Steel Sector

Baroness Wheatcroft Excerpts

Monday 12th July 2021 Lords Chamber

[Lord Callanan (Con)]

My noble friend is right to point to the problems for the sector. I mentioned in an earlier answer that we have provided more than £550 million in relief to the steel sector for its electricity costs but, of course, we keep these matters under constant review. We are aware of the problems that high electricity prices cause for the sector. On his question on scrap, we want to ensure that the metals recycling market continues to work effectively for all stakeholders, whether that is for metals recycled by steel producers or the cast metal sector.

[Baroness Wheatcroft (CB)]

My Lords, the UK steel industry has shrunk drastically over the last quarter of a century. In 2019, we produced just 7 million tonnes, which put us eighth in the league of EU producers. Does the Minister have in mind a figure for what the UK steel industry should be able to produce in order to fulfil the plan for growth? Will he also say whether in providing subsidies for automobile manufacturers in the UK, there is a stipulation that they should buy their steel in the UK?

[Lord Callanan (Con)]

I understand the points that the noble Baroness makes. My noble friend Lord Grimstone is looking forward to considering the outputs of the procurement task force. However, we should recognise the importance of continuing to treat suppliers equally and fairly through open competition. Keeping our procurement market open to international competition ensures better value for taxpayers and for UK industry.

Financial Reporting Council (Miscellaneous Provisions) Order 2021

Baroness Wheatcroft Excerpts

Thursday 18th March 2021 Grand Committee

[Baroness Wheatcroft (CB) [V]]

My Lords, I thank the Minister for the way in which he introduced this statutory instrument, and I am delighted to follow the noble Lord, Lord Davies. His final point was very interesting, and I would be interested to hear how the Minister will address the issue of how one monitors the regulators. As the noble Lord said, there are so many of them. What they do is important, and they need to be held to account.

On one level this is a perfectly straightforward SI, imposing three new and perfectly reasonable duties on the FRC. But the anomaly is the FRC itself. In December 2018, in his review of the organisation, Sir John Kingman described it as the equivalent of

“a rather ramshackle house, cobbled together with all sorts of extensions over time.”

In other words, it was not fit for purpose—a verdict that the Government themselves accepted the following March, in welcoming the review.

They were equally supportive of the findings of the Competition and Markets Authority, which called for significant changes to the way in which the audit profession operates in the UK. Indeed, the Queen’s Speech in December 2019 stated as one of its priorities the reform of auditing.

What we have here is just another extension to that rather ramshackle house, which is becoming increasingly unstable. I know that the Minister acknowledged the need for root and branch reform, and for the new regulatory authority that will eventually come to us, but here we are, in March 2021, debating a minor SI relating to the still-extant FRC.

The letter that we received this afternoon—what a wonderful coincidence of timing—tells us that the White Paper is coming out and that there will be reform. It all sounds very promising, but my first question to the Minister has to be: when does he think, realistically, that we might see legislation on this, and the emergence of the new accounting regulation and governance authority?

In the meantime, we remain dependent on the FRC to conduct this crucial work and its governance is in flux. In October 2019, Simon Dingemans took over as interim chairman. This turned out to be even more of a temporary post than most had expected; in May the following year, he was lured away by private equity. He was replaced, although not until the following October, by Keith Skeoch but this was declared to be for a term of no more than six months. My second question to the Minister is: does he have a successor lined up for 12 April? It seems that the FRC will be with us for a while to come and, at the moment, I am unaware of who is going to be leading it.

It is important that the equality duty in this SI should certainly be imposed, as the Kingman review found that very few roles at the FRC actually went through an appropriate recruitment process. That might have done more to improve the gender pay gap there, which is still quite pronounced. Reform of the organisation is clearly needed urgently, as is reform of the audit profession. It continues to disappoint. In 2018, the fines levied by the FRC against the big four accountancy firms trebled. Last year, a record fine of £15 million was levied against Deloitte. But it does no good for the credibility of the audit profession if all of the big four firms are regularly seen to be guilty of misleading accounts, and misleading the investing public—and the public more generally.

The proposal we have seen in the White Paper is that there should be compulsory joint audits. But the original suggestion was that the smaller audit firm taking part in these joint audits should be jointly liable, with the larger firm, for anything that went wrong and resulted in action and fines. As far as I can see, that is absolutely unworkable. As my third and final question, can the Minister say whether he believes that there will be equal liability on these smaller firms—the challenger firms—that will be brought into joint audits, or that a more reasonable system of liability will be brought into play?

Global Navigation Satellite System

Baroness Wheatcroft Excerpts

Wednesday 10th March 2021 Lords Chamber

[Lord Callanan (Con)]

Indeed. I know that my noble friend has great experience in these matters. Collaboration with partners and industry will be vital for success in this field. A new UK capability could offer opportunities to deliver more on global Britain through strengthening our international relationships. We would most likely seek to use our overseas territories for ground-based stations.

[Baroness Wheatcroft (CB) [V]]

My Lords, it is highly regrettable that our Brexit negotiations failed to secure a deal over Galileo. Are there any plans to try to revisit that and negotiate a deal, rather than ploughing our own course? Could the Minister also tell us about the National Space Council, which was announced in June 2019? How often has it met? Was it consulted over the purchase, which others have mentioned, of OneWeb, which was done against the advice of the Civil Service?

[Lord Callanan (Con)]

The answer to the noble Baroness’s first question is no. The UK National Space Council, chaired by the Prime Minister, will continue to play an important role in future government affairs.

Economic Partnership Agreement: Kenya

Baroness Wheatcroft Excerpts

Tuesday 2nd March 2021 Lords Chamber

[Baroness Wheatcroft (CB) [V]]

My Lords, I commend the impressive maiden speech of the noble Lord, Lord McDonald of Salford, and welcome that he is clearly intent on being an active Member of this House. I thank the Minister for giving us the Grimstone rule, to which reference has already been made. It is a small concession to parliamentary democracy, but a welcome one.

This agreement demonstrates why Parliament needs to be involved in formulating these agreements. I love Kenya and have spent many happy times there. It is a country rich in natural resources, but it has a massive problem, which I wish to concentrate on today: corruption. It ranks 124th in Transparency International’s index of 180 countries.

When Kenya’s Ethics and Anti-Corruption Commission was launched in 2016, its director said that Kenya was losing a third of its state budget—around $7 billion a year—to corruption. Sadly, things have not improved since then. A succession of scandals in public procurement have been exposed, year after year. Some have involved massive contracts and some just a consistent pattern of graft. Such corruption deprives the people of the wealth that they could be enjoying and that Kenya, without corruption, would be well placed to deliver. Currently, there are investigations into alleged corruption over Covid-related contracts—although that is of course not unique to Kenya.

So could we not have been more ambitious in pushing Kenya towards transparency in public procurement contracts? The agreement states that the parties will aim to conclude negotiations on transparency in public procurement within five years. I ask the Minister: why did we not push for something more demanding on this vital issue?

Workers’ Rights

Baroness Wheatcroft Excerpts

Tuesday 26th January 2021 Lords Chamber

[Baroness Wheatcroft (CB) [V]]

My Lords, the Transfer of Undertakings (Protection of Employment) Regulations have preserved the terms and conditions of many employees who find themselves working for a new employer after a transfer of business. With very many more businesses likely to change hands due to the effects of Covid, does the Minister believe that the TUPE rules are still fit for purpose?

[Lord Callanan (Con)]

Yes, indeed I do.

Construction Industry: Retention Payments

Baroness Wheatcroft Excerpts

Thursday 14th January 2021 Lords Chamber

[Lord Callanan (Con)]

That is indeed one of the policy suggestions we are looking at, but given the complexity of the policy issues, it is premature to commit to the introduction of a retention deposit scheme. We will continue to seek consensus and work with industry to find a way forward.

[Baroness Wheatcroft (CB) [V]]

Can the Minister estimate the construction payments retained by the public sector, specifying the extent of the payments to Carillion retained by the Government? Given that there were only 55 responses to a consultation that concluded in February 2018, why did it take two years to publish those findings on what he terms an “important matter”?

[Lord Callanan (Con)]

I do not have figures for the public sector, but not withholding retentions is government policy—although I am aware that some departments and agencies do. Unfortunately, we do not have the power to instruct local authorities in this matter. If there are any figures available, I will of course let her have them.

State Aid (Revocations and Amendments) (EU Exit) Regulations 2020

Baroness Wheatcroft Excerpts

Wednesday 2nd December 2020 Lords Chamber

[Baroness Wheatcroft (Non-Afl) [V]]

My Lords, state aid has the potential to distort market competition. As a member of the EU, we were governed by its state aid rules. This SI does away with that, but there is a degree of flexibility to those rules. In 2015, for instance, the Government wanted to subsidise the Drax power station to enable it to convert one of its units from coal to biomass fuel. The European Commission investigated and gave its approval. Clearly there were advantages for all in making that contribution to its own carbon emissions, and the EU state aid rules did not get in the way.

I am grateful to the noble Viscount, Lord Trenchard, for explaining to us how the EU state aid rules have been used so fairly, largely to keep France and Germany in line and to allow the UK to do most of what it wanted. They are not overly unfair. We should not characterise EU state aid rules as necessarily preventing the UK doing what is right. As Theresa May said in Florence in 2017, the UK and EU understand and agree about the purpose of state aid rules and

“trying to beat other countries’ industries by unfairly subsidising one’s own is a serious mistake”.

Some of us fear that the Government are about to make that serious mistake.

That is why I take issue with the noble Baroness, Lady Noakes. The Government can now define their own state aid rules but those have implications far beyond the UK. After all, we are a great trading nation, and everything being said about our future outside the EU is about how we are going to trade brilliantly all around the world. State aid rules that are not approved by those we wish to trade with will make that increasingly difficult. That is why we shall not be able to escape completely from state aid rules. The WTO operates its own and, as the noble Lord, Lord Liddle, pointed out, they are far from adequate, but in every trade deal, as we have heard, state aid will be an issue that has to be agreed on.

So what state aid are the Government so keen to be able to dispense that it stood, in part, in the way of a Brexit deal being negotiated? Perhaps the Minister could tell us what the Government want to do. It seems very strange to see a Conservative Government so apparently keen on being able to dispense state aid. In the past, we have seen plenty of instances where government interventions in industry have been disastrous. It gave us the Austin Allegro, for instance, a car that was not only unattractive but prone to breaking down. That failed to rescue the British car industry; being open to overseas investment was what did that.

Backing winners is not something that we have shown particular acumen in doing, but perhaps that is what the Government have in mind to try again. The partial purchase of the bankrupt satellite company, OneWeb, in the summer seemed to be a move in that direction, but hopes for that business have already begun to fade. At the time of the partial purchase, which civil servants definitely were not comfortable with and had to be mandated to do, OneWeb appeared to be caught in the UK’s efforts to find a replacement for the crucial Galileo project and the GPS system that it fuels. Five months on from that purchase, I am no clearer about how we plan to replace Galileo. I would be grateful if the Minister could tell the House whether he envisages pumping more public money into OneWeb and indeed if he could provide reassurance about how Galileo is to be reproduced in just a matter of weeks.

As the noble Lord, Lord Stevenson, pointed out, we still do not know what state aid policies the Government have in mind. It seems wrong to do away with one policy without explaining what will take its place. I can understand why the EU would be concerned about that, and why it could be standing in the way of a deal. Whatever importance the Government put on being able to dispense state aid as they wish, that cannot be as important as securing a deal with our largest trading partner.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I remind the noble Baroness that the time limit for speeches is five minutes.

[Baroness Wheatcroft (Non-Afl) [V]]

In debate after debate, we hear more stories of the chaos that looms with a no-deal Brexit, particularly on top of Covid, so surely the Government could make clear what state aid regime they favour and whether they no longer believe that British companies are capable of competing fairly on the world stage. Four years after the decision to leave the EU, could the Minister tell us how close the Government are to developing their state aid regime?

[The Deputy Speaker (Lord Faulkner of Worcester) (Lab)]

The noble Lord, Lord Berkeley, has withdrawn from the debate, so I call the noble Lord, Lord Moylan.

Supplementary Protection Certificates (Amendment) (EU Exit) Regulations 2020

Baroness Wheatcroft Excerpts

Friday 27th November 2020 Lords Chamber

[Baroness Wheatcroft (Non-Afl) [V]]

My Lords, I thank the Minister for introducing this SI. I am pleased to follow the noble Lord, Lord Lansley, with his endorsement of the great achievements of our pharmaceutical industry.

In one way this legislation is very straightforward but it is also a reflection of the drastic change now under way in what is still, for the time being, our United Kingdom. It encapsulates the fact that, once the transition period ends, Northern Ireland’s relationship with Great Britain will be dramatically changed. As someone who believes in the union and is clear that it has strengthened its component parts, it grieves me to see this rupture.

Supplementary protection certificates are not common. Apparently only about 70 are issued in a year. They are important; the need to get medicines to market can be huge, and the time taken can span many years. However, as we have seen with the development of Covid vaccines, it can be done remarkably quickly in some cases, which we should all be very grateful for. Nevertheless, given the usual investment, in money and in the time that it takes to develop drugs and some agrochemicals, it makes sense to provide a mechanism that allows the usual patent lengths to be extended. That is what the SPCs do. However, the SPC relates to the marketing authority that approves the product for market, and once the transition period has ended, no matter how often we say that there will be no hard border between the UK and Northern Ireland, products authorised in Northern Ireland will not be able to apply for an SPC that would be recognised on the mainland. Equally, a product approved by the relevant regulator will only be eligible for an SPC that protects it in Britain.

Therefore, to be covered in both territories, companies will need two marketing approvals. This is not a mere technicality. When this SI was debated, or waved through, in the other place—to call it a debate is something of an exaggeration, since there were only two speakers, one of whom was the Minister—the potential risks came to light. The Minister accepted that if a product from Northern Ireland secured an SPC on the basis of an EU marketing authority, it would be vulnerable to having the intellectual property unprotected in Great Britain. There would thus be the risk of the market being flooded with generic copies of something that it had invested huge amounts in developing.

The Minister assures us that the SPC remains a UK-wide intellectual property right, but the protection that it provides extends only to the territory in which the product has been authorised. This sounds like Alice in Wonderland reasoning. What use is a property right if it does not confer protection? Can the Minister tell the House how he would define an intellectual property right? No impact assessment has been conducted on this SI, so can he put a cost on the extra bureaucratic procedures that drug manufacturers will have to go through to get wide authorisation? Also, as the noble Lord, Lord Lansley, pointed out, it is possible to extend an SPC by six months in the case of paediatric medicines. Can the Minister explain why this exception, and say whether it would be sensible for us to have it secured for any drug in this category?

Covid-19: Small Businesses

Baroness Wheatcroft Excerpts

Thursday 29th October 2020 Lords Chamber

[Lord Callanan (Con)]

I am pleased that the noble Lord has been able to take advantage of one of our loan schemes. He made an interesting suggestion about a national Government—but I hope he will accept that that is way above my pay grade.

[Baroness Wheatcroft (Non-Afl) [V]]

My Lords, in the time of Covid, small businesses are having to rely increasingly on internet platforms such as Amazon and Google to market their products. The digital services tax, which was supposed to ensure that these platforms pay their fair share, is being passed on to those small businesses, which cannot afford to pay the extra 2% they are being asked for. So will the Minister revisit the digital services tax, which is clearly not working as it was supposed to?

[Lord Callanan (Con)]

Again, the noble Baroness is tempting me to enter the territory of the Chancellor. We have been clear that the digital services tax is temporary, and businesses are liable to it only when they have worldwide revenues of more than £500 million, and more than £25 million of those revenues is derived from UK users. So it applies only to the very largest businesses.

Health Protection (Coronavirus, Restrictions) (Obligations of Hospitality Undertakings) (England) Regulations 2020

Baroness Wheatcroft Excerpts

Friday 9th October 2020 Lords Chamber

[Baroness Wheatcroft (Non-Afl) [V]]

My Lords, the regulations related to hospitality do not make sense. Other noble Lords have pointed out the illogicalities, particularly around dancing. The Minister insists that consultation has driven government thinking. Consultation with the restaurant and pub business would have told the Government that the 10 pm curfew could not be justified. There has been little evidence of scientific reason behind it. Restaurants practising social distancing could survive if they were able to do two sittings at dinner, but the 10 pm curfew makes that impossible.

Publicans have to watch their customers leave and head straight to the supermarket or off-licence to buy more alcohol, which they can then drink outdoors without following any social distancing rules at all. Local authority leaders have pleaded with the Government for changes to this legislation on drink sales but have had no success. The regulations are not being respected because people do not understand government thinking.

Are we really facing an appalling rise in Covid cases, as the scientists say? Even Health Minister Nadine Dorries has warned that our intensive care beds could be overrun within 10 days if the current rate of increase in Covid cases continues. If that is the case, why are we debating these already outdated regulations? We are consistently told that the Government are following the science, but at what distance?

With a virus that spreads in this way, we need immediate action. It will be painful but, without decisive action, the long-term pain will be even greater. If we need more draconian measures, let us have them now, when they might stave off the problem, not when it is too late. The leader of the Opposition, Keir Starmer, wrote this morning that the current dithering is causing confusion.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I ask the noble Baroness to draw her comments to a close because we are very tight on time.