Draft Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017

Bill Esterson Excerpts

Tuesday 7th March 2017 General Committees

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Pritchard.

I welcome the Whip, who I understand is taking the place of the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Stourbridge because she is unable to join us for family reasons in what are sad circumstances. I am sure that he will deputise for her extremely well. He was certainly very brief in his comments. I suspect that I shall be slightly less brief, but here goes.

The Government made some significant changes to insolvency law in 2015 through the Deregulation Act and the Small Business, Enterprise and Employment Act, and in 2016 through the Insolvency (Amendment) Act (Northern Ireland). The Government’s intention in making the changes was to decrease undue regulation and reduce cost. However, the primary legislation that enacted the changes was not applicable to all kinds of financial services, as the Minister said, because such organisations tend to have special insolvency regimes, given their unique position.

The Opposition will not oppose the statutory instrument today, but we have some specific concerns about the provisions, which I hope the Minister will be able to address. The regulations extend section 17 of the Deregulation Act 2015, which made changes to the licensing regime for insolvency practitioners, to financial services. Previously, practitioners were granted an insolvency licence that allowed them to act in relation to both corporate and personal insolvency cases.

My concern is that bankruptcy is very different from corporate insolvency. As some insolvency practitioners have pointed out, if someone acts only on bankruptcy, how can they understand corporate insolvency? Likewise, if someone has been doing corporate insolvencies all their life, how can they understand adequately what is involved for a sole trader or a partnership, or for personal bankruptcy as a whole? I would be interested to hear the Minister’s analysis of that point.

A question was asked in the Deregulation Public Bill Committee about the impact on the quality of professional work of requiring practitioners to pass only one part of the insolvency exams. It is an extremely rigorous set of qualifications. I worked for an insolvency practitioner a very long time ago, and the qualified insolvency practitioners in the firm generally came from a cohort of which only 2% passed the professional exams, such are the high standards in the profession. There has been great concern about the impact of these changes on the profession.

Similarly, the Opposition had serious concerns about section 118 of the Small Business, Enterprise and Employment Act 2015, which is also extended to financial services through this statutory instrument. That section amended the Insolvency Act 1986 to allow a liquidator or administrator to assign causes of action that arise on a company going into liquidation or administration. Opposition Members said of the section:

“This clause would allow the office holder to assign not only the right of action but the proceeds of such action. By ensuring that the purchaser would stand to gain fully from potential benefits arising from the action, alongside bearing all the risk and cost of pursuing the claim, the Government are assuming that a clear incentive will be created to pursue more wrongdoers. The clause may well deliver in that regard. However, there may be other, unintended consequences.”––[Official Report, Small Business, Enterprise and Employment Public Bill Committee, 4 November 2014; c. 445.]

I would be grateful if the Minister gave us examples of how the section has been implemented thus far to help us understand its extension to financial services.

The statutory instrument includes measures to support unsecured creditors, but may I ask about the impact on staff? Staff are ring-fenced in insolvency proceedings and have been for some time, but there is a limit to how much money is recovered for redundancy payments during insolvencies. We have seen that in high-profile examples, such as BHS and Comet. I had a Comet store in my constituency, so I know how much money staff members were still owed after the Government-backed scheme was exhausted. Will the changes to the support for unsecured creditors make any difference in helping staff to recover the excess amounts not covered by the Government schemes, or is this just a more general set of changes for unsecured creditors?

Similarly, there is the opportunity for administrators to take action against directors for fraudulent or wrongful trading. Will the Minister give us examples of where the provisions that have already been approved outside financial services have been applied? That will indicate whether there will be successful additional action when they apply to financial services.

I mentioned two high-profile cases, but there are a number of others. There is great concern inside and outside Parliament about the actions of some directors. Philip Green is a notable example; we are all familiar with his having agreed a sum of £363 million out of a £571 million pension shortfall. Is that an example, or are there other examples, of where the changes in regulations will enable action to be taken against directors to ensure that they act in the way that most people would expect them to? Do the terms “fraudulent or wrongful trading” cover those sorts of examples? Can we be given some assurance that the changes, which the Opposition broadly welcomed when the original legislation was passed, have started to create the intended improvements and have been helpful in supporting creditors and ensuring that directors take a more responsible attitude to business?

With those remarks and questions, I am happy to say that we broadly support the changes that have been introduced. We were pleased that the Government introduced them at the time. Having put our concerns on record, I look forward to the answers. We will not oppose the regulations.

[The Chair]

Of course, this is Parliament and I want to encourage as full a debate as possible, but for the guidance of Members, we are expecting a series of votes in about nine or 10 minutes.

[Stephen Barclay]

I am grateful to the hon. Member for Sefton Central for his broad support for the regulations, which essentially focus on tidying up measures relating to the financial services sector. He referred to Philip Green. The focus of the regulations is to target not the retail sector as a whole, but the financial sector specifically.

The hon. Gentleman raised a number of points. In the absence of the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Stourbridge, I will answer them as best I can. First, he referred to section 17 of the Deregulation Act 2015 and the difference between bankruptcy and corporate insolvency. He asked whether those who are trained to act on one will understand the other. The key point is that we intend that there will be a general paper, and that people can specialise within that. We are separating out the authorisations to allow insolvency practitioners to specialise in one or the other, but there will still be an initial general paper covering both.

I am happy to write to the hon. Gentleman to provide clarification and further detail on his points about fraudulent or wrongful activity and the extension to financial services. The key point to make to the Committee is that we have had a much wider debate on the changes that are being made to insolvency, and I do not want to revisit that wider debate today. We are here to debate the specific impact on financial stability and how we amend the legislation to fit with those wider reforms.

The hon. Gentleman asked about the impact on staff and the extent to which we ring-fence for insolvency procedures. He mentioned the Comet case specifically, which I know caused numerous concerns. The reforms are intended to benefit creditors by removing red tape. Therefore, as far as insolvency procedures are concerned, staff are often creditors and will benefit from the reforms. I hope that that reassures him that where instances like Comet arise in future, there will be some benefits from this exercise.

I am grateful to the Committee for its consideration—

[Bill Esterson]

The Minister kindly offered to write to me on one matter. Perhaps when he does, he could flesh out some of the other points a little more. In particular, can he give details of how staff will benefit, rather than the more general point that he just made? I appreciate that he is probably not in a position to tell me that in detail now, so perhaps that will be an opportunity to address the point more fully.

[Stephen Barclay]

I am happy to provide the hon. Gentleman with a much fuller example, and I commit to writing to him on that basis.

Subject to there being no further comments from Members, I am very grateful to the Committee for its consideration of the regulations today and for the points that have been made. In summary, the regulations make consequential amendments to the special insolvency procedures for financial sector firms to take account of the reforms that we have discussed. I ask the Committee to support the changes.

Question put and agreed to.

Oral Answers to Questions

Bill Esterson Excerpts

Tuesday 17th January 2017 Commons Chamber

[Mr Hammond]

The Government will, of course, consider all proposals for infrastructure investment on their merits. When the industrial strategy Green Paper is published, it will set out the Government’s approach to prioritising infrastructure to support the economy.

[Bill Esterson (Sefton Central) (Lab)]

When the Chancellor considers the effect of bringing in quarterly reporting, will he look at the figures showing that only 25% of our smaller businesses have maintained electronic accounting records and that 38% lack basic digital skills? Will he listen to what the Chair of the Treasury Committee said when he described this as a potential “disaster”?

[Jane Ellison]

I always listen to what the Chairman of the Treasury Committee says. I am considering the Committee’s very useful report carefully. Of course, it acknowledged that the digitisation of the tax service represents the direction in which we should be travelling, but we are looking carefully at the possible impacts on small businesses, many thousands of which we have already exempted through our existing announcements.

Oral Answers to Questions

Bill Esterson Excerpts

Tuesday 29th November 2016 Commons Chamber

[Mr Hammond]

My hon. Friend is absolutely right and of course flood defences are categorised as economic infrastructure precisely because they are a critical enabler of business activity and are critical to protect transport, communications, infrastructure and so on, and we will continue to invest in them.

[Bill Esterson (Sefton Central) (Lab)]

It is about time we heard from this Government about support for our coastal economies because we have just seen, in last week’s autumn statement, a catalogue of six and a half years of abject failure, whether on infrastructure, skills or support for businesses. The coastal communities of Formby and Crosby in my constituency need to hear a lot more from the Chancellor. They need support now and in the future.

[Mr Hammond]

If the hon. Gentleman had been listening, what he would have heard last week was a catalogue of 2.7 million new jobs created over the last six and a half years, a deficit inherited from Labour at a peacetime record high slashed by two-thirds, a million new jobs created in the UK, record employment levels and 865,000 fewer workless households, all of which will have made an important contribution to improving living standards and prospects in coastal communities throughout the UK.

Enterprise Bill [Lords]

Bill Esterson Excerpts

Wednesday 9th March 2016 Commons Chamber

[Brandon Lewis]

No, I am not going to take an intervention. We need to allow other hon. Members to have their say.

We have listened to the principled opposition to our plans. I have listened to colleagues who have made strong, passionate and clear proposals to us, and we are amending them accordingly with our proposal for an exploratory evaluative phase, which we will lay amendments for in the other place—a draft is available for colleagues to look at now. I therefore call on all Members to support the Government’s amendment and to vote against amendment 1.

[Bill Esterson (Sefton Central) (Lab)]

Welcome to our deliberations, Madam Deputy Speaker. I should refer the House to my entry in the Register of Members’ Financial Interests.

That really was the “Trust me, I’m Honest Brandon” speech: “We’ve got it wrong so far. We promise to do better next time, so I’m begging you to support me, despite making such a mess of things so far.” Honestly, have we ever heard anything quite so absurd?

The Minister asked why we did not vote against the measure in Committee, so I will read him what my hon. Friend the Member for Cardiff West (Kevin Brennan) said then:

“I will cut short my comments and simply say that we are against these proposals—”

that sounds pretty clear to me—

“but we will not vote against them at this stage because we want the opportunity to test the opinion of the whole House on Report.”––[Official Report, Enterprise Public Bill Committee, 25 February 2016; c. 328.]

Today that is exactly what we are doing.

--- Later in debate ---

[Joan Ryan]

Is my hon. Friend aware of any provision that allows Government Members to pre-empt a decision in the other place, or to offer this strange variant on a deferred Division on a proposal that nobody anywhere—other than those on the Government Front Benches, and possibly not all of them—actually wants?

[Bill Esterson]

My right hon. Friend makes a good point, and the Government have had ample opportunity in the Lords—[Interruption.] As my hon. Friend the Member for Makerfield (Yvonne Fovargue) reminds me, this provision was not even mentioned in the Lords. It was not in the original Bill, and it was not mentioned until Second Reading, when the Secretary of State announced for the first time that the Bill would cover Sunday trading. The Minister had plenty of time to table amendments then, in Committee, or today, but he chose not to. Why should we believe a word he says?

[Mr Shuker]

Let me underline the point made by the hon. Member for Enfield, Southgate (Mr Burrowes). If we want enhanced provisions, surely the logical thing is to vote for amendment 1. There is nothing to prevent the Minister from bringing his provision forward in the House of Lords, regardless of the vote, other than the fact that we have not amended the Bill and it stands in the way he has presented it to us today.

[Bill Esterson]

I completely agree—

[Brandon Lewis]

rose—

[Bill Esterson]

Let me answer my hon. Friend. Perhaps the Minister will answer the similar point made by the hon. Member for Christchurch (Mr Chope). Why does he not go back to the drawing board, start again with a new Bill, and bring it back to us once it has been properly considered? Both Houses should have ample opportunity to consider this issue properly, debate it fully, and get the right conclusions and legislation. He could start again.

[Brandon Lewis]

Let me help the hon. Gentleman and his colleagues. I outlined the measures in the way I did because, if amendment 1 is accepted, the Sunday trading clauses will not apply. We need to support the Government amendments in order to amend the Government amendments in the House of Lords. From a technical point of view, that is why we did it in that way. I want to ensure that we run these pilots for the benefit of local economies.

[Bill Esterson]

That is complete nonsense. The Minister had long enough when he was on his feet to demonstrate the nonsense of what he is saying. The only way to do this is to start from scratch, and enough hon. Members across the House have made that point. The Minister should listen, particularly to his own Members, who have made that point well.

[Rachael Maskell (York Central) (Lab/Co-op)]

Are we moving towards talking about a hypothetical amendment with hypothetical evidence, when in fact this provision could create huge risk for neighbouring areas that will not be part of the pilot? In 12 months’ time, those businesses may no longer exist.

[Bill Esterson]

That is an excellent point, and I will expand on it later.

[Mark Durkan]

Do we not have a choice today between a clear amendment that we can understand, feel and touch, and, not just a flat-pack pilot scheme, but an artist’s impression of a flat-pack pilot scheme? It would be ludicrous for the House to buy that.

[Bill Esterson]

In both his interventions the hon. Gentleman has made the point as well as anybody, and I completely agree with what he said.

[Several hon. Members rose—]

[Bill Esterson]

I really should make progress and I will take more interventions later.

I congratulate the hon. Member for Enfield, Southgate (Mr Burrowes) and all who have signed his amendment. He gave an excellent speech with a measured and appropriate tone. I commend the Keep Sunday Special campaign for its hard work in making sure all the arguments were marshalled, given the Government’s failure to provide evidence in a timely fashion.

Sunday is the one day a week when workers in larger stores do not have the prospect of having to work long hours. It is the one day a week when those workers have the prospect of spending at least a part of the day with their families. For many people of faith it is more than that: it is the most important day of the week. For many people of faith and otherwise, Sunday is a day of rest. It is also the one day a week when smaller retailers have a slight competitive advantage and can stay open longer if they wish.

Nearly 3 million people, one in 10 of our workforce, work in the retail sector. This matters a great deal. There will be profound changes to the lives of many people, both at work and outside, if the changes go through.

[Mrs Main]

I would like to ask the hon. Gentleman the same question I asked my hon. Friend the Minister. What discussions has he had on what is effectively the pilot operating in Scotland, which we can look at to see how beneficial, leaving aside what is being paid to the workers, liberalisation has been to the Scottish economy? Has he looked at that?

--- Later in debate ---

[Bill Esterson]

I am sure SNP Members will answer the hon. Lady’s question. The reality is that we have a great British compromise that allows different situations in different parts of the United Kingdom.

Before the election, as we have been reminded a number of times, the Prime Minister’s office confirmed that the Prime Minister had no plans to change Sunday trading. The Conservative party manifesto did not state that it would change Sunday trading. Many Conservative candidates—a number of them have told me this—wrote in good faith to constituents to confirm that the Government would not be implementing such changes.

In Committee, the Minister justified the changes by saying the current rules date from a time before the internet—1994, to be precise. In a Populus survey from January this year, however, not a single respondent said that restrictions on Sunday trading were a reason for them shopping online—not a single person out of 2,008 people in a representative sample. Yet online trading is given as a key reason for needing to extend Sunday trading. For good measure, not a single industry or media analyst suggested that the recent poor Christmas trading results were caused by a lack of opportunity for shoppers on Sundays. Unbelievable!

The Minister told us in Committee that the reason for the change of mind was that when the Prime Minister’s office wrote the letter it was as the Prime Minister of a coalition Government, but that now he is the Prime Minister of a Conservative majority Government everything has changed. Presumably, he intended to become the Prime Minister of a majority Government when his office wrote the letter and when it wrote the manifesto, and I rather doubt that that cuts much ice with Conservative Back Benchers who support the Keep Sunday Special campaign.

The Minister also told us that the proposed changes were about devolution and decisions being taken by local people. However, as council chief executives have clearly said, in most areas, the changes would be applied to out-of-town shopping centres, to the detriment of high streets. Those same chief executives have also pointed out that, if one council introduces changes to Sunday trading, their neighbours will have little or no choice other than to follow suit, or run the risk that trade would migrate to businesses in the neighbouring authority. This is not the localism the Government claim. It is passing on the blame for an unpopular measure that only one in eight people support, according to a Populus poll last September. We were told that the changes would help the high street.

[John Stevenson]

Does the hon. Gentleman not think it is right that the people of Carlisle should decide whether shops are open on a Sunday, so that they can compete on an equal footing with Scotland, which is only nine miles away?

[Bill Esterson]

If the hon. Gentleman wants to organise an Adjournment debate about the people of Carlisle, I am sure the Minister will answer him. The reality is, however, that if one—[Hon. Members: “Answer!”] If hon. Members will let me answer the question, I will. If one council changes its rules, neighbouring authorities will feel under pressure to do exactly the same thing. They will have no choice. If a Tesco opens on a Sunday until 10 o’clock at night, then the Tesco, Asda or Morrisons in the borough next door will have to open until that time, too.

[Kevin Hollinrake]

Will the hon. Gentleman give way?

[Bill Esterson]

I am going to make some progress, because unfortunately the Minister took up so much time.

[Sammy Wilson]

Does the hon. Gentleman agree that the hon. Member for Carlisle (John Stevenson) has just made his point for him? If the people of Carlisle were to decide what happened in their area so that they could compete with Scotland, the next-door council would make exactly the same argument. The shadow Minister is exactly right: that would have the effect of ensuring that this was not localism, but a national decision.

[Bill Esterson]

I thank the hon. Gentleman for his intervention. The hon. Member for Kensington (Victoria Borwick) asked the Minister about zoning and whether London could be a single zone, but why stop at London? Why not designate England as a single zone, given that that is exactly what would happen because of the domino effect of the proposal?

[Barbara Keeley]

My hon. Friend is making a very good speech. The Trafford centre is a large shopping centre situated next to my constituency. It attracts an enormous amount of traffic, so if it extends its hours my constituency will never get a moment’s peace. Moreover, building work on the Government’s motorway project can take place only when the Trafford centre is not busy. [Interruption.] It is not my council. If the Trafford centre opens 24/7, the logistics will make things impossible for my constituents.

[Bill Esterson]

There are similar examples up and down the country. My hon. Friend is absolutely right.

Let me turn to some of the evidence we have been given in the lead-up to this debate. During the Olympics, convenience stores experienced a fall in Sunday trade of up to 7%. There was also a displacement of trade to different times of the week, but, instead of an increase in overall trade, there was a slight fall. The Government assumption that people will have more money to spend just because the shops are open longer does not bear scrutiny once we start to look at the evidence.

Meanwhile, the extra Sunday hours would increase costs in those large stores that stay open longer, and while there will be some displacement from convenience stores to larger retailers, as happened during the Olympics, there will be little or no overall increase in trade to pay for the increased cost in most shops.

[Chris Philp]

Will the hon. Gentleman give way?

[Bill Esterson]

I am going to make some more progress before I take any more interventions.

The larger retailers that open longer will have to find a way to reduce costs, which means removing the premium for shop workers. Given that the major retailers operate UK-wide, a change in pay and conditions in England and Wales will mean changes in Scotland and Northern Ireland as well. Premium pay on Sundays is viable across the UK because large retailers in most of the UK are restricted to six hours’ opening. The time and a half paid to many shop workers will be under threat to make up for staying open longer across the UK, which, of course, is why this is a UK-wide matter and why it is entirely appropriate that Members from across the UK have a vote on this very important proposal.

Removing time and a half would cost shop staff who work an average shift in Scotland £1,400 a year, which in anybody’s money is a very significant hit, particularly for those on low pay in the retail sector. The proposed changes in England in Wales would have a profound effect on workers in Scotland, and I am glad that the SNP recognises that Scottish workers will be hit. I was a bit surprised when the hon. Member for Livingston (Hannah Bardell) told us in Committee that, while her concerns focused on Scottish workers, the SNP welcomed the additional employee protections in the Bill, which she ascribed to

“the strong and principled action of the SNP”.––[Official Report, Enterprise Public Bill Committee, 25 February 2016; c. 322.]

We will come to how those protections will not do what the Government claim they will, but I am glad that the letter from my right hon. Friend the Leader of the Opposition and the leader of Scottish Labour, Kezia Dugdale, has had the desired effect. I welcome the SNP’s confirmation that its Members will vote against the Government, and I look forward to them joining us in the Lobby.

[Hannah Bardell]

Will the hon. Gentleman give way?

[Bill Esterson]

I don’t have a choice, do I?

[Hannah Bardell]

On a point of clarity, the hon. Gentleman can read the record for himself, as can members of the public and Members of this House, but we have been very clear. We engaged with all sides of the argument up until the point where we took a decision at our group meeting as part of a democratic process.

[Bill Esterson]

I am grateful to the hon. Lady for that intervention. All I will say is that I am glad that she and her colleagues came to the right decision in the end; it does not matter how they got there.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Will the hon. Gentleman give way?

[Bill Esterson]

I am not going to take any more interventions at the moment. We have not got very long, because the Minister took so much time, and a lot of Members want to speak.

The Minister claimed that the Bill would help workers, but 91% of shop staff oppose longer Sunday opening hours and only 6% want more hours on Sundays. Listening to the Minister in Committee, we might have been forgiven for thinking that the figures were the other way around. The Minister says that he is improving workers’ ability to opt out of Sunday working. Let us just go through some of what happens now. Staff who apply for jobs with some retailers are asked whether they will work Sundays. Failure to say yes can mean no interview. Staff who are still in their notice period who try to opt out of Sunday working can and do lose their jobs. Staff who try to opt out of Sunday working can and do lose hours. Staff who want to opt out come under pressure from managers and colleagues not to do so. The reality is that staff already have to work on Sundays in too many large retailers when they do not want to, when they would rather spend more time with their children or—as most people want to do on Sundays—enjoy leisure time or rest. What happened to the family test?

[Chris Philp]

Will the hon. Gentleman give way?

[Bill Esterson]

No, I am not going to give way.

The Prime Minister said that the family test should apply to all legislation. I understand that it is in the impact assessment. I have not had time to read it in detail, because we had only two hours’ notice of its publication, but I understand that it says that when it comes to the family test, the overall impact is unclear. It is clear enough to families of shop workers up and down the country that the measure will have a profound effect on them and on what happens on Sundays.

[Helen Goodman (Bishop Auckland) (Lab)]

Will my hon. Friend give way?

[Bill Esterson]

I am not going to give way at this stage.

Because of the cost of going to an employment tribunal, it is beyond the means of most workers to challenge their employer, especially if they have just been fired. The changes to employee rights will not change the realities faced by shop workers, and they will not change the difficulty of getting access to justice at an employment tribunal. Shop workers will, all too often, have no choice, just as they often have no choice at present. They will have to work longer hours, in many cases, whether they want to or not.

What of the evidence for the reforms? We have heard the farcical answers about the consultation, and how the Department cannot publish the details because people chose to write their answers in their own words. What absolute nonsense. There are so many things to choose from in this farce, but that really sticks out. The Government have claimed that a majority of large businesses are in favour of the changes. That is one bit of the consultation that they have bothered to publish. However, retailers, including Sainsbury, Tesco, John Lewis, Dixons and Marks & Spencer, expressed their opposition to the Prime Minister at a meeting last week and pointed out that their customers do not want to be able to shop for longer on Sundays.

Until noon today, we awaited the publication of the impact assessment, on which, presumably, the Sunday trading clauses are based. We were told in Committee that it would be published soon. It has been published, as of two hours ago, so Members have had less than three hours to consider the Government’s impact assessment on a piece of legislation. Seriously, what a way to do business. It really is an outrage.

The measure represents a broken election promise. It will have a domino effect among local authorities. High streets will be harmed, not helped. Smaller retailers will lose business. Staff will be unable to refuse to work longer hours. There will be cuts to premium pay in Scotland, as well as in the rest of the UK. That is all backed up by the lack of any published evidence to support the measure until the last minute, and I am not convinced that it does back it up. Remember that the Bill started life in the Lords, and Sunday trading was introduced in the Commons only at the very last minute. The measure has not had any scrutiny in the Lords. This is a significant change for businesses, shop workers, faith groups, families and all who want to keep Sunday special. The Government have not made the case for their proposal, and the suggested possible amendment, which may be introduced at some time in the future, will not do so either.

We know that the Government want to make this change, although many large retailers do not. If they really insist that this is right and that there are serious reasons to introduce something so far reaching that was not in the manifesto, they should do so with full scrutiny and with evidence. They should give Members of both Houses the opportunity to make sure that any changes made are done with great care, given the far-reaching consequences of what is proposed. That does not mean tabling a last-minute manuscript amendment in a desperate bid for a last-minute deal.

As far as what is proposed on the amendment paper today and the way in which it has been proposed is concerned, Labour Members will stick to the consistent line we have had all along. Let us keep our great British compromise on Sunday trading and support the amendment tabled by the hon. Member for Enfield, Southgate.

[Several hon. Members rose—]

Enterprise Bill [ Lords ] (Seventh sitting)

Bill Esterson Excerpts

Thursday 25th February 2016 Public Bill Committees

[Anna Soubry]

We need to remind ourselves, of course, that the Government have been clear that ending six-figure payments should apply to all public sector organisations, with few exceptions. Of course, it is the taxpayer who picks up the cost of exit payments and employees who have specialist skills should not automatically be exempt.

I was a little troubled by the contribution from the hon. Member for Wakefield, and not because I disagreed with her for one moment about the dreadful accident the day before yesterday at Didcot and the subsequent fatalities. It is undoubtedly the case that many people do dangerous jobs. I am reminded, of course, of all those who work in the fire and rescue service; we often forget that the fire brigades provide the rescue service as well. They do incredibly dangerous work, not only when they are fighting fires but when they are rescuing people. Although it is extremely rare, if it ever happens, that we make firefighters redundant, nevertheless they are also included in this new provision. I do not think that the fact that someone does a dangerous job should in some way exempt them.

The list of exempt organisations will be set out in the regulations, not in the Bill itself, and of course they will need the approval of both Houses of Parliament. The guidance accompanying the regulations will set down the criteria that Ministers, or those who have been delegated the responsibility, must consider in decisions to relax the cap. In other words, there are exemptions that can be made, but they will be determined in a list that, as I say, will require the approval of both Houses.

Regulations relaxing the cap can apply to individual cases and to groups of individuals, to cater for cases where Ministers may wish to consider organisational cases for relaxing the cap. So there is already a mechanism in place for organisations to be considered for exemption. Therefore, the amendment is unnecessary.

The regulations implementing the cap will be in force from October 2016 at the very earliest. However, as I think I have explained—it has certainly been explained in correspondence, but now I will make it very clear again—Magnox employees who are in the current redundancy programme and due to exit by September 2016 will not—repeat, will not—be caught by the cap, and the cap will not affect the core terms of the pension scheme available to Nuclear Decommissioning Authority staff, in other words Magnox employees, such as the retirement age or the basis on which their pensions accrual rate is set.

The hon. Member for Cardiff West used a particular example, of course, from somebody who had quite properly written in, which is absolutely the right thing to do. In relation to that point, I will say that I have indeed had meetings with MPs. I have not met the unions, not because I have any difficulty in meeting unions, but only because—unfortunately—my diary is pretty hectic.

However, I particularly made the point when I met the MPs, and I have made it clear to the unions by way of a letter, that people should please use their MPs to make full representations to me. As we all know, in this place Members can lobby a Minister in a corridor, or anywhere we bump into each other. That is the quickest and easiest way, but it is not a slight on the unions. I have specifically said to Members of Parliament, “Get back to them, and tell them about our meeting. Use your good self to communicate through.”

[Bill Esterson (Sefton Central) (Lab)]

Will the Minister give way?

[Anna Soubry]

In just a moment. I have drifted off, and I want to come back to my point on Magnox pensions. These are employer-funded costs that form part of the exit payment, and the cap does not affect the core terms of the pensions. That is important, and everyone is beholden to ensure that employees get the facts, not the myths or the spin. The cap does not affect the core terms of their pensions, such as accrual rates and normal pension age. I hope that might be of some assistance.

--- Later in debate ---

[Bill Esterson]

I want to make a few remarks as the Minister did not allow me to intervene earlier. My hon. Friend the Member for Wakefield made a point about consistency and the treatment of workers, whether they are senior bank executives or Magnox workers. Reasonable people might expect similar and decent treatment from the Government, whether they work in a bank, in decommissioning in the nuclear industry, or anywhere else. That is the grave concern about some of what we have heard and about the clauses tabled by the Government, which we want to amend. I tried to intervene on the Minister’s comments on trade unions. I do not doubt her desire to engage with trade unions or her understanding of the importance of talking to the trade unions.

The Minister is right that constituency MPs have a crucial role in discussing with Ministers the impact of legislation on their constituents. Workers in the nuclear industry who are extremely worried, with good reason, about the proposals in the Bill are rightly being represented by their Members of Parliament and by members of the Committee. Indeed, representations were made on Second Reading and will be made on Report in two weeks’ time. The Minister made comments about the pressures on her diary, but I gently say to her that partnership between Government, business and the workforce, especially through its trade union representation, is a hallmark of successful economies.

As success comes in large part from the relationship between the Government and the trade unions, in order to do the Magnox workers justice, the Minister should have made it a priority to meet their trade union before we got to this point in Committee. It is a great pity that she did not.

[Kevin Brennan]

I thought the Minister’s response was disappointing, given the weight of the evidence submitted to the Committee and the strength of feeling among hon. Members and their constituents. The workers have made their plans and taken decisions on the basis of guarantees and promises given by Government. As far as we can surmise from the limited information that the Minister is prepared to provide about the Government’s intentions, it now appears that the Government are going to take action that will affect them.

To listen to the Minister, one might think that the workers would not be affected at all. She seemed to be dealing with all sorts of shibboleths that were nothing to do with what is in the new schedule, rather than telling us directly whether the workers’ pensions and prospects would be affected by the exit payment cap. The Minister rehearsed arguments about all sorts of scares, which may have been put about by mythical people she was not prepared to name, but going by the evidence submitted to us, the workers in question will be affected—and to quite a large extent.

We represented those arguments and made the case on the workers’ behalf, and quoted, albeit selectively, from a heavy weight of evidence that they submitted to us about their circumstances. All we got from the Minister was a response to issues that had not been raised in the workers’ letters to us and a vague reference to secondary legislation at some later date that will name some as yet unknown entities that may be excluded from the cap.

I am sorry, but I was brought up not to buy a pig in a poke, and if I were the Magnox workers I would not fall for that for a second. It is the oldest trick in the book for Ministers to say “We might do something at a later date, but let something through in the meantime.” That is not why we are here. We are here to get on the record the Government’s position, and whether they accept the arguments about Magnox and other workers that we have set out in the new schedule. We want to know whether they are prepared to exclude those workers, through secondary legislation, from the exit payment cap. At the very least, will they give a strong indication that that is how they are minded to act?

All we got from the Minister was an empty sheet of paper, with nothing written on it. I am afraid that is not good enough for the constituents who have written to us and who are directly affected.

--- Later in debate ---

[Brandon Lewis]

Actually, we are enhancing the position for both employers and shop workers. We are improving shop workers’ rights and giving better access to and understanding of those rights; we are putting a bigger duty on employers to notify their staff of their rights; we are increasing the penalty for employers who do not abide by the rules; and, importantly, we are giving wider opportunity and choice to local economies and people who wish to work longer on a Sunday or to spend time with their families either by shopping on a Sunday or before or after they have shopped.

Let me be clear to the Committee more generally: if a shop worker suffers detriment, or is dismissed for exercising, or even just planning to exercise, their opt-out rights, the employer will be breaking the law. It is important that that is on the record so that anyone can see it.

[Bill Esterson]

How does the Minister envisage the rules being enforced? One concern that has been expressed is that the Government can legislate all they want on these sorts of things, but in the end it comes down to the balance of the relationship and whether anyone is prepared to challenge their employer. When a law has been broken, it comes down to whether anything meaningful—anything with teeth—can be applied. How will it work and how realistic are the proposals?

[Brandon Lewis]

I say gently to the hon. Gentleman that, if during the lunch break he looks back over what I said just a few moments ago, he will see that we are increasing the penalties on employers who do not abide by the rules. Not only are we increasing the financial penalty and, therefore, the benefit for an employee who is unfairly treated, but we are giving further responsibilities to the employer on the notice period that they need to give.

It is important that people understand what workers’ rights are, which is why we are increasing the number of ways for people to understand them and know how to exercise them. I say it again: a very large number of people in this country want to work longer hours and want the flexibility to be able to work more hours on a Sunday as opposed to other hours in the week.

Some retailers I have spoken to have been clear that in some areas Sunday is the easiest day of the week for them to recruit staff who want to work. It is good for family opportunities, and it is particularly good for women and students who want to work. We want to ensure that we create that opportunity for more local areas so that they have economic growth and create more jobs, and so that there are more opportunities for people to work if they want to, all while retaining the flexibility for both the local area and shop workers to have the choice.

[Bill Esterson]

rose—

[Brandon Lewis]

I can see that the hon. Gentleman is very keen to intervene again.

[Bill Esterson]

Well, it is an incredibly important point. I was talking about the penalties. How likely is it that the rules will be enforced and the penalties used? We are told that there has been an impact assessment, but it has not been published yet, so we are in the dark as to just how effective the remedies are going to be.

--- Later in debate ---

[Brandon Lewis]

I can repeat what I said for the hon. Gentleman very clearly. First, where the employer fails to comply with the notification requirement, the notice period for both opt-outs will reduce automatically: from one month to seven days at large shops, and from three months to one month at small shops. Secondly, we are enabling an employment tribunal to make a minimum award if an employer is found to have failed to notify shop workers of their opt-out rights in the context of a related successful claim. With that, I commend the new clause to the Committee.

[Bill Esterson]

Finally, we have the long-anticipated debate on Sunday trading. Until the eve of Committee stage, uncertainty reigned as to whether we would be debating it at all—as it was, of course, only the week before that the Secretary of State had announced that Sunday trading would be part of the Bill. From what the Minister just said, it seems that the new clause might be more correctly called the “Harrods clause”, given that Knightsbridge is the only part of the country he could cite where there is support from the high street for the Government’s proposals.

[Brandon Lewis]

As I am sure the hon. Gentleman will recollect, I explained the matter to him. Think of the impact across the country. Even in a constituency such as mine, where tourism in its high street is looking to compete with out-of-town shops and online, it is a massive opportunity. I gave an example to highlight just how big these numbers are and how many jobs will potentially be created. I hope he understands that.

[Bill Esterson]

Those are points I will come to. I did not know that Harrods had a shop in the Minister’s constituency or that it contained the Knightsbridge of the east.

The other description might have been the “domino clause”. The Minister talked about local leaders having the opportunity. The Opposition fully support the proper devolution of powers and responsibilities, and the ability to make a difference in the local area. Although he talked about local leaders, he did not talk about the views of the local community, the workers affected or the small independent retailers and the impact the proposals will have on many small shops.

The problem is that, when talking to local authority leaders and chief executives, as some organisations have done, one main reason given for saying they may well end up implementing these provisions is that they feel they have no choice. Their neighbours having allowed Tesco, Asda or out-of-town shopping centres to have extended opening hours on a Sunday, they fear that loss of trade within their own boundaries will force them down the route of using these provisions in their own local authority area.

The Government knew full well that any attempt to reform Sunday trading legislation would spark significant debate and opposition from a wide range of stakeholders. The Prime Minister’s spokeswoman wrote on 20 April last year to the campaign group Keep Sunday Special assuring them that the Conservatives had no plans to relax Sunday trading laws. Indeed, it was not in the Conservative party manifesto. She wrote:

“I can assure you that we have no current plans to relax the Sunday trading laws. We believe that the current system provides a reasonable balance between those who wish to see more opportunity to shop in large stores on a Sunday, and those who would like to see further restrictions.”

There we have it. Presumably, in the Conservative party, the Government and the previous coalition Government, when the Prime Minister’s official spokesperson spoke it was on his behalf and we should take as gospel what she said at the time. The country as a whole should have trusted what we were told on 20 April. The Government knew this would be opposed and were that worried about it that they went so far as to reassure the country before the election that they had no plans to change Sunday trading laws. They knew it would be opposed, cause problems and break the consensus that had stood for 22 years, since the Sunday Trading Act 1994.

The amendments we are considering include a change to the name of the Bill in amendment 77, as the Minister has just said, to include Sunday trading. We have to wonder what is going on when a Bill started in the Lords and went through the entire Lords proceedings without any mention of Sunday trading. Only on Second Reading in this House was Sunday trading mentioned. In fact, it was so late that Members who oppose changes to Sunday trading did not even know the Bill would consider it.

I spoke to a number of Members on the Government Benches on the day of Second Reading and they had no idea that the issue was in the Bill because they were not in the Chamber to hear the Secretary of State mention it in his opening speech. Had they been, they could have made their opposition clear and raised their concerns but there was no such opportunity for Government Members. That is a great shame.

[Stephen Barclay (North East Cambridgeshire) (Con)]

With the leave of the Chair, I beg to move that the Committee be now adjourned.

--- Later in debate ---

[Bill Esterson]

My speech would take us all the way through the lunch period, which may not be popular with Members.

[The Chair]

I understand that Mr Esterson will have the opportunity to make a second speech if he wants to return to the topic later in the debate. He may wish to avail himself of that opportunity.

[Bill Esterson]

Thank you. I will take advantage of that.

Ordered, That the debate be now adjourned.—(Stephen Barclay.)

Small Businesses: Tax Reporting

Bill Esterson Excerpts

Monday 25th January 2016 Westminster Hall

[George Kerevan (East Lothian) (SNP)]

I commend the hon. Member for Hertsmere (Oliver Dowden) for bringing the matter to our attention. As is usually the case with Petitions Committee debates, we come here to speak on behalf of not ourselves or our parties, but the 100,000-plus individuals and small businesses who have expressed their concern.

I heard the Minister’s words in the Chamber about the Google issue and I take his point that small businesses are not being asked to commit to quarterly full tax returns. That is understood, but the very fact that so many people have signed the petition—every Member will be able to cite examples of constituents and local businesses who have expressed their worries—shows how worried people are, and that indicates clearly that the Government need to consult further.

This is not about whether we should implement a fully electronic, real-time tax system on the internet, as all that would provide benefits. The issue is not the technology, but bringing that technology into play and taking small businesses and the electorate with us. The charge against the Minister and the Government, which is not new or made in a cavalier way, is that there is a rush to judgment.

The Minister simply has to tell us that there could be a delay in implementing the quarterly information updates and that, rather than setting a band at £10,000, there could be a variation as to when small businesses of various sizes are brought into the system. He could tell us about checks and balances with regard to the delivery and effectiveness of HMRC’s system that must be addressed before activities such as updating quarterly are triggered. He could provide all sorts of safeguards so that we could reassure our constituents and give all-party support to the introduction of the new technology.

[Bill Esterson (Sefton Central) (Lab)]

Like the hon. Gentleman, I and, more importantly, my constituents would be fascinated to learn how increasing the rate of reporting to quarterly—whether that involves a full report or an update—reduces the amount of administration faced by businesses. That is a crucial point. Did he hear the estimates at the time of the Chancellor’s announcement that HMRC would collect an additional £600 million as a result of the policy? Is the purpose of the change really to increase tax returns from small businesses? Deals such as that with Google, which was the subject of today’s urgent question, have caused great unease and real anger not just in my constituency, but right across the country.

[Philip Davies (in the Chair)]

Order. Before Mr Kerevan resumes his speech, may I say that interventions should be somewhat shorter than they have been?

Oral Answers to Questions

Bill Esterson Excerpts

Tuesday 19th January 2016 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right. We are investing in transport infrastructure in the Southampton area and along the south coast, as I was just saying to my hon. Friend the Member for Havant (Mr Mak). We understand that all parts of the country can benefit from additional investment in transport infrastructure, and that is why we are increasing the transport budget even at a time when public budgets are tight. None of these things would be affordable if we crashed the economy.

[Bill Esterson (Sefton Central) (Lab)]

The introduction of quarterly reporting and tax returns has been described by the Institute of Chartered Accountants as an additional burden for business. Does the Chancellor understand the very real anger among businesses in my constituency and around the country that they are being penalised while many of the largest corporations are allowed to avoid tax altogether?

[Mr Osborne]

We have increased our action against large-scale corporate tax avoidance and evasion, and the new diverted profits tax is designed to deal with the very real anger that people feel, particularly in the small business community, when they see large businesses not paying tax. We are also dealing with the burdens of tax administration, and we are consulting small businesses. I would just make the point that we would be crazy as a country not to make use of new digital technology and the internet to update and modernise our tax collection system, and we would regret not taking those steps today and letting other countries power ahead in reducing the burdens on business.

The Economy

Bill Esterson Excerpts

Wednesday 18th November 2015 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

Let me begin by responding to what was said about the deficit by the hon. Member for Cheltenham (Alex Chalk). We should judge the Conservatives by their own record. In 2010, the Chancellor said that he would get rid of the deficit in one term; that target rapidly disappeared. He then said that he would halve the deficit in one term, a plan that was clearly shown to have failed when it was down by only a third at the time of the election. He then moved the target to 2019, and then to 2020. When it suits him, the Chancellor changes his mind and his measure as much as he can on the deficit, so it is clearly not as important as Conservative Members claim.

[Jeremy Quin]

Surely the hon. Gentleman welcomes the flexibility shown by my right hon. Friend the Chancellor. After all, Opposition Members are always asking him to show flexibility. He makes certain that he stays on course and we get to the right place. The deficit has been halved to date, and that will continue, but it is happening in a measured and effective way.

[Bill Esterson]

Of course we need to get rid of the deficit so that we can start reducing the debt, but it must be done in a way that is sustainable, and that can only happen if we grow the economy.

The Government have presided over the slowest recovery on record. Tax receipts are an indicator of the health and productivity—[Interruption.]

[Madam Deputy Speaker (Natascha Engel)]

Order. A conversation is taking place across the two Front Benches while a Member is speaking. Let us listen to him.

[Bill Esterson]

Thank you, Madam Deputy Speaker.

As I was saying, the Government have presided over the slowest recovery on record. Tax receipts are an indicator of the health and productivity of the economy, and they fell as a result of the financial crisis. In the United States, Germany, France and Canada, they had returned to pre-crisis levels by 2013, while in the United Kingdom they remained 15% below those levels.

Meanwhile, the Tories have claimed that the financial crisis was the result of public spending—the result of recruiting nurses and doctors, and building new schools and hospitals. In fact, spending in this country was below the average among similar advanced western economies. The crisis was caused by an actual financial crisis, not by Government spending. The fact that the current Chancellor supported Labour spending plans before the crisis says what needs to be said about the claims that have been made ever since. Conservative Members know that the crisis was a financial one, not a Government one. They also know that the Chancellor was calling for less regulation of the banks, not more, in the run-up to that same crisis.

The fact is that in 2010 we had half the level of unemployment, half the number of home repossessions, and half the number of business bankruptcies that we saw during the Tory recessions of the 1980s and 1990s, precisely because the Labour Government intervened to support and protect people, businesses and jobs. The economy was recovering strongly in 2010 as a result of the stimulus injected by that Government, but it came to a juddering halt with the emergency Budget of June 2010, when investment in capital infrastructure projects was stopped. In 2010, other countries continued their stimulus package for far longer, and businesses, jobs and the wider economies of those countries saw the benefits.

So what should happen now? Let us look at what businesses say. They say that they want to see investment in infrastructure, energy, transport, broadband and, especially, skills. They say that they need those skills so that they can grow and pay good wages. That is what the CBI says, it is what the EEF says, and it is what the Federation of Small Businesses says. When businesses want to grow, they invest. They understand the need to invest in new equipment, property and skills. They develop a business plan. They invest capital and pay it back from the proceeds of growth. Households do something similar, whether through student loans to invest in skills or borrowing money to buy a house; they invest for the future. We take out a mortgage typically over about 25 years and the bank or building society works out whether we can afford the interest payments and the capital repayment over the term of the mortgage. Government should invest in the future, just as business does, and just as homeowners do.

The lack of an industrial strategy is clear in how the steel industry has been abandoned. The Government do not seem to believe in having a business plan for the economy at all. They do not believe in investing for the long term or in following the good practice of businesses in seeking a return on investment in the form of growth and increased tax receipts as the way to higher living standards and deficit reduction. The Government say that they will not borrow money at all and won a vote in this House to confirm their view. The Chancellor used to say that fiscal responsibility charters were the mark of a lack of confidence in a Government’s own policies; not any more, however, because they forced that through the House. The “fiscal irresponsibility charter”, as it is better known, is the equivalent of the Government saying that if they were a householder they would not take out a mortgage to buy a home and they would have to buy a house out of their annual salary. If this Government ran a business, they would not take out a loan to buy a new van or a new piece of machinery.

The Government have signed deals with the Chinese Government to build and run our new nuclear industry. They are happy for foreign Governments to invest in this country, but not for our own to do so. That is a strange way to do business, because in the end these sums of money will have to be repaid, it seems, through much higher energy prices paid by those very same people the Government say they worry about in terms of the deficit. This is a Chinese form of private finance initiative by any other name.

Let us have a debate about borrowing, the best value for money and the best way of investing in the future of this country. Let us not rely on a charter that is economically illiterate and undermines economic success and prosperity.

Tax Credits

Bill Esterson Excerpts

Tuesday 15th September 2015 Commons Chamber

[Seema Malhotra]

The hon. Gentleman continues to miss the point. We cannot remove tax credits in that way without ensuring first that there is an increase in wages for families so that they can support themselves and not see an increase in household debt.

[Bill Esterson (Sefton Central) (Lab)]

On that point, the Institute for Fiscal Studies figures that were given to the Treasury Committee show that the average gain is only £200 for the 8.4 million working age households who are estimated to lose £750 through this measure. Does that not show that the Conservatives’ claim of being the party of working people is a complete fraud?

[Seema Malhotra]

My hon. Friend has made his point incredibly well. I now wish to make some progress.

The IFS has also shown that those on the lowest incomes are being hit the hardest by the Government’s tax and benefits changes. It is also of great concern that many tax credit claimants will not be aware of the cuts and will suffer additional hardship from April without any time to adjust their budgets. Cuts in families’ income will have wider economic impacts. For example, the changes will hit local businesses, and less will be spent in our local shops.

It is staggering that the Budget document did not include a distributional analysis of the impact of the Chancellor’s spending decisions. It is no wonder that people believe that that was deliberate and part of the intent to hide the impact of these changes. That pattern has continued today.

Greece

Bill Esterson Excerpts

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

I know my hon. Friend has consistently held that view since he put it in his maiden speech, as I remember from listening to him many years ago. He identifies two challenges. One, fiddling the figures, we have addressed in this country by creating the Office for Budget Responsibility. When it comes to ever-closer union, that is precisely one of the issues that we are seeking to address in the renegotiation that we are conducting with the European Union.

[Bill Esterson (Sefton Central) (Lab)]

The Chancellor has been asked a number of times about the worst-case scenario for this country as a result of the crisis. Can he spell out what that would look like for the people of this country?

[Mr Osborne]

As I have said, Britain is not immune to the problems in the European economy. Some 50% of our exports go to the European Union, even if only a very small proportion of that goes to Greece, and we are a very large financial centre, so there would be an impact on our economy if the Greek crisis continued to deteriorate. That is why it is absolutely in our interests that there is a solution.