Preparing for Extreme Risks (RARPC Report)

Debate between Lord Berkeley and Baroness Neville-Rolfe

Thursday 12th January 2023 Lords Chamber

[Baroness Neville-Rolfe (Con)]

I think the noble Lord is right that the main focus is on the next five years, but I will perhaps come back to him to discuss that point further. It is clear from what I have been saying that we are looking at extreme risks, and they are not necessarily going to arrive tomorrow, so I understand and sympathise with the point he has made.

The second step is strengthening the crisis and resilience structures in the Cabinet Office with the creation, as I have said, of the resilience directorate and the COBRA unit. We are responsible for resilience planning and national crisis response, working closely with departments which have sectoral responsibilities. This includes identifying, planning and preparing for risks, and building capacity to respond effectively. The changes to how it is organised will help to ensure that the Government have the capacity and capability to respond to emergencies, which is obviously particularly important in the wake of Covid-19.

Thirdly, we are working to improve our resilience to chronic risks and vulnerabilities, such as climate change—which was emphasised by the noble Viscount, Lord Thurso—and artificial intelligence. We have recognised that this type of risk poses continuous challenges over time to communities, the economy and security, and requires a different type of response to more acute risks, such as flooding or terrorism.

The scale of the risks we face has required a new strategic approach to resilience. That is why we published the UK Government Resilience Framework in December, which previously had the working title of “national resilience strategy”, to respond to a point made by several noble Lords. It is a new strategy which is already being implemented across government. It reflects our ongoing commitment to resilience which we made in last year’s integrated review, and the new strategic approach will be reflected in further publications this year, with the refreshed national risk register, the updated biological security strategy, and the update to the integrated review itself, which has also been promised.

[Lord Berkeley (Lab)]

The noble Baroness has given us some good information about progress being made but, as the noble Lord, Lord Arbuthnot, said in his introduction, this is all a question of when it is going to happen and having some independent monitoring of progress. Does she not think that it would be a good idea to have something independent, rather like the Infrastructure and Projects Authority, as I mentioned? I can quiz her further when she comes to meet our Select Committee next week, but I would really rather hear it now.

[Baroness Neville-Rolfe (Con)]

I thank the noble Lord for his intervention, and I will reflect further on the best way of satisfying him.

I emphasise that the framework is important and strategic. It strengthens the systems, structures and capabilities which underpin the UK’s resilience to all risks and those that might emerge. It is based on three key principles. The first is a shared understanding of the risks we face. The second is a focus on prevention rather than cure, wherever this is possible, as several people have mentioned. Some risks can be predicted or prevented, but it is more difficult to do so for others. The third principle is of resilience as a whole-of-society endeavour. Everyone seems to agree on the importance of that. We are more transparent, and we want to empower all parts of society to make a contribution, so I was glad to hear from the right reverend Prelate the Bishop of Leicester about the possible role of faith groups and volunteers of all kinds. He is right about the contribution they make in crises, as I know from the work of the churches in my own local area of the Nadder Valley. Faith groups are also part of the local resilience forums. In London, for example, we have a voluntary, community and faith sector sub-group—but the key message is about resilience as a whole-of-society endeavour. Covid taught us the value of that.

Nobody has mentioned this, but central to delivery on those three principles is improving the communication of risks and impacts. We want people to better understand what they may actually experience, and what they can do to protect themselves, their families and their communities. We must drive early action on risks; that is at the core of the framework.

Some noble Lords will have looked at the framework, which sets out our ambition to 2030. It includes improved risk communication by growing the Government’s advisory groups to bring in experts, academics and industrial partners. We are strengthening local resilience forums, which has included extra DLUHC funding to improve multi-agency planning. I should say that my husband is chair of a parish council, so I know that resilience systems already assist in great detail towns and villages, and how important that was in marshalling voluntary effort during Covid. We need to build on those sorts of strengths. The measures include delivering a new UK resilience academy built up from the Emergency Planning College, thereby making world-class professional training available to all who need it. I have a lot of material on that, if noble Lords are interested. We are also establishing a new Cabinet sub-committee of the National Security Council. I suspect that we will have many more debates, because we are introducing an annual statement to Parliament on civil contingencies risk and the UK Government’s performance, which I hope will help noble Lords to hold us to account.

Procurement Bill [HL]

Debate between Lord Berkeley and Baroness Neville-Rolfe

Committee stage
Monday 4th July 2022 Grand Committee

[Baroness Neville-Rolfe (Con)]

My Lords, I very much welcome the question of the noble Lord, Lord Scriven, about local authorities. They are so often underappreciated and undervalued, and we need to know what can and cannot be done in a collective way—the question he is rightly probing. For example, a simple question would be: for planning services—where my committee has identified a huge shortage of talent and resources in some planning authorities—could you have a collective procurement, and would that be caught by this Bill?

I also ask what the GPA does on telecoms and the internet infrastructure. I must say that I tried in vain, as a Minister, to get contracts for the roll-out of infrastructure around Washington DC—there was not a level playing field. I fear that overseas interests will benefit preferentially from this Bill, as they have done in some other areas, such as contracts for difference in energy. Can the Bill help to hold the GPA to level the playing field?

I strongly support my noble friend Lady Noakes, both on her brilliant technical points, which I barely understand, and on ARIA. On the latter, I agree with her that it must be free from hassle—I think we agreed that in our debates in this House. It probably does not have enough money, but it is important to ensure that it can proceed without the benefit of lots of new regulations, which could be quite bureaucratic to them.

[Lord Berkeley (Lab)]

My Lords, I shall speak to my Amendment 7. I do not think I need comment on any of the other amendments in this group. I tabled this probing amendment to ask why this particular piece of text is here:

“This Act does not apply to Her Majesty acting in her private capacity.”


That is quite unusual in Bills. Usually at the end there is a clause that says something along the lines that Her Majesty and, often, the Duke of Cornwall have given their consent to that piece of legislation. Sometimes when I ask the Minister what relevance the Bill has to the Duke of Cornwall they cannot answer; no one seems able to because it is nicely confidential.

Obviously I can see why Her Majesty acting as the Crown is included in this Bill because effectively the Crown is the Government. However, why is the Duke of Cornwall not included in the Bill in his private capacity? He usually appears alongside Her Majesty. The Duchy of Cornwall has said it is in the private sector, which means, whatever we are going to call it, that it is a private sector organisation that presumably will have to comply with every other part of the Bill.

It is interesting to see where the sovereign grant for transport comes in. I happened to get a Written Answer today. I asked who funded the return charter flight of the Duke of Sussex from the United States for the jubilee. According to media reports, it was the most expensive charter plane that you could possibly get, and it seemed to me that, as in so many of these matters, they could actually have gone on the scheduled service. The answer I had was that it was not funded by the sovereign grant because that

“only covers expenses incurred by other Members of the Royal Family when they undertake official duties on behalf of Her Majesty”,

and clearly that was not the case. When it comes to the sovereign grant and the award of contracts for helicopters or planes across the world that the Royal Family—or even occasionally members of the Government—might take, presumably that will be subject to competitive tendering because they are acting in their public capacity.

It would be good to hear from the Minister what correspondence, if any, took place before Clause 1(9) came into the Bill. Are the Government quite happy with it? I look forward to hearing his answer.

Environment Bill

Debate between Lord Berkeley and Baroness Neville-Rolfe

Wednesday 15th September 2021 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, the recognition that coal is polluting is true, but we need to judge every proposal on its merits, as I think the noble Baroness, Lady Jones of Moulsecoomb, has said in a roundabout sort of way. As in all things, we need balance and we need to avoid perverse effects. I do not resile from my comment that the Bill could bring about the death of Thomas the Tank Engine.

By making it impossible to use British coal for heritage trains, boats and steam engines, we could be consigning these, in time, to the slag heaps of history. Either they will use coal imported from Russia, adding the damage of travel emissions, or these activities will die out, with the loss of valuable employment, as the noble Lord, Lord Faulkner, has explained. The vehicles, engines and boats concerned will create their own waste pile and diminish the tourism industry inspired by Thomas the Tank Engine and the Fat Controller. I would like to press this amendment, but I look forward instead to the assurances that I believe the Government are prepared to give the noble Lord, Lord Faulkner, on this important occasion.

[Lord Berkeley (Lab)]

My Lords, I rise to support this amendment. I congratulate my noble friend Lord Faulkner of Worcester on the work that he has done over so many years as the HRA president. He has kept this issue at the forefront of everybody’s concern and, of course, the latest idea that you cannot have the right coal in this country and you have to import it from Russia just demonstrates what a stupid situation we have got ourselves into, I suppose.

Heritage railways are loved by millions. They do not operate very fast or very frequently and, as other noble Lords have said, the issue has to be proportionate. It is not just trains; it is road vehicles—road tractors, I think most people call them—and boats, as the noble Lord, Lord Forsyth, has mentioned. Of course, fixed engines are also used to pump water supply; there is a very good one at Kew Bridge, which works very well. All these things have something in common, which is their Victorian engineering. It is amazing that these enormous great bits of steel, beautifully machined and very accurately made, work really well—when they do work, which is not very frequently.

I hope that the Minister will support and accept this amendment, but I have to remind my noble friend that he and I have a track record of causing trouble. About 10 years ago—the House was much emptier than it is tonight; there were probably about 25 Members here, which was below the limit—we got very angry about something. I cannot even remember what it was now, but we decided to divide the House. However, unfortunately, because there was not a quorum, it did not count. Noble Lords can imagine the kind of talking to that we got from our then Chief Whip in the morning, but it was absolutely worth it. I do not know whether my noble friend will do that tonight—he has probably got saner with age—but I hope that the Minister will look at this and say that it is a really good idea and accept it.

Trade Bill

Debate between Lord Berkeley and Baroness Neville-Rolfe

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Monday 7th December 2020 Lords Chamber

[Lord Berkeley (Lab) [V]]

My Lords, in moving Amendment 1 I shall also speak to Amendments 4 and 5. The purpose of these amendments is to provide a legal basis for the Government to bring forward a statutory instrument to ratify the Luxembourg Rail Protocol. Noble Lords will probably remember that I spoke about and explained the purpose of this protocol in Committee. Very briefly, I remind the House that the Luxembourg Rail Protocol is a protocol to the Cape Town convention to reduce the risk for creditors, which in turn will reduce the cost of financing for new and current rolling stock.

An Oxera study published this week showed, I think, a saving to the rail sector of about £130 million per year. However, it is particularly important for the British rolling stock manufacturing community looking to develop new markets outside the UK, which I believe is one of the purposes of the Trade Bill. This rail protocol follows an older protocol on aircraft leasing and financing, which I think most people believe has been very successful in financing aircraft.

In Committee, the Minister replied that the Government support the ratification of the protocol. I am very grateful for the support of the noble Lord, Lord Grimstone, and the noble Viscount, Lord Younger, on this. Since they felt it was more appropriate to get the necessary legal basis through the private international law Bill, I agreed that I would not move my amendment. We had discussions with Ministers on the private international law Bill. I am once again grateful to Alex Chalk MP, the Justice Minister, and to the noble and learned Lord, Lord Stewart, for their help in drafting the new amendment to the PIL Bill when it came back to your Lordships’ House for ping-pong. I am grateful to the Ministers for their discussion.

During the debate the noble and learned Lord, Lord Stewart of Dirleton, agreed how important the rail protocol is to the industry but suggested that the application of the protocol was narrower than I might have thought, saying:

“The Government consider this to be an important issue and are thinking about how best to implement the protocol in the United Kingdom. As we discussed last week, we consider that the power in this Bill”—


that is, the PIL Bill—

“is too narrow to fully implement the protocol, although the provisions in applicable law would be within its scope.”—[Official Report, 19/11/20; col. 1574.]

That is very good but all it did was allow half the protocol to be implemented, which noble Lords will probably agree is not a good situation.

The Government appear to support the ratification of this protocol and to consider it important for the rail industry. However, I feel that I have been sent round the houses, from the Trade Bill to the PIL Bill, and now the Ministers have discovered that it will allow only half the protocol to be ratified. I was grateful for further discussions with the noble Lord, Lord Grimstone, by email recently, in which he suggested that

“the Trade Bill should not be expanded beyond essential readiness for trading as an independent country outside the EU.”

I would argue that this protocol would allow the rail sector to do just that. I think it would be very useful if it could be included.

The Minister again suggests that the Trade Bill is not an appropriate vehicle for matters relating to finance and transport, which should be considered elsewhere. If it were a matter of motor manufacture or printing-press manufacture, surely those would be trade issues as well. For motor manufacture, is the Department of Transport involved or is it a trade matter? That question must be resolved. Government lawyers from probably three different departments are dancing around a pinhead. This merry-go-round must stop because it is wasting a lot of government time, as well as Parliament’s.

I have been sent around the houses: transport, trade and justice, and now we are back in trade. I am very pleased to be back in trade this afternoon. Ministers say that they support the protocol to help achieve better trade in railway equipment, so in order to stop this merry-go-round, will the Minister urgently arrange a meeting with myself, the Department of Transport, the Department for International Trade and the Ministry of Justice if necessary? Will he then bring forward an amendment at Third Reading, which I assume and hope would be agreed across government, to enable the Luxembourg Rail Protocol to be ratified? Surely the Government can get their lawyers to agree.

If the Minister could commit to arranging such a meeting with me to resolve these issues and bringing forward an amendment at Third Reading, I would be very content. If not—and I hope it does not go that way—I am minded to seek the opinion of the House, if only to demonstrate the strength of internecine warfare in this Government on an issue that they all support but cannot work out how to deal with. I beg to move.

[Baroness Neville-Rolfe (Con)]

My Lords, I rise primarily to support the noble Lord, Lord Berkeley, as I did in Committee, in his efforts to get the Luxembourg Rail Protocol to the Cape Town Convention implemented in the UK. As we have heard, some steps have been taken, thanks to the good offices of the Minister and of Alex Chalk in the other place, but sadly they have not quite done the trick. I refer to my business interests in the register, including the UK-ASEAN Business Council, and a new role as chair of Crown Agents, which curiously, I find, did a great deal of work on rail and rolling stock during its long history.

I see two advantages to the protocol that was signed by the UK as long ago as 26 February 2016—obviously a very different world then. First, it will reduce the risk to creditors, which in turn will reduce the cost of financing new and current rolling stock—everything from engines to equipment and parts, data and manuals. Whether these are for a new line that is being built or for existing lines, by lowering creditor risk the protocol will assist in lowering the cost of new, more efficient, locomotives and wagons for freight and passenger transport. As the noble Lord, Lord Berkeley, has just said, an Oxera study to be published this week suggests a saving to the rail sector of about £130 million a year. This is quite significant when rail funding is under pressure, and particularly desirable as part of a move to net zero as we seek to combat climate change.

Secondly, it would help British rolling stock manufacturers seeking to develop new markets outside of the UK. There is an urgent need, for example in Africa, for more railway equipment both for urban transport—light rail, metro and trams—and for intercity rolling stock. The markets are there for British exporters, but the Governments and their operating agencies do not have the resources. I am talking about countries such as Namibia, Egypt, Ethiopia, Kenya, Uganda, Zambia and South Africa. The lack of resources has been a major constraint, and in a number of cases, operators have bought Chinese rolling stock instead, even when it is less suitable, because it comes with Chinese state-backed financing.

Business and Planning Bill

Debate between Lord Berkeley and Baroness Neville-Rolfe

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 13th July 2020 Lords Chamber

[Baroness Neville-Rolfe (Con) [V]]

I will speak to Amendment 44 on digital age verification and thank my noble friend Lord Clement-Jones for his support. I raised this at Second Reading and thank my noble friend the Deputy Leader for his courteous and timely letter. I am especially grateful to him and the Minister for Crime and Policing at the Home Office for publishing on GOV.UK the government response to the call for evidence on violence and abuse toward shop staff. That certainly helps to put discussions today into perspective. I am glad to hear that the Minister for Crime will work with business, the police and other partners to tackle this serious issue, including underreporting. I know the British Retail Consortium is disappointed about some aspects of the government response, but that is for another day.

Today is about emergency measures to deal with life under Covid-19, and they are all most welcome. As my noble friend Lord Holmes said, we need to get the economy motoring again. That includes measures that encourage business to revive and grow, as his amendments have proposed. In that context, I remain concerned about the absence of digital age estimation and verification for sale of alcohol. Our amendment enables the use of such verification, provided that the licensed seller in a shop or pub takes reasonable precautions and applies due diligence to ensure the purchaser is over 18.

The obvious example is the Yoti app used in a number of European countries, such as Estonia— a real digital leader—and some parts of the UK. It means there is no need to show paper ID and wash your hands or resanitise—or perhaps not—or to remove a mask to engage in a physical conversation and a physical check of the customer’s ID. It works brilliantly at automatic checkouts, as their videos show, and would help to speed up queues in pubs and elsewhere. Other apps will no doubt be developed, making the technology more widely available. Interestingly, I see from the Yoti website that NHS England and NHS Improvement have begun deploying a secure digital ID card from Yoti to put employees’ NHS ID cards on to their phones. The killer argument for this Business and Planning Bill is that this system is already in use in shops to verify sales of knives—arguably much more dangerous than drink—and other age-restricted products such as tobacco, lottery tickets and fireworks.

It has been argued that we cannot introduce a digital system for alcohol outside the Proof of Age Standards Scheme—PASS—which is being developed for card issuers. However, that has got bogged down and delayed by Covid and is not producing the solution required when it is so desperately needed. It is of great significance that the British Retail Consortium, which set up PASS, no longer has faith in it. It rightly believes that no scheme should be skewed to a particular interest group.

Ours is an open amendment that overnight would improve things hugely and allow more enforcement of the drinking rules than I believe is taking place at present. A sunset clause can be included allowing the opportunity to simply trial these new app-based methods, at the same time avoiding the need for young people to carry passes—and lose them, as they often do. I hope my noble friend the Minister will look favourably at this amendment and be open to agreeing a simple enabling provision before Report.

[Lord Berkeley (Lab) [V]]

My Lords, I will speak to Amendments 36, 39, 40 and 43, to which I have added my name. I fully support what the noble Lord, Lord Holmes, said in his introduction and will not preface what my noble friend Lord Kennedy of Southwark may say when he introduces his amendment later. While supporting and fully agreeing with the view of the noble Lord, Lord Balfe, that we should all get back to work in the Chamber, I do not really agree that the increased number of outlets will improve the environment of Cambridge. You could then argue that we had better get back to prohibition days, and I do not think anybody wants that.

My amendments are intended to increase the choice of products and balance the smaller number that can be inside a pub or restaurant with more space outside. I commend the Government on allowing many outlets to put more space on the pavements or even roads and increase the space for cycling at the expense of polluting cars. The amendments would also allow a greater choice of suppliers, which I think is important.

My interest is encouraging small brewers and limiting the bullying tactics we have seen over the years from the pubcos, which are very much to the detriment of the small landlord. As the noble Lord, Lord Holmes, said, small brewers have lost a large proportion of their trade during the Covid lockdown, and 65% of breweries have apparently been mothballed because they could not sell their product direct to the public. Some of the smaller breweries do not have premises licensing and without these amendments cannot offer takeaways or deliver direct to the public. I believe that small breweries have really reinvigorated the hospitality sector in recent years. Allowing off-sales on a fair, proportionate and reasonable temporary basis, subject to the various conditions put in these amendments and the existing legislation, is surely a good thing.

I certainly believe that the amendment is not a licence for street raves. It is just a means of providing similar spaces outside due to the shortages inside because of the lack of social distancing space, combined with adding the possibility of much more competition within the brewing industry generally.

Domestic Gas and Electricity (Tariff Cap) Bill

Debate between Lord Berkeley and Baroness Neville-Rolfe

Committee: 1st sitting (Hansard): House of Lords
Monday 11th June 2018 Grand Committee

[Baroness Neville-Rolfe (Con)]

My Lords, I join others in thanking the noble Lord, Lord Berkeley, for setting off a discussion on this important issue of communication with consumers on electricity prices and the cap. I was going to add to the discussion from my own experience as a householder in Wiltshire. I have had a letter from SSE which is meant to tell me simply how my electricity prices are increasing, what I could do and how I might be able to pay less. I have to say that it is very difficult to understand, so there is a problem outwith the legislation that we are putting through. It is also wrong to suggest that energy companies are always trying to dissemble. How well they do depends on satisfying the consumer and the better ones want to be able to say clearly what is happening.

If we were to add to the system a requirement to communicate about the tariff cap provision, it would make the sort of letter that I have already described yet more complicated. My own experience is that these things can be costly to business. When the minimum wage came in, I remember being telephoned by the business department—I was at Tesco at the time—to ask whether we could put the minimum wage on our payslips. Having talked to our ICT people, I discovered that it would cost us an extra £1 million to put the minimum wage on the payslip. It was therefore agreed that the minimum wage could be communicated in other things. I worry that if we in this Committee put down requirements, it could have a similarly escalating effect on costs.

I have looked at the impact assessment—noble Lords will remember that I am always passionate about the usefulness of impact assessments—but this one does not go into any detail. It just suggests that there are savings to consumers. If we were to add extra provisions on communication, we would need to consider the cost of that because it would then get passed through to the consumer. That cost will apply to the small, new entrants to the industry as well as to the bigger suppliers.

That leads me to one final thought. When we took through the Consumer Rights Bill, in which we were also concerned about communication to consumers, the department worked with the industry to produce special communication. That was then used across the retail industry to inform shops as to the new rights that were coming in for consumers. I wonder whether some of the concerns raised today could not be met by voluntary action within the industry, dedicated to improving clarity for consumers in this important area.

[Lord Berkeley]

The noble Baroness cited a figure for the cost for communication but in terms of the total cost to the businesses we are talking about, that figure must still be very small. Given the example that I quoted of the banks being required to provide paper statements for anybody who wanted them, surely it is more important that anybody should have access by whatever reasonable means to the information, even at the expense of them paying a little more on communication. The people who will suffer are those who cannot fiddle with their emails, even if they can get the information by email.

[Baroness Neville-Rolfe]

I can understand that. Clearly, there may well be a case for requiring some communication to be online and some on paper because some people cannot manage online. However, what I am saying is that this will involve changes in systems across however many energy suppliers there now are—I do not know whether it might be 40, 50 or 60—and there is a cost to that, which we have not looked at or costed. How that fits in with suppliers’ information systems can make a big difference. Clearly, the Bill is going ahead rather rapidly. I have seen no analysis of this angle of things, which is why I support these amendments this afternoon, at least in the form of probing amendments.

Hinkley Point C

Debate between Lord Berkeley and Baroness Neville-Rolfe

Thursday 15th September 2016 Lords Chamber

[Baroness Neville-Rolfe]

While I agree with my noble friend about Sizewell B, which I had the pleasure of visiting during its construction phase all those years ago, I cannot agree with him on the general approach. For reasons that I have already explained, nuclear is a central part of our future and I have explained what would happen if the Hinkley power station is badly delayed. I do not believe it will be. We have learned from Flamanville and from the troubles in Finland. Our own chief scientist has given us reassurance on that. I have visited CGN myself. It is producing a nuclear power station in Taishan on similar technology, which is nearly ready for operation. We cannot afford to wait, because the existing fleet is coming offline. By 2030, except for Sizewell B—my noble friend’s legacy—we will not have any nuclear power stations, unless we invest now in a new nuclear fleet. This proposal is on the table and we have decided, having looked at all aspects, that it is right to proceed.

[Lord Berkeley (Lab)]

My Lords, I am not against nuclear at all, but the Minister has tried to say that this technology is proven and works, yet nothing I have heard in the Statement or in other noble Lords’ comments this afternoon indicates that that is the case. The Finland scheme is years out of date and is not finished. The last thing I read about the one at Cape Flamanville was that the French nuclear regulator had said it could not generate more than 60% of its planned output because the basic design of the welding inside the core, surrounded by concrete, was faulty. It looks as if that means the whole thing has to be broken apart and started again, if that is possible.

It is fine saying that we have learned from their mistakes, but how many more mistakes have yet to be uncovered? It seems to me pretty irresponsible for the Government to commit maybe in the end £16 billion of taxpayers’ money to a technology that is not proven when there are so many other technologies for generating electricity that are. I cannot think of any precedent—maybe the Minister can give me an example—of such profligacy with government funding apart from, of course, in the MoD. I leave them to one side.

[Baroness Neville-Rolfe]

I cannot agree with the noble Lord. In business you learn from mistakes and—I remember this well—from other people’s mistakes. As I have explained, EDF has learned from Flamanville and Finland, and CGN is already producing a reactor of this kind. The consortium is taking the construction risk. That is one reason why we believe this is a good approach.

Enterprise Bill [HL]

Debate between Lord Berkeley and Baroness Neville-Rolfe

Wednesday 4th November 2015 Grand Committee

[Baroness Neville-Rolfe]

My Lords, I think that we have been through the arguments. I understand the disappointment. Noble Lords need to understand that the Government are trying to do this in a way that is less bureaucratic and more effective. That is the basis of the consultation. However, I understand the strength of feeling that has been expressed today. We want to get the implementation of the Pubs Code, the adjudicator and the provisions right. We are genuinely consulting on the proposals that we have put forward. There will be a meeting of representatives of tenants’ groups and pub companies as early as next week to discuss the proposals in detail and to take them through our thinking. This subject is on the table, so it can be discussed. I very much hope that by Report we will have satisfied the obviously genuine concerns raised today. In the mean time, I hope that in the light of my comments noble Lords will feel able to withdraw the amendment.

[Lord Berkeley]

The noble Baroness has talked an awful lot about the consultation that has gone on this summer with the different groups. Did any of them express a view on PRA and whether they wanted it or not, particularly the tenants, or was it not discussed?

[Baroness Neville-Rolfe]

My Lords, my understanding is that PRA was not discussed but I will engage further in the process and ensure that it is discussed in the context of the consultations going forward next week. As I pointed out, it is mentioned in the consultation paper, so obviously it can be on the agenda of the discussions taking place this month.

Small Business, Enterprise and Employment Bill

Debate between Lord Berkeley and Baroness Neville-Rolfe

Monday 9th March 2015 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, I apologise for the confusion. There are a lot of different amendments here and perhaps I may have noble Lords’ patience. Perhaps the noble Lord could clarify to which amendments in which groups he seeks a response, because there are two or three different ones that relate to “must” and “may”. I explained where I was happy to accept “must”. If he is asking me to accept it in other places, there are reasons that I can go through.

My apologies to the House; we have moved on more rapidly than I could possibly have believed. I thank the noble Lord, Lord Stoneham, for his amendments. Amendments 33H and 33K would change two references to “may” in Clause 42. This would turn the powers in the Pubs Code to require pub companies to provide parallel rent assessments and give the adjudicator functions in relation to PRAs into duties. We have made a commitment to this House to introduce PRA. This commitment, together with the duty on the Secretary of State to produce the Pubs Code in Clause 42(1), means that the Government must deliver on these provisions in the secondary legislation one year after these provisions come into force, as I explained a minute ago. There can be no doubt that we will introduce these provisions.

We had similar debates on a number of topics in Committee. As I set out then, it is standard legislative drafting to refer to provisions that “may” be set out in secondary legislation to preserve some flexibility. If we were to change these “mays” into “musts”, we would need to be aware of the possibility of overly restricting and restraining the use of these powers. For example, we have said that the adjudicator “may”, in the interests of fairness and administrative effectiveness, choose not to charge fees to smaller pub companies that have bought only one pub formerly owned by a pub company. These amendments would remove such flexibility and I hope my noble friend will recognise the undesirability of that. I can assure him that the Government will include all the provisions set out in the Bill in the statutory code, which will be made by secondary legislation and subject to parliamentary scrutiny by the affirmative procedure.

With noble Lords’ permission, I shall comment on Amendments 33AJ, 33AL and 33AP. Where the Bill provides that the Secretary of State “may” by regulations give the adjudicator functions in relation to dispute resolution and determining rent for market rent only, it is clear that the Government must set out these functions for the adjudicator in secondary legislation. Clause 42(1) sets out a clear duty on the Government to introduce the statutory code within 12 months of the Bill coming into force—14 months from Royal Assent, as I have said—and to establish an adjudicator to enforce the code. The code must include the market rent only option and the adjudicator must therefore be able to enforce the market rent only option.

I turn now to Amendment 33AR. The definition of a tied pub set out in Clause 68 determines the scope of the regime and deliberately focuses on the alcohol tie, rather than other product and service ties. This is because it is in the abuse of the combination of the alcohol tie and property rent that we have evidence of problems in the relationship between tenants and pub-owning companies. This has been documented in the evidence we received to the Government’s consultation, in the continued correspondence the department receives from tied tenants, and in the multiple reports into the sector carried out by the BIS Select Committee. These reports and the evidence we have received point to problems with the alcohol tie.

The requirements for a market rent only-compliant agreement set out in the Bill specify that an agreement made once the tenant has opted for MRO must not include any alcohol, product or service ties. This is to ensure, when a tenant opts for MRO, that he or she is offered a genuinely free-of-tie agreement. However, it does not follow that all pubs with any kind of tie should be brought into the scope of the code at the outset. Amending the definition of a tied pub in the way proposed is a different prospect, as this changes the scope and application of the measures as a whole. For example, this would mean that a pub with no alcohol tie but with a service tie of some description would be covered by the legislation. This would bring into scope a pub that is contracted to a pub-owning company for something like cleaning services, but is in all other respects free of tie and able to purchase beer and other products from any source. This is not the sort of pub where we have evidence of a problem, and I believe we must avoid inadvertently capturing free-of-tie pubs and creating greater uncertainty in the regime. Focusing these measures on those pubs that are tied for their beer and alcohol will ensure that we target that part of the market where we have evidence of a problem.

I hope that my noble friend Lord Stoneham has found my explanation reassuring. I know it is all very complex, but on the basis of my full explanation, which I think has explained why the Bill says “may” and “must” on different occasions, I hope that he will feel reassured and able to withdraw his amendment.

[Lord Berkeley]

My Lords, could the noble Baroness clarify—I, too, feel that it is a bit complicated—that the first five amendments in this group from the noble Lord, Lord Stoneham, which replace “may” with “must”, will in fact be done in secondary legislation? Even if she does not accept these amendments, will their spirit and meaning be in the secondary legislation?

[Baroness Neville-Rolfe]

I thank my noble friend Lord Berkeley—

[Lord Berkeley]

I am not a noble friend.

[Baroness Neville-Rolfe]

I am sorry; I think he is a friend on this occasion. The noble Lord, Lord Berkeley—I will have to go back to Lords school shortly. As I explained in my long reply, it is standard legislative drafting to refer to provisions that “may” be set out in secondary legislation. In practice, we will do all the things that I have described. Therefore, I feel that these “musts” are not needed.

Small Business, Enterprise and Employment Bill

Debate between Lord Berkeley and Baroness Neville-Rolfe

Wednesday 28th January 2015 Grand Committee

[Lord Berkeley]

Before we get to that, could the Minister please clarify what she said, quite a long time ago in a very interesting speech, about the timing of the introduction of the MRO? That has been changed in her amendments; the Bill says a maximum of one year. What is the actual timing? That is one of our big worries—that this could get kicked into the long grass.

[Baroness Neville-Rolfe]

I thank the noble Lord for raising that point. The confusion may arise because it is within 12 months of Royal Assent.

[Lord Berkeley]

If it will help the Minister to deal with this, I could speak for a little longer. I thank her for her comments generally in her necessarily long speech. She gave me a lot of comfort that what the Government are trying to do is the right thing. She prayed in aid the will of the Commons a number of times, and that is right. Of course, timing is one of those issues. I will be very pleased to hear what she has to say.

[Baroness Neville-Rolfe]

Before the noble Lord sits down and the noble Lord, Lord Whitty, takes the Floor, the answer is 12 months—but that is 12 months after the Bill comes into force. Apparently it will take two months for the Bill to go through to Royal Assent, so the maximum is 14 months. However, the message that I was trying to impart to the Committee is that we are determined to get on with this, push ahead and find workable solutions in that time.

--- Later in debate ---

[Baroness Neville-Rolfe]

My Lords, I am grateful to the noble Lord, Lord Berkeley, for these amendments. In the spirit of collaboration, perhaps I can explain why we see them as problematic and see whether he agrees.

Amendment 68T would require pub-owning companies to publish wholesale prices. Even if that requirement was limited to alcoholic drinks, it would make public the details of a commercial financial arrangement between two parties to the world at large—including the pub owner’s customers, if I have understood the amendment correctly. It is important to stress that in this Part of the Bill we are regulating the relationship between tied tenants and their pub companies. At no point in our consultations has the need to publish wholesale prices emerged as a requirement to address unfairness. To do so would be an additional piece of regulation for the sector on top of the regulation we are introducing. In a few cases, pub-owning companies that we expect to be covered by the code already publish their wholesale drink prices online. Others publish those prices on a site with access restricted to their own tenants. Others do not publish them at all. On beer prices, tied tenants will tend to pay higher prices for their beer than from an outside wholesaler. That is integral to the tied deal. We recognise that transparency is important, and the Pubs Code already provides that transparency where it is needed—in the relationship between the tenant and the pub-owning company. As I said, the Pubs Code will require the wholesale prices to be provided to the tenant, as well as the current and relevant price lists.

Turning to Amendment 68U on guest beer, when the Government consulted on the issues and evidence that preceded the drafting of these clauses, we included questions about guest beer. The reasons for rejecting that option were clearly set out in our response to the consultation. Some will remember that I come from an all-male family of very keen beer drinkers, so I sympathise with the point, but while there was considerable support for the right to stock a guest beer, there were concerns about the potential for this to undermine the tied model by reducing the alignment of interests between the tenant and the pub company. This was because many tenants would select a draught lager as guest beer, which would typically be the biggest-selling beer. The proposal in the noble Lord’s amendment seeks to address this concern by stipulating that the guest beer should be limited to a brand of cask-conditioned or bottle-conditioned beer. I understand that. Unfortunately, this raises potential competition law issues. We are advised that restricting the guest beer to a particular type is likely to be contrary to EU competition law.

I hope that that background shows that the Government have considered the noble Lord’s proposition seriously and that, in the circumstances, he will agree to withdraw the amendment.

[Lord Berkeley]

I am grateful to the Minister and to my noble friends for their responses. On Amendment 68T, I think that putting the price of beer charged to a tenant in the public domain may be going a little bit over the top, but if it is published on a website and available to the tenant that is fair enough. However, this comes to the imbalance between a small business—and tenants are, after all, very small businesses—and the pubco. The fact that these people did not understand that the price of beer may not have been what they thought shows something about the unbalanced and bad relationships that some of these pubcos clearly have with some of their tenants. I am not blaming anybody but they are small businesses. Maybe we could have a think about that and have a meeting to discuss it before Report.

Amendment 68U deals with guest beer. I spent the morning at DG Comp in Brussels today. I cannot say I was talking about beer but I know the people there well and I can always check on that. There are important issues here but perhaps we could have a discussion about this too. I would like to see guest beers in some of the tied pubs and I think many others would too. What beers they are would depend on what kind of beer you like drinking. That is enough of that, at this time of the night. I am grateful for the Minister’s response and look forward to further discussions. I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Berkeley]

My Lords, this amendment concerns how the adjudicator takes into account the various financial factors relating to a pub when considering what its market rent should be. We have a lot of pubs where I live in Cornwall, some of them very lovely ones on the waterfront. I do not know how much money they make but there is a feeling that if they were sold for desirable waterside residences, of which there are already an enormous number, they could probably fetch a much larger amount of money than they earn for the owners at the moment as pubs.

That may or may not matter, but there is an issue here of what the role of the pub is in a small community. It acts as a kind of community centre. It may be where people congregate at different times of the day. It keeps village life going. It would be a great shame if the value of a pub on the open market, for retail or as a house, made it in the interests of the landlords to sell it and try to change its use.

There was another example in the Guardian last Saturday, in a nice article on pubs generally, given by someone who works for a company called Paramount Investments:

“In north London if I am selling a pub as a development opportunity I might be able to ask £700,000-£1m for something that as a pub I would only be able to get £350,000-£450,000 for”.

It gives other examples in Marylebone and other places where property values are very high, as they are in London. The problem is wider than London and Cornwall; it could be in many places where the property value is high. In this amendment, which obviously is a probing amendment so the wording might not be quite right, I am trying to propose that in assessing the rent no allowance should be made for a change in value due to a change of use that could be achieved if the pub were no longer a pub. I beg to move.

[Baroness Neville-Rolfe]

My Lords, I am grateful to the noble Lord for his amendment and I am looking forward to visiting some of his local pubs in Cornwall before long. To be brief, subsection (10) of the proposed new clause in government Amendment 89A makes it clear that a market rent is,

“the rent which the premises might reasonably be expected to fetch at that time in the open market”,

on the assumption that the sale of alcohol for consumption on the premises remains the main activity or one of the main activities of the premises. It is clear that the market rent is for the premises as a pub. I hope this reassures the noble Lord.

[Lord Berkeley]

I am very grateful to the Minister. The amendment came through after I went through all this. I am very grateful for her explanation and beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Berkeley]

I really cannot imagine how anyone would want to take a franchise like this. It is a variation on the old zero-hours contract, which we talk about. It could be a franchise with zero income and the hours being 24/7. Why should anybody want this contract? I will be interested to hear what the Minister says, but the pubcos must love it.

[Baroness Neville-Rolfe]

My Lords, I thank my noble friend Lord Hodgson for this amendment on franchises and the noble Lord, Lord Berkeley, for his intervention. Pub franchises are of course covered by these measures because they fall within the definition of a tied pub in Clause 65. I understand my noble friend’s argument that a pub franchise agreement based on a share of turnover, rather than a tied rent, can lead to a better alignment of interests between a pub company and a tenant.

However, there are other aspects of the pub company and tenant relationship that can lead to unfairness, in the same way as for more traditional tied pubs. The Pubs Code includes transparency protections for tied tenants to ensure that they are clear as to what they are signing up to. We believe that these protections and others in the code should be available for all tied pub tenants, including those with a pub franchise agreement. I can, however, provide some reassurance to my noble friend. If, as he says, price increases make no impact on the tenant in a franchise agreement, the MRO-only trigger for pricing will never apply to a franchise agreement. Should a franchisee exercise the MRO option the pub company will still be able to benefit from the stocking requirement, so the tenant could still be required to stock its beer and/or its cider. The pubs company’s obligation to provide services as part of the franchise agreement would of course fall away.

I am, however, afraid that we believe that to exempt franchises would leave a loophole in the legislation. Tied pubs could be converted to franchise pubs to gain exemption from the code. If pub franchise agreements seek to reduce some of the risks of the tied model for tenants by revenue-sharing, as my noble friend Lord Hodgson explained, we would welcome that. One would expect such agreements to be less likely to fall foul of the Pubs Code. In turn, one would expect those tenants to be more satisfied and less likely to request the MRO option. This is not a reason, however, for removing franchise agreements from the scope of the legislation where we remain uneasy about opening up a loophole. I appreciate my noble friend’s amendment but I hope that he will feel able to withdraw it.