, the TUC—as we heard from my noble friend Lady Blower—and the Equality and Human Rights Commission have all declared their support, which is a very powerful coming together of different views. There can be no excuse for the Government’s delay: it is now time for the introduction of these new requirements. But they must go further than just mandatory ethnicity pay gap reporting. We also need to close the gap with a new requirement on employers to report and eliminate pay gaps. This can begin with the implementation of action plans to eradicate inequalities in the workplace, and must form a part of a wider strategy to end the poverty wages and insecure work that blight millions of lives and are holding back our economy. We have heard in the debate about the disproportionate impact of the Covid pandemic on ethnic minorities. We also know about the impact of poverty on children in our communities; I have said before that we know that a quarter of children under the age of 16 living in Leeds are deemed to be living in poverty, and 75% of those are living in working households. What do we actually know about the disproportionate impact on children from ethnic minorities affected by this?

The right reverend Prelate the Bishop of Bristol has very carefully talked about the work on the gender pay gap, and we heard from the LSE earlier this year that, since the legislation came in in 2017, there has been progress—but all of us know just how much work there is to do. Unfortunately, we have in front of us a real sense that the Government are dragging their feet on this issue, despite the well-documented public concern and the fact that good practice is evidenced in many of the workplaces that are doing good work in this area. Practical issues are raised as objections. We need to make sure that the Government issue guidance. I finish by asking the Minister: are the Government on our side and prepared to take the next steps in making ethnicity pay gap reporting mandatory?