Debates between Lord Callanan and Lord Fox during the 2019 Parliament

Thu 10th Jun 2021
Tue 2nd Mar 2021
Tue 26th Jan 2021
Mon 14th Dec 2020
United Kingdom Internal Market Bill
Lords Chamber

Consideration of Commons amendments
Wed 9th Dec 2020
United Kingdom Internal Market Bill
Lords Chamber

Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Mon 9th Nov 2020
United Kingdom Internal Market Bill
Lords Chamber

Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Wed 4th Nov 2020
United Kingdom Internal Market Bill
Lords Chamber

Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Mon 2nd Nov 2020
United Kingdom Internal Market Bill
Lords Chamber

Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Wed 28th Oct 2020
United Kingdom Internal Market Bill
Lords Chamber

Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Mon 26th Oct 2020
United Kingdom Internal Market Bill
Lords Chamber

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Wed 14th Oct 2020
Thu 17th Sep 2020
Wed 8th Jul 2020
Tue 23rd Jun 2020
Corporate Insolvency and Governance Bill
Lords Chamber

Report stage (Hansard) & Report stage (Hansard): House of Lords & Report stage
Tue 23rd Jun 2020
Corporate Insolvency and Governance Bill
Lords Chamber

3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & 3rd reading
Tue 16th Jun 2020
Corporate Insolvency and Governance Bill
Lords Chamber

Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords & Committee stage
Tue 9th Jun 2020
Corporate Insolvency and Governance Bill
Lords Chamber

2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 2nd reading
Wed 15th Jan 2020
European Union (Withdrawal Agreement) Bill
Lords Chamber

Committee: 2nd sitting (Hansard continued) & Committee: 2nd sitting (Hansard continued): House of Lords & Committee: 2nd sitting (Hansard continued) & Committee: 2nd sitting (Hansard continued): House of Lords

Post Office: Horizon Compensation

Debate between Lord Callanan and Lord Fox
Monday 10th January 2022

(1 week, 4 days ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

“Shockingly” is almost an understatement of the full extent of the terrible injustices that went on for sub-postmasters over many years and many different Governments, Ministers et cetera. Most of the senior executives of the Post Office who were responsible are not there anymore, but the appropriate mechanism to find out exactly who was to blame and who was responsible is the independent public inquiry with full statutory powers, which is currently considering these matters.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, this is not the first time that your Lordships have had to discuss this, and already this year we have this Question again. I am sure that the Minister would agree that, for these people to start to live the rest of their lives, they need to draw a line and be able to move on. This process is dragging on, so does the Minister agree that by setting a target—a political target that the Minister can set—with his department, with the lawyers and with the Post Office, we could get this done? Will he undertake to do that, and make sure that this is done in the first half of this year, so that the line can be drawn?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I can speak for my colleague Paul Scully, the postal affairs Minister, that we want to see this settled as quickly as possible in order, as the noble Lord said, to draw a line under it for the benefit of those people who were so badly affected. Of course, we are in the hands of the courts initially for the convictions to be overturned, but as soon as they are—if that is the judgment that the courts come to—we want to use the ADR process to try to get compensation offers to these people as quickly as possible.

Advanced Research and Invention Agency Bill

Debate between Lord Callanan and Lord Fox
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

My Lords, it is my great pleasure to thank all those who have supported the progress of this Bill. I first thank my Whip, my noble friend Lady Bloomfield, who is currently demonstrating just how good she is at multi-tasking because she is in Grand Committee supervising another piece of legislation going through. It is always a joy to work alongside her with her support, capability and good humour.

As we have debated this Bill, I am of course grateful to have witnessed the shared ambition across the House for our nation to cement its role as a science superpower and for recognition of the important role that additional funding for high-risk research can play within that, through the ARIA model. While this is a relatively short Bill, the debate has none the less been thorough, as is right and proper in this House—from the role of ARIA in the R&D landscape to the definition of gratuities. It has demonstrated once again the important function of this House.

To that end, I join the noble Viscount, Lord Stansgate, in thanking my noble friend Lady Noakes for her efforts in sharpening the governance arrangements set out in the Bill, and my other noble friends Lord Willetts, Lord Lansley and Lady Neville-Rolfe, among others, for contributing their considerable experience.

I thank, on the part of the Opposition, the noble Baroness, Lady Chapman, for her constructive challenge on many parts of the Bill. I think we worked well together, and I look forward to continuing to work with her on future Bills. I also pay tribute to the noble Lords, Lord Ravensdale, Lord Fox and Lord Clement-Jones, the noble Viscount, Lord Stansgate, and members of the Science and Technology Committee for their very thoughtful contributions. I particularly welcome the thoughtful debate we have had on, for instance, intellectual property and the importance of retaining its benefits. I thank all noble Lords who spoke on these important issues. I am sure that the noble Lord, Lord Browne of Ladyton, especially, will closely follow the words of the Science Minister as the Bill returns to the other place.

It would be remiss of me not to also thank, once again, the excellent team of officials who have been behind me on this Bill. As always, I am just the front guy, as it were. Their support has been invaluable and a tribute once again to the finest traditions of the Civil Service. I particularly single out my private secretary, Hannah Cowie, for her support; the Bill manager, Andrew Crawford, and his deputy, Salisa Kaur; and Katie Reardon, Alex Prior, Robert Magowan and Charles Norris for their work over the last 18 months—a considerable time—to take this Bill forward and, hopefully in the near future, get it on the statute book. I also thank the broader ARIA team and colleagues across government who are undertaking the programme of work to make it a brilliant and realistic success.

Finally, let me recognise the exemplary work of the parliamentary counsel in both drafting this Bill and supporting its progress at so many points during its passage so far, and, of course, the House authorities, parliamentary staff, clerks and doorkeepers. As I mentioned, this is a relatively short Bill, but I really do believe its potential impact is profound. I know I am not alone in this House in looking forward in anticipation to all that will come out of ARIA and the benefits it will create for the research community, businesses and the everyday lives of people across this country.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, first I should apologise for not being here to participate in the Report stage of this Bill. My disappointment was alleviated by the knowledge that my colleague and noble friend Lord Clement-Jones would more than compensate for my absence. I thank him for that and for his assistance throughout consideration of the Bill, and my noble friends Lady Randerson and Lord Oates for their work. I also thank the Minister, the noble Baroness, Lady Bloomfield, and the departmental team that has seen this Bill through; and the noble Baroness, Lady Chapman, the Labour Party and their team for working with us and the Cross-Benchers in a collegiate way. This was an example of good scrutiny coming to the fore. Finally, a big thank you to Sarah Pughe in our office for her support.

We still do not really know what ARIA is. Until it is decided who is leading ARIA, we will not know what its purpose is or how it will interact with the rest of the research environment. During the debate the Minister undertook to keep us informed—while enshrining secrecy in the Bill, of course, at the same time. So, I hope he will be able to keep us well informed as this effort unfolds —indeed, perhaps in advance of things happening. Without wishing to rain on the parade, we should keep a sense of proportion about what this is. This primary legislation has put in place a research effort worth about £200 million to 300 million per year. Meanwhile, the UK’s participation in Horizon Europe has more or less evaporated. During the debate, there were many discussions about the effectiveness of UKRI. In accepting this Bill and moving forward with ARIA, we would be grateful if the Minister also addressed these two elephants in the room: the continued participation of the United Kingdom in Horizon Europe and making sure that UKRI is as effective as it really can be, in order to make a big difference to the research effort in this country.

Small Business Commissioner: Late Payments

Debate between Lord Callanan and Lord Fox
Tuesday 7th December 2021

(1 month, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

This is a priority for the Government —there are lots of priorities for the Government at the moment. The new powers that we consulted on include compelling the disclosure of information, including in relation to payment terms and practices, and imposing financial penalties or binding payment terms on businesses. These are important issues that need to be considered properly. We need to go through the consultation responses properly, and we will respond as soon as we can.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, there is a danger that the Minister’s response might be interpreted as kicking the can down the road and waiting some time for legislation to possibly come in the future. In the meantime, small businesses of the type described by your Lordships are suffering. Will the Minister recognise that the current situation is not as it should be and use current powers and levers to improve it?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

We have a newly appointed Small Business Commissioner who is cracking on with the job. She is currently in discussion with my department about the resourcing that she requires. As I said, so far almost £8 million-worth of debts have been recovered for small businesses, so there is a lot of good work going on, but I totally accept that we need to do more.

Newport Wafer Fab

Debate between Lord Callanan and Lord Fox
Monday 6th December 2021

(1 month, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

Nexperia is not new to this particular company; it already owned 15% of it before the latest takeover. As I said, I cannot comment any further on that particular transaction, but we will look carefully at all the facts of the case. Our powers are being strengthened with the National Security and Investment Act coming into force on 4 January next year. We have retrospective powers under that Act and we will not hesitate to act if we need to.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, hardly a week goes by without the semiconductor shortage impacting some of our businesses in this country. It is not just about security; it is about manufacturing. Meanwhile, there is an investigation into Newport Wafer Fab and a separate one going on into Arm. Would it not make more sense if there was a holistic view of the semiconductor business in this country and a task force put together, so that we can secure indigenous supplies of these absolutely vital components?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

The noble Lord is of course aware that we have announced action in both of those cases: both the instances he mentioned are currently being reviewed. As I said, if we need to take action, we will. On his broader question about semiconductors, we already offer a lot of support to industry through the research councils and the catapults and will continue to do so. It is an area that the Government are acutely aware of.

Oil and Gas Authority: Remit

Debate between Lord Callanan and Lord Fox
Thursday 2nd December 2021

(1 month, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

That is a very good question, and this is why we have our world-leading oil and gas sector transition deal, the North Sea Transition Deal. We are committed to it, with the support of all the oil and gas companies, to precisely bring about that happy state of affairs so that workers can transition to working in the clean economy.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, speaking last month, Tim Eggar, the chairman of the Oil and Gas Authority, was bullish when referencing future offshore licensing rounds in the UK. He said:

“Let’s be clear, there is no current ban on exploration and licensing”—


and, of course, he is right. On the other hand, the International Energy Agency—the global expert on energy stats—is equally unequivocal that the development of any new gas or oil field is incompatible with net zero by 2050. Perhaps the Minister could help us here and confirm what his department’s objectives will be with regard to future licensing. Will it adhere to IEA advice, aim for net zero and end future exploration, or will it go along with the oil industry and keep on drilling?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

We will go along with our net-zero commitment. I do not know how many times I have to repeat this for the benefit of the Liberal Democrats, but under all of the climate change scenarios, including that towards net zero, we will remain a net importer of oil and gas during that period. The choice that faces us is whether we wish to import them or produce them domestically and gain the tax revenues from that. I really cannot see why this is such a difficult concept for the Liberal Democrats to grasp.

Power Outages: North of England

Debate between Lord Callanan and Lord Fox
Thursday 2nd December 2021

(1 month, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

Of course, there are many lessons to be learned from the past week. It has been extremely challenging in the north of the country. I am from there myself and well aware of the issues: many people have contacted me about it. I just say to the noble Baroness that more than 4,000 engineers have been working to repair the damage, 750 generators have been deployed to provide emergency power and vulnerable customers have been prioritised for support. There are clearly issues about being able to contact Northern Powergrid, in particular; it was overwhelmed by the volume of calls. These were exceptionally strong winds of more than 100 miles per hour, and it is the most damage that has been done to the system for 15 years.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, obviously, the capacity to respond is in question, and I am pleased to hear the Minister say that there will be a review ongoing, but the review is no good to the people who have lost power today. As the noble Baroness, Lady McIntosh, said, there are rumours—indeed, statements—that this could go on for some people right up to Christmas and the new year. Speaking in the House, the Secretary of State was unable to say whether that was true. He said

“I will do everything in my power to ensure that this does not happen.”—[Official Report, Commons, 1/12/21; col. 924.]

Given the structure of the industry, perhaps the Minister can say what is in the power of the Secretary of State and what practical help he has given to the people who still do not have power.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

My colleague, Minister Hands, went up to visit the area yesterday, spoke to many people who had been affected and met many of the engineers who have been working around the clock over the past week to restore power. As the noble Lord said, there are a number of lessons that we need to learn from this. It was fairly unprecedented, but of course that is no compensation to the people affected, concentrated in the north of England and Scotland, who have been suffering greatly—I have heard many of their stories myself. We must give any resources or support that we can to the companies concerned. Restoring power is a complicated, technical exercise. We need to ensure that the people doing it, who are very skilled personnel, are working safely and we will want to support them in every possible way.

Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Debate between Lord Callanan and Lord Fox
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

Before the Minister sits down, first I thank the Minister, who has largely been able to meet most of our concerns. On a point of clarification, he said something like, “There will be no automatic restoration process, nor is there a need for one” for the purposes of investigation and disqualification. Does that also mean that there would be no need for one for the purposes of pursuing a compensation order? Can the Minister confirm that there does not need to be reinstatement for the compensation order to be pursued?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

Yes, it is my understanding that the Bill, if passed, will enable compensation to be pursued, and there is no need for the restoration of companies to the register for that to take place.

Advanced Research and Invention Agency Bill

Debate between Lord Callanan and Lord Fox
Monday 22nd November 2021

(2 months ago)

Grand Committee
Read Full debate Read Hansard Text
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, I took the time to discuss this amendment with the noble Baroness, Lady Neville-Rolfe, and I congratulate the noble Baroness, Lady Noakes, on completely representing her views on it—but, strangely, we approach this from opposite directions and land in the same place, similarly to the noble Baroness, Lady Chapman. There is a false dichotomy here. Just because an organisation has a purpose does not mean to say that it cannot be independent. On that basis, it is important for it to be independent, and it is equally important for it to have a purpose—and that purpose should be climate change.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I thank the noble Baroness, Lady Noakes, for her comments and for stepping so ably into the breach to represent my noble friend Lady Neville-Rolfe in her amendment. It is perfectly right that we have returned once again to the central issue of ARIA’s independence, because it is a core part of equipping it for its unique funding approach and for the distinct contribution that we expect it to make to the UK’s R&D landscape.

I support the ambition for the Secretary of State to be mindful of protecting ARIA’s independence in all its interactions with the organisations, where such interactions are required by the Secretary of State’s very limited functions. However, I differ with my noble friend on how we protect its independence in a practical way. I submit that it would be the accumulation of many small things—perhaps creeping influence over strategy, new mechanisms of oversight, or ever-increasing reporting demands on issues of political priority—that would be the arena in which ARIA’s independence would be compromised or lost.

My noble friend Lord Willetts, who is not in his place, spoke eloquently on Wednesday about the challenges he has experienced in trying to carve out space for new approaches in the current R&D system. At that stage, we also had a fairly extensive debate on the accumulated obligations placed on ARIA. We considered how those obligations might be balanced with this vital principle of independence, in the context of amendments which, I believe, would have diminished ARIA’s autonomy in a way that would have been entirely counterproductive. If we truly wish to safeguard ARIA’s independence, it is on those issues that we must look to do it, and there is no easy alternative.

I do not suggest that this is a moment to reopen that debate, but I submit that we cannot have this conversation on independence in an abstract way, divorced from consideration of the practical and operational ways in which it will or will not be given to ARIA. I am sure that there will be plentiful opportunities to discuss this important issue in future. I hope, on the basis of the reassurances I have been able to provide, that my noble friend will, on behalf of my noble friend Lady Neville-Rolfe, feel able to withdraw the amendment today.

--- Later in debate ---
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, this has obviously been an unsatisfactory semi-debate. That dissatisfaction has rung out in various corners of the Room. The advice of the noble Lord, Lord Browne, seems good; if we continue on our current trajectory, Wednesday afternoon will have some time in it. I will not repeat the questions which have been raised, but I add another which we would like to address on Wednesday afternoon when the Minister calls us together to explain. Is this outwith the framework agreement process? Is there a separate process going on? I add that to the list of unanswered questions.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I thank noble Lords for their comments. First, on the agreement, the text has been agreed by Ministers in Scotland, Wales and Northern Ireland. I thought it best to share it as soon as possible; I wanted to share it in advance—it was not far in advance but it was slightly in advance—rather than not share it at all. We originally committed to sharing it ahead of Report; I will ensure that all noble Lords have the opportunity properly to scrutinise it ahead of that and we can return to the issue then. Once noble Lords have had an opportunity to discuss it, I would be very happy to arrange a further briefing with officials for anyone interested in this subject.

--- Later in debate ---
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I thank Members who have contributed to this brief debate. I am disappointed that the noble Lord, Lord Browne, did not exercise us again with his Daily Telegraph subscription, which I was very impressed by. I congratulate the noble Lord, Lord Fox, on saving the best to last with his bravura amendment. He has obviously been searching his thesaurus over the weekend for appropriate analogies. It was well moved and I do understand the seriousness of the issue and the noble Lord’s intention, which relates to the desire, as we have heard, to understand more details of how ARIA will work in practice.

As I mentioned at Second Reading, ARIA’s framework document is a governance document. It is a standard requirement for public bodies—which, of course, ARIA will be. As suggested in the noble Lord’s amendment, it will set the parameters for ARIA’s relationship with BEIS, as its sponsoring department. That is indeed its very purpose.

The noble Lord, Lord Clement-Jones, referred to the guidance published by Her Majesty’s Treasury, and I reassure him that, by drawing on the Treasury’s guidance, ARIA’s framework document will ensure that the agency and BEIS work effectively together. It will outline ARIA’s accountability, its decision-making and its financial management structures, along with some broader reporting requirements. However, it is not the appropriate place to codify ARIA’s relationship with other government departments. Other departments have no accountability relationship with ARIA, so its terms of engagement with them are a question of strategy rather than governance. The framework document will not contain any information relating to ARIA’s strategy in terms of collaboration, its project portfolio or indeed, its areas of research interest, all of which, I know, are of great interest to noble Lords.

On the sequencing of publication and commencement, given that both ARIA and the department need to be in agreement on the framework document, I reiterate, as I said at Second Reading, that it is therefore not possible to finalise it before ARIA’s senior leadership is in place, as my noble friend Lady Noakes, pointed out. It is not possible for the framework document to be published in advance of ARIA coming into legal existence. Similarly, the framework document for UKRI, for example, was finalised and published after that body came into legal existence.

Finally, it is worth noting that framework documents are live publications and are amended regularly to reflect any changes in the sponsor department or indeed the arm’s-length body itself, and they are all thoroughly reviewed every three years.

On the point raised by the noble Viscount, Lord Stansgate, on whether the framework document will outline the role of the Government’s Chief Scientific Adviser on ARIA, it is likely to. I will be happy to write to the noble Viscount with any more detail that I can on that.

I hope therefore that noble Lords understand that, in our view, there is a logical process to follow in the establishment of a public body and therefore that they will accept my assurance that we will publish the finalised framework document as soon as practicably possible.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

I have a couple of questions before the Minister sits down—or rather, I will now respond. The Minister seeks to downplay why we should be interested in the framework agreement, but the noble Lord, Lord Willetts, when he was in his seat, specifically asked about the relationship between UKRI and ARIA. That is just one question; there is a lot of interest in this and a lot of need to know. So the Minister should acknowledge that this is important to people and to organisations that are, in turn, important to this country.

I have a second point on which I would like an answer. I assume from what the Minister said that the sequence is: first, appoint a chief executive and then appoint the person to whom the chief executive reports. I still find that an interesting sequence, but certainly both those people will be asking what our relationship is with, for example, UKRI—or with others, as set out by the noble Viscount, Lord Stansgate.

It seems to me that either the Government will have an answer to that question during the recruitment process, or they will say, “Well, please yourself”. I suspect they have an answer and, just as the noble Lord, Lord Browne, said, trusting us with the draft of how that question will be answered would be completely reasonable and something that we would appreciate. With that said, I beg leave to withdraw the amendment.

Advanced Research and Invention Agency Bill

Debate between Lord Callanan and Lord Fox
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

I asked some specific questions about the future legal structure of ARIA and the nature of who its members are. I do not think the Minister had time to answer.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I will write to the noble Lord with the legal details he requires.

Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Debate between Lord Callanan and Lord Fox
Wednesday 10th November 2021

(2 months, 1 week ago)

Grand Committee
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I thank all noble Lords who contributed to what was a good short debate on Amendments 4, 5 and 8. I completely agree that it is very important that we closely monitor the effectiveness of the new legislation and make sure that our departments are adequately resourced to do the work asked of them.

I start with the amendment of the noble Baroness, Lady Blake, on the reporting of enforcement outcomes. I hope that she will be reassured to hear that there is a wealth of insolvency enforcement statistics. They are published regularly by the Insolvency Service and are readily available on this internet thing.

The published data includes figures for company insolvencies across the UK and personal insolvencies in England and Wales, as well as some of the data behind those figures, which the noble Baroness might be interested in, such as regional variations. Those statistical releases are made every three months, but, since the Covid pandemic started, experimental releases of monthly data concerning numbers of insolvencies have been provisionally added by the Insolvency Service. This additional information has been extremely valuable as an indicator of the impact of Covid on insolvencies. From my point of view, the number has been lower than I expected, which is good news.

Specifically regarding the Insolvency Service’s enforcement activities, information on numbers of disqualification orders is published and updated monthly. Those figures include the number of companies that are wound up in the public interest and a breakdown of disqualification orders and undertakings obtained under the relevant section of the Company Directors Disqualification Act under which they were sought. Those monthly figures also include lengths of periods of disqualification and, furthermore, there is an annual report on the nature of misconduct in disqualification allegations.

Perhaps the noble Baroness could have a look at all that published information and check that it is adequate for her requirements. I hope that this reassures her that, when she does the online search, she will find all the information she requires. There is a copious amount of excellent, helpful data. If the Bill is subsequently passed, future reports will include disqualification numbers made against former directors of dissolved companies.

The noble Lord, Lord Fox, made the very good point that it is important to see evidence of returns to creditors, but I make the important distinction that the disqualification mechanism is for deterring misconduct and protecting the public. It is not, in fact, intended primarily to be a method of recovering funds to creditors. However, he will be pleased to hear that compensation orders can be issued in respect of disqualified directors, who may be required to make good financially on the damage that they have caused, which I suspect is the outcome that we all looking for.

Both the noble Lord, Lord Fox, and the noble Baroness, Lady Blake, asked a good question about the numbers of additional staff. I assure them both that the point I made earlier applies: resources are not limitless, the Insolvency Service already has a team set up for this precise purpose, and a complaints portal is waiting to go live, although of course we will not activate it until the Bill is passed and given Royal Assent.

My noble friend Lord Leigh asked about the number of cases that have been referred to. If I may respectfully correct him, the number of cases investigated that he cited was actually the number of successful disqualifications. There will be many more cases investigated where it will have been determined that there was no public interest in proceeding. That is a difficult judgment that officials in the Insolvency Service and, ultimately, the Secretary of State will take.

My noble friend also asked about the regulation of insolvency practitioners. As I think he is aware, we are reviewing the regulatory framework that governs them to ensure that the best possible outcomes are achieved for creditors. He will be delighted to hear that we will publish the proposed reforms to the insolvency profession shortly, which I hope will go some way to assuaging his concerns.

I move on to the figures that we will publish and the impact assessment in terms of a post-disqualification review. Did the noble Lord want to intervene?

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

I intervene given that the Minister is moving on. I specifically asked what tools would be available to deliver compensation. The Minister referred only to compensation orders; the noble Lord, Lord Leigh, made it clear that there are extreme limitations to those and if you talk to the professionals, they have a great deal of doubt about how effective they can be overall. Will the Minister either address that now or come back to us in letter form to explain how these compensation orders can be used to compensate people more widely or, if they cannot, what other options there are?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I outlined the issue of enforcement orders, but I am very happy to clarify any additional tools available to the Insolvency Service and to other agencies directly—though not connected to this Bill—to help recover funds both for public authorities and individual creditors. I will write to him about that.

As I said, we have already committed in the legislation to conduct a review into how it is working in practice. That will be done within five years of commencement of the legislation, in line with our better regulation requirement. It is too soon to determine exactly how that review will look, but it will likely be informed by overall case numbers and will include an assessment of whether the new powers are being used as intended.

Net-zero Emissions Target: Fossil Fuel Extraction Projects

Debate between Lord Callanan and Lord Fox
Wednesday 3rd November 2021

(2 months, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

In reply to my noble friend, the Minister set up a false dichotomy. I will answer his question: we do not want the oil to come from Surrey. However, Surrey County Council has granted permission to drill oil wells as part of the Horse Hill development. If these are developed, they will put 10 million tonnes of CO2 into the atmosphere. So will the Minister use his influence with his Conservative colleagues who run the council and get them to step back from this development—and, if he fails, will he ask his colleague to call this development in?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

It is strange; I thought the Liberal Democrats were in favour of local planning control—obviously not in these particular cases. As the noble Lord is aware, that application is subject to an application in the Court of Appeal at the moment, and therefore I cannot comment on it.

Advanced Research and Invention Agency Bill

Debate between Lord Callanan and Lord Fox
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I am sure it was equally as good as the first half of his speech and that the Whip has taken careful note. It is a principle of our Committees that we try not to have the same speeches we got at Second Reading made again—a point most Members tend to ignore—so the noble Lord is well positioned to make a new contribution in Committee. Most other Members could perhaps take note of the excellent example that he will be setting them.

I also recognise the sentiment of the noble Lord, Lord Rees of Ludlow, that the setting up of UKRI was not that long ago in the grand scheme of things. With an £8 billion budget, UKRI has system-wide responsibilities and with this comes a certain operating model. I refer the noble Lord, Lord Fox, to Professor Leyser’s other comments, where she said at her select committee appearance that UKRI’s responsibility to make the whole system work sometimes makes it harder to do the wild experimental things.

In contrast, as enabled by Clause 3 of the Bill, which has been the focus of a number of contributions from noble Lords, it is ARIA’s mandate to do the experimental things and push the frontiers of science. To achieve this, it must have a streamlined structure and minimal bureaucracy. In response to the noble Lord, Lord Rees, this goes beyond what is possible or desirable under the legislative framework and governance arrangements in place for UKRI as the system’s core funding agency.

In reply to the question put by the noble Lord, Lord Fox, as part of any Parliament it is usual to review our partner organisations to ensure that they are successfully fulfilling objectives on the Government’s behalf. The independent review of UKRI to which the noble Lord referred began yesterday under the leadership of Sir David Grant, and it will be reporting to Ministers in due course.

The noble Lord, Lord Rees, also mentioned a very important point about how ARIA’s success will be measured without constraining creativity. There are is a key point I would like to put to the noble Lord here. One of the key features of the ARIA model is its hands-on approach to project management, with projects constantly being re-evaluated and reassessed. ARIA’s agility means that programmes can not only start quickly, but they can also be halted quickly too. ARIA should not be judged on projects that fail in the short term because that is the nature of high-risk research.

The noble Lord, Lord Kakkar, in one of his typically excellent contributions, asked about how ARIA can truly be risk taking as a government arm’s-length body. We will have both legislative and non-legislative mechanisms to enable ARIA to operate boldly and autonomously. Clause 3 in the Bill equips ARIA to give particular weight to the potential benefits of high-risk research in carrying out its functions—not just what research it funds, but how it funds it. We will also set out in a future framework document and other agreements, a unique and specific set of financial and non-financial arrangements to cut unnecessary bureaucracy and ministerial control from ARIA’s operations. I hope that will also allay the concerns raised by the noble Lords, Lord Patel and Lord Broers, on protecting ARIA from day-to-day political pressure. The independent review of research bureaucracy being led by Professor Adam Tickell will also consider bureaucracy from a system-wide perspective. Interim findings will be produced this autumn, and we are expecting a final report to follow in early 2022.

In terms of governance, the noble Lord, Lord Patel, asked who the senior Minister with responsibility for ARIA will be. As my noble friend Lord Patten helpfully reminded us, as a manifesto commitment ARIA is a priority for the Prime Minister and the Cabinet. The Bill provides a specific role for the Secretary of State and any delegation of ministerial responsibility would be at the Secretary of State’s discretion.

I move on to the decision to exempt ARIA from freedom of information requests, which was raised by a number of noble Lords: the noble Lords, Lord Clement-Jones, Lord Davies of Brixton and Lord Fox, and the noble Viscount, Lord Stansgate. I reassure the House that the decision to omit ARIA from the FoI Act has not been taken lightly. To create the extraordinarily lean operating system that I have spoken about, we have had to consider what the most appropriate mechanisms to assure transparency and accountability are within ARIA. I thank my noble friend Lady Noakes for her support on this. Together, robust arrangements are in place that will provide a clear picture to Parliament and taxpayers about how ARIA’s activities are funded and where it spends its money. So I politely refute the views of the noble Lord, Lord Fox, on this.

First, the Bill requires ARIA to submit an annual report and a statement of accounts, which will be laid before Parliament. Secondly, ARIA will be audited by the National Audit Office and will be the subject of value-for-money assessments. Thirdly, ARIA will interact with Select Committees of this House and the other place in the normal way. Finally, we will draw up a framework document, detailing ARIA’s relationship with BEIS and further reporting requirements, such as details of what is published in the annual report. It is also an important fact that other bodies subject to the FoI Act, such as universities and government departments —including my own, BEIS—will still process requests about their activities with ARIA in the usual way.

The noble Lord, Lord Clement-Jones, made a comparison to the number of FoI requests in DARPA. It is an interesting fact that, when making an FoI request in the US, requesters are required to consider paying applicable fees of up to $25—I think that that is an excellent idea. If requests are expected to exceed this cost, the requester is notified to agree additional payment. While fee waivers or reductions can be granted in certain circumstances, there is not a like-for-like comparison to the FoI process in the UK, where, as I am sure the noble Lord will be aware, we get hundreds of what I call “sweeping requests” from people fishing for information when they are not really sure what they want but think that there might be something there, so they pour in FoI requests. Therefore, it is not right to assume that ARIA will receive a similar amount of FoI requests to DARPA.

The noble Lords, Lord Clement-Jones and Lord Fox, and my noble friend Lord Borwick asked about whether the Government will publish the framework document during the passage of the Bill. I should be clear that the framework document will not set a vision or strategy for ARIA—as I have said, that is for the organisation itself. It is a governance document that will follow the Treasury’s standard template and set out the role of BEIS as ARIA’s sponsoring department, its accountability, decision-making and financial management. Given the nature of its content, the framework document must be agreed with ARIA’s senior leadership, for which we are still recruiting. We are therefore not able to publish a draft framework document at this stage, but I would like to reassure the House that I will do so as soon as I am able to.

I thank the noble Baroness, Lady Chapman, for her general support, from the Opposition’s point of view, for the Bill. She rightly asked about the provisions in the Bill to exempt ARIA from public contract regulations and how we assure the appropriate propriety. We have provided a non-legislative commitment for an independent internal auditor to report on ARIA’s procurement activities, demonstrating transparency and good governance. ARIA’s framework document, which I just referred to, will also set out the expectations for conflict-of-interest procedures, in line with practice across government. I thank my noble friend Lord Borwick for his thoughtful comments on this. However, as a further safeguard, Schedule 1 provides the Secretary of State with the power to set out a procedure in legislation should it be required in the future. We will bring forward draft regulations for this power, for illustrative purposes, as the Bill goes through the House.

The noble Lord, Lord Davies of Brixton, and my noble friends Lady Noakes and Lord Patten asked about how we attract these high-risk ideas and the exceptional people who will pursue them, or, as the noble Viscount, Lord Stansgate, eloquently put it: today’s Alan Turing or Barnes Wallis. The recruitment campaign for the CEO launched on 1 June and will aim to conclude in the coming weeks. We are looking for the ability to provide inspiring leadership to high-performing teams.

In response to my noble friend Lord Borwick, we will soon be launching campaigns for the chairman and other non-executive members through an open and fair ministerial appointments process so that we are able to recruit the right talent to work alongside the CEO as a complementary leadership team. We recognise the need to ensure a competitive salary for this position and are in discussions with the Treasury. I will update the House as appropriate.

I welcome the considered contributions from my noble friend Lord Lansley, the noble Lord, Lord Kakkar, and the noble Viscount, Lord Stansgate, on the Haldane principle and ARIA’s use of peer review. It is right that at its core this is about scientists judging ideas on their merits, and that is at the heart of ARIA’s approach. However, the concept that funding proposals should be assessed by peer review is embedded within the Haldane principle, and I agree that that will not always be appropriate for ARIA, which will have an innovative approach to funding and will seek to empower exceptional scientists to start—and stop—projects quickly.

The noble Lord, Lord Patel, asked about research cost sharing, by which I assume he means with universities. We are considering the appropriate arrangements for funding research projects in universities to ensure both that they are properly costed and that those costs are met to enable transformative scientific research. Details on expectations for ARIA in that regard will be set out at a later date.

My noble friend Lord Borwick queried the definition of “property” in Clause 2. The Bill uses the definition “that which a person owns”. In exercising its functions, ARIA may acquire and own both physical property and intangible property, such as intellectual property. “Restoration” means “to return”, so ARIA can own a piece of research equipment that it can loan out on the condition that it is returned to ARIA within a specific timeframe. I hope this clarifies the issue for my noble friend and that he agrees that an amendment is therefore unnecessary.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

I do not wish to labour the property point, but if ARIA is not doing research then I do not understand why it would own research equipment. Sorry, I am confused.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

It can fund the purchase of a piece of research equipment, which ARIA then owns, and it can loan it out on the condition that it is then returned within a specific timeframe. I am not quite sure why the noble Lord is confused but perhaps we can return to this issue in Committee.

I have tried my best to address most if not all of the points that have been made today. I am sorry to detain the House at such a late hour but I am deeply encouraged by its general support, albeit with some reservations, for the dedicated funding of high-risk research. I look forward to continued engagement with all sides as we progress the Bill through the House. I therefore commend the Bill to the House and beg to move.

Private Equity Takeovers

Debate between Lord Callanan and Lord Fox
Thursday 21st October 2021

(3 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

My Lords, of course we look at all transactions closely and there are specific grounds to intervene, set out by the Government that the noble Lord was actually a member of, as I said. We recognise the need for greater accountability for large private companies, including those owned by private equity. We published plans to do just that in our proposals on restoring audit and governance.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, I am sure that the Minister is aware of the acronym ESG, which stands for environmental and social governance—an important way of making sure that businesses behave properly. But there are different reporting standards for listed companies and private equity companies. Will he ensure that all companies trading in this country report on a level playing field? Will he undertake to make sure that everybody affirms the same ESG standards?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

As the noble Lord is aware, there are a multiplicity of different international standards, but we are of course introducing the transparency requirements on climate disclosures, as he knows. We have the audit reform proposals, which will extend the reporting requirements to many large private companies as well. We will publish our response to that consultation shortly.

UK Property Ownership: Overseas Jurisdictions

Debate between Lord Callanan and Lord Fox
Wednesday 13th October 2021

(3 months, 1 week ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

As I said, the Financial Action Task Force that we established got the best rating of any country assessed so far in the round of evaluations in countering money laundering. We are opposed to it and we will do all we can to fight it, as noble Lords will want us to do. We intend to legislate on the registration of beneficial ownership and will do so as soon as parliamentary time allows.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, as we all know, “legislate when time allows” is a phrase to kick things into the long grass. The evidence to date is that this item is nestling very deep in the long grass. The Government have had the time and the opportunity to bring forward legislation, so can the Minister be clearer to your Lordships’ House why they have not done so?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

It is absolutely not an intention to kick it into the long grass: it remains a priority, which is why we published the draft Bill, why we invited pre-parliamentary scrutiny and why we have acted on many of the recommendations that were issued during that time, but there remains a lot of pressure on the parliamentary timetable and we will legislate when time allows.

Emissions Trading Scheme: Transport

Debate between Lord Callanan and Lord Fox
Monday 11th October 2021

(3 months, 1 week ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

The effect on poor people, including in the UK, will be one of the factors that we will need to consider when expanding the ETS. These are important fiscal measures. We will need to look at them properly and consider all the implications, and we will set out our thinking in due course.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, as the Minister pointed out, these schemes cover energy-intensive businesses. However, if the disorderly situation that is currently under way continues, manufacturers of ceramics, steel and cement—energy-intensive businesses—will not have any emissions to trade because they will have collapsed. Can the Minister clear up what is happening? Have talks between BEIS and the Treasury happened, as the Secretary of State said yesterday, or was the Treasury right that no talks have happened? When will the Minister let us know what is going on? Can the Government clear up this mess?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I agree with the comments made by my Secretary of State yesterday. There are always ongoing discussions between government departments on a huge range of measures, and I am sure that the Treasury and BEIS will be closely involved in further discussions.

Employment Rights

Debate between Lord Callanan and Lord Fox
Thursday 10th June 2021

(7 months, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, I thank the Minister for repeating the Statement. This is a relatively small, long-overdue step towards upholding workers’ rights, and to that extent it is welcome. However, it comes with no parliamentary time allocated for legislation and no new funding.

There was a glaring hole in the Queen’s Speech. After a pandemic that has made life extremely hard for many people, it is disappointing that the Government are yet to announce an employment Bill to strengthen workers’ rights and to make the rules fit for modern working practice.

A single enforcement agency is welcome but, unless we look again at people’s working conditions and the rules in place, this agency—when it eventually emerges—will not be able to deliver the change that people need in their lives. To do that, it needs proper funding. For example, the International Labour Organization recommends that Governments have one inspector per 10,000 workers. In the UK the current funding is for 0.4, so can the Minister tell your Lordships’ House if and when the new agency will be funded to deliver ILO levels of inspection?

When an illusionist is practising their art, the key skill is misdirection. In this case, our attention is in danger of being distracted by decent and welcome words condemning the practice of fire and rehire. Meanwhile, the Government have conflated employment abuses with measures to crack down on trade unions. While there may be some issues in a small number of unions, they are not the cause of the problems faced by so many families. It is sharp employment practice that is taking UK families to the edge, not trade unions, so my next question to the Minister is: how do the Parliamentary Under-Secretary’s words in this Statement help people who right now are being fired and taken back on downgraded working contracts? This Statement condemns the practice, but now the Government have asked for a further report on the subject. This is kicking it into the long grass. When will the Government actually do something to help workers?

More broadly, in October 2016 the Government commissioned Matthew Taylor to carry out an independent review of the UK employment framework. The Taylor Review of Modern Working Practices found that the labour market was changing due to the emergence of new business models and different forms of gig economy working; the Minister knows about this very well. It proposed many important measures to help support people’s jobs in those sectors. These measures received a broad welcome, and indeed warm words flowed from the Benches opposite. In their last manifesto, the Conservatives undertook to implement many of the report’s findings—yet it still gathers dust. Mr Taylor became interim Director of Labour Market Enforcement in August 2019, but then in January this year he announced that he was leaving and the role was not refilled. So have the Government abandoned their pledge to implement the Taylor review?

With or without Taylor, things need to change—and quickly. When will we see an end to the toxic practice of delivery workers being required to drive illegally so that they can meet their quotas? When will we see an end to people being forced to skip bathroom breaks? When will nearly two in five workers get more than a week’s notice of their working hours? When will gig economy workers get the wages they deserve—for example, the 20% higher minimum wage for people on zero-hours contracts? Because this is the real world of work that is facing many people right now.

Speaking in the Commons, the Parliamentary Under-Secretary said:

“Nothing is off the table.”—[Official Report, Commons, 8/6/21; col. 849.]


Actually, for the poorest, most exploited workers there is nothing on the table. These are words. When will we see some action?

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - -

I thank the noble Lords, Lord Lennie and Lord Fox, for their comments. To pick up the final question from the noble Lord, Lord Fox, about the Taylor review and workers’ rights, we have made good progress in bringing forward legislation to protect workers’ rights. We have closed the loophole that sees agency workers employed on cheaper rates than permanent workers, we have quadrupled the maximum fine for employers who treat their workers badly and we have given all workers the right to receive a statement of their rights from day one.

We are committed to protecting and enhancing workers’ rights. The noble Lord pointed to the Uber Supreme Court judgment. It was clear that those who qualify as workers under existing employment law are entitled to rights such as the minimum wage, and all gig economy businesses should ensure that they are fulfilling their legal responsibilities.

On the employment Bill, which both noble Lords asked me about, I can tell them, particularly the noble Lord, Lord Lennie, who said that the Bill had been dropped, that he is not correct. We are committed to bringing forward an employment Bill to protect and enhance workers’ rights as we build back better. We want a high-productivity, high-wage economy that delivers on our ambition, and we want to see workers protected.

With regard to firing and rehiring, the Government have set out a clear and proportionate course of action to address fire and rehire. It is a complex area of law so we have asked ACAS to produce better, more comprehensive and clearer guidance to help employers explore all the options before considering fire and rehire and to encourage good employment relations practice. We are looking closely at the ACAS report. While we are not legislating at this stage, we will continue to monitor the evidence on the use and prevalence of fire and rehire.

Both noble Lords asked me about the funding for the single enforcement body. As with all government funding, that will be considered during the spending review later this year. On the questions about the Certification Officer, it is important to point out that the principle of this in the legislation was passed and agreed in the Trade Union Act 2016. This is merely the enactment of those provisions, and it does no more than give powers to the Certification Officer similar to those that many other regulators already possess in these sorts of areas.

Post Office Update

Debate between Lord Callanan and Lord Fox
Monday 24th May 2021

(8 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, let us remind ourselves of the human scale of this outrage. Starting more than 20 years ago, the Post Office prosecuted nearly 1,000 sub- postmasters and sub-postmistresses based on incorrect information from a recently installed computer system. Some went to prison following convictions for false accounting and theft, many were financially ruined, and some have since died with the shame of this still hanging over them and their families.

As we know, a subset of those people were acquitted and, as we discussed around a month ago, the Government have asked Sir Wyn Williams to inquire into this episode. We are of course pleased that the lid is beginning to be lifted on some of these issues. Speaking on 28 April about suggestions that the inquiry was underpowered, the Minister was very clear:

“Given that all parties so far are committed to co-operating, we remain of the view that a non-statutory inquiry is the right approach.”


He added:

“However, if Sir Wyn does not get the co-operation he requires, then all options are on the table and we will not hesitate to act.”—[Official Report, 28/4/21; col. 2324.]


Today we are discussing a new Statement that says the context of the inquiry has changed, hence the move to a statutory basis, but it cites the successful appeal as that context. That is strange as the results of that appeal were available on 28 April. So what has actually changed? What has caused the department to change its mind? For example, has the co-operation of which the Minister spoke evaporated? If so, who is now no longer co-operating?

I do not think the noble Baroness, Lady Hayter, or I are surprised that this change has had to happen. Like her, we welcome it as a small step in the right direction, but I point out that on an already tight schedule this has not helped. On 28 April the Minister said he expected the report in the summer, and in your Lordships’ House the Minister was adamant that this deadline could be met. Now the inquiry report is delayed. What will take the extra time? What has caused that delay? Will the new deadline of the autumn be met?

As the Statement suggested, the terms of reference for Sir Wyn have been amended. As we do not have the benefit of tracked changes, can the Minister please outline for the record and for your Lordships the principal changes in those terms of reference? If we look overall at the terms of reference, the overriding problem is there for all of us to see: six clauses, each set out with very passive language. “Assess”, “understand” and “acknowledge” are all good words, I will admit, but they are not an indicator that this inquiry has any way to identify culprits. They are not the words of a robust bringing to book. Even if he wanted to, Sir Wyn will not be able to go beyond those terms of reference as there is no wriggle room. If this is the only inquiry, I fear it is not going to be a satisfactory one.

For example, section B of the terms of reference uses the words

“to establish a clear account of…the implementation and failings of Horizon”

and the Post Office’s use of that information—the latter are my words, not those of the ToR. Given that this inquiry is essentially a fact-finding mission, what will the Government do with the facts when they get them? Further, it seems to be focused largely on the failure of the Horizon system and not that of Post Office management—and, as we know, this case was compounded by what appears to have been an intentional decision by the Post Office not to disclose material that undermined its case. So where in the terms of reference will this issue be tested and judged?

As in other cases, there are two levels of failure here. The first was an excess of trust in the system and technology; the second was the failure to deal with the consequences of this when the facts became apparent to some people within that organisation. This inquiry is set up to learn lessons from history but not to deal with the legacy of this past. With these terms of reference, I do not see how this inquiry will establish culpability from these facts, and how it will be the means to deliver resolution to the sub-postmasters and sub-postmistresses and their families over whom this case hangs. I do not see it as a route to compensating these people. So, while it is a step forward, I can understand why former sub-postmasters are demanding a judge-led inquiry into this scandal. I have a great deal of sympathy for their demand.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - -

I thank the noble Baroness, Lady Hayter, and the noble Lord, Lord Fox, for their comments. Let me say from the start that I completely share their outrage about this scandal, as I think they both know. It has been going on for many years, under many different Ministers and Governments, and we should all accept our share of the responsibility for the dreadful way these poor people were treated. Nobody who saw them emerging on to the steps of the High Court a few weeks ago could have failed to have been moved by what they had to say.

Turning to the many questions that the noble Lords asked, as I said, this Government deeply regret that this situation has occurred. Since it was launched in September 2020, the Post Office Horizon inquiry has made swift progress. The inquiry’s chairman, Sir Wyn Williams, and his team have heard from many affected postmasters and gathered evidence from key parties, including the Post Office, my department, UKGI and Fujitsu.

The noble Lord, Lord Fox, asked about the changes to the terms of reference. It is clearly critical that the inquiry is able to look at exactly what decisions were made and why, in relation to the Horizon prosecutions, so that lessons can be learned. The terms of reference have changed to clarify that the inquiry can investigate the Post Office’s decision-making in taking action against postmasters, including pursuing prosecutions and a fairly aggressive legal strategy, and in particular of course it can investigate the cases of those whose prosecutions have now been quashed.

The noble Baroness, Lady Hayter, asked about accountability. Let me be clear, for the avoidance of doubt, that the inquiry can make findings of fact and make recommendations. With regards to accountability, as noble Lords will understand, matters of criminal and civil law remain for the courts, as only the courts can make such judgments. However, they and other bodies can draw on the findings of the inquiry when considering these issues. It is therefore now for Sir Wyn to establish what happened, what went wrong and why it went wrong. We can then consider whether more needs to be done in the light of those findings.

The noble Lord, Lord Fox, asked about the timeframe for the inquiry. The deadline for the final report has now been extended to autumn 2022, to take account of the new statutory nature of the inquiry, but we are expecting a progress update later this summer. The changes to the inquiry’s timeline mean that Sir Wyn will have more time to determine exactly what went wrong at the Post Office during this period and to make sure that a situation such as this cannot happen again.

The noble Lord, Lord Fox, and the noble Baroness, Lady Hayter, both raised the issue of compensation. I know that many postmasters, and Peers across this House, have called for further compensation for those who have been caught up in this situation. Those whose convictions have been quashed, with a settlement amounted in the group litigation, are of course outside the scope of the inquiry. But, as I said previously, the Government are keen to see that all sub-postmasters whose convictions are overturned are fairly compensated as quickly as possible. We will ensure that we work with the Post Office to make this happen as quickly as it is possible to organise.

The noble Baroness, Lady Hayter, referred to Fujitsu. She will be aware that two Fujitsu employees are still the subject of a police investigation. However, so far Fujitsu has co-operated fully with the terms of the inquiry. I confirm to the noble Lord, Lord Fox, that all actions of the Post Office, including its fairly aggressive legal strategy, can and will be examined under the terms of the inquiry.

Post Office Court of Appeal Judgment

Debate between Lord Callanan and Lord Fox
Wednesday 28th April 2021

(8 months, 4 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, I thank the Minister for bringing this Statement to your Lordships’ House, and for his two letters to all Peers over the last five weeks. I should say that I have been a member of the Post Offices APPG for some time.

Looking back, the Government have said that they will determine what went wrong. Of course, we absolutely support that. To this end, their route has been to ask Sir Wyn Williams to lead the Post Office Horizon IT inquiry. The inquiry, they say, will work

“to fully understand these events, gather available evidence and ensure lessons have been learnt so that this cannot occur again.”

I am sure that this will be a thorough investigation, which will shine a bright light on systems and programmes, and their implementation. But can the Minister reassure us that it will also illuminate the overriding issue of how this business behaved? As the noble Baroness, Lady Hayter, has just eloquently set out, the moral shortcomings of the management are central to why this happened. To fully understand this issue, as the Government want to, they need a thorough appraisal of the management culture of the Post Office. It is changing the culture that makes sure that something never happens again, not updating an operating system or rewriting a computer programme.

Can the Minister please make available the full terms of reference according to which Sir Wyn will conduct his inquiry? Government communications include the phrase:

“The Government look forward to receiving Sir Wyn’s report in the summer”.


Does the Minister expect the report to be completed by this summer, or have I misunderstood? If so, what support will the investigation have to run to such a tight timetable? I am concerned because this is not a statutory inquiry. What will happen if individuals retain lawyers to represent their interests? How will Sir Wyn proceed in those circumstances?

I echo the praise given by the noble Baroness, Lady Hayter, to the noble Lord, Lord Arbuthnot of Edrom. He has tenaciously pursued this issue, and in February last year he asked a question of the then Under-Secretary of State at BEIS, the noble Lord, Lord Duncan of Springbank:

“To ask Her Majesty’s Government what recent assessment they have made of the Post Office’s powers to conduct prosecutions.”-


The response was that

“the Post Office’s powers to bring a private prosecution, which fall under section 6(1) of the Prosecution of Offences Act 1985, are not specific to that company.”—[Official Report, 4/2/20; col. 1709.]

I forewarned the Minister that I would bring this up, because my understanding is that while it has not been granted investigative powers, the Post Office has regularly undertaken joint investigations with the police and other investigative bodies that do have statutory investigating powers. It was granted access to the national police computer system for intelligence and prosecution purposes; it had financial investigators appointed by the National Crime Agency for the purpose of undertaking financial investigations for restraint and confiscation proceedings; and Royal Mail was included in the list of relevant public authorities, under the Regulation of Investigatory Powers Act 2000, designated to grant authorisations for the carrying out of directed surveillance to investigate crime. The Minister’s views on that would be welcome. Is it really still appropriate that this organisation should enjoy those powers?

This is by no means the end of the road, as the Statement makes clear. In yesterday’s debate in the House of Commons, my honourable friend Christine Jardine MP asked the Parliamentary Under-Secretary, Paul Scully, to give an assurance that the Government will commit to treating each of the former sub-postmasters as individuals. The Minister acknowledged that, as well as those prosecuted, there were those whose lives had been blighted by incorrect accusations. I am pleased to report that he acknowledged the human cost. However, it is not clear to me what this acknowledgment means in practice. How will the Government embark on treating everybody individually? As part of the settlement, we have the historical shortfall scheme and it has been explained that this had received over 2,400 applications when it closed last August. First, although this is more than the Post Office anticipated, is the Minister satisfied that everybody who could have applied for this was aware of it and did? Secondly, the Minister was clear that Her Majesty’s Government will support the Post Office with resources. We of course endorse that. We do not yet know what form compensation will take and how it will be calculated. However, in a Written Answer, the noble Lord, Lord Callanan, said:

“we will not spend more of taxpayer’s money than is necessary to ensure that the Scheme meets its objectives.”

That sounds like a management expectation exercise and is a bit ominous. This is not an area, or a time, for penny pinching.

However financially generous the scheme turns out to be, the Government have to be clear that they can never fully compensate for the emotional and social damage that has been visited on many thousands of innocent people in this country.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - -

I thank the noble Baroness, Lady Hayter, and the noble Lord, Lord Fox, for their comments. I completely share many of their sentiments of shock and outrage. The tragic failings of the Post Office have occurred over many years, over many different Governments. On behalf of the current Government I can only say that we are truly sorry.

We welcome the decision of the Court of Appeal on 23 April to quash the 39 convictions. This is in addition to the six convictions that were quashed in the Crown Court in December. The impact that this ordeal has had on affected postmasters, their lives and livelihoods cannot be overstated. Nobody who saw the television coverage and the news reports the other day can fail to have been affected by the individuals featured. We certainly hope that, with this decision, these postmasters can at least start the process of moving forward to a new chapter in their lives.

I move on to the specific issues raised by the noble Lords. On compensation, the Government hope that the court’s decision is another important step towards bringing resolution to these postmasters. The Court of Appeal’s judgment will require careful consideration by all involved, and the Post Office itself will need to consider the next steps and the best process for fairly compensating these postmasters. We are keen to see that all those whose convictions are overturned are fairly compensated as quickly as possible and we will certainly work with the Post Office towards this goal. I understand the strength of feeling felt by those postmasters in the GLO who I understand only received a portion of the original £57.75 million settlement by the Post Office. However, that was a full and final settlement reached between the claimants in the GLO and the Post Office.

Both noble Lords mentioned the inquiry. Many postmasters and their families have suffered issues and distress since the faults in the Horizon system. We all agree on that. Some had their livelihoods and businesses taken away and were convicted of crimes that we now know they did not commit. Anybody can only imagine the distress that that must have caused to loyal, upstanding and honest members of the community. We are clear that a situation such as this must never, ever be allowed to happen again.

To ensure that the right lessons are learned, and to establish what must change, we launched an independent inquiry, led by Sir Wyn Williams, in September last year. He is a retired High Court judge with a wealth of experience and is fully independent of both the Government and the Post Office. I can tell the noble Lord, Lord Fox, that the inquiry has made swift progress. It has already heard from a wide group of affected postmasters. The call for evidence has recently closed and I understand that Sir Wyn is planning to have some public hearings on these matters in June. I can confirm that we expect to get his report by the end of the summer.

Given that all parties so far are committed to co-operating, we remain of the view that a non-statutory inquiry is the right approach. However, if Sir Wyn does not get the co-operation he requires, then all options are on the table and we will not hesitate to act. We do expect his report in the summer.

On who is to blame, decisions regarding the litigation strategy at the time were taken by the Post Office based on the legal advice that it had received. The Government at the time relied on the Post Office’s management to investigate issues with the Horizon system. As we have seen from both Mr Justice Fraser’s judgment and now the Court of Appeal judgment, the Post Office consistently maintained that the Horizon system was robust. That obviously turned out to be incorrect. What is also clear, from the Court of Appeal judgment last week and the judgments in the 2019 group litigation, is just how misguided the Post Office was in its approach to the management of issues arising from the operation of the IT system. All of these matters will be investigated in the inquiry, so that we can ensure this never happens again. I commit to keeping the House fully informed.

The noble Lord, Lord Fox, raised the issue of private prosecutions. The Post Office no longer undertakes any private prosecutions, and I have been personally assured by the new chief executive that it has no plans to undertake any further prosecutions in these matters. However, the Government understand the wider challenge that the Post Office case poses regarding the responsibilities that companies have in undertaking private prosecutions. The Justice Select Committee considered this last year and concluded that prosecutions brought by victims of crime themselves, whether corporate or individual, still have a valuable part to play. The Select Committee concluded that existing safeguards in place to regulate private prosecutions are effective at filtering out weak claims. As the noble Lord, Lord Fox, himself acknowledged, the Post Office’s powers to bring private prosecution fall under Section 6(1) of the Prosecution of Offences Act 1985, and they are not specific to that company. It has the same right as any other, whether an individual or a company, to bring a private prosecution but, as I said, I have been assured that it has no plans to bring any further prosecutions.

The noble Lord, Lord Fox, was kind enough earlier today to mention the issue of the Post Office and its investigatory powers. Since he did, I have asked my officials to investigate this matter. There are, apparently, over 600 public authorities that can use investigatory powers, and these are overseen by the Investigatory Powers Commissioner’s Office. There have been no changes to the authorities that the IPCO oversees since the introduction of the Investigatory Powers Act. According to the IPCO 2019 annual report, Post Office Ltd is not on that list.

National Security and Investment Bill

Debate between Lord Callanan and Lord Fox
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

My Lords, I of course welcome the amendment from the noble Lords, Lord Fox and Lord Clement-Jones, which seeks further parliamentary scrutiny of Clause 6 regulations, and the opportunity to put forward the Government’s case once more. I can spare the noble Lord, Lord Fox, the agony and tell him that, great though my ministerial powers are, I am not a miracle worker and, therefore, probably will not satisfy him.

The Bill as drafted provides for regulations made under Clause 6 to be subject to the affirmative resolution procedure. This amendment would require the Secretary of State to lay a proposed draft of any regulations made under Clause 6 before Parliament for 30 days before the draft regulations themselves are laid and subject to the approval of both Houses. It would also require the Secretary of State to identify a committee to report on the proposed draft regulations and then report on their consideration of the committee’s recommendations.

We have, as the noble Lord, Lord Fox, said, previously discussed the importance of regulation under Clause 6, and I thank the noble Lords for their commitment to ensuring meaningful parliamentary scrutiny of the making of such regulations. However, the Government’s position remains that the affirmative procedure—or regulations made under Clause 6—ensures such scrutiny by requiring Parliament to approve regulations. In Grand Committee, the noble Lord also highlighted the importance of the Secretary of State maintaining “serious technology foresight” and making any regulations under Clause 6 to protect our national security effectively. I can assure noble Lords that the Government are committed to keeping regulations under constant review to ensure that this regime is effective in protecting our national security and reflects technological changes.

The affirmative procedure will, in addition, provide the Secretary of State with the flexibility to update the mandatory regime quickly should new risks to national security arise. For all these reasons, I ask that the noble Lord withdraw his amendment though, in the absence of the requested miracle, I suspect that he is not going to do so.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

I thank the Minister for his response and the noble Lord, Lord Grantchester, for his speech. The Minister is correct: there was no miracle, and there was no surprise. Of course, I was aware that the Secondary Legislation Scrutiny Committee had not recommended opposing this in any way. Sitting through three days in Committee and a day on Report would activate many people who worry about the way in which Governments run their affairs. Therefore, with all due respect to everyone, having been through that process, it would be remiss if someone did not bring an amendment of this kind before your Lordships’ House. To that end, I would like to test the mood of the House.

Global Navigation Satellite System

Debate between Lord Callanan and Lord Fox
Wednesday 10th March 2021

(10 months, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

As I said in answer to the noble Lord, Lord West, we have been clear that the possible provision of PNT services was not the rationale for our investment in OneWeb. OneWeb is primarily a telecommunications operation and that is what its primary focus will be. However, we are not ruling out that it may play a role in future services to come.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, the cost of OneWeb does not stop with the Government’s share of $1 billion. In order to complete the array, the chairman of Bharti Enterprises says that a further $2.5 billion will be required, for which the Government are on the hook for $600 million. Given that that has to happen soon, where in the Budget is that line for the Government’s investment, and what value are UK taxpayers going to get from that huge amount of money?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

We will be setting out a strategy for OneWeb in the future. We have made an investment in OneWeb and we are looking for alternative sources of finance to come.

Vauxhall at Ellesmere Port and Battery Manufacturing Strategy

Debate between Lord Callanan and Lord Fox
Tuesday 2nd March 2021

(10 months, 3 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - -

I assure the noble Lord that we are doing all that we can to ensure that Ellesmere Port has a bright future. The automotive industry in general is an essential part of the Government’s plans for green growth, levelling up across our country and driving emissions to net zero. As the noble Lord will be aware, as part of the Prime Minister’s 10-point plan, the Government brought forward the phase-out date for new petrol and diesel cars and vans to 2030, and, by 2035, all new cars and vans must be fully zero-emission at the tailpipe.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, I am on the executive of the All-Party Parliamentary Motor Group. In his Statement, the Secretary of State boasted that some £1.5 billion of joint funding had gone to the APC and the Faraday battery challenge. To put that into context, that is about a tenth of what the French Government are putting into this sector. The fate of Ellesmere Port will be decided in days, but the Government have had years to get ready for moments like this. Everyone knew and knows that we need significant battery manufacturing capacity in this country. The Faraday challenge has been running for eight years, so what has stopped a battery gigafactory being built already?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

Ultimately, of course, these are commercial decisions for the companies involved, but we are working closely with a number of people interested in establishing gigafactories. We have announced £500 million as part of our wider commitment of up to £1 billion to support the electrification of vehicles and their supply chains, including developing gigafactories in the UK.

National Security and Investment Bill

Debate between Lord Callanan and Lord Fox
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

During that comprehensive answer, I think I heard the Minister say something and I would like to test whether I understood correctly. In explaining why people should not be concerned that certain parts of infrastructure are not included in the list, I think I heard the Minister say that the Bill’s call-in power is economy-wide. That suggests to me that the list of 17 issues is irrelevant because everything is on the list. In other words, anything can be called in, whether it is on the list or not. So, the list is merely indicative, but the exhaustive list is the entire economy. Could the Minister explain whether that is the correct interpretation of what I just heard?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

If the acquisition in question poses a risk to national security, yes, there is the general power, but the point I was making is that, with regard to areas of political and national infrastructure, there are also separate powers in different pieces of legislation that would help to protect in those areas.

Workers’ Rights

Debate between Lord Callanan and Lord Fox
Tuesday 26th January 2021

(12 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

There is no plan to make vulnerable workers more vulnerable, as he put it. The House should be in no doubt that the Government will always stand behind workers and continue to stamp out unscrupulous practices where they occur.

Lord Fox Portrait Lord Fox (LD) [V]
- Hansard - - - Excerpts

My Lords, I know of no business organisation calling for the Government to cut back workers’ rights, but no matter how much the Minister protests, the Government did sound the working time dog whistle to Back-Bench Tories. Business are calling for help to retain and recruit people through, for example, a cut in employers’ national insurance contributions. Will the Minister undertake to redirect the activities of his department to ensure that the Treasury brings in this vital support to our businesses?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I am sure the noble Lord is well aware that I cannot speculate on tax changes. They are a matter for the Chancellor. I would get myself into serious bother if I tried to pre-empt what he might decide to do.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Fox
Consideration of Commons amendments
Monday 14th December 2020

(1 year, 1 month ago)

Lords Chamber
Read Full debate United Kingdom Internal Market Act 2020 - Government Bill Page View all United Kingdom Internal Market Debates Read Hansard Text
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, I welcome the noble Baroness, Lady Bennett, back to her seat—just in time for tier 3 to arrive. We have again had a short debate. As we have seen the evolution of this argument—in the amendment’s approach to common frameworks it is, in a sense, the yin to the yang of the noble and learned Lord, Lord Hope—we are now looking at a different way of trying to ensure that diversity can survive under the automation of the market access measures.

In the past, the Minister has brought to bear the Government’s disapproval of the breadth of the exclusions that previous versions of this amendment made. As the noble Baroness, Lady Bennett, pointed out, many of those have now dropped off. So, in a sense, the Government have already pushed this to a narrower set of exclusions. The Minister highlighted his uncertainty around the word “proportionate”. Of course, none of us would want to do something disproportionate, but I cannot help thinking that the Government, in all their wisdom and with all their clever legal people, could come up with a frame of words that will prevent hideous problems developing in the courts—so I cannot help thinking that that is something of a red herring.

As the noble Lord, Lord Stevenson, said, this is getting more modest than was previously attempted, but it still has the overriding aim of dealing with the problem which keeps coming up throughout this debate. The Minister has magnanimously said that the devolved authorities are perfectly at liberty to develop new and innovative ways of doing things—so far, so good—and then, of course, the market access principles mean that those innovations will get undercut if someone else in the British Isles is doing it differently. I do not understand how the Minister can keep linking those two sentences without seeing that the one excludes the other. If it does not do it in governmental terms, it will do it in the courts. This will be a creature of the courts, because there will be businesses that will be going at a legal opportunity to get their products into devolved authorities that have sought to raise standards, as they see it.

The issue of minimum-unit alcohol pricing often comes up, and it is quite clear that this legislation will not affect that at all. We are all in agreement there. But if we were seeking to bring that in once this legislation was in place, what chance would it have of surviving the courts? That is why we will support this amendment.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I thank everybody who has contributed to what has been a very good, albeit brief, debate. I have listened very carefully to the points that have been raised, and I will respond directly to the points of the noble Lords, Lord Stevenson and Lord Fox. Innovative policy-making relating to public health and the environment will be fully possible under the Bill, within the clearly defined market access principles. Schedule 1 sets out a clear exclusion process for:

“Threats to human, animal or plant health”.


There are also several other exclusions relating to the environment and public health: chemicals and pesticides, for example. All of these are drafted tightly to strike the right balance between these objectives and the integrity of the market.

It is also essential to remember that neither of the market access principles affects the devolved Administrations’ abilities to uphold and enforce rules governing how consumers use goods. Neither would they prevent reasonable “manner of sale” restrictions, as long as they are not discriminatory. If an Administration wanted to introduce minimum alcohol pricing or the plastic bag charges, they are fully able to do so and can use them to fulfil environmental or public health aims in future; the principles would not be an obstacle to that, as long as those rules do not discriminate. I say to the noble Baroness, Lady Bennett, that she is wrong: if a future devolved Administration wanted to introduce the plastic bag charges, they would be able to do so under these market access principles, as long as they were non-discriminatory.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Fox
Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Wednesday 9th December 2020

(1 year, 1 month ago)

Lords Chamber
Read Full debate United Kingdom Internal Market Act 2020 - Government Bill Page View all United Kingdom Internal Market Debates Read Hansard Text
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, like the noble Lord, Lord Stevenson, I will take the amendments in the opposite order to the Minister, if the House is happy with that.

The delegated powers issue has almost become a ritual in your Lordships’ House. A Bill is published and in it are many very draconian powers, which seek to change almost everything the Bill can do at the will of the Minister. There is then a report from the DPRRC which condemns it, and then there is a debate and we start to move towards a more reasonable situation. I hope, perhaps, that we can learn from this and maybe cut out a few of the steps, so that we can get to the reasonable situation. The Government have given considerable ground on this, and for that we should all be accepting and reasonable and, I suppose, grateful, although perhaps gratitude is the wrong word.

With respect to Clause 12, I think we will all be watching quite closely to see how those powers are exercised, because advice can come in many forms and we will be seeking to observe that.

The characterisation that these delegated powers are required in order for the Government to react and act with speed has been absolutely confounded by the way in which the Covid crisis has been addressed by the Government. There has been very rapid legislation and very rapid reaction. Looking forward, we have got to a better place than we were in when we started. I still do not think that we would call it perfect, but we have taken a long time to get there.

My reading of the amendment proposed by the noble Lord, Lord Stevenson, is that it is the return of Amendment 21, or at least most of it. Listening to his very reasonable presentation of the amendment and having listened to the debates on Report, I am somewhat surprised that the Government continue to dig their heels in. I can understand that the list in subsection (2) of the proposed new clause might have raised some concerns, and it can of course be subject to negotiation, but as the list now stands—with environmental standards and protection; animal welfare; consumer standards, including digital; employment rights and protections; the health and life of humans, animals or plants; the protection of public health; or equality entitlements—it seems that the Government could not possibly object to it, so I am surprised. The Minister has set out his concerns about an ordered market, but it is very clear that any market that did not observe these things would not be one that we wanted anyway.

With that response, I suggest that we will be supporting the noble Lord, Lord Stevenson, when this Motion is put to a vote. We hope that the Government will be able to have discussions with the noble Lord and others, so that next time they can come back with something much closer to what we have seen today.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I thank both noble Lords for a good, albeit brief, debate. To summarise, earlier I expressed my concerns about Amendment 8L and the expansive list of exclusions from the market access principles that it introduces. The list that we have included has been carefully drafted to strike what is, in our view, a measured balance. It protects the ability of the devolved Administrations and the UK Government to deliver policy, while avoiding harmful or costly barriers to trade within the UK internal market. The Bill does nothing to stop all nations working together to achieve mutual goals and build on our shared high standards.

On the delegated powers in the Bill, it is not proportionate to remove the Government’s ability to ensure that the list of exclusions and legitimate aims remains appropriate. The Government have already set out a comprehensive package of changes to the delegated powers in the Bill, including for the removal of certain powers and for reviews and reporting to Parliament, and new amendments on the role of the devolved Administrations. This provides for effective transparency and scrutiny of the remaining powers.

We believe that there is a reasonable middle ground here. Many noble Lords tabled and supported amendments to alter, but not remove, the powers in the Bill. We agree with those colleagues. These powers are necessary, and we believe that the changes we have proposed should address their concerns. I therefore hope that noble Lords will be able to support the Government’s approach to reinstating these powers in the Bill.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Fox
Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Monday 9th November 2020

(1 year, 2 months ago)

Lords Chamber
Read Full debate United Kingdom Internal Market Act 2020 - Government Bill Page View all United Kingdom Internal Market Debates Read Hansard Text
Lord Alderdice Portrait The Deputy Chairman of Committees (Lord Alderdice) (LD)
- Hansard - - - Excerpts

I have received a request to speak after the Minister from the noble Lord, Lord Fox.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

With every answer, there come more questions, I am afraid. The Minister sought to explain that the devolved authorities will still be able to spend the money—I think those were the words that he used—but I am interested to know to which money he is referring. How in future will they get their hands on the money? Will there be a competitive bidding process? Is it part of the formula? Is that the money that he is talking about? Perhaps he could outline what he means by “the money”, because it is not entirely clear to me. He is looking at me as though I am being slightly stupid and I shall be very happy to be educated by him in writing rather than verbally.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I certainly did not intend to imply that at all and I apologise if the noble Lord got that impression. I was talking about the existing block grants that the devolved Administrations have. It is their existing spending power—the money that they spend at the moment. They will continue to make decisions about their devolved spending on subsidies, as they do at the moment—how much, to whom and for what—within any future UK-wide subsidy control regime if, following consultation, the Government and Parliament decide that we want to legislate in this space. I hope that I have resolved the noble Lord’s question; if not, I will certainly write to him.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Fox
Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 4th November 2020

(1 year, 2 months ago)

Lords Chamber
Read Full debate United Kingdom Internal Market Act 2020 - Government Bill Page View all United Kingdom Internal Market Debates Read Hansard Text
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

I much appreciate the Minister’s answer. The questions I asked about university tuition fees were in the light of having read his letter, which my noble friend Lord Purvis made available to me—there is no need to send it to me. In it the Minister states that,

“we are aware of the questions raised in relation to university services and how they may interact with the Bill”,

which is good. The letter continues:

“We have the power to amend the exclusions Schedule and will keep the area of higher education under close review.”


It therefore seems that the Government are planning to do that after Report. My point is that it would be a boon to our process on the Bill if the Government were to consult before Report and come back with something that I am sure, given what the Minister said, would merely fulfil their ambition for the Bill while settling concerns in the university sector.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I thought that I had put the matter to rest by writing the letter to the noble Lord, Lord Purvis, on which the noble Lord, Lord Fox, has commented. In our view, there is no doubt that the regulation of tuition fees is outside the scope of the Bill and, therefore, beyond the scope of the office for the internal market’s functions. But as the letter to him confirmed, we will keep the matter under review and not hesitate to take action if there is a problem, which we do not believe exists.

--- Later in debate ---
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, at the outset I should say that, because of my past but discontinued interests, I will not be speaking to the specifics of the example that the noble Baroness, Lady Hayter, brought up; rather, I will speak generally on this issue.

I speak to support the spirit of this amendment. It is a shame that the noble Lord, Lord Tyrie, is not still here because I would have welcomed his view on this issue. As the noble Baroness, Lady Neville-Rolfe, said, there are examples of Secretaries of State who wanted to do more but were constrained, and Cadbury is a good example of that.

However, after two dozen or more hours in Committee, I find myself at last coming to agree with something that the noble Lord, Lord Naseby, said, and that is that this issue goes wider than simply the nature of the Bill. The noble Baroness, Lady Neville-Rolfe, said the same thing. It is an important issue, so we should be thankful that the noble Baroness, Lady Hayter, has brought it up. It is clearly inadequate; the Secretary of State needs a better armoury to assess the public interest and deal with what will undoubtedly be, as the noble Lord, Lord Naseby, said, a flood of potential acquisitions and hostile takeovers.

This may not be the right Bill to be doing it in, but it is a big issue. That said, it also opens up the question of how the new office for the internal market relates to the Secretary of State and the CMA when it is dealing with a hostile takeover that the Secretary of State has called in. As the Bill stands now, allowing for the fact that the Minister may not accept the amendment, how do the Government envision the interactivity between the office for the internal market, the CMA and a hostile takeover bid that the Secretary of State has called in? Who does what, and where?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I thank the noble Baroness, Lady Hayter, for her amendment. I understand her concerns but, as I am sure she is aware, the internal market Bill is concerned with protecting the flow of goods and services across the UK after the end of the transition period. It is not concerned with the general merger regime, nor with Ministers’ powers to intervene in mergers. Noble Lords should be aware that they will have the opportunity to debate these matters further in the Government’s forthcoming national security and investment Bill.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Fox
Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd November 2020

(1 year, 2 months ago)

Lords Chamber
Read Full debate United Kingdom Internal Market Act 2020 - Government Bill Page View all United Kingdom Internal Market Debates Read Hansard Text
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, with all due respect to the Minister, I am sure he understands how unsatisfactory that answer was. My noble friend Lord Thomas of Gresford talked about the gobbledegook of future-proofing, and this is gobbledegook. First, could the Minister tell your Lordships’ House what past examples lead the Government today to this conclusion? Secondly, why is there a problem with bringing any future issues to the Government and your Lordships’ House bespoke in the event that the Minister proves correct and something turns up? To seek to produce a Bill that covers all of the unknown unknowns that are going to happen in the history of time seems overambitious.

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I think we are just going to have to differ on this one. We do not want to be returning to the House to create unnecessary difficulties and disagreements in the future; we want to ensure that, before any of these difficulties arise, we have put in place, as in the rest of the Bill, a framework that covers the whole of the United Kingdom to regulate how we will manage and control these issues in the future. That is all we are seeking to do. I understand the points that noble Lords are making. There are differently regulated professions in some parts of the UK already; we accept that and that the status quo is there, but we think that, in future, these things are best regulated on a UK-wide basis, and we want no new barriers to trade to emerge.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Fox
Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 28th October 2020

(1 year, 2 months ago)

Lords Chamber
Read Full debate United Kingdom Internal Market Act 2020 - Government Bill Page View all United Kingdom Internal Market Debates Read Hansard Text
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

I sometimes wonder whether the Minister sustains himself through the long periods of Committee by imagining himself throwing off the yoke of hideous EU conformity. In fact, nothing could be further from the truth. How does the noble Lord explain all the examples of diversity across the four nations of the United Kingdom if there is this conformity? How can his comment that the market has worked very well for 20 years stand up, if this conformity was so bad? Indeed, the 2020 assessment by the Government of the frameworks says that they will maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory, as afforded by the current EU rules. The Government clearly recognise the flexibility in the current EU rules.

I commend the Minister for getting through that lengthy statement without once mentioning the words “common frameworks”. There is still no explanation of how the common frameworks inform the Government’s view today of the internal market. Will he please answer that question?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

I thought my comments might provoke a reaction from the noble Lord. Of course, there are EU common standards in many areas as well as EU minimum standards in many areas, and it is possible for Administrations to go further than those minimum standards in many areas, as he will know from his knowledge of EU affairs.

I have said a number of times that we are committed to the work on frameworks and will take it forward, but we were looking for frameworks in something like 38 different areas. So far, we have managed to agree frameworks in two of them. In terms of the frameworks that have been approved by the ministerial committee, I think those numbers are correct; I will write to the noble Lord if they are not. We are committed to taking forward that work on common frameworks, but we believe that this legislation provides an underpinning to that work. We do not believe that they are mutually exclusive; indeed, we think that they complement each other.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Fox
Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 26th October 2020

(1 year, 2 months ago)

Lords Chamber
Read Full debate United Kingdom Internal Market Act 2020 - Government Bill Page View all United Kingdom Internal Market Debates Read Hansard Text
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, if the Ministers shepherding this Bill expected an easy ride, this gives a taste of things to come. It serves a purpose in setting the scene, and a lot of arguments and debates will come in other groups as we go through this process. I shall not labour those points. An overriding sense I got from my noble friend Lord Purvis is that the question everybody wants to know the answer to is: why have Her Majesty’s Government decided to turn away from a process of managing markets that has been extremely successful? It was successful before we joined the European Union and successful afterwards. This is the overriding question that hangs over this whole debate.

On Amendments 1 and 112, if ever we needed convincing that things such as the environment need to be written into the Bill, the speech by the noble Lord, Lord Naseby, convinced me that they do. This is because we cannot take things for granted. Governments come and Governments go, but the law stays, and we need to be sure that our public policy is being directed properly. I uncharacteristically find myself somewhat agreeing with the noble Baroness, Lady Noakes: we have to be careful not to constrain the nature of this Bill. We need to find a way to write in issues such as those of the consumer and the environment. I would add some of the points made by my noble friend Lady Bowles and food safety to that. We need to ensure that there is an assessment of the success of this internal market in some of those areas, including the environment, the effect on consumers, the effect on jobs, et cetera. I share the view of my noble friend Lady Bowles that perhaps more work is needed, but the issue is live and very important. I thank the proposers of the amendment.

Turning to Amendment 2, I do not think proportionality pops up anywhere in other amendments. We had a brief discussion of this extremely important subject from various speakers. I take my lead on this from the noble and learned Lord, Lord Hope, who understands the law, and my noble friend Lady Bowles, who knows a thing or two about regulation. If they are concerned about proportionality, so are we on these Benches. The Government need to find a way of writing that issue into the Bill.

On public procurement, we need to understand what the Government mean by what they seek to do in this legislation. The issue highlighted by my noble friend Lord Purvis is live and real: how will this legislation affect those issues? It is a probing amendment, but for it to work we need answers.

We have started. There are issues we shall return to, but proportionality and public procurement are two on which I hope the Minister will respond at length.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - -

My Lords, let me open by thanking noble Lords for their contributions at Second Reading last week. Again, the contributions have demonstrated the tremendous breadth of expertise in this House. This is indeed a crucial piece of legislation. In this respect, I agree with the noble Lord, Lord Fox, and I look forward to providing the scrutiny it deserves and that I am sure it will receive from noble Lords, beginning today and in the days and weeks ahead.

Let me reassure, and to some extent disagree with, my noble friend Lord Cormack, which will not come as a surprise to him. We are not riding roughshod over the devolution settlements. The devolved Administrations will acquire dozens of new powers that they have not exercised before once we leave the EU transition period. The Bill is about ensuring that those powers are exercised in a non-discriminatory manner, but they will acquire new powers and new responsibilities. Before I address the specifics of Amendments 1, 2, 59 and 112, which we are discussing in this first group, I want to remind to noble Lords of why we need this Bill and the context of Part 1.

By opening with the purpose of the Bill, I hope to explain why these four amendments, which seek to alter the Bill’s core principles, are not necessary. The Bill aims to allow the continuing smooth functioning of our UK internal market at the end of the transition period. As we set out in the White Paper, and as I explained at Second Reading, the Bill will establish a market access commitment by enshrining mutual recognition and non-discrimination in law. Part 1 concerns itself with delivering this market access commitment for goods. The principle of mutual recognition is that goods and services from one part of the UK will continue to be recognised across the country. This will ensure the devolved Administrations will benefit from their additional powers and freedoms outside the EU. As the transition period ends, they will gain increased powers, as I said to my noble friend Lord Cormack, to set their own rules and standards across a wide range of policy areas within their competence. At the same time, it provides firm assurance to our businesses that their goods can continue to flow freely throughout the United Kingdom. Non-discrimination ensures that there is continued equal opportunity for companies to trade in the UK, regardless of where in the UK the business is based.

I say to the noble Lord, Lord Empey, that the measures in the Bill will also ensure that Northern Ireland qualifying goods benefit from the market access commitment and receive mutual recognition in the rest of the UK. The Bill will also affirm the principle that those goods are not subject to checks, controls or administrative processes as they move from Northern Ireland to Great Britain. I hope that I can reassure the noble Lord on that point. This means we will fulfil our commitment to legislate for unfettered access, as we promised to the people and businesses of Northern Ireland. This will ensure that businesses and citizens in the United Kingdom can continue to trade freely across the four nations.

With this context in mind, I turn to Amendments 1 and 112 together. These seek respectively to limit the purpose of Part 1 and the Office for the Internal Market’s statutory objective to the protection of the environment and consumer interests. Now, it goes without saying that the protection of the environment and consumers is hugely important, and something that we as a Government are already committed to. The UK, as I never tire of repeating, has some of the highest standards in the world, and we will continue to improve these ahead of others. We remain committed to being at the forefront of environmental protection and a leader in setting ambitious targets to prevent damage to our natural world, building on our already strong environmental record. For example, we have set out a range of new policies in the Environment Bill that are designed to drive up environmental standards in line with the UK’s priorities.

The statutory objective of the Competition and Markets Authority—acting as the Office for the Internal Market—ensures that the office is able to effectively operate as the monitoring body for the internal market, and that there is no confusion between the pre-existing powers of the CMA and those newly conferred on it as the OIM. Distinct objectives will prevent any operationally problematic blurring of functions.

As my noble friend Lady Noakes observed, the office will operate for the benefit of all those with an interest in a smooth-functioning internal market, whether that be regulators, businesses, professionals, the four legislatures or indeed consumers. Explicitly narrowing its focus to consumers would be to the detriment of all the others that I have listed.

Moreover, the functions set out in Part 4 of the Bill clearly establish that the office will consider the economic impacts of regulatory measures on the internal market. Although some of these will of course be environmental protection measures, it will not be authorised to opine on the extent to which these measures safeguard the environment, because this would risk duplicating the role of existing public bodies with a purely environmental focus. As such, given how much the Government are already doing in the area of consumer and environmental protection, I consider that these amendments, which seek to change the purpose of the Bill, are unnecessary, and I hope that I have been able to persuade my noble friend Lady McIntosh and the noble Baroness, Lady Hayter, to withdraw Amendment 1 and not move Amendment 112.

Amendment 2 aims to introduce the principles of proportionality and subsidiarity into the Bill as additional market access principles. These are European law principles. We have now left the EU and are free to organise our internal market in a way that is better suited to the UK’s unique constitutional arrangements and common-law systems. I agree with my noble friend Lady Noakes that the market access principles will protect seamless trade and jobs across all four corners of the United Kingdom following the end of the transition period in December 2020. They have been designed for the UK’s specific devolution arrangements and legal approach, and they already take account of the need for reasonableness and respect for devolution. In contrast, the proposed amendment would muddy the waters with EU concepts that in our view are ill-fitting in the UK. For these reasons, the Government cannot accept this amendment and I hope that noble Lords will not move it.

Amendment 59, on which there was considerable discussion, seeks to disapply the market access principles from the public procurement rules. I assure the noble Baroness, Lady Hayter, and the noble Lords, Lord Purvis and Lord Fox, that the principles proposed in the Bill will not typically operate in the area of public procurement, and indeed that we intend to legislate separately in this area via a wider package of procurement reform, on which we will shortly consult. The market access principles are not relevant to procurement as they are about how business is regulated. The procurement rules cover how public authorities carry out their procurement function. We believe that the risk of divergence can be effectively managed through a combination of close devolved Administration engagement and use of the common frameworks, and we are working to develop a concordat on expected public procurement practices and policies between the four UK nations.

--- Later in debate ---
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

The purpose of the office for the internal market is to provide advice, reports and monitoring to all four Governments and legislatures. It will have no direct role in dispute resolution, which will be a matter for the Joint Ministerial Committee to discuss.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, I apologise to the Deputy Chairman of Committees for having jumped in so soon. I thank all noble Lords for their contributions; the subsequent questions were worth waiting for, so I am glad that I did not plough on.

This has been an interesting debate; however many more hours we will have in Committee, it has uncovered above all else how half-baked—how completely undercooked—this Bill is. It is not worked through. The point of this amendment was to highlight, and give the Government, an opportunity to step back and admit that there are so many open questions and so many issues. I feel sorry for the Minister—I rarely do, but on this occasion I do—because he is having to respond to things that have not been properly locked down in this legislation. So I will look at Hansard, but it is quite clear that, one way or another, we will have to come back on Report to these absolutely central issues. Having said that, I beg leave to withdraw Amendment 4.

Rolls-Royce

Debate between Lord Callanan and Lord Fox
Wednesday 14th October 2020

(1 year, 3 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

The noble Viscount makes a very good point. We are working closely with the company to ensure that the UK remains at the heart of its operations, and we are currently supporting the development of the next generation of engine through the ATI programme, as well as discussing longer-term possibilities around new, clean aviation technologies.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, in moving this vital skill to Singapore, Rolls-Royce was obviously responding to financial inducements. In his Answer to my noble friend, the Minister threw up his arms metaphorically and said “There’s nothing we can do. It’s the global market”. The Government had leverage and are giving support to the company. Why did the Government not tie that support to the retention of these jobs and skills in this country?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

The noble Lord needs to understand the difficult environment in which Rolls-Royce is operating. Its revenues have fallen off a cliff, and we all know what has happened to the passenger jet market. It has to consolidate its operations across two sites, and that was the commercial decision it took. As I said, we are offering it extensive support and we are in regular and ongoing dialogue.

Energy White Paper

Debate between Lord Callanan and Lord Fox
Monday 28th September 2020

(1 year, 3 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

We are always willing to work with innovative British companies. I agree with the noble Viscount’s points about hydrogen and advanced nuclear technologies, which we are providing considerable support for.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

As the Minister knows, the current target for offshore wind generation is 30 gigawatts by 2030. During the election campaign, Boris Johnson said that if the Tories won, that target would go up to 40 gigawatts. Which number will be included in the energy White Paper? Whichever one is used, do the Government recognise that not just Ofgem but the Government must make sure that this electricity can be distributed around the country?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

The noble Lord makes an important point about the distribution and alterations of the grid that will be required, but I am afraid that I must ask him to curb his impatience and wait for the White Paper with regard to numbers.

REACH and CE

Debate between Lord Callanan and Lord Fox
Thursday 17th September 2020

(1 year, 4 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

We are aware of the possibility, but of course we are working hard to make sure that does not happen. The registration requirements in the UK will be as strict as they were previously; we are seeking to duplicate many aspects of the previous regime. Of course, we are seeking during the negotiations a data-sharing agreement with the European Chemicals Agency which will reduce the costs and burdens of the new scheme.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, the Government have been flexible. They have listened and proposed lengthening the registration time for chemicals under British REACH, which I think is welcomed by the industry. However, the cost of registering chemicals has not been addressed. That additional red tape will cost British industry at least £1 billion—that is its estimate. This is money being spent on re-registering chemicals today that cannot be spent on creating jobs for tomorrow. Can the Minister undertake to be similarly flexible when looking at costs and redouble efforts with his department and other departments to address this tax on British business?

Lord Callanan Portrait Lord Callanan (Con)
- Hansard - -

As I said in previous answers, we are endeavouring to be as flexible as possible to keep the transition as simple as possible and to reduce the costs. As I said, we are seeking a data-sharing agreement with the European Chemicals Agency which will make the registration process relatively straight- forward.

OneWeb

Debate between Lord Callanan and Lord Fox
Wednesday 8th July 2020

(1 year, 6 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan
- Hansard - -

The noble Lord asks a lot of questions and there is not time to address all of them. We are investing in this as a one-off strategic opportunity to own a satellite communications network, working with Bharti Global Ltd, and to support our ambition for the UK to be a pioneer of novel satellite technologies. We are delighted that our bid was successful.

Lord Fox Portrait Lord Fox (LD) [V]
- Hansard - - - Excerpts

As recently as last year, OneWeb raised $1.25 billion, then in March of this year, having launched only a fraction of the satellites that it needs, it filed for bankruptcy protection. Clearly, the American market was not prepared to back it any more. For now, the UK Government, along with Indian tycoon Sunil Bharti Mittal, have committed a further billion dollars. On recent experience, that will last about nine months. How much more will it cost the British taxpayer before the Minister and his colleagues realise that this is not a good investment?

Lord Callanan Portrait Lord Callanan
- Hansard - -

As I have said, given commercial considerations, I am unable to provide further detail on ongoing discussions, but we will be discussing the future funding of the business, and the merits of bringing in additional shareholders, with our partners in due course.

Corporate Insolvency and Governance Bill

Debate between Lord Callanan and Lord Fox
Report stage (Hansard) & Report stage (Hansard): House of Lords & Report stage
Tuesday 23rd June 2020

(1 year, 7 months ago)

Lords Chamber
Read Full debate Corporate Insolvency and Governance Act 2020 - Government Bill Page View all Corporate Insolvency and Governance Act 2020 Debates Read Hansard Text
Lord Fox Portrait Lord Fox
- Hansard - - - Excerpts

In reference to Amendment 75, the Minister talked about the danger of employees leaking the state of the business. In my experience of acquisitions and disposals in continental Europe, where the pre-briefing of employees is legally required, there has never been an issue with employees leaking the information. The leaks have only ever come from advisers, usually banks. What grounds does the Minister have for making that statement?

Lord Callanan Portrait Lord Callanan
- Hansard - -

I do not think that I used the word “leaking”. We want the moratorium to be a light-touch procedure with the minimum level of bureaucracy. Of course, it goes without saying that any information being disclosed from whatever source of a company’s intention to go into this procedure could have serious adverse consequences if certain creditors seek to pre-empt the operation of the moratorium. However, we have built concessions into this part of the Bill. I hope noble Lords will be able to accept them. I take on board the noble Lord’s points, although I did not use those words.

Corporate Insolvency and Governance Bill

Debate between Lord Callanan and Lord Fox
3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & 3rd reading
Tuesday 23rd June 2020

(1 year, 7 months ago)

Lords Chamber
Read Full debate Corporate Insolvency and Governance Act 2020 - Government Bill Page View all Corporate Insolvency and Governance Act 2020 Debates Read Hansard Text
Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - -

My Lords, first, I thank the House of Lords Public Bill Office and the House clerks for their support and their extremely hard work in ensuring that this emergency Bill could be expedited through the House to support businesses as a matter of urgency in these unprecedented times.

Secondly, I place on record my thanks to the Bill team, Andy Ormerod-Cloke, Muneera Lula, Jess Bradbury and all the team, both in BEIS and in the Insolvency Service, who have worked so hard on the Bill. I am sure Members will appreciate the untold hours that went in on evenings and weekends to assist in the progress of this legislation and to provide help and guidance to me, my noble friends Lady Bloomfield and Lord Howe and many other noble Lords who we have spoken to and consulted over the last couple of weeks on all sides of the House. I am grateful to all Members for their contributions. The Bill team and the Insolvency Service did a splendid job operating in, let us not forget, extremely difficult circumstances. They can be proud of their work and they are a credit to the Civil Service.

I also thank my private office team, Marty and Jenny, for ably assisting me in co-ordinating the various bits of government to come together on the Bill. I pay tribute to the Opposition spokesmen: the noble Lords, Lord Stevenson and Lord Fox. This made a pleasant change from my previous job, piloting the Brexit legislation through, where, as Members can imagine, there was no common ground whatever. This has been an historic day: I have actually won three votes in the House, which is the quite amazing pinnacle of my ministerial career. It can only be downhill from here. I am grateful to them for their constructive engagement. They have acted responsibly, recognising that this is emergency legislation, and have worked with us to improve the legislation where that was required. On behalf of the Government, we have been pleased to accept the many constructive contributions. The Bill leaves this House in a much better and improved form than when it entered it. We have been responsible and have acted where necessary, and I hope Members will agree that the Government have responded to their concerns.

I mentioned them earlier but I the other members of the ministerial team—my noble friends Lady Bloomfield and Lord Howe—who have assisted me in pushing this measure through. As a result of this legislation, I hope that many otherwise viable companies will no longer face the threat of insolvency. The measures that the Bill introduces will give our businesses the vital support that they need to keep themselves afloat, thereby preserving jobs and maintaining productive capacity, enabling the foundations to be late for this country’s economic recovery.

Once again, I thank noble Lords for their scrutiny of the Bill. It has, as I said, been much improved thanks to the amendments that have been made during its passage. I hope Members will think that the Government played a constructive role in reacting to many of the concerns they have raised. I hope that the other place will promptly accept these amendments so that the Bill can come into force as a matter of urgency. I beg to move.

Lord Fox Portrait Lord Fox
- Hansard - - - Excerpts

My Lords, the Minister was right that this is an important Bill because it is about people’s jobs, livelihoods and future prosperity. I think we all agreed from the outset that that was the objective here, and in many respects we have managed to fulfil it. I join the Minister in thanking the Public Bill Office, which as usual has been extremely helpful when it comes to marshalling our amendments.

I especially pick out the Bill team. Normally when I look at the Box over there, there is a team looking tired, wan and reasonably pleased that their job is reaching the end. They must have had some very long days. I assume that the Bill team are somewhere out there in the ether, so I thank them for their work.

I thank my own team: my colleagues who have sat through this process, on the Benches and virtually, and Sarah Pughe, who has kept us more or less on the straight and narrow. I thank my opposite number the noble Lord, Lord Stevenson, and the ministerial team—the noble Lord, Lord Callanan, the noble Earl, Lord Howe, and the noble Baroness, Lady Bloomfield—for their open and cheerful approach to the Bill. I think we got a glimpse of why the noble Lord was cheerful: this Bill is nowhere near as bad as what he has just been doing.

That is true, but it was still a difficult Bill. It is a big Bill of mixed intent, in that some of it is permanent and some of it is not, and it was an accelerated process. It has not been easy, and of course we leave here wishing that things were different from the way they are. This feels like the end of something but I suspect, given the powers and the intent that the Government have to trim, modify and improve the Bill, it may be a question not of “Farewell” but rather of “See you later”.

Corporate Insolvency and Governance Bill

Debate between Lord Callanan and Lord Fox
Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords & Committee stage
Tuesday 16th June 2020

(1 year, 7 months ago)

Lords Chamber
Read Full debate Corporate Insolvency and Governance Act 2020 - Government Bill Page View all Corporate Insolvency and Governance Act 2020 Debates Read Hansard Text
Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, I draw noble Lords’ attention to my interests as set out in the register. The noble Lord, Lord Stevenson, in his understated way, called this a wide group of amendments and we have heard a wide and knowledgeable group of Peers speaking to it. I agree with the noble Viscount, Lord Trenchard, that we need proper scrutiny of this Bill. Whether we are here virtually or physically, cramming so many amendments into one group is symptomatic of trying to rush this Bill through. That will have unintended consequences, whether the noble Baroness, Lady Neville-Rolfe, believes it or otherwise. We are suffering from undue haste in trying to do in one day what should have been done over at least two or three days.

I will speak to a small number of amendments. On Amendment 10, the noble Lord, Lord Stevenson, queried 20 days and suggested 30 days. My question for the Minister is: why 20? What was the science and evidence that suggested that 20 was correct? The noble Lord, Lord Leigh, spoke about the courts being busy. Well, one way of relieving the courts of work would be to have a slightly longer period, because that would mean that the monitor would not have to go back to the courts so often to renew the process. Why 20 days and why not 30, or indeed some other number of days?

Amendment 2, to some extent Amendment 1 and certainly Amendment 28 ask the perfectly reasonable question of what the monitor’s role is. What is the correct qualification for the monitor? It is perfectly reasonable in a Bill such as this, with the role of monitor so central to this process, that we understand what that monitor is and who it might be. I look forward to the Minister’s comments on that.

This group, among others, contains a whole load of amendments that address what I call the creditor waterfall. Amendment 21 and, in different ways, Amendments 25 and 40, talk about the role of the banks and financial institutions and seek to restrain the advantage that those institutions can get from their special position within the creditor landscape. It is not in the Government’s interests to continue to allow these organisations the freedom of the remaining resources of a failing business. What was going through the mind of the Government when those decisions were made to set out this level of access and give financial institutions the run that they seem to get from the Bill?

My noble friends Lady Kramer and Lady Bowles and others talked about the role of small and medium-sized businesses, and Amendment 22 adds small entities to the list of those with preferential treatments. Amendments 37 and 40 call for a review after 18 months of how a moratorium is dealing with SMEs. This is an entirely different review from the other reviews that crop up on later groups. It is very much about how this is really affecting businesses. I am proud to put my name to Amendments 98 and 99, proposed by my colleague and noble friend Lady Bowles, which makes wages and salaries rank alongside continuing supplier and not below them. That seems entirely reasonable and I thought that she set that out very well.

All these issues set up the central point: the Bill is not a fully formed piece of legislation. The Government have recognised that, as my noble friend Lady Bowles pointed out, by granting themselves an almost unprecedented ability to rewrite it. They know that it is not the finished article. We will have an opportunity in later groups of amendments to discuss a better way of doing that and a way of giving Parliament the power to assess and possibly rewrite the rules, but I look forward to the Minister’s reply.

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - -

I thank all noble Lords who have spoken in this debate. Yet again, the contributions have demonstrated the breadth of expertise that exists in this House. I must say to my noble friend Lord Trenchard that I would never scowl at him. This is entirely the job of the Whips and not my fault. While there is of course no overall time limit on speeches at Second Reading, there is an overall time limit on the debate in Committee. With that, I will address as many of the points as possible. I apologise to noble Lords if there is not enough time to address all their points, but I am happy to have individual correspondence or a meeting with anyone who does not feel that their concerns have been addressed.

The moratorium was a subject raised by many noble Lords. It is built on two pillars: that the directors believe that the company is insolvent or likely to become so, and that an insolvency practitioner thinks that the company is liable to be rescued having been in a moratorium—finances on one hand and viability on the other. The intention of the moratorium is not to make the creditors’ position worse nor to allow a company to delay an inevitable administration or liquidation. On the contrary, the intention of the moratorium is to rescue the company, and a rescue of the company will be better for creditors, better for suppliers and of course better for employees.

I say in response to the noble and learned Lord, Lord Hope, that, although I fully understand the intention behind his amendment, we are concerned that it would add another burden on to the directors of the company at a time when the company needs to enter into the procedure as quickly as possible. It has never been our intention that the moratorium should be used to “line up the ducks” for a pre-pack administration. Although they are subject to some criticism, we believe that pre-packs are a useful tool that allows businesses and jobs to be saved. However, as with all administrations, the likelihood of a substantial return to unsecured creditors is of course small.

The amendments tabled by noble Lords who seek to lower the barrier to entry into a moratorium to focus on the rescue of a company’s undertakings, rather than the company, could, in our view, lead to increased losses to creditors. The new moratorium provides protection for a company, perhaps further upstream than when administration is the only route open to it. If the company or corporate vehicle can be saved, the outcome for unsecured creditors will almost certainly be better than it would be through the form of insolvency that results in the sale of the company’s undertaking and its ultimate dissolution.

As has been said, the moratorium lasts for an initial period of 20 business days, although it can be extended relatively easily for a further 20 business days. In response to a point raised by the noble Lord, Lord Fox, and my noble friend Lord Leigh, we do not believe that it will lead to an increased burden on the courts. The moratorium is intended to be light touch as far as the court is concerned. Entry is by administrative filing, other than where overseas orders file a winding-up petition, rather than through judicial scrutiny. The courts get involved in longer moratoriums only if the monitor requires court direction or if there is a challenge to the monitor or to the directors’ actions. I hope that that resolves those issues.

Although, in my view, the amendment in the name of the noble Lord, Lord Stevenson, that seeks to permit small businesses an initial period of 30 business days is laudable, it does not appreciate the position that the company’s creditors are in. In our view, the moratorium balances creditor interests with those of the company.

The noble Lord, Lord Fox, asked why the period proposed is 20 days, and that of course is a good question. We consulted on what the period should be, and the clear view was that it should not be left for too long before creditors’ views are considered. The Government are confident that a moratorium with one extension lasting 40 business days is the right length. There is of course always a balance to be struck, and the company should seek the views of its pre-moratorium creditors on whether a moratorium should or should not continue.

A number of amendments have been tabled on the role and status of the monitor, including by my noble friend Lady Altmann, the noble Baroness, Lady Kramer, and my noble friend Lord Hodgson. It is important to say that only licensed insolvency practitioners—a highly regulated profession—are permitted to be monitors of company moratoriums. Practitioners are subject to very high ethical and professional standards. The insolvency code of ethics sets out five fundamental principles of ethics for insolvency practitioners. These include the need for objectivity and a duty not to compromise professional or business judgments because of bias or a conflict of interest. We believe that this strong regulatory framework underpins the independence of insolvency practitioners from those who appoint them.

Many of the amendments proposed by noble Lords, with good intention, seek to strengthen the independence of the monitor, but in our view they would in practice add nothing to the regulatory framework that monitors will already be subject to. Creditors benefit from strong protections. If they think that their interests have been unfairly harmed by the action, or indeed inaction, of the monitor or the directors during a moratorium, it is always open to them to challenge that behaviour in court. This specific right to challenge builds on the strong foundations of the regulatory framework.

In addition, employees are well protected. Requiring a statement from a trade union, alongside documents filed in court when a moratorium commences, as proposed by the noble Lord, Lord Lennie, would in our view add an unacceptable layer of bureaucracy. It might also risk a company’s financial problems being publicised before it is protected from creditor action, leading to unnecessary company failures. I repeat the Government’s view that the greatest support that we can give workers is to keep their businesses afloat, thereby saving their jobs.

Horizon: Sub-postmaster Convictions

Debate between Lord Callanan and Lord Fox
Thursday 11th June 2020

(1 year, 7 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - -

My Lords, I join the noble Lord in paying tribute to all those Members from both Houses who have laboured for many years to draw attention to this unfolding scandal.

While the terms of reference for the review chime with that of an inquiry, we are undertaking a review in order to allow progress to be achieved in an accelerated timeframe. I can tell the noble Lord that the Post Office has committed to fully co-operating with the review, and Ministers will hold it to that commitment. The purpose of this non-statutory inquiry is to ensure that there is a public summary of the failings that occurred at the Post Office, drawing on the judgments from the Horizon case and listening to those who have been most affected, so that we make sure that those lessons have genuinely been learned and this cannot happen again. With regard to documentary evidence, as I said, the Post Office is expected to co-operate fully with the review.

Lord Fox Portrait Lord Fox (LD) [V]
- Hansard - - - Excerpts

My Lords, I associate myself with the comments of the noble Lord, Lord Stevenson, regarding the campaigners in this case, because hundreds of people have had their lives ruined, and sometimes ended, by this terrible scandal. The Prime Minister in February committed to getting to the bottom of this, and we have to take that at face value, but in answer to the question of the noble Lord, Lord Stevenson, I do not think it is entirely clear what powers this independent inquiry will have. Yes, the Post Office has committed, but will this inquiry actually have legal powers to command people to give evidence and to sequester evidence? Unless it is able to do that, I do not think the Prime Minister is going to get his wish—we will not get to the bottom of this. I understand the time element, but can the Minister reassure the House that this will be an inquiry with teeth?

Lord Callanan Portrait Lord Callanan
- Hansard - -

Well, we are committed to getting to the bottom of this scandal. I can tell noble Lords that, yes, the Post Office has committed to co-operate fully with the inquiry; Ministers will expect it to do that. We expect others involved to co-operate with the inquiry as well, and if we need to take further action to make sure that they co-operate, we will be prepared to look at that.

Corporate Insolvency and Governance Bill

Debate between Lord Callanan and Lord Fox
2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 2nd reading
Tuesday 9th June 2020

(1 year, 7 months ago)

Lords Chamber
Read Full debate Corporate Insolvency and Governance Act 2020 - Government Bill Page View all Corporate Insolvency and Governance Act 2020 Debates Read Hansard Text
Lord Callanan Portrait Lord Callanan
- Hansard - -

I start by thanking all noble Lords, both in person and virtually, for their insightful contributions to this debate, which has shown this House at its best, and for the co-operation of many and their engagement throughout the Bill. I thank particularly the Labour and Liberal Democrat Front Benches for the co-operative spirit that they have shown. I am grateful to all noble Lords who have contributed, and who are helping us scrutinise the Bill effectively.

The points raised have highlighted the importance of the measures in the Bill and the necessity of giving them effect without delay. The permanent package of insolvency reforms in the Bill—the moratorium, restructuring plan, prohibition of termination clauses, et cetera—will provide businesses with the space and tools they need to help them continue trading and avoid insolvency during this challenging time and beyond. It is vital that we introduce these measures immediately to help UK businesses weather this crisis and, I hope, thrive on the other side.

The temporary changes to insolvency law introduced are necessary to help businesses get through this unprecedented period. The temporary suspension of wrongful trading liability will encourage directors to use their best endeavours to keep trading through Covid-19 by removing the threat of personal liability. I again reiterate that directors will still be bound by their wider legal duties under company and insolvency law.

The Bill also temporarily prohibits creditors from issuing statutory demands and winding-up petitions against companies unable to pay their debts due to Covid-19. It will give businesses and creditors the opportunity to co-operate to reach a fair agreement and help companies survive. These temporary insolvency measures are retrospective in effect and have been widely welcomed by the business community. They will apply until one month after Royal Assent and can—and will—be extended should it prove necessary to do so. Of course, any case for further extensions will be carefully considered and subject to all the usual scrutiny that this House undertakes.

The temporary changes to corporate governance that the Bill introduces will provide companies and other bodies with much-needed temporary flexibilities on meetings and filings. This is of particular importance at this critical time, when businesses are struggling to cope with reduced resources and, like the rest of us, are abiding by social distancing rules. We have been careful, throughout this process, to take account of the interests of investors and others in devising these measures.

I will now respond to the many points that have been made. Many noble Lords, including the noble Lord, Lord Stevenson, and my noble friend Lord Balfe, raised the important issue of employees’ rights. I am in complete agreement with my noble friend Lord Dobbs, who summed it up extremely well—as he usually does—when he said that the greatest protection for employees is to see their company survive. Where employees are included in restructuring plan proposals, they will be treated in the same way as other creditors, including in relation to their right to information, participation in voting and ability to make representations to the court. I can confirm to my noble friend Lord Balfe that I fully support ministerial colleagues in the other place, who said that it is expected that the court would be mindful of the interests of employees affected by a restructuring plan when deciding if that plan is just and equitable.

The noble Lords, Lord Stevenson, Lord Mendelsohn and Lord Hain, my noble friend Lady Altmann and other noble Lords asked about the classification of pensions and defined benefit schemes. Similar issues were raised by the noble Baronesses, Lady Drake, Lady Warwick and Lady Blower. Employees will want the company pension scheme to be able to pay them when they retire. If an employee is not a creditor or shareholder of the company, they cannot be included in a restructuring proposal. The interaction between pensions legislation and insolvency legislation gives rise to some extremely complicated issues, and the Government are working closely with key stakeholders to determine any implications for the Pension Protection Fund, the Pensions Regulator and pension schemes more generally.

The noble Baroness, Lady Bowles, spoke about the prioritisation of debt in relation to moratoriums and termination clauses. If a moratorium ends and is followed within 12 weeks by administration or liquidation, any unpaid moratorium debts, including those to suppliers who were obliged to continue supply under the new termination clause provisions, will indeed receive super-priority. This means that they are paid above all expenses of that administration or liquidation, including the administrator’s or liquidator’s fees and payments to other creditors, other than fixed-charge creditors.

On super-priority, the noble Baroness, Lady Bowles, and the noble and learned Lord, Lord Hope, both raised points on preventing banks profiting in moratorium. We are aware of the concerns that have been raised about the priority order of debts. We are also very conscious that attempts to game super-priority, by banks or anyone else, should be deterred. The Government are working with all the relevant stakeholders to ensure that creditors are not disadvantaged by these important measures, and we will continue to work to avoid this.

On the knotty subject of HMRC, many noble Lords, including the noble and learned Lord, Lord Hope, the noble Lords, Lord Adonis, Lord Palmer and Lord Liddle, and my noble friend Lord Leigh, raised concerns about Her Majesty’s Revenue and Customs climbing up the creditor ranking, not through this Bill but through other work that is being done. This House will of course agree—I hope—that it is important that taxes go to fund our valuable public services. This reform will ensure that when a business becomes insolvent, more of the taxes that have already been paid in good faith by its employees and customers, but which are held temporarily by the business, will go to fund public services, as intended, rather than being distributed to other creditors. This is money that has already been paid by employees but is held by the business. It is important to note that HMRC will remain an unsecured, non-preferential creditor for taxes levied directly on businesses, such as corporation tax and employer national insurance contributions.

I thank the noble Lord, Lord Stevenson, and my noble friends Lord Dobbs and Lady Neville-Rolfe for their important points on the need to extend the powers of the Small Business Commissioner. This Government intend to fulfil our manifesto commitment to consult on extending the powers of the Small Business Commissioner to advocate for and support small businesses as soon as we are able. We are keen to capture as many views as possible to ensure that the policy response is the right one. In light of businesses having furloughed staff and other priorities, we do not believe that consulting now would be the correct course of action.

The prompt payment code was raised by the noble Lord, Lord Stevenson, as well as the noble Baroness, Lady Kramer. The code now has more than 2,400 signatories. UK legislation already effectively establishes maximum 30-day payment terms for contracts for the supply of goods and services between businesses and public authorities. There are 60-day maximum payment terms between businesses, although longer payment terms may be agreed, provided that they are not grossly unfair to the supplier. To make the voluntary code mandatory without further appropriate modification would in effect set maximum payment terms for large companies when contracting with smaller suppliers.

I understand that it might seem desirable but, while setting limits on the maximum legal payment terms might address the problem of lengthy payment periods in some commercial contracts, we believe the disadvantages of a one-size-fits-all approach are of greater significance.

I thank the noble Lord, Lord Stevenson, my noble friend Lord Bourne and others for raising their concerns on the need for directors to continue to act in good faith when wrongful trading liability is suspended. Let me reassure them and other noble Lords who raised this point that directors will still be obliged to comply with their normal duties, as clearly set out in the Companies Act. Other remedies will remain available where directors do not meet acceptable standards of behaviour, such as fraudulent trading provisions. I therefore hope that noble Lords will agree that, with these provisions stated elsewhere, putting them in the Bill is unnecessary.

I pay tribute to the noble and learned Lord, Lord Hope, for raising an important point on the role of the court, as mentioned in Clause 10, in relation to wrongful trading. Let me reassure him that the wording of the clause is sufficient to direct the court to make an assumption. It does not invite an argument to the contrary. The noble and learned Lord may be aware of similar provisions elsewhere in insolvency legislation which create the possibility of rebuttal. For example, where a preference payment is made by a company, which may be clawed back by a liquidator, and the recipient is a connected party, it is presumed to have been made with the intention of putting the recipient in a better position in the event of insolvency “unless the contrary is shown”. The last part of that provision creates the opportunity for rebuttal, and Clause 10 does not use such language.

The lack of transparency of pre-packs was raised as a concern by a number of noble Lords, including the noble Lords, Lord Vaux and Lord Mendelsohn, and my noble friends Lord Hodgson and Lady Neville-Rolfe. The Government recognise creditors’ concerns about pre-packs, particularly where the sale is to a connected party. If strengthening of professional standards and the existing regulation do not deliver increased creditor confidence in connected pre-pack sales, the Government will look to bring forward further legislation.

The noble Baroness, Lady Bowles, asked whether Companies House undertakes scrutiny of information submitted during this emergency. The register of companies is continuously under scrutiny. It was accessed more than 9.4 billion times in the financial year 2019-20. With so many eyes viewing the data, any errors, omissions or worse can be identified and reported. Companies House undertakes numerous checks on the validity of information, both at incorporation and throughout the life of the company as new information is submitted. Companies House will continue to be vigilant during the current period. Compliance with the extended deadlines is still expected, and the existing offences and penalties for late filings, as set out in the Companies Act 2006, will continue to apply.

In addition, my noble friend Lord Wei asked whether late filings should be reflected in the credit rating of a company. This is already the case. Extending the filing deadline will therefore ensure that filings are not classified as late. This will help directors to focus on managing their businesses without being diverted by credit rating changes based on temporary practical impediments to filing while the Covid-19 restrictions apply.

The noble Lord, Lord Vaux, the noble Baroness, Lady Burt, and my noble friend Lord Blencathra raised concerns regarding small suppliers once termination clauses are prohibited. We think it right to give a temporary exemption to small companies at a time when many are suffering due to the pandemic. I entirely understand and sympathise with noble Lords’ concerns and the desire to assist small companies; the intention is to do so for as long as necessary in the current economic climate. I assure them that if the protections are needed beyond their present expiry date, they can be extended by statutory instrument. In addition, we have built in numerous protections for suppliers who are required to continue supplying a company during a moratorium or other insolvency procedure, including allowing suppliers to apply to a court for permission to terminate a contract if continuing supply would cause them hardship.

My noble friend Lord Dobbs mentioned the need for the moratorium to run beyond 20 business days. The initial moratorium period of 20 business days can be extended by the company by a further 20 business days, and further extensions beyond that can also be made with creditor or court approval.

On timing, the noble Baroness, Lady Falkner, asked whether there was a limit to the number of times a moratorium could be extended. While creditors can agree to extend a moratorium a number of times, they cannot agree cumulatively to extend beyond one year. A court may extend beyond one year but, when doing so, it must consider the interests of pre-moratorium creditors and the likelihood that the extension will lead to a rescue of the company.

During the debate, we have heard several questions about moratoriums, including from my noble friends Lord Hunt, Lord Flight and Lady Altmann. I assure the House that the qualifying condition of entry into a moratorium is that it is likely that the moratorium will result in the rescue of the company. This will be assessed by the proposed monitor of the moratorium prior to their agreeing to take the appointment.

On the lack of a requirement to seek support from the secured creditors, the moratorium will enable companies to act early, which we hope will increase the chance of a successful rescue. For unsecured creditors, the new moratorium can be accessed only if the company is likely to be rescued as a going concern in the opinion of an insolvency practitioner. Where a rescue is achieved via the moratorium, all stakeholders of a business, including secured creditors, will benefit.

On her point about individual bankruptcy, I assure my noble friend Lady McIntosh that the Government recognise fully the impact of Covid-19 on individuals. We will continue to monitor the situation as a whole and consider whether further measures are needed. Credit card companies and other lenders have been required by the Financial Conduct Authority to offer payment holidays to people struggling to make repayments at this time, and it has issued guidance to lenders about offering mortgage payment holidays and halting repossession actions.

I appreciate the points made by the noble Lords, Lord Stevenson, Lord Mendelsohn, Lord Palmer of Childs Hill and Lord Mann, and my noble friends Lord Hunt, Lady Altmann and Lady McIntosh on insolvency practitioners acting as monitors. Insolvency is a highly regulated profession. Insolvency practitioners are qualified members of a recognised professional body who are required to abide by legislative, professional and ethical standards. There are strict educational and professional competence requirements for becoming a practitioner, and the vast majority are highly professional individuals with a great deal of expertise in insolvency and business rescue. Where an insolvency practitioner fails to comply with required standards, they can be subject to disciplinary sanctions by their authorising body, which, in the most serious cases, can involve them having their authorisation to practise withdrawn. I hope that this goes some way to alleviating noble Lords’ concerns.

As the noble Lord, Lord Blunkett, rightly said, the role of insolvency practitioners is positive rather than negative. They can offer professional advice to companies on the best options available and may help businesses to avoid insolvency where appropriate, as well as ease the process where it is inevitable.

The noble Baroness, Lady Jones, spoke about the green recovery. My department is committed to a recovery that is as green as possible, and it is of course responsible for energy and for COP 26.

I turn to the point raised by my noble friend Lady Anelay about charities and the impact that the Bill will have on that sector. As my noble friend said in her contribution, it is important to listen to those closest to the third sector. Colleagues at the Department for Digital, Culture, Media and Sport have developed these measures alongside the Charity Commission. The commission has indicated that it will take a proportionate approach where members’ meetings need to be postponed or held virtually in order to comply with social distancing, even if that is contrary to the rules of the charity’s governing document. In such cases, the Charity Commission advises trustees to record their decisions, attendees and the time of the meeting in order to demonstrate good governance of the charity. I hope this will provide some reassurance to my noble friend and to those charities that the regulator will adopt a sensible and flexible approach in the current difficult circumstances.

We have heard a number of concerns about the limited time available to scrutinise the Bill, and I totally accept the points made by many noble Lords. These concerns were rightly highlighted and raised by my noble friends Lord Blencathra, Lord Flight, Lord Shrewsbury and Lord Trenchard. The Bill contains a series of familiar measures; in fact, many of these insolvency measures have been consulted on and refined over many months. Her Majesty’s Government were always seeking to bring forward reform to the insolvency regime that would bring our regime in line with those of other nations with similar economies. Covid-19 has, sadly, made the need for these measures more acute.

The other provisions in the Bill are all temporary. If the Government wish to extend their operation, both Houses will have the opportunity to scrutinise the relevant order. In addition, any regulations made after the Bill will of course be subject to the usual scrutiny.

The noble Lord, Lord Stevenson, asked whether there was no limit to the overall number of times that the temporary measure can be extended. At present, all the temporary insolvency measures will automatically sunset one month following Royal Assent. The Bill contains a provision enabling these temporary measures to be extended by statutory instrument where appropriate. The Government have every intention of making use of that provision if the protections are needed beyond their present expiry date. The maximum time period for which the temporary measures can be extended by statutory instrument is six months and the power to extend can be used more than once, so there is no absolute sunset.

The noble Baroness, Lady Kramer, asked for the Bill to sunset the permanent measures. The permanent provisions have not just been developed in the short time since Covid-19 first appeared; they have been the subject of a considerable period of consultation and engagement dating back to 2015. This process included the then Government’s review of the corporate insolvency framework, a public consultation in 2016 and an extensive period of engagement since then with a wide range of stakeholders. Additionally, the Bill includes regulation-making powers to enable changes to be made as and where necessary.

At present, all the temporary insolvency measures will automatically sunset the month after Royal Assent. These measures all have significant impacts on the normal working of various parts of insolvency legislation and the business community, and they will need to be considered and scrutinised by Parliament when determining when the temporary measures should be extended and for how long. The Government also have the power to bring any temporary measures to an early end if they are no longer required.

My noble friend Lord Trenchard also raised a point on the introduction of retrospective legislation. The decision to make certain aspects of the Bill retrospective has been taken for specific policy reasons. For example, in the case of the suspension of wrongful trading, retrospection takes effect at the time the Covid-19 emergency began, rather than when the Bill is enacted.

I thank the noble Lords who raised the use of Henry VIII powers. I thank the chair of the Delegated Powers and Regulatory Reform Committee, my noble friend Lord Blencathra, for his comments on these powers. We all look forward to receiving the committee’s report on the Bill, which I think is due tomorrow. The Bill contains powers to enable its provisions to be adapted to different types of corporate body or bodies subject to special insolvency procedures, as well as to ensure that the detail of the procedures can be amended in the light of these reforms. Delegated powers are also included to extend the temporary provisions should it prove necessary and to make other temporary amendments to insolvency law to deal with the effects of Covid-19 where needed.

The noble Baroness, Lady Northover, raised a point about impact assessments on the Bill’s measures. The impact assessment estimates that the three permanent changes to the UK insolvency framework will result in net benefits totalling over £1.9 billion in today’s prices. The equivalent annual net direct cost to business of the three permanent changes to the UK insolvency framework is estimated to be minus £222.9 million. In other words, we estimate an overall £222.9 million annual net benefit.

I will respond to the point from the noble Lord, Lord Fox, about WUPs and the Covid test: how, in this climate, the creditor will be able to show that the test has been met, and whether it is to be fleshed out by the courts. Whenever legislation creates a new legal requirement, it will of course be for the courts to consider how the test should be applied in individual cases. Indeed, this measure is no different. The test of whether Covid-19 has caused the company’s difficulties is indeed intended to present a high bar. The measures in respect of statutory demands and winding up petitions are intended to temporarily enforce the forbearance from creditors that the Government have called for.

I will be happy to meet the noble Lord to discuss trade credit insurance. He also asked about what happens if directors do not co-operate with the monitor. The legislation enables the monitor to bring the moratorium to an end if the directors fail to comply with the rules. These include providing information requested by the monitor and paying certain debts due during the moratorium period.

In closing, since 23 March this country has faced unprecedented hardship as a result of the stringent social distancing measures necessitated by the Covid-19 pandemic. As noble Lords are all aware, UK businesses have been hit hard as a result, with many unable to trade or facing a significant reduction in demand for their goods and services. Consequently, many otherwise viable companies face the threat of insolvency.

The Government are committed to doing all we can to support businesses during this challenging time to ensure that they can bounce back once the pandemic is over. The measures introduced by the Bill offer vital support alongside the substantial fiscal support packages for businesses and workers already in place. It is crucial that these measures are brought forward as a matter of urgency to protect those businesses. They will provide the flexibility and breathing space needed by businesses large and small to ensure their survival now and as the country emerges and rebuilds from this crisis.

Lord Fox Portrait Lord Fox
- Hansard - - - Excerpts

Could the Minister write to my noble friend Lady Barker on her question on mutuals?

Lord Callanan Portrait Lord Callanan
- Hansard - -

Yes, of course. I would be very happy to do so.

Covid-19: British Business Bank

Debate between Lord Callanan and Lord Fox
Thursday 30th April 2020

(1 year, 8 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
- Hansard - -

The Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme have been developed to provide financial support for UK businesses that have been impacted by the coronavirus outbreak. There will be no limit on the number or aggregate value of loans that lenders can issue through these schemes. As of 29 April, over 25,000 loans, worth over £4 billion, have been provided to businesses under the two schemes.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, this money is needed urgently, yet many businesses are encountering problems in getting access to it. For example, long-standing and profitable firms whose cash flow was perfect before the Covid-19 outbreak now apply to banks and are told that they cannot have the money because they do not have the cash flow. This is a Catch-22 situation. It is supposed to be emergency assistance. The Treasury issues guidance but on the grounds the banks are dragging their heels. Unless that culture is changed, good businesses will go to the wall. What are the Government doing to lean on the banks to change this very damaging culture?

Lord Callanan Portrait Lord Callanan
- Hansard - -

I thank the noble Lord for his question; he makes a good point. We have received lots of helpful feedback from stakeholders on how the schemes have been working. He will be aware that, on Monday, the Chancellor announced further steps to ensure that lenders have the confidence they need to process these applications. We have removed the forward-looking viability test and the per-lender portfolio cap, to give lenders the full 80% guarantee across all CBILS lending. We keep the scheme under constant monitoring and are available for any future changes.

Scientific Advisory Group for Emergencies

Debate between Lord Callanan and Lord Fox
Tuesday 28th April 2020

(1 year, 8 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan
- Hansard - -

My Lords, I certainly agree with the noble Baroness about transparency. I can give her a commitment that the minutes of the SAGE meetings will be published at the end of the pandemic in line with normal procedure. The Chief Scientific Adviser has agreed that the names of those participants who wish to be named will be published in the coming days.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, almost to the day, 34 years ago the Chernobyl nuclear disaster kicked off. In retrospect, the Soviet expert scientific committee was shown to be slow to react, driven by political apparatchiks rather than scientists. We saw the same in Wuhan. We are told by the newspapers that, of the 23 members of SAGE, 13 are paid advisers. Does the Minister agree that, to get the best advice, scientific committees such as SAGE should be left to independent scientists and should not include political advisers?

Lord Callanan Portrait Lord Callanan
- Hansard - -

I agree. As I said in my Answer to the noble Baroness, Lady Thornton, SAGE is not a membership body. The number of participants varies from meeting to meeting. There have been over 100 participants in all of the 29 meetings that have taken place on the Covid pandemic. It is up to the Chief Scientific Adviser and the Chief Medical Officer to invite the appropriate academics and advisers to each meeting. The number and names of participants vary from meeting to meeting.

Covid-19: Business Interruption Loans

Debate between Lord Callanan and Lord Fox
Wednesday 22nd April 2020

(1 year, 9 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan
- Hansard - -

It is important to remember that not all SMEs will want debt finance. There is a wide range of different support schemes available to businesses, including the job retention scheme and various local authority grants. We will be looking to publish, in the interests of transparency, the full range of offers that have been made to business in due course.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, I join the noble Lord, Lord Stevenson, in congratulating BEIS, the Treasury and HMRC on the work that they done but, looking at the point in a different way, of those 47 accredited lenders, only the banks have the liquidity to lend at scale. Those banks are generally sticking to their current customers and, today, only six banks are offering CBILS loans to new customers. This is a really important issue. Furthermore, many are not lending below £25,000; about 90% of applications are pitched at that level and below. I was pleased that the Minister said that this was a work in progress. Can he confirm that further modifications are now under consideration and also undertake to ensure that the lack of access for new customers and the exclusion of lower-value applicants are addressed really quickly?

Lord Callanan Portrait Lord Callanan
- Hansard - -

The noble Lord makes a very good point. As I have said, we have already introduced a number of technical changes to the scheme—obviously it was introduced very rapidly. We are keeping all aspects of it under review. The one that he has mentioned is important; we are looking at bringing in new lenders as soon as possible, including Funding Circle, which specialises in smaller loans for companies such as those he talks about. To answer his question: yes, we are keeping this under review, we are seeking to get new lenders accredited as quickly as possible, and we are keeping all other aspects of the scheme under review as well.

Climate Change: COP 26 Arrangements

Debate between Lord Callanan and Lord Fox
Thursday 12th March 2020

(1 year, 10 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan
- Hansard - -

What I like about my noble friend is that he is always tenacious in getting his subjects on to the agenda. Perhaps in this instance it would be best if I did not comment directly on the substance of his question.

Lord Fox Portrait Lord Fox (LD)
- Hansard - - - Excerpts

My Lords, we welcome the Minister’s commitment to a successful COP 26. As he knows, success at the conference is predicated on intergovernmental discussions beforehand. It is only through shuttle diplomacy between the key players at the conference that anything meaningful can come out of it. Can the Minister tell us what level of engagement is currently under way with the key players around the world, particularly the United States, because without its signing up to the COP 26 conclusions it will be a very poor result?

Lord Callanan Portrait Lord Callanan
- Hansard - -

The noble Lord is quite correct that a huge amount of international engagement will be required. We are looking to every country to put forward its nationally determined contributions this year at COP, including the United States. We have been talking to it about that. Obviously, the current coronavirus problem presents a challenge for international engagement, but we continue to do our best in the circumstances.

Artistic Content: Copyright Protection

Debate between Lord Callanan and Lord Fox
Monday 2nd March 2020

(1 year, 10 months ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan
- Hansard - -

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 Portrait Lord Fox (LD)
- Hansard - - - Excerpts

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 Portrait Lord Callanan
- Hansard - -

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.

European Union (Withdrawal Agreement) Bill

Debate between Lord Callanan and Lord Fox
Committee: 2nd sitting (Hansard continued) & Committee: 2nd sitting (Hansard continued): House of Lords
Wednesday 15th January 2020

(2 years ago)

Lords Chamber
Read Full debate Read Hansard Text
Lord Callanan Portrait Lord Callanan
- Hansard - -

My Lords, I thank the noble Lord, Lord Fox, for his amendment and for raising the important subject of a mobility framework. I also thank the noble Earl, Lord Clancarty, the noble Lord, Lord Warner, my main interlocutors, the noble Baronesses, Lady Ludford and Lady Hayter, and the noble Baroness, Lady Bennett, for their contributions.

We are all aware that free movement of people between the EU and the UK will end as we leave the European Union. I am sure that noble Lords will appreciate—even if they do not necessarily agree—that seeking to mandate the Government to negotiate further free movement provisions goes against our entire approach. As we have previously announced, the Government will be introducing a new points-based immigration system built around the skills and talents that people have, not necessarily based just on where they are from.

I appreciate the desire to secure rights to travel, work, study and live in the EU in the future. We recognise the importance of mobility for economic, social and cultural co-operation, and we committed to agreeing the best deal for the whole of the United Kingdom. The political declaration that we have agreed sets out the aspects of mobility that the UK and the EU have committed to discussing in the future-relationship negotiations. These include: providing for visa-free travel for short-term stays; mobility for research, study, training and youth exchanges, and securing mobility for business purposes.

The noble Lord’s inclusion of the right to work across borders is well intentioned, but in our view unnecessary. The agreements that we have reached on citizens’ rights with the EU, EEA/EFTA countries and Switzerland protect the rights of these so-called frontier workers. These are UK nationals who are living in the UK or a member state but are working in another member state, or EU citizens living in the EU and working in the UK. That will take effect at the end of the implementation period.

For example, this will protect an individual who lives in London but works in Paris or Brussels, and vice versa. I hope that I have been able to reassure the noble Lord on this point. However, as we have argued in other amendments, in this situation it is not helpful for Parliament to set a negotiating objective for the Government in statute. This would limit the Government’s flexibility in negotiations and, as I said, the detail of future mobility arrangements with the EU is set out in the political declaration and will be discussed in the next phase of the negotiations.

The noble Baronesses, Lady Hayter and Lady Ludford, raised the important subject of the onward-movement rights of UK nationals in the EU. We recognised at the outset that this was a vital subject for those UK nationals who are living in the EU. I have to tell both noble Baronesses that we tried very hard to get it included in the negotiations, but the EU refused to discuss it in the withdrawal agreement and said that it was an issue to be discussed in the future relationship negotiations—so that is what we will do. I assure noble Lords that we tried very hard to get it included in the negotiations, and it was not for the lack of trying on our side that we were not able to conclude an agreement on that. On that basis, the details of future mobility arrangements will be subject to negotiations in the next phase of the talks.

I hope that I have been able to satisfy the noble Lord, Lord Fox, with my response to his amendment—although I suspect that I have not—and that he will feel able to withdraw it.

Lord Fox Portrait Lord Fox
- Hansard - - - Excerpts

I thank the Minister for his response. Frankly, I had not expected a great melding of minds. It is clear that from these Benches, and seemingly from all the other Benches, that we think the Government are wrong on this. The Government of course have a majority and therefore have the right to pursue their wrong-headed policies, but there will be many of us who will continue to remind them of, and take opportunities to change, that wrongness. As time unfolds and the Government begin to attempt to implement a complex points-based system, as they call it, they will find that they have neither the personnel nor the systems to do so quickly, and pretty soon they will find that we are accessing and bringing in at least as many people as we are now, if not more. Personally, I welcome that, but it stands against many of the things that the Government have said in the past. That said, I beg leave at this stage to withdraw the amendment.