Sub-postmasters: Compensation
Baroness Burt of Solihull Excerpts(4 years, 2 months ago)
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Lord Callanan
First, I pay tribute to my noble friend for rightly pursuing these matters with dogged determination. We probably would not be where we are today without his work and that of many others on this issue. The Government recognise the strength of feeling about the negative impact that the court case has had on postmasters. As my honourable friend, Paul Scully MP, announced at BEIS Oral Questions on Tuesday, we are looking into what needs to be done. We will outline the next steps following the Prime Minister’s announcement as soon as possible.
Baroness Burt of Solihull (LD)
My Lords, we on these Benches welcome the Prime Minister’s commitment to an independent inquiry into what he described as a “scandal”. We hope that those who did not take legal action will get full and rapid compensation, though I appreciate the Minister’s comments on the set-up. But no compensation can make up for the emotional trauma and loss of reputation, livelihood and health that has cost people dearly. Will the Minister agree, like us, to press for full compensation as well as restoration of moneys lost?
Lord Callanan
The noble Baroness makes an important point. In the near future, a scheme will be announced with the aim of addressing the historic shortfalls for postmasters who are not part of the group litigation. The Government will challenge and monitor the progress of this scheme. There is also the important issue of people convicted of offences: 57 cases have been referred to the Criminal Cases Review Commission. If a case is referred to the Court of Appeal and a conviction is overturned, there are avenues for people to pursue compensation there as well.
National Minimum Wage (Amendment) Regulations 2020
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The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the purpose of the regulations is to increase the national living wage and all of the national minimum wage rates from 1 April 2020. The regulations also include an increase in the accommodation offset rate, which is the only benefit in kind that counts towards minimum wage pay.
The national living wage has had a positive, real-terms impact on the earnings of the lowest paid. Between April 2015 and April 2019, those at the fifth percentile of the earnings distribution saw their wages grow by almost 11% above inflation. This is faster than at any other equivalent point in the earnings distribution. The labour market has continued to perform well: the employment rate is at a record high of 76.5%, while the unemployment rate is at 3.8%, the lowest rate since the 1970s.
From April, the national living wage for those aged 25 and over will increase by 51p to £8.72, which is a 6.2% increase. The 51p increase in April will mean that full-time workers on the national living wage will see their pay increase by £930 over the year. This national living wage increase is projected to meet the Government’s target of 60% of median earnings in 2020. The national minimum wage rate for 21 to 24 year-olds will increase by 50p, meaning that those in this age group will be entitled to a minimum of £8.20, an annual increase of 6.5%. Those aged between 18 and 20 years old will be entitled to a minimum of £6.45, which is an annual increase of 4.9%, while those aged under 18 will be entitled to a minimum of £4.55, an annual increase of 4.6%. Finally, apprentices aged under 19, or those aged 19 and over in the first year of their apprenticeship, will be entitled to £4.15, which is a 6.4% increase. All of these above-inflation increases represent real pay rises for the lowest-paid workers in the United Kingdom.
All the rates in these regulations have been recommended by the independent and expert Low Pay Commission. As noble Lords will be aware, the commission brings together employer and worker representatives to reach a consensus when making their recommendations. The Government asked the commission to recommend the rate of the national living wage such that it reaches 60% of median earnings in 2020, subject to sustained economic growth. For the national minimum wage, the commission has recommended rates that increase the earnings of the lowest-paid younger workers as high as possible without damaging their employment prospects. I thank the Low Pay Commission for its extensive research and consultation, which has informed these rate recommendations, all of which is set out in its 2019 report, published in January.
The Government have further pledged to raise the national living wage to two-thirds of median earnings and apply it to those aged 21 and over by 2024. The Low Pay Commission will continue to have a central role, ensuring that the lowest-paid workers benefit from national living wage increases.
On the subject of enforcement, the Government are clear that anyone entitled to be paid the minimum wage should receive it. That is why we have more than doubled the enforcement and compliance budget, with funding reaching £27.4 million for 2019-20, up from £13.2 million in 2015-16. HMRC follows up on every complaint it receives, even those which are anonymous. This includes complaints made to the ACAS helpline, via the online complaint form, or from other sources. Increasing the budget allows HMRC to focus on tackling the most serious cases of non-compliance, while educating employers into compliance. In 2018-19, HMRC identified a record £24.4 million in pay arrears for over 220,000 workers, and issued more than £17 million in penalties for non-compliant employers. The Government have taken further measures to help employers get the rules right first time by providing improved guidance and support.
While increases in the national living wage and national minimum wage represent a cost to some businesses, the Government have introduced a number of measures to support them. For example, we have cut the corporation tax rate from 28% in 2010 to 19% today, benefiting more than 1 million companies and delivering the lowest rate in the G20.
Record increases to the national living wage and national minimum wage rates are just part of this Government’s agenda to make the UK the best place in the world to work. I commend the draft regulations to the Committee.
Baroness Burt of Solihull (LD)
My Lords, it would be churlish not to congratulate the Government on achieving their target of 60% of median earnings this year. I also welcome the increased funding for enforcement.
The increase in the national living wage will provide a considerable uplift for the working poor in our country. A top rate of £8.72 is getting closer to the Living Wage Foundation’s recommended £9.30—I presume that it will be further uprated in due course—but it is still a way off the London living wage of £10.75. I should probably know this, but can the Minister explain why there is no Low Pay Commission London minimum wage, when clearly it is more expensive to live in London than anywhere else?
The difference between the minimum wage and the living wage is that the living wage is based on a basket of goods and services which should give a basic but acceptable standard of living. It therefore follows that the national minimum wage is not sufficient for someone to live on. Instead, it has to be subsidised by the Government through universal credit and various other benefits.
I can see that different individual and family circumstances will need a different underpinning level of help. The idea of always making work pay was quite a genius move on the part of the Government when it came in, but implementation was, and still is, another story. Fortunately, that does not come within our remit today. We are where we are and there is something to celebrate.
The adult rate for 21 to 24 year-olds received the greatest percentage uplift, at 6.5%, but the youth rate for under-18s has fared proportionately worse, at 4.6%, or the princely sum of 20p an hour. I know that it is argued that these youngsters enter the world of work with very little knowledge, but it cannot help their self-esteem to give them a 20p rise, especially if they and their families need that money.
I wish I had a crystal ball to see whether, in a time of full employment and even greater skills shortages, not helped by this Government’s immigration policies, wage rates will rise above and beyond the minimum. Unfortunately, I do not have a crystal ball, except to predict that we are all likely to meet here next March. Who knows what state the country and wage rates will be in then?
Lord Stevenson of Balmacara (Lab)
My Lords, I welcome the SI before us. As has been said, it is interesting to see every year the amount of work that goes into providing the analysis and evidence for it. It is of a very high standard and one enjoys reading the recent literature on these areas. I know that it has been updated this time, although I am afraid that I have not gone to the original texts.
I should have declared my interests. I am the father of a child who is receiving the apprentice wage, being over 19 and still in the first year of his apprenticeship—although I think that comes to an end next week.
Having said that, I want to come back to two questions I have asked previously. The first concerns the disregard for accommodation, which there is not very much detail about. I do not particularly need an answer now, but will the Minister write to me at some point in the not-too-distant future explaining why the percentage used for the disregard for accommodation is still at variance with the figures used for any of the others? My simplistic approach to this is that if there is a broad range of indicators which suggest that pay needs to increase on a particular range, and there are reasons why that might vary across the individual numbers, why do we come to a different figure for the accommodation disregard, even though it affects all those in the sector? It is too complex an issue for the Minister to respond to today, but I would be grateful to receive a letter on that point.
The noble Baroness asked about the work on making sure that employers are paying the national minimum wage, subject to a big increase in funding announced in last year’s Budget. We do not get much detail in these figures about what exactly is happening. A reference on page 37, in paragraph 146, suggests that there will be a change this year, because a greater number of employees are in the lower bands of the national living wage and there will therefore be instances where non-compliance could occur. In fact, there could be an increase in that. There is no explanation given, but if there is anything of significance, perhaps the Minister could write to me about it. I just note it at this stage.
The basic concern is that although the budget has increased and the numbers are down, an alarmingly large number of people are still thought to be affected. In April 2019, it was estimated that 424,000 jobs with pay less than the national minimum wage and national living wage were held by employees aged 16 and over. That is 1.5% of all those aged 16 plus in UK employed jobs. It is true that that is less than last year, when it was 1.6%, but it is still an awful lot of people. Will the Minister say what activity is going to be involved in the expenditure of the greater funds made available for enforcement? Does he judge that it will be successful?
Post Office: Horizon Accounting System
Baroness Burt of Solihull Excerpts(4 years, 2 months ago)
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Baroness Burt of Solihull (LD)
My Lords, we thank the noble Lord, Lord Berkeley, for bringing this debate today. On 4 February, the noble Lord, Lord Arbuthnot, asked a Question on this subject. It transpired from that that the Post Office had the power to be judge and jury for its own prosecutions. Trusted, honest people suffered at its hands because it refused to believe that the Horizon computer system had glitches that caused discrepancies. This dragged on for years, until last December the directors of the Post Office finally had to admit that they had got it wrong, but not before people had had reputations, finances and lives ruined.
The thrust of this debate is whether the Government intend to take action against the directors of the Post Office, who presided over almost 20 years of mismanagement, incompetence and downright illegal activity. We have heard many instances this afternoon of how the behaviour of the Post Office was, according to Lord Justice Coulson, who judged the Post Office’s appeal, like that of a “Victorian factory owner”, as the noble Lord, Lord Bichard, said.
It is shocking and, even with the benefit of hindsight, it is still hard for me—among many others, I am sure—to understand how things have come to the situation that we find ourselves in. Ten years ago we were talking about reversing the decline in numbers of sub-post offices and giving them a much wider remit. Indeed, they were to be the face of government in the community. We were going to combine sub-post offices with other community services—the local shop, the pub, the library—so that they would be doing more, offering those wider range of services for longer than traditional opening hours and fitting in with normal local shop opening hours. They were not going to be doing less, with much reduced revenue coming in over longer hours, to the extent that a recent survey by the National Federation of SubPostmasters found that three-quarters of sub-postmasters and sub-postmistresses are earning below the minimum wage.
Of course digitalisation and changes in shopping trends have taken their toll, but sub-postmasters have been prevented from extending their own parcel service by an exclusive contract with the Post Office itself. They are hamstrung from competing in today’s marketplace, so they are left with servicing the needs of those unconfident with buying or seeking services online—the old and the poor. Yet Paula Vennells, the previous CEO, left the Post Office for the NHS last year with a CBE, in part for her services to the Post Office.
The noble Lord, Lord Arbuthnot, has been a strong campaigner on behalf of the sub-postmasters and I am delighted that he was able to speak in the gap today. He has raised the question of the Criminal Cases Review Commission, which is considering the impact of the out-of-court settlement on the 34 Horizon-related cases that it had under review. But, he has asked, what about the rest of the cases? What about the people such as Mrs Shaheen, who was not listened to despite identifying at least 11 errors on the Horizon system? She was sent to prison after accepting a plea bargain to drop the theft charge against her. She and so many others deserve justice. They deserve to have their names cleared and they deserve reparation. An out-of-court settlement of £57.75 million, from which legal expenses have to be paid, leaving only £12 million for sub-postmasters themselves, cannot be the end of the story. That figure of £12 million came from the noble Lord, Lord Duncan of Springbank, on 4 February.
We know that Lord Justice Coulson said that he will refer Fujitsu, the providers of the Horizon system, to the Director of Public Prosecutions for possible further action, but what about the people who must admit their own culpability? What is the point of having directors without responsibility? Will those people be referred to the DPP? They must be brought to book.
We have a new chief executive in the Post Office and, we are told, a new regime. On 4 February, the noble Lord, Lord Duncan of Springbank, mentioned a new national framework that he insisted would ensure that
“the past situation cannot be repeated.”
Can the Minister give us some detail on that and when he estimates that this framework will be in place? The noble Lord, Lord Duncan, also said:
“I cannot comment on the individuals who were in positions of power during that time because I simply do not have the answer.”
Does this Minister have the answer now? The noble Lord said that
“during a significant period in the history of the Post Office, wrongdoing took place.”—[Official Report, 4/2/20, cols 1710-11.]
For the sake of the sub-postmasters who have been wronged, when will they get justice?
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
I thank the noble Lord, Lord McNicol, for his welcome. Dealing with some domestic issues makes a great change from talking endlessly about EU renegotiation and the various withdrawal Bills. I am delighted to be doing this job, tricky though many of the issues are.
I thank the noble Lord, Lord Berkeley. We are reunited in policy content after our time together dealing with transport issues. He has raised an important debate. I have been in post for only 10 days. I was not aware of this issue in detail, but I have of course seen the various press comments and summaries about it. The debate has given me an excellent opportunity to familiarise myself with the issue. I say at the outset that I share much of the horror and concern raised by many noble Lords.
I assure the Committee that the Government fully recognise the vital role postmasters and their post offices play at the very heart of our communities. It is therefore only right that their treatment is of the utmost importance to us so that they can continue to deliver a service so highly valued by many up and down the country. The Government also value the economic and social importance of post offices to people, communities and businesses across the UK. That is why, since 2010, successive Governments have made a commitment to safeguard the Post Office network and ensure its sustainability.
Let us consider the current facts regarding the Post Office. Between 2010 and 2018 the Government provided nearly £2 billion to maintain and invest in a national network of at least 11,500 post offices. We set requirements so that 90% of the UK population are within one mile and 99% are within three miles of their nearest branch. Government investment has enabled the modernisation of more than 7,000 branches, added more than 200,000 opening hours per week and established the Post Office as the largest network trading on Sundays.
Post Office banking services enable 99% of personal and 95% of business banking to be done in any of the 11,500 branches, supporting consumers, businesses and local economies in the face of accelerated bank closures. The financial performance of Post Office Ltd has also improved, with the Post Office making a profit for the third year in a row, thereby reducing government funding from £415 million in 2013-14 to £50 million in 2020-21. All this has been achieved because of the able and hard-working women and men who are proud diligently to serve their respective communities each working day. I say that as background to the appalling circumstances that we address today.
On the Horizon accounting system litigation, postmasters are a significant part of the sustainability and future of the Post Office. In relation to the Horizon accounting system case, Post Office Ltd has accepted that, in the past, it got things badly wrong in its dealings with a number of postmasters, and it is right that it has apologised. As noble Lords are aware, on 11 December, the Post Office and claimants reached a comprehensive resolution to the litigation following several days of respectful, challenging and ultimately successful mediation. The Post Office chair, Tim Parker, said:
“We are grateful to the claimants for taking part in this mediation and agreeing a settlement, bringing the Group Litigation to a close. I am grateful to Nick Read for his important engagement in the mediation process. We accept that, in the past, we got things wrong in our dealings with a number of postmasters and we look forward to moving ahead now, with our new CEO currently leading a major overhaul of our engagement and relationship with postmasters.”
I reassure the noble Lord, Lord Berkeley, that this Government do not take for granted the financial and emotional suffering that the impacted postmasters endured in relation to issues with the Horizon system, which is why this Government are pleased that a resolution has been arrived at to settle this long-running litigation.
A number of noble Lords, particularly the noble Lord, Lord McNicol, talked about the Horizon system. That question was central to the subject of the litigation and the second Horizon issues trial when judgment was handed down on 16 December. The judgment made clear that it is a historical analysis of the Horizon system at a specific point in time in the group litigation and not a judgment on the system today. When handing down that judgment, the judge found that the Horizon system as it is today is “relatively robust”.
We are committed to working alongside the new CEO of Post Office Ltd, Nick Read, to implement the necessary cultural and organisational changes highlighted by the litigation. Nick has shown that he is personally committed to learning the lessons and is currently leading a major overhaul of the Post Office’s engagement and relationship with its postmasters. The Government have proactively challenged the Post Office CEO and chairman personally to strengthen its relationship with postmasters and take on board the lessons learned through the litigation. Preparation for this debate offered me the opportunity to speak to Nick Read this morning and we had a productive conversation about all the issues, where he reassured me of the steps that the Post Office is taking on this.
The noble Lords, Lord Bichard and Lord Berkeley, made a number of points about the responsibility of BEIS and the Government for many of these issues. Let me explain that BEIS relied on the Post Office management to investigate the issues with the Horizon system and the Government were assured that the system was robust and the issues raised by the postmasters were being handled appropriately. BEIS pressed management on these issues and was given consistent advice from the company’s experts that appeared to verify those claims at that time. There have been numerous attempts over the years to try to resolve these issues, including an independent investigation in 2013 and a mediation scheme in 2015. Those failed to resolve the issues, leaving the court as the only means of providing the independent review that all sides needed. In hindsight, of course, facts came to light through the litigation that revealed that the advice received over that period was flawed. As such, the Government will monitor closely the progress that the Post Office is delivering on its programme of commitments following the settlement. That relationship will be constantly reviewed.
As I said, I spoke to the CEO, Nick Read, this morning and I was glad to hear that improvements at all levels of the Post Office are well under way, reflecting many of the lessons learned from this difficult experience, which will enable him to take forward a modern Post Office. That means a company fostering a genuine commercial partnership with postmasters, where the necessary support for them to operate branches successfully is available.
Following the agreed settlement, the Post Office is also continuing to directly address past events for affected postmasters. A scheme will be announced in the near future with the aim of addressing historical shortfalls for postmasters who were not part of the group litigation settlement.
The noble Lord, Lord Berkeley, asked about compensation for those affected. The settlement agreed with the Post Office included all legal and other costs. In those circumstances, the Government cannot accept any further request for payment. While the process was undoubtedly challenging, the Government thank all the claimants for participating in order to finally resolve this matter and enable both parties to move forward.
My noble friend Lord Arbuthnot raised the issue of the remuneration of postmasters for their losses. As I said, following that agreed settlement, the Post Office is continuing to directly address past events for affected postmasters. A scheme will be announced in the near future with the aim of addressing those historical shortfalls for postmasters who were not part of that group litigation.
I was pleased to hear from the CEO of the new personalised support that postmasters are now receiving. This includes newly established area managers able to deliver support on the ground, an improved branch support centre to support teams throughout the UK, an overhaul of postmaster training and, above all, a further increase to postmaster remuneration.
My noble friend Lord Arbuthnot asked about the National Federation of SubPostmasters and its independence from the Post Office. It is fair to say that the Post Office has acknowledged criticisms from the litigation about its dealings with postmasters, and is accelerating its programme of improving how it works with both postmasters and the NFSP. We in government are also engaging with other stakeholders in the postmaster community, including the Communication Workers Union, to understand properly the views of postmasters.
Going forward, government Ministers and officials in both UKGI and BEIS will hold the Post Office to account for these reforms, along with wider cultural and organisational changes, and will seek clear evidence that real positive change is taking place.
The noble Lord, Lord Berkeley, asked about the actions of Fujitsu and the cases arising from the litigation.
Baroness Burt of Solihull
Before the Minister leaves the subject of the accounts that are outstanding, can he confirm—yes or no—whether any director of the Post Office will be held to account for their actions?
Lord Callanan
I will come on to that shortly.
I was answering the noble Lord, Lord Berkeley, about Fujitsu. When handing down the Horizon judgment, the judge raised concerns in relation to the evidence provided by Fujitsu employees. Those cases have been referred to the Director of Public Prosecutions. It is, of course, a matter for the DPP to consider what action, if any, he would like to take following that referral.
My noble friend Lady Redfern asked about the kind of settlement and referred to it being inadequate, following the comments by my noble friend Lord Duncan. We recognise that it has been, to put it mildly, a difficult period for postmasters who have experienced the issues covered by this litigation. Mediation took place between the parties in confidence and, while I can confirm that the total amount of the settlement was £57.75 million, I am sure the Committee can appreciate the legal sensitivities of the matter. While the financial settlement is a major step towards resolving some of these grievances, there is more for the Post Office to do. It has committed to a major programme of work to overhaul its relationship with postmasters, which we in government are determined to see delivered.
My department has taken steps to strengthen the mechanisms for doing so. This has included expanding the BEIS Post Office policy team that works closely with UKGI in holding the Post Office to account at an official level. It also means strengthening the relationships and responsibilities of the Post Office, BEIS and UKGI through a new framework document that formalises that relationship and the responsibilities of those parties involved. I can announce that this will be published shortly. In addition, BEIS has established, and chairs, a quarterly working group involving the NFSP and the Post Office. The working group is a forum for discussing Post Office and postmaster relations and provides the opportunity for highlighting concerns the postmasters may have. As I said earlier, the Government are also engaging with other stakeholders in the postmaster community, including the Communication Workers Union, to understand the views of postmasters. Progress will also be monitored at the highest levels of the Post Office in quarterly ministerial meetings with its CEO, Nick Read.
I can confirm, too, to the noble Baroness, Lady Burt, that we are in the process of establishing the framework document to govern that relationship, and that will be published soon. I will now address her point about holding directors to—
Trade Unions
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Baroness Burt of Solihull (LD)
My Lords, I apologise to the House— and in particular to the noble Lord, Lord Jordan, as I unfortunately missed part of his remarks—for my late arrival into the Chamber. I congratulate him on securing the debate. I thank the Deputy Speaker who was on the Woolsack at the time for being so understanding in the event of a genuine misunderstanding and for allowing me to speak.
Liberal Democrats value the role of trade unions and we are great advocates of collective action when those in power display intransigence in the face of injustice and when there is a strong desire for change. Being part of something brings many benefits. Achieving change together and just knowing that you feel the same as others is very comforting. That is kind of what political parties are for, is it not? Many Liberal Democrats are members of trade unions. Indeed, many Liberal Democrat Members of your Lordships’ House are or have been trade unionists. The noble Lord, Lord Glasman, mentioned Lloyd George in the context of the ILO. He, of course, was a Liberal. My membership of a trade union was restricted to a brief period with the NUJ, but my noble friend Lord Goddard talked movingly of his more involved experiences and outlined the crucial role of trade unions in health and safety. He was the first of several noble Lords to do so; the noble Lord, Lord McKenzie, made a particularly powerful argument in his remarks.
One of the first Bills I worked on when I came to this place was the Trade Union Bill. I remember the shock on reading it and what it proposed to do. I immediately recognised that it was designed to emaciate the trade union movement and take away much of its power and funding. This was something the Liberal Democrats had managed to prevent in coalition, but now we saw exactly what our not being in government was going to mean. Like my colleagues in coalition, I recognise the importance of balance in good, productive industrial relations.
Frankly, I have never understood why industrial relations should be a zero-sum game. Everybody wins when trade unions and employers work in partnership. Both should benefit from increased productivity, facing the future of their organisation together. This lesson was brought home to me when I was MP for Solihull and difficulties hit the Jaguar Land Rover plant around 2006 to 2007. We feared that either the Solihull or Castle Bromwich plants would need to be closed, but JLR did neither of these things. It came to an agreement with the trade unions that workers from both plants would go on short time and that some staff would take sabbaticals. Skills and jobs were not lost and JLR was ready for the upturn without incurring staff shortage problems and damaging extra costs that it could not afford. The upturn came and the company ploughed billions into investment. Everybody benefited.
Why am I telling your Lordships this? It is because the lesson for me is that to get the best for companies and their workforces there has to be partnership, understanding of each other’s point of view, sharing and giving of information, and a longer-term perspective. Most noble Lords in this House have been around long enough to look back to the winter of discontent, Margaret Thatcher’s efforts to bring down the power of the unions and the suffering caused to us all. We cannot live in those days any more. But in the Trade Union Bill in 2016 I detected an echo of those old, tribal, almost visceral rivalries. We all know that that is no way to run a modern economy.
This year, we celebrate 100 years of the ILO. I did not know very much about the ILO before today, so I am very grateful to the noble Lord, Lord Balfe, for the history lesson and the noble Lord, Lord Lea of Crondall, for his thesis on the nature of tripartism, which I shall read about again afterwards.
The noble Lord, Lord Parekh, spoke about how trade unions, through the ILO, participate in creating more democratic citizenship. That is a valuable lesson for us. Several noble Lords talked about the importance of the role that the ILO has played and continues to play today. The noble Lord, Lord Adonis, talked about the importance of the enforcement of basic standards and how we fall far short of ILO standards. The ILO is not just about the past: it is about the future for us all, so I would like to wish the ILO a happy centenary and wish it on its way for the future.
What then should government companies and trade unions do to fit themselves for the future? Many noble Lords spoke about that. The noble Baroness, Lady Prosser, talked about how trade unions do not attract enough young people in a changing environment. Good luck to her in her work. Several noble Lords mentioned the image of trade unions putting many potential new members off. I hope that they will address that. The noble Baroness, Lady Lane-Fox, talked about dramatic changes in the very nature of work—the poor pay and conditions endured by many in the gig economy and others. I hope that her wish to reinvigorate the trade union movement and to build digital skills will be heeded. The noble Lord, Lord Adonis, talked about the need to help more people in the gig economy.
For what it is worth, here is my vision. I want a social contract between everyone in this arena. I want companies taking more responsibility, not just for involving their workforce as prescribed in the corporate governance code introduced last year and not just a mentality of “We’ve got a worker on the board, so we are compliant”. For a modern economy, it has to go far further than that. Companies need to have social contract with their workers, but also with the communities in which they operate. They are not independent entities operating outside the bounds of society. They are part of the fabric of our country and should be good neighbours, have respect for the environment in all senses and leave it richer not poorer for their contribution.
It is incumbent on those in government to create the framework in which companies operate fairly, pay fairly and treat people fairly. The noble Lord, Lord Murphy, talked about the importance of the relationship between the Government and the trade unions and I hope that in this and future Governments that will heal and there will be a more co-operative approach.
Today is about trade unions. Trade unions need to abandon their old tribal rivalries. It is not about them and us. They are in danger of becoming an anachronism, with membership numbers nearly halving since their peak in 1979, despite a much higher number of people in work. Yet arguably the need for trade unions in some sectors has never been greater. The noble Lord, Lord Morris, spoke movingly about the plight of the working poor, and the noble Lord, Lord Whitty, described working conditions for a social worker who was not paid between calls. The Government have now legislated for that, so I am sure that the noble Lord had advised him or her accordingly. The noble Baroness, Lady Lane-Fox, gave a great insight into workers in the gig economy. They will be hard work for trade unions to represent, as are other low-paid workers on precarious contracts. I hope that we see an important development after the growth of the gig economy and with developments in work. I sincerely hope they step up to the plate and embrace the challenges to come.
Companies: Parental Leave Practices
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Baroness Burt of Solihull
To ask Her Majesty’s Government when they expect to issue their consultation on requiring transparency in publishing parental leave practices for companies with over 250 employees.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, this proposal was announced last October. The department has been engaging with business and those representing employees to gather their views on the proposal and how to make it work. A public consultation on the Government’s proposed measures will be published in due course.
Baroness Burt of Solihull (LD)
I am grateful for that Answer and glad that the Government have finally announced that the public consultation will be this summer. I welcome the Government’s aspiration in the initial statement towards an inclusive economy. Does the Minister therefore agree that the requirement to publish parental leave policies would, as with the gender pay gap, shine a light on which companies are inclusive and help potential recruits to make good decisions about the best company for them, without inviting potential embarrassment and even rejection by having to ask about parental leave policies at the interview?
Lord Henley
My Lords, the noble Baroness makes a very fair point. The purpose of requiring employers to publish parental leave and pay policies is so that applicants can make an informed decision about whether to combine a job with caring for their families. At present, as she will be aware, applicants must ask prospective employers for details of parental leave and pay policies. Many people are reluctant to do this, which is why my right honourable friend made that announcement and why we are working towards this. As I said, we hope to publish the consultation soon.
Consumer Rights Act 2015 (Enforcement) (Amendment) Order 2019
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Baroness Neville-Rolfe (Con)
My Lords, I support this measure, which will improve the enforcement framework for unsafe consumer products—always a concern of mine because of my background in retail and at the business department. I want to raise two issues. The first is the adequacy of resourcing for trading standards in their important work on product safety. I welcome the new Office for Product Safety & Standards in Birmingham and hope that, through the Minister’s good offices, some of us might be able to visit it on some future occasion. Local authorities are squeezed. I fear that trading standards, which do such an excellent job across the country, do not have the funding they need to tackle product safety and product counterfeiting, which is often a cause of safety incidents in some local authority areas.
The second issue is Whirlpool. I would like an update on the recall of Whirlpool tumble dryers. I am not entirely clear on what this SI adds in the case of electrical white goods, which, as the Minister said, are already regulated, but Whirlpool is mentioned on page 3 of the Explanatory Memorandum and the 10 days of BEIS consultation on the recall are nearly up. What are the Government’s plans in respect of this matter and, even more importantly, of future enforcement of product safety more broadly? What are the criteria for recalls and speed of response, which in the case of Whirlpool has sadly been very slow—I think nearly four years, although I must commend current Ministers for moving ahead on that. Can the Minister clarify the numbers involved? I understand from Which? that the recall will involve 300,000 to 500,000 dryers, which is a fall of about 500,000 in the department’s estimate of the number of unmodified dryers since last year. Yet only some 50,000 have been modified since then, so I do not see how the numbers add up. Can the Minister also kindly advise—in writing if need be, because I appreciate that these are detailed questions—on the number of modified dryers that have caught fire, and on why the Government are comfortable, as stated in Parliament on 17 June, that they are low risk. I hope for all our sakes that this judgment is correct. We should give the owners of modified dryers further comfort if that is possible.
Baroness Burt of Solihull (LD)
My Lords, I thank the Minister for his explanation of how the investigatory powers of consumer law enforcers will be consolidated and simplified through this statutory instrument. It seems that these measures are needed in the face of mounting consumer concerns over the safety of the products that we buy.
It seems eminently sensible for the Secretary of State, or the Office for Product Safety & Standards on his behalf, to be able to investigate claims about unsafe consumer products falling within the ambit of the General Product Safety Regulations.
Lord Henley
Again, my noble friend is absolutely correct. I can remember seeing campaigns of exactly that sort. It is important for the consumer, or rather the original purchaser of a machine, to be able to identify what it is, which is why on occasion there have been such advertisements, as my noble friend points out. As I said, I would prefer to write in further detail to her on that issue.
I will now deal with the whole question of resourcing, not only of the new OPSS but of local authorities. As we have made clear, some £12 million has been made available to the OPSS, and we believe that that figure is an adequate sum. My noble friend asked whether she could visit its office, and I am sure that such a visit can be arranged through my department. If she would like to get in touch, we can send her up to Birmingham as soon as the Whips allow such visits to take place, and if other noble Lords wish to take part, that is obviously a matter for them. That money is for the OPSS; local authorities are funded through the general local authority grant, and there is no ring-fenced budget. However, we believe that, whatever difficulties local authorities might have, by giving the OPSS equivalency of investigatory powers, it can certainly support trading standards at a local level. The support of the OPSS, which employs some 300 staff, can be of extraordinary use to local authorities, providing training, for example.
I turn next to the question of EU exit, raised by the noble Baroness, Lady Hayter. Again, I make it clear that—although this issue is possibly beyond my pay grade—delivering the negotiated deal remains the priority and we continue to make appropriate arrangements in the event of no deal. We have created a new, UK-specific market surveillance database that will allow market surveillance authorities to record product safety and compliance incidents. That database will give the United Kingdom a rapid alert mechanism for dangerous products which will allow for product recall to protect consumers.
I turn now to the impact on small business. The noble Baroness, Lady Burt, was worried about the lack of an impact assessment. There is no impact assessment because the order gives powers to public bodies and does not place a burden on business itself. A full impact assessment was carried out in 2013, which I can make available to her. It concluded that there was a zero cost to business and a net benefit to business of £5.3 million by consolidating and simplifying the process. There is no reason to assume that those underlying assumptions have changed.
Baroness Burt of Solihull
Before the Minister sits down, paragraph 13.1 of the Explanatory Memorandum states:
“This instrument does not directly apply to activities that are undertaken by small businesses”.
I am not sure that what the Minister is talking about is quite the same thing. Perhaps I am getting confused here, but would he have a look at this issue and write to me? I should be very grateful.
Lord Henley
I think it is probably best if I write to the noble Baroness about the meaning of paragraph 13. I think it makes it clear that the instrument governs the investigatory powers of the Secretary of State and others with enforcement processes, so there is no specific impact on small businesses. It does not suggest that small businesses are exempt from the effect of the order, should they be making electrical goods, but I had better write to her on that detail if there is more I can offer.
Without the order, we would not be maximising the potential of the new regulator, the Office for Product Safety & Standards, to take effective action against unsafe products. If we did not do that, ultimately, the British public would have less protection from unsafe products and non-compliant businesses. That is not what the Government want. We are committed to making the United Kingdom’s product safety system the best in the world and ensuring that our regulators have the right tools to protect our people. This is a further step towards achieving that goal, and I commend the order to the House.
Employment Rights (Miscellaneous Amendments) Regulations 2019
Baroness Burt of Solihull Excerpts(5 years, 1 month ago)
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Baroness Burt of Solihull (LD)
My Lords, I am grateful to the Minister for outlining the main provisions in this suite of SIs. I have to say, it is a great pleasure not to be talking about Brexit, and to be talking about improvements in employment rights following the Taylor report. I record my thanks to the TUC for its briefing, although I do not necessarily agree with all its conclusions and comments.
It is very important that we move with the times, ironing out some of the unintended consequences of previous legislation and adapting to some of the issues developing through changes in the ways that we work. The Swedish derogation is one of the unintended consequences. I well remember introducing the Agency Workers Regulations 2010 when I was in another place. We introduced the right for agency workers to receive the same employment and working conditions as permanent staff after 12 weeks of service. The Agency Workers (Amendment) Regulations seek to remedy this loophole, which meant that some employers were getting out of giving full employment rights to agency workers by using Regulations 10 and 11 to waive the right to the same pay as a permanent worker if they signed a “pay between assignments”, also known as the Swedish derogation, which promised to pay in between assignments. Some employers were abusing this regulation, not paying material pay between assignments by keeping their staff on artificial, minimum hours contracts or deducting their “between assignments” pay from their “on assignment” pay. This Swedish derogation is to be revoked on 6 April 2020. Nothing good is lost—businesses will still be able to contract to pay agency workers between assignments after revocation. However, workers will not be able to opt out of equal pay rights after 12 weeks, which is a welcome protection for potentially vulnerable agency workers—so all good there.
The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019 introduce the welcome reform that employment agencies must give the worker information before a contract is agreed—on pay, benefits, costs, deductions and fees. It must also include the minimum rate of remuneration payable to the work seeker and the nature and amount of any deductions made to their remuneration. It must also include a worked example of a payslip. The first payslip often comes as a bit of a shock to employees, let alone an agency worker, when they see all the deductions. This key information sheet should improve transparency around pay arrangements; it is very welcome.
The final, and also very welcome, SI is the Employment Rights (Miscellaneous Amendments) Regulations 2019. These increase the maximum level of penalty available for,
“aggravated breach of a workers employment rights",
from £5,000 to £20,000. I am not entirely sure what “aggravated breach” would entail. In his remarks, the Minister talked about the minimum wage. Is it wider than that? I understand that it would persistently be breaching employment law, but how many breaches would there need to be before it becomes aggravated? This opens up the question of how many breaches are happening at the moment. The Explanatory Memorandum says that, since introducing the penalty for aggravated breach, 31 penalties have been issued. Can the Minister confirm that this 31 relates to total time since the Employment Tribunals Act 1996? That would indicate to me that there must have been more persistent breaches of employment law than that. I think it is absolutely fair to raise the limit of fine for an aggravated breach, but this will not be much of a deterrent to an employer if there is very little risk of detection. The Minister may not have the figures relating to how many companies have been inspected since 1996 and what that constitutes as a proportion of the total number of companies, but would he be so very kind as to write to me with the statistics that the Government collect regarding inspections and prosecutions for non-aggravated penalties issued since 1996, or whichever is the correct date of the legislation coming in?
A second welcome part of this SI is the extension of the right to a written statement to “dependent contractors” as well as employees. Here I would appreciate some clarification from by the Minister. I am taking “dependent contractor” to include individuals in the gig economy, but I was hoping for a little more in the explanatory notes. I would be grateful if he could write to me, or point me in the right direction, to help me understand a little better the issues facing dependent contractors. I do understand that the Government are consulting on employment status, and that there has certainly been a lot of controversy over the employment status of employees in the gig economy. Could the Minister inform the House what progress is being made on this?
The third provision was to lower the percentage requirement for a valid employee request for the employer to negotiate an agreement on informing and consulting employees, from 10% to 2% of the total. In his remarks, the Minister said that it was important to consult. I agree, but can he give a little bit of context on this, please? I am not sure if this is a very minor issue or, potentially, a big one. Could he give any examples of what employees might need to be informed and consulted on which they are not at present? The 2004 regulations, which originally imposed this application, related to employers with at least 50 employees. I presume that the same threshold number of employees would apply to this amendment. Can the Minister confirm this?
In conclusion, although the TUC felt that many more protections and issues should have been covered in these SIs, I think there is some good stuff in here. There is always a balance to be drawn between all the partners in any enterprise. More can always be done, and, as the economy develops, more will be needed, but I believe we are at least headed in the right direction.
Baroness Gardner of Parkes (Con)
My Lords, I raised the issue of care agencies earlier, regarding carers who do one hour in one place, one hour in the next and so on, all of them potentially quite far apart. There was a court decision, at a very high level, that they must be paid for their time travelling between places. I have followed this up, and have been told that, in general, they are not being paid. It is local authorities that pay for carers, but they do not seem to be paying them for this, which is very wrong, as there has been a court decision. Where in these regulations will this be covered? It seems highly relevant. I have had a great deal to do with the people who are not getting this money; when they point it out, their companies say they have no intention whatever of paying it. This is wrong since there has been a trial case. I hope the Minister can tell me where it will be covered in these regulations.
Holiday Accommodation
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Lord Henley
I am very grateful for the advice that the noble Lord is passing on to us. He is right that there is no legislation that insists that food standards advice should be put up. There is consumer regulation in this field: I refer him to the Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Contracts (Information, Cancellation and Additional Payments) Regulations 2013, which he probably remembers from his time as a Defra Minister.
Baroness Burt of Solihull (LD)
My Lords, food hygiene ratings exist to help raise food safety standards in business, and consumers welcome the “scores on the doors”. However, in England—the only nation in the United Kingdom where it is not compulsory to publish these ratings—only 28% of food businesses that score between nought and three display them. Does the Minister agree, therefore, that standards will not improve until businesses are made to display their ratings and literally clean up their act?
Unpaid Internships
Baroness Burt of Solihull Excerpts(5 years, 2 months ago)
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Lord Henley
My Lords, pupillages at the Bar have changed considerably since the noble Lord’s day and even since my day—which is also a very long time ago. In those days they were unpaid. I will take advice from my noble and learned friend sitting beside me, but I think the noble Lord will find that most pupils are paid now.
Baroness Burt of Solihull (LD)
My Lords, in 2016 the Social Mobility Commission said that any work placements lasting more than four weeks should be classified as internships and that those doing them should receive at least the minimum wage. The Bill of the noble Lord, Lord Holmes, has progressed through the Lords unamended, so it is clearly the will of this House that it should pass. Will the Minister have a word with the usual channels in the Commons to get the Bill tabled there as soon as possible?
Lord Henley
My Lords, we will leave the last point to the authorities in another place. I appreciate that my noble friend’s Bill went through this House unamended. The Government set out their views on it. As they explained at that time, the problem with the four-week rule was that it might risk giving employers the impression that all shorter unpaid internships are legal. We want to make it clear that this is not the case. The length of the internship is not an indication as to whether it is or is not work. It is the nature of the internship that matters.
Brexit: Protection for Workers
Baroness Burt of Solihull Excerpts(5 years, 2 months ago)
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Lord McNicol of West Kilbride (Lab)
My Lords, I first thank the Minister for repeating the Statement made in the other place and especially for his kind words about Lord Bhattacharyya.
The crux of the Government’s announcement is the two amendments they will table to the implementation Bill. We are told that these seek to ensure there is no regression of workers’ rights, and that Parliament will be given an opportunity to consider how rights in the UK tally with those in the EU. These are noble aims which I am sure this House can get behind. However, I am afraid that on this side of the House we have considerable concerns over whether these amendments will achieve and deliver this.
I remind the Minister of the comments that Frances O’Grady of the TUC made yesterday in response to the announcement:
“In the face of a government determined to reduce rights, these measures would in no meaningful way compensate for the loss of the protections that currently exist”.
The TUC and various unions have been clear in their response to the proposals, saying that they are not good enough and fail to protect workers after we leave the EU. Noble Lords will not be surprised to hear that I agree with those statements.
I turn to specifics. I am interested in the Government’s process of getting to this announcement. Can the Minister detail his department’s process of consultation with the different unions and the TUC? The issue at the heart of this announcement is that, even if a Statement by the Government notes that legislation would in fact lead to a regression of rights, there is no power to stop the Government proceeding with their intended course of action. Can he explain how these amendments would stop a Government reducing workers’ rights if they wanted to? If he thinks I am being a bit unfair, I remind him of the working time directive. It was a Conservative Government who sued the European Commission, claiming that there was no legislative basis for the directive since working time had nothing to do with health and safety at work. Luckily for workers in the UK, the Government lost.
On the process of adopting future improvements in EU legislation, the proposal is equally lacking. The only means of challenge is through Parliament, not the courts, and thus subject to any Government’s majority—not material facts that could be legally tested. Furthermore, these proposals apply only to changes to primary legislation. Any other forms of legislative change would not be covered. Given that the bulk of UK legislation to implement EU law is secondary legislation—the Working Time Regulations, TUPE and health and safety regulations, to name but a few—would the examples given above be covered under the new proposals? As we have seen recently, Commons procedures may not permit sufficient amendments to actually deal with all the problems at hand.
The Statement uses the words “standards” and “reduction of standards” and I seek clarification from the Minister on this. In speaking against Amendment 3 on the Trade Bill last night, the Minister said:
“First … The term ‘standards’ does not have a single legal definition which can easily be called upon … Secondly, on the notion of ‘reducing’ standards, how the Government would prove that they were or were not reducing them would be problematic”.—[Official Report, 6/3/19; col. 631.]
The Government cannot have it both ways. Either the use of the terminology “standards” and “‘reducing’ standards” is correct and proper or it is not.
The Statement provided today is not good enough. The comments made at its beginning suggesting that the Minister’s party has suddenly assumed the role and mantle as a champion of workers and working people is baffling. Annual earnings are more than 3% lower than they were in 2008 and nearly 4 million people are now in insecure work. If the Government are serious about workers’ rights in the UK, they have a long way to go to prove it.
Baroness Burt of Solihull (LD)
I agree with the Minister that we have a proud record of protecting workers’ rights. As he said, in many cases they are stronger than in European law.
I welcome the enforcement measures announced by the Secretary of State yesterday on existing rights. We all know that it is pointless introducing legislation unless someone intends to enforce it, and enforcement costs money. We on these Benches will look closely at the forthcoming spending review to check that the Secretary of State has been as good as his word.
What we see in the Statement yesterday and the Opposition’s response is a playing out of the traditional distrust between the two parties. The Government seek to assure the Opposition that they will not dilute workers’ rights post Brexit. However, I agree with Labour that the Statement does not provide all the protections that would guarantee that workers’ rights will not fall behind those enjoyed by workers in the European Union.
In the Commons yesterday Opposition spokesperson Rebecca Long Bailey, and the noble Lord, Lord McNicol, this afternoon, made the telling point that the promise given by the Government does not apply to secondary legislation, which could allow each existing EU-derived right to be watered down with ease. This latest move has been described as a cynical attempt to buy off wavering Labour MPs from leave constituencies so that they can justify voting with the Government on the EU withdrawal and implementation Bill. We on these Benches will not fall for it and the Government have a long way to go yet to satisfy a distrustful Labour Party.
The arithmetic does not yet stack up in the Government’s favour and, as things stand, they are destined for another whopping defeat in the Commons next week. The only way to guarantee that British workers’ rights keep parity with those of European workers is for Britain to remain within the EU. Why do not Labour and the Government realise that it is in the interests of all the people they represent to give them a say and back a referendum on the deal?
Lord Henley
I remind the noble Baroness, Lady Burt, that we have had a referendum which quite clearly stated that the people of this country wished to leave the EU, and there is no point in trying to readdress that question.
My right honourable friend made an announcement about how we will continue to protect workers’ rights in the future, and I am grateful that the noble Baroness took, to start with, a reasonably positive approach to this, agreed that we had a proud record in this area and welcomed his announcement about enforcement. I note what she said about examining carefully any future announcements about the level of resources. No doubt we will come to that in future business.
I am afraid the noble Lord, Lord McNicol, took—probably under orders—a less positive approach to my right honourable friend’s announcement. I do not accept a lot of what he said or the somewhat negative remarks that I also heard the general secretary of the TUC, Frances O’Grady, make on the radio yesterday morning. I think she and the noble Lord are being very negative. I give an assurance that there have been considerable discussions with MPs on his side of the House and with trade unions, as the noble Lord knows. He will know that my right honourable friend has regular meetings with individual unions and the TUC. He has committed to bring forward legislation to hold the Government to account for non-regression on these rights.
The noble Lord thinks there is no guarantee of no reduction in rights. He seems to have very little faith in Parliament being able to achieve those things. He might prefer to leave these matters to the European Court of Justice or to what is going on in the EU. I stressed that our rights here go well beyond anything that has ever emerged from the Commission. We will continue that, and we have set in place a process that will allow Parliament to provide proper scrutiny of the processes and the rights of workers, taking into account the needs of employers and of those who are not working but are seeking work to make sure that the labour market works for them and provides them with jobs.
The noble Lord also wanted to know a little more about the scope of these measures and what will be included. I assure him that TUPE will be covered and make clear that the equality framework directive and other equalities directives, where they relate to non-discrimination, equality and work, will also be covered. Working time and holidays, including the working time directive, will be covered. Directions providing protections for part-time, fixed-term and young workers will be covered, and I could go on. My right honourable friend has made it clear that we want to cover all employees and provide protection for them, and to allow Parliament appropriate scrutiny of these matters.