Furniture and Furnishings: Fire Safety

Kelly Tolhurst Excerpts

Thursday 18th July 2019 Written Statements

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

Today, I will publish the Government response to our consultation on updating the Furniture and Furnishings (Fire) (Safety) Regulations 1988, which set fire resistance requirements for cover materials and fillings used to make domestic upholstered furniture.

The review aimed to ensure that our legislative framework maintains fire safety for consumers, reflects technological advances in furniture manufacturing practices, and facilitates a reduction in the use of hazardous flame-retardant chemicals as a means of making furniture fire resistant.

The consultation sought views on proposals to amend the testing regime. It also sought views on proposals for clarifying and amending the scope of the regulations, strengthening the traceability requirements to bring furniture into line with other product sectors, updating labelling rules, and extending the time period for trading standards to institute legal proceedings.

The Government are committed to protecting consumers from all safety risks, but we will not compromise on fire safety. During the course of the review, to ensure the highest standards, we sought the views of chief scientific advisers from relevant Departments across Government.

The Government will now develop a new approach to address the different sources and chemical risks posed by fire to upholstered furniture and furnishings. It will focus on safety outcomes (such as reduced risk of ignition, reduced risk of fire spread) and will be underpinned by a set of essential safety requirements which all upholstered furniture placed on the market must meet.

This approach is consistent with that taken for other consumer products. The (new) legislation will be supported by British Standards which will be developed by the British Standards Institution in partnership with a wide range of stakeholders, including industry, fire-safety experts and consumer representatives.

This new approach will continue to ensure that manufacturers place only safe products on the UK market. I will consult on the detail of this new approach in due course. In the meantime, the existing regulations will continue to apply.

[HCWS1759]

Oral Answers to Questions

Kelly Tolhurst Excerpts

Tuesday 16th July 2019 Commons Chamber

[Chuka Umunna (Streatham) (LD)]

4. What assessment he has made of the effect of two-factor payment authentication on (a) consumers and (b) businesses.

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

The implementation of strong customer authentication, which mandates two-factor authentication for some online payments, will introduce more secure payments for individuals and businesses. That was introduced by the second payment services directive. The Treasury published an impact assessment on the implementation of that EU directive in 2017.

[Chuka Umunna]

I am staggered that the Government are not doing more about this ticking timebomb for online retail, which is on track to cause major disruption. The British Retail Consortium estimates that 75% of retailers are unaware that it is coming into effect in September. It is the same for consumers. The implementation is forecast to lead to the failure of nearly a third of e-commerce transactions from September, due to poor access to a proper phone signal or wi-fi. Will the Minister ensure that no enforcement action will be taken for at least 18 months, to give our retail sector breathing space to adapt to the new rules?

[Kelly Tolhurst]

I point out that there was £309 million-worth of fraud in e-commerce in 2016 versus £13.6 million in 1998. The hon. Gentleman will know that the European Banking Authority published an opinion on readiness for implementation and the Financial Conduct Authority published a statement in June. They are working on mitigations past the September implementation date. They are working with industry and providers to make sure that the essence of the changes prevail, which is to make it safer for merchants and consumers.

[David Warburton (Somerton and Frome) (Con)]

5. What steps his Department has taken to develop sustainable energy in rural communities in Somerset.

--- Later in debate ---

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

7. What steps he is taking to improve product safety.

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

We are providing £12 million a year of new funding through the Office for Product Safety and Standards to strengthen national capacity for product safety enforcement. The OPSS provides specialist expertise, scientific advice, support and training for trading standards, and it leads on national product safety challenges to protect consumers.

[Gerald Jones]

I recently attended an Electrical Safety First event on the dangers of buying second-hand electrical goods. The reality is that many people buy second-hand electrical goods, sometimes not by choice, so will the Minister commit, in the light of the Whirlpool recall, to a public awareness campaign on how to buy and use electrical products safely?

[Kelly Tolhurst]

I thank the hon. Gentleman for raising that question. Last week we took part in a Westminster Hall debate secured by the hon. Member for Swansea East (Carolyn Harris). The OPSS is currently working with Electrical Safety First on various campaigns, to which we have an ongoing commitment. Consumer protection and consumer education are important.

[Stephen Kerr (Stirling) (Con)]

Given the difficulty of tracing the whereabouts of half a million potentially faulty Whirlpool tumble dryers, what discussions has the Minister had with the OPSS on developing a proposal for product registration at point of sale?

[Kelly Tolhurst]

Again, I thank my hon. Friend for his question. In last week’s Westminster Hall debate I committed to developing and testing the ability for mandatory registration of electrical products, which is something we are looking at. It was initiated in a discussion at the Consumer Protection Partnership last Thursday, and we are hoping to get outcomes in the near future.

[Andy Slaughter (Hammersmith) (Lab)]

The Government have known for four years that there were 5.5 million Whirlpool tumble dryers in homes across the UK that were liable to catch fire. Last month, the Minister gave notice that she intended to order the recall of those dryers still in use, but now she has agreed a voluntary recall with the company. Will she reconsider that and use the powers she has? If she does not, how will we know that Whirlpool is taking this seriously?

[Kelly Tolhurst]

I recognise the hon. Gentleman’s concern in this regard. He is absolutely correct to say that we issued a notice of intent to recall on Whirlpool. It submitted its proposal, which we assessed. We also took advice from an expert panel, comprising an independent QC and chief scientific officers from the Health and Safety Executive, the Home Office and the Department for Business, Energy and Industrial Strategy. We decided not only to accept the proposal, which has been published, but to issue a regulation 28 notice with regard to further information that needs to be shared with the OPSS, so that we can review the recall process.

[Carolyn Harris (Swansea East) (Lab)]

8. What plans he has to improve the regulation of second-hand electrical goods online.

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

I have recently written to online platforms to make clear the priority I place on consumer safety. The hon. Lady will know, after her Westminster Hall debate last week, that the Office for Product Safety and Standards is undertaking specific projects to tackle the risks of second-hand and online sales, including targeting those goods entering the UK via fulfilment houses.

[Carolyn Harris]

I appreciated the Minister’s letter this weekend on the online sales of second-hand recalled tumble dryers. Currently, it is possible to upload details of such products on to online platforms without recall notices, or model or display numbers. Her letter states that she has written to these online platforms, but it fails to say which ones. Will she commit to publishing these letters and any advice she has given, in the interests of clarity?

[Kelly Tolhurst]

I would like to reassure the hon. Lady that I have written to not just one online platform, but all the online platforms in relation to this. I would just like to clarify that some platforms have been advertising certain models and Whirlpool has used the same model number for a number of machines, so it is not correct to assume that all models will be subject to recall. As I have outlined, if any platform is selling products that are part of that recall, the organisations are being alerted and the products are being taken down as soon as possible.

[Priti Patel (Witham) (Con)]

9. If he will hold discussions with the Secretary of State for Transport to discuss the potential benefits to (a) businesses and (b) the implementation of the industrial strategy of funding strategic transport infrastructure projects in Essex.

--- Later in debate ---

[Luke Hall (Thornbury and Yate) (Con)]

T4. The introduction of the national living wage has helped to raise the living standards of many of my constituents. What assessment has the Minister made of the impact of increasing the national living wage from 60% to 66% of median earnings and the ability of the retail sector to continue to grow its workforce considering that change?

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

Given my hon. Friend’s background, I know that he has a keen interest in the retail sector. In April, the increase in the national living wage meant that nearly 1.8 million workers received an above-inflation pay rise. The Government have stated our ambition to end low pay in the UK. The national living wage is on track to meet its target of 60% of median earnings by 2020, and we will announce its future target later this year. In setting a new target, we will work with the expert Low Pay Commission to carefully consider the impact on businesses and workers across all sectors.

[Laura Pidcock]

Given the reported use of food banks by staff in the Secretary of State’s Department, and given that the first ever indefinite strike action of outsourced workers in Whitehall is happening now, does the Secretary of State not see it as his duty at least to ensure that BEIS contractors are not breaking legislation? That includes potential breaches of regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003, whereby an employment business may not supply a temporary worker to a hirer to replace an individual taking part in official strike action. Can the Secretary of State please explain to the House what action he has taken on the issue following the Public and Commercial Services Union’s referral of the matter to the Met police, and letters sent to him and his permanent secretary on 10 July?

--- Later in debate ---

[Ms Esther McVey (Tatton) (Con)]

All forms of company are registered and incorporated with Companies House. While it is a great resource if used properly, it is open to misuse, abuse and fraudulent information. What steps will the Secretary of State take to ensure validation before companies are registered, so that the public can have faith in the register?

[Kelly Tolhurst]

rose—

[Ms McVey]

Secretary of State, please.

Whirlpool Tumble Dryers: Product Recall

Kelly Tolhurst Excerpts

Wednesday 10th July 2019 Written Statements

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

The Government’s No. 1 priority is public safety. We are committed to ensuring that the UK continues to have one of the strongest product safety regimes in the world.

I updated the House on 4 April and on 17 June. Following the publication of the review by the Office for Product Safety and Standards (OPSS) into the Whirlpool tumble dryer modification programme, I informed the House that OPSS had issued a decision letter placing a number of requirements on the company. Having reviewed Whirlpool’s response to the Government’s requirements, OPSS determined that it was inadequate.

Accordingly, on 4 June, OPSS notified Whirlpool of their intention to serve a recall notice in respect of as many as 800,000 remaining unmodified tumble dryers currently in use.

I am able to confirm that Whirlpool is now to issue a full product recall of all unmodified tumble dryers from consumers’ homes.

Whirlpool has agreed to undertake a number of actions required by OPSS, and which have been reviewed by an expert panel, consisting of an independent Queen’s counsel and three chief scientific advisors from the Home Office, health and safety executive and the Department for Business, Energy and Industrial Strategy.

Under the recall, consumers with an unmodified, affected Whirlpool tumble dryer will be entitled to a new replacement machine. This will be delivered and installed, with the old one removed, at no cost. A refund based on product age or a modification will be available to those consumers who do not want to take up the offer of a replacement dryer. Whirlpool have agreed to implement additional quality assurance procedures for any new modifications in consumers’ homes.

Whirlpool will deliver a significant consumer outreach campaign with wide ranging publicity of the product recall. Whirlpool have committed to deliver improved identification of, and outreach to, vulnerable consumers. They guarantee that there will be no charges for the delivery, installation or removal of affected machines. Whirlpool have also committed, and will be legally required, to provide OPSS with effective and timely reporting of progress made in the product recall.

As part of OPSS monitoring of the programme, OPSS is receiving weekly data reports from Whirlpool and it continues to monitor the situation very closely.

The actions taken by OPSS illustrate once again this Government’s commitment to ensuring the safety of consumers. No other European country has used the recall process in this way, and on this scale before for domestic appliance safety.

OPSS will closely monitor the recall and it will take further action should it be necessary to ensure public safety. It will continue to work closely with other Government Departments and key stakeholders to raise awareness of the recall.

The message for consumers who have an unmodified dryer is to stop using and unplug their dryer immediately and to contact Whirlpool for a replacement.

[HCWS1707]

Retail Strategy

Kelly Tolhurst Excerpts

Wednesday 10th July 2019 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Sir David, and I congratulate the hon. Member for Blaydon (Liz Twist) on securing today’s important debate. Like her, I have a family history in retail and shopkeeping: my great-grandmother ran a corner grocery store, my great-grandfather was a bootmaker and my father used to run a DIY shop.It is interesting that we are having this debate, because he closed that DIY shop after the retail sector changed. The likes of B&Q finished off some of our small, independent DIY shops. I hope I have been able to bring some direct understanding to my role as a Minister in this area.

As the hon. Lady and other Members have pointed out, the retail sector employs more than 3 million people and contributed £94 billion of gross value added to the UK economy in 2018. The retail sector is at the heart of our communities and our country. I reassure Members that I am extremely passionate and determined about the retail sector and that I care vehemently about it, much as everyone who sits in the House of Commons—not just those in the Government—cares very much about it and values it, the jobs it creates and the value it delivers to our communities.

Retail has always evolved to meet changing consumer demands, and it will continue to do so. Indeed, it is already thriving in many areas. For example, we have the most developed e-commerce market in Europe, with 48% of the estimated total of €198 billion in 2018. We recognise the high-profile pressures in the sector, but there are also businesses that are expanding and developing, as outlined by the hon. Member for Sefton Central (Bill Esterson) with his great plug for his local retailer Smiths TV. Amazon, Lidl, Aldi, Ocado and JD Sports are all companies investing in UK retail, which is a good sign for the future. Primark, which recently opened the world’s largest fashion retail store in Birmingham, is proving that a high street business can still be successful without a significant online presence. We have seen sales increase by 4% and increased profits. Organisations such as Pets at Home are taking on the challenge of changing consumer demand. In its stores, it is bringing in veterinary services and grooming services and investing in the workforce and apprenticeships. Many retailers are grasping the challenge of a changing retail sector and ensuring they are able to deliver services on the ground that consumers want.

We have heard examples from Members about local growth. It has been great to hear examples of local authorities working proactively with their high street forums and the opportunities available to them to try to grow and really focus on meeting the needs of the local community through the local retail offer. However, to continue to evolve, we need to innovate. I was therefore excited to see the UK Digital Retail Innovation Centre open in Gloucester in May this year, following a funding award of £400,000 from Gloucestershire’s local enterprise partnership. It will be a national centre for testing and developing disruptive digital innovations and will help shape and inform the future of cities with a special focus on retail.

Alongside those successes, we have seen some high-profile names struggle, including Woolworths, Toys R Us and, more recently, Debenhams and House of Fraser. We have been used to seeing those iconic names on our high streets, but in some cases they are no longer there. I do not underestimate the impact of those changes, which can be hugely difficult for the individuals and families involved and for communities. Indeed, I know the hon. Member for Blaydon met Toys R Us staff from the metro retail park when the store closed down. Some of them had been working there for 20 years, and I commend her for the support she showed to her constituents.

There is no doubt the sector is facing significant pressures, whether from uncertainty in the business environment or from changes in consumer expectations and preferences towards online shopping. Those challenges are reflected in retail across the world, not just in the UK. Our retail sector is still one of the best in the world, and we are well placed to deal with the challenges. Retail has a long history of responding successfully to change, of turning challenges into opportunities and of turning pressure into innovation. The Government are, and I personally am, absolutely committed to supporting the sector as it responds to change and strives to continue to serve the public so well, as it has in the past, and as it will in the future.

I am pleased, as part of my portfolio, to serve as the co-chair of the industry-led Retail Sector Council, alongside Richard Pennycook, the chairman of the British Retail Consortium. There has been confusion over the idea that the council does not meet very often and is just focused on the troubles of the past, rather than looking to the future, but I assure Members that we not only have Retail Sector Council meetings, but a number of sub-groups heading up the workstreams and meeting regularly. A lot of work goes on outside those meetings to reach targets. The workstreams are focused on future challenges and how we can drive the retail sector forward. It is not just a talking shop; if it were, I can assure Members I would want no part in it. I spent many a year before becoming an MP in talking shops, and I do not particularly want to do that as an elected Member of Parliament and especially not as a Minister.

[Bill Esterson]

I am glad the Minister has mentioned the Retail Sector Council. I am curious as to what it has achieved. Perhaps she can tell us, because if it is not a talking shop, it will have made a difference, and there will be some outcomes, deliverables and differences made.

[Kelly Tolhurst]

The hon. Gentleman is quite right. As he will know, when the Retail Sector Council was set up last year, we set its priorities. The six workstreams and the priority workstreams have been agreed. We are working for outcomes. The beauty of the Retail Sector Council is that it is the retail sector coming together with Government to find solutions to the future challenges. It includes not only the bricks-and-mortar retailers, but the online retailers and the small independent retailers. In the council, the sector is working with Government to move forward and bring forward plans and proposals that will benefit and aid the sector.

[Liz Twist]

Will the Minister agree to set up a retail sector deal to further promote the work of the retail sector?

[Kelly Tolhurst]

Absolutely, but the hon. Lady will know that all the sector deals are being driven by the sectors themselves with the support of Government and with strong leadership and great ideas. My wider hope for the retail sector is that we will see that deal delivered by the Retail Sector Council as soon as possible.

Costs to business is another workstream, and a number of Members raised them. As part of that workstream, the co-chair and I are meeting the Financial Secretary to the Treasury next week to discuss some of the preliminary findings on costs to business in the retail sector. A large survey of the entire sector was carried out. That area is of big interest to me in terms of how we levy taxation in the future. The skills and lifelong learning workstream is running in parallel with the costs to business workstream. Some of the early work on that is being led by Amazon and a small working group, and that is proving useful.

Alongside the work of the retail sector, the Department regularly considers a wide range of policies. My officials are working across Whitehall on policies that affect the retail sector. A number of Members have mentioned support for our high streets. Members may know that the high streets Minister, my hon. Friend the Member for Rossendale and Darwen (Jake Berry), has recently taken on a joint portfolio with my Department. As I am the retail sector Minister, we work closely on joined-up thinking on retail and high streets. We have the £1.6 billion action plan for high streets, which includes the £675 million future high streets fund. We are seeing 50 organisations move to the next stage in the development of the plans, which will enable local authorities and local populations to drive the development of their towns. We have the taskforce, which will work with local authorities across the country to deliver help for those that need to increase their retail space.

I will sit down now, because I recognise that the hon. Member for Blaydon may want to come in. I am happy to have another meeting with her on the other questions she asked.

[Sir David Crausby (in the Chair)]

With not much time, Liz Twist to wind up.

Electrical Products: Online Sales

Kelly Tolhurst Excerpts

Tuesday 9th July 2019 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Bailey. I thank the hon. Member for Swansea East (Carolyn Harris) for securing this important debate. She is incredibly passionate about this issue and, as chair of the all-party parliamentary group for home electrical safety, has played an important role in keeping a focus on it. Her commitment to electrical safety is to be commended.

I want to make it clear from the outset that in my 12 months in this post, I too have taken electrical safety and the safety of British consumers extremely seriously. It has been a focus of mine; I have spent a lot of time working on it in my day job within the Department.

It is clear that there is considerable interest among hon. Members in this issue. They have personal, and in some cases tragic, reasons for that interest. I again thank the hon. Member for Swansea East, and I thank the hon. Members who intervened on her for participating in this short debate.

Our first duty as elected Members must be to ensure the safety of those we represent. It is important that consumers should have a choice when it comes to buying all kinds of products. In today’s world, more and more of us are turning to online retailers when we purchase all manner of things, including electrical products. The changing ways in which we consumers purchase goods, including online, pose specific challenges in relation to protecting consumers. For a traditional market, the law is clear: manufacturers and importers have a duty to place only safe products on the UK market, and distributors have a duty of care when it comes to the safety of electronic products. The online marketplace makes it possible for consumers to sell to other consumers. That clearly presents new challenges. We recognise those challenges and are working with the platforms to address the issues.

The OPSS is taking forward a number of strategic projects aimed at understanding and addressing cross-cutting safety issues to deliver better protections for British consumers. One of those is rightly focused on tackling the challenges of online electrical product sales. The OPSS, working closely with a number of key stakeholders—including Electrical Safety First, which the hon. Member for Swansea East mentioned, and major online retailers—is bringing together those with specific expertise in this area to make the system work more effectively. The project is at an early stage, but a first strand is focused on evidence gathering, so that we can really understand how and where electrical products are being sold online. That work will form the basis of ensuring that we have the best system in place to protect people when they buy goods in online or offline marketplaces.

In addition, the OPSS is working with local authorities to ensure that checks are being made by sellers on products being sold online to determine whether they are subject to a recall. If a business is found to be selling recalled products, the OPSS will inform the business of its findings, so that the business can take immediate steps to remove the product from sale.

[Gerald Jones]

Will the Minister recognise that in the current climate, the financial pressures on local authorities make it more difficult for them to have the capacity to deal with some of the issues that she is discussing?

[Kelly Tolhurst]

When we are talking about such a wide brief as consumer product safety, there will always be pressures on budgets, but the OPSS is working with local trading standards, with scientific, technical support. It is providing support, through training, to trading standards, to enable local authorities to carry out the job that they have been tasked with doing.

The hon. Member for Swansea East asked a direct question about Whirlpool and the published list of recalled models, and I want to address that straight off. If products on the recall list are being sold on online platforms, that is absolutely wrong, and I will instruct our officials to ensure that those online platforms are made aware of those products, and that the products are withdrawn, as I have outlined. The hon. Lady will appreciate, because she knows this area very well, that this is ongoing work. Market surveillance—the identification of illegal and unsafe products—is not a job done today or tomorrow, with one list. Market surveillance is ongoing, and is how we continue to protect consumers. It is right that our policy and research evolves. This is work that we do independently as a Government to ensure that consumer safety is always our top focus.

[Patricia Gibson]

The Minister has talked about fines and punishments for people selling illegal or unsafe products online. Does the product safety and standards unit monitor particular sites, or does it wait for the public to make representations about them? I am interested to know how the sites operate and how they are monitored. Where does the intelligence about illegal or unsafe products come from?

[Kelly Tolhurst]

As part of the OPSS’s ongoing work, it has developed a database through which information is shared with online platforms when we are alerted to problems and particular safety concerns. That list is changing every day or every week, as new illegal products are registered. It is an ongoing piece of work, and part of what we are doing weekly to combat people who act illegally by putting illegal products on the market, and also to ensure that unsafe products that are being marketed are removed from sale. I have already outlined that this is a big challenge; it is something that the OPSS is very mindful of. That is why it is included in the first part of the workstream about understanding the extent to which such products are sold and how that can be moved forward.

A further strand of this work relates to online sales in second-hand electrical goods. OPSS is gathering evidence on the extent of the second-hand electrical goods market across the UK, so that it can provide advice to sellers on their responsibility when selling second-hand goods online.

[Carolyn Harris]

Has the Minister’s Department seen the listings put up overnight, and has it taken action to remove Whirlpool products from online platforms?

[Kelly Tolhurst]

That is a conversation that I did not have with my officials prior to the debate, so I am unable to give a direct answer. However, I have already outlined that the list has been published on the website and has been shared with our enforcement agencies. Where products on the list are being sold by online platforms, our enforcement bodies such as OPSS or trading standards—whoever is available or appropriate to deal with it—should absolutely ensure that they are removed from sale. That is a sensible thing to suggest, and I am sure the hon. Lady would expect me to say nothing less.

We have been running a series of campaigns to raise consumer awareness on keeping safe. This is being done in partnership with the leading consumer bodies, including the Royal Society for the Prevention of Accidents, Electrical Safety First, the Chartered Trading Standards Institute, Netmums and the Child Accident Prevention Trust. I was lucky enough to visit the CTSI symposium a couple of weeks ago, where I met many of those organisations. As part of the programme, OPSS and those organisations are planning a specific consumer campaign targeting issues that relate to online sales. I am sure that hon. Members agree that consumers are better able to protect themselves when they have the information and are aware of the risks.

OPSS is working to address the challenges posed by the operation of fulfilment houses. New types of businesses have emerged, and it is recognised that we need to do more online. They provide a range of services to online retailers. This work aims to combat the distribution of unsafe and non-compliant products in the UK supply chain via fulfilment houses. OPSS is working closely with local authorities and trading standards, and is targeting those businesses that choose to place unsafe or non-compliant products on the market without regard for the safety of their customers. This is an ambitious, two-year project. Our early work with national trading standards, Her Majesty’s Revenue and Customs, Border Force and local trading standards has already identified targets.

The project is bringing together OPSS, local authorities, HMRC and the Intellectual Property Office to develop a multi-agency approach to tackling the new risks that the new model of sale and delivery poses to UK consumers. OPSS has been working to understand the scope of the challenge facing trading standards from fulfilment houses, and it has developed an up-to-date intelligence profile to ensure that activity in this area is targeted at the appropriate businesses. As I mentioned, the scale of this project is significant, and it has the potential to make a serious impact on the sale of unsafe products online. Projects on this scale bring together local and national bodies, and that is one of the reasons why OPSS was created. We now have the capacity and focus to identify and tackle issues on a national scale.

Although there are many challenges from online sales, a number of which the hon. Lady has outlined, many online sales businesses already have strong relationships with trading standards and work with them to ensure the safety of the consumers to whom they sell. Businesses with primary authority relationships with an individual trading standards department know that they have available to them an expert source of assured and tailored advice on complying with consumer product safety regulations. Working closely with trading standards can help online sellers identify and address at an early stage product safety issues that may arise. E-commerce marketplaces such as Amazon and eBay are uniquely well placed to play an important role in product safety. A significant number of electrical products are sold through these platforms, which have systems to track these products.

The hon. Lady mentioned that Amazon has yet to engage with her and the APPG, but eBay has. Amazon and eBay have strong primary authority relationships in place. In both cases, the partnership has established robust systems to monitor products and sellers. Should non-compliant or unsafe products be identified, there are arrangements in place to ensure that product listings are removed from those sites quickly. I want to make it clear that we are under no illusion about the scale of the task. Those companies are among the largest in the world, and we cannot afford to be complacent about dealing with them.

As this is a global issue, OPSS is encouraging major online retailers to sign up to the product safety pledge that was initiated by the EU Commission. Under the pledge, online retailers commit to taking specific actions on the safety of products that are sold on their platform by third parties. The aim of the scheme is to improve the detection of unsafe products before they are sold to consumers, or as soon as possible afterwards.

I have spoken about the work that OPSS is doing directly to tackle the risks from second-hand and online sales, but it is important to remember that local trading standards are the main enforcers of product safety up and down the country. They play a hugely important role, and OPSS has been working with them to provide the technical and scientific advice, data and intelligence that supports their work every day. OPSS has developed a new product safety database to capture and share information on unsafe goods, so that risks can be identified and action taken as quickly as possible. It is already being rolled out across trading standards, and OPSS provided £500,000 last year to fund the testing of products by trading standards. We have increased that sum to £600,000 for 2019-20.

The hon. Lady asked many questions on issues such as additional resources and changes to the law. She will appreciate that this is the first time such questions have been levelled at me. I am more than happy to attend a meeting of the APPG, as I indicated I would; unfortunately, diaries have meant that I have been unable to. I will happily write to the hon. Lady with further detail on that, or we can have a meeting to discuss the issues—whichever way she prefers to communicate with me.

I want to reiterate that this is “job not done”. This is about how we evolve in a changing market and ensure that importers, manufacturers and marketers place safe products on the market. The onus is on the companies to ensure that they place safe products on the market. We will do all we can to ensure that we continue to monitor products and try to protect consumers as best we can. That is something that I feel very strongly about.

I thank the hon. Lady for bringing forward this important issue. I understand her passion and am desperately sorry about what happened to her constituent. I look forward to constructive conversations with her in the future.

Question put and agreed to.

Consumer Contracts Regulation

Kelly Tolhurst Excerpts

Thursday 4th July 2019 Written Statements

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

Today, I am publishing the statutory report on the Objectives of Consumer Contracts (Information, Cancellations and Additional Charges) Regulations 2013. This report sets out the conclusions of the review of these regulations.

A key foundation of our modern industrial strategy is delivering a strong, transparent and attractive business environment in the UK. The strength of the UK’s business environment is founded on our fair and open regulatory frameworks. For our regulatory frameworks to remain fair and open, they must meet the ever-changing needs of the modern consumer, the modern business and the modern world.

There is often an imbalance of power between businesses and consumers; these regulations were intended to empower consumers and create a fairer balance between the two. This was to be achieved by increasing transparency surrounding contracts they are entering into and give them the time to understand the product and consider its price before deciding to enter the contract, building consumer confidence and willingness to trade remotely in the process.

The regulations also implement the EU consumer rights directive, an obligation we are committed to meeting under the single market. But the UK has a strong history of protecting consumer rights, which is achieved not by the creation of new legislation and its enforcement but always seeking to understand whether, and how well, we achieve our underlying objectives. This report will set out objectives intended to be achieved by the regulations, assess the extent to which those objectives have been achieved, assess whether those objectives remain appropriate, and, if so, the extent to which they could be achieved in a way that imposes less regulation.

As part of the review, we made the call for evidence, which ran from 7 March to 1 May 2019. We are acutely aware of some of the issues highlighted by the response, such as the challenge of consistent enforcement. The Government’s consumer White Paper will set out our proposals for the next phase of action to strengthen the consumer regime and will be the vehicle through which the Government consider this, and a range of other issues not addressed within this report. The Government’s consumer White Paper is due to be published later this year.

Overall, it was the expressed view that the regulations continue to meet the objectives for which they were established and that these remain appropriate five years on from them coming into force. Following comments we will, however, be reviewing the existing guidance to ensure that it is sufficiently clear to support the regulations.

I will be placing a copy of the statutory report on the Objectives of Consumer Contracts (Information, Cancellations and Additional Charges) Regulations 2013 in the Libraries of both Houses.

[HCWS1691]

Whistleblowing

Kelly Tolhurst Excerpts

Wednesday 3rd July 2019 Commons Chamber

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

I thank the right hon. Member for North Norfolk (Norman Lamb) and my hon. Friend the Member for Stirling (Stephen Kerr) for securing today’s important debate. I should also like to congratulate the right hon. Sir Norman Lamb on his knighthood, in recognition of his commitment to public service. I thank all hon. Members for their contributions today, and for the passion that they have expressed in voicing the concerns and putting their arguments on UK whistleblowing policy.

The Government recognise how valuable it is that whistleblowers are prepared to shine a light on wrongdoing. That is important at an organisational level but also, more broadly, for society, so that issues such as abuse of power are brought to light. This afternoon, stories have been shared in the House of people who, having acted as whistleblowers, have been disadvantaged and experienced severe detriment.

Effective whistleblowing policies enable workers to speak up, to prevent wrongdoing and fraud. That helps to protect employers from financial loss and reputational damage, and builds their trust with customers. Those who blow the whistle should be able to do so without fear of recriminations. Employment protection enables workers who have blown the whistle to seek redress if they are dismissed or suffer detriment at the hands of the employer because they have made what is called a “protected disclosure” about wrongdoing that they have witnessed at work.

I can assure hon. Members that over recent years the Government have taken steps to support a cultural change in relation to whistleblowing in all sectors. A number of statutory and non-statutory improvements have been made. Those include the publication of guidance for whistleblowers on what they need to do to make disclosures while preserving their employment protections; and guidance for employers, including a non-statutory code of practice.

My hon. Friend the Member for Stirling and the hon. Member for Oxford East (Anneliese Dodds) mentioned guidance. The hon. Lady spoke about the extent to which MPs have clarity in dealing with people who come to them for advice. I would like to go away and see whether there is any kind of guidance that we might publish, particularly for MPs, to improve our ability to help our constituents.

[Kevin Hollinrake]

The Minister heard some of my comments about the Financial Conduct Authority and its, at best, quite tepid approach to whistleblowers. What are we to do when, effectively, an agency that is commissioned by the Government does not follow through on its whistleblower obligations?

[Kelly Tolhurst]

I thank my hon. Friend. I was preparing to come on to that, but he is absolutely right—the FCA falls under the control of Her Majesty’s Treasury. I shall go into greater detail later, but I want to meet HMT to raise with it some of the concerns that have been voiced today in the House about the FCA and whistleblowing policy.

[Norman Lamb]

I thank the Minister for her very kind comments. I am sure she will come to this, but would she agree to meet us to discuss the case for a review, because I think a review of the legislation—not just guidance—is absolutely necessary? It was a Conservative who introduced the private Member’s Bill, and it could be a Conservative Government who modernise it and ensure full protection for all whistleblowers.

[Kelly Tolhurst]

I am happy to meet colleagues to talk about things they would like done in this area, and I note that the right hon. Gentleman distinguished between guidance and a review, which I will come to.

I want to outline what the Government have done and what steps are being taken, though I understand that for some colleagues these have not gone far enough. We have increased the scope of the protections in whistleblowing legislation by extending them to NHS students, nurses, midwives and job applicants in the health sector. We have also fulfilled the commitment to keep the prescribed persons list up to date. In response to the recommendations from the Women and Equalities Committee, we have committed to adding the Equality and Human Rights Commission to the list of prescribed persons at our next annual update. It will be subject to parliamentary time, but we aim to present that to the House before the end of the year. As I outlined earlier, I will consider whether there are things we can do within that to make it clearer.

We have also introduced guidance for prescribed persons and employers to help them to support whistleblowers. The most recent reform was a new legislative requirement for most prescribed persons to produce an annual report on whistleblowing disclosures made to them by workers.

[Justin Madders]

I appreciate all the work that has been done, but, as I said earlier, does the 3% success rate at tribunals not tell the Government that the legislation is not working?

[Kelly Tolhurst]

The whistleblowing legislation at the moment is regarded as proportionate, but as new evidence comes to light and as things change, it is right that we keep these policies under review, and it is right that we have these debates in the House of Commons so that the Government can be challenged over what is happening now and how we can improve.

[Dr Whitford]

It has come out clearly from this debate that PIDA only allows 3% of people to get some redress—it is only some redress—so surely we require legislation that protects the whistleblower right at the start of the process, rather than trying to mop up afterwards.

--- Later in debate ---

[Kelly Tolhurst]

I understand the passion and concerns, and the statistics, but we need to implement a framework that works across all sectors, and actually in particular sectors some of the challenges are not easy. It is absolutely right that we do what we can at pace but that we also review and look at what happens in the future. That said, I take the hon. Lady’s point.

The relevant prescribed persons were required to publish the first of their reports by the end of September 2018, and those were placed in the parliamentary Libraries. The second annual reports will be due by the end of this September and will also be available in the House Libraries. The reporting duty increases confidence in the actions taken by the prescribed persons, because it enables greater transparency about how the disclosures are handled. With these improvements, we believe that the whistleblowing framework is proportionate, though I accept that as new evidence and practices come to light we will need to keep the legislation under review.

Hon. Members will be aware that the EU has developed a whistleblowing directive that we expect to be approved this summer. It is very wide-ranging and comprehensive, and we will have to consider how we take it into UK law. It could fall within the implementation period agreed under the terms of the withdrawal agreement, but, as we know, there are questions marks over that. The hon. Member for Ellesmere Port and Neston (Justin Madders) mentioned workers’ rights. As colleagues knows, the Government were clear throughout the EU negotiations that we would not reduce workers’ rights when we left the EU. Whistleblowing and how we proceed in that regard is covered by the overall provision for the protection of workers in employment. I hope that Members will take that as some kind of commitment from me, at least. As for more formal reviews, it is right and proper for us to review the Government’s whistle- blowing framework. It would be premature to do so now, but that does not mean that it will not happen.

I welcome the ongoing work of the all-party parliamentary group on whistleblowing, chaired by my hon. Friend the Member for Stirling and vice-chaired by the right hon. Member for North Norfolk. Officials are hoping to meet members of the APPG soon to discuss, in particular, the legislative framework and protections for workers, and to feed the results of those discussions into their internal work. I hope that my hon. Friend and the right hon. Gentleman have been able to speed up that process.

Many issues have been raised today, and I want to deal with as many of them as possible. The right hon. Member for North Norfolk talked about foster carers, and that is an issue about which I am particularly passionate. I understand the challenges faced by foster carers, and the importance of protecting people who are doing a fabulous job in looking after young people who desperately need help. Fostering services are required to have a complaints procedure and a whistleblowing policy. In addition, foster parents whose approval is terminated, or whose terms of approval are amended, have a right to challenge the decision, and the right to a review by means of the independent review mechanism. I understand that the right hon. Gentleman is to meet a representative of the Department for Education to discuss some of those challenges in more detail, and I shall be interested to hear about the outcome.

As the House will know, the Government embarked on a consultation earlier in the year. That has now closed, and we are ourselves consulting on the various elements. I know that there are certain opinions in the House. We will issue our response to the consultation very soon, but, as I have said before at the Dispatch Box, the use of NDAs in an attempt to cover up wrongdoing is unacceptable. We have made it clear that no NDA will prevent the protection of whistleblowers.

Many Members, including the right hon. Member for North Norfolk and the hon. Member for Central Ayrshire (Dr Whitford), have expressed concern about whistleblowing in the health sector. In 2016, the National Guardian’s Office was created, and there is now a network of “freedom to speak up” in every NHS trust so that staff can speak up and be given advice on raising concerns with their local guardian. There is also a national helpline. Following the independent inquiry into Gosport War Memorial Hospital, the Government responded by announcing they would legislate, subject to parliamentary time, for NHS trusts in England to report annually on the number of staff who speak up, thus increasing transparency. The Department of Health and Social Care is still considering further ways of strengthening protections for NHS workers.

I am very conscious of the time, Mr Speaker, but let me touch briefly on financial regulation. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) mentioned the work that he does in his role as chair of the all-party parliamentary group on fair business banking and finance. I have had many conversations with my hon. Friend about a number of issues. I understand that the Financial Conduct Authority is currently conducting two investigations of the activities of HBOS, including its communications with regulators, following issues relating to misconduct. I look forward to seeing the reports. As I have always said at the Dispatch Box, I am prepared to meet Treasury Ministers to take the matter further. The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) mentioned his constituent Ms Davey. I shall be happy to meet Treasury Ministers to discuss that as well. I understand that it is a live case, and I shall be more than happy to speak to the hon. Gentleman after the debate. I understand all the concerns about the FCA that have been raised by Members on both sides of the House, and I hope they accept my assurances that I will take them forward.

On blacklisting, the Information Commissioner is opening a call for evidence on the implications of modern employment practice and recruitment and selection, and hopefully that will shed further light on what can be done. As the hon. Member for Strangford (Jim Shannon) knows, we are undertaking reform of the FRC after the independent review by Sir John Kingman.

I hope I have given some reassurance to the House in the time I have had that I am taking this issue seriously. I cannot stand here and promise Members exactly what they want, but I am prepared to promise that while I am in this post I will do what I can to work with them and address as many of their concerns as possible.

Once again I thank all those whistleblowers, some of whom might be watching our debate, who feel that they have suffered detriment for what they have done, and I also thank those Members who have made sure their voices are heard in this Chamber.

Rural Areas in Scotland: Additional Delivery Charges

Kelly Tolhurst Excerpts

Tuesday 2nd July 2019 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Hollobone, and I congratulate the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) on securing this important debate on an issue that continues to be important for his constituents and those of other Members. I thank all hon. Members for their contributions and the passion with which they represent consumers in their communities.

As the hon. Gentleman will remember, we met last November to discuss his concerns about this issue and we have since corresponded, including my recent responses to the parliamentary questions that he has tabled. I understand the concerns that he and others who are here today have raised that consumers in some parts of Scotland are being charged more for delivery than those in other parts of the UK. I also recognise that similar issues exist for consumers in Northern Ireland.

I am pleased to take part in the debate and to outline the progress that has been made since this issue was last debated in Westminster Hall in a debate responded to by a previous Minister, my hon. Friend the Member for Stourbridge (Margot James), back in December 2017. The Government are committed to promoting growth in the UK economy. The growth in online shopping is increasingly important in achieving that and it is of particular importance to rural communities, where access to physical retail outlets is limited. As hon. Members have said, it is crucial that retailers are up front about their delivery charges, including where they deliver to, what they charge and when premiums apply. Consumers will then know where they stand and can make an informed decision before they purchase. That is what the law requires.

The Government strongly encourage businesses to provide consumers, as far as possible, with a range of affordable delivery options. To help to achieve that, the Government have ensured that everybody, including retailers, has access to an affordable postal service for deliveries across the UK under the universal service obligation, which has been mentioned in the debate. Through the universal service obligation, Royal Mail delivers parcels up to 20 kg, five days a week, at uniform rates throughout the UK. Let me make it clear that it is up to businesses themselves to determine the most appropriate delivery option for the consumers of their products. There are no rules to prevent differential charging between businesses for deliveries, and I do not believe that, for example, imposing a price cap is a practical answer. We should not seek to force retailers to use a specific supplier, such as Royal Mail, because competition in the delivery market is an important driver of efficiency. A competitive market should be a sufficient incentive to put pressure on charges applied by retailers and delivery operators.

There are positive signs that things are changing and businesses are listening. Wayfair took the decision earlier this year to scrap delivery charges for orders over £40 to anywhere in the UK and to charge a standard rate of £4.99 for orders below that threshold. That type of commercial decision will set the company apart from its competitors, drive competition and lead to lower costs. On the delivery side, Menzies Parcels launched a highland parcels service last year, which enables delivery to a virtual address for onward delivery at a fixed price.

Provided that consumers have the information they need at the point of purchase and the ability to shop around, shopping around is effective. Research from December 2017 shows that 59% of those faced with a surcharge often, or always, find the item elsewhere online. However, I can reassure hon. Members that the Government are not complacent. The Consumer Protection Partnership, chaired by my officials in the Department, has recognised the issue as a priority that needs to be addressed.

As hon. Members know, the CPP has been looking over the past year to improve online retailers’ compliance with consumer protection law and considering concerns raised about the level and fairness of parcel surcharging. Its work has involved partners including Citizens Advice Scotland, the Consumer Council for Northern Ireland, the Advertising Standards Authority, and the Competition and Markets Authority. The partners have been working with both the parcel and retail industries and other external organisations, including Ofcom. The work has included liaising with bodies representing both operators and retailers to try to understand the pricing models and structures that influence pricing decisions. The aim is to help industry—both parcel operators and retailers—to find a solution that works for all parties, including consumers.

We have also been liaising with officials in the Scottish Government, who launched a fair delivery action plan last November that maps both delivery hotspots in Scotland and what might constitute a fair charge. The CPP work will be informed by the outcomes and conclusions of that action. The CPP also worked with highland trading standards, the Citizens Advice consumer service and Advice Direct Scotland to launch the delivery law portal last year, which will gather information about delivery charges and parcel surcharging to inform the work and support enforcement. In the past year, the portal has received up to 1,000 hits per day. Referring potential breaches and unfair practices to the site will help enforcement agencies to ensure that retailers meet their legal obligations.

Significant work has been undertaken by the ASA and the CMA to ensure that businesses comply with the legislation, and both have acted swiftly where that has not happened. The ASA, which is responsible for ensuring compliance with the British code of advertising, sales promotion and direct marketing, has issued more than 200 enforcement notices to online retailers regarding their parcel surcharging practices and has achieved a compliance rate of more than 95%.

The CMA has issued a number of advisory notices to major retail platforms and, as a result, eBay and Amazon have reviewed and improved their policies and guidance for retailers who sell via their platforms. However, on the back of this debate, and the intelligence mentioned by the hon. Member for Caithness, Sutherland and Easter Ross that suggests that Amazon may be taking a retrograde step in what it allows its online retailers to do with delivery charges, I would be happy to raise the matter directly with Amazon. I would be very grateful for any information that could be provided to me as the Minister, and I thank the hon. Gentleman for raising the issue.

I reiterate that the advisory notices are making companies such as eBay and other online platforms look at their practices and review them. The CMA continues to work through primary authorities to ensure continued improvement in this area. On the legal compliance side, significant progress has been made and our enforcement partners will continue to monitor and take action where necessary.

I want to touch on a few of the issues hon. Members have raised, beginning with the hon. Member for Caithness, Sutherland and Easter Ross. He is right to highlight that we expect more of our online retailers and that they should be up front and transparent with their consumers. Applying large surcharges after a purchase has taken place is therefore something we take seriously on the enforcement side. I concur with what my hon. Friend the Member for Moray (Douglas Ross) said about when he has had issues and has been able to get the ASA involved to carry out enforcement. That is highlighted by the number of enforcement notices the ASA has levied over the past year.

I highlight again that the CMA has issued, and will continue to issue, advisory notices where it sees fit. My hon. Friend the Member for Moray was absolutely right to raise a concern about postcodes. Such issues need to be raised directly with retailers. I co-chair the Retail Sector Council with Richard Pennycook and, although this is not a workstream within the council, I commit here today to mention it at the next meeting as an issue that particularly affects Scottish consumers. At least then we can ensure that from a knowledge and a lobbying point of view those retailers understand that there are problems for their Scottish customers.

Companies are missing out on business when they choose to employ couriers that charge large surcharges for deliveries into the highlands. If the information is transparent, the consumer has the opportunity to shop around, and we have seen from research that 60% of consumers will do that and will find a cheaper price or a different supplier. Retailers need to understand that they are potentially missing out on a very valuable market by being restrictive with the Scottish market. The hon. Member for North Ayrshire and Arran (Patricia Gibson) is absolutely right about Scottish consumers. The evidence suggests that people in Scotland pay 30% more for their deliveries, and in the highlands the figure can go up to 50%. That is why the CPP’s work has yet to be finished; we are still monitoring the matter and will continue to engage with the industry and retailers.

I am not sure whether I have stood with the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) and spoken about Scottish surcharges, but we have spoken about most things consumer. She is absolutely right to challenge me on when the potential White Paper will be launched. I can assure her that I have been particularly interested in and working on the enforcement side and, although I cannot guarantee a date today, we hope to introduce it as soon as possible. She is right to highlight the beauty of our universal service, which offers 20 kg at a fixed price to anywhere in the UK, and it is a shame that some retailers have moved away from using it.

We can never forget that the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney), who is no longer in his place, is a postman. Every opportunity he gets, he bangs the drum on behalf of Royal Mail, our posties and the great service they provide. It is correct that businesses can choose to use different couriers. Some businesses will argue that in certain cases, further costs are incurred for delivering within Scotland and the highlands, which need to be passed on to the consumer. However, we are committed to continue working on that.

[Douglas Ross]

On the point that the Minister has made about further costs sometimes being involved, I take her back to my example, in which companies are not looking at the costs involved; they are simply looking at a postcode. In Moray, when they deliver further because the address has a different postcode, some companies charge no more for delivery than they do for an address that is closer to the depot. If companies were looking at it strategically, based on their costs, I could maybe understand it, but they are not; they are taking a blanket approach for any IV postcodes, and that is not right.

[Kelly Tolhurst]

I agree; my hon. Friend has highlighted a particular example. Since he has been elected, he has spoken with me many times, and he is known as a champion in this area. He has been pushing me as much as any constituency MP to take action. He has raised the issue of postcodes with me, and he is right that in that particular circumstance, there seems to be an absolute unfairness for the Scottish consumer. That is why one of the most important things is that we are working with couriers and highlighting the unfairness of that example.

We are putting pressure on businesses to make sure that when they instruct a courier with a contract, they do so with the best interests of their Scottish and Northern Irish consumers at heart. In some cases, we are talking about large retailers that have buying power, and they have the ability to go into negotiation with those couriers and negotiate better prices and services. I am particularly concerned about the small online retailers that do not have buying power with the couriers and, because of the number of parcels they send out in a day, cannot negotiate with them to perhaps get those surcharges reduced. My hon. Friend the Member for Moray is absolutely right: we need to continue to move forward and get more transparency.

I welcome the work that the Scottish Government have been doing on this, because they are close to this area. We in the Department for Business, Energy and Industrial Strategy and the CPP will keep engaged with the Scottish Government, and a lot of their work and its results will inform what we are doing with the CPP. I understand hon. Members’ frustration about what they perceive as a lack of progress, but I believe we have made progress, although it may not have been along the lines they would have liked to see. We have taken enforcement action; we are looking at this area, and it is being monitored. It is also right that we continue to do our best to make retailers consider their consumers who are being disadvantaged, because in not being able to supply products to those Scottish consumers, those retailers are ultimately the ones that are missing out. I congratulate the CPP on its work to ensure that when consumers purchase goods online, information is up front and transparent, and to take action swiftly when that is not the case.

Although there might be no quick fix on this issue, and although I am unconvinced at this moment about the need for further legislation, that does not mean that the issue is being ignored. I look forward to hearing about further progress through the CPP’s work and the Scottish Government’s initiatives. I am happy to update Members about progress as that work continues, and I thank the hon. Member for Caithness, Sutherland and Easter Ross for having secured the debate.

I understand the concerns of Members. After the next meeting of the Retail Sector Council, I commit that I will write to Members present today to outline what I was able to raise there. This is about a two-pronged attack: dealing with the couriers, but also making the retailers recognise that their decision making has an impact on consumers in Scotland and Northern Ireland. As the consumer Minister, I of course want there to be fairness and transparency for consumers throughout the United Kingdom, including those in the Scottish highlands and mainland Scotland.

Small Businesses: Late Payments

Kelly Tolhurst Excerpts

Thursday 20th June 2019 Written Statements

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

On 4 October 2018, we launched a call for evidence, asking for views on how to create a responsible payment culture for small business. I have published the full Government response to that call for evidence and placed copies in the Libraries of both Houses.

The Government are committed to supporting small and medium-sized enterprises (SMEs) to start well and grow, including a network of 38 growth hubs across England providing advice, guidance and support. As part of our industrial strategy we have an action plan to unlock over £20 billion of investment in innovative and high potential businesses. And where we see practices that unfairly constrain SMEs’ finance choices, we are prepared to act. For example, we recently removed a barrier that was preventing some SMEs from using invoice finance because of prohibitive contract terms imposed by their customers. This new measure is expected to provide a long-term boost to the UK economy worth almost £1 billion.

While there are a number of measures already in place to tackle late payment, from the prompt payment code, the ability to charge interest on late payments and increased transparency through the payment practices reporting duty, the call for evidence told us that there is more to do to improve the payment landscape. This is why I have announced that I will now take further and firmer action to tackle the scourge of late payments, while maintaining a holistic approach to culture change by using all of the avenues available to us in this space.

I will shortly be launching a consultation seeking views on strengthening the small business commissioner’s (hereafter “the commissioner”) ability to assist and advocate for small business in the area of late payments, through the provision of powers to compel the disclosure of information and seeking views on suitable sanctions for failure to comply.

I have also announced that the responsibility of the voluntary prompt payment code is to move to the commissioner and be reformed: this will unify prompt payment measures with the commissioner and address weaknesses within the current code’s operation.

I will take a tough compliance approach to large companies who do not comply with the payment practices reporting duty. The legislation allows for the prosecution of those who do not comply and I will use this enforcement power against those who do not comply where necessary.

The Government will launch a business basics fund competition with funding of up to £1 million, which will encourage SMEs to utilise payment technology.

I also intend to establish a ministerially led group to bring together key Government Departments to act on improving prompt payment across both the public and private sectors.

We are working with UK Finance and the finance sector to review the role supply chain finance plays in fair and prompt payment, including the potential for an industry led standard for good practice in supply chain finance. We also want to bring greater transparency to how supply chain finance is reported in company accounts and assessed in audits, by working with the Financial Reporting Council to develop guidance and build it into their sampling of companies’ accounts.

Our modern industrial strategy aims to make Britain the best place to start and grow a business and removing barriers to growth is key to this. The response to the call for evidence and the package of measures I have announced will tackle the continuing issue of late payments to ensure this happens.

[HCWS1645]

Groceries Code Adjudicator

Kelly Tolhurst Excerpts

Thursday 20th June 2019 Written Statements

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

I have today launched the statutory review of the Groceries Code Adjudicator (GCA).

The GCA was established by the Groceries Code Adjudicator Act 2013 (“the Act”). Its role is to monitor and enforce the groceries supply code of practice (“the code”), which the UK’s designated large grocery retailers must comply with when dealing with their direct suppliers.

Section 15 of the Act requires the Government to review periodically the performance of the GCA. The first review carried out in 2016 covered the period from the creation of the GCA (in June 2013) to 31 March 2016. The second review will cover the period from 1 April 2016 to 31 March 2019.

The primary purpose of the review is to look back over the period 1 April 2016 to 31 March 2019 and to seek views and evidence which will allow the Government to make an assessment of the performance of the GCA against the measures set out in the Act. These measures are explained in the terms of reference. The statutory review is not a review of the code or the remit of the GCA. The code is a competition measure owned by the Competition and Markets Authority as the UK’s independent competition authority.

The Act requires us to consult the following:

the GCA;

the Competition and Markets Authority;

the retailers subject to the code;

one or more persons representing the interests of suppliers;

one or more persons representing the interests of consumers; and

any other appropriate person.

The consultation will run for 12 weeks and can be accessed at: https://www.gov.uk/government/consultations/groceries-code-adjudicator-statutory-review-2016-to-2019. Stakeholders have until 12 September 2019 to respond. Following this, BEIS will analyse the responses. A report on the findings will then be published and laid before Parliament.

The Terms of Reference for the GCA Review have today been placed in the Libraries of both Houses.

[HCWS1641]