Post Office Ltd: Horizon Compensation Funding
Kevin Hollinrake Excerpts(11 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
In October, I announced that the Government intend to provide additional funding to Post Office to meet the costs of participating in the Post Office Horizon IT inquiry and delivering compensation to postmasters. These activities are part of Post Office’s response to the Horizon IT scandal, which arose following the installation of the Horizon software in the late 1990s. I also announced that the Government intend to provide additional funding to help with the development of the replacement for the Horizon IT system and to ensure Horizon is maintained while that replacement is rolled out.
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 subject to referral to the Subsidy Advice Unit. A report for each referral was published by the Subsidy Advice Unit, 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”.
The reports for both the inquiry and compensation delivery subsidy and the IT subsidy can be found at https://www.gov.uk/cma-cases/referral-of-the-proposed-subsidy-to-post-office-limited-by-the-department-for-business-and-trade#final-report
and https://www.gov.uk/cma-cases/referral-of-the-proposed-subsidy-post-office-it-interim-funding-by-the-department-for-business-and-trade respectively.
In October, I committed to confirm final levels of funding to the House at the earliest opportunity. Following the publication of the reports by the Subsidy Advice Unit and the conclusion of the subsequent “cooling off” period, I can now confirm that the Department for Business and Trade has agreed to provide £150 million to Post Office for inquiry and compensation delivery costs and £103 million for IT costs in the 2023-24 and 2024-25 financial years.
[HCWS155]
Statutory Parental Bereavement Leave and Pay
Kevin Hollinrake Excerpts(11 months, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
It is always a pleasure to see you at any time, not least in the Chair, Mr Sharma. I congratulate my hon. Friend the Member for Broxtowe (Darren Henry) on securing today’s debate. I am grateful to him for bringing this important issue to the attention of Parliament and for his ongoing and wholehearted commitment to improving the support available to those experiencing a bereavement. I assure him that the Government are deeply sympathetic to anyone experiencing the loss of a family member or loved one. The death of a child is a truly traumatic experience for any parent, and the effects can be devastating and everlasting.
It is for those reasons that I personally brought the Parental Bereavement (Leave and Pay) Bill to the House in 2018 and was delighted when the entitlement came into force in 2020. It was my pleasure to take up the mantle of my hon. Friend the Member for Colchester (Will Quince), who campaigned on this issue long before me. I am also very grateful for the support I received for that legislation from across the House, not least from the hon. Member for North Ayrshire and Arran (Patricia Gibson). I am not surprised that she challenges me to go further than the legislation has already taken us by extending parental bereavement to close relatives. We have discussed that matter before, and the Government have a slightly different position, but I absolutely commend her for her campaigning on it.
We introduced parental bereavement leave in recognition of the particularly tragic circumstances of losing a child before they have had the opportunity to reach adulthood. We believe it sends an important signal to employers that bereavement in the workplace should be acknowledged, and that we expect them to respond to all such circumstances sensitively and compassionately. We will continue to engage with the hon. Lady on her objective to get her proposal into legislation.
Parental bereavement leave and pay gives eligible parents a statutory right to take two weeks of paid leave to grieve the loss of their child. The entitlement to leave is a day one right, which means that it is available on the first day of someone’s employment. The two weeks can be taken together or separately, to give parents the flexibility to grieve in their own way, without having to worry about work.
In the tragic event of a stillbirth, eligible parents retain other pre-booked parental leave and pay entitlements, such as maternity, paternity and/or shared parental leave and pay. That ensures that parents have the time they need to grieve the loss of their baby. Importantly, it sends a signal to employers that bereavement and other types of personal loss should be acknowledged in the workplace.
As with all entitlements, employers are encouraged to go further whenever they can afford to and to support their employees in unforeseen and unavoidable circumstances. Since its introduction, parental leave and pay has supported thousands of parents during one of the most devastating periods of their lives, and I am proud to have played a role in passing that legislation.
My hon. Friend the Member for Broxtowe spoke eloquently and passionately about the struggles of managing a bereavement and employment while caring for young children, in particular in the case of Aaron, Bernadette and Tim. Of course, the majority of fathers or partners who find themselves in the dreadful situation of the child’s mother having died at or soon after birth are likely to qualify for shared parental and paternity leave, as they will have completed the six months of continuous service with their employer necessary to qualify. Qualifying for shared parental leave gives eligible fathers and partners access to 52 weeks of leave to care for their child. I can say in response to the shadow Minister that we anticipate that covering about 100 cases where the mother has passed away per annum. The vast majority of those will be covered because the father has the relevant level of service—26 weeks—which gives them entitlement to take leave.
We think that the number of people who would be affected as Aaron was is around 10 per annum. Of course, each one of those cases is devastating. It was my pleasure to meet with Aaron almost a year ago, together with my hon. Friend the Member for Broxtowe, with whom I worked on his private Member’s Bill to make leave and pay a day one right. It was good to hear that Aaron’s employer was benevolent and did help. I think that most employers would in those circumstances. However, I quite understand the my hon. Friend’s campaign on this. He made a very compelling case with his point about the combination of being a new parent in a new job and going through extraordinary grief. I congratulate him on securing the support of the hon. Member for Ogmore (Chris Elmore). I am very keen to meet with both of them to talk about how we might help in this case.
I thank my hon. Friend the Member for Stafford (Theo Clarke) for her fine words, yet again—she won “Speech of the Year” at The Spectator awards; a wonderful accolade—but most of all for her campaigning on birth trauma and her historic debate back in October, which was the first of its kind in Parliament’s history. As a father of four children, from my perspective, every birth is traumatic. With the circumstances and cases she describes in her speech, she absolutely makes a compelling case for the work she is doing. She challenges us to describe the support that families receive following the death of a mother in childbirth. We continue to work to address the recommendations set out in the UK Commission on Bereavement’s report. To do this, we have established a cross-Government bereavement working group, with representatives from over 10 Departments, to improve bereavement support and ensure that it is more cohesive across Government. I also thank, as she did, the all-party parliamentary group on baby loss and the all-party parliamentary group for birth trauma.
Many employers go above and beyond their statutory duties and provide paid or unpaid compassionate leave. We would always encourage individuals facing difficult personal circumstances and their employers to have an open discussion to determine what solution best balances the needs of both parties. It is vital that we continue to promote a culture of compassion and understanding to the select few employers that do not respond appropriately to their employees’ requests for time off work. My hon. Friend the Member for Broxtowe challenged us to legislate in this area, and I am very sympathetic to his pleas. Our only nervousness was set out by the hon. Member for Strangford (Jim Shannon). We are always cognisant of the impact of any legislation on businesses. However, it is fair to say in this case, with the small number of people who are affected, that this is something that merits very close consideration, if I can put it that way.
In this Parliament, we have already supported several private Member’s Bills that will offer new entitlements and additional support for employed parents and families. This always has to be balanced against the burden on business and the Exchequer—the costs, as the hon. Member for Ellesmere Port and Neston (Justin Madders) set out. For example, in July 2023, the Employment Relations (Flexible Working) Act 2023 gained Royal Assent. That legislation will give millions of British workers more flexibility on where and when they work. Flexible working arrangements will be particularly useful to individuals trying to re-establish a routine after a difficult personal life event such as bereavement. We have also legislated in many other areas, including carer’s leave, neonatal care, predictable working patterns and the tipping Bill to enhance worker’s rights during this Parliament. As I say, given such a small cohort—sadly, 100 mothers lose their lives in this way—only 10 would be covered by the legislation that my hon. Friend the Member for Broxtowe and the hon. Member for Ogmore are considering. I am happy to meet them to discuss their proposals in more detail.
We will of course continue to support the participation and progression of parents in the labour market without adding additional regulations where we can avoid doing so. I am grateful to my hon. Friend the Member for Broxtowe for organising today’s debate and to all those who contributed to it. I am keen to work with him to see how we can take matters forward.
Draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023
Kevin Hollinrake Excerpts(11 months, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
I beg to move,
That the Committee has considered the draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023.
It is a pleasure to speak with you in the Chair, Mr Efford.
The Government have set out their ambition for the UK to become the best regulated economy in the world, as in the “Smarter regulation to grow the economy” paper published in May 2023. The central regulatory focus of this Government is on how we can improve regulation across the board to reduce burdens, push down the cost of living and drive economic growth.
By ensuring that we have the best regulated economy, we can develop an environment conducive to innovation and business confidence. That will ensure that we support the UK economy to grow and to enable prosperity across society. That is particularly important following Brexit, with significant quantities of out-of-date, unworkable and unnecessary EU laws still on our statute book. On 12 May 2023, the Government launched a consultation on three areas that could benefit from reform and where we could remove unnecessary bureaucracy: record-keeping requirements under the working time regulations; simplifying annual leave and holiday pay calculations in the working time regulations; and consulting and consultation requirements under TUPE, or the Transfer of Undertakings (Protection of Employment) Regulations 1981 and 2006.
The proposals seek not to remove rights—the UK has one of the best workers’ rights records in the world—but instead to remove unnecessary bureaucracy in how those rights operate, allowing business to benefit from the additional freedoms that we have through Brexit. By backing British business, this draft statutory instrument supports one of the five areas outlined by the Prime Minister in his speech on 22 November setting out the Government’s strategy to grow the economy.
The working time regulations are derived from the EU working time directive. They create various entitlements for workers, including minimum rest breaks and maximum working hours, as well as an entitlement to paid annual leave. Those regulations provide important protections to workers, but they can also place disproportionate burdens on business in relation to recording working hours and other administrative requirements. That is why we consulted on removing the effects of the 2019 judgment of the Court of Justice of the European Union, which held that employers must have an objective, reliable and accessible system enabling the duration of the time worked each day by each worker to be measured.
Our proposed regulations make it clear that employers will not be required to keep burdensome and dispro-portionate records of the daily working hours of each worker. Instead, employers will need to keep adequate records and demonstrate compliance with their working time obligations. That clarification could help to save businesses around £1 billion a year without changing workers’ rights.
The Government recognise the importance of consultation with employees and employee representatives on TUPE transfers. However, employers can find certain aspects of the consultation process burdensome. Before a TUPE transfer, the current employer and the new employer need to consult the affected workforce’s existing representatives, or arrange elections for employees to elect new representatives if they are not already in place before the transfer. We want to simplify the process for businesses where worker representatives are not already in place.
Currently, microbusinesses have the flexibility to consult directly with workers rather than hold elections. This draft SI will extend that flexibility to small businesses—those with fewer than 50 employees—undertaking a transfer of any size, and to businesses of all sizes involved in transfers of fewer than 10 employees if no existing employee representatives are in place. That means they will not be required to undertake the time-consuming process of arranging elections for new employee representatives.
The draft regulations also introduce reforms to holiday entitlement and pay. Working patterns have changed significantly over the past decade, and the existing legislation governing holiday pay and entitlement does not fully align with current working practices. These regulations simplify and address concerns about the calculation of holiday entitlement for employers, and make entitlement clearer for all irregular hours and part-year workers. In addition, the reforms could provide significant savings to businesses by reducing the red tape and complexity of calculating holiday pay and entitlement. We have defined irregular hours and part-year workers in these regulations to ensure the terms are clear to employers and the workers to whom some of these reforms apply.
The regulations respond to the Supreme Court judgment in the 2022 case Harpur Trust v. Brazel, which accorded part-year workers a larger holiday entitlement than part-time workers who work the same total number of hours across the year. To address that disparity, the regulations introduce a simplified method to calculate holiday entitlement for irregular hours and part-year workers. Entitlement will be calculated as 12.07% of hours worked in a pay period in the first year of employment and beyond. That accrual method was widely used before the Harpur Trust judgment and better reflects what workers have actually worked in the current leave year. The introduction of that accrual method could save businesses up to £150 million a year over the long term. The regulations also introduce a method to work out how much leave an irregular hours or part-year worker has accrued when they take maternity or family-related leave or sick leave to ensure that those workers are not unfairly disadvantaged when on leave.
We are also legislating to allow the introduction of rolled up holiday pay for irregular hours and part-year workers. Rolled up holiday pay is where an employer includes an additional amount with every payslip to cover a worker’s holiday pay, as opposed to paying holiday pay when a worker takes annual leave. We consulted on introducing rolled up holiday pay for all workers, but after taking into account stakeholder feedback, we decided to introduce it as an additional method of calculating holiday pay for irregular hours and part-year workers only.
Employers do not have to use rolled up holiday pay for those workers if it does not suit their businesses, and can instead continue to use the 52-week reference period to calculate holiday pay. Employers who use rolled up holiday pay will calculate it based on the worker’s total earnings in a pay period. That will avoid the complexity of applying the rolled up holiday calculation to different rates of holiday pay. We consulted on a further reform—the introduction of a single annual leave entitlement with a single rate of pay—but we will not be introducing it as part of this package.
The regulations maintain the two distinct pots of annual leave and the two existing rates of holiday pay so that workers continue to receive four weeks at the normal rate of pay and 1.6 weeks at the basic rate. That is due to feedback received through stakeholder engagement. We will assess the take-up of rolled up holiday pay and consider more fundamental reforms to the rate of holiday pay in the future. We are supporting employers by providing clarity in regulations on which types of payments are included when calculating the normal rate of pay.
In addition to the three reforms mentioned above, this statutory instrument mitigates the risk that the removal of interpretive effects on employment law could lead to a reduction in workers’ rights by restating the following three principles: the right to carry over annual leave where an employee has been unable to take it due to being on maternity or other family-related leave or sick leave; the right to carry over annual leave where the employer has failed to inform the worker of their right to paid annual leave or has not enabled them to take it; and the rate of pay for annual leave accrued under regulation 13 of the working time regulations.
The SI also revokes the European Co-operative Society (Involvement of Employees) Regulations 2006 and the Working Time (Coronavirus) (Amendment) Regulations 2020. The main European co-operative society regulations were repealed in 2021, and the involvement of employees regulations therefore no longer have any effect in practice. The covid regulations were introduced as temporary legislation intended to prevent workers from losing annual leave entitlement if they are unable to take it due to the effects of covid. Therefore, those regulations are no longer needed.
The scope of the SI is limited to Great Britain other than the revocation of the European Co-operative Society (Involvement of Employees) Regulations 2006, which extends to Northern Ireland. Employment law in Northern Ireland is a transferred matter. We are confident that the changes comply with our international legal obligations, including those in the EU-UK trade and co-operation agreement.
Under this Government, we have seen employment reach near-record highs. The number of payroll employees for September 2023 was 30.2 million—370,000 higher than this time last year and 1.2 million higher than before the pandemic. Through Brexit, we regained the ability to regulate autonomously, and we are using the new freedoms to ensure that our regulations are tailored to the needs of the UK economy.
In addition to providing cost and admin savings for businesses, the reforms aim to provide clarity on complex holiday pay legislation so that it is simpler for employers to follow and comply with. Approximately 1.5 million workers will be affected by the holiday pay reforms. By simplifying the legislation, workers will receive the holiday entitlement and holiday pay to which they are entitled. The restatement of the three principles that I mentioned will retain existing rights. I commend the regulations to the Committee.
Kevin Hollinrake
I thank hon. Members for their valuable contributions.
We have been clear throughout the Brexit process that we have no intention of abandoning our strong record on workers’ rights, having raised domestic standards over recent years to make them some of the highest in the world. The shadow minister always talks about the impact on workers—today, the impact on irregular and part-year workers. In our debates last week and today, I noticed that Opposition Members never once mentioned the rights of businesses or protections for businesses. It is always workers. Does the hon. Member for Ellesmere Port and Neston not understand that there is a balance to be struck between the rights of workers and the rights of businesses? I never hear Members of the new “party of business” taking the needs of business into account. Why does that never feature in any of his remarks?
Justin Madders
We do support business, but every time this Government bring forward legislation, it is about attacking workers. Is it not the same today? Is not taking £250 million out of workers’ pockets an attack on workers?
Kevin Hollinrake
I do not accept that. Again, that speaks to the fact that the only organisations quoted in last week’s debate and today’s are the unions, such as the BMA. But I think what the if I can deal with his point, if I may, I think the
On the hon. Gentleman’s point about part-year workers, there is no doubt that there is a £150 million saving for businesses, but he also talked about parity, and this is about parity. It is about two workers working in slightly different patterns but working the same hours every year having the equal amounts of holiday pay. That is what this is. Many people would consider the judgment that led to a difference to be unfair, a perverse outcome. What we’re legislating for here is fairness across the board, whether people work a part-year or a full year.
Stella Creasy
The Minister is being a little bit uncharitable, given that a number of us have raised the impact on employers of the complexity of the scheme. What we recognise is that not every employer is a good employer, so both employees and employers are at risk from bad employment practices. It does not have to be a battle. I am troubled by an employment Minister who seems to think we have to pick a side. Some of us want best behaviour on both sides.
Kevin Hollinrake
It is quite the opposite. We do not pick a side; we try to help both sides and to achieve a balance. That is where we are. I never hear about that balance between both sides from the Opposition; all I hear is about the impact on workers and on unions. In the debate last week, not once did I hear once about the 4 million working days lost to strikes, the 2 million operations cancelled, the hospital appointments cancelled, or the £3.5 billion impact on the hospitality sector.
Justin Madders
Was the Minister not listening when I when I talked about how having a different holiday pay calculation rate for the four weeks and the extra 1.6 was actually going to create more burden on businesses?
Kevin Hollinrake
The hon. Gentleman raises an interesting point. He is talking about a single pot of annual leave. We believe in maintaining two pots. Presumably he is talking about the four weeks at normal pay currently and 1.6 weeks at basic pay, and about raising the 1.6 weeks of basic pay to the level of normal pay, which actually costs employers more. How much more is he suggesting employers should pay to regularise that position?
Justin Madders
Can the Minister give us a figure for how much more this would be?
Kevin Hollinrake
It is incumbent on the hon. Gentleman to do that. We are maintaining the status quo. He wants to make that change. What is the figure for what he describes as a simpler position? Does he not agree that that would be a cost on business? It is simple as that, yet he throws that out as if it were no matter for employers, who would have to deal with the extra cost.
Justin Madders
The Minister pointed out that, apparently, this will save businesses £1.2 billion. I don’t know if that is more or less than the change would cost, but I would have thought that it is something that could have been looked at, yet it does not appear to have been considered at all.
Kevin Hollinrake
I think we are back to the same place. As the hon. Gentleman knows, the £1.2 billion is largely the administrative costs of maintaining a recording position. What he wants to move to would cost a cost employers £1 billion. That is an interesting point.
Raising concerns that I think are scaremongering, The hon. Gentleman said that in future employers would be able to keep records “if they like”. That is not the case, and he knows that. Why would he say that kind of thing? Employers are required to make and keep adequate records. He knows that from the legislation. He also raised some concerns about change expressed by one of the unions, but it is not a change, because these measures have not yet been implemented in the UK economy. Again, he raises those concerns that somehow this is detrimental to health workers, but that is not the case. Does he accept that?
In terms of the points on rolled up holiday pay raised by the hon. Gentleman and the hon. Member for Walthamstow, the Government believe the existing safeguards are proportionate in addressing current concerns about impacts on workers from rolled up holiday pay. Employers are already required to provide an opportunity for workers to take leave, and we have heard through our stakeholder engagement that this is taking place. We also have safeguards in relation to the 48-hour working week, where a worker cannot work more than 48 hours a week unless they choose to opt out.
In terms of consultations, employers will have to tell their workers if they intend to start using rolled up holiday pay, and this payment will have to be clearly marked on the worker’s payslip. If employers need to make changes to terms and conditions, they must seek to reach an agreement with their workers or their representatives.
I think I have covered most of the points raised—I am sure I will be told if I have not. Our standards and our workers’ rights were never dependent on membership of the EU—indeed, the UK provides stronger protections for workers than are required by EU law. For example, we have one of the highest minimum wages in Europe, and on 21 November, the Government announced that we will increase the national living wage for workers aged 21 and over by 9.8% to £11.44 an hour. That will certainly help the hon. Lady’s constituents, some of whom may be low paid, as she said.
Our regulatory system is recognised globally, but we want to raise the bar even higher and deliver on our ambition to become the best regulated economy in the world, as we embrace our newfound freedoms outside the EU. By doing so, entrepreneurial businesses will have more opportunity to innovate, experiment and create jobs, and importantly, workers’ rights will be protected. This will cement our position as a world-class place to work and to grow a business.
Stella Creasy
I asked a specific question about the impact of rolled up holiday pay on women who take maternity leave. The Minister confirmed in his statement that the protection that holiday pay should not be calculated during maternity leave was there, but he did not clarify what this would mean if a woman came back to a role, for example, and was then told she was on rolled up holiday pay.
Kevin Hollinrake
I am happy to address that point, too. The hon. Lady talked about people being notified about their leave entitlement, and I did refer to that in my response. Indeed, employers are required to provide an opportunity for workers to take leave in any circumstance, and we have heard through our stakeholder engagement this is taking place. If there are specific points she wants to raise, I am happy to respond in writing.
Stella Creasy
A woman on maternity leave does not accrue holiday pay because she is on maternity leave, so her holiday pay, if it is then being transferred into rolled up pay, could mean that she is at a disadvantage because she was on maternity leave; there is nothing to calculate her entitlement. I am sure that the Minister thought about this. I am sure that he thought about the protections for women on maternity leave. What would a woman’s rights be if she was then moved to rolled up holiday pay?
Kevin Hollinrake
I will not clarify the position now, but I am happy to write to the hon. Lady. I commend the regulations to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023.
Oral Answers to Questions
Kevin Hollinrake Excerpts(12 months ago)
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Deidre Brock (Edinburgh North and Leith) (SNP)
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
We remain committed to reform. Significant reforms have already been delivered to the Financial Reporting Council to strengthen its capabilities and drive up audit quality.
Deidre Brock
The Institute of Chartered Accountants of Scotland has branded the Government’s decision to leave the audit and governance reform Bill out of the King’s Speech as a lost opportunity and a huge blow to the interests of UK businesses and the public. The Government have been promising the Bill since 2021. Will they reconsider that backward step and make the UK’s corporate regulatory framework fit for purpose in the 21st century?
Kevin Hollinrake
Time and again, Opposition parties seek to wrap businesses up in red tape, whereas Conservatives are keen to cut red tape. Consultation with businesses revealed concerns about imposing additional reporting requirements, while the Government are looking to simplify and streamline existing requirements.
Mark Pawsey (Rugby) (Con)
This week, the Business and Trade Committee took evidence from Wilko. Business collapses such as that of Wilko, Carillion, Thomas Cook and Patisserie Valerie have been a consequence of failures in the audit process, costing people their jobs and hurting investors and suppliers. Audit reform was recommended by the then Business, Energy and Industrial Strategy Committee in 2019, and the Government offered to bring forward a draft Bill. I know the Minister wants to reduce red tape, but does he agree that some form of action is now pretty urgent?
Kevin Hollinrake
I was delighted to give the Select Committee evidence on Wilko. The administration report on Wilko is continuing and clearly we need to see the findings, but investigations so far have not shown that director misconduct played an instrumental part in Wilko’s failure, although I think it is clear to all concerned that there were failures in management that led to the company’s demise.
Richard Thomson (Gordon) (SNP)
How strange the change from minor to major in that response. Financial transparency and accountability are essential components of economic stability. For three years now, the Government have been promising legislation and improved checks on company finances, but they have repeatedly failed to deliver. How can the Minister justify leaving the audit and governance Bill out of the King’s Speech, when it is supported by businesses, regulators and auditors alike?
Kevin Hollinrake
We work very closely with the Financial Reporting Council. No one can deny that the FRC has changed its approach completely and is now a much more effective regulator. Sir Jon Thompson did a fantastic job when he was there, and the current chief executive, Richard Moriarty, and chair, Jan du Plessis, are following his work. We are confident that the FRC can make sure that the UK’s corporate regime works effectively, without tying businesses up in red tape.
Dame Nia Griffith (Llanelli) (Lab)
Mick Whitley (Birkenhead) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
The Government consulted on a draft statutory code of practice on fire and rehire earlier this year. The Government response and the final version of the code will be published in spring next year. The code sets out employers’ responsibilities when seeking to change contractual terms and conditions of employment, and is designed to ensure that dismissal and re-engagement is used only as the last resort.
Dame Nia Griffith
The very fact that only last week P&O Cruises felt able to say it would impose new contractual terms on workers through fire and rehire tactics shows that some employers still feel that they can use these tactics with impunity, in spite of the Government’s promise to clamp down on them. I thank the Minister for his answer, but is there any way he could bring in the legislation more urgently, so that we can protect our workers properly?
Kevin Hollinrake
I agree with the sentiment behind the hon. Lady’s question in terms of bringing legislation forward as quickly as possible. Of course, we have to get this right. I have to say that P&O was not a fire and rehire situation; it was a fire-only situation, which was strongly condemned by this Government and by many other stakeholders, and a civil investigation is ongoing into the matters surrounding that case. But yes, the hon. Lady is right, and we are keen to get the new statutory code of practice in place as soon as possible. We expect that to be in spring next year, and once it is in force, the employment tribunal can increase employees’ compensation by up to 25% when an employer fails unreasonably to comply with the code.
Mick Whitley
Last week, concerns were raised that the Carnival group was making provision to fire and rehire hundreds of staff working on P&O Cruises and Cunard Line, reviving memories of last year, when P&O Ferries sacked over 800 of its employees and replaced them with agency labour, while the Government sat back and let it happen. Does the Minister agree that the only way to provide workers with the security they deserve is by legislating to outlaw fire and rehire tactics once and for all? If not, it is time the Government came clean with the British public and admitted that they will always side with bad bosses.
Kevin Hollinrake
That is not the case at all. We take these matters very seriously, but we do not think that completely banning fire and rehire is the right thing to do because there are some situations in which companies need to restructure quickly. We think that employees’ proper consultation rights should be observed. Where they are not observed and where an employer does not follow the statutory code of practice, employment tribunals can impose a significant uplift on redundancy payments. We think that is the best way to deal with this, by striking a balance between companies and their workers.
Justin Madders (Ellesmere Port and Neston) (Lab)
Fire and rehire is rife in this country. Research published by the Chartered Institute of Personnel and Development found that, between March 2020 and July 2021, 43,000 employers changed their employees’ contracts through fire and rehire techniques. The Government promised in March 2022 that they would take action following the P&O scandal, and we now learn that it will be a full two years since that time before anything actually changes. Given the propensity for using fire and rehire tactics, can the Minister tell us how many employees he estimates will have had their contract changed through fire and rehire in that two-year period?
Kevin Hollinrake
I do not have that number to hand. We want to strike a balance between employers and their workforces. We condemn what P&O did. We need to bring in new measures on fire and rehire, and we have committed to do that. A consultation is clearly needed to make sure those provisions are fair on both businesses and workers. That is what we are doing right now, and we intend to bring those provisions before the House next spring.
Alistair Strathern (Mid Bedfordshire) (Lab)
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
In addition to small business rate relief, under which businesses with a rateable value of less than £12,000 pay no business rates whatsoever, in his autumn statement the Chancellor announced a further business rate support package, worth £4.3 billion over the next five years, to support small businesses and the high street.
Alistair Strathern
My constituents in Flitwick have been dismayed over the past few years as their high street has been gradually hollowed out, losing much-loved businesses and, recently, both their post office and banking facilities. Sadly, that is far too familiar for people in towns and villages across my constituency, where businesses are weighed down by high cost pressures and a business rate system that no longer seems fit for purpose or fair. When will the Government commit to bringing forward the comprehensive business rates reform that my businesses are crying out for, so that we can get back to revitalised, much-loved high streets?
Kevin Hollinrake
I thank the hon. Gentleman for his question and welcome him to his place in the House.
Of course, we are very concerned about the high street. The pressures on the high street are largely caused by changing consumer habits, but the Government have stepped in to ease pressures, such as through the £20 billion energy bill support scheme and the £17 billion business rate package.
The hon. Gentleman talks about completely scrapping the current business rate system, which Labour has committed to do, but it is incumbent on Labour to set out how it will replace the £25 billion that business rates currently add to the Exchequer. What is the solution? It is not right for him or others simply to say they will scrap that £25 billion without setting out how they will replace it.
Dr Huq
The vanishing of Debenhams, Wilko and Paperchase has left huge holes in our town centres— I have lost a Wilko in both Ealing and Acton. Analysis shows that the incentivisation of out-of-town retail is the culprit. Labour has a five-point plan to revive our high streets, putting communities first. What are the Government doing about all this?
Kevin Hollinrake
I do not accept that, although out- of-town shopping can put pressure on the high street. Local authorities have to be very careful when they give planning consent for out-of-town shopping centres that could put pressure on the high street. That is clearly an important part of the planning process, but it is not the responsibility of central Government, of course. I would be interested to see that five-point plan, but if it includes the scrapping of business rates, which raise £25 billion, I ask the Labour Front Bench team once again—I have yet to receive an answer—where is that money coming from?
Alec Shelbrooke (Elmet and Rothwell) (Con)
Labour-run Leeds City Council has decided that it wants to bring parking charges to my market town of Wetherby—it currently has no parking charges. Does my hon. Friend agree that the investments we are making are all very well, but if local authorities make it harder for shoppers by increasing their costs, that will choke off the high street rather than help it?
Kevin Hollinrake
I thank my right hon. Friend for his question and he is absolutely right to say that some local authorities see parking charges as potential revenue raisers, but this is in effect a tax on business. Local authorities can, of course, make charges where appropriate, but they should only cover the cost of maintaining those car parks; they should not be a punitive tax on businesses.
Sir Desmond Swayne (New Forest West) (Con)
There are streets in the west end of this city, important to our economy, that would certainly benefit from the ability of tourists to reclaim VAT, aren’t there?
Kevin Hollinrake
My right hon. Friend raises an important point that this Department has looked at carefully. We are concerned about the impact of the withdrawal of that tax concession on businesses, not just for these businesses themselves, but for the other businesses that rely on foreign visitors—I am talking about hoteliers, restauranteurs and so on. We are keen to look at this matter. The Chancellor committed in his autumn statement to review the evidence to see what impact this was having. We will look at that with great interest and make our views known strongly to the Exchequer.
Ashley Dalton (West Lancashire) (Lab)
John Penrose (Weston-super-Mare) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
The CMA has a primary statutory duty to promote competition both inside and outside the UK for the benefit of consumers, which provides the CMA with a clear, strong focus on delivering for consumers. In our recent steer to the CMA, we did point out how very important it is that it focuses also on economic growth.
John Penrose
Regulators such as the CMA have huge powers, so Parliament must give clear instructions about how those powers should and should not be used. Does the Minister agree that the CMA’s instruction is a model of the kind of clear and strong legal duty that leaves no doubt in regulators’ minds about the job that Parliament has asked them to do. Will he join me in pushing for equally clear and focused duties for other economic regulators where, sadly, the same cannot currently be said?
Kevin Hollinrake
I thank my hon. Friend for his question and for his very important work in this area. I know that reducing the regulatory burden is a cause that is very close to his heart, and to the hearts of those in the Chamber today who supported his amendment in the recent Digital Markets, Competition and Consumers Bill. That view is also shared by myself and by the Secretary of State. We are very keen to make sure that, as well as ensuring that sectors are well regulated, our economic regulators focus on competition and economic growth.
Andrew Bridgen (North West Leicestershire) (Reclaim)
I disagree. The Competition and Markets Authority is not only the dog that does not bark, but the dog that does not bite. We see multinational corporations and investment funds of such a size that they have more power than a sovereign Government. When will the Government give the CMA the powers and authority needed to tackle the corporate monopolies and cartels that have so much sway over our lives?
Kevin Hollinrake
The hon. Member raises an important matter. That is why the Government are legislating in this space, through the Digital Markets, Competition and Consumers Bill, which gives the CMA huge new powers, particularly over some of our largest online platforms—platforms that have what we describe as strategic market status. This is world-leading legislation that will tackle many of the examples of detriment that he will be aware of and that he raises in his question today.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
The Government protect the post office branch network by setting access criteria and minimum service levels to be provided by branches across the country. More post offices have opened this year than have closed. The network is as large today as it has been for five years, with around 11,700 branches open, above the 11,500 target that we set for the Post Office.
Florence Eshalomi
The Minister mentioned that more post offices are opening. Actually, they are closing. The Clapham Common post office in my Vauxhall constituency has been earmarked for closure and there are no current plans to replace it. I am fighting this closure, along with my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) and local ward councillors in the Communications Workers Union. This is a pattern that we are seeing across the country. It has been identified that 260 postal shopfronts have closed across the country in the past 10 years. With those closures, we are seeing elderly and vulnerable people—people who need their post offices on the high street—having to travel further. Will the Minister tell me what more he and the Government are doing to protect these vital services?
Kevin Hollinrake
The hon. Member is absolutely right to raise this issue. The Post Office has launched a public consultation regarding the Clapham Common post office. The Post Office maintains that locals will continue to have good access to services. There is a post office within a mile of the Clapham Road branch, and three further branches within two miles. Nevertheless, the Government support the post office network with a significant amount of financial support—£2.5 billion over the past 10 years—so we do continue to support post offices. We know how important they are to constituents and other colleagues in this House. I am very happy to meet her to discuss this particular case.
John McDonnell (Hayes and Harlington) (Lab)
John Penrose (Weston-super-Mare) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
I am not known for my coyness. My hon. Friend has done very important work in this space, and we share his ambition: I chair the Smart Data Council, and we are planning to open up databases right across our economy to allow for more competition in the worlds of energy, telecoms, and buying and selling houses. He has been a great champion of all those measures. I am very keen to bring forward the roadmap that my hon. Friend has referred to, hopefully as early as January next year.
Tonia Antoniazzi (Gower) (Lab)
Florence Eshalomi (Vauxhall) (Lab/Co-op)
Kevin Hollinrake
The hon. Lady raises an important point. That is something we are looking at; we have been looking at it for some time, and are keen to bring forward the results of our deliberations very shortly.
Mr Laurence Robertson (Tewkesbury) (Con)
May I ask the Trade Minister, whom I welcome back to his position, what efforts the Government are making to raise awareness of the developing countries trading scheme, particularly among African countries? What encouragement is he giving those countries to take advantage of that scheme, which would benefit them and us?
Liam Byrne (Birmingham, Hodge Hill) (Lab)
On Tuesday, we finally had answers from Lisa Wilkinson about the mistakes that led to the collapse of that much-loved firm, but Ms Wilkinson was not able to answer why 70% of the profits in the last four years were paid out in dividends to family trusts while the deficit in the pension fund amounted to now £50 million. Will the Secretary of State ensure that regulators explore every option to claw back those dividends so that Wilko pensioners are not short-changed?
Kevin Hollinrake
The right hon. Member raises a very important point. He has looked at this matter very carefully, including on the Business and Trade Committee, and I thank him for his work. I was pleased to give evidence to his Committee on Tuesday. Clearly, the Insolvency Service is looking at this. It is looking at the directors’ conduct report from PricewaterhouseCoopers, the administrator, which it needs to look at very carefully. It is clear from that report so far that there is no evidence of director misconduct, but further work is ongoing. The Insolvency Service is due to meet the administrator, PwC, in January, and we will look at the situation as it unfolds.
Simon Fell (Barrow and Furness) (Con)
One of the most effective ways we could strengthen both the public sector and the private sector is the creation of an office of the whistleblower, as long championed by my hon. Friend the Member for Cheadle (Mary Robinson). That would strengthen corporate governance, empower those who see wrongdoing to come forward and protect them from intimidation, and strengthen the UK as a place to do business. Given that this week is Whistleblowing Awareness Week, could I encourage Ministers to bring forward proposals to support this important initiative?
Kevin Hollinrake
I thank my hon. Friend for his question and his work in this area, in which he has great expertise. I met my hon. Friend the Member for Cheadle (Mary Robinson) yesterday to discuss this very matter. She has set out some key proposals in this area. We are currently undertaking a review of whistleblowing, and we hope to report to the House very shortly.
Draft Recognition of Professional Qualifications and Implementation of International Recognition Agreements (Amendment) Regulations 2023
Kevin Hollinrake Excerpts(12 months ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
I beg to move,
That the Committee has considered the draft Recognition of Professional Qualifications and Implementation of International Recognition Agreements (Amendment) Regulations 2023.
It is a pleasure to serve with you in the Chair, Sir Mark. This statutory instrument, which was laid before the House on 17 October 2023, will implement the recognition of professional qualifications provisions contained in the UK’s free trade agreement with Norway, Iceland and Liechtenstein—the European economic area European Free Trade Association states.
The regulations place a duty on UK regulators to recognise comparable professional qualifications obtained in Norway, Iceland and Liechtenstein. They provide certainty for professionals with qualifications from those countries who want to be recognised by UK regulators and work in the UK. UK professionals also benefit from reduced barriers when having their qualifications recognised in Norway, Iceland and Liechtenstein. This is good for business and good for jobs.
First, I will give the background. The UK signed a free trade agreement with Norway, Iceland and Liechtenstein in July 2021. Chapter 12 of the agreement outlines a comprehensive system for the recognition of professional qualifications between the parties. Under the agreement, UK regulators are required to recognise comparable professional qualifications obtained in Norway, Iceland and Liechtenstein, and regulators in Norway, Iceland and Liechtenstein are required to recognise comparable professional qualifications obtained in the UK. The UK must meet the terms of the agreement by 1 December 2023.
When negotiating the agreement, the Government sought to strike a balance between providing continuity with the previous EU-derived arrangements and minimising the burden on regulators. These provisions, on recognition of professional qualifications, are important for boosting trade in professional services and for supporting professionals to enter the UK labour market.
The regulations will implement the terms of the agreement into domestic law, and place a duty on UK regulators to recognise comparable professional qualifications obtained in Norway, Iceland and Liechtenstein. To do this, the Government are using powers contained in section 3 of the Professional Qualifications Act 2022, and this is the first use of those powers. Enshrining the system in legislation is necessary to ensure that the UK fulfils its obligations under international law. Without the regulations, some regulators will not have the necessary legal powers to meet the requirements of the agreement.
The regulations will come into force at the same time that the EU-derived system for recognition of professional qualifications ends. Separate commencement regulations were recently made to revoke the previous system, and those come into effect on 1 December. That will ensure clarity and a smooth transition from the old system to the new for regulators and professionals.
Turning to the specifics of the regulations, they place a duty on all regulators of professions across the UK to recognise comparable professional qualifications obtained in Norway, Iceland and Liechtenstein. They also give regulators the powers to recognise those qualifications. Regulators will be required to treat qualifications from Norway, Iceland and Liechtenstein in accordance with the system set out in the regulations.
That system does four things: it requires regulators to recognise comparable professional qualifications; it enables regulators to refuse to recognise comparable professional qualifications, where certain conditions are met; it prescribes compensatory measures that regulators can require a professional to take in certain circumstances; and, finally, it prescribes a procedure for applications to obtain recognition. Taken together, that means that professionals benefiting from the agreement will have a clear, predictable and timely route to practise a profession in the UK.
I should also note that the regulations contain amendments to UK and devolved legislation. Those tidy up the UK statute book by removing references to related EU-derived legislation. I should inform the House that after the regulations were laid on 17 October, a correction slip was issued to address a minor formatting issue in regulation 3(1): the definition of “medical regulator” started at paragraph (d) instead of (a). That has been corrected and the corrections have been incorporated into the HTML version on legislation.gov.uk.
Regardless of those requirements, it remains the responsibility of individual regulators to set standards for their professions and decide who meets the standards. I want to assure the Committee that the Government are continuing to protect regulators’ autonomy, as prescribed by the Professional Qualifications Act. Regulators remain the experts for their professions under the regulations.
In January 2023, the former Department for Business, Energy and Industrial Strategy ran a targeted consultation with regulators covered by the agreement, fulfilling the requirements under the Professional Qualifications Act. My Department sought regulators’ views on the implementation approach and draft regulations. Respondents were generally supportive. My officials engage extensively with regulators on their feedback. Some regulators indicated that their existing sectoral legislation was insufficient to enable them to comply with the agreement. We have therefore included amendments to sectoral legislation in the regulations for a small number of professions.
This is a UK-wide SI. The Government are using concurrent powers in the Professional Qualifications Act to implement the agreement in areas of devolved competence. This approach has been taken after careful consideration and extensive engagement with the devolved Governments over the past year.
It is necessary for the regulations to cover all of the UK for two reasons. First, all regulators across the UK must be covered by legislation for the UK to be compliant with the agreement. Secondly, UK-wide legislation ensures that all regulators have the necessary legal powers to put the new system in place. That approach means that the experience of professionals with qualifications from Norway, Iceland and Liechtenstein seeking recognition in the UK will be predictable and consistent across the four nations. Importantly, it also means that those professionals will have legal recourse if a regulator fails to comply with the agreement.
In June 2023, the Department for Business and Trade ran a consultation with the devolved Governments. The consultation sought views on the implementation approach and regulations. We published the report on the consultation on 13 October 2023, as required by the Professional Qualifications Act. Amendments submitted by the devolved Governments were incorporated into the regulations. In their responses, the Scottish and Welsh Governments opposed the UK Government exercising the concurrent powers in the Professional Qualifications Act without their consent. Although our preferred approach has always been to secure the agreement of the devolved Governments, we decided to proceed without their full agreement to the instrument.
When the UK’s free trade agreement with Norway, Iceland and Liechtenstein was signed in 2021, it was clear that it contained provisions that would provide legal certainty and continued market access for professionals. The regulations bring into force the recognition of professional qualification systems contained within this agreement, meeting our obligations under international law. I commend the draft regulations to the House.
Kevin Hollinrake
I thank hon. Members for their remarks. Several points have been made, and I will try to answer them to the best of my ability. As I set out, the instrument implements the provisions of the UK’s free trade agreement with Norway, Iceland and Liechtenstein relating to the recognition of professional qualifications.
On the shadow Minister’s points, it is clearly up to employers to decide where their skills gaps are, and the provisions of the agreement can be used to fill those positions. Certainly, she can check the list of professions covered in the agreement on gov.uk. My hon. Friend the Member for Gloucester is right that the regulations relate to a range of professionals—they are not just limited to the NHS, education or anything else—but, as I say, it is up to employers to determine their skills needs and how they fill those gaps. Our points-based immigration system will be unaffected by these provisions.
On costs, as the hon. Member for Croydon Central is aware, regulators already have a requirement to recognise professional qualifications from the EU, so there should not be any further cost burdens. According to the work we have undertaken, the costs will be minimal. We did a de minimis impact assessment, and it showed no significant impact on business or public bodies.
I apologise to my right hon. Friend the Member for Hereford and South Herefordshire. F-gas stands for fluorinated gas. He is quite right that we should avoid abbreviations wherever possible to make the documents we put in front of the Committee as accessible as possible.
The UK-wide application of this instrument will ensure that the UK is fully compliant with its international obligations in the free trade agreement. It will also provide consistency across the statute book and clarity for professionals from Norway, Iceland and Liechtenstein wanting to work in the UK, and vice versa. I once again thank Members for their contributions, and I commend the regulations to the House.
Question put and agreed to.
Post Office Services: Edinburgh West
Kevin Hollinrake Excerpts(1 year ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
It is a pleasure to serve under your chairmanship, Madam Deputy Speaker. I congratulate the hon. Member for Edinburgh West (Christine Jardine) on securing this debate. She is right to say how highly valued post offices are to our communities, and to speak up for them in this debate. I promise her that I fully support her perspective, representing a rural constituency myself.
The network of roughly 11,500 branches around the UK that the hon. Member refers to is the largest retail network in the country. As she points out, a recent London Economics report pointed out how post offices not only have economic value in terms of the use of the post office itself—she referred to a gentleman with an envelope looking for a post office for a stamp—but benefit other local shops, cafés and other businesses on our high streets. The knock-on effect adds up to around £3.1 billion a year, according to that report, so we are fully aware of the importance of post offices to communities and to the economy.
I am very keen, and I have been since I took over as Minister for postal affairs about a year ago, among other duties relating to my brief, to challenge the Post Office to make sure that it is doing the right thing by postmasters. The hon. Lady quite rightly points to the level of remuneration that postmasters get. We have to get that right to make the whole network sustainable. I gently point out to her that the Post Office is a commercial business, so it is not something that I direct on a day-to-day basis, but I am keen to take forward challenges on behalf of Members on both sides of the House.
The hon. Lady is aware of the network criteria that 99% of the population must live within three miles of their nearest branch and that—this is relevant to her constituency—95% of the total urban population must live within one mile of their nearest outlet. The network actually is not in decline—more post offices opened than closed over the course of the past year—but we see fluctuations, and it is regrettable that Edinburgh West has seen closures in recent months. I know that is very disappointing for her and her constituents; we know how important the post office is for those communities.
Of course many postmasters are running franchise businesses in their own right, and many of the challenges that postmasters face are faced by many high street businesses. Consumer habits are changing the dynamic and the viability of some postmasters’ businesses, and we need to find ways to make sure that they can run viable businesses that pay them fair remuneration for their work.
The hon. Lady and other hon. Members mentioned relationships such as that with the DVLA. That has been extended until the end of March next year. We want to see a longer-term deal than that, but that is a negotiation between relevant Government agencies and Post Office Ltd.
It is the case that consumer habits are driving down remuneration, and I do not think it is for us to dictate to our citizens how they should access services. Increasingly—I am sure the hon. Lady and other Members have done this—we access services such as passport or driving licence renewal online. That is much more convenient for many people, and it is driving down remuneration significantly. Only a few years ago, some of those Government services were contributing about £500 million annually to the post office network. That is down to a few tens of millions of pounds now, again because of consumer habits, but we are keen to try to make sure that there are other opportunities for postmasters.
Jim Shannon
The hon. Member for Edinburgh West (Christine Jardine) referred to elderly people and those who are isolated in the community and do not have access to online services. Those are the people who tell me they need their post office. There are many of them. I think the Minister would probably agree that there is a duty on the Government to try to encourage the renewal of those contracts come next March, and to ensure that the people we represent are looked after.
Kevin Hollinrake
The hon. Gentleman is absolutely right. I say that both as a Member of Parliament serving a rural area and as postal affairs Minister. We want to make sure that every citizen of this entire nation is served properly. Post offices do an important job in that. We need to make sure that post offices are there, not just due to Government support, but because people use them. There are some things that we are working hard on to try to make sure that the level of remuneration, which lies at the heart of this debate, is improved.
As the hon. Member for Edinburgh West is aware, Duart Crescent and Blackhall post offices have both unfortunately closed in recent months, due to their respective postmasters choosing to resign; they were not closed by the Post Office. The Post Office is advertising those opportunities to local retailers to try to reinstate services.
Christine Jardine
On the Minister’s point about Duart Crescent, yes, the postmaster resigned, but it is proving impossible to get a replacement there and in Blackhall, because the remuneration does not encourage them. Perhaps he will bear in mind another important point: we are all buying things online, and consumers are driving that change, but Royal Mail delivers a lot of them and we often go to the post office to return or collect them.
Kevin Hollinrake
The hon. Lady makes an important point, and I will come to those comments shortly. Remuneration has to be part of the solution.
Barnton post office and Davidson’s Mains post office are both under a mile away respectively from the previous outlets at Duart Crescent and Blackhall, so there are post office services, and I understand that there are public transport routes to those services, although I have not been myself. The Government understand the disruption that the two recent closures will no doubt have caused. In October, Broomhall Drive post office opened, following a local consultation exercise in line with Post Office’s principles of community engagement, after the temporary closure of the St John’s Road post office.
Let me turn to future opportunities. Post office banking services are really important—again, they are important to remuneration—and there have been some issues with deposit limits. The Economic Secretary to the Treasury and I have applied a certain amount of pressure to banks and UK Finance to ensure that that situation is resolved, and it has improved to an extent, which is good news. We have also legislated, through the Financial Services and Markets Act 2023, for access to cash, which is really important. The Financial Conduct Authority is required to ensure that people have access to cash.
Christine Jardine
I thank the Minister for giving way again. Does he agree that, when the contract is up shortly, a longer contract, to ensure stability for post offices with the banks, and the creation of more hubs that involve post offices, will be essential?
Kevin Hollinrake
Absolutely. This is a real opportunity for the network, and not just for a longer-term contract for more stability. It has the banking framework, which forms its relationship with the banks. The banks have made around £2.5 billion of cost savings through the closure of branches. We think that a greater share of those savings should be provided to the post office network to improve remuneration and invest in productivity tools for postmasters, such as cash-counting machines, so that the job of running a post office is more lucrative. We see that as a big opportunity.
In the banking framework, we have been clear with UK Finance and Post Office that they should be ambitious in negotiations and secure extra remuneration for the network. There were some improvements to remuneration in April, but I am aware, as I speak to postmasters all the time, that those improvements have not gone far enough in their view. I work closely with the National Federation of SubPostmasters, and we hear these views all the time, so we are very alive to the difficulties.
The other big opportunity that the hon. Lady implied is in the increasing number of parcels couriered around our country. There has been an exciting development in the parcels market for the Post Office, which has just launched something called Parcels Online. For the first time, Post Office will offer a multi-carrier in-branch proposition: because the exclusive agreement with Royal Mail has ended, a customer can go into a post office and use the services of DPD, Evri and others, which are being sold by postmasters. That is a great opportunity for postmasters and may well lift their revenue. That is the kind of future we see for post offices: providing access to cash and banking services—and getting paid better and more lucratively to do so—and offering parcel hub opportunities. Those are both really important services.
The hon. Lady mentioned banking hubs. That is a slight bone of contention, in my view. At the moment, they have not really been co-located with post offices, and I would like to explore with UK Finance more opportunities for co-location where space allows. It makes little sense to have two different units on the high street when we could have one really sustainable unit. That is something we are looking at too.
On what the Government can do through direct support, we have provided more than £2.5 billion over the past 10 years and will provide £335 million between 2022 and 2025. We have also provided around £50 million through the annual network subsidy for rural post offices, as well as other measures we provide to the general business community, such as rates support worth £13.6 billion. Another £4.3 billion was announced in the autumn statement.
Matt Rodda
Would the Minister reassure me on the interoperability of post office systems with those belonging to building societies? We have talked about that before, given some of the difficulties with accessing cash in my constituency. Will he also pass on my concerns and those of colleagues to Royal Mail about the lack of cover for postal staff when they are off sick? That appears to be driving some of the problems with delivery.
Kevin Hollinrake
The hon. Gentleman is absolutely right to highlight those issues. Through the work that the Economic Secretary to the Treasury and I have done with UK Finance, more clarity has been given to postmasters about the limits for certain banks that have particular problems. The feedback I have got from postmasters is that the situation has improved, but I am very happy to hear feedback from Members of the House, including the hon. Gentleman, if that is not the case.
Of course, Royal Mail and the Post Office are two different things. Royal Mail has recently been fined for its underperformance. It has been affected by many different issues, including, of course, industrial action; it has had its share of issues this year. Hopefully it is putting those issues behind it, but we certainly expect to see a much better performance from Royal Mail going forward.
Like all retailers, post offices are facing very significant challenges at the moment. We have been clear about their value, both socially and economically—for our communities and for our economy. We will continue to work with the Post Office to ensure that both the organisation itself and the network are sustainable and fit for the future. We very much appreciate the work that the hon. Member for Edinburgh West does in this area; she quite rightly challenges me all the time on this. We are very much on the same page when it comes to making sure we have a viable network around the country, not least in our rural areas.
Question put and agreed to.
Draft Code of Practice on Reasonable Steps to be taken by a Trade Union (Minimum Service Levels)
Kevin Hollinrake Excerpts(1 year ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
I beg to move,
That the Committee has considered the draft Code of Practice on Reasonable Steps to be taken by a Trade Union (Minimum Service Levels).
It is a pleasure to serve under your chairmanship, Ms Nokes. It is good to see such a well-attended Delegated Legislation Committee.
The Government firmly believe that the ability to strike is an important part of industrial relations in the UK, and it is rightly protected by law. We understand that an element of disruption is inherent to any strike. However, strike action across our public services over the past year has highlighted the disproportionate impact that strikes can have on the public.
Taking that into account, earlier this year Parliament passed the Strikes (Minimum Service Levels) Act 2023, which seeks to balance the ability of workers to strike with the rights and freedoms of the public to go about their daily lives, including getting to work and accessing key services.
David Linden (Glasgow East) (SNP)
The Minister makes the point that he understands that people have the right to strike, but he says that strikes should not disrupt others. How does he reconcile that view with the fact that under Boris Johnson’s Government, scores of Ministers resigned at once and the Government almost ground to a halt? How does he reconcile that with what he proposes to this Committee?
Kevin Hollinrake
I do apologise, but I did not quite get the hon. Member’s point. Will he repeat it so that I can understand it?
David Linden
Does the Minister not understand that in the dying days of Boris Johnson’s Government, scores of Ministers withdrew their labour from the Government? Why is it one rule for the Tories and one rule for the workers?
Kevin Hollinrake
I cannot speak on behalf of my colleagues, but I kept doing my daily job, as I am sure the hon. Member did.
Kevin Hollinrake
I have not finished responding to the intervention from the hon. Member for Glasgow East. I kept on doing my daily duty, as I am sure the hon. Gentleman did. I will make a little progress, if I can.
The Strikes (Minimum Service Levels) Act 2023 amends the Trade Union and Labour Relations (Consolidation) Act 1992 to enable regulations to be made specifying minimum service levels and the services to which they apply. Where minimum service levels regulations are in force, if a trade union gives an employer a notice of strike action under section 234A of the 1992 Act, the employer may issue the trade union with a work notice that identifies persons who are required to work and the work that they are required to carry out during the strike to secure minimum levels of service.
Chris Stephens
The Minister mentions employers. For reasons that are unclear to me and perhaps beyond my understanding, we are discussing only one piece of delegated legislation today. Where is the code of practice for employers, and when is it likely to come before a Delegated Legislation Committee?
Kevin Hollinrake
We did not think it necessary to develop a statutory code of practice for employers, but we are producing guidance for employers on how they can comply with their regulations and engage with their workforce in such situations.
To comply with section 234E of the 1992 Act, which was inserted by the 2023 Act, trade unions should take reasonable steps to ensure that their members who are identified in a work notice comply with that notice and do not take strike action during the periods in which the work notice requires them to work.
Rachael Maskell (York Central) (Lab/Co-op)
How will the employer be compliant with GDPR requirements in a multi-union environment where lists will be going to different unions and where the employer itself will not know which unions individuals belong to? How will the Minister ensure that the names of employees will not go to unions that do not organise those particular workers?
Kevin Hollinrake
The hon. Lady may be confusing two things. The employer and the unions both have a legitimate interest in the individual they are speaking to. The employer must speak to their workforce, and I am sure the unions will speak to their members. But this is all set out in both the statutory code of practice and guidance for employers. She will see more when she sees the guidance for employers.
Rachael Maskell
I am specifically talking about a multi-union environment. Where a number of trade unions are involved, how will the Minister ensure that GDPR requirements are met?
Kevin Hollinrake
It is not my responsibility to make sure that GDPR requirements are met.
Kevin Hollinrake
Will the hon. Lady listen to my answer? The employer has a relationship with the employee —without doubt, that is a legitimate interest—and the union has a relationship with its members. I am sure we can give the hon. Lady more detail if she would like me to write to her on the point, but I do not think that there is a complicated situation here. I think she will find that it works perfectly well in practice.
Rachel Hopkins (Luton South) (Lab)
Maybe the Opposition can enlighten the Minister about workplaces in which there are multiple unions within the same work unit, representing different members. How can he assure us that the proposals set out in the code will not put employers in jeopardy of breaking the GDPR by sharing information about employees with the “wrong” union?
Kevin Hollinrake
As I say, I do not think that it is a complicated situation. As I set out to the hon. Member for York Central, the employer has a responsibility to contact their employees and union members, but I am happy to give more detail on that if the hon. Member for Luton South wants further clarification.
David Linden
Can I ask the Minister for clarification? As I understand it, the Minister said in response to my hon. Friend the Member for Glasgow South West that there will not be a need for the Government to introduce a code of practice or guidance for employers. But in response to the hon. Member for York Central, the Minister has just said that it will be provided. Which of the two is right?
Kevin Hollinrake
I do not think the hon. Gentleman was listening very carefully. I said that there was no need for a statutory code of practice for employers, but there will be guidance. We are debating the statutory code of practice for this legislation.
During the final stages of the parliamentary passage of the Strikes (Minimum Service Levels) Bill, the Government committed to introduce a statutory code of practice to provide more detail on the reasonable steps that a trade union should take. In accordance with section 204 of the Trade Union and Labour Relations (Consolidation) Act 1992, the Secretary of State consulted ACAS and, on 25 August, published a draft code of practice, enabling trade unions, employers and other interested parties to contribute their views.
Following careful consideration of those views, a number of changes were made to the draft code, and the updated draft code of practice was laid before Parliament on 13 November. It sets out four reasonable steps that a trade union should take to meet the legal requirements under section 234E of the 1992 Act. Although the code does not impose legal obligations, it is admissible in evidence and is taken into account where a court or tribunal considers it relevant.
Richard Burgon (Leeds East) (Lab)
When we strip it down, is this not really about trying to set up a whole series of complicated and uncertain hurdles so that employers or the Government can say that strike action has taken place illegally or unlawfully, and then set about trying to fine trade unions and scupper the democratic right to strike? In the Conservative party, there is a tradition of trying to avoid what it would call heavy-handed state interference in matters. Is the Government’s approach not heavy-handed state interference in the management of independent trade unions? They are trying to determine what picket supervisors and pickets will and will not say to people who have voted for strike action.
Kevin Hollinrake
The answer to the first question is no. The answer to the second question is that the legislation balances the rights of individuals to access vital public services with the rights of people to go on strike. That is the simple balance that we are trying to strike. At times the Government have to step in, and we should always use legislation as a last resort. I totally agree with the hon. Gentleman that that has been our political philosophy, but bearing in mind the hundreds of thousands of hospital appointments that have been cancelled and the billions of pounds in costs for the hospitality sector, particularly over last winter, it is right to have a better balance between the rights of individuals and the rights of workers in this area.
I will summarise the reasonable steps. First, a trade union should identify the workers who are its members in a work notice. That will enable the union to take reasonable steps regarding those workers. Secondly, trade unions should send an individual communication or notice, known as a compliance notice, to each member identified in a work notice to advise them not to strike during the periods in which they are required by the work notice to work, as well as to encourage them to comply with a work notice. Thirdly, trade unions should instruct picket supervisors to use reasonable endeavours to ensure that, so far as is reasonably practicable, picketers avoid trying to persuade members who are identified in a work notice not to cross the picket lines at times when they are required by the work notice to work.
Mick Whitley (Birkenhead) (Lab)
Does the Minister agree that the requirement that a trade union, with perhaps as little as four days’ notice, identify its members that have been issued with work notices in disputes potentially involving hundreds of thousands of workers across hundreds of workplaces is entirely impracticable? It risks exposing even the trade unions that work 24/7 to fulfil their obligations under the code of practice to a disproportionate and unfair penalty.
Kevin Hollinrake
No, we do not agree. The provisions and the code of practice are workable. As I have said, we undertook a consultation to make sure that that was the case, so we believe the proposals are workable.
Richard Burgon
I am sorry to draw a political parallel, but sometimes the parallel between politics and industrial practice is useful. It is the job of the Conservative party, in my area and others, to convince people to cast their vote for the Conservatives; it is the job of the Labour party to persuade local people to cast their vote for the Labour party. Is the requirement for trade unions to write to their members to tell them not to strike the industrial equivalent of requiring the Conservative party, in my constituency or others, to write to their own members telling them to vote Labour, or vice versa? Is it not a perverse interference to change the role of trade unions in a really authoritarian and heavy-handed way? The state interference here on behalf of employers in industrial disputes is quite appalling.
Kevin Hollinrake
More an intervention than a perverse interference, I would say, but the hon. Member is entitled to his view, which I respect. He may decide, as we have done on this subject, that we should agree to disagree.
Finally, once a work notice is received by the union, the trade union should ensure that it does not do other things to undermine the steps that it takes to meet the reasonable steps requirement. Actions taken to undermine the steps could include, for example, communicating with members whom the union knows is identified in a work notice, to induce them to strike. Where the trade union becomes aware of such actions to undermine the steps, the union should take swift action to negate any actions of union officials or members that seek to undermine the steps that the union has taken or will take to comply with the requirement in section 234E of the 1992 Act.
If a trade union failed to take reasonable steps as required by section 234E, that would mean that the strike is not protected under section 219 of the 1992 Act. As I have said, a court or tribunal could take the code into account in deciding whether reasonable steps had been taken. If the union protection is lost, the employer could seek damages from a trade union or an injunction to prevent the unprotected strike. Further, an employee taking part in a strike would lose the automatic protection from unfair dismissal under section 238A of the 1992 Act.
It is important to stress that the underlying requirement for a trade union is to act reasonably. For example, failure by a trade union to identify a small number of members, and the consequent missing out of those members from subsequent steps, may not constitute a failure in carrying out the overall obligation to take reasonable steps, as long as the trade union made a reasonable attempt to identify such members. Similarly, where the union takes steps to send promptly a compliance notice to members identified in a work notice, an accidental failure to reach a small number of identified members is unlikely to be a failure to take reasonable steps. In those scenarios, that would be for a court to determine, based on the facts of each case.
The code of practice under the Committee’s consideration has been designed to balance the objectives and benefits of the 2023 Act with the potential burdens of undertaking the reasonable steps, while providing guidance about a clear recommended route for trade unions to maintain their protections during strike action. It will help to provide clarity to employers and union members on what to expect leading up to, and on the day of, strike action where a work notice has been given to secure a minimum service level. It will also provide a greater level of assurance for trade union members who have been required to work as part of a work notice and will be encouraged to do so by the trade union, and therefore increase the likelihood that minimum service levels will be achieved.
If Parliament approves the code, it will be issued and brought into effect by the Secretary of State in accordance with the procedure set out in section 204 of the 1992 Act.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Can the Minister give us a ballpark figure for how many trade unions and how many private sector employers have been engaged in the development of the code?
Kevin Hollinrake
I do not have those figures to hand, but perhaps I will be able to give them to the hon. Member by the time of my closing speech. I would imagine that quite a number of trade unions were engaged. [Interruption.] It is quite a controversial piece of legislation, as the hon. Member knows, and it attracted a lot of attention. [Hon. Members: “Ah!”] Is that surprising?
The Government’s intention is for the code to be in effect before the regulations implementing minimum service levels come into force. To achieve that, the Government are planning for the code to come into effect shortly after the commencement order relating to it is laid.
Chris Stephens
The right hon. Gentleman is correct. The Conservative party never forgave the trade union movement for defeating the Heath Government in the ’70s. It still remembers. As my hon. Friend the Member for Glasgow East said, it has not legislated for Government Ministers. When they decided to go on strike—when they all walked out together—they did so without a ballot, let us remember. That was inconveniencing the public, was it not?
Kevin Hollinrake
I just want to point out that there is a difference between going on strike and resigning, though the hon. Gentleman might not understand it. There are no restrictions in the code or anywhere else that stop someone from resigning, which is what those Government Ministers did.
Chris Stephens
I think the Minister will find that it was co-ordinated action and that, unlike trade union action, no ballot was required.
Kevin Hollinrake
The Strikes (Minimum Service Levels) Act balances the ability to strike with the rights of the wider public, ensuring that lives and livelihoods are not put at risk. I will respond to one or two points; I probably will not be able to respond to all the points raised in this debate.
I say to the hon. Member for Bermondsey and Old Southwark that there were 46 responses: 10 from members of the public and 36 from organisations, including trade unions, employers and local government representatives. That includes, on the union side, the TUC, ASLEF, the British Medical Association, the Fire Brigades Union, Unite, the RMT, Unison and the RCN.
The hon. Member for Luton South was absolutely right to mention the cost of living crisis. To respond to her point about why we are legislating at this point in time, it is because industrial action has an impact on other people’s jobs and livelihoods. There have been 4 million days lost through industrial action, 2 million appointments cancelled in the NHS and £3.5 billion in costs to the hospitality sector. That is why we are legislating as we are.
It is right that points were raised about ensuring that both unions and employers are able to identify people who have union membership so that unions can understand who has been named in a work notice. Paragraph 18 clearly sets out the opportunity for unions to engage with employers to establish the rules on how they will identify different individuals, such as using job title, name and place of work. We do not see that it will cause a problem. Employers and unions can go further than that and enter into a data sharing agreement, which is good practice within GDPR rules.
The shadow Minister, the hon. Member for Ellesmere Port and Neston, referred to paragraph 39 and the work notice requirements. We do not feel that it is an onerous practice at all. It is quite clear that the union could communicate with its members not only about work notices but about the strike itself. The rules are set out clearly. He knows the courts very well; I cannot see anybody not being able to understand the rules in a way that would create an opportunity for somebody to challenge them in court. It is not complicated at all, in my view.
On the point about sacking, I am happy to make a clarification in terms of what I said on the Floor of the House at the time. I was quite clear in my opening remarks that protections are removed from disciplinary action against workers who do not comply with a work notice. It is our expectation that nobody would need to lose their job as a result of this legislation. There are other measures that can be taken in terms of disciplinary action. If people comply with this legislation, clearly nobody will lose their job.
Kevin Hollinrake
I am sorry, but I will not have time to conclude the debate if I take interventions, which use up a lot of time during speeches. It is right that I conclude the debate.
If the hon. Member for Glasgow South West checks Hansard, he will see what I said in response to his intervention, which was that there is no need for a statutory code of practice for employers, but guidance has been issued; it was published on 16 November. That is our view. I advise him to check Hansard. On his point about minimum service levels effectively requiring an increase in service levels, if he checks the guidance that we have put together for rail, it clearly stipulates 40% of the normal timetable. We are not expecting an increased level of service; we are just expecting a service.
To help to secure minimum service levels, it is vital that trade unionists take reasonable steps to ensure that their members who are identified in a work notice comply with that notice and do not take strike action during the periods in which it requires them to work. It will help to provide a greater level of assurance that trade union members who are required to work as part of a work notice will be encouraged to do so by the trade union, and therefore increase the likelihood of minimum service levels being achieved.
Ultimately, the code will help all parties to achieve minimum service levels where they are applied, and moderate the disproportionate impact that strike action can have. I commend the code to the Committee.
David Linden
On a point of order, Ms Nokes. I beg to move, That the Committee sit in private.
Autumn Statement Resolutions
Kevin Hollinrake Excerpts(1 year ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
As someone who was in business myself, starting and scaling up businesses for 30 years prior to entering Parliament, it is a privilege to open this debate on behalf of the Government.
For any ambitious entrepreneur, “growth” is the most exciting word in the lexicon. The Chancellor’s autumn statement contains 110 separate measures to help businesses achieve exactly that. It will help to close the UK’s productivity gap by boosting investment by £20 billion a year in a decade. That is why I am wholly unsurprised by the positive response it has received from some of our most prominent business organisations.
The Federation of Small Businesses described the autumn statement as “game-changing”, adding:
“The Chancellor and his Treasury team deserve credit for driving pro-small business change and…acting to help build future prosperity.”
UK Finance said the autumn statement
“demonstrates a continued commitment to growth”.
And the manufacturing trade body Make UK said:
“This was a bold statement by the Chancellor who has”—
delivered—
“a transformational strategy designed to turbo charge investment.”
As the Chancellor rightly said, this is indeed an autumn statement for growth, but it is also clearly an autumn statement for business. I am very proud that my Department has been at the heart of developing these measures, which will have such a profoundly positive impact on this country. Our autumn statement will enable businesses to confidently invest in their futures. It will cut their costs through lower taxes and strip away burdensome red tape. Any of these measures in isolation would be a reason to be cheerful, but taken together, and alongside measures from the spring, they are expected to permanently increase the size of our economy, raise investment, reduce inflation, increase GDP and get more people into work.
On this side of the House, we know that the best way to grow the UK’s finances is not to embrace big government and high spending, but to boost businesses and boost competition—this is the so-called “supply side” of the economy. We will provide our innovators and risk takers with the right infrastructure, regulations and support, so that they can lead this country to greater prosperity.
As the Chancellor said yesterday, every big business was once a small business. For me, those words could not ring more true. This House will know about my passion for promoting the entrepreneurs, start-ups and independent shop owners that are the life and soul of our communities and economies alike. These businesses need investment so that they can flourish. They need freedom from overly burdensome taxes and regulations so that they can grow.
Paula Barker (Liverpool, Wavertree) (Lab)
I am delighted with the feedback that the Chancellor has received from businesses, but analysis by the Resolution Foundation finds that households will be £1,900 poorer at the end of this Parliament than they were at the start of it. That means people in our communities have less to spend in these businesses. So is it not the case that families are worse off under this Government?
Kevin Hollinrake
There is no doubt that we have had to take some difficult measures because of the hundreds of billions of pounds—about £500 billion—we put into the economy to protect people from the effects of covid and the cost of living. Conservative Members know that money does not grow on trees; that money has to be paid back. We have had to take those difficult decisions but we are improving the lives of the people the hon. Lady mentions—for example, through the national living wage. It has had a record increase this year to a record level of £11.44. That will put about £1,800 annually on the table for some of the people she mentions. That minimum wage is now double what it was in 2010. We are doing many, many things, including raising the personal tax threshold. Along with her colleagues, including the Front Benchers, she has to reflect on what the Labour Front-Bench team are going to do about the tax thresholds—this is the impact she is talking about. Are they going to increase those thresholds? Please say—[Interruption.] It is no good just standing on the sidelines and criticising. You’ve got to say what you’re actually going to do. [Interruption.] The shadow Minister says he is going to do that, which is great. The cost of doing what we are talking about here is £25 billion a year by 2025, so you are going to do that? [Interruption.]
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I am slightly worried that we are getting into a “you”, “you” exchange across the Chamber. As the Members know, they should speak through the Chair and when they say “you”, that means me. I think the Minister is trying to say “the shadow Secretary of State” and so on.
Kevin Hollinrake
I do apologise, Madam Deputy Speaker. Obviously, I am speaking through you—but I apologise. I was getting carried away, because this is such an important point. It is important that if people have different ideas about how we run the economy, they should explain exactly what they are going to do and how they are going to pay for it. The cost of the measures that are being proposed is £25 billion a year, and that comes on top of other spending commitments that the Opposition have made, including £28 billion a year in green investment. Labour Members should be clear about what their plans would be, rather than just objecting.
Lilian Greenwood (Nottingham South) (Lab)
I welcome the Minister’s commitment to being clear—so will he be clear and confirm that over this Parliament living standards are going to fall by 3%? That is the biggest hit to living standards on record. Will he be clear and confirm that that is the case?
Kevin Hollinrake
As I said, there is no doubt that we have been through difficult times, but the hon. Lady should look forward optimistically to the rise in the national living wage and the probability that inflation will be halved again by this time next year, having already been halved. She needs to take a more optimistic view about will happen in the economy next year. I am very optimistic that people will see better times ahead, which is what we all want to see, but the Government are realistic. We have spent £500 billion providing support, saving jobs and businesses, and helping people during covid and the cost of living crisis, but that money has to be paid back. The Opposition need to explain how they are going to do that, if they were ever given charge of the economy.
Small businesses also need protection from late payers, so that they can safeguard their precious time and resources. The measures in the autumn statement seek to achieve all that and more, transforming the fortunes of businesses up and down the country. The statement contains a multitude of measures that will give businesses easier access to investments.
The UK has been something of a start-up miracle—we are second out of the 39 countries in the OECD for start-ups and seventh for scale-ups, which is still a good performance in relative terms but one that we need to improve. Capital holds the key. This Government could not be clearer about that fact and have introduced measures in that regard.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his positive attitude in response to the measures that have been put forward, but I have a request on behalf of my constituents who work in the hospitality sector. Rates and alcohol duties have been frozen for another year, including those on spirits, meaning it will not cost people any more to go out to pubs and other venues in the hospitality sector, but Colin Neill from Hospitality Ulster has expressed concerns about energy prices. Do the Government intend to do anything about them?
Kevin Hollinrake
The hon. Gentleman raises a good point. I chair the Hospitality Sector Council and meet large and small hospitality businesses regularly, so I understand the pressure they are under. The hon. Gentleman has some such businesses in his constituency and I do too, so we know that is a problem. We have put a huge amount into supporting businesses with their energy costs, halving the cost of energy for most businesses. Energy is much more affordable than it was this time last year, which was an incredibly difficult time, but some businesses are locked into expensive energy contracts from the backend of last year, when prices were very high. If the hon. Gentleman has any examples of such businesses, he should bring them to me, as we have commitments from the energy suppliers, so we can challenge them and try to smooth the contracts over a longer period to ease the pain. I am happy to help him with any individual cases in his constituency.
On capital investment, the Prime Minister and the Secretary of State for Business and Trade will host 200 of the world’s leading investors at the Global Investment Summit this weekend and on Monday, which I hope to attend. It will showcase the UK as one of the world’s best places to do business, and drive billions of pounds of new and strategic investment into every corner of the economy.
The autumn statement has a host of innovative measures that will unlock investment and fuel growth. For example, our pension reforms will help unlock an extra £75 billion of financing for high-growth companies, while providing an even better deal for savers. Plans include a new growth fund within the British Business Bank to crowd in pension fund capital to the UK’s most promising businesses.
Another example is our plan for further funding for two British Business Bank programmes, including the long-term investment for technology and science competition. That will make £250 million available to successful bidders to increase investment in key science and technology sectors, with the private sector contributing at least as much again. Not only that—we have made £50 million available to extend the future fund breakthrough scheme, which backs businesses focusing heavily on research and development.
Although the Chancellor did not mention it yesterday, we have also introduced important measures for equity investments, including a 10-year extension to the enterprise investment scheme and the venture capital trust scheme, giving investors and businesses the confidence, certainty and stability to invest, which underpins the system.
Secondly, this autumn statement contains a series of measures that will provide smaller businesses with practical help. As we prepare to mark Small Business Saturday next weekend—I am sure that Members across the House will visit their small businesses on 2 December—it could not be a more timely moment to announce our business rates support package. It will help high streets and protect smaller firms, which are the life blood of our local communities, saving the average independent pub more than £12,000 a year, and the average independent shop over £20,000.
In addition, the autumn statement will include measures to toughen our regulations to tackle late payments. I have seen at first hand how this scourge can crush even the most determined of business owners’ dreams, so it is right that we act.
The Procurement Act 2023 means that the 30-day payment terms, which are already set for public sector contracts, will automatically apply through the subcontract supply chain. From April next year, any company bidding for large Government contracts will have to be able to demonstrate that they pay their own invoices within an average of 55 days and that will reduce progressively to 30 days.
Peter Grant (Glenrothes) (SNP)
I am grateful to the Minister for the steps that he has announced today, but of course the proof of the pudding lies in the enforcement. Sex discrimination at work has been illegal for almost 50 years, but it still happens. The Minister will be aware that, as well as calling for action on late payment generally, I have often raised an issue that we get in the construction and civil engineering sectors, where the main contractor is paid on time but keeps the money for an inordinate length of time. If the main contractor then does a Carillion and goes down, all the money becomes part of its administration and very often the subcontractors get nothing. Can we have legislation, a code of practice or something to protect small business subcontractors from being dragged down when the main contractor goes under?
Kevin Hollinrake
I know that the hon. Gentleman has campaigned on this for some time and I have great regard for the work he does. It is worth him reading the “Payment and Cash Flow Review”, which was published yesterday alongside the autumn statement. It includes some references to retentions, to which he refers. There are other measures from the small business commissioner as well as more transparency on late payments. I am happy to engage with him further on this issue.
Although taxes pay for vital public services, this Government are clear that they must not stifle business owners’ ambitions. Quite simply, our economy relies on those ready to take risks and to innovate. Time and again, these entrepreneurs tell me that a simpler tax system would make life easier for them. This autumn statement will not just reduce tax but reform it, while putting more money into employees’ pockets.
The abolition of class 2 national insurance will save the average self-employed person £192 a year. Alongside the 1% reduction in the rate of class 4 national insurance, some 2 million self-employed people will be saving an average of £350 a year from next April.
In addition, from next year we will merge the existing research and development expenditure credit and the small and medium-sized enterprise R&D scheme. This will allow companies to claim back a proportion of their spending in this area through their tax bill, further simplifying the system and boosting innovation.
Finally, and very significantly, we have unveiled game-changing plans to make full expensing permanent. As the Chancellor set out yesterday, expensing aims to stimulate investment by giving larger companies £250,000 off their tax bill for every £1 million they invest. It was introduced, as hon. Members know, by the Chancellor in the spring and was set to last for three years, but it has been such a success, and the calls for it to continue have been so loud and clear that yesterday the Chancellor made it a permanent policy. This is the largest single tax cut in modern British history. It means that we now have not just the lowest headline corporation tax rate in the G7, but the most generous capital allowances too. That is hugely appealing to any business looking for a home in a global market.
The Office for Budget Responsibility tells us that this move alone will increase annual investment by around £3 billion a year, and by £14 billion over the forecast period. We are able to do this only because we have met our borrowing rules early, have more than halved inflation, and are seeing our debt go down every year.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Going back to the tax regime in general, one of the measures in the autumn statement—line 50 of table 5.1—was entitled “HMRC: Investment in Debt Management Capability”. According to the statement, investment of £160 million into the debt management facility of His Majesty’s Revenue and Customs will somehow unlock £1 billion a year in debt recovery. What is that investment, why was it not undertaken previously and how will it realise an extra £1 billion of income for HMRC?
Kevin Hollinrake
HMRC has a responsibility to be understanding and compassionate when it comes to business difficulties, but if debts are owed to the taxpayer it is only right that we seek to return them. Many more businesses may have that difficulty because of difficulties in recent years, but if the hon. Member is implying that we should not chase debts owed to the taxpayer—
Kevin Hollinrake
Perhaps we should have a conversation offline about that. I think it makes perfect sense to invest in reclaiming debt owed to the taxpayer.
I wish to turn now to another of my Department’s spending measures: the advanced manufacturing plan. The UK is a global advanced manufacturing hub. Recently—this is not a statistic that is often quoted in the media—we overtook France to become the world’s eighth-largest manufacturing nation. What is not to like about that? While we have a strong story to tell, there is fierce global competition. Already my Department has been instrumental in attracting significant global investment to our key future-leaning industries, including Tata’s £4 billion gigafactory and a £600 million investment to build the next generation of electric Minis.
Our £4.5 billion advanced manufacturing plan will help to safeguard the sector’s future and seal our reputation as the best place to start and grow a manufacturing business and to invest in this industry. It includes over £2 billion for the automotive industry—the single biggest Government investment ever in the UK sector—alongside £975 million for aerospace and £960 million for a green industries growth accelerator to support clean energy manufacturing. In short, the plan will ensure that our manufacturing success story can begin its most exciting chapter yet.
This is a Government who know business. We are for business because we are from business. This is a Government who believe in business. This is a Government who back business. Our autumn statement could not be a clearer illustration of those facts. Have no doubt that it will provide our most promising companies with the capital, certainty and support that they need to thrive long into the future. That is why I commend its measures to the House.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Secretary of State.
Jonathan Reynolds
Unsurprisingly, I agree with part of what the hon. Member said. We could have a lengthy and robust debate on the weaknesses of Conservative Governments in the 1980s and the consequences of their short-term decisions. I would—
Jonathan Reynolds
I would simply say to SNP colleagues that their own independence White Paper made the fair case for a UK-wide energy market. That is because, as in many areas of policy, a UK-wide energy market is the best way to deliver for my constituents in England and for the constituents of the hon. Member for Kilmarnock and Loudoun (Alan Brown) in Scotland. That is a reality that I think SNP colleagues do not accept.
I think the Minister would like a second bite, so let us bring him in to see what he has to say.
Kevin Hollinrake
On the point about industrial strategy, can the hon. Gentleman answer a simple question with a yes or no? Will he reinstate the plans for HS2?
Industrial Action: Minimum Service Levels
Kevin Hollinrake Excerpts(1 year ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
Earlier this year Parliament passed the Strikes (Minimum Service Levels) Act 2023. The Act seeks to balance the ability of workers to strike with the rights and freedoms of the public to go about their daily lives, including getting to work and accessing key services.
Most major European countries, such as France, Italy and Spain, have had some form of minimum service level regime for many years, and organisations such as the International Labour Organisation have recognised that such approaches can be an appropriate way of balancing the ability to strike with the rights of the wider public.
Where minimum service level regulations are in place, the Act requires trade unions to take “reasonable steps” to ensure that their members who are identified in a work notice do not take strike action during the periods in which they are required by the work notice to work and comply with the work notice.
During the passage of the Act, the Government committed to bring forward a statutory code of practice setting out more detail on the “reasonable steps” that trade unions should take.
I am pleased to inform the House that yesterday we laid a statutory code of practice on reasonable steps to be taken by a trade union (minimum service levels) in Parliament for approval. This follows a public consultation on the draft code and careful consideration of the feedback received. A Government response to that consultation was also published yesterday.
The code of practice is issued under section 203 of the Trade Union and Labour Relations (Consolidation) Act 1992 and sets out four steps that trade unions should take to meet the legal requirement under the Act:
Step 1: Identification of members—Trade unions should identify those of their members who are identified in a work notice;
Step 2: Encouraging individual members to comply with a work notice—Trade unions should send an individual communication or notice to each member identified in a work notice to advise them not to strike during the periods in which they are required by the work notice to work, as well as to encourage them to comply with the work notice.
Step 3: Picketing—Picket supervisors will be instructed by the trade union to use reasonable endeavours to ensure that picketers avoid, so far as reasonably practicable, trying to persuade members who are identified in a work notice not to cross the picket line at times when they are required by the work notice to work;
Step 4: Assurance—Once a work notice is received by the union, trade unions should ensure that they do not do other things that undermine the steps they take to meet the reasonable steps requirement.
Subject to parliamentary approval, the code will be issued and brought into effect by the Secretary of State in accordance with the procedure set out in section 204 of the 1992 Act.
We will also shortly publish separate, non-statutory guidance on the issuing of work notices in relation to minimum service levels.
[HCWS32]
Post Office Ltd: Horizon
Kevin Hollinrake Excerpts(1 year ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
Post Office Ltd is compensating postmasters for the suffering they have experienced due to the Horizon IT scandal, which arose following the installation of the Horizon software in the late 1990s.
In parallel with this, Post Office Ltd has continued to review its operational processes and policies to ensure that, where any further issues are identified, it takes steps to investigate and address these. Through this work, Post Office has found previous operational issues such as processes and/or policies regarding certain services that impacted postmasters financially. As a result, Post Office is establishing a compensation scheme to provide redress to postmasters affected by these issues. This is separate to its work compensating postmasters for Horizon shortfalls and for those with overturned convictions.
The Government are supportive of Post Office’s programme of reform, putting right the wrongs of the past, and its aim to help rebuild trust with its postmasters. The Government therefore intend to support Post Office’s process review scheme with funding to cover the cost of compensation to postmasters affected by the issues identified.
The compensation will be exempt from income tax, national insurance contributions, capital gains tax and corporation tax.
Post Office will communicate with current and former postmasters and publish details on its website in due course, to outline the scope of the review. The Department for Business and Trade will provide oversight to ensure that this compensation is delivered quickly and effectively to affected postmasters.
This funding is subject to compliance with subsidy control requirements, including referral to the Subsidy Advice Unit (part of the Competition and Markets Authority) under the Subsidy Control Act 2022.
[HCWS8]