Net Zero (Industry and Regulators Committee)

Baroness Donaghy Excerpts

Friday 20th January 2023 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, it is a pleasure to follow my fellow committee member the noble Lord, Lord Reay, and to thank the committee’s chair, my noble friend Lord Hollick, for his comprehensive introduction and his constructive and collegiate approach to our committee’s work. When you are planning something which has to happen in seven and 27 years’ time, and construction and operation take between five years, such as in the case of a battery factory, and 15 to 20 years for nuclear installations, that brings it home how urgent some of the decision-making is and how challenging those decisions are for any Government contemplating a general election within two years.

I will concentrate on our recommendation for a high-level task force to start the transformative changes needed, as already mentioned by the noble Lord, Lord Reay, what pump-priming, if any, the Government are prepared to support, and how the tension between the Treasury and BEIS can be solved. The Treasury focuses on new charges and revenue, whereas the Minister at BEIS has said that tax rises are not inevitable and that the priority is to bring people along with us.

First, a task force following the example of the vaccine task force is essential if there is to be any chance of reaching the net-zero target. A substantial majority of the witnesses who contributed to our inquiry were sceptical that the Government had in place the necessary strategic infrastructure. The Government’s disappointing response, saying

“Our current governance arrangements are effective”,


and then referring to the

“Government Priorities Delivery Committee (GPDC), chaired by the PM”,

just does not cut it. Will the Minister ask the Cabinet to think again?

Secondly, although it is apparent that there are plenty of willing investors around, there are some areas where the returns are not so obvious. The Government seem content to leave it to the private sector, with the honourable exception of some nuclear development which they have supported. It is important to create some strategic map to identify key areas of energy security or innovation where investors are not queuing up and where the state should intervene, at least in the short term—for instance, gas storage, interconnectivity, carbon capture, battery manufacturing and hydrogen, along with encouraging the development of the heat pump industry so that consumers have supportive infrastructure. At the moment, those costs need to be brought down.

This industry will not progress unless consumers are convinced that they will get servicing support, but housebuilders are not necessarily helping here. A relative of mine who bought a new-build house showed me an airing cupboard which was not an airing cupboard—it was full of machinery—and a garden shed which was not a garden shed but was the pump itself, taking up a considerable amount of garden space. How are the Government going about approving, if your Lordships will excuse the pun, these pump-priming projects?

Thirdly, what is the Government’s thinking on the use of government borrowing, as recommended in our report and referred to by my noble friend Lord Hollick, and the need to set out explicitly the distributional consequences for any funding proposals? The recent energy cost crisis revealed the limitation of consumer resilience.

Finally, applications for the 33rd UK offshore licensing round closed last week. Can the Minister indicate when announcements are likely to be made?

Industrial Action

Baroness Donaghy Excerpts

Wednesday 11th January 2023 Lords Chamber

[Lord Callanan (Con)]

That is not the case at all. We have outlined the services that minimum service levels will be applied to, but it is right to consult widely on how the appropriate regulations will work in practice. As I have said, if voluntary MSLs are in place—as they are in some sectors at the moment—and we do not need to regulate those sectors, that is a preferable way to proceed.

[Baroness Donaghy (Lab)]

My Lords, I was chair of ACAS for seven years. Has ACAS been consulted about these proposals? If not, why not? I was asked by a friend who sits on a school board how, if a head teacher decided to sack all the staff in their school, any minimum service or safety level would be fulfilled. Would the Government step in to provide staff?

[Lord Callanan (Con)]

As I said in response to earlier questions, we do not desire or wish to sack any public sector workers in any sectors. We are in the business of increasing the number of public sector workers, not sacking them.

Employers: Fire and Rehire

Baroness Donaghy Excerpts

Thursday 3rd November 2022 Lords Chamber

[Lord Callanan (Con)]

The right reverend Prelate is correct. The best workers’ right is the right to a secure, well-paid job, which is why I am delighted that we have delivered record low levels of unemployment in this country and that the labour market is performing well. We also have one of the highest minimum wages in the developed world which this Government have increased significantly.

[Baroness Donaghy (Lab)]

My Lords, I am looking forward to hearing from both the noble Baroness, Lady Penn, and the noble Lord, Lord Parkinson of Whitley Bay, later in Question Time. I had nicknamed them the “Fire and rehire two”, but it is very good to see them back on the Front Bench. My question is about the use of employment tribunals and the reference the noble Lord made earlier. He will know the unsatisfactory situation and the length of time it takes for people to take cases to tribunals. Many cannot afford to because they are still scratching around for a new job. Is the Minister satisfied that our employment tribunal system is adequate for today’s needs?

[Lord Callanan (Con)]

The noble Baroness has queued up my noble friend Lord Parkinson for his return; we are all looking forward to his contribution. There are difficulties in the employment tribunal system—many of which are a result of the pandemic—as there are across the whole of the judicial system. Colleagues in the Ministry of Justice and others are working hard to resolve those problems.

Queen’s Speech

Baroness Donaghy Excerpts

Monday 16th May 2022 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, it is a pleasure to follow the noble Lord, Lord Young of Cookham, and the noble Baroness, Lady Noakes—the yin and yang of the Conservative Party.

As the value of the pound dips, retail sales drop, public confidence drops, car fuel sales drop and the purchasing managers’ index drops, the Governor of the Bank of England has said the situation is unprecedented. It is not, of course. Replace the invasion of Ukraine with the 1970s OPEC blackmail and the situation is quite similar.

In the next couple of years, the Executive will replay the full panoply of blame. The Cabinet are totally brilliant at blaming everyone else: the Bank of England, civil servants, trade unions, lefty lawyers, even the House of Lords. They will be on full military alert to escape responsibility for the mess they have made—signing international agreements then threatening to renege on them, making laws and then breaking them, enriching their friends, and at the same time attacking the lowest paid and most vulnerable workers in Britain.

Households face the biggest cut in their living standards since the 1950s. Private rents are rising at a record rate, and would-be tenants outnumber available properties by more than three to one. In the most deprived areas in London, life expectancy drops by 12 years compared with the least deprived. You can walk to and from the extremes in some cases. Women living in the poorest areas of England are dying earlier than the average woman in all other OECD countries except Mexico.

The Government’s levelling-up debate paper aims to narrow the gap in healthy life expectancy, but to do this they have to improve access to decent housing, healthy food, unpolluted playgrounds and parks, employment opportunities and an improved benefit system. Government action is doing the opposite: postponing implementation of the buy-one-get-one-free legislation and failing to put forward an employment Bill in the Queen’s Speech. The TUC general secretary Frances O’Grady accused Ministers of conning working people, especially after the scandalous events at P&O. Matthew Taylor, who wrote the report on employment practices two years ago, noted that the Government were “failing yet again” to act on the recommendations of the good work review.

The Queen’s Speech stated:

“Her Majesty’s Government will drive economic growth to improve living standards”,


but the Women’s Budget Group has shown that austerity policies, low wage rises and cuts to social security have left women even more vulnerable to poverty. Increasing benefits by 7% and improving employment protection and childcare rights would go some way to alleviating these hardships.

One solution might be to abolish the Treasury, as suggested by Westlake and Haskel. It is unique in western economies in combining control of government expenditure, public credit and taxation and an economic ministry meant to stimulate economic growth. It controls the political news cycle, is addicted to policy initiatives and, as Westlake describes,

“disempowers other government departments, putting civil servants who are often experts in their field at the mercy of brilliant but inexperienced young Treasury officials.”

But it will not happen. The people who run this country quite like having the equivalent of the headmaster’s study in charge.

We are in for a bumpy ride in the next two years. We need to stick together, mitigate the worst of the damage and trust in the British people at the next general election to dismiss this disreputable Government.

Non-UK Residents: Property Ownership Register

Baroness Donaghy Excerpts

Tuesday 2nd November 2021 Lords Chamber

Asked by

[Baroness Donaghy]

To ask Her Majesty’s Government what plans they have to establish a compulsory register of United Kingdom property owned by non-UK residents.

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

My Lords, in line with our commitment to make the UK a hostile place for illicit finance, the UK remains committed to establishing a new register of beneficial owners of overseas entities that own or buy property in the UK. The register requires primary legislation and the Government will legislate when parliamentary time allows. Her Majesty’s Land Registry does not hold information on the nationality of individuals as property owners and currently has no plans to introduce this.

[Baroness Donaghy (Lab)]

I thank the Minister for that Answer. We are talking about £170 billion-worth of property. The Government are supposed to support the idea of legislation to deal with what David Cameron called dirty money, and a Home Office and Treasury report last December raised the government assessment of the money-laundering risk for property ownership from medium to high. The report said:

“Corrupt foreign elites continue to be attracted to the UK property market, especially in London, to disguise their corruption proceeds.”


If the Government support legislation, why do they not get on with it?

UK Property Ownership: Overseas Jurisdictions

Baroness Donaghy Excerpts

Wednesday 13th October 2021 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, we are talking about £170 billion-worth of property owned offshore. Think what the tax revenue could buy to sort out the energy crisis, the social care crisis and the low pay crisis. Will the Government bring back some legislation, or have they listened to the society for the protection of oligarchs? Ministers themselves claim that 75% of the property industry supports tougher action against foreigners who use the UK to wash their dirty cash. Is it not time that the Government made some parliamentary time for this?

[Lord Callanan (Con)]

Again, the noble Baroness is confusing different issues. Having hereditary beneficial ownership—which we are greatly committed to and would be, I think, a great step forward—provides transparency. It does not, of course, itself increase the tax take. But she can be convinced that HMRC is very seized of this issue and is intending to increase the taxation take where it can possibly do so. Since 2010, the UK Government have secured and protected over £250 billion in tax revenue that would otherwise have gone unpaid, including an additional £3 billion from those trying to hide money abroad.

Status of Workers Bill [HL]

Baroness Donaghy Excerpts

2nd reading
Friday 10th September 2021 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, I congratulate my noble friend Lord Hendy on his Private Member’s Bill, and on making the issues so clear and understandable. When I chaired ACAS, it was a humbling experience to listen to the helpline and see the reality of how human beings can be treated in the UK.

I shall concentrate on why the Bill will be good for employers and government revenue. When I was invited to employers’ groups during my time at ACAS—I accept that they were the conscientious employers and probably at the better end of the labour market—they wanted fairness and a level playing field, not to be undercut by less scrupulous employers. They wanted clear guidance as to their obligations and responsibilities.

If we could deal with bogus self-employment in the construction industry, referred to by my noble friend Lord Monks, we might get a more settled workforce, encouraged to improve their skills and report health and safety incidents. If workers have no job security, they are unlikely to report dangerous work practices on the Friday, to find they have no job on the Monday.

I had the privilege to serve on the Personal Service Companies Select Committee, under the exemplary chairmanship of the noble Baroness, Lady Noakes. The committee expressed its concern that individuals working through personal service companies might not be aware that they had forgone at least some level of employment protection and benefits to which they would be entitled if they were in conventional employment. As my noble friend Lord Hendy said, the real employer is insulated against any responsibility whatever for their rights.

Were the Government concerned about the Select Committee’s work? The Treasury Minister refused point blank to attend the committee, despite requests from the noble Baroness, Lady Noakes. In the seven years since the report came out, things have got worse. The right reverend Prelate the Bishop of St Albans referred to lost revenue to the Exchequer. The taxpayer is subsidising the payroll bills of the unscrupulous employer.

The noble Lord, Lord Callanan, has written that the

“three-tiered Employment Status structure provides the right balance for the UK Labour Market”.

It certainly does not provide any balance for women, the BAME community, the disabled and those seeking job security. Self-employment can be brilliant for those who want it, but 1.85 million so-called self-employed earn less than the national minimum wage, more than half of them women. The Government have said that bogus self-employment should be determined by individual cases at employment tribunal. That is all very well, but it comes over as a bit cynical, given the backlog of cases at employment tribunals and their geographical inaccessibility. There is no fairness or justice here.

Finally, the extreme flexibility in the labour market can come back and bite the economy. The shortage of HGV drivers will lead to distortions in pay and conditions. A care worker who decides to work in a supermarket or a warehouse will not help the hundred thousand vacancies. It leads to low skills, low expectations and little loyalty. There is a chance to build and progress in the Bill, and I urge the Government to accept it.

Future UK-EU Relationship on Professional and Business Services (EU Committee Report)

Baroness Donaghy Excerpts

Thursday 22nd July 2021 Lords Chamber

Moved by

[Baroness Donaghy]

That this House takes note of the Report from the European Union Committee The future UK–EU relationship on professional and business services (13th Report, Session 2019-21, HL Paper 143).

[Baroness Donaghy (Lab)]

My Lords, our report was published in October last year and I thank the House authorities for timetabling this debate nine months later—I am aware that some reports have not been so fortunate. In that nine-month period, we have had the trade and co-operation agreement and nearly seven months’ experience of it, together with the Covid pandemic, which has affected all aspects of trade and mobility.

Since the publication of the report, the sub-committee covered in more detail the impact on financial services, the creative industries and research and development. This work was published in March this year as Beyond Brexit: Trade in Services. I thank the members of the sub-committee and its staff, particularly Dee Goddard, for all their hard work producing the report. We did not share the same views about Brexit, but the views expressed in the report are unanimous. I am also grateful to all the witnesses who contributed to our inquiry, and to the Minister, the noble Lord, Lord Grimstone of Boscobel, for his frankness about possible outcomes—it was much appreciated by the committee.

We had no expectation that professional and business services would form a major part of any agreement between the EU and the UK, and the trade and co-operation agreement of 24 December last year confirmed that expectation, covering mainly goods and a promise of future co-operation—but we nevertheless welcomed the TCA, because the consequences of no deal would have been serious for professional and business services. It is a broad sector and includes legal services, market research, accountancy, audit, architecture, engineering, public relations and management consulting.

I emphasise the interconnectedness of those industries with each other and with the creative industries and financial services. It is also important to remember that they are mainly medium and small enterprises, spread throughout the UK. It is not just a London issue—although it is a London issue. The sub-committee was concerned to ensure that London remained a world centre of excellence in those industries.

One witness said about financial services: “The ecosystem for financial services is not just banks and investment houses. It’s also lawyers, accountants and related professionals.” Another said: “We are soft power exporters as well as actual exporters, but primarily we are a sector made up of very small businesses—more than 600,000 in the UK—and the average number of employees is fewer than four.”

They are vital to the UK economy, and the BEIS figures for 2019 indicate that the sector was worth an estimated £224.8 billion to the UK economy in terms of gross value added. They also provide 4.6 million jobs. This is a UK success story, and all those industries contribute to the wealth and richness of experience that we enjoy, whether it is in creative industries, a legal system that is respected throughout the world or recruitment and management consultancy.

The sub-committee was concerned that any deal needed to prevent the creation of barriers to trade that would have a detrimental effect, specifically on the issues of national reservations, mutual recognition of professional qualifications, business mobility, including comprehensive protection for travel, intellectual property rights and data adequacy. On national reservations, companies face a patchwork of complicated rules that vary by sector and member state. The committee subsequently called for guidance for business on navigating those reservations, but, as of today, this guidance has not been published. On business mobility, this will be a major change for service providers. Although the impact of the Covid pandemic has delayed the outcome, I think it will be felt once international business resumes. As of this month, the Government have published country- specific guidance on business mobility for 21 of the 26 member states.

On mutual recognition of qualifications, all our witnesses gave high priority to its importance once we had left the EU. The UK Government had an ambitious proposal, which the sub-committee welcomed, but we ended up with something much less. The TCA leaves open the possibility of a new agreement on mutual recognition of professional qualifications in future. My guess is that we will probably never know what happened in the negotiations on mutual recognition or on mobility of labour, but, post the TCA, the sub-committee urged the Government to seek such an agreement in the medium term. This is a personal view, but the professional qualifications legislation currently going through Parliament is a long way short of any medium-term deal.

On intellectual property, subsequent to this report the TCA embedded a mutual commitment to high standards of intellectual property protection, which is welcome. The sub-committee expressed the hope of regulatory dialogue with the EU to manage divergence. On data adequacy, the good news is that the EU confirmed its data adequacy decision on 28 June. One hopes that this will stick if the UK decides to make substantial changes to the GDPR.

As I said in a subsequent report, the service sector is at the heart of the UK economy, so it is essential that the Government and the EU make improvements to smooth UK-EU services trade. The sub-committee accepted that there might be divergence but urged the Government to be constructive and to set up joint consultative arrangements to maximise co-operation and avoid misunderstandings. I have to say that there is little evidence of this happening. The noble Lord, Lord Frost, said only yesterday that he regretted that the relationship was punctuated with challenges characterised by disagreement and mistrust. Passporting arrangements in financial services have stalled and there is little evidence of help for the creative industries in temporary movement of goods and people.

Parliamentary scrutiny is more important than ever on the impact of the TCA and the regulatory changes taking place, particularly in the financial sector, where financial regulations will be given the role that primary legislation has performed in the past. So it is with great relief that we finally have the European Affairs Committee to keep these issues under review and hold the Government to account. I wish the noble Earl, Lord Kinnoull, and his committee all the best in this endeavour.

[The Deputy Speaker (Lord Russell of Liverpool) (CB)]

My Lords, four speakers have withdrawn from this debate: the noble Lord, Lord Berkeley, the noble Earl, Lord Kinnoull, and the noble Baronesses, Lady Altmann and Lady Bennett of Manor Castle. I call the noble and learned Lord, Lord Hope of Craighead.

--- Later in debate ---

[Baroness Donaghy (Lab)]

My Lords, I think all Members who have contributed, particularly the four members of the committee. I was not sure whether the noble Lord, Lord Callanan, was trying to act as a recruitment officer for reindeer herders; the noble Baroness, Lady Bottomley, had better watch out—he is moving into the headhunter profession. However, I will politely decline. I do not think I would be very good at it, although, watching the numbers of speakers dropping like flies this afternoon, I am not sure whether a 30% attrition rate would be acceptable in that new career.

We have to look to the future. We are not looking just for mitigation, which the Minister spent some time doing. I know the Government are working hard on these issues but it is mainly to mitigate; it is not about improving people’s positions but about trying to make sure that they keep as good as they had.

We have such a lot of talent in the UK and such a lot to offer, and these businesses deserve constructive dialogue and renewed efforts by the Government to enable a thriving future. The noble Baroness, Lady Hayter, summed it up in saying that we need better atmospherics; that is what the professional and business services are looking for.

I shall not go on any longer, but I thank everyone for their contribution. The noble and learned Lord, Lord Thomas, talked about the innovative spirit that the UK has in regulation and our flexible legal system. It is not that I lack confidence in what we have to offer; I just lack a bit of confidence in the ability of the Government to overcome the barriers that to some extent they themselves have created.

Motion agreed.

Employment Rights

Baroness Donaghy Excerpts

Thursday 10th June 2021 Lords Chamber

[Lord Callanan (Con)]

I can indeed tell the noble Baroness that Ministers and officials from both my department and from the Department for Work and Pensions, hold regular meetings with counterparts in the devolved Administrations to discuss various employment-related issues, including regular reviews of the legislative framework.

[Baroness Donaghy (Lab) [V]]

The Statement upholding employment rights gives and takes away at the same time. Its praise for ACAS is right. I remind the House that I am a former chair and in receipt of an ACAS pension. As the Minister knows, the Certification Officer is part of the ACAS family, and the proposals in the Trade Union Act 2016 were of such concern that my party raised it at Report. They are not technical measures, as the Statement claims, and third-party claims are an invitation to anti-union newspapers to make mischief. Will the Minister be willing to discuss these points, particularly about the future of the Certification Office, to ensure that this really is about upholding employment rights, not about feeding red meat to his less enlightened colleagues?

[Lord Callanan (Con)]

This is not about feeding red meat to anybody. Some people may be vegetarian and not enjoy red meat. The noble Baroness may not like it, but the principle of the reforms was introduced in the Trade Union Act. We debated it at the time in this House, and the principle was passed then. This is merely the enactment of those provisions, which have previously been agreed.

Construction Industry: Retention Payments

Baroness Donaghy Excerpts

Thursday 14th January 2021 Lords Chamber

[Lord Callanan (Con)]

Those are two of the alternatives that have been suggested as a policy response. Changes in this area would require primary legislation, and there is always pressure on the Government’s legislative timetable. We think that working with the industry to seek a consensus is a good way forward, but there is not yet a consensus: some notable companies are against a deposit retention scheme or the other policy option the noble Lord mentioned.

[Baroness Donaghy (Lab) [V]]

I would like to thank the Minister and the noble Lord, Lord Stevenson, for referring to Lord O’Neill. We miss him and I am sure the industry misses him.

This has been going on for decades. The large construction companies that owe money to subcontractors use it as working capital. Having a retention fund would stabilise the industry and prevent job losses and redundancies. What priority will the Government give to taking long overdue action?

[Lord Callanan (Con)]

The noble Baroness is right: this has been going on for a long time and under many different Governments. The complexity of the issues is one reason why no action has been taken so far. As I said, we are committed to working with industry to find a consensus, and we are working with the Construction Leadership Council. We are committed to addressing the related issue of late payments, and we will try to find a consensus on a way forward.