Sub-postmasters: Compensation
Lord Callanan Excerpts(4 years, 4 months ago)
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Lord Arbuthnot of Edrom
To ask Her Majesty’s Government what assessment they have made of the level of compensation received by sub-postmasters as a result of the Horizon accounting system litigation, as compared to the losses those sub-postmasters incurred due to Post Office Ltd’s policies.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, while the Government are pleased that a resolution has been reached on this difficult matter, the Post Office led the mediation and the Government were not party to it. While the financial settlement is a major step toward resolving some of these grievances, there is much more for the Post Office to do, including resetting its relationship with postmasters and addressing historic shortfalls for postmasters who were not part of this group litigation.
Lord Arbuthnot of Edrom (Con)
My Lords, I am grateful to my noble friend. Many of your Lordships will have been delighted to hear the Prime Minister say last week in Prime Minister’s Questions that there would be an independent inquiry into what he described as the Post Office Horizon IT system “scandal”. Can my noble friend give us details of that inquiry, in particular of how it will be independent of not only the Post Office but the Government?
Lord Callanan
First, I pay tribute to my noble friend for rightly pursuing these matters with dogged determination. We probably would not be where we are today without his work and that of many others on this issue. The Government recognise the strength of feeling about the negative impact that the court case has had on postmasters. As my honourable friend, Paul Scully MP, announced at BEIS Oral Questions on Tuesday, we are looking into what needs to be done. We will outline the next steps following the Prime Minister’s announcement as soon as possible.
Baroness Burt of Solihull (LD)
My Lords, we on these Benches welcome the Prime Minister’s commitment to an independent inquiry into what he described as a “scandal”. We hope that those who did not take legal action will get full and rapid compensation, though I appreciate the Minister’s comments on the set-up. But no compensation can make up for the emotional trauma and loss of reputation, livelihood and health that has cost people dearly. Will the Minister agree, like us, to press for full compensation as well as restoration of moneys lost?
Lord Callanan
The noble Baroness makes an important point. In the near future, a scheme will be announced with the aim of addressing the historic shortfalls for postmasters who are not part of the group litigation. The Government will challenge and monitor the progress of this scheme. There is also the important issue of people convicted of offences: 57 cases have been referred to the Criminal Cases Review Commission. If a case is referred to the Court of Appeal and a conviction is overturned, there are avenues for people to pursue compensation there as well.
Lord McNicol of West Kilbride (Lab)
My Lords, I want to follow up on the point made by the noble Lord, Lord Arbuthnot. At Prime Minister’s Questions, as has been said, the Prime Minister committed to an independent inquiry on the back of a Question from Kate Osborne about whether he would launch such an inquiry. The Prime Minister said that he would follow up on that but No. 10 communications later said that no decisions had been taken with regard to a specific independent inquiry. I was not clear from the Minister’s earlier answer whether we are going to progress with an independent inquiry to get to the bottom of this matter. We had a very good debate in the Moses Room on it last week, and a lot of information came out. Can the Minister say whether there will be an independent inquiry and, if so, what its timescale will be?
Lord Callanan
We agree that there needs to be a full examination, with due rigour, of what happened and what the next steps will be, but I cannot go further than the answer that I gave earlier to my noble friend—that, as soon as we can, we will announce the next steps following the Prime Minister’s announcement.
Lord Howell of Guildford (Con)
My Lords, it is possibly worth remembering in this case that a major national organisation running a public service has stamped on and destroyed the lives not merely of local innocent people but of local people who are key members of their communities, serving those communities and doing their best to maintain the community spirit. Can this matter be addressed with intense urgency? Otherwise, some very sad personal tragedies will follow.
Lord Callanan
My noble friend is absolutely correct and I agree with what he says. There were a number of tragedies and some people committed suicide as a result. There is no question but that the Post Office management at the time behaved disgracefully but none of them is now in post. It is very important that we get on with these matters as quickly as possible. Some of them are subject to the judicial process, which my noble friend will know I cannot comment on, but I hope that there will be a resolution as soon as possible for these sad, unfortunate individuals.
Lord Hain (Lab)
What lessons have the Government drawn from this? This is a public corporation that has acted in an authoritarian way to trash the reputations of pillars of the community—people who are respected in the local community. There must be some lessons to be drawn by the Government. What are they?
Lord Callanan
The noble Lord is entirely right: a number of lessons need to be drawn. The Post Office is an independent company where the shareholding is owned 100% by the Government, and we appoint an independent director to the board. During the unfolding of this scandal, BEIS officials were clearly misled by the Post Office and the information provided was not correct. We are looking at a new governance framework to address these matters going forward and, again, an announcement on that will be made in due course.
Baroness Redfern (Con)
My Lords, it has been acknowledged this morning that the PM said a few days ago that we need to get to the bottom of the matter. Does the Minister agree that an inquiry needs to begin sooner rather than later and that its scope should include the possibility of changing the police records and decriminalising those who were falsely accused?
Lord Callanan
I hope that we can get the matter resolved as quickly as possible. The work of the CCRC is important and the Government cannot interfere in it. I understand that decisions on this issue are expected fairly soon and will then have to go back to the Court of Appeal. I think we all wish that the judicial process could be speedier at times but we have to let these matters take their course. However, I take on board my noble friend’s concerns.
Lord Polak (Con)
My Lords, in a previous discussion on this issue, I asked the Minister about the role of the Government’s non-executive director on the board of the Post Office. In reply, he said:
“His role has evolved from a perhaps more passive approach to a much more active one going forward.”—[Official Report, 4/2/20; col. 1711.]
Can my noble friend tell us what this new active approach of the Government’s non-executive director is?
Lord Callanan
My noble friend makes an important point. As I said in response to an earlier question, we are looking at the framework of the decisions. This is not just about the role of the non-executive director; it is about the whole oversight of the organisation by BEIS—how we improve the governance and monitoring of what is, in effect, an independent company. Operational decisions are a matter for the board of the Post Office, but clearly the fact that I am standing here in front of your Lordships answering questions now shows that it is a company owned 100% by the Government. Lessons need to be learned and we need to get to the bottom of this. I have spoken personally to the new chief executive of the Post Office, as have other ministerial colleagues, and we are satisfied that he now has a grip on the situation. The accounting system has been improved and the board is co-operating fully with the work of the Criminal Cases Review Commission, as indeed it should.
Parental Bereavement Leave Regulations 2020
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Lord Callanan
That the Grand Committee do consider the Parental Bereavement Leave Regulations 2020.
Relevant document: 4th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, I beg to move that the draft regulations laid before the House on 23 January 2020 be approved. These SIs implement a new entitlement to paid leave for employees who lose a child under the age of 18, or whose baby is stillborn.
Every year, there are around 7,500 child deaths, including stillbirths, in Great Britain. While this number is relatively small, each parent of those babies and children will, of course, experience unimaginable grief and sadness following such a tragic event. At the moment, there is no specific right to take time off work to grieve following the loss of a child. The majority of employers respond to these circumstances with great sensitivity and compassion, but sadly there are still a few who do not. These SIs will ensure that there is a statutory minimum provision in place which all working parents can rely on in the event of a child death or stillbirth. They will also establish a clear baseline of support for employers when managing bereavement in the workplace.
Before I go on to explain exactly what each of the two SIs actually does, I thank the noble Lord, Lord Knight of Weymouth, for his excellent stewardship of the Parental Bereavement (Leave and Pay) Act 2018 through this House. It is this Act that gives the Government the powers needed to make these SIs.
The draft Parental Bereavement Leave Regulations 2020 give all employees a right to a minimum of two weeks off work in the event of their child’s death or stillbirth, regardless of how long they have worked for their employer. The Statutory Parental Bereavement Pay (General) Regulations 2020 implement a new statutory payment for parents taking time away from work following their bereavement, subject to the same eligibility criteria as all other statutory family leave payments.
The SIs for which I seek approval today set some of the key policy detail in relation to leave and pay, including how a “bereaved parent” will be defined, how and when the leave and pay can be taken, and the notice and evidence requirements. A “bereaved parent” for the purposes of entitlement to this leave and pay has been defined in broad terms, by reference to the employee’s relationship to the child. The definition reflects the diversity of family structures, taking account of biological and adoptive parents, as well as certain foster carers and kinship carers.
The SIs provide for two weeks of parental bereavement leave per bereaved parent, per child or stillbirth. Individuals will have the choice to take the two weeks consecutively or non-consecutively if they want one week initially and one week further on. The regulations provide a window of 56 weeks, beginning with the date of death, in which the entitlement can be exercised. Bereaved parents will therefore be able to take time off in the immediate aftermath of the death, or at a later point, for example around the first anniversary, or on both occasions.
Lord Stevenson of Balmacara (Lab)
My Lords, this has been a useful and helpful debate on an uncontentious set of regulations stemming from a Bill which had to be a Private Member’s Bill but did, it should be said, feature in the 2017 Conservative manifesto—which is why it may have got through with the speed it did. This is in no sense to denigrate it, but from listening to the debate, one might have imagined that it would have been a flagship measure in certain circumstances. It was not to be that way, but that does not take anything away from the fact that this is an important social measure which we welcome.
In a sense the narrative, as rehearsed by my noble friend Lord Knight, reflects the fact that the campaign raised by Lucy Herd has been successful in getting movement in this area. The order before us is about the consequences of that Bill, the consultation that took place and the decisions taken as a result. Despite the points already been made today, we can be pleased that the consultation went well. It seemed to cover exactly the points we were nervous about when saw the Bill through both Houses. The results, although they may not satisfy everybody, give enough of a base for introducing the arrangements that we can welcome them.
Having said that, the points made by the noble Lord, Lord Hendy, are valid. Indeed, I was going to make them myself. We need to settle the question of whether we are going to treat fairly and equitably those who work across the various boundaries described by the noble Lord. I hope that the employment law, when it comes forward, will cover the gig economy and benefits for those who are workers but not employees. There will be no question of the Government being able to rely on the EU regulations in force not permitting them to do this because we will be able to do that ourselves, will we not?
Having been welcoming and supportive of what has been said and noting the points made by noble Lords about issues that perhaps still need to be picked up, I want to mention three myself. First, I welcome the fact that that these regulations have a common commencement date. The Minister will have been advised that I have a thing about this. His predecessor managed a score of one set of SIs starting on a common commencement date and 13 SIs that did not. There was never an adequate answer for that. It just seemed to be the way it happened. I am delighted that the Minister is starting his regime with an appropriate commencement date of 6 April.
Secondly, I read both draft instruments looking for the point picked up in previous discussions in the Grand Committee today about uprating arrangements. I assume that it is automatic, but given the experience of those in the previous debate of there being no statutory requirement to uprate, can the Minister confirm that these payments, if successfully claimed, will be uprated annually? If he cannot confirm that today, perhaps he can write to me.
Thirdly, when the Minister introduced the debate, he estimated that there are 7,000 child deaths a year. However, the Explanatory Memorandum has a figure of 10,200 parents a year eligible for parental bereavement leave, with 9,300 of those eligible for the payment. Can he confirm what the figures actually are? We have just discussed whether we should include in the figures gig economy workers who are not employees, so I think the overall figure is probably bigger. However, as the noble Baroness, Lady Brinton, said, it is still a small number and therefore not one that carries political weight, but we should know what we are talking about. Again, if the figures are not available, I would be happy for the Minister to write to me.
We support these regulations. They have been interpreted with sensitive regard to what is required, with the evidence that came forward supporting what we said at Second Reading. They are therefore welcome.
Lord Callanan
I thank all noble Lords for their valuable contributions to the debate. I start by reflecting the point made by the noble Lord, Lord Knight of Weymouth. The legislation would not have made it this far were it not for the commitment and support of Lucy Herd, and of Kevin Hollinrake and Will Quince and others in the other place—on both sides of the House, it is fair to say—as well as the work of the noble Lord.
I totally associate myself with the remarks the noble Lord made about the political process. It is often a source of great frustration, even to those of us within government. I am profoundly grateful to have the honour of presenting the regulations, which in no sense were my work, in this place. It shows that occasionally the political process works to the benefit of the people that we are all here to help and it was great to see the support for this measure on both sides of this place. As well as thanking the politicians, I thank all the officials in my department who worked hard to bring these measures before us today.
I hope noble Lords will agree that the Government have carefully considered the needs of bereaved parents, as well as those of employers, in drafting these regulations. I agree with the noble Baroness, Lady Brinton, that the broad definition of a bereaved parent—relying on a parental relationship, rather than biological parentage, to determine eligibility—will ensure that this provision reaches those who need it most. She will get the answer she was expecting to her second point: the policy in this area is not held by my department; it is a matter for the DWP. However, I will ensure that her point is conveyed to that department and that she gets a written reply to her valid concerns.
As I have already set out, the entitlement can be taken flexibly, giving bereaved parents choices about how best to use their time off to support their own, individual grieving process. This is important, as grief rarely follows a predictable path and significant events, even some time after the death, can cause bereaved parents to need time away from work. Wherever possible, these regulations have sought to mirror the existing framework of family-related leave and pay entitlements, which is familiar to most employers. The regulations ensure that an employer has certainty about when their employee will be off, which will enable them to plan ahead. I hope that this will ultimately lead to a more supportive and compassionate response from employers.
These regulations represent a statutory baseline, which should be considered the bare minimum for an employee who has suffered such a tragic loss. Many of us who are parents cannot comprehend the pain that someone in such circumstances will go through. As always, the Government encourage all employers to go further than the statutory minima where they are able to, and to act compassionately and considerately towards their staff. I am happy to say that many employers already provide exemplary bereavement support to their staff. However, there are still a small minority who do not, so I hope that this new legislation will not only ensure a minimum protection for all employees, but lead to better workplace support for bereavement across the board.
ACAS has produced guidance with Cruse, the bereavement specialists, for employers on managing bereavement in the workplace that includes specific advice relating to a parent losing a child of any age. We encourage employers to take notice of the ACAS guidance and to go beyond this statutory minimum in their own workplace policy where possible. I understand the concerns of the noble Lord, Lord Hendy, about the lack of provision for bereaved parents who are self-employed, or who are “workers” as opposed to employees. The Government understand the challenges that the self-employed and other non-employee parents face. We will continue to keep differences in treatment between self-employed and employed people under review with respect to parental leave and pay.
I am happy to reassure the noble Lord, Lord Stevenson, that this payment will be uprated annually, in line with other family payments. Regarding the numbers—we had 7,500 and he quoted 10,500—every child’s death will have a number of parents associated with it. The number in the impact assessment is not exactly twice the number of deaths; the 10,500 takes account of many things, including the number of parents who are not employees. If it would be helpful to him, I can write to him to explain that in more detail.
I hope I have answered all the questions. I commend these draft regulations to the House.
Statutory Parental Bereavement Pay (General) Regulations 2020
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Lord Callanan
That the Grand Committee do consider the Statutory Parental Bereavement Pay (General) Regulations 2020.
Relevant document: 4th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
National Minimum Wage (Amendment) Regulations 2020
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Lord Callanan
That the Grand Committee do consider the National Minimum Wage (Amendment) Regulations 2020.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the purpose of the regulations is to increase the national living wage and all of the national minimum wage rates from 1 April 2020. The regulations also include an increase in the accommodation offset rate, which is the only benefit in kind that counts towards minimum wage pay.
The national living wage has had a positive, real-terms impact on the earnings of the lowest paid. Between April 2015 and April 2019, those at the fifth percentile of the earnings distribution saw their wages grow by almost 11% above inflation. This is faster than at any other equivalent point in the earnings distribution. The labour market has continued to perform well: the employment rate is at a record high of 76.5%, while the unemployment rate is at 3.8%, the lowest rate since the 1970s.
From April, the national living wage for those aged 25 and over will increase by 51p to £8.72, which is a 6.2% increase. The 51p increase in April will mean that full-time workers on the national living wage will see their pay increase by £930 over the year. This national living wage increase is projected to meet the Government’s target of 60% of median earnings in 2020. The national minimum wage rate for 21 to 24 year-olds will increase by 50p, meaning that those in this age group will be entitled to a minimum of £8.20, an annual increase of 6.5%. Those aged between 18 and 20 years old will be entitled to a minimum of £6.45, which is an annual increase of 4.9%, while those aged under 18 will be entitled to a minimum of £4.55, an annual increase of 4.6%. Finally, apprentices aged under 19, or those aged 19 and over in the first year of their apprenticeship, will be entitled to £4.15, which is a 6.4% increase. All of these above-inflation increases represent real pay rises for the lowest-paid workers in the United Kingdom.
All the rates in these regulations have been recommended by the independent and expert Low Pay Commission. As noble Lords will be aware, the commission brings together employer and worker representatives to reach a consensus when making their recommendations. The Government asked the commission to recommend the rate of the national living wage such that it reaches 60% of median earnings in 2020, subject to sustained economic growth. For the national minimum wage, the commission has recommended rates that increase the earnings of the lowest-paid younger workers as high as possible without damaging their employment prospects. I thank the Low Pay Commission for its extensive research and consultation, which has informed these rate recommendations, all of which is set out in its 2019 report, published in January.
The Government have further pledged to raise the national living wage to two-thirds of median earnings and apply it to those aged 21 and over by 2024. The Low Pay Commission will continue to have a central role, ensuring that the lowest-paid workers benefit from national living wage increases.
On the subject of enforcement, the Government are clear that anyone entitled to be paid the minimum wage should receive it. That is why we have more than doubled the enforcement and compliance budget, with funding reaching £27.4 million for 2019-20, up from £13.2 million in 2015-16. HMRC follows up on every complaint it receives, even those which are anonymous. This includes complaints made to the ACAS helpline, via the online complaint form, or from other sources. Increasing the budget allows HMRC to focus on tackling the most serious cases of non-compliance, while educating employers into compliance. In 2018-19, HMRC identified a record £24.4 million in pay arrears for over 220,000 workers, and issued more than £17 million in penalties for non-compliant employers. The Government have taken further measures to help employers get the rules right first time by providing improved guidance and support.
While increases in the national living wage and national minimum wage represent a cost to some businesses, the Government have introduced a number of measures to support them. For example, we have cut the corporation tax rate from 28% in 2010 to 19% today, benefiting more than 1 million companies and delivering the lowest rate in the G20.
Record increases to the national living wage and national minimum wage rates are just part of this Government’s agenda to make the UK the best place in the world to work. I commend the draft regulations to the Committee.
Baroness Burt of Solihull (LD)
My Lords, it would be churlish not to congratulate the Government on achieving their target of 60% of median earnings this year. I also welcome the increased funding for enforcement.
The increase in the national living wage will provide a considerable uplift for the working poor in our country. A top rate of £8.72 is getting closer to the Living Wage Foundation’s recommended £9.30—I presume that it will be further uprated in due course—but it is still a way off the London living wage of £10.75. I should probably know this, but can the Minister explain why there is no Low Pay Commission London minimum wage, when clearly it is more expensive to live in London than anywhere else?
The difference between the minimum wage and the living wage is that the living wage is based on a basket of goods and services which should give a basic but acceptable standard of living. It therefore follows that the national minimum wage is not sufficient for someone to live on. Instead, it has to be subsidised by the Government through universal credit and various other benefits.
I can see that different individual and family circumstances will need a different underpinning level of help. The idea of always making work pay was quite a genius move on the part of the Government when it came in, but implementation was, and still is, another story. Fortunately, that does not come within our remit today. We are where we are and there is something to celebrate.
The adult rate for 21 to 24 year-olds received the greatest percentage uplift, at 6.5%, but the youth rate for under-18s has fared proportionately worse, at 4.6%, or the princely sum of 20p an hour. I know that it is argued that these youngsters enter the world of work with very little knowledge, but it cannot help their self-esteem to give them a 20p rise, especially if they and their families need that money.
I wish I had a crystal ball to see whether, in a time of full employment and even greater skills shortages, not helped by this Government’s immigration policies, wage rates will rise above and beyond the minimum. Unfortunately, I do not have a crystal ball, except to predict that we are all likely to meet here next March. Who knows what state the country and wage rates will be in then?
Lord Callanan
I thank the noble Baroness, Lady Burt, and the noble Lord, Lord Stevenson, for their contributions to this important debate. I do not know whether it is a commentary on the time that the debate is being held or the fact that there is such widespread support for the Government’s policy that they are the only two valiant Peers who have turned up to comment on something that will make such a difference to hundreds of thousands of workers in this country.
The introduction of the national minimum wage and the national living wage is one of the great successes of the UK labour market. Since the year that the national living wage was announced, the annual earnings of a full-time minimum wage worker will have increased by more than £3,700. That is equivalent to a 21% increase in the national living wage since 2015. The record high employment rate shows that a higher minimum wage can go hand in hand with strong employment growth. The Government’s green-rated impact assessment estimates that the minimum wage increases we have debated today will directly benefit around 2.4 million low-paid workers, and of course nearly 8 million workers are estimated to benefit both directly and indirectly because some workers who are paid slightly above the minimum wage will also benefit from increases in the average wage of employees in their companies.
Sustainable increases in minimum wage rates also depend on strong economic fundamentals and I am delighted to say that those of the UK are strong. Since 2010 our economy has grown by 19.5%, which is faster than in France, Italy and Japan. In 2016 the Government committed to raise the national living wage to 60% per cent of median earnings and we have stayed loyal and true to that commitment. Looking ahead, our pledge to raise the national living wage to two-thirds of median earnings by 2024 makes the UK the first major economy in the world to set such an ambition.
Artistic Content: Copyright Protection
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Lord Clement-Jones
To ask Her Majesty’s Government what steps they are taking to ensure that United Kingdom creators of artistic content have the same level of copyright protection as those working in the European Union.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, UK copyright works, such as books, films and music, will continue to be protected in both the EU and the UK because of the UK’s participation in the international treaties on copyright.
Lord Clement-Jones (LD)
My Lords, in contrast to the Government’s present intention not to implement the copyright directive, the Culture Minister, Nigel Adams, said in January:
“It is imperative that we do everything possible to protect our brilliant creators”.—[Official Report, Commons, 21/1/20; col. 56WH.]
Does the Minister recognise that creative workers are crucial to the success of the UK’s creative industries; that many rely on payments related to copyright to sustain their careers; and that the new rights in the copyright directive, for which they fought hard to be included, are absolutely essential? These include transparency, contract adjustment and, of course, fair remuneration. Should these not now be introduced in UK law?
Lord Callanan
As the noble Lord will be aware, the UK has now left the EU and the transition period will end on 31 December. This means that the UK is not required to implement the copyright directive, but the UK has one of the strongest copyright protection frameworks in the world. Many of these are subject to international treaties, which we will continue to be members of. We will continue to value the creative sector; of course its work should be recognised.
Lord Watts (Lab)
My Lords, the creative industries will face major problems when we finally leave Europe. Is the Minister working with the industry to do something about visas, which are a particular problem for travelling artists?
Lord Callanan
The visa system will be the subject of negotiation. The UK is about to implement a new immigration system, but we will, of course, want to continue to co-operate closely with our friends in the EU on these matters. Artists will continue to want to transfer backwards and forwards for their work.
The Earl of Clancarty (CB)
My Lords, with respect to the Question, will culture, media and arts services be included in future trade deals with the US, with which we already have a close cultural relationship in the performing arts?
Lord Callanan
As the noble Earl will be aware, most trade deals contain a number of paragraphs on cultural exchanges and creative industries. I am sure that that will be the case with the EU agreement and with the US agreement.
Baroness Neville-Rolfe (Con)
My Lords, with the onward march of the digital revolution and our pre-eminence in artistic areas such as music and arts, copyright is becoming ever more important. Can the Minister give us an assurance that intellectual property has a high priority in policy-making for this Government? However we attack that in any particular trade deal, the overall point is to protect our artistic success and endeavour everywhere.
Lord Callanan
Of course, my noble friend makes a very important point. As I said earlier, we have one of the strongest copyright protection frameworks in the world. Many of these are subject to international agreements, such as the TRIPS agreement. We will continue to engage in international fora and make sure that artists and creators have protection for their works.
Lord Fox (LD)
My Lords, a number of different ministries have commented on this, as my noble friend pointed out, including BEIS and DCMS. Am I to conclude from the fact that the noble Lord, Lord Callanan, is speaking to this that BEIS will be accountable for this and will be the ministry that makes sure that people—including, I should say, people in my family—who work in this industry get paid? If they do not, they need to know who is accountable.
Lord Callanan
Yes, BEIS is responsible for intellectual property and copyright, but of course there is considerable input from DCMS concerning the creative industries. DCMS is taking forward a creative industries forum and various round tables with content providers and social media platforms, et cetera. So it lies across the two departments.
Lord Stevenson of Balmacara (Lab)
Does the Minister agree that unless Article 17 or an equivalent measure is introduced, creative personnel in this country are going to be disadvantaged relative to how they would have been had we stayed in the EU, and certainly in comparison with their counterparts in the EU, which was the basis of the Question? Is this not a case of cutting off your nose to spite your face? Why would we not want to make sure that those who are earning benefits from the cultural industries for this country and for themselves are able to earn, and that their copyrights are not being ripped off by the tech giants, as is currently happening?
Lord Callanan
We will continue to advocate for the rights of the creative industries. We shall see how the copyright directive is implemented and how the various enforcement regimes within it will work, but of course it is not possible for us to remain part of it, because we will not accept the jurisdiction of the CJEU in these matters. We will see how it works and will continue to keep the matter under review. It is of course a matter for this Parliament to determine how our copyright protection framework goes forward.
Lord Berkeley of Knighton (CB)
My Lords, at a time when royalties are being cut at almost every level—I include the BBC in this—it is more essential than ever that the creators of intellectual property are able to reap some sort of reward. What alarmed me slightly about the Minister’s replies was that he kept using words such as “hope” and “expect”. That is not so good for those of us who have to know that we can pay our bills.
Lord Callanan
We should be proud in this country: we have one of the strongest copyright protection frameworks in the world, as I said earlier. Many of these matters, as the noble Lord will be aware, are the subject of international agreements and we will continue to engage in those fora to make sure that creators get the value of their works.
Housing Insulation
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Lord Teverson
To ask Her Majesty’s Government what plans they have to insulate existing housing in order to contribute to (1) ending fuel poverty, and (2) achieving net zero carbon emissions.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the energy company obligation is our main domestic energy efficiency policy. It is worth £640 million a year and is focused on fuel poverty. This year, we will announce further policies to upgrade the energy performance of our homes, which will address fuel poverty and support the transition to net zero.
Lord Teverson (LD)
My Lords, I welcome the noble Lord, Lord Callanan, to his new position as Minister for Energy. It is estimated that, if we had each of the 29 million households in this country with an energy performance certificate rating of A or B—which we would like to—we would save something like the energy from six Hinkley Points and abolish fuel poverty at a stroke. Does he feel that that is a good policy and focus?
Lord Callanan
I thank the noble Lord for his good wishes. It is nice to answer questions on something other than EU withdrawal for a change. I take on board the noble Lord’s concerns. He makes a very good point. As I said, we will be announcing further policies in this field in the Budget and in the forthcoming energy White Paper. He will understand that I cannot predict what might be announced at those times.
Baroness Jones of Moulsecoomb (GP)
My Lords, it is fantastic to hear that the Government will have another policy. I welcome the noble Lord to his new post—I am sure that we will confront each other about this quite a lot. It is not just about having policies but having the funding in place. Will we see some funding for this in the Budget?
Lord Callanan
I thank the noble Baroness for her best wishes. I am sure that confronting is not the right word. Working together for the common goal would be more appropriate—you have to start out optimistically. There were funding commitments in the Conservative manifesto. As I said earlier, we will set out the details of that funding in the Budget and the energy White Paper.
Baroness Corston (Lab)
My Lords, in welcoming the Minister to his new post, I remind him that we are now supposed to save energy wherever we can under the Paris climate accord. Can he tell the House why new builders are allowed to build traditional homes? Why do they not have photovoltaic panels or tiles on the roof so that every building generates electricity?
Lord Callanan
The noble Baroness makes a good point about building standards. That is something we will seek to address. There have been tremendous improvements over recent years in building standards and quality; the issue is the relative cost of installing all these measures in new homes, and the price that will be reflected. However, as I said, she makes a good point; it is something that we will need to look at.
Lord Low of Dalston (CB)
My Lords, I would like to add a third part to the Question: what plans do the Government have to protect existing housing against flooding?
Lord Callanan
Given the recent horrible news from many parts of the country, particularly in the north, the noble Lord makes a very good point.
Viscount Ridley (Con)
My Lords, will my noble friend agree to look into why it is that, if you switch a house from oil-fired to gas-fired central heating, its energy performance certificate gets worse, not better? It is a perverse system in the regulations. I declare my interest as a landlord.
Lord Callanan
It does sound like a particularly perverse incentive. I will certainly look into the reasons why and write to my noble friend.
Lord Foster of Bath (LD)
My Lords, the Government already have ambitious targets for improving home energy efficiency, so 10 days ago I introduced a Bill simply to put those targets into legislation and give the home energy efficiency industry the certainty that it needs. The noble Lord, Lord Duncan, said that the Government could not support my Bill because it would cut across their plans for strategies and a route map. Yesterday, the Energy Minister in the other place told people at a Sustainable Energy Association reception, “We tend not to support Private Members’ Bills when we are going to legislate for the same things.” Which excuse is right?
Lord Callanan
I notice that my noble friend Lord Duncan is watching the performance today. I will certainly not disagree with what he told the House. As I said, there will be a number of upcoming announcements in this field. I cannot at this stage predict what they will be, but I am sure that the noble Lord will be pleased when he hears them.
Baroness Boycott (CB)
My Lords, I congratulate the Minister on his new post. Can he share with the House any thinking in the forthcoming White Paper that will ensure that the cost of cutting carbon and retrofitting will not fall unevenly on the poorer people in our society, who are already suffering from fuel poverty and will need all the help they can get?
Lord Callanan
The noble Baroness makes an extremely good point. As she will be aware, the ECO scheme is funded from fuel bills. If we increase funding for the ECO scheme for poorer households, that puts up the cost of bills for all customers. That is one of the points we need to address; her point is well made.
Lord Whitty (Lab)
My Lords, I too welcome the Minister to his new post—and his new collaborative approach. However, he still manages to miss the point. He said that the ECO scheme was the main weapon for tackling fuel poverty, but it has failed to do that and to meet what is necessary on home heating to tackle climate change. Has the time not now come—I hope that he will raise this with the Chancellor—for the restoration of a tax-funded intervention for the nearly 4 million homes that are suffering particularly from lack of insulation and failed heating systems? This was dropped 10 years ago; it now needs to be restored.
Lord Callanan
I am, of course, always happy to work collaboratively with the noble Lord, but I point out gently that he is not correct to say that the ECO scheme has failed. The latest fuel poverty statistics show that the aggregate fuel poverty gap is falling year on year. We can always argue that we need to make faster progress, but the scheme is a success and it is working to bring down fuel poverty.
Post Office: Horizon Accounting System
Lord Callanan Excerpts(4 years, 5 months ago)
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The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
I thank the noble Lord, Lord McNicol, for his welcome. Dealing with some domestic issues makes a great change from talking endlessly about EU renegotiation and the various withdrawal Bills. I am delighted to be doing this job, tricky though many of the issues are.
I thank the noble Lord, Lord Berkeley. We are reunited in policy content after our time together dealing with transport issues. He has raised an important debate. I have been in post for only 10 days. I was not aware of this issue in detail, but I have of course seen the various press comments and summaries about it. The debate has given me an excellent opportunity to familiarise myself with the issue. I say at the outset that I share much of the horror and concern raised by many noble Lords.
I assure the Committee that the Government fully recognise the vital role postmasters and their post offices play at the very heart of our communities. It is therefore only right that their treatment is of the utmost importance to us so that they can continue to deliver a service so highly valued by many up and down the country. The Government also value the economic and social importance of post offices to people, communities and businesses across the UK. That is why, since 2010, successive Governments have made a commitment to safeguard the Post Office network and ensure its sustainability.
Let us consider the current facts regarding the Post Office. Between 2010 and 2018 the Government provided nearly £2 billion to maintain and invest in a national network of at least 11,500 post offices. We set requirements so that 90% of the UK population are within one mile and 99% are within three miles of their nearest branch. Government investment has enabled the modernisation of more than 7,000 branches, added more than 200,000 opening hours per week and established the Post Office as the largest network trading on Sundays.
Post Office banking services enable 99% of personal and 95% of business banking to be done in any of the 11,500 branches, supporting consumers, businesses and local economies in the face of accelerated bank closures. The financial performance of Post Office Ltd has also improved, with the Post Office making a profit for the third year in a row, thereby reducing government funding from £415 million in 2013-14 to £50 million in 2020-21. All this has been achieved because of the able and hard-working women and men who are proud diligently to serve their respective communities each working day. I say that as background to the appalling circumstances that we address today.
On the Horizon accounting system litigation, postmasters are a significant part of the sustainability and future of the Post Office. In relation to the Horizon accounting system case, Post Office Ltd has accepted that, in the past, it got things badly wrong in its dealings with a number of postmasters, and it is right that it has apologised. As noble Lords are aware, on 11 December, the Post Office and claimants reached a comprehensive resolution to the litigation following several days of respectful, challenging and ultimately successful mediation. The Post Office chair, Tim Parker, said:
“We are grateful to the claimants for taking part in this mediation and agreeing a settlement, bringing the Group Litigation to a close. I am grateful to Nick Read for his important engagement in the mediation process. We accept that, in the past, we got things wrong in our dealings with a number of postmasters and we look forward to moving ahead now, with our new CEO currently leading a major overhaul of our engagement and relationship with postmasters.”
I reassure the noble Lord, Lord Berkeley, that this Government do not take for granted the financial and emotional suffering that the impacted postmasters endured in relation to issues with the Horizon system, which is why this Government are pleased that a resolution has been arrived at to settle this long-running litigation.
A number of noble Lords, particularly the noble Lord, Lord McNicol, talked about the Horizon system. That question was central to the subject of the litigation and the second Horizon issues trial when judgment was handed down on 16 December. The judgment made clear that it is a historical analysis of the Horizon system at a specific point in time in the group litigation and not a judgment on the system today. When handing down that judgment, the judge found that the Horizon system as it is today is “relatively robust”.
We are committed to working alongside the new CEO of Post Office Ltd, Nick Read, to implement the necessary cultural and organisational changes highlighted by the litigation. Nick has shown that he is personally committed to learning the lessons and is currently leading a major overhaul of the Post Office’s engagement and relationship with its postmasters. The Government have proactively challenged the Post Office CEO and chairman personally to strengthen its relationship with postmasters and take on board the lessons learned through the litigation. Preparation for this debate offered me the opportunity to speak to Nick Read this morning and we had a productive conversation about all the issues, where he reassured me of the steps that the Post Office is taking on this.
The noble Lords, Lord Bichard and Lord Berkeley, made a number of points about the responsibility of BEIS and the Government for many of these issues. Let me explain that BEIS relied on the Post Office management to investigate the issues with the Horizon system and the Government were assured that the system was robust and the issues raised by the postmasters were being handled appropriately. BEIS pressed management on these issues and was given consistent advice from the company’s experts that appeared to verify those claims at that time. There have been numerous attempts over the years to try to resolve these issues, including an independent investigation in 2013 and a mediation scheme in 2015. Those failed to resolve the issues, leaving the court as the only means of providing the independent review that all sides needed. In hindsight, of course, facts came to light through the litigation that revealed that the advice received over that period was flawed. As such, the Government will monitor closely the progress that the Post Office is delivering on its programme of commitments following the settlement. That relationship will be constantly reviewed.
As I said, I spoke to the CEO, Nick Read, this morning and I was glad to hear that improvements at all levels of the Post Office are well under way, reflecting many of the lessons learned from this difficult experience, which will enable him to take forward a modern Post Office. That means a company fostering a genuine commercial partnership with postmasters, where the necessary support for them to operate branches successfully is available.
Following the agreed settlement, the Post Office is also continuing to directly address past events for affected postmasters. A scheme will be announced in the near future with the aim of addressing historical shortfalls for postmasters who were not part of the group litigation settlement.
The noble Lord, Lord Berkeley, asked about compensation for those affected. The settlement agreed with the Post Office included all legal and other costs. In those circumstances, the Government cannot accept any further request for payment. While the process was undoubtedly challenging, the Government thank all the claimants for participating in order to finally resolve this matter and enable both parties to move forward.
My noble friend Lord Arbuthnot raised the issue of the remuneration of postmasters for their losses. As I said, following that agreed settlement, the Post Office is continuing to directly address past events for affected postmasters. A scheme will be announced in the near future with the aim of addressing those historical shortfalls for postmasters who were not part of that group litigation.
I was pleased to hear from the CEO of the new personalised support that postmasters are now receiving. This includes newly established area managers able to deliver support on the ground, an improved branch support centre to support teams throughout the UK, an overhaul of postmaster training and, above all, a further increase to postmaster remuneration.
My noble friend Lord Arbuthnot asked about the National Federation of SubPostmasters and its independence from the Post Office. It is fair to say that the Post Office has acknowledged criticisms from the litigation about its dealings with postmasters, and is accelerating its programme of improving how it works with both postmasters and the NFSP. We in government are also engaging with other stakeholders in the postmaster community, including the Communication Workers Union, to understand properly the views of postmasters.
Going forward, government Ministers and officials in both UKGI and BEIS will hold the Post Office to account for these reforms, along with wider cultural and organisational changes, and will seek clear evidence that real positive change is taking place.
The noble Lord, Lord Berkeley, asked about the actions of Fujitsu and the cases arising from the litigation.
Baroness Burt of Solihull
Before the Minister leaves the subject of the accounts that are outstanding, can he confirm—yes or no—whether any director of the Post Office will be held to account for their actions?
Lord Callanan
I will come on to that shortly.
I was answering the noble Lord, Lord Berkeley, about Fujitsu. When handing down the Horizon judgment, the judge raised concerns in relation to the evidence provided by Fujitsu employees. Those cases have been referred to the Director of Public Prosecutions. It is, of course, a matter for the DPP to consider what action, if any, he would like to take following that referral.
My noble friend Lady Redfern asked about the kind of settlement and referred to it being inadequate, following the comments by my noble friend Lord Duncan. We recognise that it has been, to put it mildly, a difficult period for postmasters who have experienced the issues covered by this litigation. Mediation took place between the parties in confidence and, while I can confirm that the total amount of the settlement was £57.75 million, I am sure the Committee can appreciate the legal sensitivities of the matter. While the financial settlement is a major step towards resolving some of these grievances, there is more for the Post Office to do. It has committed to a major programme of work to overhaul its relationship with postmasters, which we in government are determined to see delivered.
My department has taken steps to strengthen the mechanisms for doing so. This has included expanding the BEIS Post Office policy team that works closely with UKGI in holding the Post Office to account at an official level. It also means strengthening the relationships and responsibilities of the Post Office, BEIS and UKGI through a new framework document that formalises that relationship and the responsibilities of those parties involved. I can announce that this will be published shortly. In addition, BEIS has established, and chairs, a quarterly working group involving the NFSP and the Post Office. The working group is a forum for discussing Post Office and postmaster relations and provides the opportunity for highlighting concerns the postmasters may have. As I said earlier, the Government are also engaging with other stakeholders in the postmaster community, including the Communication Workers Union, to understand the views of postmasters. Progress will also be monitored at the highest levels of the Post Office in quarterly ministerial meetings with its CEO, Nick Read.
I can confirm, too, to the noble Baroness, Lady Burt, that we are in the process of establishing the framework document to govern that relationship, and that will be published soon. I will now address her point about holding directors to—
Lord Bichard
Before the Minister sits down, will he agree, since he is clearly not inclined to accept the need for an independent inquiry, that the independent non-executive director, who I think sits on the BEIS board, might have a role in ensuring that these promises are kept?
Lord Callanan
Indeed, I would of course be happy to accept that. We believe, however, that additional accountability should be in place, which is why I outlined the further accountability mechanisms that we are putting in place: it will not be just the director on the board—there will also be a series of quarterly meetings between the CEO and Ministers, to make sure that we put in place all the appropriate accountability that is required.
On the issue of the directors responsible, we are pleased that the Post Office’s chairman and its new CEO, as well as the previous CEO, have fully apologised for getting things wrong in the past. The appointment of the new CEO in September last year is an important step for the Post Office in improving how the organisation is run, along with its relationship with its postmasters. However, the Government do not propose to take any further action against current or former directors.
Following the conclusion of the mediation, the Government’s focus is now on ensuring that the Post Office lives up to its commitment and moves forward under the leadership of its new CEO. The judgments in this litigation have provided the independent view of the facts that both parties sought for many years, resulting in firm pledges from the Post Office to reform postmaster relations and ensure the stability and sustainability of the network.
Your Lordships can be sure that the Government will hold the Post Office to account in delivering reform and ensuring that these crucial changes have a tangible and positive impact on postmasters. We will make sure that those hard-working individuals are respected and valued for the fundamental role they play in upholding the post office network and with it, delivering essential services to communities up and down the country.
Finally, I apologise for not having time to respond in detail to a number of points that were raised. I will do so in writing.