(6 years ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
It is a pleasure to serve under your chairmanship, Mr Owen, and not to be grilled by you this afternoon. I thank the hon. Member for Stroud (Dr Drew) for securing this debate—people often pronounce my constituency incorrectly as Rochester and Stroud, so it is nice to respond to the hon. Member for Stroud this afternoon.
I am pleased to speak in a debate about safety. This Government take product and consumer safety incredibly seriously. Government’s first duty is to guarantee the safety of their citizens. In my role as Minister I focus on product safety and standards, an area that I have a particular interest in, having spent my life dealing with products for sale on the market prior to joining the House of Commons.
I will give the hon. Gentleman an update on where the Government are. In January, the Government launched the Office for Product Safety and Standards, to deliver the highest level of protection for consumers and to build confidence in our regulatory system. In August, the office published its strategy for product safety, detailing how it will achieve its goals. It now has in place a dedicated intelligence unit that assesses information from a variety of sources to monitor trends and identify potentially unsafe products on the market. With a £12 million funding upgrade, it now has an operational budget of £25 million a year.
In March, in partnership with the British Standards Institution, the office published the first Government-backed code of practice on product recalls. We have trained more than 300 trading standards officers to identify products and implement that code. That means that we will be better prepared to deal with product safety incidents and support manufacturers in preparing for potential incidents.
The Government are determined to be a world leader in how we deal with regulatory frameworks. A couple of weeks ago I was at the international regulatory delivery conference, which hosted professionals from more than 60 countries. That is an example of the things that we will continue to do to be leaders in this field.
The hon. Gentleman raises concerns about the safety of notice boards in particular. The points he makes are extremely important; he rightly points out that boards can be found in schools, hospitals, doctors’ surgeries, university halls of residence and workplaces up and down the country. It is vital that products of that kind are safe and remain safe. By law—under the General Product Safety Regulations 2005—manufacturers have a responsibility to put only safe products on to the market. That applies to any product that is intended for or likely to be used by a consumer, including where the product was originally intended for professional use. Products must be safe for any reasonable foreseeable use and the materials used must also be safe.
Furthermore, where manufacturers or distributors identify a safety issue with a product that is already on the consumer market, they must take action, which may, where appropriate, include a recall. If notice boards are for sale only to businesses or public bodies for use at work, they will be caught by the Consumer Protection Act 1987, which applies to all consumer products and products used in the workplace. It places liability for any damage caused by an unsafe product firmly on the producer or importer. The Health and Safety Executive also has a role in ensuring that workplaces are safe. I am aware that a number of universities have banned the use of notice boards or otherwise restricted their use. My understanding is that that is due chiefly to the fact that in the event of a fire, notice boards hold a lot of paper and therefore present a risk.
The hon. Gentleman has a keen interest in schools, which formed a major part of his speech. Having also been a teacher for many years, I am sure we agree that schools must be a safe place for all pupils, teachers and visitors. It was quite shocking to hear his statistics about the number of fires that have taken place. There are already strong protections in place: all schools must follow strict fire safety regulations, including a fire risk assessment that is designed to ensure that they are as safe as possible and well prepared in the event of a fire. In addition, all new school building projects must comply with building regulations, including on fire safety. That is independently checked by building control or other such inspectors before buildings are occupied.
The hon. Gentleman referred to fire safety; the horrific and tragic fire at Grenfell last year was a shocking and terrible event. It is right that the Prime Minister ordered the full public inquiry, which is now under way, in the aftermath of the fire in response to concerns raised about the external cladding on tower blocks. As the hon. Gentleman will know, the Government commissioned Dame Judith Hackitt to conduct an independent review of the regulatory system for buildings and fire safety. The Ministry of Housing, Communities and Local Government is responsible for the safety of building products and is leading on the Government’s response. In a statement in the House following the publication of the review, my right hon. Friend the Secretary of State for Housing, Communities and Local Government made clear the Government’s support for the principles outlined in the report.
On the specific things that the hon. Gentleman said he would like me to investigate, in my experience fire safety regulations and standards are extremely complex and depend on the particular product or market in question. This debate is very important—it is absolutely right that Members should bring such issues forward and challenge the Government about how we will improve standards and conditions. I was interested in his point about the different fire safety grading of products, so I will happily investigate that.
The fundamental objective of the new Office for Product Safety and Standards is to use intelligence and work with trading standards locally so that we do better at identifying bad products or areas where further action is particularly needed. I am extremely hopeful that the OPSS will achieve that, especially as it starts to implement its strategy. I agree with the hon. Gentleman about the need for a level playing field. He is absolutely right that consumers need to know that the products they buy meet minimum standards and that they must be fully aware of the risks associated with those products.
I thank the hon. Gentleman for securing the debate. I hope he is happy with the commitment I made. As the new Minister for small business, product safety and consumer protection are a particular focus and interest of mine. I reiterate the Government’s firm commitment to ensuring that everyone has access to safe products in their homes, schools and workplaces. I am extremely grateful to him for raising his concerns. I am interested to know about the company he mentioned—perhaps we can discuss that outside the Chamber.
Yes—that would be good. The Government will continue to do all we can to deliver the highest levels of consumer and product safety, and to use trading standards to combat illegal products that come on to the market. I thank the hon. Gentleman again.
Question put and agreed to.
(6 years, 1 month ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) on securing the debate. I welcome the comments and interest of other hon. Members; they mentioned the particular issues for their constituents. We have a shared wish to see proper redress for consumers who have been mis-sold green deal plans. I thank the hon. Gentleman for highlighting the case of Mr and Mrs Murray. We listened to his account of the sadness and horror that they have experienced.
I want to make a particular point at this stage. As the Minister responsible for consumer protection, company law and the insolvency process, I place it on record that the Government are committed to ensuring that rogue directors, rogue traders, are investigated, in the interest of protecting consumers. I feel very strongly about that in this role and, obviously, my other roles in Government.
In total, Home Energy and Lifestyle Management Ltd, which I shall refer to as HELMS, was responsible for selling 4,581 green deal plans. Of those, 3,068 were sold to households in Scotland and 293 in the hon. Gentleman’s constituency. We understand that about 460 consumers have made complaints about the green deal plans provided to them by HELMS. That is a substantial number and it is a real concern, but let us remember that a large majority of green deal plans run smoothly, without complaint.
Most complaints focus on the fact that HELMS led consumers to understand that there would be no cost to their installation. HELMS gave consumers the impression that that was possible because of the nature of the Government’s green deal scheme. Consumers were then surprised to see green deal payments appear on their electricity bills. Many consumers were unaware that they were entering into a credit agreement, or of the opportunity that they had to cancel their agreement. That runs counter to what the green deal is about—enabling consumers to install energy efficiency measures through a loan and then repay through the resulting savings on their energy bills.
The consumer’s position was often worsened because they were persuaded by HELMS to assign elsewhere the rights to any feed-in tariff from the measures. HELMS encouraged many to transfer their feed-in tariff rights to a separate company—one related to HELMS—as a contribution to the costs of their installation. That meant that consumers could not put that potential funding stream towards meeting the costs of the green deal plans, and HELMS failed to inform the consumer of the impact.
Before saying more about the HELMS cases, I shall provide some background on the green deal. It was launched by the coalition Government in 2013. Under the green deal, consumers can borrow money to fund improvements and repay the loans over time through their electricity bills. In the case of solar PV, consumers can begin to use renewable energy generated on-site in their homes. The savings can then be used to repay the loan. A principle called the golden rule, which has been mentioned today, is in place and intended to ensure that loan repayments do not exceed expected savings.
It is true that at the time the Government and, indeed, hon. Members from across the parties had high hopes for the green deal. But it failed to take off to the levels expected. Various reasons have been offered for that. They include its complexity and the fact that it did not properly consider consumer demand to undertake energy efficiency improvements in this way. The original scheme design was not perfect, but we and others believe that the pay-as-you-save mechanism at the heart of the green deal can still play a valuable role in the future. We have published the summary of responses to our call for evidence and will consult on proposals in due course. The right consumer protection will be paramount in any reformed scheme.
We want to improve the green deal, but it is far from being the only game in town for energy efficiency. Just yesterday the House debated the Draft Electricity and Gas (Energy Company Obligation) Order 2018, under which we are looking to further improve the already successful energy company obligation scheme. Since 2013, it has led to over 2.4 million measures being installed in nearly 2 million homes.
To make things right for the consumers who have suffered from the activities of HELMS, it is important to know that there is a specific process for handling complaints under the green deal. Consumers should first approach their green deal provider. If the problem is not resolved, the consumer may then approach the green deal ombudsman or the financial ombudsman service, depending on the nature of the complaint. Ombudsman decisions are binding on the green deal provider. If the consumer is still dissatisfied, they can refer their complaint to the Secretary of State for consideration.
The liquidation of HELMS further complicated resolving consumer complaints, as it meant any ombudsman decisions against HELMS could not be implemented through the company. Therefore, my Department worked with other key parties to establish a mechanism to offer a resolution for consumers. The Green Deal Finance Company reviews those cases and, where it considers it appropriate, makes settlement offers to consumers. If they are dissatisfied with any offer received, consumers can still refer their cases to the Secretary of State under the green deal framework regulations. The Secretary of State has the power to reduce or cancel loans where he is satisfied that the consumer has suffered, or is likely to suffer, a substantive loss.
Does the Minister think that, rather than the onus being on the individual to seek that assistance, the Green Deal Finance Company ought to be writing to every recipient of a loan and every customer of HELMS to make them aware of the route to getting redress, if they need it?
The Green Deal Finance Company will make those offers. If they are not accepted by the consumer, the onus is on them to recommend the case to the Secretary of State and for him to take the decision. That is the redress process that we have put in place.
I thank the Minister for giving way again. She said that roughly 10% of people who have a HELMS green deal have instigated a complaint. Therefore, 90% of those sitting on these deals have not complained, and many do not even know that they have been conned. That is why the Government have a responsibility to contact them directly and begin investigating, to see what help they can give.
If that has not already been done, I am sure it will be looked at. I am not sure whether it has been done or not, as I do not have that information.
The Minister spoke about the compensation that effectively comes through the Green Deal Finance Company. Does she think it right that a private company, which had nothing to do with the initial mis-selling or scamming, is left to deal with this issue and possibly £20 million of compensation to consumers, instead of the Government, whose scheme it actually was?
As a Government, we have worked with the Green Deal Finance Company to establish the redress system. That is why it can make offers and has done so. I will repeat the process again. If consumers are not happy with the offer that has been made, they can refer the case to the Secretary of State. We understand that only 100 offers have been accepted and 52 have been referred to the Secretary of State, so I encourage consumers to refer them to the Secretary of State. So far, only one decision has been taken on a HELMS case, but the Department is considering the evidence in other cases before the Secretary of State decides what sanction, if any, is appropriate. We expect more decisions to follow shortly.
From the outset, the green deal was subject to a monitoring regime administered by the Green Deal Oversight and Registration Body, which started investigating HELMS in October 2013 and concluded with a report in March 2015. Based on that report, the Government concluded that there had been significant consumer protection issues with the company, and the then Department of Energy and Climate Change imposed a final sanction on HELMS in November 2015. In September 2015, the Information Commissioner’s Office issued HELMS with a £200,000 nuisance calls fine—its largest ever at the time—after ruling that it
“recklessly broke marketing call regulations.”
Soon afterwards HELMS stopped issuing green deal plans, and in March 2016 it entered into liquidation.
I regret that it is taking some time to reach conclusions in many of the cases, but I would like to assure everyone that my Department is focused on progressing them as quickly and fairly as possible. We need to ensure the necessary evidence on substantive loss being incurred and to allow time for representations to be made.
Notwithstanding such mis-selling issues, let us be clear that solar PV in the UK is a success story, with rapid deployment over the last eight years. We are now exceeding our projections on solar PV deployment. In 2013 we estimated that solar capacity would reach 10 to 12 gigawatts by 2020, but the latest figures indicate that we now have over 13 gigawatts of solar capacity installed in the UK—enough to power over 3 million homes.
As I have said, I would be happy to meet with trading standards and the constituent of the hon. Member for Paisley and Renfrewshire North—I want to get a greater understanding—but will quickly answer some of the questions raised, so that the hon. Gentleman has time to wrap up.
I thank the hon. Member for Strangford (Jim Shannon) for his point about Northern Ireland. The green deal has not applied in Northern Ireland, because some of these matters are fully devolved. I thank the hon. Member for Glasgow North East (Mr Sweeney) for his comments. I would like to hear further information on the issues particularly affecting properties in his constituency, which I can pass on to the Secretary of State. I also thank the hon. Member for Central Ayrshire (Dr Whitford) for her comments. She is always a champion for her constituents, and where she feels there is an injustice, she stands up for them. The green deal framework ensures that payments should not exceed the period of the savings—over 15 to 20 years. Providers that do that will be found in breach and then action can be taken by the Secretary of State, including fines and stopping the actual deal. I would be interested to know about particular ongoing cases that may be of interest.
Unfortunately, we will probably never be able to completely eradicate mis-selling but, as a Minister in this Department, it is something I feel strongly about. Where it does happen, we will try to have the best processes in place to deal with it. I am grateful to the hon. Member for Paisley and Renfrewshire North for securing this debate and I look forward to seeing him in the future.
(6 years, 1 month ago)
Commons ChamberIn March, we published the first Government-backed code of practice on recalls, and we have trained almost 300 trading standards professionals on its use. The Office for Product Safety and Standards is working with UK manufacturers and importers to ensure that their recall plans and processes are adequate.
Electrical Safety First tells me that the successful product recall rate for electrical goods is abysmally low, so why are the Government not doing more with platforms such as Amazon and eBay, which hold considerable consumer information, to find a solution to this problem?
I thank the hon. Lady for her question, and I understand her particular interest in this area. She is the chair of the all-party parliamentary group on home electrical safety, which I look forward to meeting at the end of the month. With particular regard to online traders, we need to ensure consumer confidence. Amazon and eBay already have primary authority partnerships with trading standards. They are advised by trading standards on the regulations and work with them to make sure that goods are removed as quickly as possible.
Those who do not wish us to leave the European Union claim that standards will fall, but will the Minister confirm that enhancing the UK’s product safety regime is in the industrial strategy, to give consumers in the UK and around the world ultimate confidence in the quality and safety of UK-manufactured goods in the future?
I thank my hon. Friend for his question, and I absolutely agree. Consumer product safety is a key part of our industrial strategy. The Government are determined to maintain a strong safety regime, and consumers can be confident that consumer protections already based in EU law will be retained. We want robust systems that identify unsafe products, share information and make sure that the checks at our borders and ports are right.
I am glad that the Government now take product recall seriously. They certainly did not in the case of the 5 million Whirlpool tumble dryers, many of which are still in our constituents’ homes. More catch fire every week, destroying peoples’ properties and putting their lives at risk. What will the Minister do about those?
I thank the hon. Gentleman for his question; he raises an extremely important point. The Office for Product Safety and Standards is already reviewing Whirlpool’s recall programme. Some 1.7 million dryers have been replaced or maintained under the programme. We are keeping it under review, and we will report once that review has taken place.
I welcome my hon. Friend to her new role. I also welcome the Government’s recent steps to improve the recall process. However, as the hon. Member for Hammersmith (Andy Slaughter) said, tumble dryers continue to be a leading cause of devastating house fires, as happened to my constituent in Long Eaton just last week. Will my hon. Friend look at what more can be done to improve the recall process, and more importantly, what more can be done to improve the rights of consumers who have purchased faulty products?
I thank my hon. Friend for her question and express my condolences to her constituent over that horrific incident.
I assure my hon. Friend that the new Office for Product Safety and Standards takes this issue seriously. We are working with UK manufacturers on the recall process; we are keeping it under review. We want to make sure that the UK is recognised for having high standards and consumer protections, and my Department will continue to work on that.
Improving access to finance is the mission of the British Business Bank, which addresses gaps in the finance market through guarantees and through debt and equity finance. The bank recently launched an online finance hub to help entrepreneurs identify the most suitable finance options for their needs. It is currently supporting about £5.2 billion of finance to almost 75,000 businesses across the United Kingdom.
I thank my hon. Friend for her response. As somebody who campaigned to get her elected, may I say how good it is to see her on the Front Bench?
Small businesses play an important role in my constituency’s economy. Will my hon. Friend tell me what the Government are doing to tackle the late payment culture, which has such a negative effect on small businesses?
I thank my hon. Friend for his kind words. It is great to be answering a question from him at my first Business, Energy and Industrial Strategy oral questions today. I know his constituency well, and I know that he represents the interests of his small businesses.
It is true to say that late payments are an issue that we want to tackle. Debt to small and medium-sized enterprises has halved since 2012. We have established a Small Business Commissioner, and introduced a requirement for large businesses to report publicly on their payment practices. However, we want to go further and bring in new measures to underpin the prompt payment code. We work closely with the Federation of Small Businesses, which has said that
“it is good to see the government getting serious about this issue, especially when it comes to large firms paying their supply chains promptly.”
What specific programmes are available to coastal businesses in towns such as Southend-on-Sea that not only benefit hospitality businesses but help high streets that are sometimes suffering?
I thank my hon. Friend for his question, and I know what a champion he is particularly for that industry in his constituency. The coastal communities fund supports jobs and growth in coastal towns. Projects are forecast to deliver more than 18,000 jobs and £363 million in new visitor spending, benefiting local businesses along seafronts and in coastal towns. In England, the local enterprise growth hubs in coastal areas also provide local business support and advice. Retail and hospitality businesses in coastal towns benefit from those national programmes as much as they do from business rates relief, business improvement districts and the business support helpline.
Social enterprises—for example, Wrexham football club—are important employers and active community hubs in a lot of constituencies up and down the country. It seems to me that banks do not support or understand social enterprises sufficiently well. Does the Minister agree?
There are a range of options to support all kinds of SMEs and social enterprises in the current system. We have launched a finance hub which, with the British Business Bank, is available for organisations to get in touch with. A whole range of finance is available for different types of organisations. As MPs, we have a duty to make sure that our constituents and the businesses operating in our constituencies are aware of Government information, so that might be useful in future.
And it continues to fight, as do I. Thank you all.
Some of our most important small businesses are local post offices. In 2017-18, post office profits rose to £35 million, while postmaster pay was cut by £17 million. Communities and the Post Office are facing a crisis as more and more postmasters resign, as they are undervalued and underpaid while executives receive a pay rise. What are the UK Government going to do to support sub-postmasters and make their businesses financially viable?
Fundamentally, the Government absolutely support the post office network, and we are determined to make sure that it is provided across the country. As the Minister with responsibility for post offices, I have taken a particular interest in that since taking up my role. I am determined to make sure that we keep the network running across all parts of the country to benefit our communities.
First, I welcome the Minister to the Dispatch Box.
The British Business Bank is simply not reaching most businesses that need support. Only 12% of members of the Federation of Small Businesses apply for external finance, and two thirds of those applications are rejected. In the spirit of cross-party co-operation, how about setting up a network of regional development banks to deliver business finance where it is most needed? The Government have stolen a number of our policies—why not that one?
I must remind the hon. Gentleman that the British Business Bank has access to the £20 billion investment in the industrial strategy. Through our start-up loan scheme, we have made 57,000 loans, delivering £436 million in finance and creating more than 56,000 jobs. Access to finance has improved a great deal since I became an MP. The hon. Gentleman served on the Committee on which we made invoice financing another option for many small businesses.
I am proud that BEIS supports all its employees with comprehensive family-friendly policies. More widely, employees are entitled to a suite of family rights and protections, and we are looking to go further. We are considering requiring employers to assess whether a job can be done flexibly and to make that clear when advertising. We will also consult on a proposal to require large employers to publish their parental leave and pay policies.
I have just come from the Education Committee, where we heard from Pepper the robot, who could perhaps help us all give better answers to questions.
Does the Minister agree that one of the keys to unlocking the gender pay gap and family-friendly working practices is to raise the esteem in which part-time workers are held, so that they have the same pay, career progression and investment in training as other employees, and that perhaps if more fathers worked part time, we might raise that esteem further?
The hon. Lady raises an important point. Part-time workers are a valuable part of our economy, and it is right that they be held in the same esteem as full-time workers. With our policies and announcements on flexible working, I hope that the Government can strengthen this and deliver what she seeks.
Only last week, the publicly owned Post Office announced the closure of a further 74 Crown post offices. Although the Post Office has not disclosed all its spending for its franchising programme, the Communication Workers Union estimates that up to £30 million of public money will be spent on compromise agreements, with staff being paid to leave, as customers, local high streets and the jobs market suffer. Does the Secretary of State agree that the Post Office must be transparent about how much its franchising programme is costing the public purse?
On 11 October, the Post Office announced a plan to relocate 40 post offices in WHSmith stores. The overall number of post offices will not be reduced. WHSmith will also reach a franchise agreement for the 33 post offices that are already in its stores, so the total number of post offices operated by WHSmith in its stores is planned to rise.
As I have outlined, a number of stores are going into franchise agreements. It is important that we have a post office network that is fit for purpose and serves consumers as they currently are being. As Post Office Minister, I take that very seriously, but I am always happy to meet with the hon. Gentleman to discuss any particular concerns in his constituency.
As my right hon. Friend will know, our high streets face unprecedented challenges. Will he therefore join me in challenging the sharp practices of Smart Parking, which operates in the Westgate shopping centre in Basildon? Its charging and fining regime is damaging the viability of shops and fining thousands of people who have all tried to do the right thing.
My hon. Friend raises an important point, and it is one of the issues we will be looking at with the Retail Sector Council. There is already the review by John Timpson into our high streets, but we need to keep track of this area. My hon. Friend will, as a local MP, champion the cause of his constituency, and I, as Small Business Minister, am acutely aware of the challenges facing our high streets.
The Department’s consultation on limited partnerships closed on 23 July. Scottish limited partnerships continue to be used for dirty money, to the absolute discredit of the country. When will the Minister do something about this?
We acknowledge the reports that limited partnerships, particularly Scottish limited partnerships, have been misused. That is why we have consulted on proposals to tackle the issue and to modernise the law. In June 2017, Scottish limited partnerships were brought within the scope of the register of people with significant control, and since then there has been a fall of 80% in the registration of new partnerships.
Thank you, Mr Speaker. I have been desperately trying to catch your eye. We have had a number of comments on post office relocations and closures. Will the Minister make it absolutely clear that relocating a post office to WHSmith does not save the services within it? Many have been massively downgraded at the point to which they have been relocated.
As I have already outlined, we are committed to delivering a postal network that services the needs of our communities. If the hon. Gentleman has concerns relating to particular post offices, will he please contact me?
Thank you, Mr Speaker. May I bring to the Secretary of State’s attention the power that he has to mutualise Post Office Ltd to allow sub-postmasters and sub-postmistresses, and their customers, to have a share in their own Post Office? Will he look at this, because it would bring greater sustainability to the post office network?
That is something I am more than happy to look at in my new role, but it is something that you could have done yourself—[Interruption.] Sorry, Mr Speaker! It is something that the right hon. Gentleman could have done when he was a Post Office Minister.
Well, anyway, the House is consumed by a state of jollity, and that is always much to be encouraged. Finally, I call Mary Robinson.
My hon. Friend is right that post offices are now so valuable to our high streets. There are lots of opportunities for post offices to develop further in providing services to their community. As the Minister with responsibility for post offices, I will do whatever I can to facilitate that.
(6 years, 2 months ago)
Written StatementsThe UK’s retail sector is a driving force in our economy and plays an important social role in communities across the UK. The industry employs 3.1 million people and generated £93 billion of gross value added in 2017—5% of UK GVA.
Change has always been an inherent part of the UK’s dynamic retail sector and the Government are clear that we want all types of retail to thrive now and in the future. We are supporting the sector as it undergoes structural change and responds to changing consumer expectations, embraces new technology and prepares for EU exit.
Government and industry have recognised that positive action is needed to ensure the sector thrives in the future. To achieve this, and as part of the industrial strategy, we established the Retail Sector Council in March.
The council is jointly chaired by the Minister for Small Business, Consumers and Corporate Responsibility and Richard Pennycook (chair of the British Retail Consortium). All retail activity in the UK is represented: large and small; independents; and traditional and online or disruptive retailers. Through the council the Government are helping the retail industry to come together to develop sector-led solutions to support its productivity and growth. The council has now met twice and is identifying its priorities and actions to be agreed at the next meeting later this year.
In addition, the Government are also committed to supporting the retail sector through a range of measures.
In July the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Rossendale and Darwen (Jake Berry) appointed a panel of experts to diagnose issues that currently affect the health of our high streets and advise on the best practical measures to help them thrive now and in the future. Chaired by Sir John Timpson (chairman of Timpson—the multiple service retailer) the panel will focus on what consumers and local communities want from their high streets. They are holding a series of evidence sessions across the country to hear directly from communities. The panel will look at the current challenges and work out options to ensure our town centres remain vibrant. The panel of experts have a wealth of experience and include representatives from the retail, property and design sectors.
We have taken action to reduce the business rates burden faced by some businesses, with reforms and reductions worth over £10 billion by 2023, and the Government are currently reviewing the wider taxation of the digital economy to make sure all businesses pay their fair share.
The Government understand the concerns of those affected by job losses in the sector, and the uncertainty this can cause. Where job losses occur, Jobcentre Plus, along with other Government Departments, works with the companies affected to understand the level of employee support required to get people back into employment as soon as possible.
British retailing is transforming and the Government are committed to doing all they can to ensure the sector continues to thrive.
[HCWS968]
(6 years, 2 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
It is an absolute pleasure to serve under your chairmanship for my first Westminster Hall debate, Mr Hollobone.
I congratulate the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) on securing this debate. The IPPR’s Commission on Economic Justice has produced a thoughtful and wide-ranging report on our economy, and it is absolutely right that this House should debate it and its recommendations. I thank him for bringing it to the House and for introducing it, and I congratulate the IPPR and the commission on their contribution to the public debate.
We can all agree that the issues raised today are of fundamental importance. Tackling low pay, boosting equality and putting fairness at the heart of society, while building on the strength of our jobs market and on economic growth, are issues that affect all our constituents. I will start by simply reflecting on where we are now. We have a deserved reputation for being a great place to do business, with high standards, respected institutions and the reliable rule of law. We are an enterprising and successful economy, built on firm foundations: the skills of our workers, the quality of the infrastructure, and a fair and predictable business environment.
The Government are committed to building an economy that works for everyone, to raising living standards and to growing our national wealth, not just for today, but for future generations. That commitment is demonstrated by our progress since 2010: near-record levels of employment, with more than 3.3 million more people in work than in 2010, unemployment at a record low, income inequality down, fairness in the tax system—the right hon. Gentleman spoke about the wealthiest 1% in this country, but the top 1% contribute 28% to income tax and the top 5% contribute nearly 50% of income tax—and absolute poverty falling.
In terms of rebalancing the economy and an economy that works for everyone, can the Minister explain how cutting the rate of inheritance tax and cutting capital gains tax help the poorest in society?
One of the things we have absolutely seen is that putting wealth back into the system creates wealth. That is one reason why we have these measures and why we take some of these fiscal decisions—to ensure that we are fuelling wealth to be spent in order to benefit the lowest in our society.
We recognise the progress that has already been achieved in improving the life chances of millions around the country, but the right hon. Gentleman is right that we must not be complacent. For all our many strengths, we have businesses, people and places whose level of productivity is well below what can be achieved. That is why the Government have launched ambitious and transformative plans for our economy and for employment. The industrial strategy deliberately strengthens the five foundations of productivity: ideas, people, infrastructure, the business environment and places. It is a strategy that is being implemented with, not just for, British enterprise. It provides a template for the partnership between Government and the private sector that is required to solve productivity issues. Through the “Good Work” plan, the Government are supporting people to seize those opportunities as the labour market is changed by technological advances. I will talk about those today.
The Government’s industrial strategy is our long-term plan for building a Britain that is fit for the future. It sets out how we will help businesses to create better, higher paying jobs in every part of the UK. It focuses on the necessary investment in the skills, industry and infrastructure of the future. It ensures that our country and its citizens can embrace and benefit from the opportunities of technological change. We need to prepare to seize those opportunities. That would be necessary at any time, but Britain’s decision to leave the European Union makes it even more important.
Technology is transforming the world of work. That means we must invest in our workforce. We have committed to establishing a technical education system that rivals the best in the world, to stand alongside our already world-class higher education system. As part of wide-ranging reforms, we will invest an additional £406 million in maths, digital and technical education. Technological progress and a faster pace of change create opportunities but also challenges for those who may find themselves needing to learn new skills to find a job. We will therefore embed a culture of career-long learning through a new national retraining scheme that supports people to re-skill and grow their earning power throughout their lives.
We should not forget that it was the Conservative party that introduced the national living wage, delivering the lowest earners their fastest pay rise in 20 years. In April this year, we increased the national living wage by 4.4%, from £7.50 to £7.83. That increase is expected to benefit more than 2 million people and means that a full-time worker on the national living wage will see their pay increase by over £600 over the year.
Our industrial strategy also sets out what we are doing to make sure that the UK is the best place in the world to start and grow a business, which will create new jobs. We firmly believe in business as a force for good in society.
I will make some more progress.
Our corporate governance reforms are driving changes in how our largest companies engage, at board level, with employees and external stakeholders. Significant changes to the corporate governance code will strengthen workers’ voices in boardrooms by requiring boardrooms to put in place robust employee engagement mechanisms, while new laws will require companies to report how they engage with employees and have regard to their interests. Amplifying the voices of employees and external stakeholders will improve boardroom decision making, deliver more sustainable business performance and build confidence in the way businesses are run.
We are also introducing pay ratio reporting, requiring quoted companies to compare CEO pay with average worker pay, supported by an explanation of why the ratio is consistent with pay, reward and progression policies in the wider workforce. Under the revised UK corporate governance code, remuneration committees will have to engage with the workforce to explain how executive remuneration aligns with wider company policy. These changes will help to ensure that boardroom pay is connected with wider workforce pay and not set in an artificial bubble.
I thank the Minister for setting out the Government’s industrial strategy proposals. Does she intend to deal with the proposals in the report? Specifically, does she agree with the report’s underlying assertion—that our economy is currently unjust?
The premise of the report and some of the measures it suggests are already being considered by the Government, and I am outlining the actions we are taking in those areas. I am committed, and so are the Government, to providing fairness and high-quality jobs in the workforce.
The Government are investing. We plan to deliver £20 billion of investment in innovative and high-potential businesses by establishing a new £2.5 billion investment fund, incubated in the British Business Bank, and we will continue to support businesses to grow by accessing international markets. We aim to create a business environment well equipped to meet the challenges and opportunities of new technologies and new ways of doing business.
Across Government we are making huge strides towards rebalancing the economy and empowering local government. Through devolution deals we have strengthened local leadership and devolved powers and funding away from Whitehall, so that they are exercised by those with the strongest understanding of the needs of their communities. We are absolutely committed to this continuing.
The Minister must forgive me for presuming that she will refer to the UK shared prosperity fund; she already referred to the importance of regionality and understanding the regions. Will she explain why a devolved English Ministry—namely the Ministry of Housing, Communities and Local Government—will administer the shared prosperity fund? Its history has involved dealing with English issues, rather than, for example, deprived communities in Wales.
As I have outlined, the Government are committed to devolution and to giving local people the power to take decisions. There is a Minister responsible for the shared prosperity fund in that Ministry, but we feed into it across Government.
However, we are committed to delivering for the whole UK, including England, Wales and Scotland. That is why we are implementing the industrial strategy and why we are working with local communities to come up with, for example, local industrial strategies, which will build on their strengths and deliver on the economic opportunities that every region in the UK requires. Leadership and ambition for the future are key, and we recognise that there are individuals in those regions who can deliver those. The Government also continue to support the northern powerhouse strategy and have invested more than £3.4 billion directly into it for locally determined projects. Public support, combined with private sector dynamism, is enabling the region to flourish.
Technological change presents both challenges and opportunities for the world of work. New ways of working have a part to play in a modern, flexible labour market, but it is absolutely right that we look at what we can do to support people through these changes. In response to Matthew Taylor’s review of modern employment practices, the Government published the “Good Work” plan, in which we commit to reporting annually on the quality of work in the UK, with the first baseline report to be published later this year. I am clear that quality of work should take equal priority to quantity of work. Through the plan, we are also supporting workers by introducing a right to request a more predictable and stable contract, to tackle issues around one-sided flexibility, and by introducing enforcement of holiday pay.
I will pick up on some of the points raised by hon. Members. I again thank the right hon. Member for Birmingham, Hodge Hill for bringing the debate before us. I also thank the hon. Member for Mitcham and Morden (Siobhain McDonagh), who has a strong interest in this area and is extremely committed to tackling the injustices that affect her constituents.
On the point from the right hon. Gentleman about AI, robotics and the potential loss of 2.4 million jobs, the report by the Royal Society for the Encouragement of Arts, Manufactures and Commerce, “The Age of Automation”, suggests that technological advances would not necessarily lead to job losses in the medium term but would actually improve opportunities for workers.
I must also clarify a point around zero-hours contracts. We often hear that they are all bad contracts and that people do not want them. In reality, we need to keep up with modern practices, and people want the flexibility that these contracts provide to work around childcare or other home commitments. That is why it is important that we are truthful about the benefits of zero-hours contracts.
On the Taylor review, we are analysing the responses to it and we will come forward with proposals in the relatively short term. I am committed to that.
I thank the IPPR for its report. I am committed, as the Minister responsible, to delivering fairness and quality of work for the people of this country. I must mention that I am not smug and I am not wealthy. I am a working-class girl who is a Conservative MP. I am absolutely committed to delivering for the people of my country.
(6 years, 2 months ago)
General CommitteesI beg to move,
That the Committee has considered the draft Business Contract Terms (Assignment of Receivables) Regulations 2018.
It is a pleasure to serve under your chairmanship, Mr Sharma. This is the first time I have served on a Committee as a Minister, and I am extremely pleased to bring forward these positive draft regulations. I am also pleased that the shadow Minister, the hon. Member for Sefton Central, is on the Committee, because he is a Medway person, too—we grew up in the same area. It is great that there are two people on the Committee who know Medway well.
Britain’s 5.7 million small and medium-sized enterprises are the backbone of the economy, accounting for more than half of turnover and 60% of employment in the private sector. Finance is the lifeblood of those businesses, yet many of them are denied by their customers the ability to access one particular finance option. That is the anomaly that the draft regulations will put right. In future, SMEs will, if they choose, be able to raise finance on their invoices more easily.
The most recent figures for asset-based finance show that total advances stand at £22 billion, of which more than £20 billion is invoice finance. Around half that is to large businesses, so invoice finance advances to SMEs amount to approximately £10 billion. In comparison, bank loans and overdrafts to SMEs were £165 billion at the end of 2017.
Invoice finance has real advantages—it is flexible, immediate and supports businesses to grow—so why is take-up so low? The answer is that many customers prohibit their suppliers from assigning invoices—or, more accurately, receivables: the right to receive the proceeds from an invoice. That assignment is essential for invoice finance to operate. Such restrictive terms are found in many purchase contracts. An SME supplier is typically unable to negotiate changes. If it wants a contract, it had better just accept the standard terms, otherwise the work will be offered to a competitor.
Why do those contract terms persist? Some such clauses are written as a general catch-all to prevent suppliers from subcontracting services. However, those standard terms are so wide that suppliers are equally prevented from assigning their invoices to finance providers. In other cases, customers may not want to deal with an invoice finance company. They know that the imbalance of power means their small suppliers are unlikely to act against them if they impose long payment terms or simply pay late. A finance company is a different proposition. Whether such onerous terms exist through inertia or deliberate intent, their effect is the same: they prevent suppliers from accessing the finance they need to thrive and grow.
The draft regulations will put an end to that situation for SME suppliers making routine supplies of goods and services. They will allow providers to offer invoice finance even where restrictive contract terms are in place, knowing that those terms will have no effect. The draft regulations do not require any contract to be redrafted, nor are they in any way retrospective. Existing agreements will continue to be enforceable, and the same standard drafting, including clauses prohibiting assignment, may still be used for contracts entered into on or after 31 December this year. Those clauses will simply have no effect. Therefore, the impact of the draft regulations will be felt gradually, as new supplier relationships are created. This is a simple mechanism with no compliance or reporting burden.
To offer invoice finance, providers will simply need to assure themselves that the supply contract was entered into on or after 31 December this year and that none of the exemptions apply—for example, that the supplier is not a large enterprise. The change will also unlock additional finance for existing clients where advances are currently restricted due to prohibitions on assignment imposed by some of the SME’s customers. The position for both supplier and finance provider will be simpler and more certain, which will help to create the significant benefits that are expected to flow from the regulations.
Two direct benefits are described in the impact assessment, which reflect the two elements of a typical invoice finance arrangement. The first benefit is a reduction in the discount fees charged to suppliers, which reflects the reduced risk that the finance provider will be unable to collect payment because the assignment was not valid. The annual savings to business from lower discount fees are assessed at £13.7 million. The second benefit is a reduction in the service charge based on turnover. That benefit is assessed at £46.1 million. Both benefits result from the reduced costs incurred by finance providers being passed on to SMEs in a competitive market.
Finally, there will be significant indirect benefits from additional finance becoming available and allowing suppliers to take advantage of new business opportunities. Those benefits are assessed at £84.6 million. All those benefits are calculated from survey evidence and follow-up research, as set out in the impact assessment. The overall outcome is a net present benefit to business of £966 million, which I am sure all hon. Members will welcome.
As with any intervention, it is important to ensure that the benefits do not give rise to unintended consequences. Acting to make contract terms ineffective is a powerful measure, which is typically used where there is an imbalance of power between the parties that cannot be corrected in any other way. After the consultation, and even after an earlier version of the regulations was laid, the legal profession raised concerns about the potential impact of the regulations on the use of English law. As hon. Members will know, English law is one of this country’s most valuable exports and forms the basis for contracts in areas as diverse as aircraft leasing, project finance and infrastructure.
We listened carefully to those concerns and my predecessor, my hon. Friend the Member for Stourbridge (Margot James), withdrew the instrument so that they could be properly considered. Following extensive discussions, I am glad to say that these regulations incorporate changes that meet those concerns. I thank all those involved from the City of London Law Society and the trade body UK Finance who have ensured that the original aim was met without putting at risk the position of English law as the leading choice of governing law for international agreements.
The regulations will set suppliers free to access invoice finance when they wish, without being prevented from doing so by their customers. They will do this while preserving the attractiveness of English law overseas and they will bring significant benefits, with a net present value to business of £966 million.
On a point of order, Mr Sharma. Having heard the introduction to the debate, I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests. I am a member of an SME LLP firm, but it has had no involvement with invoice finance in relation to its own contracts during the whole of its existence.
I am grateful for the Committee’s consideration of the regulations, and to the hon. Gentleman for his contribution to this important debate. I will touch on a number of the elements he rightly brought up.
The hon. Gentleman is absolutely correct that there are two types of benefit to invoice financing: a factoring element and a discounting element. He is also right that it is one tool within the overall finance packages from which businesses are able to draw. The measures before us will aid the growth of invoice financing so that where suppliers want to enter into a contract agreement with invoice financing, nullifying the term allows them to do so. However, invoice financing on its own does not solve the problems with accessing finance. It is one tool—the regulations try to widen the scope for businesses to access it, but there are two different elements.
It is true that many small businesses have applied for finance with banks, but many have not. They decided that they would rather stunt their growth than borrow because of the fears around long-term borrowing. We know, however, that they will often be willing to improve their cash flow, which enables them to grow and invest. Without the ability to access invoice financing, many small businesses would not be able to take up the contracts that they want to, which enable them to grow.
The Minister will be aware that there is a shortfall in lending to SMEs of £35 billion relative to the pre-crisis period. She referred to just under £1 billion that would be made available through this policy, which is welcome, but is a drop in the ocean compared to the bigger challenges facing SMEs. SMEs have created 2 million jobs since 2010 and power our economy. With the uncertainty of Brexit, life will get worse for SMEs. Will she say something about the broader picture of what the Government will do to address the pre-crisis gap of £35 billion? That is the bigger question that the Government need to address. Lots of work had been done to address the lending issues facing small businesses, but as she knows from her impact assessment, it has not happened to the extent that it needs to.
The Government are looking at many different ways to increase small businesses’ access to finance. Having run a small business, I know how crucial that is. While this statutory instrument represents just under £1 billion of net present benefits, it is a gain. Because we are making this decision, this element of finance will be available to more SMEs, which can only help. It will also aid the ability of new invoice financers to come into the marketplace, which we welcome, because that brings more jobs and more receipts into the Exchequer.
I have covered the cash-flow issue. Many businesses will not now take an overdraft. Instead they can take out finance invoice and manage their business needs as a small business. It is difficult for small business owners to get access even to what we might regard as small sums, so many suppliers will use this as an ongoing tool. Factoring may suggest that a company has been in financial difficulties. That factoring can now take place on a private and confidential basis, so that customers are not aware of that financing on their faced invoices.
The hon. Member for Sefton Central mentioned the small business commissioner, whom I was pleased to meet for the first time last week. He is doing wonderful work with small businesses in the battle against late payments to ensure that they can receive some of the moneys they are owed. The hon. Gentleman is right to mention the prompt payment code, particularly in relation to Carillion. However, he will know that we are looking to consult widely on late payments. Since I have been in my post I have been particularly concerned about that, so I have been looking at it personally. I look forward to launching that, so that we can assess it and, as a Government, take forward more measures to help small businesses.
We all agree that businesses should be able to access the finance they need, choosing whatever options are most suitable for them. The Government are committed to ensuring that businesses can secure the finance they need to invest and grow. It is not about favouring one type of finance over another. Invoice finance will not be the right choice for every business, but that should be a decision made by individual entrepreneurs, not made for them through onerous terms imposed by their customers. The regulations ensure that restrictive terms will no longer apply to SMEs while protecting freedom of contract for large enterprises. That change will allow thousands of small businesses to access invoice finance for the first time and will reduce the cost for existing and new clients alike. I commend the regulations to the Committee.
Question put and agreed to.
(6 years, 7 months ago)
Commons ChamberIndeed. The hon. Gentleman always has a keen sense of what is about to follow, which, colleagues—I merely remind you; you will be keenly aware of it—is motion 5. I call the Whip to move.
(7 years, 1 month ago)
Commons ChamberIt is an honour to follow my hon. Friend the Member for Eddisbury (Antoinette Sandbach), who made a passionate speech. I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) on promoting the Bill, and my hon. Friends the Members for Colchester (Will Quince) and for Banbury (Victoria Prentis). I also acknowledge the passionate speech given by the hon. Member for Lincoln (Ms Lee). I thank everyone for their contributions. It is amazing how much work can be done by Back-Bench MPs.
The Bill follows on from the debate last week—I cannot always remember when debates took place, because they all merge into one—on the bereavement care pathway. A huge amount of work has been done by a group of newish or young MPs who have been in Parliament for only a few years. It is amazing how much work can be done in a short period.
I support the Bill and am proud that it was among our party’s manifesto commitments. The manifesto stated:
“We will ensure all families who lose a baby are given the bereavement support they need, including a new entitlement for child bereavement leave.”
I am not the only Member of Parliament who will have attended a surgery quite early on in their career and had to try to support and manage a bereaved parent who might have been dealing not only with the loss of their child, but with other issues such as housing and healthcare, and who was nervous about talking to their employer. It was difficult for me to give the best possible advice in my first few cases, so I am really pleased that the Bill will help those people.
I concur with my hon. Friend about the understanding that Members gain from people visiting their surgeries. I thank my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) for promoting the Bill.
I am lucky enough to represent a constituency with two amazing charities, Abigail’s Footsteps and Making Miracles, and our area will be part of the bereavement care pathway trial. It is a credit to my constituents and others around the country who, despite having experienced such desperate suffering, have provided the drive, working with Members here, to bring us to where we are today. I congratulate them and I hope my hon. Friend the Member for Wealden (Ms Ghani) agrees.
I completely agree. My hon. Friend has been a strong advocate for her constituency and a champion of her local charities. I have a great birthing centre in my constituency, the Crowborough birthing unit. The midwives do fantastic work, which I would also like to acknowledge.
I am keen to support the Bill because members of my family are involved in employment that is a little unstable and it can be tricky to take time off. One member of my family is involved in shift work: it is not easy to take time off, because it changes the pattern within the factory. I hope the Bill would provide them with support if they ever found themselves in that situation again. Another member of my family who lost a child was in the teaching profession. Taking time off was seen as not the right thing to do. I hope the Bill will bring common sense and compassion to employers, as well as support to such families.
Parents in my constituency must feel properly supported by their employer when they go through the deeply distressing ordeal of losing a child. Losing a child must cause grief beyond words. It is right that employees are able to feel comfortable taking time off to grieve without being nervous of having that conversation or nervous about losing pay. It is only right that parents with a child over six months old have the same protection in law as those who lose a child under six months old. There is no set limit on how many days may be taken off as leave and the definition of a reasonable time remains vague. The Bill will provide certainty and a little bit of a buffer—a bit of space of time, with a bit of pay—to parents who are grieving.
Most employers are excellent and act with compassion and kindness, but we should not leave it to chance or to the most articulate parents who have lost a child to have that conversation. I am therefore pleased to support the Bill, and that the UK Government are leading the way in supporting parents who need time away from their work to grieve for their lost child. I am proud of my colleagues who have been able to do so much work in such a short time. The Bill will provide some support to my constituents who lose a child.