Whistleblowers

Lord Browne of Ladyton Excerpts

Monday 28th October 2024 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

The noble Baroness is absolutely right to raise those cases. We all take those issues very seriously, and we have debated them here in the Chamber on many occasions. There should not be a need for anybody to whistleblow; people should have their concerns taken seriously in the first place. This Government are absolutely determined, from the top, to make sure that people who have concerns at the workplace are able to raise them without the detriment to which the noble Baroness refers. With regard to an office for the whistleblower, there are a number of ideas around this. We are looking at the role and remit that such a body could have. There will be a need to look at the cost, role and function of a potential new body, but we are looking at all the ways we can ensure that whistleblowers are protected at the workplace, as they should be.

[Lord Browne of Ladyton (Lab)]

My Lords, alongside the essential statutory protection of whistleblowers, the current director of the Serious Fraud Office has repeatedly emphasised the importance of offering incentives to the whistleblowers. My noble friend will be aware that my right honourable friend the Foreign Secretary, in May, when he was talking about a crackdown on money laundering and corruption, stated that a Labour Government would

“launch a new whistleblower reward scheme to incentivise and encourage sources to step forward”.

Can my noble friend the Minister outline where the Government’s thinking is on balancing the need for these incentives, as well as the existing legal protection?

[Baroness Jones of Whitchurch (Lab)]

My Lords, we are continuing to look at the whistleblowing regulations. We understand that there may be a need to review them further; a review was carried out by the previous Government. But I reiterate the point I made earlier: there should not be a need for whistleblowers to come forward; they should be protected in the workplace to come forward with their concerns. This requires leadership from the top in every department to make sure that those concerns are heard and acted upon properly. That is what we intend to do across government—make sure that people do not have to resort to whistleblowing to make sure the terrible incidents they are shining a light on finally come to light.

Online Safety Legislation: Abuse on Social Media

Lord Browne of Ladyton Excerpts

Thursday 5th September 2024 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

My Lords, we share my noble friend’s concern about the flourishing of hate crime on these sites and particularly on smaller online platforms. The Secretary of State for DSIT is carefully considering Ofcom’s categorisation recommendations and will make regulations as soon as reasonably practical. He can decide to proceed with Ofcom’s advice or divert from it. If the latter approach is taken, a statement must be published explaining why.

[Lord Browne of Ladyton (Lab)]

My Lords, it was reported today that the United States, the EU and the UK are all expected to sign the Council of Europe’s convention on AI, which emphasises human rights and democratic values in its approach to the regulation of public and private sector systems. The convention, which is legally enforceable, requires signatories to be accountable for any harmful or discriminatory outcomes of AI systems and for victims of AI-related rights violations to have legal recourse. In addition to the offence of sharing, is now not the time to consider criminalising the creation of sexualised deepfake images without consent? The noble Baroness, Lady Owen, called for this on 13 February in your Lordships’ House, and described deepfake abuse, which is almost wholly misogynistic and now epidemic. It is the new frontier of violence against women.

[Baroness Jones of Whitchurch (Lab)]

My Lords, my noble friend will know that, in addition to the implementation of the Online Safety Act, we already have plans to bring forward a new data Bill where some of these issues can be debated. We also have ambitions to bring forward a further piece of AI legislation, on which we will have the opportunity to talk about those issues in more detail. He is absolutely right: these are serious issues. They were debated at length during the passage of the previous data protection Bill, and we hope to return to them again.

Post Office (Horizon System) Offences Bill

Lord Browne of Ladyton Excerpts

2nd reading
Monday 13th May 2024 Lords Chamber

[Lord Browne of Ladyton (Lab)]

My Lords, I thank the Minister for setting out the provisions of this very important legislation in such plain language. I think that most, if not all, of your Lordships understand what this Bill sets out to do. I feel honoured to be the first speaker from these Benches to welcome this Bill, particularly when I see who the next but one speaker in your Lordships’ debate is; my admiration for the noble Lord, Lord Arbuthnot of Edrom, goes back to even before his work on Horizon. I admire him greatly for what he has done, and he is deserving of the recognition of that work that he and my right honourable friend Kevan Jones did for years in trying to get proper redress for this egregious miscarriage of justice.

There is no doubt that the Post Office Horizon scandal is, if not the worst, one of the worst miscarriages of justice in British history. I think I remember that, in January, when the Prime Minister made a public statement that this Bill would come before Parliament, he described it as the worst miscarriage of justice in British history. I am inclined to agree with him: I do not always, but in this case I think I do. As we know, it robbed many people of their good character, their livelihood, their liberty and, in some cases, their life. Because of the nature of the damage that was done to the sub-postmasters, it has been carried down and will be carried down in generations of their families; it has influenced very badly the families of these great public servants. It caused unimaginable pain and suffering, which can never be fully compensated or fully alleviated.

To make matters worse, the fight for justice for the sub-postmasters has become bogged down in a great many delays and barriers, and some of those affected, tragically, as I have already alluded to, have passed away before having the chance to see the justice they deserve. What we do know is that this Bill will free hundreds of innocent people of their wrongful convictions. It will not restore their character, because that can never properly be fully restored, but it will give them an opportunity to try to put it behind them. Importantly, it facilitates the opportunity to make much-needed progress in otherwise righting the wrongs. Those are the reasons given by my honourable friend Jonathan Reynolds in the other place, and they are why Labour will give this Bill our full support.

However, not only must the convictions be overturned but, thereafter, compensation must be delivered at pace. Justice and accountability must follow the conclusions and recommendations of the ongoing independent public inquiry.

I was struck by the words of Sir Robert Buckland at Second Reading in the other place. On more than one occasion in debates and questions on these issues, he has hit the nail on the head. In his first intervention, he said that

“it is important that we emphasise the wholly exceptional nature of this legislation, but we are dealing with wholly exceptional circumstances”—

which were described very clearly by the Minister. I also agree with his emphasis that we have to look again at our evidential

“presumptions about machines and what they produce when it comes to criminal litigation”.—[Official Report, Commons, 20/3/24; col. 960.]

This is unfinished work that should be done in lockstep with the work that is being done to try to resolve the challenges of Horizon.

I wish to pause for a moment from talking about the Bill itself to recognise the work of the many people who have brought us to this landmark occasion. The postmasters themselves demand a great deal of credit for that. I cannot imagine what it must have been like for people who had been so badly damaged to pick themselves up and fight over tens of years, as some of them have, to get justice not just for themselves but for their colleagues. They deserve the greatest amount of credit.

I have already referred to the noble Lord, Lord Arbuthnot, but the Horizon Compensation Advisory Board also requires a great deal of credit for getting us here. As I understand the chronology of how we got here in the last stages, its letter of December last year to the Minister explained in some detail just how difficult it was for anybody to get redress in the Court of Appeal. I think the statistics when the letter was written to the Lord Chancellor showed that there had been 900 prosecutions, but only 93 people had had their convictions overturned at that stage. I cannot work out what that meant and how long it was going to take, but I recently overheard somebody say that, at the pace that those convictions were being overturned, it was going to take the Appeal Court process 50 years.

For the reasons set out in the letter, the board told the Lord Chancellor that the only viable approach was to overturn all the Post Office-driven convictions. Remarkably, within a matter of days, Kevin Hollinrake, the Minister with responsibility for this, said he was taking legal advice on what could be done. By 10 January, the Prime Minister announced publicly that this Bill would be brought before Parliament. Anything would be fast compared with the alternative that was going through, but that was remarkably quick for a Government, because of the number of people who have to be satisfied, and I congratulate and thank all persons involved in getting us to where we are.

In many ways, this is a very unusual piece of legislation, but it is also unusual in this sense: I do not think anybody can make a speech saying that it has come to this House without having had the attention that it deserved in the House of Commons. I know the other place did it all in one day, but it did go over the Bill very carefully and Members deserve some credit for that. There is not much in it that we will need to look at carefully, although I did get an email from the Law Society—as I am sure did all Members who are on the speaking list—which goes on for about four pages. I have not had a chance to consider it, but the Law Society recommends some probing amendments to reinforce the idea that this is not a precedent. I do not think it needs to be reinforced, to be honest; I think enough Ministers have said enough about that at the Dispatch Box for people to establish that it is not a precedent.

However, I am a recovering lawyer, and I must say that, although this is not my Law Society, I am a bit disappointed that there was not a word in it about the number of lawyers involved in getting us to where we are. I will be in correspondence with it and will raise that point. I will ask it whether at some point it might want to say something about the number of lawyers who must have been involved in helping to create this system that has got us to where we are.

Noble Lords will be pleased to hear that I do not intend to speak for much longer, but I want to make two points, which I think we should consider. First, I fear that the issue of extending the Bill to cover Scotland will come up again somewhere in our debates. The Justice Minister in the Scottish Government, the former First Minister Humza Yousaf, and any number of SNP Members in the other House have used some quite critical language about the Government and this Parliament for not extending the Bill to Scotland. The simple answer to that is to remind them that justice is a devolved matter in Scotland. They usually defend devolved matters quite strongly.

My second point is regarding the Lord Advocate—a woman I know well and who is a very good lawyer. For those noble Lords who do not know what the Lord Advocate does—this is important in terms of their requests that the Bill be extended to Scotland—she is, among many other things, the principal legal adviser to the Scottish Government. She is also the head of the system for investigation and prosecution of crime in Scotland. Essentially, she is a public prosecutor, and she spoke to the Scottish Parliament at length about the Horizon cases. She made a statement there on 16 January 2024. I will not read it all to your Lordships because it is four to five pages long, but the important part of it is that, as the Scottish Government’s legal adviser and head of the prosecution service, and having spelled out the circumstances of the Horizon cases as far as they apply to Scotland, she said:

“It is important to recognise that in Scotland, there is an established route of appeal in circumstances such as this. That route involves the SCCRC”—


the equivalent of the committee in England and Wales that looks at cases before sending them back to the Appeal Court—

“considering cases in the first instance prior to referring appropriate cases to the Court of Appeal. This is an important process because not every case involving Horizon evidence will be a miscarriage of justice and each case must be considered carefully and with regard to the law. It is also important to recognise the important and established constitutional role of our Appeal Court in Scotland and that due process must be followed”.

That is the Scottish Government’s lawyer’s position. She is part of the Government. That is how it should be done.

There is another way it could be done in Scotland. The Lord Advocate could, as a prosecutor, say to the procurators fiscal and to the Crown Office, “Look at these cases, tell us whether they can be sustained on appeal and, if they can’t, just take them to the Appeal Court and say that you no longer stand by these convictions”. There is a very simple way—in my view, and this is a view held by many lawyers in Scotland—for the devolved Administration in Scotland to get these cases dealt with through the existing prosecutorial system.

I have a final point I would like to put to the Minister. Why do we persist in excluding from this Bill those who have had their convictions held up on appeal? There is no doubt that the public inquiry has revealed considerable further evidence since those appeals were refused. There is no question that if any of those cases involve Horizon-generated evidence, they should be given the same consideration as the cases that have been prosecuted to conviction but not appealed. Every single witness who gave evidence to the Justice Committee in the other place when it was considering the Bill said that that should be the case. I urge the Government to reconsider that issue.

I have nothing further to say. I will participate in further debates but will continue to support the Bill.

Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill [HL]

Lord Browne of Ladyton Excerpts

2nd reading
Friday 10th May 2024 Lords Chamber

[Lord Browne of Ladyton (Lab)]

My Lords, it is a pleasure to rise in support of this Bill. In doing so, I congratulate the noble Baroness, Lady Young of Hornsey, not just on introducing the Bill but on the lucidity and moral force that characterised her opening speech.

In opening, I feel bound to observe that the Bill, or rather—I am anticipating, but I think I will be proved right—the Government’s reluctance to accept it, is part of a regrettably familiar pattern. The Government identify an injustice and vigorously concur that it must be remedied before declining to act, even when a proportionate and measured solution is offered to them.

Even if I restrict myself to the last couple of months, the Bill takes its place as but one example of this apparently contradictory approach to policy. It is true of the Employment and Trade Union Rights (Dismissal and Re-engagement) Bill, which had its Third Reading in your Lordships’ House earlier today. It was true of my amendment to the Rwanda Bill, on which the Government were forced to concede only after weeks of self-inflicted delay. Several recently departed Ministers, and a couple of incumbents, have admitted that they understand the necessity of reversing persistent cuts to the size of our Armed Forces—but again the Government have failed to rally to a clarion they themselves have sounded. So while the Government once more offer their imitation of the deaf adder of scripture, what opportunities are they missing in refusing to support the Bill?

The Bill engages a real moral imperative. It replaces a patchwork of admittedly valuable provisions under the Companies Act 2006 and the Modern Slavery Act 2015, among others, with something that is at once clearer and more effective. Crucially, it is proportionate and realistic in what it demands. Clause 2, which establishes a duty for commercial organisations to prevent humanitarian and environmental harms in their own activities and those of supply chains

“so far as is reasonably practicable”,

is hardly demanding Promethean levels of ambition from responsible agencies. It is simply establishing in law the very least that anybody should expect.

Likewise, I point to the Bill’s stipulations around reporting requirements for companies whose income exceeds a certain level as a welcome adjustment to the current regime. The requirement that they must be both backward-looking and forward-looking is essential if they are to mean anything. Too often, reporting under the current regime involves an annual compilation of aspirations in respect of the environment and modern slavery, with far too little, if any, accountability in terms of their translation into reality.

In adopting the measures in the Bill, we would not blunt our attractiveness to inward investment or stultify our economy but ensure future regulatory alignment with France, Germany, the wider EU and south-east Asian economies that are working on similar provisions. Of course, I understand the need to avoid stultifying regulation, but in many cases it is the companies themselves that have asked for the promulgation of these measures. These include Jupiter Asset Management, Tesco, Charles Stanley plc, Legal & General, Investec Wealth & Investment, and Microsoft. If these are agents of what the current Prime Minister’s predecessor enjoys referring to as the “anti-growth coalition”, its parameters must be much wider than even she has suggested.

In 2022 the noble Lord, Lord Callanan, sent a letter to Darren Jones, now the shadow Chief Secretary to the Treasury, explaining why the Government are not minded to introduce a comprehensive due diligence framework like that proposed in the Bill. In it, he asserts that any attempt to mandate due diligence in law must be “practical” and “proportionate”, and must

“deliver tangible improvements to human rights and the environment”.

He goes on to outline the Government’s preference for “voluntary due diligence approaches” and voluntary compliance with the UN guiding principles on business and human rights and the OECD guidelines on multinational enterprises. What severe punishment awaits businesses that fail to meet this test of voluntary compliance? It is the grim prospect of the national contact point for businesses making “voluntary recommendations” and following up with businesses to implement these. Where companies or public bodies are indifferent to environmental and humanitarian concerns, or where they are an afterthought, it seems unlikely that these powers of the national contact point will be a stimulus to action.

Although I understand that there are supply chain transparency requirements in place for large UK companies under the Modern Slavery Act and some due diligence requirements because of the Environment Act, it is increasingly clear that we will be an international outlier in failing to adopt mandatory, as opposed to optional or anaemic, due diligence. We have been told of the possible unintended consequences of a more robust regulatory regime, but equally we must examine the conspicuous failures of the current approach.

Mindful of time, I will remind your Lordships’ House of just one notable public procurement failure that this legislation would have prevented. In 2015, a UK subsidiary of the Malaysian Supermax Corporation received a contract of around £350 million from the NHS. As the pandemic loomed, the NHS bought a further £311 million of PPE from a Supermax healthcare brand. By December 2021, the UK Government, in the shape of NHS Supply Chain, had named Supermax as an approved supplier, entitled to pitch for contracts worth £6 billion of UK taxpayers’ money. This was even though, three months earlier, the US Government had decided to institute a ban on Supermax products, owing to concerns around forced labour, detention, inhumane living conditions and passport confiscation. It was a further year before a High Court challenge compelled NHS Supply Chain to place a ban on Supermax products and to review their procurement processes. That is but one consequence of our current regime.

YouGov polling suggests that four-fifths of UK adults support mandatory—and active rather than passive—due diligence in terms of human rights and environmental concerns. Many of the companies upon which these obligations would devolve have requested rigour and certainty. Why do the Government neither accept this Bill nor seek constructively to amend it? In so doing they could provide far greater reassurance that neither British companies nor, more seriously still, British taxpayers’ money can ever inadvertently support the destruction of our planet or the exploitation of workers. I look forward to supporting this Bill as it makes its way through your Lordships’ House.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Offord of Garvel) (Con)]

My Lords, I join your Lordships in thanking the noble Baroness, Lady Young, for tabling the Bill, and I thank all noble Lords for their valuable contributions today. This debate is timely given recent developments in the European Union, and I share noble Lords’ views on the abhorrent practice of slave labour. I therefore welcome the opportunity to explain the Government’s current thinking on mandatory due diligence and why I am unable to support the Bill today.

I begin by noting that the Government are committed to tackling human rights and environmental abuses. The Government have consistently supported the UN guiding principles on business and human rights, which the noble Baroness referred to in her opening remarks. We are a signatory to the OECD guidelines on responsible business conduct for multinational enterprises, and for some time we have encouraged businesses to conduct due diligence voluntarily. Importantly, as the noble Lord, Lord Browne, mentioned, the UK also operates the national contact point, which provides a non-judicial mechanism for cases to be brought to when a company contravenes the OECD guidelines. The national contact point does important work and many of the cases that it mediates result in positive change.

Although the contact point does valuable work, the Government recognise that it is a non-binding mechanism and that harder legislative requirements also have a role to play. Some 13,000 statements have been submitted to the modern slavery statement registry under the Modern Slavery Act 2015, but the Government recognise that there is more to do. The Government have therefore committed to take forward an ambitious package to strengthen the Modern Slavery Act, which includes a proposal to mandate the topics covered in the modern slavery statement. This would mean that a company must publish details of its due diligence processes in cases where it has them.

Pressures on parliamentary time mean that these new measures have not been taken forward as quickly as many in this House would like. I understand that frustration, although I note that the Home Office has recently taken steps to update the modern slavery registry. I also urge noble Lords to consider that the Modern Slavery Act sits alongside a wider set of initiatives that are designed to tackle environmental harms and human rights abuses. Specifically, three initiatives are pertinent to this debate.

First, the 2013 timber regulations already require due diligence from organisations that place timber products on the market. Defra is building on these by taking forward new due diligence legislation in relation to specific commodities at risk of being produced following illegal land use and illegal deforestation. These regulations will be published shortly, and I encourage noble Lords to review them when they are available.

Secondly, noble Lords will be aware of significant reforms occurring in relation to public procurement and supply chains. Following a review of NHS supply chains, the Department of Health will be introducing regulations in relation to them. I note that the noble Lord, Lord Browne, drew attention to the case of Supermax, which the Government investigated. Since then, steps have been taken through the Procurement Act 2023 to strengthen the rules on modern slavery and environmental misconduct in relation to those supplying public authorities. Among other things, the Act will allow procuring authorities to exclude suppliers where there is evidence of modern slavery, even in cases where a conviction has not taken place. I appreciate, given his speech, that my noble friend Lord Deben has some concerns about this Act, and I will be happy to ask my colleagues in the Cabinet Office to take this up with him further.

Finally, the Government recognise that corporate transparency can be a powerful tool, and we are taking forward a process to assess the suitability for use in the UK of the IFRS Foundation’s recently published international sustainability disclosure standards. The IFRS Foundation’s initial standards focus on climate issues, but companies that choose to use the standards would also report on nature-related risks where they are material to their business, thereby raising greater awareness of potential environmental harms.

These initiatives demonstrate that the proposed Bill enters a crowded landscape, interacting with a wide range of existing and forthcoming legislation. I therefore worry that it would create confusion and cost for businesses, which would need to wrestle with multiple requirements articulated in competing ways. That is at odds with this House’s desire for a coherent legislative framework.

Turning to the proposed Bill, I start by observing that the evidence base for the success of mandatory due diligence remains extremely limited. A small number of jurisdictions have enacted similar legislation to the proposed Bill, but those pieces of legislation are relatively recent and their complexity can make them hard to implement, partially due the global nature of the supply chains that noble Lords have referred to.

Rather than introducing legislation to tackle both environmental harm and human rights abuses, the Government intend instead to observe how new developments unfold while taking targeted due diligence measures in relation to forest risk commodities and testing their effectiveness following implementation. For instance, Defra’s legislation will focus on a specific list of products that are connected to illegal deforestation. By contrast, the proposed Bill would require companies to make complex assessments for a potentially unlimited range of goods and services.

Moving on to the detail, I have several concerns about the Bill’s contents and I share many of the sentiments expressed on the Benches opposite by the noble Lord, Lord McNicol. Unlike the EU and German legislation, which applies only to the largest businesses, this Bill would apply to all 5.5 million companies in the UK. This would include 3 million sole traders and 2.5 million SMEs, many of which will lack the resources of the 8,000 larger organisations in our country to undertake the required checks. As a result, it runs a very real risk of creating an unlevel playing field in the UK economy, as well as creating real difficulties for suppliers in developing nations, which might struggle to provide the data required by companies in developed nations. I understand this all too well, having observed some of these difficulties just four weeks ago while undertaking—

[Lord Browne of Ladyton (Lab)]

I am concerned that the Minister or his officials have perhaps misunderstood this legislation’s provisions. It proposes that the threshold for these obligations will be set by regulations, which will emanate from a Secretary of State in government and be approved by this Parliament. You cannot just aggregate all the businesses in the country and say that they will all be subject to this, when the Government themselves will have the ability to make it cut at a particular point.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that point. I think that proves the point that there is complexity here. We have a very wide matrix of businesses in this country, which need to be legislated on quite separately. That is not what is currently in the Bill.

As I was saying, there is also the issue of suppliers in the developing nations having to provide data to developed nations. I saw that myself in Colombia and Bolivia recently, in the context of discussions on climate change and sustainable development.

The Bill would also impose an obligation to conduct reasonable due diligence, with Clause 3(3) listing a series of contextual factors that are relevant when determining what can be considered “reasonable”. As drafted, this list means that companies would find it incredibly difficult to know whether they have complied with the Bill. In practice, the application of the term “reasonable” could be debated in the courts for years, leading to an unsatisfactory situation in which companies within the Bill’s scope face significant legal uncertainty. When combined with the fact that criminal offences and substantial fines rest on this term, this undermines the goals the noble Baroness seeks to achieve, as it may incentivise well-run but risk-averse companies to terminate commercial relationships entirely rather than seek to remediate issues when they find them.

Clause 8(1) would introduce civil liability for businesses that fail to prevent human rights abuses or environmental harms in their operations, subsidiaries or value chains. The Bill attempts to give businesses grounds for defence where they have conducted due diligence, but I am concerned that this provision, when applied in practice, would shift legal responsibility to UK companies, with cases being introduced against UK companies in UK courts in the first instance. It would be preferable for claims against individuals and companies that are directly responsible for harms to be brought in the jurisdiction in which they occur.

Code of Practice on Dismissal and Re-Engagement

Lord Browne of Ladyton Excerpts

Monday 25th March 2024 Lords Chamber

I do not wish to take up any more of your Lordships’ time by repeating arguments I have made many times before, so I will end on this point. Fire and rehire is deeply unpopular, with 70% of the Government’s own voters wanting to see the back of it. But this new code, if anything, actually legitimises this abusive practice and shows bad bosses how to get away with it, legally. In my opinion, enough is enough; it is time for change. When will this Tory Government finally fight back and stand up for ordinary workers who are being exploited day in, day out? Thankfully, Labour will take steps to end fire and rehire within the first 100 days of coming to power. I sincerely hope that that is the case, because working people at the sharp end cannot put up with this any longer. The sooner we get rid of it, the better.

[Lord Browne of Ladyton (Lab)]

My Lords, I am confident that the Minister will have read the Second Reading debate of my noble friend Lord Woodley’s Employment and Trade Union Rights (Dismissal and Re-engagement) Bill. I too do not intend to repeat the speech I made then, but I make no apology for repeating the most important points, because they were designed to expose whether the code will be the deterrent that the Government think it will be. I am personally extremely sceptical about that, for two very clear reasons, which I will repeat by way of explanation.

First, while this debate is ostensibly concerned with this somewhat anaemic code of practice, it engages much larger questions of access to justice, the balance of power between employers and workers, and, fundamentally, whether the code does what it purports to do and will shield workers from manifest injustice. Given that the introduction of this code was announced in response to P&O Ferries instituting mass redundancies in March 2022, I think it is legitimate to look back at what the Government said then. The then BEIS Minister, Paul Scully, explained the Government’s new commitment to introduce a statutory code of conduct. He did so in highly emotive and, one might say, colourful language. He described the practice of firing and rehiring as “deceitful” and “disgraceful”, labelled the actions of P&O “appalling” and “unscrupulous”, and vowed that the Government would “stand up for workers” against the flagrant disregard shown by companies that use sudden mass dismissal as a negotiating tactic.

Having raised these expectations, it is no wonder that there is manifest disappointment with the glacial emergence, over two years, of a code of practice that will impinge upon employers only at the point a case reaches tribunal. Testing whether or not that will be a deterrent is what I want to draw the Minister’s attention to. I did this in my contribution to the Second Reading debate, drawing attention to the issues of delay and the coming imposition of fees for tribunals. The Minister who responded to that debate, the noble Lord, Lord Johnson of Lainston, was unable to pick up on those points in his winding up of the debate and offered to write—and, true to his word, he did write. I thank him for attempting to ease my anxieties but I confess that his letter was not wholly successful. Indeed, it was the opposite: it raised the temperature of my anxieties.

The letter began by admitting that there remains a backlog of 32,000 cases in the tribunal system, asserting that reducing outstanding caseload is the key to bringing down wait times, before revealing that:

“Employment Tribunal timeliness data has not been published for some time due to the Employment Tribunal changing their case management system in 2021”.


That was three years ago. We have an assertion that bringing down wait times is essential, followed by a confession that, owing to a change in the case management system three years ago, we are today unable to gauge whether or not wait times are falling.

The viability of this code of practice is entirely contingent on a tribunal system that is effective and can prove timely redress. The fact that we currently, by the Government’s own admission, have no access to the data that would tell us whether it delivers timely redress is absurd, if the Government are to rely upon that as being the ultimate deterrent against this behaviour by the people they described with those very colourful adjectives.

The letter also engaged the question of the Government’s consultation on reintroducing fees at this time, of all times, for those who wish to bring a case before an employment tribunal. I thank the Minister for outlining, in his letter, the details of the help with fees remission scheme, but I remind your Lordships’ House that I raised the case of R (UNISON) v the Lord Chancellor in my speech on Second Reading. It is not mentioned at all in the letter, and I can understand why, because the judgment in this case was unambiguous. It concluded that levying fees was unlawful. It cited the Leggatt report, which specifically identified the absence of fees as one of the three key elements that made tribunals successful, and concluded that fees, however modest, have the effect of preventing access to justice. That was the principal point that I raised in that aspect of my speech, and it was just ignored in the letter I got back from the Government.

I understand the fees coming under consideration are appreciably lower than they were previously, but they will certainly not encourage victims of fire and rehire to have recourse to the tribunal system and may well act as a further discouragement. This is yet another case of the Government telling us that they understand the existence of an injustice, assuring us that their heart is in the right place and they are seeking to right a wrong, but then again balking at doing the needful. We are all familiar with the cases of Tesco, Jacobs Douwe Egberts and Carnival and the other cases that seem to be appearing by the day, some of which the noble Lord, Lord Woodley, referred to, and the way in which employers and others weaponise the power advantage they have and exploit their workers. Rather than institute a non-legally binding code of practice that tells employers what they already know, I believe a more fitting course of action would be to enshrine good practice into law and offer clear redress to workers when they are victims of injustice.

[Lord Hendy (Lab)]

My Lords, I share the regrets expressed by my noble friends. I intend to address the second element in the regret amendment put down by my noble friend Lord Woodley, and that relates to the International Labour Organization, which your Lordships will recall is a tripartite body, consisting of Governments, employers and workers. The United Kingdom was a founding member in 1919; it was the first signatory of the fundamental convention on freedom of association—convention 87—in 1949; it is a member of the governing body; and it is represented on the Committee on Freedom of Association.

The relevance of that is that, on 8 November last year, the governing body approved the 404th report of the Committee on Freedom of Association, which reported on the P&O Ferries saga of St Patrick’s Day 2022. Your Lordships will recall that 786 seafarers were dismissed on that date and only 100 were subsequently reinstated. The other jobs were given to agency staff. The Committee on Freedom of Association, as approved by the governing body, made three substantive recommendations, none of which, so far as I can see, is reflected in the code of practice.

The first recommendation related to collective bargaining. The committee said that it

“urges the Government, with the social partners, to ensure mutual respect for the commitment undertaken in collective agreements, which is an important element of the right to bargain collectively and should be upheld in order to establish labour relations on stable and firm ground”.

In many of the instances of fire and rehire mentioned by my noble friend Lord Woodley, there have been established collective agreements and established collective bargaining. That was the case with P&O Ferries, where collective agreements stretching back nearly 100 years were flouted.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

I thank all noble Lords who have participated in this debate. I hope to clarify some key points that were mentioned. I will first turn to the regret amendment tabled by the noble Lord, Lord Woodley. I know that the noble Lord is a champion of protecting and enhancing worker’ rights, but the Government do not believe that his suggested amendment to the code would be appropriate.

The amendment suggests adding measures from his Private Member’s Bill on dismissal and re-engagement and from a report from the International Labour Organization. The measures contained in the noble Lord’s Bill would, in effect, ban dismissal and re-engagement. That is because the Bill would remove the ground of “some other substantial reason” for an employer to justify a dismissal in a dismissal and re-engagement scenario. Almost all cases of dismissal and re-engagement rely on this ground as potentially a fair reason. Therefore, this would, in effect, ban the use of dismissal and re-engagement.

As I said earlier, it would not be appropriate to impose an outright ban on dismissal and re-engagement. There are some situations in which dismissal and re-engagement have a valid role. Companies that are, for example, going through difficult economic times or a change in their business model may need the flexibility to use this option to save as many jobs as possible.

In regard to the International Labour Organization’s Committee on Freedom of Association’s definitive report 404, as raised by the noble Lord, Lord Hendy, I would like to clarify that the UK is committed to all ILO conventions that we have ratified, including Convention 87 on the freedom of association and protection of the right to organise, and Convention 98 on the right to organise and collective bargaining. We are carefully considering the Committee on Freedom of Association’s recommendations and will provide information to the ILO in due course.

Turning to the point made by the noble Lord, Lord Woodley, about P&O Ferries, echoed by the noble Lords, Lord Fox and Lord Leong, as we said at the time, the treatment of staff by P&O Ferries was disgraceful and was called out as such from this Dispatch Box. It fell short of the high standards we expect in this country, and which most businesses uphold. The company deliberately chose to ignore statutory consultation requirements. P&O Ferries broke the law by dismissing its workers with no warning, having made prior arrangements to bring in agency staff to replace them. What P&O Ferries did was “fire”, and not “fire and rehire”. The company dismissed staff with no notice or consultation. I understand that it was not seeking to renegotiate its employees’ terms and conditions, so the code would not have applied.

The noble Lord said that some of those employees were fired and rehired. I thank him for bringing that to my attention. I am not familiar with the detail of their personal circumstances, but speaking generally, if an employer seeks to renegotiate terms and expects that it may dismiss an employee and rehire them or another employee to effect the changes, then it would be bound by the code. The Government have taken action in response to what P&O Ferries did. This includes legislating through the Seafarers’ Wages Act 2023 and the ongoing Insolvency Service civil investigation.

A number of noble Lords raised the deterrent effect of the code and, as I said, the code of practice is a proportionate response, balancing protections for employees with business flexibility. An employment tribunal could increase an employee’s compensation by up to 25% where an employer unreasonably fails to comply with the code. The Government will bring forward legislation so that the 25% compensation uplift also applies to the protective award, where employers have not complied with the collective consultation obligations and have unreasonably failed to comply with the code. The noble Lord, Lord Woodley, asked for an update on this legislative change that will increase the deterrent effect of the code. Subject to parliamentary time, the Government intend to bring this forward this summer.

The noble Lord, Lord Leong, asked when the code would apply to an employee. The code will apply from the first day of an employee’s employment, though it will be subject to qualifying periods in individual claims.

Having heard the debate, I think there is perhaps just a philosophical difference on how we proceed in these matters. This Government believe that our workforce and labour laws are in an advanced and sophisticated state. We have record employment in this country: 33 million out of a population of 66 million working. We have just increased the national minimum wage at twice the rate of inflation over the last 25 years, and only 5% of our workforce is on the national minimum wage. Now that they have reached that level, they can be considered to have been taken out of low pay if that is defined as two-thirds of median hourly wages. They are now at that level, and therefore, within our labour force, our laws are working flexibly.

In my role as Minister for Exports, I travel the length and breadth of the country, and I meet companies of all shapes and sizes. The one observation I will make to this House is that post Covid, there has been a reassessment of the value of labour in this country. The labour force is now one of the most valuable parts of any company’s make-up and capability. There are labour shortages, and good labour is scarce. I would argue, perhaps, that there has never been a better time to be an employee, because of the ability to receive higher wages for good skills that are at a premium, and companies want to have those employees within their businesses. In this situation, and thinking as an employer, I can imagine that it would be only in exceptional circumstances, where we were trying to keep our employees together and keep our company on the road, that we would have such a discussion. It would be absolutely as a last resort.

To take the point raised by the noble Lord, Lord Browne, about there being no teeth and waiting times in the tribunal system, I acknowledge that there are perhaps backlogs in that system, but this is a process that no employer wishes to get caught up in, considering the amount of time and cost it would take when we want to have our employees happy and working and producing effectively for the benefit of all the stakeholders within the company. Just as a matter of philosophy, we would say that this is an exceptional situation. The TUC says that it estimates that only 3% of employers have ever gone down the road of fire and hire. As we said in the code quite clearly, it is not toIn conclusion, I would argue that the Government are taking robust and appropriate action in this area. A statutory code of practice is a proportionate response to dealing with controversial fire-and-rehire practices. The code will address this practice, aiming to ensure it is only ever used as a last resort, and that employees are properly consulted and treated fairly. It clarifies and gives legal force to accepted standards about how employers should behave when seeking to change employees’ terms and conditions. Subject to parliamentary approval, the code will be in force later this summer. The House should be left in no doubt that the Government will always continue to stand behind workers and stamp out unscrupulous practices when they occur.

[Lord Browne of Ladyton (Lab)]

Does the Minister have a response to my question about the coincidence of the Government consulting on imposing fees on those who seek to apply to an employment tribunal in the face of the case of UNISON v Lord Chancellor, where fees were held to be unlawful because they impeded access to justice? This issue was not addressed in the letter that the noble Lord, Lord Johnson of Lainston, sent to me. It was in my speech at Second Reading. Do the Government have a position on that? Is it just a coincidence that this is happening at the same time as employment tribunals are being given the ability to impose an extra 25% of financial penalties on employers who fire and rehire as part of the code of practice?

[Lord Offord of Garvel (Con)]

As the noble Lord knows, one can read Hansard as well as one can, but not being in the Chamber to hear his eloquent argument of the case makes me slightly deficient in this response. I am disappointed that my noble friend was unable to write more comprehensively on the matter. Perhaps I can follow up with a second letter in that regard.

Employment and Trade Union Rights (Dismissal and Re-engagement) Bill [HL]

Lord Browne of Ladyton Excerpts

2nd reading
Friday 1st March 2024 Lords Chamber

[Lord Browne of Ladyton (Lab)]

My Lords, it is a genuine pleasure to follow my noble friend Lord Sikka. It is not the first time his admirable forensic skills have made the House much better informed. He is, in my view, the antithesis to the widely held view that accountants are boring; he is certainly not.

I also commend my noble friend Lord Woodley and the ecosystem that supported him, not just for drafting this legislation but for the powerful, comprehensive and convincing speech he introduced the debate with. Mostly, I thank him for securing a Second Reading that helpfully coincides with the publication and laying of the Government’s feeble draft code of practice. It is remarkably easy, as all the speeches today have shown, to support this legislation. It is even easier to criticise and disaggregate the useless code the Government have come up with. I intend to spend a bit of my time trying to do that.

I have read almost every word that has been recorded in Hansard about the practice of firing and rehiring, and there seems to be a broad consensus on the unfairness of this practice. The debate is not a diagnostic one; we all know that this is a problem. It is rather a debate about solutions. While I recognise that recently the Government have fulfilled their commitment to publish and lay a draft statutory code of practice, I simply do not believe that it will have a material impact on removing the thumb on the scales that currently tilts the balance of power strongly in favour of unscrupulous employers. There is a catalogue of companies, and now, unfortunately, local councils, which have used this dreadful practice. There is no point in going through them; we all know that.

Given that the introduction of this code was first announced in response to P&O Ferries instituting mass redundancies in March 2022, I understand those who feel a little sceptical when the Government claim they wish to provide urgent redress. What can explain the slowness with which they have moved in this matter? The then BEIS Minister, Paul Scully, explained the Government’s commitment to introduce a statutory code of conduct in emotive and highly colourful language. He described the practice of firing and rehiring as “deceitful”, and “disgraceful”, labelled the actions of P&O “appalling” and “unscrupulous”, and vowed that the Government would “stand up for workers” against the “flagrant disregard” shown by companies that use sudden mass dismissal as a negotiating tactic. What has been the response to this clarion call—the Government’s own clarion call? We have seen the glacial emergence of a code of conduct over two years that will impinge on employers only at the point if a case were to reach a tribunal.

Given that, it may be worth examining the degree to which the tribunal system is currently calibrated to provide swift and effective redress for victims of this practice at all. Although backlogs have eased from pandemic levels, the average waiting time for claims to arrive at final hearing has increased, with some cases taking between 12 and 18 months from the date of issuing a claim. Furthermore, the Government have just begun a consultation on reintroducing fees for those who wish to bring a case before an employment tribunal. The last time this was tried, the Supreme Court ruled that unlawful in UNISON v Lord Chancellor 2017, and the judgment in that case was unambiguous. It cited the Leggatt report, which had identified the absence of fees as one of the three key elements that had made tribunals successful, and it concluded that levying fees was unlawful because

“it has the effect of preventing access to justice”.

The fees currently being considered by the Government are appreciably lower and accompanied by a fee remission scheme. They will certainly not encourage victims of fire rehire to have recourse to the tribunal system, and they will likely act as a further discouragement.

My final point on the tribunal system concerns the Government’s reasoning for introducing fees. The open consultation they have started explains that it is unfair for the taxpayer to bear the burden for the tribunal system while those who have recourse to it can access it without charge. Are they serious? There are some areas of policy in which this reasoning holds true, but this is not a question of repaying an investment or a discretionary activity; it is about access to justice for the vulnerable, which is a fundamental tenet of a civilised society.

Rather than reposing its faith in the forthcoming code of conduct, the Bill enshrines good practice into law and provides clearer lines of redress where appropriate standards are not met. Ultimately, the Bill is about justice and accountability. It protects workers from having their pay and conditions degraded under duress and ensures that, where companies or public sector employers, such as councils, choose to do this, they will do so only at the price of breaking the law.

Guidelines in the form of a non-binding code of conduct are simply inadequate. I do not believe that managers who threaten to fire several hundred employees unless they accept a pay cut do this without knowing that they are doing something wrong. They simply choose to do it anyway. The Bill prevents that, enshrining good practice into law. As my noble friend Lord Woodley told your Lordships’ House, the Bill would mandate appropriately deep consultation with unions. It would allow employees automatically to claim unfair dismissal in the absence of the best practice, and it would allow unions to do what they are designed to do and take rapid action where a reaction is needed to a fire and rehire threat.

Clause 2 speaks directly to the debate about equity between employers and their staff. First, it states that any change to an employment contract would be void if it was obtained under threat of dismissal. Secondly, it removes one of the arguments currently in the Employment Rights Act 1996 that an employer can make, in the case of fire and rehire, to show that such a dismissal was fair—namely, that there is “some other substantial reason”. Instead, the employer would be obliged to prove bad conduct, lack of competence, a threatened breach of the law or that the employee’s job had become obsolete. This specificity will ensure that fire and rehire will no longer be possible as a negotiating tactic.

Crucially, as my noble friend stressed and re-stressed, the Bill does not ban fire and rehire outright. There are cases where it is the only means of protecting jobs by preventing a company from collapsing altogether. The Bill is an attempt not to strangle enterprise but to ensure that those whose hard work has made an enterprise possible are protected from having their pay and conditions changed by managerial fear.

I began my remarks by saying that politicians of all stripes have acknowledged that the use of fire and rehire as a negotiation tactic is wrong. Granting that, the question that follows is about what solution we believe will be most effective: is it the passing of provisions that will explicitly prevent this practice, or placing our trust in adherence to a code of conduct that is not legally binding? My answer to that question is reflected in the support I offer the Bill and the support I will offer any similar measure that will come before your Lordships’ House.

Post Office Horizon: Compensation and Legislation

Lord Browne of Ladyton Excerpts

Tuesday 27th February 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am grateful to my noble friend and pay tribute to his work. The Post Office will not play a role in deciding the correctness of the overturned convictions in the Bill; that will be a matter for the Government. The statement about the Post Office paying compensation is well heard. I am grateful for that and I hope I have made the point that the Government continue to look into it. Having said that, the Post Office has paid a very large quantum of compensation payments—several thousand, I think. It would be extraordinary if the team there were not completely aware of the need to ensure that they get this right, I hope including significant cultural change. There has been a wholesale change of individuals on the board of directors since 2021 and 2022. Currently, the important thing is to get the compensation payments paid and, in parallel, review how the process is working.

[Lord Browne of Ladyton (Lab)]

My Lords, because of the moral imperative, when I was Secretary of State for Defence, in 2006 I amended the Armed Forces Act with two clauses to pardon 309 of the 346 shot at dawn for cowardice. The evidence suggested that most of them were suffering from PTSD and the records for the rest were poor. I was told that this would be a slippery slope and that I would undermine military justice by so doing, and historians told me that I was changing history. Military justice has survived and is just as robust as before, and on the “Today” programme I said to a historian that I was not remaking history but making it. Ministers are making history now, absolutely rightly, because of the moral imperative.

The Post Office’s lawyers, who were responsible for a number of these convictions, have tried to influence Ministers. I have not seen the letter, but I understand from the way in which it has been reported that they said

“it is highly likely that the vast majority of people who have not yet appealed were, in fact, guilty”

because there were

“clear confessions and/or other corroborating evidence of guilt”.

From what I have seen of the way in which these interrogations were conducted, it is no wonder that some of these people confessed. They had this evidence from the Horizon system rammed down their throats and were told what the consequences would be if they did not confess. It seems to me that these confessions are pretty poor and I cannot think of any other evidence that could corroborate the false information that this system was producing. I do not see the argument here.

The Government should look very carefully at these cases before exoneration or quashing the convictions. As I understand it, the Minister said that they will ask people whose convictions are quashed to sign a statement that may later cause them to be prosecuted for fraud. We should not leave anyone with that hanging over them. We should check all these cases and see exactly what Peters & Peters is talking about, because I cannot think of anything that was not poisoned by Horizon.

Finally, my noble friend raised this crazy presumption that computers always produce the truth. When will we do something about this in the laws of evidence in this country?

[Lord Johnson of Lainston (Con)]

I thank the noble Lord for those points. I was reminded of his making of history in an unprecedented and wholly unique way only a few years ago. I think he will agree that that was the right thing to do then and that this is the right thing to do now. It does not set a precedent; these are truly specific circumstances. I agree with him about the principle around the confessions. The excellent and important TV series powerfully demonstrated the relevance of this point; in a number of cases, people seem to have been given ultimatums to accept an admission of guilt for a lower level of penalty. It is right that this legislation, when it becomes an Act, will exonerate all those who fulfil these criteria.

I push back on the principle that each of the cases should be reviewed in the detail that the noble Lord suggested, because the whole point is that we want to move with a sense of pace. It has been widely reported—and, I am sure, discussed among everyone who has been following the case—that it is certainly possible that some people who have committed a crime will be exonerated. It is the Government’s view—I call on the legal experts in this House in saying this—that the clear uncertainty on which the evidence was based would impact the retrials. I would have assumed that, if there was a retrial for each case, the baselessness of the evidence being used would mean that, even if those people were guilty of committing a crime, they would probably be exonerated in many instances. It is not simply around the technical element of the necessity; it is the fact that we want to move fast, and we want to exonerate these people who are aging—in many instances, sadly, some have already passed away. It is the right thing to do, and it sends a very clear message that this country and our two legislative Chambers want to redress a significant wrong.

Post Office Governance and Horizon Compensation Schemes

Lord Browne of Ladyton Excerpts

Wednesday 21st February 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

On the first point, I do not have the exact intricacies of which bank account the money sits in. I am happy to write about that, but it seems to me that if the Treasury and the Government have said we have a potential liability of £1 billion, we are good for the £1 billion. I will find out where it is sitting, if that is the question, but to me that is perhaps a lesser matter.

On the Staunton case, I am not prepared to do HR in the Chamber. That would not be fair or right. We should not talk about detailed conduct allegations in a Chamber such as this. The chairman was dismissed by the shareholder, the Secretary of State. In any company I have ever operated in, the shareholder is entitled to remove a chairman. The chairman’s job is to represent the shareholder, so if the shareholder is not happy with the chairman, it is absolutely valid that the shareholder can dismiss the chair. That is what happened in this case, and there is now a process that is better done in private. Let us not do HR in the Chamber.

[Lord Browne of Ladyton (Lab)]

My Lords, I recognise that the outcome of this competition of accounts between Henry Staunton and the Secretary of State could have significant consequences for them both, certainly for the Secretary of State if she is proved, at the end of the day, not to have been truthful to Parliament. She has another problem to do with what Canadian High Commissioner Ralph Goodale has said to the Business and Trade Select Committee, so she is in some difficulty.

I am in the space that I think the noble Lord, Lord Arbuthnot, is in. I do not think that this unedifying spectacle—this sideshow of mud-slinging—is the Minister’s priority. The priorities need to be full and proper compensation to the people who have lost out; the restoration of their good name in all the ways that will be necessary, which will involve exoneration; and, in the longer term when the inquiry is over, proper accountability for the people responsible for this. In the immediate term there is a simple way of resolving this competition of accounts: to put into the public domain all the information that it is proper to and to let the people out there see it and make up their own minds. They will in any event.

My real concern is that there is almost certainly an ongoing miscarriage of justice occurring in our justice system, as has been exposed, properly, by this Horizon scandal. It is the ludicrous presumption that if information comes from a computer, it is deemed to be reliable evidence. If that is to be challenged, it is up to the person who is claiming that it is not right—not the person who owns the computer—to show that the computer is not producing the right evidence. When on earth will we get this presumption changed around the right way? There must be daily cases in our courts that are not up to the level of the Horizon scandal, in spades and at every single level, creating other miscarriages of justice whose mess we may have to clean up in future at enormous expense to the public.

[Lord Offord of Garvel (Con)]

I absolutely agree that the Staunton issue is a distraction that none of us needs; it is certainly not in the interests of the postmasters and postmistresses, who want to see compensation paid and convictions overturned. As I said, the Ministry of Justice is working expeditiously to sort the overturning of convictions. As I have also said before in this Chamber, there will be serious ramifications regarding a number of matters that will come from the inquiry when it is finally published. I imagine that the matter about which the noble Lord has deep knowledge, the presumption that the computer is always right, will be one such. I imagine that will be taken forward following the inquiry.

Post Office Ltd

Lord Browne of Ladyton Excerpts

Tuesday 30th January 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for her question. We have to clarify that what we are doing here is separating their compensation, so that it is done as immediately and expeditiously as possible. Then we will do fact-finding through the inquiry and accountability will follow. The Prime Minister and Secretary of State have said that there will be no deadline put in place, partly because this is a complex process that requires the postmasters to co-operate and come forward. Of the 2,417 postmasters in the HSS scheme, 100% have received offers, of which 80% have been accepted. We are making great progress.

[Lord Browne of Ladyton (Lab)]

My Lords, on the issue of how long the arm between the Government and the Post Office was, in 2020, following a High Court decision against the Post Office, experts on electronic evidence were invited by the Government to suggest changes to the legal presumption that computers are reliable. That lies at the heart of this case. To whom did those experts report, was the Post Office consulted about whether the recommendations should come into force and why have the recommendations never even surfaced, let alone been put into force?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his question. I know that he is well versed in these matters. As we have discussed in the House before, there will be many ramifications from this case when the facts come out, one of which, as the noble Lord highlighted, is this presumption that the computer is always right, which clearly was not the case. I would have to refer to MoJ colleagues to find out exactly what happened in that case. The judgment was given in the Appeal Court in 2019 and the inquiry was set up in 2020. In 2021, when the convictions were overturned, the inquiry became a statutory inquiry. Under a statutory inquiry, we will get to the bottom of those questions.

Alan Bates and Others v Post Office Limited

Lord Browne of Ladyton Excerpts

Wednesday 24th January 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his question. The Horizon system has been upgraded—and upgraded again since 2017—and we now have a reasonable audit that it is now working satisfactorily. It will now be further replaced by a cloud system that will run alongside the current system, so I think there is now a feeling that there is efficacy in that system. What the noble Lord refers to is why there was an unshakeable belief in the computer system that went on for so long. We need to understand exactly how that happened, what the role of Fujitsu was in that, whether this was corporate malfeasance or the role of one or two individual bad actors, et cetera. We need to get to the bottom of that, and that is what the Williams inquiry will do.

[Lord Browne of Ladyton (Lab)]

My Lords, the reference my noble friend Lord Sikka made to the comparative inaction in respect to the directors of Carillion is but one of a number of scandals of which the Post Office Horizon scandal is the latest. It is another example of how poorly equipped the UK is to deal with corporate abuses.

Let us look across the Atlantic to New York. At the instance of Manhattan’s District Attorney, 17 of the Trump Organization’s many corporations were convicted of criminal offences, including tax fraud. Its chief financial officer pleaded guilty, was fined the maximum in compensation, and went to jail for five months. Now, the Attorney General of New York is asking a court to ban Trump and his three eldest children from ever running a corporate business in New York again, and to fine them $250 million. Can the Minister point me to any similar type of prosecution in this country, or tell me how that could ever happen here? I believe it could not.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that question. The Financial Reporting Council is the UK body that deals with accounting failures. It had a considerable review following the failure of Carillion and British Home Stores—the Sir John Kingman review in 2018. A number of Carillion’s previous directors have been disqualified and other cases are still under way. The FRC is now much more effective as an audit regulator—it has had a change of personnel, and the relationship between the FRC and the audit companies has been removed at further arm’s length. There is still a long way to go, but the FRC is now in a position to take more stringent action.