United Kingdom Internal Market Act 2020 (Services Exclusions) Regulations 2023

Debate between Baroness Blake of Leeds and Earl of Minto

Wednesday 18th October 2023 Lords Chamber

[Baroness Blake of Leeds (Lab)]

My Lords, I thank the noble Baroness, Lady Kramer, for the image of a Rubik’s cube in looking at this legislation. I welcome the detail that has been provided; it has been very helpful and, as a result, I will keep my comments fairly brief. I thank the officials who have been involved in the process and the Minister for his detailed explanation.

The major concern I want to raise is that, despite the detailed consultation—I am very pleased to see the extent to which that was undertaken—it is troubling that consent was only achieved with Welsh Ministers and not Scottish Ministers. Obviously, the Written Ministerial Statement was laid before the Summer Recess, which was a significant time ago now, and I wondered whether there have been any more conversations between those bodies to seek further reassurance about the progress of this.

I have a specific question. The Scottish Government made a request in relation to heat network authorisations. Can I seek clarification that that has been incorporated into this SI?

I too would like to ask if the noble Earl is able to give us a more detailed explanation of why consent was not forthcoming. As we know, the Scottish Government did not consent to the UKIM Act. Could the Minister explain whether this is the reason? Has he had any explanation of the reasons? Is there a reflection of any concern with the content of the SI as a result? We obviously have to note the continued absence of the Northern Ireland Assembly and Executive. We want to explore with the Minister if that is seen as one of the reasons consent was not forthcoming.

This speaks to a broader concern, which we have expressed on many occasions, about the hoarding of power in Westminster. This is still seen as an issue. Perhaps the lack of progress on an agreement on a range of common frameworks with the devolved Administrations, and the failure to bring this forward, undermines the co-operative working with the DAs.

In terms of review, paragraph 14.1 of the Explanatory Memorandum mentions a review of the Act’s amendment powers, which “must take place” between the third and fifth anniversaries of the passing of the legislation. Could the Minister provide an update on this? Would it be reasonable to assume that there will be further review towards the end of the period stated? If this is the case, has work already begun to detail what further amendments might be required?

[The Earl of Minto (Con)]

I thank noble Lords for their valuable contributions to the debate on this instrument. I agree that it is a very technical SI, and I would like to answer some of the detailed questions properly in writing. I have a lot of the detail here, but I know that time is short, and we want to get on with it. A number of very valuable points have been made, and I will endeavour to answer them to the best of my ability.

The provisions of the UKIM Act naturally bring up historic opposition, but I hope that the legislation that we are looking to pass today will be considered on its own merits in relation to protecting the UK internal market. As a reminder, the instrument will enable the effective operation of services regulation in the UK by adding, amending and removing service sectors excluded from the market access principles in Part 2 of the UKIM Act to reflect current regulatory practice in the UK.

This instrument is a direct result of a public consultation and therefore a rare amendment to the exclusions list, following the intention to make the scope of the UKIM Act better support intra-UK trade. It continues to guarantee that services connected with the supply or production of gas and electricity can be regulated separately in the parts of the UK. This will ensure regulation, mainly in environmentally sensitive areas, can continue without the application of the UKIM Act’s market access principles maintaining how the service is provided or regulated in parts of the UK. It will also ensure the services excluded in Schedule 2 better reflect the UK’s circumstances post-EU exit by removing exclusions which are no longer necessary in this new context.

Post Office Compensation

Debate between Baroness Blake of Leeds and Earl of Minto

Tuesday 19th September 2023 Lords Chamber

[The Earl of Minto (Con)]

I do not have that detail now, but I will certainly write and let the House know.

[Baroness Blake of Leeds (Lab)]

I think the mood of the House is very much to put pressure on to get some answers about when the three main stakeholders are going to be in front of the inquiry. We cannot wait any longer. Some of those people will be retiring; some of the people involved will not be with us anymore. The clock has been ticking for so long. If the noble Minister cannot answer now, will he come back and give us a very clear picture as to when those people will be held to account and what we can expect from the process to make sure that everything that needs to be is brought to light and exposed for what it is?

Employment Relations (Flexible Working) Bill

Debate between Baroness Blake of Leeds and Earl of Minto

3rd reading
Friday 14th July 2023 Lords Chamber

[The Minister of State, Department for Business and Trade (The Earl of Minto) (Con)]

My Lords, I thank the noble Baroness, Lady Taylor, for bringing the Employment Relations (Flexible Working) Bill through the House. The Government have been pleased to support the Bill throughout all its stages, in line with our 2019 manifesto, which committed to promote flexible working. I am pleased to continue that support today at Third Reading and am very grateful for the cross-party support that the Bill has received.

The successful passage of this Bill will introduce changes to the existing right to request flexible working, which will be made alongside the Government’s commitment to make the right to request flexible working available from the first day of employment. The changes represent a timely, sensible and proportionate update to the right to request flexible working and reflect what many employers already do. They will particularly support those who need to balance their work and personal lives and may as a result find it harder to participate in the labour market. From older workers to new parents and those with disabilities or long-term health conditions, this Bill will be an important step in supporting their ability to remain and progress in work.

I am very pleased to support the Employment Relations (Flexible Working) Bill. It is a meaningful step in the right direction to help employers and employees agree work arrangements that fit with life. I thank the noble Baroness, Lady Taylor, for her sponsorship of the Bill as it has moved through this House, and the honourable Member Yasmin Qureshi and my honourable friend Kevin Hollinrake for their sponsorship in the other place and hard work in putting this Bill forward.

[Baroness Blake of Leeds (Lab)]

My Lords, I briefly add my thanks for the smooth passage of this Bill. I pay tribute to the Bolton mafia and, in particular, my noble friend Lady Taylor of Bolton. I also thank the Minister for his support going forward.

We were all struck by the moving testimonies at Second Reading; I think it was the noble Lord, Lord Holmes, who said, “Flexible working—why wouldn’t you?” That absolutely summed it up. A cultural shift is happening. As we know, many companies are already on board and getting great benefit from a more flexible approach to their workforce.

I cannot let this moment pass without referencing our culture; I note that at Second Reading there were 10 noble Baronesses on the Front Bench.

I say an enormous thank you to everyone who has assisted with this in both Houses and look forward to the next steps that will follow once the Bill is enacted.

Register of Overseas Entities (Penalties and Northern Ireland Dispositions) Regulations 2023

Debate between Baroness Blake of Leeds and Earl of Minto

Tuesday 13th June 2023 Grand Committee

[Baroness Blake of Leeds (Lab)]

I add my thanks to the Minister for his opening remarks and the detail that he went into in explaining the nature of the SI before us. I preface my comments by picking up on one remark that he made, that the whole purpose of this is not to deter investment. We are always looking at finding the bad actors in this situation, rather than bringing in penalties that will have a detrimental effect on businesses’ ability to attract investment.

We regard this as an important statutory instrument, and I am sure the Minister will agree with me that it is very overdue. We know that there were conversations around this and action was taken by David Cameron back in 2016. We have to acknowledge that it is a tragedy that it took the war in Ukraine to precipitate the action that we have seen thus far. I hope we do not get into a Groundhog Day situation, as I know that we will probably engage in further conversations around this when we head into Report on the Bill next week. However, that is the nature of the fast-moving situation that we are in. Many of the issues that have been touched on today have been discussed at length in Committee on the Economic Crime and Corporate Transparency Bill, so I do not want to repeat too much of that, knowing that we will come back to it.

As I say, we support provisions within this SI and believe that they are common sense, but we have to acknowledge that the delays have been at a cost.

I believe the fine is currently set at £2,500 per day. Is it the case that no one has yet been issued with a penalty? It would be good to clarify where we are in the process. We certainly want to see action stepped up against those failing to comply with the new legislation, and we know that there are those who are yet to face financial penalties. The spirit running through all the debates about the next stages of this is of wanting the system to be as robust as possible. In particular, as the Minister mentioned, this presents us with an opportunity to bring in further measures and strengthening, but the question that will run throughout this, which he probably cannot answer at the moment, is whether it will be fit for purpose and will cover all the issues that come up.

How soon after the passing of the SI will the registrar be able to issue financial penalties? I presume there will be a process of issuing warning notices. Has there been any provision for warning notices to be sent out in advance of the SI being passed? It would be helpful to know whether that is the case and therefore whether it will be possible for the registrar to move to those financial penalties as soon as the SI has been passed.

More generally, on timings, the dates of appeal on the warning notices suggest that a period of 28 days needs to be passed. Can we have some clarification? The draft regulations state that the period contained in any warning notices

“must be at least 28 days beginning on the day after the date of the warning notice”

being issued. If a company or entity disagreed with what was in the warning notice, would it have to make representation to the registrar within 28 days or after a minimum of 28 days? There is a need for some clarification. Also, if warning notices have been issued, have any written representations been received?

I also emphasise the issue that we have raised significantly. I am grateful to the noble Lord, Lord Johnson, for arranging for us to meet the registrar and some of her officers; it was a very instructive meeting. But, as has been outlined, I want to put on record our continuing concern about whether the level of resources will be fit for purpose, given the scale of change being brought in, the number of companies that we have heard about and the fact that there will be stubborn cases that are difficult to bring to a conclusion. We have had some reassurance that this will not be fixed in stone and that if the registrar feels that more resources are required, they will be able to come back to that. The issue is the sheer capacity and the fact that the status of those working in Companies House is being changed from recording information to taking action when there is suspicion of wrongdoing.

The other area that has generated a great deal of concern is the 25% threshold for beneficial ownership and the possibility of anonymity that it gives, enabling overseas entities access to UK properties and markets. I know there will be more discussion around this, but it is important to flag these matters whenever we have the opportunity. I hope the Minister will acknowledge that this area still presents a problem in getting underneath all the issues that need to be addressed. I thank him for his very clear explanation of the powers in the SI to consent to Northern Ireland dispositions.

I conclude by saying that, yes, we support the changes being introduced, but it is an area of huge concern. Economic crime is still increasing, as we know, and coming back to deal with unforeseen loopholes that might ensue will be an important part of the legislation before us. I very much look forward to the Minister’s response and to continuing the work on this important area.

[The Earl of Minto (Con)]

I thank both noble Lords for their valuable contributions to this debate—not just now but in the past.

The Government are absolutely committed to ensuring that the register is robust and effective at tackling the use of UK property to launder money. These regulations provide mechanisms that ensure the register operates effectively. A clear and effective procedure for the imposition and enforcement of penalties will serve as a deterrent against non-compliance and bad actors, as well as punishing guilty parties, including by potentially imposing charges over their land.

The provisions relating to the dispositions in Northern Ireland extend the same treatment to the entirety of the UK. They allow the registration of land, where it would otherwise be prohibited, for the benefit of those who act in good faith, and ensures that their interests are not affected by the actions of non-compliant overseas entities.

The points that noble Lords have discussed today highlight the necessity of the measures contained in these regulations. I will try to address some of these now. The noble Lord, Lord Wallace, raised a number of extremely important issues, and I will take them in the order I wrote them down.

On the question of proper funding for Companies House, there are two elements of funding, which total a maximum of about £83 million in any one period; that should certainly be enough. I think one can see from the work it has already achieved that it has made great strides. I am not saying the work is finished, but it has made great strides towards achieving the whole purpose of the register and, through that, giving the registrar the leeway to concentrate on the people who have not yet fully complied.

On the continuous rate of compliance, I think we last met here on about 2 May. Since then, Companies House has had 600 more applications for compliance. That rate of about 100 a week is continuing, so the process is working.

Carer’s Leave Bill

Debate between Baroness Blake of Leeds and Earl of Minto

Friday 19th May 2023 Lords Chamber

[Baroness Blake of Leeds (Lab)]

My Lords, I welcome this stage of this important Bill. I acknowledge the very rich debate we had at Second Reading, including the incredible personal testimony from so many Members on behalf of their own families and people they had met in their communities or work. As the noble Lord, Lord Fox, laid out, this is an important first step, but we need to acknowledge that there is still much more to do. I emphasise, to avoid any confusion, that this refers to unpaid leave, although many arguments have been made to move to paid leave.

We have heard very clearly that the Bill will help to relieve the stress and isolation that carers often experience—the loneliness, the impact on mental health and, as we have heard, the disproportionate impact on women. But what we also know, which is not emphasised enough, is that the Bill will benefit employers by reducing the risk of the absenteeism, turnover and retention of staff.

All that remains is to thank Wendy Chamberlain MP, the Bill’s sponsor in the other place; the noble Lord, Lord Fox, for bringing it to the Lords; and the cross-party support we have seen. I also refer to the work by Carers UK from which we have all benefited. I thank carers and their families who have shared their stories and experiences. In particular, I make special mention of my noble friend Lady Pitkeathley; she is very sorry not to be able to be here today. I thank her again for her tireless work over many years and her absolute determination to make progress on this really significant issue.

[The Minister of State, Department for Business and Trade (The Earl of Minto) (Con)]

My Lords, I thank the noble Lord, Lord Fox, for bringing the Bill through the House. The Government have been pleased to support it throughout all its stages. This is in line with our 2019 manifesto, which committed to introduce one week of leave for unpaid carers; I am pleased to continue that support today at Third Reading. I am also very grateful for the cross-party support that the Bill has received.

The Government appreciate the time dedicated by unpaid carers to help those who rely on them for their everyday needs. No one should underestimate the contribution that unpaid carers make. They play a vital role in society, supporting those who are unable to care independently for themselves. Many provide that care while holding down a job. We know that there are some brilliant, supportive and flexible employers out there already who are taking great steps to support those in their workforce with caring responsibilities, recognising the value to both their businesses and their employees of helping carers to stay in work. The Bill will extend aspects of what those employers do voluntarily to all employers, ensuring a baseline of support for all working unpaid carers. This will help to alleviate the pressure that carers—particularly women, who are more likely to provide care—can face as they seek to juggle their work and caring responsibilities.

The new right to carer’s leave will provide more flexibility to those unpaid carers. It will enable them to take more time out of work if they need to. Carer’s leave will allow employees to be absent from work on unpaid leave to provide or arrange care for a dependant with a long-term care need. Eligible employees will be able to take the leave, regardless of how long they have worked for their employer. It will be available from the first day of their employment. The leave will be available to take in increments of half-days, up to a week, to be taken over a 12-month period. Employees will not be required to provide evidence in relation to a request for carer’s leave. Employees taking carer’s leave will have the same employment protections as associated with other forms of family-related leave, including protection from dismissal or detriment as a result of having taken the leave.

I am personally very pleased to support the Bill; it is a huge step in the right direction for our carers, who give their time to help others who need it. I once again thank the noble Lord, Lord Fox, for his sponsorship of the Bill as it has moved through the House. I also thank Wendy Chamberlain and my honourable friend Kevin Hollinrake for their stewardship in the other place and their hard work in putting the Bill forward.

Car Industry

Debate between Baroness Blake of Leeds and Earl of Minto

Wednesday 17th May 2023 Lords Chamber

[Baroness Blake of Leeds (Lab)]

My Lords, I watched this Urgent Question in the other place keenly today but was left disappointed by the number of questions actually answered, so I thank the Minister for coming here to answer ours.

This situation is extremely serious. As we know, all manufacturing is facing supply chain difficulties globally, and our car industry is suffering. Does the Minister agree that our trading relationship with the EU should reflect this? Will the Government follow the sector’s advice by reopening negotiations on the trade and co-operation agreement to protect it from further risk?

[The Earl of Minto (Con)]

My Lords, the Government are acutely aware of the global challenges that the UK car industry faces. We have been leveraging private investment, alongside government support, to bring EV manufacturing to UK shores. The UK remains highly attractive; our workforce is among the most productive in Europe, and we excel in R&D and innovation. The DBT Secretary of State is aware of this issue facing the automotive sector, and is raising this with her counterparts in the EU.

Whistleblowing Framework

Debate between Baroness Blake of Leeds and Earl of Minto

Tuesday 16th May 2023 Lords Chamber

[The Earl of Minto (Con)]

My Lords, I quite agree that taking any form of case to an employment tribunal is risky and difficult for the individuals involved, and it is no less so in a whistleblowing case. When the review is done and we are able to take a look at what the recommendations are—I think I have said this twice already—it will be very surprising if the question of an office of the whistleblower did not come up.

[Baroness Blake of Leeds (Lab)]

My Lords, evidence suggests that the UK’s law on whistleblowing is falling behind international best practice and has not kept pace with the modern workplace or the scale of the problem. We welcome the Government’s announcement of the establishment of the review into the whistleblowing legislation, but perhaps the Minister could tell us when this will report. In the light of that, would he not agree that the Economic Crime and Corporate Transparency Bill, shortly going to Report, provides an ideal opportunity to act now to bring in immediate, obvious improvements? Further, does he agree that requiring all employers to introduce effective internal arrangements would be a beneficial step forward?

[The Earl of Minto (Con)]

I absolutely agree that the current whistleblowing framework is not current best practice. This was basically put in place in 1996 and 1998, and that is one of the main purposes for the review being carried out now. The review is due to complete its work in October this year and will report very soon after that. Hopefully, from that, we can get to a situation where we are able to move forward to something that really is world-class.

Register of Overseas Entities (Definition of Foreign Limited Partner, Protection and Rectification) Regulations 2023

Debate between Baroness Blake of Leeds and Earl of Minto

Tuesday 2nd May 2023 Grand Committee

[Baroness Blake of Leeds (Lab)]

My Lords, I thank the Minister for his opening comments. I think he will be aware that several of us are spending quite a lot of our time on the Economic Crime and Corporate Transparency Bill, which is going through the House at the moment, and many of the issues in the statutory instrument we are discussing today are the subject of ongoing conversations.

We recognise that this is secondary legislation to amend the Act that went through last year. I welcome the Minister’s comment that this is work in progress and that further revisions will be required because there are still some gaps that we may need to consider in future.

I preface my remarks by highlighting the scale of the problem that we are dealing with. I do not think any of us should shy away from the real problem we have in this country now as a result of not taking action sooner. It is a tragedy in many ways that it was the onset of the conflict in Ukraine that necessitated swift action, and it is regrettable that this problem, which had been highlighted before, had not come into our focus and received the attention necessary.

I welcome in the main the provisions in the statutory instrument, but I shall make a couple of comments and ask a couple of questions. I make it clear, as we have done throughout the discussions in this area, that we recognise that the vast majority of companies investing in the UK do so with good intentions and bring great benefit to the country and that we are concentrating on the actions of the relatively small number of bad actors. Sadly, their contribution to this is profound and has done an enormous amount to damage the reputation of the UK on the world stage. I hope that we are united across the Committee in making sure that we take every opportunity to improve the chances of our reputation being recovered and are seeking out problems as they arise.

My main hope is that those at serious risk if information is given out are protected. It is very important that we recognise that there are genuine cases where protection needs to be secured. By the same token, we have to avoid disproportionate burdens and make sure that legitimate investors are welcome to operate in our country.

I seek some clarification. There seems to be some concern that the Act still does not provide a complete definition of what a foreign limited partner is. The description in the Explanatory Memorandum seems rather abstract. I wonder whether this may lead to practical implications where the confusion continues to exist. Reassurance on this point would be gratefully received. Most of all, we want to make sure that the register is populated correctly and effectively. Throughout the discussions on this matters, transparency is paramount in the context of those who will need further protection, as the Minister outlined.

I thank the Minister for his comments about risk, but I want to understand if bringing this instrument forward has led to further thought on the definition of risk. Have we gone far enough? I would like to understand how this is demonstrated and whether there has been an assessment of how well this is working so far. As has been highlighted, the issue of the alternative address could still be problematic. I understand the need for flexibility, but is there a risk remaining? We would like to be confident of the success of this provision. Again, this links to the balance between protection and transparency.

The other area is—if you can describe it as this—cleaning up the register and recognising, as we have heard, that some of the information held is clearly not factually accurate or even worse, as we know there is certainly a measure of intent in some of the entries. Do we know the extent of this? On how many occasions is this going to be necessary? Do we have an estimate of how much of a problem this is and how regular it is? Most importantly—I think this runs through all the debates on the Bill itself—how will this work be resourced? Can we be reassured that there are adequate personnel and resources at our disposal to make sure that we get this done successfully?

What are the sanctions once a forgery or anything factually inaccurate has been identified? Are there punishments? Do we have any evidence of this? Can we have a general clarification around the deterrent factor to make sure that we do not have problems going forward? Obviously, with there being an equivalent provision in the Companies Act 2006, I would hope that we have learned from the experience of working on this. I wonder if there are examples of that that would help to inform the debate.

I understand the Minister’s comments about the deadline of 31 January, but I have heard an estimate that 7,000 companies failed to register. Is that about the ballpark he is suggesting? Since January—we are now in May—has there been an understanding of how successful the action taken against the remaining numbers has been?

There are still other issues and I look forward to other measures coming forward to fill the loopholes. In conclusion, of course we welcome the provisions being made, but are seeking reassurance and confidence that concerns will be addressed, and the necessary changes will be made as we go forward.

[The Earl of Minto (Con)]

I thank both noble Lords for their valuable contributions to the debate. The Government are committed to ensuring that the register of overseas entities is robust and effective at tackling the use of UK property to launder money. These regulations provide the mechanisms that ensure that the register of overseas entities operates effectively. A clear definition of “foreign limited partner” provides greater certainty concerning registrable beneficial owners of overseas entities; I have a full definition for the noble Baroness that I can share. Applicants will be able to identify registrable beneficial owners more easily with a definition that is recognisable across multiple jurisdictions.

The amendment to the protection regime will address the unintended consequences of the regulations as they stand, by removing the requirement to demonstrate the risk of violence or intimidation arising directly from the individual’s association with the overseas entity. The measure on rectification ensures that errors on the register, whether deliberate or accidental, are identified and removed. The points raised by noble Lords highlight the necessity of the measures in these regulations, and I will answer some of them now.

The noble Lord, Lord Wallace, raised the question of accuracy—that is definitely ongoing. I do not think Companies House fully knows the number of inaccurate entries, but it still stands by the estimate it has used before of there being 32,000 registrable entities in total. We are up above 28,000 now. Although there will be some inaccuracies, I hope that by continuing to approach these organisations, Companies House will iron them out. I have not been involved in this sort of thing before but, despite the fact that it has taken some time to get there—it took the atrocious situation in Ukraine to bring this to the fore—it has certainly made some significant progress in getting that many people to register in such a short period of time. However, the point is well made that the accuracy of the register is paramount, including in terms of lost revenue.

On the younger people mentioned, I understand there are issues of family trusts, particularly with UK beneficial owners. That point, too, was well made. I could go through what is meant by the “foreign limited partner”, but I would rather share that with the noble Baroness. I hope that answers some of the more direct questions, and I will write to noble Lords if there is anything that I have not answered.

[The Earl of Minto (Con)]

Behind the noble Lord’s question is the question of resource. Companies House has 120 full-time equivalent staff working on this and pursuing precisely what the noble Lord referred to. I hope that will continue to improve the situation as time moves on, but the point was very well made.

[Baroness Blake of Leeds (Lab)]

Can I link that to the question I asked about what punishment or sanction there is? I apologise if the Minister is coming to that.