Retail Store Closure: Boxing Day

Bill Esterson Excerpts

Monday 12th December 2016 Westminster Hall

[Bill Esterson (Sefton Central) (Lab)]

This has been an excellent debate, Mrs Moon. I congratulate my hon. Friend the Member for Warrington North (Helen Jones) on making a comprehensive, passionate plea to support working people in the retail sector. That was supported by nearly everybody who spoke, and the contributions made by hon. Members around the Chamber were entirely consistent with what she said. The hon. Members for Belfast East (Gavin Robinson) and for Kettering (Mr Hollobone) were entirely sympathetic, as were my hon. Friends the Members for Makerfield (Yvonne Fovargue) and for Newcastle upon Tyne North (Catherine McKinnell) in their interventions. The one discordant note came from the hon. Member for Morley and Outwood (Andrea Jenkyns), who frankly gave a description of retail that many workers in the retail sector would not recognise.

On Christmas day, my children will wake my wife and me early—we are still in that stage of family life. We will go and visit other family members, and we are lucky to be able to do so, but such a happy family scenario is not available to everybody in this country. As other hon. Members have mentioned, many workers in sectors beyond retail have to work over the festive period, for very good reasons. My hon. Friend the Member for Warrington North said that shopping is not a matter of life and death, but for key workers in the NHS, the care sector and in our police and fire services, working is a matter of protecting life and sometimes dealing with death. Sadly, that includes on Christmas day and Boxing day. We can take this opportunity to thank everybody who works in the emergency services and the care sector for the contribution that they make every day of the year, and especially at the festive time, when most of us are able to take time to be with family and friends.

Many people have to work in the hospitality sector over Christmas, as has been mentioned, and it is right to recognise the realities for such people. There are also some in retail, in small shops, who work on Christmas day and sometimes Boxing day—typically shop owners. The Association of Convenience Stores has said that smaller shops tend not to want what it describes as “paid staff” working—staff who are not owners or family members—because of the costs. However, it recognises as part of that equation the desirability of paid staff—again, the ACS’s term, not time—being able to have time off to spend with their families.

That leaves us with the large stores. The successful USDAW campaign saw the private Member’s Bill introduced by my hon. Friend the Member for North Durham (Mr Jones) become law in the Christmas Day (Trading) Act 2004. At the time, the internet was not as advanced as it is now—I will come to some points made about online trading later. What happens to staff on Boxing day is increasingly a concern, and it has led to this petition, which has been signed by a very large number of people. The petition was the result of an increasing number of large retailers opening on Boxing day—and opening earlier and for longer.

As we have heard—I have heard this from constituents of mine—people are finishing later and later on Christmas eve. They still have to prepare for Boxing day, sometimes on Christmas eve, and sometimes on Christmas day itself. I heard a story about a major high street retail name that opens at 5 am on Boxing day, and staff have to be there at 3 am or 3.30 am. They have to travel—what time do they get up? Are some of them even starting on Christmas day? What kind of a Christmas is it for someone who knows they have to be at work at 3 am or 3.30 am on Boxing day? I cannot even begin to think what that must be like. However, that is where some large retailers are headed—that is the reality—and why there has been this petition. When we look at the consequences for family life, I think we can all understand and share people’s concerns—as everybody in the Chamber did, with one sad exception so far, although we have yet to hear from the Minister.

Like my hon. Friend the Member for Warrington North, I am a very proud member of USDAW. Its survey said that 16% of workers say that they face working longer hours this year, 7% say the hours will be shorter and 77% say the number of hours will be much the same. The number of hours that staff are being asked to work is therefore increasing. We have heard about the impact of long hours in the run-up to Christmas and about the inability of most staff to take time off for a considerable time—time off that would enable them to recuperate—and about the impact on families, especially those with children. Parents who finish late on Christmas eve then have to come back and put the stockings together.

[Helen Jones]

Put the toys together.

[Bill Esterson]

Yes, and the toys—I thank my hon. Friend. They also have to prepare the food for Christmas day with very little time to enjoy themselves.

[Mr Hollobone]

I am enjoying the hon. Gentleman’s speech hugely. We are all sympathetic to the plight of retail workers at Christmas time. I am not a member of USDAW, but my grandparents were small shopkeepers. To my mind—and in answer the petitioners who have gone to such efforts to draw this plight to our attention—the point is that the Christmas Day (Trading) Act 2004 prohibits large shops from opening on Christmas day. Are Her Majesty’s Opposition in favour of a Boxing day trading Act, which would prohibit large shops from opening on Boxing day?

--- Later in debate ---

[Bill Esterson]

I had not realised just how much I had in common with the hon. Gentleman. Like him, I had grandparents who ran a cornershop—I am assuming his grandparents ran a cornershop?

[Mr Hollobone]

indicated assent.

[Bill Esterson]

The hon. Gentleman is nodding; so we both had grandparents who ran cornershops.

[Mr Andrew Smith]

You’re not cousins, are you?

[Bill Esterson]

I am struggling to make progress, Mrs Moon, because I am being given all sorts of interesting suggestions.

My grandad told me that if people cannot afford to pay decent wages, they should not open a shop. That is a good piece of advice about being a responsible employer. He might have amended that, in the context of this debate, to say that if employers cannot give decent time off over Christmas, they should not be opening a shop, especially on Christmas day and Boxing day. The hon. Member for Kettering is suggesting one option. Only 1.5% of the thousands of staff surveyed by USDAW said they wanted to work on Boxing day, so something needs to be done and it needs to be addressed. One option, undoubtedly, would be to amend the Christmas Day (Trading) Act 2004; another would be to have a Boxing day trading Act. I wait to see what the Minister has to say on that score. I suggest to the hon. Gentleman that if nothing is done through that piece of legislation, there should be action to ensure—this goes back to his earlier comments—that staff who do not want to work on Boxing day will not be under pressure to do so.

The hon. Gentleman reminded us that he voted against the Government’s attempt to include relaxation of Sunday trading in the Enterprise Bill in Committee and on Report. He will remember from that debate that points were put forward very forcefully and that extremely strong evidence was presented to us that many staff are simply unable to take time off on Sundays because of concerns and pressure, and the same applies to Boxing day, even though the legislation is different unless Boxing day is on a Sunday. We have to find some way of addressing the issue. I do not think the answer is necessarily for the Opposition to be prescriptive, but we need to get to a point where no one has to work in a large store on Boxing day unless they want to. Like the rest of us, they want to enjoy Christmas. They want to travel, see family and enjoy Christmas eve, not to feel under pressure through to Boxing day.

USDAW’s view is that the only staff who should be available to those large retailers at that time are volunteers. I suppose the point it is making is that if a store could manage purely with volunteers, there would be no objection in principle to that store opening. However, if stores are relying on only the 1.5% of staff who are prepared to work and the 5.5% of staff—I think that was the figure —who are non-committal, most stores would struggle to open without forcing staff to work.

Let me turn to the points about online trading. Things have changed since 2004. The nature and scale of online trading is very different. A number of hon. Members have made points about the impact of online trading on high street and, indeed, out-of-town stores. Perhaps the time has come to look at the needs of staff working in the warehouses such as those that the hon. Member for Kettering described in his constituency. Perhaps it is time to look at what the Government’s responsibility is towards staff who work in warehouses or for internet retailers, and the way in which they are treated. Those staff have a right to a Christmas day and at the moment they are not covered by the Christmas Day (Trading) Act, let alone by what we are talking about for Boxing day. The time has come to consider how that might be addressed and how we might get the kind of fairness that we would all expect for our own families.

Points have been made about the level of trading over Christmas. One estimate is that more than £77 billion will be spent in the Christmas period in the retail sector. Most of the people who work in retail, of course, are very low paid. As we have heard, premium pay is now a thing of the past in most businesses. In that context, is it too much to ask of the major retailers to do more to support their staff by not trading on Boxing day? Remember that those major retailers all have their own internet retail presences, so it is not as if they cannot trade online. By the way, plenty of people go online on Christmas day. It is not just Boxing day, is it?

Some online retailers do not necessarily fulfil orders. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) made the point from his own experience in the internet retail sector—he may want to intervene to set me straight on this—that there are plenty of opportunities to delay fulfilment of orders. There are plenty of retailers that do just that, so they are not open 24/7.

[Drew Hendry]

I am grateful for the opportunity to underline that point. There is room for retailers to be innovative by using the new technology—what would in other circumstances be the challenge of internet retailing —to help to create a much more equitable situation with in-store retail. The big benefit of having in-store staff is that they can give advice. Boxing day is a day when people are picking up units. They do not need advice; it is just about picking up the goods at a discount.

[Bill Esterson]

I am grateful for the hon. Gentleman’s intervention because it really adds to everybody’s understanding of the challenges, opportunities and some of the realities. Perhaps the Minister can take some of these points away and, as well as responding to them, look at how online and offline retail operate and at what might be appropriate in supporting staff in both parts of the industry.

I want to talk a bit about some of the retailers who have so far resisted the pressure to open on Boxing day, because not every major retailer does. The initial consultation for the Christmas Day (Trading) Act, which was carried out in 2002, suggested that competitive pressure was one reason the Act was needed. Although at the time not every retailer by any means was opening on Christmas day—indeed, it was only a few—the sense was that in the end everybody would have to do so to keep up or they would lose ground.

A similar pressure now applies with Boxing day. So far, retailers including Lidl, Aldi and John Lewis have resisted the pressure, and have done so successfully, which suggests a public appetite for delaying shopping to a degree. In the last year, those retailers have seen their trading figures go up at the expense of some of their competitors, but we do not know for how long that will continue. Earlier evidence suggests a concern across the sector that businesses will ultimately all have to work and trade on Boxing day unless there is Government intervention—nobody else can make such an intervention.

The Conservatives say that this is nothing to do with them—that it is a free market and that it is up to businesses to decide what to do. The problem, if we follow that argument, is who will prevent abuse. The problems with Sunday trading, and now with Boxing day, mean that workers are unable to take time off. Who will intervene to look after workers and ensure fairness between employers on the one hand and staff members on the other?

We have seen far too many abuses recently. We have seen the behaviour of Sports Direct, and some of Amazon’s behaviour in Scotland was highlighted over the weekend. A number of us will have constituents who have been affected by the cuts in pay and conditions at Marks and Spencer. It is all our responsibility, and particularly the Government’s responsibility, to intervene on the side of working people, whether on fair pay or hours of work.

Who looks after responsible businesses? The businesses I mentioned, Lidl, Aldi and John Lewis—and there are many more like them—want to do the right thing and act responsibly. How will they be encouraged and supported unless the Government introduce the necessary conditions so that they can do that without succumbing to competitive pressures? As we discussed when we were considering a statutory instrument last week, the Prime Minister is consulting on boards having a representative with responsibility for staff. It is regrettable that the Government appear to be walking away from having elected worker representation on boards, but will such board representatives be strong enough? Will they have the interest to ensure that staff are treated fairly? The concern is that the measure just will not go far enough. This is an example of where Government intervention cannot just be left to the market. It cannot just be voluntary.

Perhaps the time has come to consider a cautionary tale. We can either go down the route of supporting responsible businesses and treating workers fairly, or we can consider what has happened historically. I have mentioned some of the more recent cases, but we saw all sorts of horrors before there was Government support. I am not suggesting that the Minister is in any way interested in repeating what happened hundreds of years ago, but my mind goes back to “A Christmas Carol”. I wonder who Ebenezer Scrooge might be in this scenario. Surely not the Prime Minister.

Where is the line if the Government say they will not intervene? We used to send children up chimneys in Victorian Britain, and I know the Minister is not suggesting that, but let us remember the ghost of Christmas past and make sure that the ghosts of Christmas present and Christmas future show fair treatment for workers and responsible businesses. That is the way forward, and the right solution will ensure that workers are looked after on Boxing day, that family life is protected, that responsible businesses are encouraged and that there is the right balance between online, high street and out-of-town shopping. I challenge the Minister to deliver on that.

--- Later in debate ---

[Margot James]

It would be interesting to look at the picture when Boxing day falls on a Sunday. Presumably that would give people greater rights, at least on those rare occasions. Any changes to the legislation that I have mentioned would require primary legislation. I would hope that there were other ways to afford shop workers some protection without recourse to primary legislation. The law is a balance that Parliament has accepted, and the Government are reluctant to disturb that balance. To change the law would risk opening new disagreements; new primary legislation would create new demands and new risks.

[Bill Esterson]

The Minister is making some reasonable points, but she said that she hoped that there was some recourse for the Government other than primary legislation. I thought that she was going to tell us what it was, but she seems to have moved on to another point. If I can bring her back, what does she see as the recourse, other than primary legislation, to ensure that staff who want time off get it?

[Margot James]

I have no suggestions at the moment to put to the hon. Gentleman, and I would not like to give the impression that the Government are exploring that. We are opposed to a ban on retail trading on Sundays. More generally, Boxing day is a day on which some people like to get out of the house. It has long been a major day for shopping and other events, and I have covered the point that an increasing number of workers in other sectors are busy at work.

Another argument against banning offline retail—that is what it is now—from opening on Boxing day is that many other workers would want to know why we were making an exception for the offline retail trade when employees in other sectors work on Boxing day. There are many aspects to the issue other than the threat posed to retailers by an outright ban, particularly, as I have mentioned, to retailers without a strong online presence.

May I respond to a few of the points made by the hon. Member for Warrington North in her interesting and well researched speech? Workers have many protections under the working time regulations, including entitlements to rest breaks, daily and weekly rest periods, and a maximum working week of 48 hours, normally averaged over 17 weeks. However, workers can choose to opt out of the 48-hour limit, and I accept that some jobs are more or less conditional on their exercising that opt-out. The qualifying period for unfair dismissal, which the hon. Lady also mentioned, is intended to strike the right balance between fairness for employees and flexibility for employers.

Draft Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016

Bill Esterson Excerpts

Thursday 8th December 2016 General Committees

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

I beg to move,

That the Committee has considered the draft Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016.

It is a pleasure to serve under your chairmanship this morning, Ms Buck. The main purpose of the draft regulations is to fulfil our obligation to transpose into law the non-financial reporting directive, or NFRD. While we remain a full member of the European Union, we will continue to implement EU legislation in a positive and cost-effective fashion. That is why we are in Committee today.

The NFRD builds on provisions in the EU accounting directive, which requires certain business entities to disclose a range of non-financial information alongside their accounts. The accounting directive applies only to certain types of business undertaking that have limited liability, including certain types of partnerships known as qualifying partnerships, as well as groups of business entities. I will generally refer to companies for simplicity’s sake, but the Committee should please bear in mind that my remarks apply also to qualifying partnerships and groups.

The NFRD applies only to large companies that are defined as public interest entities and that have more than 500 employees, or to groups with a public interest entity parent, which are large groups having more than 500 employees within the group. Public interest entities are entities whose activities are of major interest to the public and include banks, insurance companies and quoted companies. We estimate that the total number of UK companies impacted by the NFRD will be about 260 such public interest entities. However, some 15,000 subsidiaries of public interest entities will also be impacted by the need for reporting across the corporate group.

The requirements of the directive were strongly influenced by the UK’s existing regime for non-financial reporting. Consequently, the new framework broadly mirrors the requirements that apply to all the UK’s quoted companies, regardless of their size, so the regulations will not significantly change company reporting. In one change, the regulations will cover all large public interest companies, not only those quoted on the stock exchange. Companies do not have to be quoted for their activities to have far-reaching consequences.

At present, all companies except those eligible for the small companies regime must publish strategic reports. Within the strategic report, companies that do not qualify as medium-sized are required to provide analysis about the company’s development and performance using non-financial information, which includes employee and environmental matters. Quoted companies must also publish information about social, community and human rights issues, including information about any company policies in relation to those matters. They must also give specific disclosure on gender diversity for directors, senior managers and employees.

The strategic report is the narrative element of a company’s annual report. It should provide colour and context for the accounts and be forward looking to provide reassurance on the company’s direction of travel for investors and suppliers. The report should contain a fair review of the company’s position, as well as risks and uncertainties that are not easily quantified. Issues such as cyber-security and employee matters can be as significant as the fiscal issues covered in company balance sheets.

The draft regulations build on that by requiring eligible companies to disclose, to the extent necessary for an understanding of the company’s position, information on environmental, employee, social and human rights matters. That is already required by the UK’s existing regime for some of those companies, but the regulations also require disclosure of anti-corruption and anti-bribery matters.

Companies must also describe any policies they pursue in relation to any of these matters and identify the principal risks relating to them. These disclosures will provide companies with an opportunity to bring discussions on these issues to the boardroom and to demonstrate to shareholders and other parties that they are considering issues in their proper context and addressing potential risks.

The regulations strengthen the current regime by requiring companies that do not have policies in these areas to provide an explanation for not doing so. I stress that companies are not required to make policies in order to have something on which to report, but they will have to consider whether they should have policies on such matters. Furthermore, if they decide they should not, they will have to explain their reason for the omission.

The regulations also bring benefits by providing shareholders and investors with a greater level of consistency and conformity with EU counterparts in relation to non-financial information. This is important. Bringing entities of a certain size and type up to the same level will mean that UK companies within the scope of NFRD that currently provide such information will not face greater reporting requirements than EU counterparts.

The regulations are sufficiently flexible to enable disclosure to be specific to the company. This balance between specifying categories and allowing companies flexibility to provide relevant information should ensure that reporting is meaningful and cost-effective. Disclosure is important to ensure that shareholders can act as a critical friend to directors.

It is worth mentioning by way of reassurance that the regulations will not require disclosure of information about impending developments if the disclosure would be seriously prejudicial to the company’s commercial interests. However, non-disclosure should not prevent a fair and balanced understanding of its position or the impact of its activity.

In our consultation earlier this year, stakeholders recognised the need to transpose the NFRD. During the consultation, stakeholders raised concerns about how the requirements would interact with the UK’s existing regime. The regulations provide that a company that reports under the NFRD framework qualifies as having complied with overlapping elements of the UK’s domestic regime. They also permit voluntary compliance with the NFRD disclosure requirements, so that companies can avoid the complexities of moving between reporting obligations during their life cycle as their size, in financial terms or staff numbers, increases or decreases year by year. I acknowledge the contribution from representatives of business, professional bodies and national regulatory bodies throughout the development of the regulations, including KPMG and PwC. I am grateful to them for their engagement.

Another aspect that I must mention briefly is that regulation 3 contains a minor correction to the transposition of the accounting directive. This ensures that the parent company of a small group cannot benefit from an exemption from the requirement to produce group accounts just because that member is established under the law of a European economic area state and not in the UK. If a member of a group is a public interest entity in any EEA state, the exemption should not be available.

I am aware that some businesses struggle with regulatory change to financial reporting. The regulations do not fundamentally change the UK’s regime for annual reports. Many companies within the scope of the regulations will have to adapt their reporting only slightly. Although the changes are not substantial, I believe they will add value to company reporting in the UK.

[Bill Esterson (Sefton Central) (Lab)]

This statutory instrument and the non-financial reporting that the Minister is describing follow the recent announcement about a change in corporate governance. I wonder whether she could tell us how the regulations fit in with the Government’s plans for corporate governance.

[Margot James]

The regulations complement our framework in the corporate governance Green Paper but they do not touch directly on the main thrust of its proposals, which are mainly about the voice of workers and other stakeholders on boards and about executive pay. They are definitely in the same terrain, but I would not put them any closer than that.

It is greatly to our advantage for the UK to maintain its reputation as a hub of global transparency. However, as our future relationship with the EU becomes clearer, it may lead us to examine whether certain aspects of company law are cost-effective. In the meantime, I am sure Members will agree that building on the reputation of UK governance and the reliability of annual reports can contribute to making the UK an attractive place to invest. I commend the regulations to the Committee.

[Bill Esterson]

I am grateful to the Minister for her summary of the regulations. As she said, while we remain members of the EU, we continue to implement its directives. Some members of this Committee may be considering the irony of that situation, but that is where we are.

I raised the question of corporate governance because it struck me on reading the regulations and the Government’s response to the consultation that this was an opportunity to pick up on many of the points considered in the Green Paper at an early stage, including, but not exclusively, worker representation on boards. At one point the Prime Minister was very keen on having elected representatives, but we seem to have gone into reverse on that. Perhaps the Minister will correct me if I am wrong, but my understanding is that a director will now represent workers, small businesses/suppliers and customers, and presumably that director will be appointed by the board.

A number of aspects of the regulations seem worthy of further debate. If we are to make the most of the opportunities afforded by non-financial reporting, matters such as how companies deal with worker representation and their relationships with suppliers and customers will fit directly with that approach.

[John Redwood (Wokingham) (Con)]

Does the hon. Gentleman not think that this sums up the EU perfectly: no financial benefits, plenty of financial costs and we cannot do anything about it?

[Bill Esterson]

Just when we thought we had escaped the debate about the EU this morning.

There are opportunities, regardless of whether we are part of the EU. I happen to think it a very good thing for companies to report on their approach and attitude to wider stakeholders, because I think companies should behave responsibly. I hope hon. Members on both sides of the Committee agree with that. Section 172 of the Companies Act 2006 has provisions, which have never been enforced, about directors’ long-term responsibilities to have regard to employees, suppliers and customers, to the community and the environment, to standards of business conduct and the importance of the company’s reputation, and to the way they treat fellow directors and shareholders. Those matters would fit very well with duties to report non-financial matters. Do the Government intend to consider section 172 as part of this statutory instrument? What does the Minister think will be contained in the reports after it passes? We have no intention of dividing the Committee, because this instrument is a thoroughly good move, but perhaps she could tell us what she thinks will be in the reports.

The Minister mentioned gender reporting. Again, the diversity of company boards is exactly the sort of thing that should be seen in company reports, but is it also an opportunity to consider gender equality in terms of pay, or the difference between the top pay and the pay of everybody else in companies? Is it an opportunity to examine pay policy and have it clearly set out in the non-financial as well as the financial part of company reports? She mentioned that there will be omissions. Can she explain what those omissions will be and why things will be omitted, as well as whether she agrees about the areas that I would like to be included?

The Minister discussed the importance of employees. She also said that because of their security implications, cyber matters—I think that was the phrase she used—were as important in reports as financial matters. I agree, but that led me to think about electronic reporting. She can correct me if I am wrong, but I think the Government are still considering requiring small firms, which are clearly outside the scope of the legislation—[Interruption] —she is confirming that to me by nodding—to undertake significant additional bureaucratic responsibilities by reporting quarterly using digital reporting. The feedback that I get—we have discussed this before, and I am sure we will discuss it again—is that that is time-consuming and expensive for many small firms that simply do not have the resources in-house to address them. Does she consider it ironic that, although she made it clear that she did not want to extend the responsibilities in these regulations any further than necessary beyond the largest firms, when it comes to electronic reporting, she is making small firms comply with time-consuming additional responsibilities?

I mentioned the importance that I think we should attach to the wider stakeholders when it comes to the responsibility of business to society. These regulations are a move in the right direction. Non-financial reporting is extremely important, and I hope that the Minister will take on board the opportunity that the regulations present, alongside the corporate governance Green Paper, to partner with business to develop the relationships and arrangements with the wider community and society that are the hallmarks of a successful business environment and a prosperous economy and country.

[Margot James]

I thank the hon. Gentleman for his thoughtful comments and questions. He mentioned the Green Paper on corporate governance again and asked whether we were going backwards on certain of the commitments made, particularly in relation to the voice of workers, suppliers and other stakeholders on boards. He mentioned one particular proposition in the Green Paper to have a non-executive director responsible for ensuring that those voices are heard, but that is just one of several options. The Green Paper is not prescriptive at all. We are consulting at this stage, and he is welcome to contribute his thoughts. We will be collecting the thoughts of many other stakeholders with a view to reaching conclusions in future, but it is certainly not prescriptive at this stage.

I agree with the hon. Gentleman when he points to section 172 of the Companies Act 2006. Since the Act came into being there has perhaps been an over-emphasis on the undoubtedly vital subject of ensuring that the board of directors ensures a return for investors. However, inadequate attention has been paid to the other requirements on a board of directors that contribute in their entirety to the long-term future of the company and to the responsibility of directors to secure that long-term future by their decision making. I very much hope that the outcome of our consultation on the Green Paper and the steps taken as a result will up-weight those other requirements on directors. That is an aspiration and not in any way prescriptive, because at this stage it is all a consultation.

The hon. Gentleman talked about gender reporting and the gender pay gap.

[Bill Esterson]

I want to work with the Minister on these points, so just to be clear and in no doubt, can she say whether she and the Secretary of State—and, as far as she knows, the Prime Minister—are open to all the elements of section 172 being implemented in full? [Interruption.] That is obviously a call from the Prime Minister to answer my question. This is an important issue for the wider stakeholders, so will the Minister please clarify whether the Government are open to that?

[Margot James]

I am sorry to disappoint the hon. Gentleman, but I have said all I can say about that particular matter.

The hon. Gentleman also asked about gender reporting and the gender pay gap. Gender pay reporting is in legislation at the moment. We intend for that to lead over time to a closure of the gender pay gap. It may not be adequate to the task in and of itself, but it has to be given a chance. I very much share the hon. Gentleman’s concerns about the unacceptable level of the current gender pay gap.

The hon. Gentleman mentioned the subject of omissions in the context of this directive being—

[Bill Esterson]

Before the Minister moves on, I have a question about gender reporting. The Government’s response referred to senior managers in gender reporting. Is the Minister saying that it applies to all employees, not just senior management?

[Margot James]

I am so sorry; I do not think I can answer that at this point. It is actually in relation to boards of directors, senior management and the entire workforce, I believe. If I am incorrect about that, I will write to the hon. Gentleman.

To continue answering the hon. Gentleman’s point about omissions, the directive places the obligations on companies on a “comply or explain” basis. He mentioned the quarterly reporting of financial information and the pressures that that bears on small and medium-sized enterprises, particularly the very small companies.

I have met the Federation of Small Businesses and listened to its concerns. This is a Treasury matter—it is not actually my or my Department’s area of responsibility —but I have also met the relevant Treasury Minister to raise the concerns expressed to me by the FSB. The Treasury is consulting on the matter of quarterly reporting and is prepared to make certain changes that the FSB has told me will be of benefit to its members. There is a move. It will not fundamentally alter the requirement for quarterly reporting, but it raises the threshold for a company’s turnover before it qualifies as being required to comply with the regime and in certain cases the requirement will be delayed. However, that is really a question that the hon. Gentleman should raise with Treasury Ministers.

I thank hon. Members, in particular the hon. Member for Sefton Central, for their valuable comments during this debate. The regulations strike the right balance between offering flexibility for companies to report on those issues of risk that relate to their activities and provide a structure that makes the disclosures meaningful. The regulations should help to increase the transparency of how our companies behave and better equip shareholders to be active stewards of the companies they own.

Question put and agreed to.

Oral Answers to Questions

Bill Esterson Excerpts

Tuesday 8th November 2016 Commons Chamber

[Margot James]

I thank my hon. Friend for her plans to get involved in Small Business Saturday on the first Saturday of December. My Department will support Small Business Saturday with events across the country to which hon. Members are invited. In particular, they should contact their LEPs to see what is going on locally and join the hon. Lady, and all of us, in visiting a small business on the first Saturday in December.

[Bill Esterson (Sefton Central) (Lab)]

In the United States, 23% of federal Government direct spending is with small businesses; in this country, the like-for-like direct comparison is just under 11%. Is it not time that we learned from President Obama’s success in government? If we did, we would improve quality and value for money for the taxpayer, support growth for small firms and help rebalance the economy. That is what I call a plan.

[Margot James]

I certainly agree with the hon. Gentleman that we need to invest more in support for SMEs, and that is precisely what we intend to do in my Department.

Oral Answers to Questions

Bill Esterson Excerpts

Tuesday 13th September 2016 Commons Chamber

[Greg Clark]

Free trade courses through the veins of this country. It is one reason why we have been most successful. I was surprised to hear a commitment to free trade described as dogma last week. It is one of our strengths, and my hon. Friend has my absolute assurance that it will be very much to the fore of our reputation in the future as it was in the past.

[Bill Esterson (Sefton Central) (Lab)]

I welcome the Secretary of State to his new post. He certainly has his work cut out. Australia says that it will take at least three years after Brexit before a trade deal can be in place with the UK, while the United States, Japan and China have all expressed their views about the prospects for foreign investment and trade with the UK. What is he doing to get behind UK businesses and deal with the concerns of our international partners following the Brexit vote? He could not do better than to start by telling his Cabinet colleagues to get behind business and stop insulting it.

[Greg Clark]

I would be interested in the support of the Labour party for promoting British business around the world. The hon. Gentleman will know, from our previous work on local growth, that he will always have a willing ear and assistance from me in doing that. He was kind enough to welcome me; I welcome the Opposition Front Bench team. The hon. Member for Hemsworth (Jon Trickett) was my shadow in my role at the Department for Communities and Local Government. He has followed me here—perhaps he is not so much a shadow as a stalker, but I regard it as flattery. [Laughter.]

As I said in my initial answer, relationships are important. We can exchange letters and bits of paper, but it is important that we get to know well our partners around the world. I have done that and my colleagues have done that. As I said earlier, I visited our investors and manufacturers in Japan and India. I will continue to do so.

--- Later in debate ---

[Greg Clark]

My understanding is that the feasibility study is being undertaken. I have not received its final conclusions yet. At that point, I will look at it with the same interest as my hon. Friend.

[Bill Esterson (Sefton Central) (Lab)]

The European Commission says that Apple should cough up £13 billion in taxes for earnings generated across the EU, including in the UK. Most UK businesses pay their fair share of taxes and expect all other businesses, large or small, to do the same. Will the Secretary of State confirm that he is doing everything he can to ensure that the very biggest companies pay up and that we receive our share of the £13 billion Apple tax pie?

[Greg Clark]

The hon. Gentleman makes a reasonable point. Responsibilities come with being in business in this country, and paying taxes to contribute to the public services that we enjoy is one of them. He has my assurance that we will ensure that we pursue the correct tax from all companies that locate here.

Draft National Minimum Wage (Amendment) (No. 2) Regulations 2016

Bill Esterson Excerpts

Thursday 8th September 2016 General Committees

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Wilson. The Minister set out the good news about the 3.7% rise in the national minimum wage that is before us. She acknowledged that it has been some time since there have been significant rises; the regulations start to rectify the fact that rates have fallen behind over many years. This good news for young workers is tempered by the fact that if someone is under 25, they do not get the national living wage. The Scottish National party spokesman asked why; I am afraid that I do not find the Minister’s answer at all convincing, any more than we did when the national living wage first came through.

[Margot James]

I am sorry to interrupt the hon. Gentleman so soon in his speech, but will he acknowledge that young people aged between 21 and 24 will be paid, through this increase in the minimum wage, £6.95 per hour? Would he not agree that the difference between that and the national living wage is fairly small?

[Bill Esterson]

Perhaps the Minister has just told us that she has no intention of putting up the so-called national living wage by very much. I remind her that the Living Wage Foundation says that a living wage in this country is £8.25, or £9.40 in London—not the lower smoke-and-mirrors figure of £7.20 that the former Chancellor introduced.

[Michael Fabricant]

I was quite involved in the minimum wage when it came in under Tony Blair, the former leader of the Labour party, in 1999. The age of 25 was chosen was because the Labour party got good advice that if it priced the minimum wage for those under 25 at the same amount as for those aged 25 and over, those under 25 would not get employed. The Labour party wanted 21 to 25-year-olds in work; it is as simple as that. It may be that the old Labour party, as opposed to new Labour, resents or rejects that, but that was the view of the Labour party at the time, and it was correct.

[Bill Esterson]

I remember all too well the all-night sitting—I was a researcher at the time—during which Conservative MPs filibustered as long as they could to prevent the national minimum wage from being introduced, so we will not take any lectures about the implementation of the national minimum wage. [Interruption.]

[The Chair]

Order.

[Bill Esterson]

The point is well made that there is a difference. The reality is that old and young workers will potentially be set against each other. Employers in low-paid sectors might be encouraged to recruit up to the age of 24, to replace staff by using short-term contracts, and to discriminate against older workers. There are all sorts of problems and concerns arising from the differential. I will be interested to see whether the so-called national living wage goes up by a similar amount.

There are real problems with what has happened. We had a successful partnership between the Government, business and trade unions in the Low Pay Commission, which is still operating for under-25s. The way that the previous Chancellor went about introducing the national living wage undercut that partnership approach and has caused problems for low-paid sectors such as care and hospitality. In care in particular, and where budgets have been cut in local government and in the public sector generally, it has really caused a problem. Those employers, and employers whose private businesses are engaged by the public sector, have no way of making up the shortfall in order to pay the higher national living wage. I do not think the Government have addressed that point in their introduction of the national living wage. Surely they should have increased local government budgets, so that local government could in turn pass on those increases either to its own workers or to workers employed by contractors.

We have heard about M&S, and a similar point could be made about Sports Direct. The Minister talked about enforcement and how serious the Government are about it. She spoke about the welcome increase in funding for HMRC staff from £13 million to £20 million, but how many staff is that? How many prosecutions has HMRC started? How many times has the national minimum wage penalty been applied? What level of criminal evidence does HMRC require to start an investigation?

We have heard enough about Sports Direct’s behaviour for me to ask whether the Minister believes that it should be subject to a criminal investigation, notwithstanding its apparent Damascene conversion to the cause of workers and low pay over the past few days, just before its annual meeting. Of course, it turned out that the improvements in pay and conditions would affect 10 workers a year. I would like to hear a bit more about exactly what action has been taken. The SNP spokesman spoke of hundreds of thousands of cases across this country. I very much doubt there have been hundreds of thousands of investigations by HMRC, so let us have the figure, so we can see exactly how effective the measures are.

A successful economy is characterised as one where working people are paid well. There are a number of reasons for that—not just reasons of decency and prosperity. Where people are paid well, they have more money to spend with private businesses, and more people are in a position to pay tax to fund the high-quality public services that we as individuals need, and that the private sector needs to be able to run effective businesses. So we should all support attempts to improve the rates of pay and the standard of living of ordinary working people in this country. Is that really what is happening as a result of the differential between under-25s and over-25s? Will a 3.7% one-off rise in the national minimum wage, after years of stagnation and a fall in real terms, really cut it? I rather doubt it.

I look forward to the Minister’s response on the level of prosecutions, and on investigation and enforcement by HMRC. Employers who are allowed to get away with not paying the minimum wage are gaining an unfair competitive advantage over those who want to pay properly. We should be encouraging good, responsible business behaviour in this country, so let us see more enforcement. I look forward to hearing what the Minister has to say on those points.

[Michael Fabricant]

I was not going to speak, but I have been driven to do so by the hon. Member for Sefton Central. I agree with his last few words—enforcement is tremendously important—but his rewriting of history has been quite remarkable. He may have been here as a researcher when the minimum wage was introduced; I was the Opposition Whip at the time, but they would not put me on that Committee because the only row I ever had with our then leader, William Hague—now a noble Lord—was over the minimum wage. I said to him at the time that the minimum wage was something that we would come to support. He said, “It will never happen”—that was not a very good impersonation—and I said, “Oh yes it will, and it works in the United States.” On that occasion, I was proved right and he was wrong.

Earlier, talking about the level of the minimum wage, I gave the example of the United States, where the federal rate is just $7.25 an hour. Interestingly, there are many exemptions in the US. For example, disc jockeys—I was a disc jockey for a short while on a pirate radio boat—are exempt, and so are waiting staff. That is one of the reasons why people have to tip well when they go to the US—because the waiting staff live on tips. I go to the US a lot for private reasons. I was chatting to a barman who told me that he is on $2.50 an hour, which is only £1.90, so we really can be proud of the UK’s minimum wage.

The rate is tremendously important. It is all very well for the hon. Member for Sefton Central to say that it should be higher, but if people are not employed, the rate is zero per hour. It is always a balance. Tony Blair knew that; Gordon Brown knew that; sadly, the hon. Gentleman does not seem to realise that. If people are priced out of the market, they will not get anything, because they will be unemployed.

[Bill Esterson]

Given the hon. Gentleman’s belief that the national living wage prices people out of jobs, was he against the former Chancellor’s introduction of the national living wage at £7.20—a rate significantly higher than the then national minimum wage?

Paris Agreement on Climate Change

Bill Esterson Excerpts

Wednesday 7th September 2016 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

I did not realise that I was at a “Star Trek” convention, but we learn something new every day in this place.

This has been an incredibly important debate. There have been a number of excellent speeches from all parts of the House by Members who really know this subject inside out and upside down. The debate was opened with a formidable tutorial by my hon. Friend the Member for Brent North (Barry Gardiner), who mentioned the Government’s woeful record.

[Drew Hendry]

On the subject of the Government’s woeful record, does the hon. Gentleman agree that a missed opportunity was not supporting the alternative air fuel scheme, proposed by British Airways, which would have transformed 575,000 tonnes of London’s waste into fuel and allowed BA to operate its flights twice over for a year from London City airport? Does he agree that that was a missed opportunity by the UK Government and that they should revisit it?

[Bill Esterson]

I am grateful to the hon. Gentleman for his exceedingly early intervention in my speech. Of course, there are many examples of the kind that he gives.

We heard from my right hon. Friend the Member for Doncaster North (Edward Miliband) about the worrying loss of UK influence on tackling climate change, like so much else that results from the Brexit vote. He also mentioned his grave concerns about the damage being done to the international community’s ability to tackle climate change, given our leading role up till now and the likely dramatic reduction in our influence outside the European Union.

We heard contributions from my hon. Friend the Member for Southampton, Test (Dr Whitehead), who reinforced the importance of the UK’s role and the implications of Brexit. He questioned whether Government policy meant that we were on track to meet our obligations. That theme was picked up by other hon. Members later in the debate, including my hon. Friend the Member for Wakefield (Mary Creagh). We heard from my hon. Friends the Members for Wirral West (Margaret Greenwood), for Copeland (Mr Reed) and for Llanelli (Nia Griffith), among other contributions.

Earlier, the Minister spoke about what he called the Government’s fantastic record, but he rather ignored the fact that investor confidence has plummeted, subsidies have been cut and jobs, not least in the solar industry, have been lost. He blamed the European Union for our not having ratified the Paris agreement, while acknowledging that other European countries had done so. The Government and the Department for Business, Innovation and Skills have been happy enough recently to act against the rest of the EU. The UK recently blocked action by the rest of the EU to protect our steel industry. The Government are happy enough to take unilateral action when it suits them, but we had enough false claims about the EU during the referendum campaign, thank you.

[James Heappey]

It is my understanding that no EU member country can fully ratify the treaty until all have done so and the EU ratifies it as well, so some European countries may have taken the early legislative steps to put themselves on the way to that, but I do not believe that any of them will have ratified it yet.

[Bill Esterson]

Last time I checked, France was still a full member of the EU, with no intention of leaving.

We had the announcement last night, and we have heard the loose interpretation of legal obligations today in the Chamber when it comes to the preparation and delivery of the fourth and fifth carbon plans. That announcement, the approach and what we heard today confirmed the need for today’s debate, and it is why we are right to press the motion.

It is astonishing how quickly the Government have trashed our hard-won reputation for leading the world in responding to the challenges of climate change. Our role as key EU negotiators at Kyoto, our world-leading Climate Change Act 2008 and our progressive reputation at the Paris climate conference all risk being left in tatters if we are seen to be dragged to the table at the last minute as a result of being outside the EU. Whereas China, the US and France, among many others, have all ratified the Paris agreement, despite what the Prime Minister said earlier today, we are being left lagging behind.

At least the Government have moved on from the position under the previous Business Secretary, who refused to let the words “industrial strategy” pass his lips. The new Business Secretary will have to develop a strategy. That is especially true in respect of green energy. The argument for energy, particularly green energy, to be at the heart of our industrial strategy was well made by my hon. Friend the Member for Copeland, and the Minister made similar remarks in his speech.

Last year, we were going to lead the way in Paris with a £1 billion carbon capture and storage competition. The United Nations framework convention on climate change identified CCS as one of the interventions that could help countries worldwide meet emissions reduction targets, yet just a week before the Paris climate conference the Government scrapped their plan, despite the international praise it had received. After the Paris agreement had been signed, the Government abolished DECC, precisely when the Department’s expertise would most sorely be needed. They cut subsidies for green household energy initiatives by 65%, and then they increased subsidies for fossil fuel production at the same time as cutting investment in green technologies. While the cost of green energy has been falling, the Government have instead focused on fracking.

There are signs, with the arrangements for devolution, that we are starting to see the sort of long-term, ambitious vision at a local level that is sadly lacking at the national level. My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) is Labour’s candidate for metro mayor for the Liverpool city region. After many false dawns, we finally have a chance for the Mersey barrage to be a reality, developing the high-tech industries that can drive forward the economy and deliver the quality jobs his constituents and mine so badly need, while potentially delivering energy self-sufficiency to the city region. The devolved Administration in Wales are committed to green technology, with eye-catching proposals for tidal lagoons—something mentioned by my hon. Friend the Member for Llanelli. Meanwhile, Sadiq Khan has committed to make London a city run entirely on clean energy by 2050, joining the leaders of 50 Labour-run councils in making a 100% clean-energy pledge. Sadiq and his Labour colleagues recognise the damage being done by harmful emissions to the health of the people they represent.

Labour in local government and in the devolved Administrations wants to deliver on the green agenda, but it cannot do these things alone, and they should not have to be done in a piecemeal way. Why is the green agenda not a national priority, on which Government, local authorities and Assembly Administrations can all work together to deliver as full partners? Where is the underwriting by the Government of the development of our green industries? Where is the Government-backed green energy company to challenge the market and to address complacency from the energy cartel, which is simply not set up to put the needs of residential or business customers first? That is what follows from the short-term nature of the stock market-listed companies that make up the cartel and from their need to put shareholder returns above all else. Where is the development of a national energy strategy to address the very real security concerns about supply? If the Government are committed to the green agenda, why, oh why, did they privatise the Green Investment Bank?

The Government are missing the fact that inconsistency and uncertainty are the enemy of investment. Last year, for the first time, the UK fell out of Ernst & Young’s top 10 most attractive countries for renewables investment. We used to top the table, thanks to clear long-term planning that gave investors confidence, but we fell to fourth in 2013 and 11th in 2015, and now we are 13th. The Government’s inconsistency is also undermining confidence in green tech start-ups. Why has confidence gone among investors? Because the Government have put short-term budget cuts before strategic investment, and because they make and revoke green policy piecemeal and in a vacuum.

There is an overwhelming economic case for the UK to build infrastructure and cutting-edge technologies, not just to meet our Paris agreement commitments. We are well placed to serve the market that exists given that 180 countries signed the Paris agreement. There are nearly 100,000 low-carbon and renewable energy businesses in the UK. UK Government figures value the green economy as a whole at £122 billion a year—double the size of the automotive industry, twice the size of the chemicals industry and five times the gross value added of aerospace.

Green energy is a major trade opportunity. We have signed deals for low-carbon trade of £6.7 billion with China and £3.2 billion with India. The global green energy market is growing at over 4% a year and is expected to reach £5 trillion this year. Trade in green energy has the potential to transform our export prospects just at the moment we most need it, following the Brexit vote.

Then there is the long-term cost of failing to invest. The decision to cut the pioneering CCS project might have saved the Exchequer £1 billion this year, but it is forecast to push the bill for meeting climate change agreements up by more than £30 billion, according to the National Audit Office—a very clear example of false economy. So where is the strategy: where is the coherence? Where is the Government’s fabled long-term plan? Whether we are looking for an environmental, economic or business rationale, the plan simply is not there. No wonder the 100,000 members of the public who signed the petition on ratifying the agreement on environmental grounds were joined by investors worth £13 trillion arguing the business and economic case for early and enthusiastic ratification of Paris.

The complete lack of strategy in green and renewable industries is threatening to rob the UK of a golden opportunity at the very time when it is most needed. The opportunities exist in renewables. They include the potential for us to be self-sufficient, the delivering of energy security, lower prices, a chance to develop world-leading status in a high-tech sector, and a massive export opportunity at a time of great economic need—and all the while we deliver on our obligations to the international community and to the environment.

We have a new Business Secretary: the chance for a fresh start. If he wants to—I hope that he is serious about an industrial strategy and about our global and domestic responsibilities—he has the chance to develop and deliver a strategy that puts the green sector at the heart of what his Government do. He has the chance to support our renewables industry, so that it can be the world leader it wants to be and can be. I hope that he takes the chance he has been given.

[Madam Deputy Speaker (Natascha Engel)]

I call Jesse Norman.

Draft Pubs Code (Fees, Costs and Financial Penalties) Regulations 2016

Bill Esterson Excerpts

Monday 18th July 2016 General Committees

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Ryan. I join my hon. Friend the Member for Wrexham in welcoming the Minister to her post. She follows in some illustrious shoes. I have enjoyed debating with the right hon. Member for Broxtowe (Anna Soubry) over the past nine months or so, especially on the topic of the pubs code and the adjudicator, and on creating a level playing field and a fair arrangement between tied pub tenants and pub-owning companies. I welcome the Minister to that debate and to our attempt to create a fair market for pubs. Indeed, we debated the previous statutory instrument as recently as last Wednesday.

I am sure that the Minister, new though she is to the topic, will understand that it is important to get the measures right. It is quite right that we support community pubs not just because of all that they bring to the community, but so that we support small local business including the increasing number of micro-brewers such as Red Star Brewery from Formby, whose beer was in Strangers Bar not long ago. All hon. Members are able to get the beers of their favourite local brewers into Strangers if they apply.

The regulations need not detain us for too long, but I have a couple of questions for the Minister. I hope she can clarify what I have understood. She mentioned the adjudicator’s role in resolving disputes. I believe she said that the adjudicator sets the level of the fees and decides the nature, size and scale of any penalties that might be implemented in the case of complaints or breaches. Will she confirm that?

The Minister mentioned that the legislation includes a threshold of pub companies owning 500 or more pubs. We debated that topic in Committee for the 2015 Act. There are concerns about pub-owning companies possibly being split into smaller companies that own fewer than 500 pubs. Thereby, the pub-owning company would not be covered by the adjudicator. Will she keep an eye on that particular concern and challenge that has been raised in Committee and outside this place?

My final question is about enforcement. Will the Minister keep in mind concerns about the level of resources that the adjudicator will have, and about his ability to enforce penalties that he might wish to impose? How does the Minister envisage enforcement being carried out, and what is her view, at this early stage in her role, on ensuring that the adjudicator’s office is sufficiently well resourced to achieve what everybody wants, which is the proper balance between tied pub tenants and pub-owning companies? With that, I happily await the Minister’s response.

[Margot James]

I thank the hon. Gentleman for his kind comments. He asked whether the level of fees is set by the adjudicator. It is, in fact, set by the regulations, and the adjudicator has discretion within the regulated amount set out in the regulations.

The hon. Gentleman asked me to keep in mind the potential for pub-owning companies to fragment their business such that large sections fall just beneath the threshold of 500 or more tied pubs as set out in the regulations. In that respect, we will certainly keep the operation of the code under review. The adjudicator must report on cases of avoidance if he thinks that unfair practices are going on. There will be some protection by the fact that the level of fines—the 1% of group turnover—applies to the entire group, no matter how many small subdivisions the pub-owning company might establish.

Finally, the hon Gentleman mentioned the issue of resources for the adjudicator. I agree that there is no point having an adjudicator if he is not sufficiently resourced to tackle the many cases that might come before him. We think that the resources established will meet the likely demand, but that will be kept under review. I hope I have answered all the hon. Gentleman’s questions. If I have left one out, perhaps he would like to intervene.

[Bill Esterson]

indicated dissent.

Question put and agreed to.