Post Office: Horizon Inquiry Participation Costs

Kevin Hollinrake Excerpts

Tuesday 19th March 2024 Written Statements

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

In October 2023, I announced our intention to provide funding of up to £150 million, plus any contingency that may be required, to support the Post Office fully participating in the Post Office Horizon it inquiry and to support the delivery of redress to postmasters.

Since then, those costs have increased and the Government have decided to provide access to contingency funding, and award a further £40 million to ensure Post Office can continue to deliver this important work. The Government remain determined to address the wrongs of the Horizon scandal.

In accordance with the Subsidy Control Act 2022, the Department for Business and Trade’s assessment of the funding’s compliance with the subsidy control principles was previously referred to the subsidy advice unit. A report was published, which concluded that the Department had

“conducted an assessment which considers the subsidy’s compliance with the subsidy control principles in line with the Statutory Guidance”.

[HCWS355]

Simpler Corporate Reporting

Kevin Hollinrake Excerpts

Tuesday 19th March 2024 Written Statements

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

Yesterday, the Government announced our first set of intended regulatory changes as part of our commitment to make the non-financial reporting framework smarter, simpler and better for business. These changes focus on reducing regulation on small and medium-sized companies, ensuring that reporting requirements are proportionate, so that those companies can focus on their growth and delivering for their customers.

The Government intend to lay legislation this summer to lift the monetary thresholds that determine company size by 50%, in order to take account of inflation and to reduce burdens on smaller businesses, a change that we are able to make following the UK’s withdrawal from the European Union—see table. Overall, the effect of these changes is that 5,000 large companies would be reclassified as medium-sized and access more proportionate reporting; 13,000 medium-sized companies would be reclassified as small companies, enabling them to benefit from exemptions to statutory audit requirements as well as the ability to file simpler accounts; and 113,000 small companies would be reclassified as micro-sized companies, which will allow them to file simpler accounts—a benefit for more than one in every four businesses that are currently classified as small.

Draft National Minimum Wage (Amendment) (No. 2) Regulations 2024

Kevin Hollinrake Excerpts

Monday 18th March 2024 General Committees

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

I beg to move,

That the Committee has considered the draft National Minimum Wage (Amendment) (No. 2) Regulations 2024.

It is a pleasure to serve with you in the Chair, Mr Hosie. The purpose of these regulations is to raise the national living wage and national minimum wage rates on 1 April 2024. They were laid on 13 January and approved by the House of Lords on 12 March.

We are delighted to say that this uplift will see the achievement of one of our core pledges: for the national living wage to reach two thirds of median earnings by 2024. The target was set with the intention of ending low hourly pay, in line with the OECD definition, for those eligible. Now, on the 25th anniversary of the minimum wage, that target will be met—a genuinely historic moment.

We have achieved that on time, in spite of the difficult global conditions of the past few years—the huge economic impact of the pandemic, the shockwaves of the war in Ukraine and recent cost of living challenges. That is something that the Government, and every parliamentarian, should be proud of. Indeed, we should also be very proud of the contribution from businesses, who have obviously borne the greatest burden of paying it.

I will turn shortly to the detail of the regulations, but I will first thank the Low Pay Commission. We have once again accepted all of its recommendations for the national living wage and national minimum wage rates. Its diligent approach to conducting detailed analysis and carrying out a range of stakeholder engagement has continued to pay dividends, enabling the Government to strike the right balance in giving millions of workers a well-earned pay rise, without harming businesses—the lifeblood of our economy—or adversely impacting the balance of the UK’s labour market. I extend my thanks to all of the commissioners, including Bryan Sanderson, whose term as chair ended around the turn of the year. I look forward to continuing to work closely with the Low Pay Commission, including the newly appointed chair, Baroness Stroud.

Turning to the rates themselves, once these regulations have secured parliamentary passage, the national living wage will increase on 1 April to £11.44 an hour—a record 9.8% cash increase of £1.02. As well as hitting our goal of seeing the national living wage reach two thirds of median earnings, we are also delivering on our pledge to extend eligibility from workers aged 23 and over to those aged 21 and over. By including 21 and 22-year-olds in the national living wage, these regulations will put more money into the pockets of more workers.

Given that younger workers remain more susceptible to economic shocks, the national minimum wage rates for those under 21 years old will remain in place. However, in making its recommendations, the LPC noted that employment among workers aged between 16 and 20 has been strong in recent months, and that the previous large increases to the national living wage have widened the gap to those younger workers entitled to the national minimum wage at lower rates. We are therefore pleased to deliver a significant uplift to the other national minimum wage rates.

These regulations will increase the rate for 18 to 20-year-olds to £8.60 an hour—a rise of 14.8%, or £1.11. The minimum wage for workers above school leaving age, but under 18 years old, will increase to £6.40 an hour—up by £1.12, or 21.2%. The same applies to the apprentice national minimum wage rate, which applies to apprentices aged 19 and under or in the first year of their apprenticeship. The accommodation offset, meanwhile, which is a daily rate, will increase by 9.8%, or 89p, to £9.99.

The Government published a comprehensive impact assessment when these regulations were laid, including an equalities assessment. Hon. Members will note that this impact assessment has once again received a green, fit-for-purpose rating from the Regulatory Policy Committee. I also note that the net cost to business is £217 million per annum.

[Chris Stephens (Glasgow South West) (SNP)]

I am very grateful to the Minister for showing his customary politeness in giving way. In the impact assessment, I do not see any reference to UK Government employees. Does the Minister know how many UK Government employees will benefit from the provisions he is laying out today?

[Kevin Hollinrake]

I do not know that figure, but the hon. Gentleman raises an interesting point. He is not just talking about the overall number of Government employees—I do not know that number either—but the ones that are on national living wage. I am very happy to look at that, and I will be interested to hear his reflections later. Perhaps he will enlighten us on what he believes that number to be.

We estimate that three million workers will receive a direct pay rise as a result of this uprating. The increase to the national living wage will represent a boost of more than £1,800 to the gross annual earnings of every full-time worker on the national living wage compared with this year, and a boost of £8,600 compared with 2015, when the policy was first announced. To put that in context, when this year’s uprating comes into effect in April, the national living wage will be approximately 70% higher than in 2015. Meanwhile, the consumer price index has increased about 30%, so it has increased at over twice the rate of inflation.

Finally, I remind hon. and right hon. Members of one further important change we have introduced to the minimum wage regulations. The Low Pay Commission recommended that minimum wage exemption for live-in domestic workers, which the Employment Appeal Tribunal had found amounted to indirect discrimination against women, should be removed. Due to legislation we passed earlier this year, it will be removed from the statute book from 1 April, protecting more of the UK’s vulnerable workers from exploitation.

We recognise that businesses and workers alike remain keen to hear about the future of the minimum wage. I can therefore confirm that we will be publishing the 2024 remit to the LPC shortly. The remit will ask it to provide recommendations for the national living wage and national minimum wage rates to apply from April 2025. The Government and the LPC will continue to monitor closely the impacts of these increases on the economy, and carefully consider our future ambitions.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Mr Hosie. I thank the Minister for outlining the changes these regulations make to implement the new rates of minimum wage, as recommended by the Low Pay Commission, to which I also pay tribute for its sterling work. I will refer to some of the findings from its annual report during my contribution.

I also—he should really steel himself, because I do not do this often—congratulate the Minister on delivering the promise to match the minimum hourly rate to two-thirds of median wages. I think that has been eight years in the offing, but we have got there. In achieving this figure, the Low Pay Commission recommended a rise that represents the largest increase in cash terms since the introduction of the minimum wage. That is clearly welcome news for those working in minimum wage jobs, as is the extension of the entitlement to all those over the age of 21. It represents a 9.8% increase for those older than 21, with the hourly rate of the main rate—the so-called national living wage—now at £11.44 an hour. That equates to an annual increase of just over £1,800 for someone working a 35-hour week, and clearly we in the Opposition welcome that.

While I understand the Government are keen to celebrate this year’s levels, I would caution them not to be too overconfident, because anyone who has taken the time to study the Low Pay Commission’s report will see that much more needs to be done before work in this country pays in the way that it should. There are clear warning signs in the report about the persistence of insecure work and in-work poverty.

No one here will need reminding that the rates of inflation we have had to endure in recent years have thrown workers—and, indeed, everyone in this country—into a cost of living crisis. Inflation rates peaked at 11.1% in October 2022 and have been hovering around 4% and 5% even now. Between April 2021 and April 2022, household bills doubled, and the price of essential goods and services increased at a magnitude not experienced since the 1970s and 1980s. The Low Pay Commission report notes that energy, food and transport costs were at the “highest rates recorded” since the CPI series began, way back in 1989. Even in September last year, when inflation was beginning to come down, energy prices were still increasing by 5% and food inflation was 12.2%.

Last year I raised concerns that, in the face of such high levels of inflation, the minimum wage uplifts were not large enough to prevent a real-terms cut to the rate. That has been confirmed by the Low Pay Commission report, which states that the past two years’ increases in the minimum wage have in fact represented a cut in real terms due to inflation. I am pleased that the commission is confident that today’s increases will restore the value of the minimum wage in real terms, but I am also aware that the increases do not undo the previous two years, when pay did not keep up with the cost of living and hardship has endured as a result.

[Kevin Hollinrake]

As I said, the national living wage has outstripped inflation twofold during the period since its implementation. At one point in time, the Opposition talked about a national living wage of £15 an hour. Is that still the hon. Gentleman’s policy? Is that his personal policy or the Opposition’s policy?

[Justin Madders]

That very interesting question is some way outside the remit of the regulations. Of course, if the Minister wants to talk about what our policies will be, he should advise the Prime Minister to call a general election—but perhaps we are not quite there.

My question for the Minister is about the inflationary spikes of the last couple of years. What mechanisms are being looked at to ensure that the minimum wage increases at a rate that reflects those in real time? The evidence gathered by the Low Pay Commission on how workers have been affected is truly sobering. In Belfast, the commission found that supermarkets had introduced payday pantries, which provide food for workers in the run-up to payday. A care worker in Manchester told the commission,

“Most of my colleagues are using food banks.”,

and stated that that was not a new, post-pandemic problem. Such examples chime with responses in trade union surveys. In autumn 2022, Unison found that 17% of respondents had skipped meals and that 20% had asked for a loan from family or friends. In May 2023, USDAW found that 46% of its members surveyed were worried about food bills, 15% had turned to food banks and 42% had missed meals in the last year to pay for bills. If anything, the situation has been getting worse. The Joseph Rowntree Foundation’s yearly poverty report states that the proportion of households in poverty with at least one working adult increased from 61% in 2021 to 64% in 2022. The poverty rate across the country as a whole is now more than one in five, and poverty has not fallen for 20 years.

It is worth saying a few words about why, despite the Minister’s comments, minimum wage increase have not eradicated in-work poverty, which is what we would like to see. Of course, I commend the Government for reaching their 2016 pledge to increase the minimum wage to 60% of median wages by 2020 and to two thirds of median wages by this year. Indeed, the impact has been that the number of employees on low hourly pay has fallen consistently; the fall since 2015 is estimated to have been about 20%.

However, the graph on page 62 of the Low Pay Commission report reveals that on two issues we still have an awful long way to go. It is hard not to be struck by the large disparity between men and women in terms of low pay—a point I shall return to—and the persistence of low weekly pay as opposed to low hourly pay. That instructive graph shows that increasing the minimum wage floor is only one of the tools needed to tackle problems in the labour market, and that it has largely left unaffected the issue of low pay for those on weekly earnings. There is clearly an issue about the number of hours people are working.

The Low Pay Commission annual report highlights the wide gap between men and women. Consistently since 2011, roughly 15% of men in employee jobs have been on low weekly pay, despite the increases in the minimum wage. The percentage of women on low weekly pay is double that of men, at roughly one in three. That has fallen gently since 2011, when the rate was around 41%, but that large disparity is still there. Will the Minister say whether there are any plans to deal with that gender pay gap and the question of hours worked?

To adequately address the problems in our labour market, we have to consider not only the number of hours but the quality and insecurity of work. Citizens UK has estimated that there are 6.1 million workers currently trapped in insecure forms of work, 3.4 million of whom are on low pay. That amounts to 19% and 11% of the total workforce respectively on low pay. Low pay is not an inherent condition for those in insecure work, however; those on low pay are around five times more likely to be in insecure jobs.

It is noted in the Low Pay Commission’s report that those insecurely employed struggle to get adequate hours, still receive late shift notices and are on zero-hours contracts. Respondents noted that workers in sectors such as hospitality had to take on multiple jobs to obtain full-time hours, which brings the challenge of having to juggle their availability in order to be accessible for both.

In its fieldwork, the Low Pay Commission found that workers continue to struggle to get contracts that reflect their actual hours worked. It was also noted that employers are still allocating shifts with as little as a day’s or just a few days’ notice, with some workers interviewed even stating that they had had shifts cancelled on the day they were meant to be in work. That is clearly a problem that is not going away. I ask the Minister this: how is someone supposed to plan for the future when they do not know how many hours they will work from week to week or month to month? What can a worker do if they are told they are surplus to requirements on a particular day when they might have already paid out for childcare or transport costs? Such practices erode the gains that we have made on the minimum wage.

As I say, I will not be entirely negative—the Minister would not expect me to be so. Positive steps have been made this year. We particularly welcome the removal of the 21 to 22-year-old age category. That measure was found to have broad support among those contacted by the Low Pay Commission. But as I mentioned last year, we are sad to see the Government continuing to support age discriminatory bands for those over the age of 18. Why should someone’s age determine their pay? A young adult is unable to go to their landlord and demand lower rent or to tell the cashier at the supermarket that they should have a discount because they are under the age of 21. Their bills are no cheaper than anyone else’s, yet for some reason we expect young people to make ends meet on lower pay.

That is accentuated by the fact that the rates have grown more slowly for younger workers. The gap between the main rate and the 18 to 20-year-old rate has grown massively since the Conservative party came to power in 2010. The Low Pay Commission report shows how the 18 to 20-year-old rate hovered around 85% of the value of the adult rate throughout Labour’s time in office. It then fell to below 80% between 2011 and 2013 and has continued to fall since 2015.

The minimum wage rate now for those aged 18 to 20 is just over 70% of the adult rate—around 15% lower than it was under the Labour party, rubbing salt into an already unjust situation. I appreciate that the Minister has referred to an above-rate increase for 18 to 20-year-olds this year, but is that part of a concerted plan and strategy to bring back the differential that existed under the Labour Government?

Eligibility is only half the battle. Unfortunately, entitlement to a minimum wage does not translate directly into securing that rate of pay. Enforcement is key and the right to be paid a minimum wage remains an important part of the enforcement universe. Questions, therefore, ought to be asked about the effectiveness of enforcement, as too many workers still report being underpaid.

Data from the annual survey of hours and earnings shows that, despite the total number of people reporting being paid less than the minimum wage having fallen since 2019, last year 365,000 workers were still being underpaid by their employer. As a share of the minimum wage coverage, that has increased since 2019, at a rate of 23.4%. That means that of those who earn on or around the minimum wage, around a quarter of them are not actually receiving it. That is certainly something that we need to see more action on.

From what we have seen from the Low Pay Commission’s report, workers in certain sectors are impacted more than others. I spoke last year in the same debate about the impact in the social care sector and raised the findings that Unison had shared with me about the exploitation of domiciliary care workers. I mentioned then that 73% of those workers were being underpaid. They were not being paid for the travelling time. I also stated that record keeping by employers was found to be way below the standards expected and that the complexities of those pay calculations made it incredibly difficult for employees to establish whether they had in fact been underpaid.

It was therefore pleasing to see that the Low Pay Commission had dedicated some space in its annual report this year to discussing those issues. It noted that the amount of arrears that His Majesty’s Revenue and Customs recovered for non-payment of the minimum wage

“pales into insignificance when compared to the average amount of arrears that Unison secures”

for social care workers—well done to the trade union Unison, but should it not be HMRC’s job to recover arrears and ensure the minimum wage is paid properly in the first place? Is it the case that HMRC is unable to properly decipher the records, or is it going lightly on social care employers?

--- Later in debate ---

[Kevin Hollinrake]

I thank hon. Members for their contributions. The passage of the regulations will provide a boost to the incomes of 3 million workers, rewarding many of the lowest paid people in society for their contribution to the economy and protecting them from exploitative wage levels.

The shadow Minister, the hon. Member for Ellesmere Port and Neston, talked about the increases in the living wage. There is not just an increase above inflation over that period of time; it is more than double the rate of inflation. I invite him to again clarify exactly where he thinks it should go. On whether we will raise the expectation above two thirds of the medium wage, that is again something that I am sure we will set out in our manifesto. From a personal perspective, having talked to many businesses around the country, as we have done today at our SME Connect event, I know that many, particularly in hospitality, social care and other sectors, are finding life difficult right now. We should always bear in mind the needs of businesses and try to strike a balance between the impacts on businesses and the benefit that people get from higher wages.

The hon. Member raised a point about the gender pay gap. I note that, according to a recent report by the Office for National Statistics, the gender pay gap has

“decreased across all major occupational groups”

over the past two years, and the accountancy firm BDO said it decreased over the past six years, so that gap is definitely narrowing. He raises the valid point that more women are on the national living wage, but of course they benefit disproportionately from an increase because there are more of them. I do not think that any of us will rest until that gap is narrowed further. The hon. Member talked about predictable hours. We have legislated on predictable hours in line with the Taylor review. I think the actual term is the right to request predictable terms and conditions.

[Justin Madders]

On the Minister’s point about how the minimum wage has increased over the past eight years, why is it still the case that so many people are in in-work poverty? How many people have actually made that request for predictable hours under the legislation?

[Kevin Hollinrake]

There has been a significant decrease in the number of people in absolute poverty—millions of people since 2010 and 400,000 fewer children in absolute poverty, which we all welcome. As I said before, in pushing the national living wage as high as we have done, we are putting burdens on businesses. We want to ensure that we strike a balance, and that is our concern with this. We always take into account the concerns of employers as well as workers.

[Sir Desmond Swayne]

I entirely accept the point the Minister makes with respect to the definition of poverty, but the hon. Member for Glasgow South West makes a fair point in drawing attention to the number of people, particularly those employed by Government, who are claiming benefits notwithstanding being paid the minimum wage. It behoves Government to make some analysis of the extent to which the taxpayer is subsidising low wages, albeit one of the principal concerns drawn to my attention by small businesses is every increase in the minimum wage.

I accept that this is a very difficult equation to have to deal with, but I have always suspected that the former Chairman of the Work and Pensions Committee, Frank Field, was right in his assumption that universal credit, like tax credits before it, was actually just subsidising a low-wage economy that would not otherwise exist. There are clearly costs that are not worth incurring here.

[Kevin Hollinrake]

My right hon. Friend is right to say that part of the rationale behind the national living wage is to ensure that wages that employers pay are not being subsidised. The total cost of the welfare system is around £303 billion, some of which is a result of the issue he raised. To me, that is wrong and that is one of the reasons why we would like to see the national living wage increased. Nevertheless, we do not want to see that at the detriment of jobs in our economy.

There is still a balance to be struck on making sure people have the opportunity for predictable hours. That is covered in the legislation we have introduced. I understand that the policy of the hon. Member for Ellesmere Port and Neston is that anybody who has been in work for 12 weeks and is on a contract can request those hours in terms of as a permanent position. I think that is the policy that the Opposition are going to introduce. It will be interesting to see what impact that will have on employers, particularly employers of seasonal workers.

There is a balance to be struck between business and workers. I point out that there are 4.2 million more jobs in our economy than there were in 2010. That is a huge success story. There are 1.2 million fewer people unemployed and looking for work. That is a huge achievement. Some of the policies that Labour always tend to bring forward end up costing jobs. Every single time we have had a Labour Government, unemployment is higher at the end of their term than it was at the start.

[Justin Madders]

Is the Minister aware that an election is about to be called, because he has spent the last couple of minutes talking about Labour policies rather than the statutory instrument? If he is so convinced that our policies are bad, why won’t he let the public decide?

[Kevin Hollinrake]

I am purely responding to the points that the hon. Gentleman raised, to try to make him understand there is a balance to be struck in the economy between jobs and pay. That is the balance we are trying to strike.

The hon. Gentleman and the SNP spokesman, the hon. Member for Glasgow South West, made points about enforcement, which we take very seriously. We have doubled the compliance budget between 2015-16 and today to £27.8 million. We have ordered employers to reimburse £100 million to 1 million workers. We take this very seriously.

The naming and shaming scheme was suspended during covid. I understood why, but I was very keen to reintroduce it. It is the principal deterrent. I reassure the hon. Member for Ellesmere Port and Neston and other members of the Committee that, whenever we are about to do a naming round, we write to all the employers and tell them that they are going to be named. We get a lot of push-back, and we push right back again. There is no excuse for not paying the minimum wage. We have named a total of 3,200 businesses since 2013, including more than 500 just last month.

The hon. Gentleman raised the point about the vacancy in the Low Pay Commission. We are actively seeking candidates for that; if anybody is out there listening, I am very happy for them to come forward. I am very confident that new chair Baroness Stroud will do a fantastic job.

The SNP spokesman said that he wants a higher living wage, which I completely understand. He is very willing to nail his colours to the mast, unlike the Opposition, about where he thinks that should be, but I gently push back to him as well on the balance we need to strike here. The hospitality sector in Scotland is struggling as well as ours, and others are too. We must make sure we get that balance right. I have to say that in Scotland the failure rate in hospitality is even worse, being 30% higher than it is in England. That is partly down to the fact that Scotland has not passed on the rates money for those hospitality businesses, as has been done in England. The average pub in Scotland is £15,000 a year worse off because of that policy.

[Chris Stephens]

Surely, the big problem in the hospitality industry is the fact that worker after worker is being discriminated against in that industry. Zero-hours contracts are rampant—people turn up for a shift and they are told the shift has been cancelled. Surely that is the big problem. The Minister is not seriously defending bad employers, is he?

[Kevin Hollinrake]

I would never do that; as a former employer myself, I would never do that. However, I do not accept the picture that the hon. Member paints. The hospitality sector is a fantastic sector in this country, with many good businesses and many good employers. For him to trash the reputation of the sector in that way, saying that zero-hours contracts are “rampant” in the sector—I think that he should just check his language. That sector does a fine job under very difficult circumstances, and the circumstances are far more difficult in Scotland.

Regarding the Low Pay Commission, the hon. Member made the point about younger workers on lower pay. That is a very fair point; he raises it time and again. It is our position and the position of the Low Pay Commission that younger people are more susceptible to a weaker labour market. That is why we have different rates. I declare my interest—I have daughters of that age who earn the lower rates of the minimum wage and I am very happy that that is the case, because I would rather that they had a job than no job at this point in time.

The minimum wage and the national living wage are floors, not ceilings. If good employers pay more, and many do, clearly we welcome that.

I will just conclude—

[Chris Stephens]

Before the Minister concludes, can he answer this question about UK Government employees? How many of them are on the national minimum wage? Can he say whether the Government have a plan to deal with that situation?

[Kevin Hollinrake]

As I said before, I do not know the answer to that question; if the hon. Gentleman wants to put down a written question on the subject, we can give him an answer to it by separate means.

This debate is an important reminder of the good that Government can achieve—a sentiment that I am sure will be echoed by Committee members. I thank the Low Pay Commission once again for its advice this year, which has been as expert as ever, and I commend the regulations to the House.

Question put and agreed to.

Resolved,

That the Committee has considered the draft National Minimum Wage (Amendment) (No. 2) Regulations 2024.

Draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Supplementary and Incidental Provisions) Regulations 2024 Draft Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024

Kevin Hollinrake Excerpts

Thursday 14th March 2024 General Committees

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

I beg to move,

That the Committee has considered the draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Supplementary and Incidental Provisions) Regulations 2024.

[The Chair]

With this it will be convenient to consider the draft Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024.

[Kevin Hollinrake]

It is a pleasure to serve with you in the Chair, Ms Vaz.

The first set of regulations were laid before the House on 30 January 2024, the second on 19 February 2024. These regulations form part of a series of secondary legislation needed to effectively implement the Economic Crime and Corporate Transparency Act 2023, which I will refer to as “the 2023 Act”. The measures effectively form the basis of a civil penalty regime and offer data- sharing help to ensure that we can fight economic crime.

The 2023 Act is a landmark piece of legislation, which demonstrates the Government’s commitment to tackling economic crime. As I have stressed on many occasions, it will bear down on kleptocrats, criminals and terrorists who abuse our open economy, will significantly strengthen the UK’s reputation as a place where legitimate business can thrive, and will drive dirty money out of the UK.

Passing the 2023 Act was of course only the first step on the journey to make these reforms a reality. We now face the task of designing and implementing the many new processes and procedures at Companies House, underpinned by a substantial programme of secondary legislation that consists of some 50 statutory instruments.

The first of those instruments has been approved by both Houses, which means that I am glad to announce that the first of the 2023 Act’s reforms has already taken effect. Companies House has started to cleanse the register and quickly remove names and addresses that have been used without consent. Going forward, Companies House is turning its attention to register entries that it knows to be problematic and is beginning to remove what it has already identified as manifestly fraudulent filings.

For example, last week there were media reports of hundreds of rogue filings at Companies House, totalling approximately 800 “satisfaction of security” forms. I am pleased to say that, thanks to the registrar’s new powers, all of these fraudulent filings have been taken down swiftly by Companies House. That would not have been possible prior to 4 March.

Although that is already a major improvement, there is much more work to be done. That is why we are here today to debate the next set of regulations in the reform programme.

I will first address the financial penalty regulations. Currently, obligations in the Companies Act 2006, which I will refer to as “the 2006 Act”, relating to the functions of the registrar are enforced primarily through the criminal justice system. The only civil penalty regime that Companies House currently operates under the 2006 Act is the accounts late filing penalty regime, where a company automatically incurs a penalty for failing to file its accounts on time. That regime will remain unaffected by these regulations.

The 2023 Act sets out that the registrar may impose a financial penalty as an alternative to criminal prosecution where the registrar is satisfied beyond reasonable doubt that a person has engaged in conduct amounting to a relevant offence under the 2006 Act. In turn, this instrument sets out the procedure for the imposition and enforcement of financial penalties.

If the registrar suspects that a person has committed a relevant offence, she may issue a written warning giving them at least 28 days to make representations about their conduct. If the registrar is satisfied beyond reasonable doubt that the person has committed a relevant offence, she may issue a penalty notice in writing to that person, giving them 28 days’ notice to pay the penalty. The instrument sets out that financial penalties imposed by the registrar may be fixed, a daily rate or a combination of both. The penalties will be based on the severity of the offence, up to a maximum total of £10,000. In certain cases, more than one penalty can be imposed. This flexibility allows proportionate and effective targeting of those who commit an offence.

The instrument gives the registrar the power to vary or revoke financial penalties on a case-by-case basis —for example, if new information comes to light that aggravates or mitigates any offence. The instrument also sets out the grounds for appeal and the court’s powers in relation to the appeal. This adds to the tools available to the registrar to promote compliance and maintain the integrity of the UK companies register. It means that the registrar will now have the discretion to choose to pursue a financial penalty or to pass over to law enforcement to consider criminal sanction. It is important to note that the 2023 Act allows that, where a civil financial penalty is imposed on a person, it can contribute to that person being disqualified from acting as a UK director.

All of this means that we are striking the right balance between deterring non-compliance and not unduly burdening small business. Companies House’s new intelligence hub will also strengthen the registrar’s role in fighting organised crime. The hub will use data science to identify patterns and threats of economic crime on the register. Via new data-sharing powers, Companies House will proactively share its analysis and intelligence with law enforcement partners and supervisory bodies. That will ensure that evidence of organised crime can be pursued by the most appropriate agency.

This instrument makes minor changes to the Register of Overseas Entities (Penalties and Northern Ireland Dispositions) Regulations 2023. These technical changes ensure consistency between the two financial penalty regimes.

As of 11 March 2024, 30,614 overseas entities had registered with Companies House. A further 857 overseas entities had notified Companies House that they had disposed of all their interests in land before the register opened. That is a very good rate of compliance, as Companies House estimates that 10% of the entities originally in scope are dissolved or struck off. Many of these entities are in the process of being restored to their respective register, and Companies House has been working with overseas jurisdictions to ensure compliance with the requirements.

Companies House has taken robust action against the entities that have failed to comply with the requirements. As of 11 March, more than 400 penalty notices had been issued, with penalties totalling more than £20 million. That includes cases in which Companies House has received representations and appeals that are ongoing.

The next phase in the compliance process is imposing charges against land held by overseas entities where penalties remain unpaid. I will provide a progress update when we debate the next set of regulations relating to the register of overseas entities, which we will lay in Parliament in the coming months.

The other of the two instruments before us today is the Economic Crime and Corporate Transparency Act 2023 (Consequential, Supplementary and Incidental Provisions) Regulations 2024, which make minor consequential amendments to the 2006 Act and the Economic Crime (Transparency and Enforcement) Act 2022. They also introduce minor technical changes to eight pieces of secondary legislation. These regulations ensure that the changes made to the 2006 Act will also apply consistently to the law governing other business entities registered in the UK where that is possible. For example, this lifts restrictions on the use and disclosure of certain data by the registrar, allowing her to share that data more widely, and particularly with public authorities for purposes connected with the exercise of their functions.

In conclusion, I emphasise that the regulations are a further step towards effective implementation of the 2023 Act. I hope that Members will support them. I commend both sets of draft regulations to the Committee.

--- Later in debate ---

[Kevin Hollinrake]

I thank Committee members for their valuable contributions to the debate. The shadow Minister asked about resources; the Government provided £63 million to start the work at Companies House on the change from having a dumb register to having a proactive registrar who maintains the integrity of the register. Also, £20 million was provided last year through the economic crime levy, which will be one of the future sources of funding. The key area for funding is the uplift in the registration fees and annual filing fees at Companies House. It used to be £12 to register a company; it is now £50. It used to be £13 to lodge an annual return; it is now £34. We think that provides Companies House and the Insolvency Service, which is the enforcement body for such matters, with the extra resources needed, and hundreds more people will come as a result. It will also fund things such as the intelligence hub, which is hugely important.

The hon. Member for Glenrothes might want to alert Companies House about the address that has been used improperly. Companies House should then deal with that, and can do so much more quickly as a result of the new powers.

[Peter Grant]

I am sure it will come as no surprise to the Minister to hear that Mr Barrow has already done that. We look forward to that company being removed from the register quite soon. One of the things that I found interesting is that the address used is not the company’s registered address.

[Kevin Hollinrake]

I am happy to talk to the hon. Gentleman offline about that particular case, but any Member of this House or member of the public can alert Companies House about incorrect filings. As I say, as a result of what we have already done, that can be acted on much more quickly.

The hon. Gentleman talked about disqualification, and yes, absolutely, penalties can, as I said in my opening speech, contribute to a decision on disqualification. The penalties are civil penalties, but where the registrar feels that the conduct or offences are sufficiently serious, they can pass that on to the relevant prosecution body —the Insolvency Service, the police, the National Crime Agency or others. That is the kind of approach that Companies House typically takes.

The hon. Gentleman raised Blackmore Bond again, and has done a fantastic job of raising that on so many occasions. We have finally seen the FCA actually do something about it, as a result of much work. I remind the hon. Gentleman that what underpins the whole regime is the recognition that it is impossible, given the number of records, for Companies House to be a policeman of every single record and everything that happens. Five million companies are on the register, and 800,000 were registered last year alone, so it is not practical to look at every single one, but there are serious consequences if people improperly or falsely file information, particularly if they do so maliciously. They can be sentenced to up to two years in prison. That underpins the regime as well.

I thank you, Ms Vaz. The debate has highlighted the need for a robust financial penalty regime at Companies House, as well as consistency in the law that governs business entities. I commend both sets of draft regulations to the Committee.

Question put and agreed to.

Draft Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024

Resolved,

That the Committee has considered the draft Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024.—(Kevin Hollinrake.)

Post Office Legislation

Kevin Hollinrake Excerpts

Wednesday 13th March 2024 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

With permission, Mr Speaker, I shall make a statement about Post Office legislation and the Horizon redress schemes.

I am very pleased to be able to announce that today we are introducing a new Bill that will quash the convictions of postmasters in England and Wales affected by the Horizon scandal. As set out in my written statement last month, this legislation will quash all convictions that meet a clear set of conditions. Those in scope will have their convictions quashed on the day that the new legislation is brought into force. Subject to parliamentary passage, our aim is for Royal Assent to be received as soon as possible before the summer recess.

We accept, and have always been clear, that the legislation may overturn the convictions of some people who are guilty of genuine wrongdoing, but we believe this is a price worth paying to ensure that many innocent people are exonerated. However, the Government will seek to mitigate the risk of people receiving financial redress when they have not been wronged.

The Government also accept that this legislation is unprecedented. It is an exceptional response to a factually exceptional situation. I want to be clear that this does not set a precedent, and neither is it a criticism of the judiciary or the courts, which have dealt swiftly with matters brought before them. The fact remains, however, that three years after the first convictions were overturned, only around 100 have been quashed. Without Government intervention, many of these convictions could not be overturned, either because all the evidence has long been lost or because, quite simply, postmasters have lost faith in the state and the criminal justice system, and will not come forward to seek justice.

The legislation will apply to England and Wales only. However, we are fully committed to working with the Scottish Government and the Northern Ireland Executive through regular, weekly official-level engagement to progress their own approaches. I have met my counterparts in the Scottish Government and the Northern Ireland Executive to offer support and address their concerns, and I will have further meetings. The financial redress scheme will be open to applicants throughout the UK, once convictions have been overturned.

I thank the Business and Trade Committee, which recently published a report that includes some recommendations for the Government regarding Horizon redress. We will respond to them in the usual way, but today I would like to address two of the Committee’s recommendations. The first is that responsibility for redress should not lie with the Post Office, as it should be subject to independent oversight—something that has also been recommended to us by the Horizon compensation advisory board. I can announce today that the Department for Business and Trade, rather than the Post Office, will be responsible for the delivery of redress for overturned convictions. Final decisions on redress will be made by independent panels or independent individuals.

With your permission, Mr Speaker, I shall return to the House at a later date to provide details on how we intend to deliver redress for those who have their convictions overturned by the Bill or via subsequent measures taken in Scotland and Northern Ireland. We are discussing the details with the advisory board. The Financial Secretary to the Treasury, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), will introduce legislation to make any payments made via the new scheme exempt from tax.

Secondly, the Select Committee recommended that the Government introduce legally binding timeframes to deliver redress for sub-postmasters, with financial penalties for non-compliance. I strongly support the Committee’s desire to speed up redress, but we feel that its proposed regime would have the opposite impact. It would potentially mean imposing penalties on forensic accountants or others who are helping postmasters to prepare their claims. Doing that would probably cause some of them to withdraw from this work, which would slow down the delivery of redress. Furthermore, we do not want to be in the position of rushing postmasters into major decisions about their claims and the offers they receive, which would possibly mean that some are timed out of redress altogether. The advisory board has said that its “strong view” is that

“this would be a backward step”,

which is why we passed legislation less than two months ago to remove the arbitrary deadline from the group litigation order scheme. We do not want to reverse that change.

However, the Government are acting to ensure that redress is delivered as quickly as possible. First, we are working with claimants’ lawyers to reduce the number of cases that require expert evidence—for example, from forensic accountants—or medical evidence, which delays claims. We will pilot that approach and, assuming that the pilot succeeds, we hope to expand it rapidly.

Secondly, the advisory board and I have asked for monthly reports on each scheme. They will come from schemes’ independent case managers, where such managers are in place. We will publish the reports, which will give us the best basis on which to assess measures for speeding up redress.

Finally, we are introducing optional fixed-sum awards. In January, the Government announced that they would offer an optional fixed-sum award of £75,000 to those in the group litigation order scheme. As of 5 March, 110 offers have been accepted, and over 100 people have taken the £75,000 fixed payment. Of those who have accepted the fixed payment, three quarters are new claimants, so the fixed offer has already meant that over 100 claims have been resolved promptly. In some cases, those people will have got more than they would have asked for. The fixed offer has also had a helpful effect on other claims, because it substantially reduces work on small claims by claimants’ lawyers, making more resource available to progress larger claims more quickly.

I am pleased to announce today that the £75,000 fixed-sum award offer will now be extended to the Horizon shortfall scheme, to ensure that everyone is treated fairly across all the schemes. Those who have already settled their claim below £75,000 will be offered a top-up to bring their total redress to that amount; over 2,000 postmasters will benefit quickly from this announcement.

We are mindful that claims are not being submitted to the GLO scheme as swiftly as we would like. We have already announced the optional fixed-sum award of £75,000, but to ensure that we get help to claimants more quickly, I can announce today that anyone who chooses not to take that offer, and instead submits a full claim for individual assessment, will have their interim payment topped up to £50,000 straight away.

Many postmasters’ lives have been ruined by the Horizon scandal, and we are working hard to deliver redress. We have set up the Williams inquiry, which will discover the truth. We will provide fair financial redress as promptly as we can, and we will exonerate those who were so unjustly convicted of crimes that they did not commit. I commend this statement to the House.

[Mr Speaker]

I call the shadow Minister.

--- Later in debate ---

[Rushanara Ali]

I will move on. I simply hope that the Minister will reflect on the reversal of the statement he gave this morning, in which he took the position that he would take a donation from that donor. I hope he reflects on the impact that the issue is having on many of us.

I turn to today’s crucial statement. The Horizon scandal is truly shocking, and is one of the most devastating miscarriages of justice in British history. The scandal has brought devastation to the lives of hundreds of falsely convicted sub-postmasters. Over 20 years on, they and their families still suffer from the consequences and the trauma of all that they have been put through. I pay tribute to them for their determination in pursuing justice, and to Alan Bates and the sub-postmasters who pioneered the campaign and worked tirelessly to seek justice. Without their bravery and perseverance, the campaign would not be where it is today. I also pay tribute to my right hon. Friend the Member for North Durham (Mr Jones) for all his work, to Lord Arbuthnot for his campaigning on this issue for many years, to others in this House and the other House, and to members of the Business and Trade Committee and its Chair, my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne).

We of course welcome the legislation that is being laid before Parliament today, but before giving a full verdict on it, we will need to properly scrutinise the details and analyse its potential impacts. In the first instance, the legislation leaves a series of outstanding issues, and the question of when justice and compensation will be delivered, and to whom. First, I will address the territorial scope of the legislation, which currently applies only to England and Wales, even though the Post Office is not devolved, and the Horizon system and the impacts of the scandal are UK-wide.

Approximately 30 cases need overturning in Scotland and Northern Ireland, but a series of outstanding questions remain as to when sub-postmasters in Scotland and particularly Northern Ireland will receive justice and compensation. I welcome the Minister’s assurance that there will be regular dialogue with the devolved Administrations, but I would be grateful if he provided more detail on how that will work in practice, given the different legal processes.

As we know, 80% of the redress budget is yet to be paid out. There remains considerable uncertainty about when sub-postmasters will receive their compensation. I am sure that we can all agree that they have waited long enough, and the delays are causing further financial distress and suffering. We note the Business and Trade Committee’s recommendation that there be a legally binding timeframe for the period between an offer being first tabled and a settlement being reached. If those legally binding targets are not adopted, what assurances can the Minister give that he will meet his target of ensuring that all compensation is out of the door by the end of the year? What mechanisms will he put in place to ensure that there are no further delays? I know that he is committed to ensuring that there are no further delays, but sub-postmasters will want to know that this will actually happen.

Given the recent chaos in the Post Office’s leadership, we welcome the decision to take the Post Office out of the redress process. As the Minister said, redress must have independent oversight. The Post Office is in disarray, and we need focus and efficiency in ensuring that compensation is paid to the sub-postmasters as soon as possible.

Financial redress alone cannot come close to repaying sub-postmasters for their suffering, though it is so important that we get it right. The very least the Government can do is ensure that sub-postmasters receive fair compensation and exoneration as soon as possible. There are those impacted by the scandal who have sadly passed away, and did not live to see their innocence proven or to receive the compensation that they deserved. It is vital that the Government act with the urgency and speed that is needed to correct this terrible injustice.

[Kevin Hollinrake]

The shadow Minister’s comments are on the record, so I shall deal with them briefly. I think this is the second time she has made comments at the Dispatch Box that have been unfair or factually incorrect, and I hope that she will correct the record. If she had actually watched the interview I gave, she would know that I absolutely did condemn the words of Mr Hester. I said they were wrong. I said they were racist, and I think it is absolutely right that he has apologised. She should watch the full broadcast, and I hope that she will apologise to the House and correct the record.

The points that the hon. Lady raised pertain largely to the Scottish and Northern Ireland devolved Administrations. I quite understand the concern around those issues, and I am very keen to ensure that we get this right across the United Kingdom. As she acknowledges, there are different legal processes in those areas, and we think it would be inappropriate for us to legislate for parts of the United Kingdom that have different legal processes and different prosecutors. Justice is devolved, although the Post Office is a UK-wide organisation, as she rightly says. That is why we think the legislation should allow devolved Administrations to legislate for themselves, if they choose to. We will work closely with them. Officials meet them weekly to assist wherever we can, so that compensation can be delivered UK-wide; that is how the scheme operates.

I think the hon. Lady said that 80% of compensation was yet to be delivered. I may be wrong there, so I will check the record. Across all the schemes, in around two thirds of cases, full and final compensation has already been received. That being the case, about 2,000 people will be topped up to £75,000, as I announced earlier, but it is not right to say, as I think she did, that the majority of people are waiting for compensation.

The hon. Lady asked whether we wanted to deliver the compensation by the end of the year. Absolutely we do, but as I said, not everything is in our gift. We cannot compel a claimant to submit a claim, or know when that will happen. If somebody puts in a claim right towards the end of the year, for example, it may not be possible to deal with it before the end of the year. Not everything is in our gift, but we are keen to expedite anything that is.

It is absolutely critical that we have independent oversight; all schemes have it. In the overturned conviction scheme, we have retired High Court judge Sir Gary Hickinbottom, and the £600,000 fixed-sum award; but on Mr Hickinbottom’s advice, we have also introduced the £450,000 payment as soon as a full claim has been submitted. We are doing everything we can to make sure that people are compensated as quickly as possible.

[Paul Scully (Sutton and Cheam) (Con)]

I welcome the Minister’s statement, and the pragmatic way that he has looked to speed up claims, and to take this in-house as best he can. I also welcome the proposed legislation, and the extension of the £75,000 to those in the historical shortfall scheme. I point the Minister to an article in The Times this morning about people who may reportedly be excluded from the legislation. Can he give any assurances that people who have gone through this process and whose original conviction was based substantially on the Horizon problems will indeed be exonerated and therefore able to get compensation?

[Kevin Hollinrake]

I thank my hon. Friend for his question, for his tireless campaigning in this area, and for his tireless work as my predecessor in this role. He did some great work to help us get where we are today. He is right to say there are some people who are not exonerated through this process—for example, people who have been before the Court of Appeal—but they will be able to appeal again in the light of our legislation. Of course, they had the right to do that anyway, but we will support them where we can in bringing forward their case to the Court of Appeal, and we very much hope that innocent people who follow that process will be exonerated.

[Mr Speaker]

We come to Scottish National party spokesperson.

--- Later in debate ---

[Marion Fellows (Motherwell and Wishaw) (SNP)]

Thank you, Mr Speaker, and apologies for being slightly late. I thank the Minister for giving me prior sight of his statement. I welcome the announcement of the legislation. It will hopefully go a long way to speeding up full and fair financial redress for a large number of Horizon victims, and will bring them closer to justice. Furthermore, I welcome the enhanced financial redress for those who experienced Horizon-related shortfalls, and the fact that those who have already settled for less than £75,000 will have their redress topped up.

I pay tribute to the Minister for his hard work on this, to the Horizon compensation advisory board for its sterling work, and to Sir Wyn Williams and his inquiry for their ongoing work. Most of all, I pay tribute to the victims, following the unimaginable pain that they have been forced to endure at the hands of Post Office Ltd and successive UK Governments. I hope that today’s announcement can give them some hope, and that there is an end in sight to this sorry chapter.

I welcome the administration of financial redress schemes being taken out of the hands of Post Office Ltd —not before time. Post Office Ltd has demonstrated obfuscation and incompetence at every stage. From a Scottish perspective—I am sure my Northern Irish colleagues will agree with me—I am deeply disappointed that the legislation is confined to England and Wales only. That needs to be addressed. We should include Scotland and Northern Ireland to ensure parity. The Westminster Parliament is sovereign, but the Scottish Parliament can be challenged on its legislation, and this needs to be looked at.

The devolution process also risks slowing things down. Will the Minister guarantee today that any relevant orders under section 104 of the Scotland Act 1998 will be processed quickly by his Government? Scotland has no direct equivalent Minister for postal affairs, as only Westminster and his Department have a remit for the Post Office. Will he ensure that the Bill contains provisions requiring Post Office Ltd to fully co-operate with the Scottish Government and to supply all needed materials? It is vital that victims in Scotland and Northern Ireland do not have to wait any longer for justice than their English and Welsh counterparts. Victims across these isles suffered enormously at the hands of a wholly reserved institution, so complete parity is essential.

[Kevin Hollinrake]

I thank the hon. Lady again for all her work in this area. She has been a tireless campaigner. We would all like to be further along, but she has made an important contribution to our work.

The hon. Lady is right to say that victims should be front and centre when it comes to compensation, which must be delivered fairly and as quickly as possible. Some of the changes I have announced today, including in my statement, have been brought forward on the basis of feedback from victims and their legal representatives. We are listening to them, and we will make sure that we deliver any changes where we can.

I fully understand the hon. Lady’s point about Scotland and Northern Ireland, and she will understand the constitutional sensitivity of this area. These are tough decisions, and I understand that Scottish Ministers will have to make similar decisions. They can decide to do what we are doing and, if they do, we will support them in how they legislate. Given the sensitivities, we thought that, where justice is devolved, the devolved Administrations should make the decision. I again commit to making sure that we work across the piece, wherever we can, to deliver the consistent compensation that she requires, without forgetting that the redress schemes are UK-wide. As soon as people’s convictions are overturned, they will be able to access compensation, just as they can in England and Wales.

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

Everyone wants to see the sub-postmasters’ suffering brought to an end as swiftly as possible, and I welcome what the Minister has said about simplifying and speeding up the compensation scheme. He will know that claimant lawyers such as Neil Hudgell, who gave evidence to the Business and Trade Committee, have real expertise in this field, and I hope he will work very closely with the sector to maximise that expertise in designing the scheme.

I sound one note of caution. The Minister says this is exceptional, and it is constitutionally unprecedented to overturn, through legislation, convictions imposed by our courts in good faith, based on the evidence before them at the time. Frankly, it is most undesirable that we should ever go down that route.

Some of us will need to see the detail of the legislation and what evidence the Government have that it will be quicker and more comprehensive to quash convictions via this constitutionally unprecedented route, rather than leaving the courts to deal with it, with assistance. As the Minister knows, this could have been dealt with via a presumption in favour of sentences being quashed where they depended on Horizon evidence, rather than this wholesale measure. In particular, will he look at what impact it will have on rehabilitation of offenders legislation, and at whether convictions quashed by this Bill will be removed effectively so that people can, for example, travel to the United States or other foreign jurisdictions where they may need a visa, for which they need to show that they do not have an outstanding conviction?

[Kevin Hollinrake]

I thank my hon. Friend for his question and all his work on this subject. Our engagement with him throughout the process has been very important. He has much expertise in this area.

We agree that this is unprecedented and undesirable, but we believe it is the least worst option. We want to see this delivered more quickly as, of the 790 or so sub-postmasters whom we believe this legislation will affect, only around 100 convictions have so far been overturned. We think that situation is untenable, which is why we decided to take this route. Of course, I will continue to work with him and listen to his wise advice.

I think I am right in saying that, for convictions overturned by the Court of Appeal, the record is marked “Overturned by the Court of Appeal”. We foresee these records being marked in a similar way—“Quashed by Parliament” or something along those lines. Again, I am happy to engage with my hon. Friend to make sure we get it right.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I welcome the Minister’s statement and thank him for the collegiate way in which he is working across the House to try to secure justice for those who have suffered.

This is a welcome step forward. I am glad to see the Minister taking on board some of the recommendations made in the Business and Trade Committee’s report last week, setting out how we can deliver fair, fast and independent redress. The Government have today proposed how they will overturn convictions. They have taken the Post Office out of some, but not all, claim processing and, crucially, they have increased the number of people who can apply for fixed-term remuneration. However, the Post Office is still handling the claims of at least 100 people with overturned convictions when it is patently not fit for purpose.

For those who seek to contest their claim, the Minister says there will be no legally binding timeframe between the submission of a claim and an initial offer being made by his Department, which is a problem. There is no standard tariff proposed for compensation under key heads of terms, such as loss of reputation. That, too, is a problem. The Bill is far more than a half measure, that is true, but it is not yet a full solution.

I leave the Minister with the words of Jo Hamilton, who messaged me last night to highlight the plight of the GLO litigants, in particular, and the way in which they

“have to justify every last penny even if some of their claim is for actual monies stolen from them by the Post Office… Why can’t the Government do the right thing before even more victims die?”

Those words need to ring in our ears as we seek to perfect this Bill.

[Kevin Hollinrake]

I thank the right hon. Gentleman for his comments and collaboration. It is important that we listen to his Committee’s recommendations and its very informative evidence sessions—I sat through all five hours.

At this point, we believe the Post Office should continue its work on the 100 or so cases before it. We currently have no capacity in the Department to handle those claims, although we clearly will by the time the Bill comes into effect. We do not want to pause between the Bill coming into effect in July and compensation payments being made. We think we can get those payments to people in August using that route.

There may be some people left in the first tranche of overturned convictions, for people who have been through the Court of Appeal. We will certainly look at the Committee’s recommendations on whether we should bring those cases back in-house or leave them with the Post Office. We will keep an open mind on that.

We already have fixed timescales to respond to offers or service level agreements in the GLO scheme. We commit to responding to 90% of full claims within 40 days of submission. I am happy to look at how we might put some benchmarks in place to make sure the new scheme has a similar speed of response. I am sure the right hon. Gentleman heard what I said about our new pilots under which lawyers can submit claims without forensic accountants and medical reports. That may do something along the line he says, and I will happily have an ongoing conversation with him.

Thus far, 128 of the 490 claims have been submitted to the GLO scheme, and 110 of them have been settled. To my knowledge, only one claim has gone to independent dispute resolution before going to the independent panel, which hopefully indicates that, generally, the offers are fair and have been accepted almost straightaway.

I understand what Jo Hamilton says, and I met her to discuss some of the processes she had to go through to prove her claim. We are determined to reduce those frictions and evidence requirements, certainly for things that are not essentially material. There are three things that we have to get right in delivering compensation: we have to be fair to the individuals and families affected; we have to be fair to all the other sub-postmasters to make sure there is consistency across the scheme; and, of course, we have to be fair to the taxpayer. There is no cap on what we will pay people, as long as it is fair.

[Duncan Baker (North Norfolk) (Con)]

I thank the Minister for bringing this statement to the House, as it clearly moves things in the right direction for closure. I have talked many times in this House about similar issues. The Government have put £1 billion aside to deal with all this, despite the fact that the Post Office has taken millions upon millions off postmasters—innocent people. We have never had the figure of what was taken, although I have asked for it before. I want a second figure, because Fujitsu has said on the record that it would help to compensate victims as well, by adding to the remuneration pot. What progress have we made on making Fujitsu pay also for being culpable in this fiasco?

[Kevin Hollinrake]

I thank my hon. Friend for his regular contributions in this area, as it is always good to have the views of the only former serving postmaster in this House. We are looking to try to identify the figure he refers to and we hope to come back to him at some point; it is complicated, as a lot of these records go back a long way. However, that is a body of work we are undertaking with the Post Office. The Secretary of State had a conversation yesterday with the global chief executive of Fujitsu; we are keen to make sure that Fujitsu contributes and it has already said that it will—it said it has a moral responsibility to contribute. My hon. Friend mentions a figure of £1 billion, but we do not know the final figure for compensation. However, we would expect a significant element of it to come from Fujitsu.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Like others, I thank the Minister for advance sight of his statement but, novelly, I also thank him for advance sight of the Government “top lines to take”. That latter document includes this passage:

“So far we have identified up to around 800 cases that are potentially in scope [Note: if we use this number in public we are going to get held to it. There is a risk that we may deliver fewer overturns or award redress”—

to—

“fewer individuals, we will then have to explain that]”.

If it is the view of officials in the Minister’s Department that accountability and transparency are some sort of problem, does he really think that they are best placed to exercise oversight of the compensation scheme? Should that not be put now in the hands of someone who is independent of both Government and the Post Office?

[Kevin Hollinrake]

The figure the right hon. Gentleman uses and the document he references, which I was unaware he had, are interesting. Me being me, I had not read that line, although my previous comments might indicate that I had because I mentioned that exact figure. I am not afraid to be transparent or accountable for any of the delivery of these compensation schemes.

[Shailesh Vara (North West Cambridgeshire) (Con)]

I congratulate my hon. Friend on all that he is doing, working night and day to bring this painful issue to a conclusion for the many postmasters and their families who have suffered so much over so many years. Where people do not accept the fixed offer but wish to pursue an individual claim, may I seek his assurance that such claims will be treated expeditiously, and that resources will be made available to deal with those claims quickly and efficiently? Will he also give an assurance that claimants will have a named individual responsible for their file, rather than whoever happens to pick up the file on a specific day?

[Kevin Hollinrake]

I thank my right hon. Friend for his question and can absolutely give him the assurance he seeks. A fixed-sum award is only one route; it is not right for everybody. Some people have higher levels of claims, and we will support them where we can. In my remarks, I announced new measures we are using to do that, including a pilot scheme where expert reports are not required. That should significantly abbreviate the timescale between being able to submit a claim and getting a response. As for expediting in this area, in the GLO scheme we set a target that in 90% of cases we would respond to a final claim within 40 days. Currently, we are on 87% against that measure, so we are delivering this more quickly. He makes an interesting point about a named claim manager or something along those lines, and, if I may, I will take that away with me.

[Clive Efford (Eltham) (Lab)]

I welcome the statement, the legislation and the removal of the Post Office from the process to the extent that we have seen so far. However, I do not think the Post Office is able to deal with any claims credibly. I wrote to the Minister on 12 February about my constituent who came forward after the TV programme. She had had problems with Horizon, had agreed compensation with the Post Office, which was way below what her losses were, and had signed a non-disclosure agreement. At the time she had been dealing with a terminally ill partner, who has since passed away, and so was in no fit state to take on the Post Office. She is seriously out of pocket, so I would expect her to be able to fall under the Horizon shortfall scheme. I hope that the Minister will confirm that in the letter he will doubtless send me.

[Kevin Hollinrake]

I have not seen the letter the hon. Gentleman mentions yet, but I look forward to it and I understand his points about the Post Office handling claims. I am responding personally to every letter I get on this matter from colleagues; we always do that, but I am doing so even more on this occasion. I am sorry to hear about his constituent and the situation she is in. If she has accepted less than £75,000, she will get an automatic uplift to £75,000. We are determined to ensure that, across every scheme, people are treated fairly and feel that they are being treated fairly, and I am keen to look at the hon. Gentleman’s letter and make sure that is the case for his constituent.

[Virginia Crosbie (Ynys Môn) (Con)]

I welcome this important new Bill. I know that the Minister and his team have worked exceptionally hard to make it happen. Will he join me in thanking Mr James Evans from Llanfair P.G., who worked as a sub-postmaster in Llanfairpwll for 47 years, with a post office service record of 60 years, for bringing together sub-postmasters and those on Ynys Môn affected by this gross miscarriage of justice to ensure that they receive the correct support, compensation and, importantly, exoneration?

[Kevin Hollinrake]

Again, I thank my hon. Friend for her work on this, and I absolutely thank Mr Evans. We are here now because the victims of this scandal are supporting each other, led of course by Alan Bates. So I welcome Mr Evans’s work, and if I can assist him or his group at all to make sure that they get compensated fairly, whatever their circumstance within these schemes, I am happy to do that.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

My constituent Mr Ennion ran the post office in Llandovery in Carmarthenshire between 2000 and 2018. In a recent BBC interview he estimated that he had lost about £75,000, and said that, in addition, his health has deteriorated severely. He said he had no faith in the Horizon shortfall scheme and making an application to it, because he has not kept any records and because he just does not think he is well enough to take on the Post Office for a second time. I know that the Minister is working extremely hard, and I pay tribute to him for the work he has done, but what more can he do to encourage people such as Mr Ennion to make an application through the scheme?

[Kevin Hollinrake]

I thank the hon. Gentleman for his kind words and for representing his constituent so effectively. I hope that what we have announced today will be absolutely the right route for his constituent, as it means he would not have to go through what can be a complex process of submitting a detailed claim; he can simply opt for the £75,000 fixed-sum award and walk away. There is no claim form to be filled in—a simple letter needs to be signed and that is it. If he feels he should be compensated for more than that, he can go through the Horizon shortfall scheme. That takes a little longer, but he will still end up with compensation both for the financial impact and the impact on his health. I am happy to help, wherever I can, with his case.

[Sammy Wilson (East Antrim) (DUP)]

I welcome the Minister’s statement. He promised the House that he would bring forward legislation quickly, and he has done so. However, I must express the disappointment of all Northern Ireland representatives that Northern Ireland is not included in the Bill, and the reasons that the Minister has given for that do not stand up.

The Minister has argued that this is a sensitive constitutional issue—it is not. The First Minister, the Deputy First Minister and the Justice Minister have all made it clear that they would be quite happy for Northern Ireland to be included in the legislation. He has argued that the systems are different. There have been many occasions when Northern Ireland has been included in legislation here even though the judicial system is different. This Bill is about exonerating people, not about interfering with how the system works. The last thing he said was that including Northern Ireland might slow down the legislation. Since the legislation is going to go through the House following the normal process, there is absolutely no reason why, as has happened on previous occasions, he could not include a Northern Ireland clause at a later stage in our consideration of the Bill.

I ask the Minister to look again at the arguments he has made, because I do not think they stand up. There is a way forward to ensure that those affected in Northern Ireland are treated in the same way, and at the same time, as those in England and Wales.

[Kevin Hollinrake]

I thank the hon. Gentleman for all his contributions, and for representing his constituents, and others in Northern Ireland, who have been affected by the scandal. I understand his point and am very sympathetic to it. We took a very difficult decision. Clearly, we are happy to work with the authorities in Northern Ireland. As I said in the statement, I have spoken to my counterpart in Northern Ireland. We are today introducing a 10-clause, 10-page Bill, and we hope we have put together a relatively straightforward piece of legislation. We are happy to lend our support so that Northern Ireland is able to do the same as we are doing, if that is the choice that is made. As he has outlined, that is the political consensus in Northern Ireland, which I welcome.

[Stephen Farry (North Down) (Alliance)]

This is a national scandal that requires a national solution. As has just been stated, the political leaders in Northern Ireland are unanimous that they want Westminster to act in this sphere. The Minister will not be stepping on anyone’s toes constitutionally if he proceeds on that basis. The Justice Minister advises me that what is required to include Northern Ireland is relatively straightforward. It is not complicated in any shape or form. The stark reality is that the newly restored Executive does not have the capacity to pass such legislation at the same time as Westminster, so there will be an iniquity across the UK on this reserved matter. Can I ask the Minister one more time to listen to the voices from Northern Ireland? I understand that he says he will work with the Executive, but will he take on board what the Executive are saying and include Northern Ireland in the Bill?

[Kevin Hollinrake]

I thank the hon. Gentleman for his points. To reiterate what I said in response to earlier questions, we are very sympathetic. We are keen to lend support, and not just moral support but help in drafting the Bill. Of course I will continue to listen to him and others with similar views about the involvement of the devolved Administrations. We are keen to make this work UK-wide. The redress schemes will be available UK-wide, if we can get those prosecutions quashed on a UK-wide basis.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister and pay tribute to his perseverance in bringing about a legislative change. It is fantastic to hear that the legislation will quash convictions relating to the Horizon scandal. This has been a long time coming and those affected must be praised for their long journey to justice. However, unfortunately there are many who have not lived to see this. What steps will he take to ensure the legacy of those who were affected but have passed away will live on, and that their families are supported through the redress payment scheme, to lessen the years of pain that they have endured?

[Kevin Hollinrake]

I thank the hon. Gentleman for his work on the issue, and for his regular contributions on this and many other matters. The legislation has taken too long, as he rightly says, and sadly some people have passed away, which is terrible for the families. Those people will never live to see their convictions quashed and names exonerated. The redress schemes work for the estate, so if somebody has passed away, the family can come forward and submit a claim, or they can choose a fixed-sum award and pursue their claim in that way, which is a quicker process. That happens for families in the sad situation the hon. Gentleman outlines. I am happy to work with him to ensure that we deliver for his constituents.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Thursday 7th March 2024 Commons Chamber

[Craig Tracey (North Warwickshire) (Con)]

3. What steps her Department is taking to support small and medium-sized enterprises through the Small Business Council.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

On 1 February, the Government reaffirmed our commitment to all the UK’s 5.5 million small businesses with the creation of the new Small Business Council, which is looking at key areas, such as improving business support, access to finance, support and advice, and breaking down barriers, including barriers to female entrepreneurship.

[Craig Tracey]

As chair of the women and enterprise all-party parliamentary group, it has been fantastic to see the boom in female-led businesses over the past few years. We now want to see consideration of how some of them can grow. Can the Minister set out how the new Small Business Council can help them to do that?

[Kevin Hollinrake]

I thank my hon. Friend for his question and for all he does for women in entrepreneurship and on the APPG, on which he has worked for many years. The Small Business Council has excellent entrepreneurs on it, such as Emma Heal from Lucky Saint and Julianne Ponan from Creative Nature, who we rely on for expert advice. We also have the investing in women taskforce, which has helped to increase the number of female entrepreneur businesses from 56,000 in 2018 to 150,000 in 2022. The investing in women code has 240 signatories. We are keen to do more and to work alongside my hon. Friend to ensure that the world of entrepreneurship is as friendly as possible to female entrepreneurs.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Will the Minister ask the Small Business Council to wake up to the opportunities in the hydrogen sector, not only in terms of the engineering that supplies that sector, the coming replacement of batteries and all that transportation stuff, but in the infrastructure of our country? We have great engineering that is ready to go with a hydrogen future. When will he wake up to that opportunity?

[Kevin Hollinrake]

We already have woken up to that opportunity. As the hon. Gentleman knows, we have great opportunities in hydrogen in Teesside and in Yorkshire, with the Humber hydrogen cluster. It is something we are keen to support as a Government, and I would appreciate it if he offered his support, too.

[Mr Speaker]

I call the shadow Minister.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The perfect storm of rising borrowing, rent and labour costs is continuing to cripple businesses, and the UK small business index fell 78 points last December, according to Xero Small Business Insights, to the lowest reading since the middle of the pandemic in August 2020. The Government have had 14 years to tackle the barriers facing SMEs. What specifically will the Small Business Council do, and what will Ministers do to halt the alarming trend of more businesses closing than opening?

[Kevin Hollinrake]

I am sorry that the shadow Minister is so pessimistic about the world of business. We have spoken at events together many times, and she hears the mood in those audiences, which is far more positive than she sets out. We are active in many areas, as she knows. At the event we both spoke at this week, I talked about access to finance, support and advice, and removing barriers. Access to finance has been key, with £1 billion of Start Up loans having been made to 100,000 businesses. If she listened to the Budget yesterday, she will have heard about the rise in the VAT threshold and the growth guarantee scheme. There are many opportunities for small businesses. We will have 200,000 more workers coming back into the workplace, tackling another barrier for businesses. Get with the programme; it is much more exciting than she thinks.

[Nicola Richards (West Bromwich East) (Con)]

4. What recent progress her Department has made on negotiating a free trade agreement with Israel.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

Some 130,000 children are in the care of close family members in England alone. We recognise the vital role that kinship carers play in looking after children who cannot live with their parents. Last year, the Government published the national kinship care strategy and announced a £20 million package of support for kinship carers in 2024-25.

[Munira Wilson]

The Minister just referenced the Government’s kinship strategy, which was published in December. Their own strategy has recognised that kinship carers in employment often report the need to give up work or reduce their hours to be able to care for the children they support; it cites a survey revealing that 45% of kinship carers give up work and a similar number have to reduce their hours permanently. Given the Minister’s desire to drive up employment and the fact that kinship carers stepping up overnight to look after children saves the taxpayer a huge amount of money in comparison with when children go into local authority care, why are the Government not making paid employment leave a statutory right and only publishing guidance?

[Kevin Hollinrake]

The hon. Lady raises a very important point. We call on local authorities to be considerate to people who are in employment when they take on a child to look after in a kinship care situation. We think that employers are the right people to make sure that any provision we provide is a floor, not a ceiling. Companies such as John Lewis take a very considerate approach to people in that situation. We urge them to do so, but we also encourage local authorities, which have budgets allocated to this particular issue, to provide support where they can.

[Matt Western (Warwick and Leamington) (Lab)]

12. If she will make an assessment of the potential impact of infrastructure on levels of business investment.

--- Later in debate ---

[Christine Jardine (Edinburgh West) (LD)]

14. If she will make an assessment of the potential impact of regulatory costs on small and medium-sized enterprises.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

We are hacking through the red tape, not least with our smarter regulation programme. We have announced reforms to employment law and the recording requirements of the working time directive, which will save UK businesses up to £1 billion, particularly benefiting SMEs.

[Christine Jardine]

I note that the Minister welcomed yesterday’s Budget as helping small businesses, particularly in the hospitality sector, which is very hard hit in my constituency. One of the problems that many businesses tell us about is the business rates system. More businesses have failed in the past two and a half years than have been established. In Scotland, we often find that while the downsides of this Government’s policy are happily passed on by the Scottish Government, any benefits are not. We would like to see complete reform of the rating system—not tinkering but reform. Can the Minister tell us whether widespread reform is planned? How would he plan to do it? How could businesses in Scotland also benefit?

[Kevin Hollinrake]

The hon. Lady is absolutely right to point to some of the difficulties in the hospitality sector. I speak to hospitality entrepreneurs in my constituency and across the country who are finding it difficult, which is why we stepped in with, first, a package of about £13 billion of business rates support, and there was £4.3 billion of business rates support last autumn. We passed the equivalent moneys on to the Scottish Government to pass on to their hospitality venues, but they passed on none of it.

A typical pub in Scotland is £15,000 worse off than a typical pub in England, and a typical guest house is £30,000 worse off. That is why Scotland has a 30% higher failure rate than England. Similarly, a typical pub in Labour-run Wales is £6,000 worse off and a typical guest house is £12,000 worse off, and there is a 19% higher failure rate. It is critical that the benefits are passed on to those businesses, and that we look for structural reform. Anyone who wants to scrap business rates needs to show where the £22.5 billion of income will come from, rather than simply saying that they will scrap them without announcing a replacement.

[Christian Wakeford (Bury South) (Lab)]

15. What assessment she has made of the effectiveness of publicly naming employers for the enforcement of the national minimum wage.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

Since 2011, we have published 20 press releases and named around 3,200 employers that have, in total, repaid over £41 million in arrears to over 460,000 workers. We have recently had round 20 of the scheme.

[Christian Wakeford]

Naming and shaming serves as a deterrent, but should we not go further against persistent offenders? Paying the minimum wage is not an opt-out; it is a law that no company is above. Stronger penalties, including fines proportionate to the severity of the violation, to ensure that no employer can exploit its workers with impunity, would level the balance between employers and employees. Will the Minister commit to exploring these measures to safeguard the rights and the dignity of workers?

[Kevin Hollinrake]

The hon. Gentleman is right to point to this measure. We know that naming and shaming is a significant deterrent against underpayment of the national minimum wage, and we are very keen to ensure that naming continues. Alas, in the most recent naming and shaming round, 2,800 minimum wage investigations returned more than £16.3 million in arrears to over 120,000 workers. His Majesty’s Revenue and Customs issued businesses with nearly 700 fines, totalling £13.2 million. As the hon. Gentleman recognises, naming and shaming alone is a significant deterrent and we intend to continue doing it.

[Mr Speaker]

I call the shadow Minister.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

My hon. Friend the Member for Bury South (Christian Wakeford) is right that too many employers still think they can opt out of paying the minimum wage. Earlier this week, the Low Pay Commission published its 2023 report, which said that non-compliance “appears persistent” in the social care sector. I have heard a range of evidence citing problems with record keeping, exploitation of migrant workers, and workers routinely not being paid for travel time.

It is clear that the social care sector has a real issue with the minimum wage but, when browsing through the latest naming and shaming list published by the Department a couple of week ago, I found only 17 employers classed as being within the social care sector, which is less than 0.1% of the total number of employers in the sector. What will the Minister do to ensure that everyone working in the social care sector gets at least the minimum wage?

[Kevin Hollinrake]

The hon. Gentleman is right to raise this issue, on which we do much. For example, we make sure that people can anonymously report the underpayment of the national living wage through either His Majesty’s Revenue and Customs or ACAS. It is really important that we do that. We have labour market enforcement undertakings and orders, and we provide the tools for serious cases. As of April 2022, 40 employers were on labour market enforcement undertakings and 18 employers have been prosecuted. The message should be loud and clear to employers that if they do not comply with the law, we will take action.

[John Penrose (Weston-super-Mare) (Con)]

17. When she plans to publish the smart data road map.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

My officials are co-ordinating and leading on the drafting of the road map, which will set out the Government’s ambition for future smart data scheme development across seven different sectors. We will publish that very shortly.

[John Penrose]

I am delighted to hear that the road map is coming very shortly. My hon. Friend will recall that I asked this question just before Christmas and he said it would be out in January. We were then hoping it might be coming out in yesterday’s otherwise excellent Budget, but it did not. Other countries are coming up on the rails and trying to overtake us. The noise of the approaching herd is growing in our ears, so can we please move as fast as possible on this?

[Kevin Hollinrake]

My hon. Friend is right to hold our feet to the fire on this. We are pressing forward and we are determined to get it right, not just out quickly. He rightly said that I set the ambition to get it out in January, and that has put officials’ feet to the fire as well in getting it out. I signed off the road map yesterday, so it should be out very shortly. I do not agree that other nations are hot on our heels on this issue, as we are way ahead. There are billions of calls in open banking every month, and millions are using this every day without even knowing it. We are going to extend those opportunities to energy, telecoms and, crucially, small and medium-sized enterprise finance, making the journey for SMEs to get business finance far easier.

[Grahame Morris (Easington) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

--- Later in debate ---

[Munira Wilson (Twickenham) (LD)]

T8. Quarter 4 of 2023 was the 10th quarter in a row in which more British businesses closed their doors than opened up. Just yesterday, a small business owner in Twickenham contacted me to tell me that his business was on the brink. If the Secretary of State will not consider business rate reform, as my hon. Friend the Member for Edinburgh West (Christine Jardine) suggested, what is she doing to help our small and medium-sized businesses, and to stem the tide of insolvencies?

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

The hon. Lady raises an important point. We do not shy away from the fact that things have been difficult for businesses, with the covid crisis, of course, followed by the cost of doing business crisis. That is why we stepped in to support businesses, with a £4.3 billion package for rates last autumn, which has helped many businesses to get through a difficult time. Unfortunately, that support has not been passed on in Scotland and Wales, but it certainly has in England. I am very happy to meet with her to discuss her particular business problem.

[Mr Laurence Robertson (Tewkesbury) (Con)]

T7. Because of its very large population and economic activity, Nigeria offers many opportunities for British businesses. I understand that there was a recent ministerial visit to that country. Could we have a brief report of the outcome of that visit?

[Liz Twist (Blaydon) (Lab)]

T9. Last week, Carl Cresswell, director of business resilience in the Department for Business and Trade, told the Select Committee that he personally thinks that we will end up spending more money on Horizon compensation overall than that £1 billion currently allocated by the Treasury, but we did not hear anything about that in yesterday’s Budget. Does the Secretary of State share that view?

[Kevin Hollinrake]

We have always been clear that the £1 billion is not a cap. Clearly, the amount of compensation that needs to be paid for redress is to get people back to where they were before the scandal took place. At the moment, we are not nearing that £1 billion, but I think that over time we will be. As I say, it is not a cap; if we need to raise the amount, we will.

--- Later in debate ---

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

The Secretary of State will have seen the recommendations that our Committee set out this morning for ending the circus of the Post Office administration of the redress schemes for victims of the Horizon scandal. I know that she takes this incredibly seriously and so I know that she will study our cross-party recommendations for the new legislation that she is about to bring before the House. The question for today is this: if we put all the ongoing investigations to one side, on the basis of the facts as they are known today, does she still have full confidence in Nick Read as the chief executive of the Post Office to run the redress schemes currently under way?

[Kevin Hollinrake]

We thank the right hon. Gentleman for his work. I have taken a quick look at the report, although it was only issued this morning. All the recommendations he makes in that report we have either fixed or are fixing with the assistance of the Horizon compensation advisory board. We agree with him that we need to bring the compensation schemes in house. The GLO—group litigation order—scheme is already being delivered by the Department for Business and Trade. We believe that further compensation will flow from our overturning of convictions. We will be overturning hundreds of convictions through legislation in this House very shortly, as quickly as possible, and that will provide a flow of hundreds of millions of pounds in compensation for those individuals. That will be done by the Department for Business and Trade.

[Martin Vickers (Cleethorpes) (Con)]

As the trade envoy to the western Balkans, the issue of Government-to-Government agreements is raised with me frequently. There is no doubt that if they were available, more deals could be done with the Balkan countries. Will the Minister give an update on the Government’s position, please?

--- Later in debate ---

[Richard Foord (Tiverton and Honiton) (LD)]

Mr Hussein from east Devon, whom I represent, has effectively been robbed of £100,000, given that £40,000 of sub-standard building work has to be levelled and destroyed. The Federation of Master Builders has campaigned for a compulsory licence scheme for construction companies. The Domestic Buildings Works (Consumer Protection) Bill would outlaw cowboy builders, provide compensation for consumers and ensure that reputable builders were not undercut by unlicensed rogues. Will the Minister take a fresh look at that Bill?

[Kevin Hollinrake]

The hon. Gentleman raises an important point. Some of the most frequent correspondence that I get from colleagues from across the House relates to rogue builders. We are determined to ensure that this does not happen to our constituents. We advise them to use builders registered with TrustMark, which is a trusted scheme, to ensure that work is done properly. I would be very happy to meet him to discuss that potential legislation.

Budget Resolutions

Kevin Hollinrake Excerpts

Wednesday 6th March 2024 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

In his statement, the Chancellor mentioned “not just higher GDP, but higher GDP per head.” There is just one slight snag: figures published today for GDP growth per capita from 2024 to 2027 are lower for every year than figures published only a year ago, so we are talking about not higher GDP per head, but lower GDP per head. I use that as an example; we hear the rhetoric and hyperbole of the Budget statement, but it rarely stands any scrutiny when one reads the Budget documentation. The Government can claim that they will meet both their fiscal targets at the end of a five-year rolling forecast period—indeed, every Government could say they will meet their targets at the end of a five-year rolling forecast period—but it is what happens in between those points that is important.

The Government told us a year ago that net debt would fall as a share of GDP in 2024-25, and that net borrowing would fall below 3% of GDP in 2025-26. However, by the autumn statement, only five months ago, we were told that debt would not fall until 2025-26, a year later—and they still forecast that the deficit would fall below 3% of GDP in the same year. We were also told in spring that GDP growth would exceed 2% in two of the next five years, and that productivity would sit between 1% and 1.3% every year across 2024 to 2027. By November, growth was not forecast to exceed 2% in any of the forecast years, and the productivity growth forecast was down for every single year. Today, the Chancellor announced that while the Government would still meet their primary debt target in 2025-26, the percentage of debt to GDP would be higher than it was only five months ago, so debt is not really falling; at best, it is stagnating. GDP growth would still not exceed 2% in any year to 2028, and that is important. That is another half-decade in which GDP growth will not even reach historical trend growth rates. That is absolutely shameful.

The figure for productivity per hour—a metric that the Government like—is lower cumulatively over today’s new forecast period than the figure was that they announced last November. The Chancellor said this was a Budget for growth, productivity and long-term investment, but debt is not really falling as a share of GDP. The deficit is not getting smaller—it is actually getting worse, compared with the forecast last year—and productivity growth, that perennial problem that we all recognise exists, is cumulatively lower over the entire forecast period than the Government announced last November.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

Does the right hon. Gentleman agree that we have to increase growth? We all agree that we have to get all parts of the United Kingdom growing. If he looks at the figures from the Library, he will see that from 2011 to 2021, England grew cumulatively by 14.9%, Wales by 13.7%, and Scotland by 7.2%. Does he agree that the Scottish Government need to do more to stimulate growth in Scotland?

[Stewart Hosie]

I agree that we need growth across the piece. One of the tools to facilitate growth is tax credits, and I am sure the Minister recognises that tax credits are a function of corporation tax. If he is serious about encouraging growth in Scotland, the Government should devolve business taxation powers and power over the associated tax credits; we would then see how we got on.

Whatever was said at the start of the statement about growth and productivity, and despite the hyperbole, the big introduction and all the fanfare, this Budget delivers neither of those things, as evidenced by the numbers that the Government have published today.

Shared Parental Leave and Pay (Bereavement) Bill: Instruction

Kevin Hollinrake Excerpts

Instruction
Tuesday 5th March 2024 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

I beg to move,

That it be an instruction to the Committee on the Shared Parental Leave and Pay (Bereavement) Bill that the Committee have leave to make provision about paternity leave in cases involving the death of—

(a) the mother of a child,

(b) a person with whom a child is, or is expected to be, placed for adoption, or

(c) an applicant or intended applicant for a parental order under section 54 of the Human Fertilisation and Embryology Act 2008.

The Shared Parental Leave and Pay (Bereavement) Bill, introduced by the hon. Member for Ogmore (Chris Elmore), was supported by the Government on Second Reading and enjoyed cross-party support from the House. I congratulate the hon. Member on bringing forward this very important Bill. My hon. Friend the Member for Broxtowe (Darren Henry) has also campaigned on the issue.

As it stands, the Bill would require regulations to be made that remove the continuity of service requirement for bereaved partners so that they are eligible for shared parental leave and pay. The Bill aims to provide a parental leave entitlement for bereaved fathers by providing a shared parental leave entitlement, but that is not the only or necessarily the best mechanism available. It is also possible to use parental leave to achieve the Bill’s objective.

[Jim Shannon (Strangford) (DUP)]

There is nobody in the House who does not welcome the legislation and the thought behind bringing it forward. I understand—perhaps the Minister can confirm this—that the Bill will not be law in Northern Ireland, and that it will take a process to make that happen. Will he outline the process that will ensure that those in Northern Ireland have the same opportunities as those the Bill?

[Kevin Hollinrake]

I am very happy to work with the hon. Gentleman to ensure that is the case. We will do everything possible to support those efforts in Northern Ireland.

My officials are working to complete a comparative analysis of shared parental leave and paternity leave entitlements to establish which mechanism is best to achieve the Bill’s intent. To ensure we use the best available mechanism to deliver this entitlement, we are seeking to broaden the scope of the Bill to include paternity leave. In that way, both shared parental leave and paternity leave can be considered in Committee. We are of course working closely with the hon. Member for Ogmore on that.

What is more, the instruction would enable a Committee to consider amendments that would extend the measures to new parents who have their children through other routes, such as adoption or surrogacy arrangements. Where possible and appropriate, the Government aim to afford adoptive and surrogate parents similar employment rights to those we give to birth parents. Employed parents who have their child through adoption or surrogacy arrangements may be entitled to adoption leave and pay, or paternity leave and pay. Extending the provision in the Bill to new parents who have their children through those other routes is consistent with the Government’s stance on this issue. I have discussed this motion with the hon. Member for Ogmore, and I appreciate his support. I commend the motion to the House.

Groceries Code Adjudicator

Kevin Hollinrake Excerpts

Tuesday 5th March 2024 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

It is a pleasure to serve with you in the Chair, Mr Deputy Speaker. This debate is very important to me personally. My father was a hill farmer, and I represent a rural constituency with many farmers who are experiencing many of the pressures that the right hon. Member for Orkney and Shetland (Mr Carmichael) referred to; indeed, he described them as a perfect storm. I congratulate him on securing the debate and on all the work he does in this area, of which I am only too aware. He mentioned the pressures that farmers and those in the farming community face making a living, and the competition for land from different land uses, with which we should be careful in ensuring that we have food security as well as energy security and the other things that we need to retain in this country.

The right hon. Gentleman is of course familiar with the Groceries Code Adjudicator, but it might be worthwhile setting out exactly what it is there to do, how it can help get a fair deal for farmers, and what else we are doing to ensure that that is the case. The role of the GCA is to enforce the groceries supply code of practice. It does so by providing advice and guidance to both suppliers and large retailers on matters relating to the code, arbitrating in disputes between large retailers and their direct suppliers, investigating issues to ascertain whether there has been non-compliance with the code, and imposing sanctions and other remedies for breaches of the code.

The code applies to the 14 largest grocery retailers in the UK, which have an annual turnover in groceries of £1 billion or more. As the right hon. Gentleman rightly pointed out, the code was put in place following a detailed market investigation by the Competition Commission between 2006 and 2008, which found that direct suppliers of groceries to large supermarkets faced unfair risks that adversely affected competition and, ultimately, consumers. The code regulates designated retailers’ interaction with their direct suppliers, including some but not the majority of farmers.

While the code prevents the unilateral variation of supply agreements, such as on wastage and forecasting errors, and requires retailers to pay invoices on time, it does not cover prices agreed between a retailer and a supplier, which, as the right hon. Gentleman says, are a matter of commercial negotiation. However, the code does help ensure that negotiations are conducted fairly and transparently, and the GCA has an interest in ensuring that negotiations on cost price pressures do not lead to non-compliance with the code.

Of particular note are the GCA’s seven golden rules, which all the regulated retailers have signed up to and which safeguard the requirements of the code in discussions about price and cost pressures. There is strong evidence to show that the GCA has been highly effective since it was established in ensuring compliance with the code and changing the behaviour of retailers to ensure fairness for suppliers.

Stakeholders have expressed a positive view of the GCA and their input has helped inform the statutory review of the performance of the GCA that the Government conduct every three years. Indeed, I met many of those suppliers and they spoke very clearly about the benefits of the GCA that they see. Those suppliers represent many of the primary producers referred to by the right hon. Gentleman.

The third such review concluded in July 2023 and I hope the right hon. Gentleman’s constituents felt able to submit their views. The review considered publicly available evidence and the responses submitted by 71 stakeholders, including from 27 individual suppliers and their representative bodies, and 30 other trade associations, organisations and individuals. Most of the suppliers who responded to the review said they believed the impact of the GCA on the groceries market had been positive as retailer behaviour had improved. They also said the adjudicator had addressed the previous imbalance of power and made the grocery market fairer to operate in. For instance, in 2014, just after the GCA was set up, four out of five direct suppliers responding to the GCA’s first annual survey said they had experienced an issue with the code. That is now down to one in three, and the issues that concern suppliers are down in practically all cases. Suppliers, including small and medium-sized enterprises, feel better protected against any poor behaviours from retailers following the best practice put in place by the GCA. In 2022, more than two thirds of direct suppliers felt that retailers covered by the code conducted relationships fairly.

Overall, there is a consistently high level of awareness among suppliers of the GCA and the code. I have met the current adjudicator, Mark White, several times and have been extremely impressed by his pragmatic approach to ensuring the compliance of the designated supermarkets, which has helped to stop problems escalating and reduced the need for time-consuming and expensive formal dispute resolution.

I am aware that some Members have asked whether the GCA has the necessary powers and resources. I know that Mark White believes his current powers provide the necessary tools to enforce the code and change retailer behaviour. He is also responsible for determining the level of resources that he needs and setting the levy of regulated retailers to fund his work. While Ministers are responsible for approving the proposed levy, the Government have always accepted the adjudicator’s levy business case and will of course give careful consideration to future requests.

[Mr Carmichael]

I am pondering the words the Minister has used. I think he is right that the adjudicator does have the powers to investigate and enforce the code of practice, but there are still big areas that are not covered, and that comes to the concern that farmers, producers and processors have.

[Kevin Hollinrake]

I am not ignoring the right hon. Gentleman’s concerns at all. I recognise them and, as I said earlier in my speech, the vast majority of the market in terms of primary producers is not covered by the code. I will come on to that shortly. The right hon. Gentleman will be aware that there would be challenges in the GCA being the custodian or overseer of thousands upon thousands of business contracts, with the complexity and bureaucracy that would flow from that, which neither of us would wish to see. That would, of course, result in an impact on prices as well. I will address that later.

We recognise that, despite the GCA’s effectiveness and successful interventionist approach, we have not yet stamped out all unfair practices. The impact of the recent cost price pressures in the food sector has demonstrated how external factors can affect relationships and behaviours. As such, we recognise the continued need for the GCA’s role in ensuring fair treatment of suppliers to supermarkets through enforcement of the code. We are aware that some poor practices are affecting producers across several agricultural sectors not covered by the code and that primary producers, such as farmers, have felt unfairly treated. The Government also want farmers to get a fair price for their products—that was the opening and closing argument of the right hon. Gentleman—and we are committed to tackling contractual unfairness that can exist in the agrifood supply chain.

Powers in the Agriculture Act 2020 enable the introduction of statutory codes and contractual practice to protect farmers. Those codes would apply to any businesses purchasing agricultural products directly from farmers, including processors, consolidators and other intermediaries, providing greater certainty for farmers by ensuring that clear terms and conditions are set out in contracts. That will seek to improve the negotiating position of farmers to achieve fairer prices and greater transparency and accountability in supply chains. Ministers in the Department for Environment, Food and Rural Affairs are exercising the powers under the 2020 Act in a sector-specific approach, acknowledging that the problems experienced by each sector differ widely and avoiding broad regulation that places burdens on sectors that may not require intervention.

The first sector-specific regulations for the dairy sector were laid in draft in February 2024 and regulations for the pig sector are expected to be introduced later this year. Work is also progressing on regulations for the egg sector, and DEFRA carried out a fresh produce review, which the right hon. Gentleman referred to, in December 2023, and the response to that will be published shortly. I cannot give a more definitive timescale than that, I regret—if it was all in my gift, perhaps I could, but it is not. He is probably pretty familiar with the term “shortly”. Crucially, the recruitment is under way for an agricultural supply chain adjudicator, who will be responsible for enforcing the new regulations.

As I touched on earlier, it may be that the GCA’s effectiveness is the reason why some think we should extend its role to ensure the better protection of primary producers in the grocery supply chain, such as farmers. Requiring the GCA to regulate the many thousands of transactions throughout diverse supply chains would risk diluting the adjudicator’s tight focus on the 14 largest supermarkets and could undermine its record as a highly effective regulator. In terms of what it does, if something is not broken, don’t try and fix it. However, we do understand that parts of the system are broken, and that is why we are bringing in the sector-specific supply chain remedies.

It is important to safeguard the GCA’s ability to remain vigilant on the compliance of the 14 designated retailers. The Government therefore have no plans to extend the adjudicator’s remit, but instead seek to learn from and emulate the GCA’s approach and effectiveness, so that it can be replicated for the sector-specific codes.

Question put and agreed to.

Post Office Board and Governance

Kevin Hollinrake Excerpts

Wednesday 28th February 2024 Commons Chamber

[Marion Fellows (Motherwell and Wishaw) (SNP)]

(Urgent Question): To ask the Secretary of State for Business and Trade if she will make a statement on what steps are being taken to restore public confidence in the Post Office board and governance following evidence taken at yesterday’s Business and Trade Committee.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

I sat there for five hours listening to all the evidence that was given to the Select Committee yesterday. Several serious allegations have now been made against the Government, my Department and its officials by Henry Staunton. His most recent revelation is that there is an ongoing HR investigation that involves both him and the Post Office CEO Nick Read. I have to say as a former chair that I clearly found that statement to the Select Committee highly unprofessional.

The fact that Nick Read is being investigated is evidence that no one is untouchable and the Post Office culture is changing. An investigation is of course not evidence that allegations are accurate. While Nick Read has co-operated fully, Mr Staunton tried to block the investigations looking at his conduct. It was this action, as well as his attempt to bypass the formal process to appoint a new director to the board, which led the Secretary of State to lose confidence in Mr Staunton. As was said in the Business and Trade Committee yesterday, board members felt so strongly about Mr Staunton’s conduct that they were going to resign. It was right that the Government decided to act.

Mr Staunton has now made a series of allegations which we strongly reject. He is using the Nick Read investigation to divert attention from the issues the Select Committee was discussing about his dismissal. The allegations made are also proving to be a further distraction from the victims of this injustice. His central allegation is that the Government told him to slow down compensation payments. Not a single person backed him up on this claim. My officials are clear that they have never been instructed to do this. Post Office executives are clear that such an instruction was never passed on to them. We have provided a letter from June 2023 from my Department to Mr Staunton telling him the opposite. His only evidence is a note of a conversation which is clearly about operational financing of the Post Office business; this is entirely different from compensation to sub- postmasters. The permanent secretary wrote recently to give her truthful account of what happened. We also released her office’s contemporaneous notes of that meeting.

Mr Staunton alleged that the Secretary of State refused to apologise to him after he learned of his dismissal from Sky News; this was not the case. He claimed there was pressure on Nick Read to send a letter to the Justice Secretary; this was not the case. He claimed the Secretary of State told him that someone has got to take the rap for the Horizon scandal and that was the reason for his dismissal; this was not the case.

The Post Office faces unprecedented challenges and needs to work at pace to deliver compensation to the thousands of postmasters who fell victim to a flawed IT system as well as continue the essential work to implement the necessary operational and cultural changes needed within the business. As we have repeatedly said, Post Office governance is a priority for the Government; that is why we acted swiftly to remove a chair about whom there were serious concerns and allegations and why we are working at pace to appoint an interim chair.

We of course recognise the seriousness of an investigation into individuals at the Post Office. I also recognise parliamentary and public concern and the need to ensure there is confidence in the Post Office leadership. I will therefore ask the Post Office to provide me with the findings of the investigation once it is completed. However, it is right to wait for this investigation to conclude before making any further judgment.

[Marion Fellows]

I am really disappointed that the Secretary of State herself is not here, but I thank the Minister the hon. Member for Thirsk and Malton (Kevin Hollinrake) for everything he does for post offices and am happy to work with him going forward.

Prominent Horizon victims are still saying financial redress is far too slow. Legal representatives of victims said yesterday that redress schemes are not working for victims—too much “lawyering” going on, too much obfuscation. Lawyers say complete claims might have settled for less than they were entitled to and might need to be revisited. Neil Hudgell suggested that August deadline target will not be met and the current compensation impasse could continue for another one or two years.

Henry Staunton’s claims persist. Why has the Prime Minister refused to back up the Secretary of State, refusing to repeat the claim that Staunton lied? This is the third time we have been here to find out about the circumstances of Mr Staunton’s departure. The last time the Secretary of State mentioned investigations into Staunton but failed to reveal an 80-page investigation into current CEO Nick Read. With all we have seen about the Secretary of State’s past assurances being undermined, how can we trust her firm assurances now?

Does the Secretary of State have faith in the Post Office board, which is clearly in total disarray? There were even claims that the chief executive officer, Nick Read, had threatened to resign over pay. Victims and the public have lost faith in the Post Office board and governance. When more than £1.2 billion of public money is being spent on financial redress, the taxpayer ought to have confidence that costs will not be driven up further by mismanagement. The evidence from yesterday’s Business and Trade Committee shows that the public and victims have no reason to be confident, as incompetence and obfuscation has marred the process until now. Sub-postmasters say that redress schemes are not working. Victims agree. The lawyers say that they are not working and the former chair of the Post Office says that they are not working. Why should we trust the Government, and what will the Minister do to fix this?

[Kevin Hollinrake]

I should say that the Secretary of State is abroad at a World Trade Organisation conference.

I thank the hon. Lady once again from this Dispatch Box for all that she does on behalf of postmasters. Interestingly, in his evidence yesterday, Mr Staunton said that he had no concerns over the speed of compensation, which I think astounded both the hon. Lady and me. We have been fighting for years to try to improve the speed of compensation. That is just one more concern that people might have with Mr Staunton’s evidence, but it was clearly stated in one of his responses.

It is right that we constantly seek to improve the speed of compensation and to make sure that it is full and fair and is seen to be so. One reason that I spent all day listening to the evidence yesterday was to make sure that we are doing everything possible to accelerate compensation. I heard some interesting conversations in the evidence session, including ideas from Mr Hudgell and others on how we can accelerate compensation, which we are very keen to do.

The hon. Lady will know that the latest figures were quoted yesterday at the Select Committee hearing. On the group litigation order scheme, for example, 106 full claims have been submitted, 104 offers have been made, and 80 have been accepted without reference to the independent panel, which would tend to indicate that the offers being made are fair. The hon. Lady will also recognise from the announcements that we made on Monday during the statement that we have introduced a £450,000 interim compensation figure for when people submit their full claim for the overturned convictions. When an offer is made, we will provide 80% of that initial offer to claimants in the GLO scheme.

Interestingly, Henry Staunton seemed to think that the biggest concern with the compensation schemes was around the overturned convictions—he clearly said that yesterday—when the hon. Lady and every Member of this House knows that we announced legislation on Monday, and previously, that will overturn the convictions en masse, which is unprecedented. Obviously, that is the key to unlocking compensation. For all those reasons, we should not take Henry Staunton’s evidence at face value.

[Julie Marson (Hertford and Stortford) (Con)]

Mr Staunton continues to insist that he was told to delay compensation for the postmasters, but at the Select Committee hearing yesterday he said that, unlike his own notes, the published notes of the meeting with Sarah Munby were not contemporaneous. Can the Minister undertake to provide a contemporaneous note of that conversation to put this accusation to bed once and for all?

[Kevin Hollinrake]

I thank my hon. Friend for her question and for her work on the Select Committee. It is one thing to criticise Ministers, but entirely another to sully the good name of a civil servant. Sarah Munby has been very clear in her letter that she published on this matter that Mr Staunton is wrong. She has also been very clear that she has contemporaneous notes of that meeting, and we will be publishing those notes that will clarify and back up the fact that Henry Staunton is wrong and that Sarah Munby is right.

[Mr Speaker]

I call the shadow Minister.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

What we saw yesterday was unedifying and, at points, a fiasco. Sub-postmasters watching will have rightly been dismayed and will have felt that, if anything, they were moving further away from justice. The ongoing conflict at the top of the Post Office and the failure of the Government to get a grip is helping no one and is only further eroding trust in this process. The Secretary of State should reflect on how her approach to the news of recent weeks has only exacerbated that. We, and especially victims, have all had enough of the “He said, she said”. Does the Minister now recognise that the best way to end this is by fully clarifying what the Government have or have not said, through an independent Cabinet Office investigation?

May I also pick up on some very worrying evidence given yesterday by Carl Creswell, the director of business resilience in the Department for Business and Trade? When talking about the financial provisions set aside for Horizon compensation, he said:

“I personally think we will end up spending more money on compensation overall than that £1 billion figure, which was modelled at an earlier stage.”

That is incredibly serious. Does the Minister share that view held by one of his senior civil servants? If so, what conversations has he had with Government colleagues and will we see that reflected in next week’s Budget?

Will the Minister clarify whether he or the Secretary of State were aware that Nick Read was also under investigation, as was allegedly stated in the 80-page document referred to by Henry Staunton in yesterday’s Select Committee hearing? In response to me during an urgent question on 29 January, the Minister said that Henry Staunton’s sacking was not due to a falling out, but that it was

“about very serious governance issues related to the person who headed the board of the organisation, which are obviously confidential human resources issues.”—[Official Report, 29 January 2024; Vol. 744, c. 612.]

Will the Minister confirm whether he had sight of the confidential human resources report referred to in yesterday’s Select Committee hearing? If so, why was he selective in his update to the House?

Finally, it is very important to make sure that we restore trust, by urgently bringing forward legislation. I hope that, unlike yesterday’s unseemly events, our focus can return to making sure that we exonerate the sub-postmasters and deliver the recompense that they rightly deserve.

[Kevin Hollinrake]

When the hon. Lady says that I was “selective” about what I said, is she accusing me of being economical with the truth? If so, I would take exception to that. It would be absolutely wrong for anybody in this House to disclose information about an investigation that has not concluded and where the presumption of innocence must apply for the individuals concerned. If she thinks I should come to this House to talk about those kind of sensitive, confidential matters, she does not understand how the corporate world works.

[Rushanara Ali]

rose—

[Kevin Hollinrake]

I will not give way, as I am answering the hon. Lady’s question.

[Mr Speaker]

This is not a debate.

[Kevin Hollinrake]

I did find what happened yesterday unedifying, but that was about one person; everybody else who gave evidence yesterday was clear that there was no sense ever of trying to slow down compensation. Neither do I think the hon. Lady is right to say that postmasters are further away from getting compensation; it is quite the opposite. To imply that and so raise questions about the compensation scheme could lead to people not coming forward. We welcome the fact that 1,000 more people have come forward since the ITV series. People are closer to compensation, not further away, and the actions we are taking, through the compensation advisory board, the overturning of convictions, the Horizon shortfall scheme, which is nearly completed, and the GLO scheme are all moving on. If she wants to end the, “He said, she said”, perhaps she should end it, because we want to move on and pay compensation.

As for the figure of £1 billion, is the hon. Lady saying it is serious if we have no cap on compensation? I do not think that is serious at all; of course we have no cap on compensation. The £1 billion is a maximum budget, but if that needs to be increased, it should be. If she is saying that we should not increase it if people deserve more, she should put that on the record. It would be an entirely irresponsible thing to do. Every time I have dealt with this matter over the Dispatch Box with shadow Ministers, it has been constructive and collaborative, and I resent the tone she has taken in this case.

[Mr Speaker]

Let me say, in fairness to the Minister, that he has come here on more occasions than anybody else I have known. He has absolutely ensured that the House has been kept informed—he goes without question on this.

[Mark Pawsey (Rugby) (Con)]

I commend the Minister, not only for the consistent and compassionate approach he has taken to this matter, but for his attendance at yesterday’s session. It lasted for five hours and he was there for the greater part of it. He is right to say that much of what we heard yesterday was a real distraction from the key objective of the Government and the Committee of making sure there is speedy compensation for our postmasters. It was clear that the former chairman and possibly the chief executive exhibited limitations in their roles and were perhaps unsuitable for the roles to which they were appointed, so are there any broader lessons we might deduce on how we go about recruitment for publicly owned organisations such as the Post Office?

[Kevin Hollinrake]

I thank my hon. Friend for his question and for his work on the Select Committee. He is a doughty champion in this area and many others relating to the Committee’s work. There are some lessons we need to learn; the Post Office certainly requires the right kind of skills and the right kind of person to turn it around. That is clearly a work in progress and I do not think people will be confident that that is happening until it has actually happened. Words are no longer enough; we need actions, be it on the turnaround of the Post Office or on the compensation schemes.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Chairman of the Select Committee.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I am grateful to the Minister for joining us for most of the five hours of hearings yesterday, but he will know as well as I do that what we saw yesterday was complete chaos at the top of the Post Office, when what we needed was a clarity of purpose about paying redress fast and fairly. Not a single witness yesterday said that they were satisfied with the speed of any one of the three processes. In fact, the lawyers for the claimants said that it may now take one to two years in order to complete the payment of redress, and we heard evidence of offers being made that were, frankly, insultingly low. That is true across each of the three schemes.

Most worryingly, we heard that the Post Office chief executive had not had regularly meetings with the Secretary of State or received a clear written instruction to accelerate every one of the three schemes; there were no deadlines and no targets, and there are no incentives to get the redress schemes done and dusted. That is not good enough. Will the Minister again reflect, when he brings his Bill before the House, on the need to eliminate the Post Office from this process to the maximum possible extent and ensure that there are a legally binding set of timescales under which claims are given the information they need and processed, with offers made and offers settled? I say that, because we cannot go on like this.

[Kevin Hollinrake]

I do think the chaos was caused by one individual. I sat through the whole session; for the bit I was not in the room with the right hon. Gentleman, I was watching on television. It is right for people to be able to say that they are not satisfied with the speed of compensation. I have said that time and time again from this Dispatch Box, and we are keen to accelerate the process and make sure it is fast and fair.

We are aware of the recommendations from the right hon. Member for North Durham (Mr Jones) on an appeals mechanism for some of the schemes where people feel the compensation is too low. We are looking and will continue to look at that. Every compensation scheme I have dealt with, such as the Royal Bank of Scotland global restructuring group scheme and the Lloyds-HBOS scheme, has been too slow, because of some of the complexity involved. We heard some good suggestions yesterday about how we might remove some of that complexity, which I am very keen to do. We heard some positive remarks from the individuals concerned, for example, from some of the solicitors, and from the Post Office on the fixed-sum awards—the £650,000 for the overturned convictions and the £75,000 for the GLO scheme. We heard how that was reducing the amount of disclosure that was required—that is one of the limiting factors. This should mean that the timescales that some people put on the table of one to two years should be rapidly reduced, and I am very keen to build on that work.

As the CEO confirmed to the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) yesterday, I meet him every month, and we speak about the need to accelerate compensation every single time. We have targets for when to pay the compensation by: August for GLO cases, and for all cases ideally by the end of the year. As we heard yesterday, 1,000 new claimants have come forward since the ITV series, which makes it difficult to put deadlines on payment. I am aware that the right hon. Gentleman wants a legally binding target. I am happy to discuss that with him, but we have just removed one legally binding target because not everything within the process is within our gift.

[Dean Russell (Watford) (Con)]

I know that my hon. Friend has a passion to get this right, and to right the wrongs of the past. Does he agree that we must do all that we can to ensure that sub-postmasters who were victims of the awful Horizon scandal are exonerated, and compensated fully, fairly and with haste?

[Kevin Hollinrake]

I thank my hon. Friend for his work on this issue as one of my predecessors; I know that he was as keen as I am to ensure that full and fair compensation is paid to all individuals. As I said, there is no limit to the amount of compensation that we will set aside to ensure that people are compensated properly for this horrendous scandal.

[Richard Thomson (Gordon) (SNP)]

In the week that we heard that more than 250 postmasters whose lives and reputations were damaged by Post Office Ltd died before they could get justice, yesterday we found another layer of Post Office Ltd’s organisational dysfunction. On 19 February, the Secretary of State informed the House of bullying accusations against Mr Staunton, only for us to find out yesterday that those accusations related to another individual entirely. Could I first ask the Minister, for whom I have the greatest respect—not just for the manner in which he goes about his business with regard to the Horizon scandal—whether the Secretary of State misled the House by telling Members that Mr Staunton was under wider investigation for bullying? Secondly, will the Minister now respond positively to requests from the Scottish Government and the Northern Irish Executive to reconsider introducing legislation that could lead to a swift UK-wide exoneration for the postmasters affected?

[Kevin Hollinrake]

To be clear, we terminated Mr Staunton’s role as chair of the Post Office not because of bullying accusations. There was an 80-page report, which he referred to yesterday, and which I have not read. He freely admitted in yesterday’s evidence session that he was named in that report. To what extent, I do not—[Interruption.] Well, that is what Mr Staunton said; he said that it was to a very minor extent. I do not know that, I do not think the hon. Gentleman knows that, and I think we should wait for the investigation to conclude before we make a judgment on that. The point was not about the allegation itself; the point was that, as Mr Staunton admitted yesterday, he interfered with the investigation. That is unacceptable, and if we had not acted in the way that we did, I think that the hon. Gentleman and others would be calling us to account for why we did not act when somebody had tried to suspend or interfere with an investigation into his own conduct.

I am aware of the Scottish and Northern Irish Governments’ position on legislation. Of course we will continue to discuss that with them. There are some separate devolved issues around the judicial systems in Scotland and Northern Ireland. That is the reason we have done it differently. We are happy to continue our dialogue on it.

[Jane Stevenson (Wolverhampton North East) (Con)]

From my time as a Parliamentary Private Secretary in the Department, I know the determination of the Minister and the Secretary of State to get compensation to these wronged postmasters as quickly as possible. In yesterday’s Select Committee session, Mr Staunton spoke about lobbying for a pay rise for Mr Read, which I know must have been quite galling to many of the sub-postmasters. The Minister reportedly refused to grant that pay rise. What sort of pay rise did Mr Staunton think would be a fair, equitable agreement at that time?

[Kevin Hollinrake]

I think on two occasions Mr Staunton lobbied for a pay increase for Mr Read. He sought to double the overall package of Mr Read on those occasions.

[Ian Lavery (Wansbeck) (Lab)]

Yesterday’s Committee meeting was bizarre in many ways. It was five hours long and, as happens only rarely, the people in front of the inquiry had to swear on the Holy Bible. That is how bad it was. The recently dismissed former chairman revealed a number of things that were quite alarming. First, he revealed that the current chief executive is under investigation. Perhaps the Minister can explain why we were not aware of that. Secondly, he revealed that the current chief executive had threatened to resign on more than four occasions, not because of the lack of progress on any financial redress for postmasters and postmistresses, but because he said his wages were too low. The chief executive also said that he was proud that he had a hardship fund for workers in the Post Office. Can the Minister clarify whether there has been an approach by anyone on behalf of the current chief executive for a pay rise, and what the response was?

[Kevin Hollinrake]

First, may I correct the record? In response to the Chair of the Business and Trade Committee, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), I said that the fixed sum award was £650,000; it is £600,000.

It would be wrong to disclose an investigation into somebody’s conduct before that investigation had concluded. It would be extraordinary to do that in any work context, be it in the public or private sector. I am happy to have a conversation with the hon. Member for Wansbeck (Ian Lavery) about the hardship fund. If he is talking about the Post Office paying salaries to postmasters, most postmasters are self-employed, not paid a salary directly, and have a number of different streams of income into their business. These are businesses in their own right, of course, but there is a hardship fund for certain postmasters in certain situations.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

I echo the comments about the Minister and his assiduous work on this issue, both as a Back Bencher and now as the Minister. Does he agree that perhaps it is necessary to look at how many people are working on the compensation scheme on the Post Office’s side? I have raised the matter with him before. A lot of it is expert work, but if anything can be done to build the resource, that would be helpful, particularly for my constituent, whom we have discussed before. On disciplinary and grievance procedures, is it not normal that they are private until the point when a decision is made?

[Kevin Hollinrake]

On the last point, my right hon. and learned Friend is absolutely right; he clearly understands these situations very well. They should of course be kept confidential, which is why it was highly unprofessional of Mr Staunton to say what he said yesterday. On my right hon. and learned Friend’s first point—I cannot remember what it was now.

[Sir Oliver Heald]

Resource—getting more lawyers in.

[Kevin Hollinrake]

We are absolutely committed to ensuring that we have the resources available to settle compensation claims quickly. Certainly, a file note that I took away from yesterday’s session was about the number of individuals looking after compensation from Addleshaw Goddard’s end, although it is turning around the offers increasingly quickly. Responses to full claims now happen within 40 days in 85% of cases. There has been an improvement. We are keen to ensure that every part of the process has the resources it needs to pay the compensation fairly and quickly.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Surely what we saw yesterday was a glimpse of senior management in the Post Office who are now completely dysfunctional. As such, it is difficult to see how anyone can have confidence in their administration of the various compensation schemes. Would it not be a sensible first step to restore confidence in that most important national institution—the Post Office—to take all role for them out of the administration of the compensation schemes and appoint an independent commissioner? Nothing starts to get better for the Post Office until the schemes are successfully delivered and wound up.

[Kevin Hollinrake]

I think what we actually heard and saw was a dysfunctional former chair of the Post Office; that is what we saw. Interestingly, to the right hon. Gentleman’s point about compensation schemes, the former chair said at one point during his evidence that he had no concerns about the speed of delivery of the HSS—which was extraordinary, because I have many concerns about it.

I hear loud and clear calls from across the House about the role that the Post Office is playing in compensation schemes. These are sensitive matters, because people in the Post Office are employed to manage and administer the compensation schemes. I hear the point made by the right hon. Member for Orkney and Shetland (Mr Carmichael) loud and clear. We are looking at it, but I reassure him that all three schemes have independence in them: an independent panel in the HSS; an independent panel and a reviewer, Sir Ross Cranston, on the GLO scheme; and the independence on the overturned convictions in Sir Gary Hickinbottom. Both latter people are retired High Court judges, which should give claimants and the right hon. Gentleman, I hope, some confidence that the schemes will operate properly.

[Sir Christopher Chope (Christchurch) (Con)]

My hon. Friend the Minister has referred to Mr Staunton, who it seems had serious character defects. How was he ever appointed in the first place, and who provided the character references and oversaw that appointment process? May we have an inquiry into that?

[Kevin Hollinrake]

Thankfully, not me. I have nothing against Mr Staunton personally. He had a strong track record as the chair of various large organisations, as he said yesterday. I think we would all agree that the Post Office is a specific organisation with specific challenges. Yesterday’s evidence from Ben Tidswell, the senior independent director, was interesting. He felt that Mr Staunton’s behaviour changed in November last year and became far more “erratic”—his word. I do not know the reasons for that specifically, although Mr Tidswell suggested some yesterday. Whatever the reason, Mr Staunton’s recent conduct is not consistent with remaining chair of the Post Office. That is why we decided to act.

[Andy McDonald (Middlesbrough) (Ind)]

I thank the Minister for his work in this area. He has been assiduous in his attention to detail—I cannot say the same of the Secretary of State. Nevertheless, yesterday was unedifying, and we are sick to death of the “He said, she said” business—we are not interested, except that two witnesses yesterday took the oath and spoke to the same issue: as to whether Mr Read had ever tendered his resignation or threatened to. It was totally conflicting evidence from the two people; they both cannot be right, so I suggest that one might have been a little economical with the truth. From Dr Neil Hudgell, though, the message came loud and clear: these schemes are way too “over-engineered” and far too “bureaucratic”, and that has led to the delay in getting the money out of the door. I have to correct the Minister—only 20% of the fund is out of the door as yet. We have to speed it up.

Finally, I ask him to take on board the words of the predecessor Select Committee, the Business, Energy and Industrial Strategy Committee, in February 2022, which said that the best way through this was to remove the Post Office from the system. Now, it may be too late to do that, but my goodness, was not the Committee right to say that? Can we find ways to relegate the role of the Post Office, because that is the only way we will get justice for postmasters? Ultimately, that is what this is about—getting them compensated.

[Kevin Hollinrake]

I totally agree with the hon. Gentleman’s final point, and a number of the points he made. It is fair to say that on the compensation schemes, we could use the old phrase, “If you were going there, you wouldn’t start from here.” I think that Sir Wyn Williams has said that, but the best way now is to say, “When you’re going through hell, keep going.” We have to improve the schemes we have got. The hon. Gentleman made an interesting point about the Post Office, and he will have heard what I said earlier. I think the fixed-sum awards do take the Post Office out of the schemes completely, because no disclosure is required for them.

On tendering resignation—again, I thought it was extraordinary that a chair would disclose confidential and private conversations that he has had with the chief executive. I have to say for the record that Mr Read has never tendered his resignation to me or to the Secretary of State. Others would be better than me to comment on the nature of those conversations, but I do not think that it was right for Mr Staunton to comment at all.

I assure the hon. Gentleman that the Secretary of State has given me 100% support in everything I have done in trying to address these matters. I accept what Neil Hudgell said—I spoke to him afterwards, and we have spoken before about the schemes being over-engineered—and he suggested some ways to try to accelerate compensation. We are of course looking at those to see what the best way is to ensure that they are not over-engineered, but deliver rapid and fair outcomes as quickly as possible.

[Ian Paisley (North Antrim) (DUP)]

My primary interest is in compensation payments being made expeditiously across the entire United Kingdom, and in Northern Ireland in particular, where I have been lobbied directly by a number of the sub-postmasters who have been treated so vilely. After the statement of 10 January, I asked whether the Minister would ensure that no delays would be allowed whatever, and he affirmed from the Dispatch Box that that was exactly the Government’s intention. Will he reaffirm that no delays will be allowed, irrespective of the devolution settlement in Northern Ireland? No devolved Minister or devolved court was involved at that time. Will he reaffirm that the payments will be made, and that our sub-postmasters will not have to wait a day longer than anyone else?

[Kevin Hollinrake]

I will be very pleased to ensure that that happens. I met the Northern Ireland Justice Minister virtually a few days ago to discuss these matters. I know that the Northern Ireland Administration’s preference is for UK-wide legislation; we do not think that is the right approach, but we will continue to work with the Administration to ensure that they can deliver the right legislation or process to make sure that the compensation is paid. Clearly, once convictions are overturned anywhere in the United Kingdom, people enter exactly the same compensation scheme—they can get rapid compensation through the fixed-sum award of £600,000, or go through the full assessment process. We are determined to make the process quicker, easier and fairer. I am happy to work with the hon. Gentleman to ensure that that is the case.

[Dame Nia Griffith (Llanelli) (Lab)]

I thank the Minister for his work on the Horizon scandal, and for answering my letter concerning a constituent. In that answer, he confirmed that former post office clerks and those working for a franchise who lost money, jobs and reputation through the Horizon scandal are not eligible for compensation under the current scheme. Will he look into ways to include them in a compensation scheme?

[Kevin Hollinrake]

I thank the hon. Lady for her question and for representing her constituents so effectively. I am keen to have continued conversation with her. All the schemes that have been established thus far require a contractual relationship between the Post Office and the individual, and I know that was not the case for her constituent. A number of Members of this House have addressed the issue, and we will continue to look at it.

[Kirsten Oswald (East Renfrewshire) (SNP)]

Whether we are talking about my constituent Roger, a former postmaster whose case certainly needs review, constituents in communities such as Clarkston and Neilston, who have experienced the most recent post office closures in East Renfrewshire, or the brilliant postmasters operating locally, none of them deserves this mess. This is turning into a regrettable circus to all looking in from the outside. What assurances can the Minister give me today that that will not be allowed to divert or distract from a genuine focus on the swiftest possible resolution, and on delivering a sustainable future for the Post Office?

[Kevin Hollinrake]

I thank the hon. Lady for making that point and for representing her constituents so well. Yes, absolutely, we understand that this is distracting, or could distract, from work to ensure not just that we make right the wrongs of the past, but that the Post Office has a strong future, as she put it. I totally agree. We think that the Post Office does have a strong future. Revenue streams have been affected by changes in how and where people acquire certain things or access certain services, but the banking framework—we encourage the Post Office to be more ambitious in its negotiations with the banks on the remuneration that flows from the framework to postmasters—and the parcel hubs are an opportunity for the future. We believe that the Post Office has a strong brand and strong future. We are keen to support its efforts to ensure that the future is bright for all postmasters.

[Mr Kevan Jones (North Durham) (Lab)]

I declare my interest as a member of the Horizon advisory board. Welcome back to the Minister. He should bring in his sleeping bag—he is here that often. I was at the five-hour marathon yesterday, and I was totally unconvinced by Henry Staunton’s accusations, and his allegations about delaying compensation. Like the hon. Member for Christchurch (Sir Christopher Chope), I wonder why Mr Staunton was appointed in the first place—to any board, for that matter. However, to come to the point, Mr Staunton did raise the point that the chief executive is under investigation, following an 80-page report. I accept that the Minister cannot talk about that individual—that would be wrong—but he knows that the culture at the Post Office is rotten, and it is important that the cloud be lifted quickly. When the Secretary of State came to the House on 19 February, did she and the Minister know that Nick Read was under investigation? Is it true that the former HR director who wrote that report has left the Post Office with a settlement, and does that settlement include a non-disclosure agreement?

[Kevin Hollinrake]

I am very happy to come to the Dispatch Box any time I am required to, or feel that there is a need to, which, as the right hon. Gentleman says, is quite often at the moment.

I was aware of the investigation relating to Mr Read and Mr Staunton. That was not the reason why the Secretary of State decided to part company with the chair; that was about interfering with the investigation. The right hon. Gentleman asks about the HR director. I do not know about those matters, but I am happy to look into them and come back to him.

[Christine Jardine (Edinburgh West) (LD)]

I am sure that the Minister will agree that everything we are seeing and hearing about the Post Office inquiry is further undermining the confidence of those who were affected by the Horizon scandal. As the Minister says, 1,000 more people have come forward; they have no more confidence than anyone else in the governance of the Post Office. One of them, a constituent of mine, had been with the Post Office for almost 20 years, and was about to be offered redundancy. She was asked to take over a sub-post office for two months to make up the 20 years. During those two months, she became embroiled in the Horizon scandal. She was not charged, because her Post Office managers pleaded on her behalf, but she lost her redundancy, and she is now completely confused about where she stands, and has no faith in the governance to fix the problem. Is the Minister prepared to meet me to discuss that case, so that I can assure my constituent that it is being dealt with?

--- Later in debate ---

[Kevin Hollinrake]

Yes, of course I would be very happy to meet the hon. Lady and her constituent. Given what the hon. Lady has said, the place for her constituent to go is the Horizon shortfall scheme, which will be happy to look at that particular situation. Of the 2,417 people who applied to the original scheme, 100% have had offers and 84% have accepted those offers, so she can be assured that there will be fairness. We are looking to ensure that the scheme is fair and is seen to be fair.

The other schemes are also delivering outcomes more quickly than they were. There were 106 claims in the group litigation order scheme; 80 offers have been accepted, and compensation for overturned convictions is a fixed-sum award of £600,000. The fact that 1,000 people have come forward for compensation since the ITV series indicates that people do have confidence that they will be compensated fairly, but I absolutely understand that we have work to do to ensure that people feel that way across the board.

[Jim Shannon (Strangford) (DUP)]

The Minister has been incredibly honest and forthright in all his answers, and we have every faith in him, given his conduct and all the information he has brought to the Chamber, for which I thank him. As locally elected representatives, we are accountable to our electorates. How will the Minister ensure that those who are paid from Government funds are accountable in the same way? What more can be done to hold those decision-makers to account?

[Kevin Hollinrake]

As ever, I thank the hon. Gentleman for his contribution. On the point about Government funds, I guess that he is referring to executives in the Post Office. Clearly, that is the Government’s responsibility as the single shareholder. We have a representative on the board in Lorna Gratton from UKGI, in whom I have a great deal of confidence. I think it fair to say that my Department and its officials have learned a lot from the process and from what has gone on, and that is right. We should be clear that mistakes have happened, and apologise for the way that they have contributed to the scandal.

I am very keen to ensure that there is continued accountability. We have, at significant expense to the taxpayer, set up the public inquiry, which was called for by Members across the House. It will take evidence in public, so that the public can see what is happening, and will conclude by the end of this year and report next year. We will then have a lot more answers to the hon. Gentleman’s question, as well as accountability not just for Post Office executives in future, but for Post Office executives of previous years.

[Mr Deputy Speaker (Sir Roger Gale)]

That concludes proceedings on the urgent question. I thank the Minister for his now daily appearance, as well as the Opposition Front Bencher, the hon. Member for Bethnal Green and Bow (Rushanara Ali).