Internal Market Information System Regulations (Amendment etc.) Regulations 2021

Debate between Lord Callanan and Lord Stevenson of Balmacara

Tuesday 29th November 2022 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am sorry that the very interesting and, to me, quite new explanation for the IMI, and its rather interesting resonances for cultural goods and other material that needs to be notified from country to country, has not attracted a wide number of speakers. However, I will do my very best to enliven the House for a few seconds while we get to the point at which we make a decision about these important regulations.

My first question is very simple, and I was surprised that the Minister did not mention this in his introduction. Why the delay? This instrument was originally laid on 20 July 2021. It is still referred to as a 2021 regulation, although it seems to me that we are in 2022, almost 2023. There must be an explanation. It might be eluding the Minister at the moment, but I am sure that inspiration will arrive very shortly from the Box. We will wait for that to occur. It may or may not be important, but it links to what I want to say at the end. I therefore make the point now and look forward to the response.

It is very unusual for this House to have the leisure of so much time to consider regulations in any detail. Those of us who have struggled under many years of Conservative government legislation will know that we are often under pressure to read and respond to material at short notice. The idea that one has nearly 24 months to respond is one I could get used to very quickly.

Secondly, why is this being done at all? The main purpose here is to eliminate from the UK statute book things that are no longer relevant or which resonate with material relating to those who work or operate in parts of the United Kingdom other than Northern Ireland, so that the statute book is not cluttered up with that. However, as I understand it, but perhaps I am out of date, there is to be an EU Bill shortly which will do exactly the same thing. Perhaps I am reading something incorrect into these regulations, and if so, perhaps the Minister will correct me when he responds. However, this seems to be ahead of the plans of the former Secretary of State and his department. Of course, given that change, perhaps that Bill is no longer happening, but as I understand it the intention was to go through all the legislation retained after we left the EU to make sure that the statute book was uncluttered by it, yet here we have a statutory instrument doing that very job. Why is that?

Thirdly—I mention this because it raises issues relating to some of the affected material—we have not had an impact assessment and no consultation has taken place, as I understand it, on this statutory instrument. That is unusual, but not in relation to material carried forward from the exit from the EU. However, it would be helpful to those of us who have to consider these matters if we knew who precisely was affected. When he responds, can the Minister name any company or organisation that would be more profitable or even affected by the passing of this legislation? I look forward to his response.

[Lord Callanan (Con)]

My Lords, I join the noble Lord in expressing my regret that this major piece of legislation has not attracted more speakers. Nevertheless, it is quality that counts, not quantity, and I thank the noble Lord for his intervention. As I previously set out, this instrument makes a series of technical amendments to reflect the current position regarding the UK’s access to the IMI. By updating the statute book, this instrument provides clarity for public authorities, businesses and citizens about how and when data previously shared between UK, EU member states and the European Commission is now treated following the UK’s departure from the EU. As I said in my opening speech, it introduces no new obligations, costs or powers and will not change the service provided by public authorities to UK businesses and citizens under the Northern Ireland protocol.

In response to the noble Lord’s question about what businesses would be affected, the answer is none. This instrument removes references to legislation which previously facilitated IMI access. Access was necessary to enable the UK to comply with its obligations under single market legislation while we were a member state. Now that we have left the EU, this instrument updates the statute book to reflect the areas where access has already been terminated by the European Commission on the grounds that UK access is no longer required. In other words, access is no longer necessary to support compliance under the Northern Ireland protocol. Therefore, this instrument removes references containing legislative areas in respect of which the UK does not have access to the IMI, including the services directive, recognition of professional qualifications, patients’ rights relating to cross-border healthcare, posted workers, public documents and non-road mobile machinery.

Public authorities will nevertheless continue to have access to the IMI modules relating to disputes concerning mutual recognition of goods, the return of cultural goods and firearms transfers, as I outlined earlier. This will support continued communication, administrative co-operation and data-sharing between regulators in those areas. As required by the specific legislation, it continues to apply in Northern Ireland. The instrument facilitates such co-operation where required without the need to establish new secure channels of information and communication with individual EU member states and the European Commission.

In response to the noble Lord’s question about why this instrument is so late, the answer is that the UK was given a right of access to the IMI under the withdrawal agreement for a period of nine months in order to finalise any outstanding applications for professional qualification recognition under the European professional card route from general system nurses, pharmacists and physiotherapists. The UK agreed to the EU’s decision to extend the UK’s right of access to the IMI beyond the deadline, as applications were still outstanding beyond that period. The making of this instrument therefore had to be delayed so as not to remove the UK’s ability lawfully to access the IMI for this purpose. The need for temporary access has now been resolved, and we are in a position to progress the instrument. I hope that resolves the noble Lord’s query.

As I have set out, this instrument ensures that UK public authorities can continue to access the IMI where necessary to allow them securely, effectively and efficiently to deliver their obligations under the protocol, while ensuring that the UK statute book accurately reflects the changes in access to the IMI following the UK’s departure from the EU.

I hope I have resolved the noble Lord’s query, and I commend these regulations to the House.

Post Office: Horizon

Debate between Lord Callanan and Lord Stevenson of Balmacara

Thursday 24th February 2022 Lords Chamber

[Lord Callanan (Con)]

It is a complicated picture. There are a number of different compensation streams. There are the original GLO participants who took the case to the High Court. The problem there is that that case was settled—the point that I was making earlier—although there is considerable pressure, with which I sympathise, for them to be compensated further. There is the historical shortfall scheme and then there is the compensation due to those who probably suffered more than anyone, in that they were prosecuted, found guilty and often jailed or bankrupted accordingly. So there are a number of different compensation streams, and we need to make sure that everyone receives the compensation they deserve.

[Lord Stevenson of Balmacara (Lab)]

My Lords, the Minister will be aware that we have previously raised the question of the powers of the inquiry. Obviously, the inquiry has got going, and quite significant information has already been released. My concern was—I think the Minister has answered this before, but I would like to get him to repeat it—whether the inquiry, although not being held under the Inquiries Act, has the powers to call all the evidence that it may require in order to get to the bottom of this. That includes not just Fujitsu but Ministers.

[Lord Callanan (Con)]

My understanding is that, yes, Sir Wyn has all the powers available to him. We would be happy to look at any further powers that he needs if he does not have them, but my understanding is that Ministers going back over the relevant period, officials, executives of the Post Office and Fujitsu will all be playing a part in the inquiry and giving evidence to it.

Economic Crime: Planned Government Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Monday 31st January 2022 Lords Chamber

[Lord Callanan (Con)]

I cannot give the noble Lord a commitment about when a Bill might arrive. I also cannot give a commitment about what might be in it when it does arrive.

[Lord Stevenson of Balmacara (Lab)]

One of the key recommendations of the recent Joint Committee on the Online Safety Bill was that scams and economic crimes on the internet should be in scope of the revised Bill when it comes forward. We obviously await the Government’s response to that, but does this not give the Government an opportunity of a double win? Either Bill would do, but the issue has to be addressed.

[Lord Callanan (Con)]

There are indeed a number of positive elements to legislating on this issue. One of them is the issue highlighted by the noble Lord. However, we are again dealing with hypotheticals: something that may happen in good time. As I keep saying, we are committed to pursuing this legislation, but I am afraid I am going to sound a bit like a broken record when I say I cannot give a commitment at this stage to noble Lords on when we might be able to do it.

Employment Rights

Debate between Lord Callanan and Lord Stevenson of Balmacara

Thursday 10th June 2021 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness is right: we are not proposing that the HSE become part of the single enforcement body. The HSE is a large, established organisation. Given its size and scope of its functions, and the focus on high-harm incidents, incorporating it into a new body could lead to a shift in priorities away from other employment rights, but we will ensure that the HSE remains a key partner for the single enforcement body. The noble Baroness should be aware that since the start of the pandemic, HSE has carried out more than 243,000 Covid-19 spot checks and responded to more than 22,000 concerns. There are currently around 1,300 workplace spot-checks carried out per day, targeted on those industries whose workers are most likely to be vulnerable to transmission risks.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, can the Minister confirm that the Government’s response to the recent court cases on the gig economy—on issues that concerned the minimum wage, sick pay and holiday pay entitlements—are that no further changes to employment law are considered necessary?

[Lord Callanan (Con)]

We are considering all these matters. We keep these matters under review. We are committed to protecting and enhancing workers’ rights. As I said earlier, the Uber Supreme Court judgment was clear that those who qualify as workers, under existing employment law, are entitled to rights such as the minimum wage. All gig economy businesses should ensure that they are fulfilling their legal responsibilities. I think it is important to point out that the gig economy offers individuals flexibility and it can provide opportunities for those who may not be able to work in more conventional ways. Indeed, Government research has indicated that people mostly value the flexibility that it offers—56% of respondents said that. An individual’s entitlement to rights at work is determined by their employment status, whether employee, worker or self-employed, and gig economy workers can be classed under any of these, depending on their particular employment relationship.

Post Brexit: Small Service Businesses

Debate between Lord Callanan and Lord Stevenson of Balmacara

Monday 24th May 2021 Lords Chamber

[Lord Callanan (Con)]

As the noble Lord is aware, having raised this a number of times, we are working closely with the music industry to help musicians adjust to the new trading relationship. Bilateral conversations have established that some touring activities are possible and, under certain conditions, without visas or work permits being required. We have created landing pages on GOV.UK to provide guidance to musicians on these areas.

[Lord Stevenson of Balmacara (Lab) [V]]

Further to the question from the noble Lord, the TCA contains no overarching agreement with the EU on short-term work relating to our creative industries and, despite what the Minister says, no bilateral or reciprocal agreements are being signed at the moment. What assessment have the Government made of the impact that this will have on our services trade, which in 2019 was worth over £534 billion?

[Lord Callanan (Con)]

As I said, we are working closely with the sector and across government to consider how we can help resolve these issues. I understand the noble Lord’s point. This has been very damaging to the creative industries. It is hard to quantify the impact at the moment. Given the pandemic, not many people are travelling anywhere, but we will monitor the situation closely.

10-point Plan: Six Months On

Debate between Lord Callanan and Lord Stevenson of Balmacara

Wednesday 19th May 2021 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness is right to draw attention to the work of the devolved Administrations. I can tell her that we work very closely with the DAs, at both ministerial and official levels, when developing policies and measures to reduce emissions and in tracking progress against our respective targets. Regular engagement takes place through the bi-monthly net-zero ministerial group, which has been developed in the context of the review of inter- governmental relations, and the supporting director-level net-zero nations board, as well as money policy-specific fora and frequent ad hoc contacts. Separately from that, there is a DA ministerial group chaired by COP president Alok Sharma, and the offshore transmission network review looks at policy and regulatory changes across England, Scotland and Wales.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I was surprised that there was no mention of SMRs or AMRs in the Statement. The original plan says that

“further investment in Small Modular Reactors and Advanced Modular Reactors”

will be made, and mentions sums of £125 million and £170 million respectively. Can the Minister update us on where we are on that regarding both the spend to date and whether the rather larger sums that were due to be brought in from the private sector have actually been forthcoming? Can he also confirm that phase 2 of the SMR proposals is still due by the end of 2021? If so, could he give us a bit more clarity about the dates?

[Lord Callanan (Con)]

The noble Lord is right to draw attention to the importance of nuclear generation in the mix of fuels that we will need to take forward. I am happy to provide an update for him. I am delighted to see that the noble Lord, Lord West, is fully in agreement with this.

The PM has confirmed the Government’s commitment to advancing large, small and advanced reactors as part of our 10-point plan for the green industrial revolution. We have announced £385 million in an advanced nuclear fund to invest further in the next generation of nuclear technology, subject of course to value for money and future spending rounds. The advanced nuclear fund announced as part of the 10-point plan includes funding of up to £215 million for small modular reactors and up to £170 million for advanced modular reactors. We are also investing up to an additional £40 million in developing the regulatory frameworks, including developing, funding and siting policies for small modular reactors, to which the noble Lord referred, and supporting UK supply chains in helping to bring these technologies to market.

The Energy White Paper confirmed that generic design assessment, the first stage of the UK’s nuclear regulatory process, will be opened up to SMR technologies this spring. We are pleased to confirm that the guidance for advanced nuclear technologies to enter GDA has been published on GOV.UK. GDA entry is an open and ongoing process, with a standing invitation for advanced nuclear companies to apply when they believe that they are ready to do so.

Post Office Court of Appeal Judgment

Debate between Lord Callanan and Lord Stevenson of Balmacara

Wednesday 28th April 2021 Lords Chamber

[The Deputy Speaker (Lord Alderdice) (LD)]

The noble and right reverend Lord, Lord Harries of Pentregarth, has withdrawn, so I call the noble Lord, Lord Stevenson of Balmacara.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the Minister has confirmed that the inquiry—although, technically, I think it was originally called a review—is looking at corporate governance issues, and that is welcome. Could he answer two specific questions? Have the Government submitted any evidence already in the response to the call for evidence? If not, why not? Secondly, does Sir Wyn have the powers to subpoena information from the Government if it turns out that he requires that?

[Lord Callanan (Con)]

The Government are committed to fully cooperating with Sir Wyn’s inquiry; whatever information or access he needs will of course be provided. I am not sure whether we have submitted evidence, but I will certainly get back to the noble Lord on that. As I said, the inquiry is making swift progress and we look forward to receiving Sir Wyn’s report. However, as I said in my earlier remarks, if there are instances of any stakeholder in this area not co-operating, we will certainly not hesitate to take further action.

Industrial Strategy: Local Growth

Debate between Lord Callanan and Lord Stevenson of Balmacara

Monday 26th April 2021 Lords Chamber

[Lord Callanan (Con)]

We will continue to work on the levelling-up agenda, building on the strength of many places. We encourage those places to consider key sectors, assets and clusters that they want to support to foster their long-term growth ambitions, building on the strong evidence base and the brilliant work done to date by many places across the country.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, following on from that question, can I ask the Minister to set out the ways in which the innovation, productivity and wealth-creation capacity of sectors of the economy that are not the direct responsibility of BEIS, such as the creative industries, will be engaged at a local level in the delivery of the plan for growth?

[Lord Callanan (Con)]

I know that the noble Lord has been a long-term champion of the creative industries, and I agree with him. We recognise the importance of the creative sectors. In Build Back Better: Our Plan for Growth, creative industries are highlighted as one of the sectors that we expect to shape the UK’s economic future. Upgrading and creating new cultural and creative spaces represents a core element of the £4.8 billion levelling-up fund.

Global Navigation Satellite System

Debate between Lord Callanan and Lord Stevenson of Balmacara

Wednesday 10th March 2021 Lords Chamber

[Lord Callanan (Con)]

The noble Lord makes an important point. OneWeb has met the Royal Astronomical Society to discuss the potential impact of its operations on astronomy. We will continue to support that dialogue and wider engagement with the scientific community.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the Minister said that he was clear that OneWeb was not going to play a significant part in the PNT strategy—while at the same time saying how important that was —but he did not say what exactly it would be doing. Could he elaborate a little more on where he sees the focus of that £1 billion investment?

[Lord Callanan (Con)]

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.

Retail Sector: Unemployment

Debate between Lord Callanan and Lord Stevenson of Balmacara

Wednesday 27th January 2021 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, our thoughts are with the staff and their families who are affected by the closures under this deal. Is there a plan, in scope or in contemplation, for our high streets? If so, will the Minister ensure that it includes consideration of business rate levels, planning issues, investment and transport links, training and retraining? He has mentioned some of those but they need to be bound together in a coherent way.

[Lord Callanan (Con)]

The noble Lord makes a very point. In November, we announced the levelling-up fund, worth £4 billion, for England. This will invest in a broad range of high-value local projects, including upgrading town centres and community infrastructure.

Workers’ Rights

Debate between Lord Callanan and Lord Stevenson of Balmacara

Tuesday 26th January 2021 Lords Chamber

[Lord Callanan (Con)]

Yes, indeed I do.

[Lord Stevenson of Balmacara (Lab) [V]]

I thank the Minister for confirming that the Government have no plans to weaken employment rights. This will be a great relief to many people across the country. However, what about levelling up? Does he agree that there is still work to be done on, for example, the Taylor review, which is yet to be completed; the protections needed for employees on zero-hours contracts, as mentioned by my noble friend Lord Monks; the differences in rights between workers and employees; and the continuing need for vigilance about non-payment of the minimum wage?

[Lord Callanan (Con)]

We will of course always clamp down on unscrupulous practices where they occur, including on those who do not pay the minimum wage. I am proud that it was a Conservative Government who banned exclusivity clauses in zero-hours contracts, giving gig economy workers more control over the hours that they work. We will look to go further where we can.

Covid-19: Night-time Economy

Debate between Lord Callanan and Lord Stevenson of Balmacara

Tuesday 26th January 2021 Lords Chamber

[Lord Callanan (Con)]

My noble friend makes some important points. We will of course work closely with the Treasury, as always. The support package that the Government have put in place is designed to help businesses with their fixed costs. It includes the business rates holiday, the job retention scheme and various grants, and introduces a moratorium on the eviction of commercial tenants. The Government keep all these support measures under constant review.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the night-time economy also generates employment for freelance and self-employed musicians, actors and technicians. It is clear that DCMS funding for established building-based clients is not reaching this group, over half of whom have reported receiving no support. Will the Minister work with colleagues in DCMS to ensure that this issue is resolved quickly and for the future?

[Lord Callanan (Con)]

The noble Lord makes an important point, as he so often does. The Government recognise the important role that freelancers, including musicians, play in the night-time economy. That is why we have put the Self-employment Income Support Scheme in place. We have funded Arts Council England to provide £26 million to support over 8,200 creative people. We have provided £6 million in benevolent funds to make direct awards, reaching almost 3,500 people so far, but of course we need to look at what more we can do to help.

Construction Industry: Retention Payments

Debate between Lord Callanan and Lord Stevenson of Balmacara

Thursday 14th January 2021 Lords Chamber

[Lord Callanan (Con)]

I do not have figures for the public sector, but not withholding retentions is government policy—although I am aware that some departments and agencies do. Unfortunately, we do not have the power to instruct local authorities in this matter. If there are any figures available, I will of course let her have them.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I declare an interest as my wife is a construction lawyer. This issue was raised regularly by the late Lord O’Neill of Clackmannan, and I am sure I speak for the whole House when I say that we miss him. The consultation referred to by the noble Lord, Lord Aberdare, is highly critical of current practice. It also stresses that the pandemic raises major insolvency worries. Why do the Government not use their Covid-19 emergency powers either to introduce an RDS or to abolish retention payments and try out this new policy?

[Lord Callanan (Con)]

I join with the noble Lord in paying tribute to the work of the late Lord O’Neill: as the president of the Specialist Engineering Contractors’ Group, he was active on this issue for many years and instigated an inquiry on it in 2002. As I have said, given the complexity of the policy issues, there remains no consensus on the way forward, but we will continue to examine the issues, to work with industry and to seek a solution to this problem.

Covid-19: Small Businesses

Debate between Lord Callanan and Lord Stevenson of Balmacara

Wednesday 13th January 2021 Lords Chamber

[Lord Stevenson of Balmacara]

To ask Her Majesty’s Government what assessment they have made of the number of small businesses at risk of permanent closure as a result of the restrictions put in place to address the COVID-19 pandemic; and what additional support they plan to provide to such small businesses.

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

Throughout the pandemic, the Government have recognised the need to support businesses through the impacts of Covid. The Government continue to deliver a comprehensive package of measures to provide that support, including loan guarantees, business grants, tax deferrals and the Coronavirus Job Retention Scheme. We will continue to keep the approach under review and continue to engage with the business community.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the ONS’s index of services shows that, despite the Government’s welcome support, all but a few sectors of the economy are significantly down on previous years. The travel, hospitality and creative industries are in deep trouble, registering between 50% and 90% cuts in activity. We have consistently called for a differential approach to sectors with a high level of freelance, seasonal and self-employed workers. Does the Minister agree that it is important to retarget government support going forward?

[Lord Callanan (Con)]

We keep all these matters under constant review. We are supporting self-employed people with the fourth income support grant. We are providing an extra £4.6 billion to protect UK jobs and businesses. Businesses that are self-employed, freelancers and sole traders can benefit from other measures such as mortgage holidays, VAT relief and business loans with generous repayment terms.

Covid-19: Impact of No-deal Brexit on Vaccine Supplies

Debate between Lord Callanan and Lord Stevenson of Balmacara

Wednesday 16th December 2020 Lords Chamber

[Lord Callanan (Con)]

As I said in my previous answer, the use of the military is very much a last resort. I am sure that the noble Baroness will understand that I cannot share details of security arrangements, but I can assure her that we have worked very closely with vaccine suppliers and others to ensure that shipments are properly protected and looked after.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, will the Minister tell us a bit more about the contingency plans? Apparently, there is a Government-procured ferry on standby. We did not have much luck last time. Can he confirm that it is properly equipped to deal with the extreme refrigeration needed? Is there a backup to this contingency plan?

[Lord Callanan (Con)]

The noble Lord makes a very good point. I can assure him that there are a number of backup plans. We have worked very closely with the suppliers and we are confident that the cold supply chain will not cause any problems. Obviously, everybody is aware that this vaccine has to be transported at a temperature of minus 70 degrees, plus or minus 10 degrees centigrade, and the manufacturers have put in place proper supply units that are maintained at that cold temperature and can also be used for temporary storage.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Consideration of Commons amendments
Monday 14th December 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I agree with others who have spoken that this has been an interesting debate. It is clear that good discussions have taken place between Ministers and the movers of the amendments, which is a good sign and reflects changes.

The Government have made a concession and a commitment to extensive consultation prior to bringing forward proposals for their state aid regime. That is a major change compared to where we were at the start of this Bill, which we welcome.

Like the noble and learned Lord, Lord Thomas, we agree that control of state aid and the regime which underpins it must lie at the UK level, but, as we discussed when debating a recent regret amendment to the statutory instrument referred to by the Minister, we think that policy development in this area has been quite bizarre. How on earth Parliament is expected to opine on state aid rules without first knowing what those state aid rules might be—whether we are continuing where we were, whether we are changing to WTO or whether it is somewhere in between—is beyond me; it is not the way we normally do things, as we made clear in that debate. I imagine, and it has been said by others, that it is because this issue is still at the heart of the never-ending discussions in Brussels about the future of the EU free trade agreement. We may begin to see progress once that is resolved, but we are where we are, and we are moving to World Trade Organization rules—much discredited—on 1 January and have yet to consult on an appropriate state aid regime. This is not the way we should do things.

However, we on this side of the House accept that Ministers have given assurances at the Dispatch Box, and they have been repeated today, that spending on state aid, as opposed to the control of policy on it, is an issue that has to respect the devolution settlement. It needs to be done in a way which brings forward the consultation and the seeking of consent that have been discussed by just about everybody who has spoken today. However, a final assurance from the Dispatch Box is required to take the trick on this matter. If the Government repeat that they will make every effort to work consultatively and seek the consent of the devolved Administrations, I do not think that this is right amendment on which to divide the House on this issue or the right time to do it, so we would not support that.

The noble Baroness, Lady Bowles, on the other hand, is moving ahead of the game, looking to future changes and asking how they would be introduced. She is right that these are big decisions that need to be thought through very carefully. If they are to be slipped through in some form of secondary legislation, they will not achieve the scrutiny and debate that they should. She makes some good points about that, and about the gap that will emerge if there is no primary legislation, let alone the need for consultation and discussion with those who have to implement the legislation once it is brought in. Although I discussed it with the noble Baroness prior to this evening’s debate, I suspect that this amendment has been picked up too late to be included in the Bill at this time. As she said, however, it would be good to hear the Minister set out his plans at the Dispatch Box. Again, if he does so, I would not be prepared to divide the House on this issue.

[Lord Callanan (Con)]

My Lords, I have once again listened carefully to the points made in the debate today. It is always particularly entertaining to listen to the noble Lord, Lord Adonis, who has once again benefited us with his Brexit prejudices. I give some advice to the noble Lord: he just needs to accept that we had a referendum on this subject as well as a general election that was mainly devoted to it. He really needs to use his considerable talents in other areas and get on with his life. The issue is settled; we are leaving the European Union. I respect his ideas and opinions, but he lost. As a Conservative from the north-east, I know when I have lost an election, and there have been plenty of them in the past.

Regarding devolution, in my previous job I chaired the Joint Ministerial Committee with the devolved Administrations on ongoing EU business. I attended many meetings with both Scottish and Welsh Ministers. Of course, we did not always agree on the outcomes or the issues, but we certainly had a very good personal relationship. I listened to their concerns very closely, as indeed they listened to mine; as I said, we had a good working relationship.

I reiterate, first, that I welcome the shared consensus in this House to continuing the UK-wide approach to subsidy control and confirming this in law. While I am grateful for the time and the effort that has been devoted to scrutinising this provision as is right for your Lordships’ House—perhaps too much time and effort, but we are where we are—it is important to note that we have asked the other place, the elected Chamber, to think again on the relationship between subsidy control and common frameworks. It has been clear that subsidy control does not fall within the common frameworks programme, and that any undue delay is not something to be supported. I hope that noble Lords will be able to respect that decision. I recognise the concerns of the Welsh and Scottish Governments, but I reiterate that the noble Baroness’s amendment is not the best way forward. This amendment is inconsistent with the reservation clauses that both Houses have now agreed should remain in the Bill.

I also reiterate that state aid has always been reserved and, as such, has never been part of the common frameworks programme. This amendment seeks to reverse a decision which has already been made. We need to move forward on this issue as I have indicated, and this will be done through the forthcoming consultation.

The noble Baroness, Lady Finlay, asked me for an assurance that we will make every effort to get devolved Administrations’ support. Amendment 51B demonstrates that the Government are committed to maintaining a constructive, collaborative relationship with the devolved Administrations, as it is in all our interests to ensure that a new regime works for the whole of the United Kingdom. We hope that this amendment will enable us to discuss and resolve any such issues before the publication of any consultation response, and we will commit to listen very carefully to the devolved Administrations’ concerns.

We all agree that the UK Government and devolved Administrations should work constructively and co- operatively in this policy area. That is why, as I have said, the UK Government have set out an amendment that commits to consulting them. The amendment ensures that, before publishing any relevant report relating to the outcome of the UK subsidy control consultation, the Secretary of State will provide a draft of the proposed response to the devolved Administrations, inviting them to make representations. The Secretary of State will then consider any representations and determine whether to alter the report in light of that consideration. If after all that we decide to legislate, it will, of course, come to this House.

This process will ensure that the devolved Administrations’ voices are heard, but it avoids creating the unnecessary delays and confusion that a legislative requirement to try to agree a common framework would introduce. Potentially waiting 18 months for a UK-wide system to be agreed would create uncertainty for UK businesses and damage our efforts to promote the UK’s economic recovery. For these reasons, I respectfully suggest that the approach put forward in the amendment from the noble Baroness, Lady Finlay, is not appropriate at this time.

Green Economic Recovery

Debate between Lord Callanan and Lord Stevenson of Balmacara

Monday 14th December 2020 Lords Chamber

[Lord Callanan (Con)]

The noble Lord makes a very good point; the Midlands green growth conversation is an important piece of work, and I look forward to the Midlands Engine growth action plan, which I understand is being published in the new year. The 10-point plan sets out our intention to “reinvigorate our industrial heartlands”, such as the north and the Midlands.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, we face increasingly high levels of unemployment post-Covid-19, so does the Minister agree that retraining will be key to the green recovery? Can he explain why that is not mentioned in the 10-point plan? Can he also confirm what budget has been allocated for retraining and that it will be additional to the funding already announced?

[Lord Callanan (Con)]

I agree with the noble Lord that retraining will play an important part. We recently launched the Green Jobs Taskforce to support it. It will look at the key challenges faced by employers and workers in supporting a green recovery, ensuring that we have the right pipeline of talent and skills provision.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

3rd reading & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords
Wednesday 2nd December 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, my original Amendment 21 on Report, also signed by the noble Lords, Lord Anderson and Lord Wigley, and the noble Baroness, Lady Bowles, on which I spoke on 18 November 2020 and moved formally on 23 November 2020, replaced the original Clause 10 with a new clause listing public interest derogations from market access principles. I was pleasantly surprised and grateful that the Government accepted the amendment without a Division. The clerks subsequently advised us that the amendment required some consequential changes to the Bill to remove minor inconsistencies. These changes are set out in the amendments before your Lordships’ House today. Amendment 1 removes two subsections on page 8 and Amendment 3 removes Schedule 1 entirely. I beg to move.

[Lord Callanan (Con)]

The Government regret the changes made to the previous Clause 10 on Report, but I will not reopen that debate here. I appreciate the need for these amendments to tidy up the Bill text so the Government will not oppose them.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th November 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

I am going to disappoint the noble Lord, Lord Fox, as I will not go through my arguments at length, because they have been made so well by the noble Baroness, Lady Bowles, and the noble Lord, Lord Wigley. I put on record my absolute support for the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, who, while they have comments about the detail of the amendment, support the principle of it. I am grateful to them for that.

It is a simple proposition: the internal market must work and be seen to work for all and, therefore, must have buy-in and support from all. It should not favour one geographical area or country over another. It is important that we do not upset the balance struck in the CMA and its functions. The noble Baroness, Lady Noakes, is right that there may be an adverse impact on the CMA, if it is forced to take on something that is not its primary purpose. Thirdly, the devolved Administrations need to be part of the organisation, its process and appointments.

There are reservations about proposed new subsections (3) and (4) in the amendment. It is beyond our hopes, but perhaps the Minister will consider bringing forward an agreed amendment at Third Reading. If he did, we would support it but, if he will not do that, we will support the noble Baroness if she tests the opinion of the House.

[Lord Callanan (Con)]

I thank noble Lords who participated in the debate, particularly for their brevity. This is, I suspect, a simple difference of opinion, but I will give it a go anyway.

In previous groupings we have discussed the detail of how the office for the internal market would be governed, including the composition of its board, and so noble Lords will be delighted that I am not going to go through all that again. I have set out consistently in this House why the CMA was chosen as, in our view, the most appropriate body to undertake the new UK internal market oversight functions. The CMA has an outstanding international reputation as an independent regulator and is already equipped with highly relevant economic expertise, necessary to undertake its new functions in the context of the operation of the UK market. Moreover, the CMA has well-established relationships with all the Administrations, with offices in London, Edinburgh, Belfast and Cardiff. This UK-wide presence will help ensure that the OIM will work in the interests of all parts of the United Kingdom.

However, we have made it clear that some bespoke arrangements for the OIM will be necessary, in recognition of the focus on devolved matters. As provided for in the Bill, the OIM will be able to benefit from the CMA’s existing expertise and operate within its overall framework, while having its own functions and powers, including distinct governance arrangements such as the OIM panel and task groups. The Government have recognised that some degree of separation is vital and have developed proposals for the OIM accordingly. I wish to strongly emphasise that the distinct statutory objective for the OIM, and for the targeted adaptation in the Bill of the CMA’s statutory framework, enshrines this separation from the outset.

On Monday, we had a good debate on the composition of the board and the role of the devolved Administrations in appointments. The Government have taken a number of reasonable and pragmatic steps to secure the appropriate balance between ensuring that the devolved Administrations have a real say and that the appointment process is not held up unduly—that would, of course, be risked by the amendment.

Finally, I would like to discuss in a little more detail how this amendment would seek to propose a new role for the OIM regarding subsidy control. I recognise that the amendment reflects a desire for reassurance on the enforcement of any future UK subsidy control regime. However, we believe that it risks undermining and prejudging the outcome of the forthcoming consultation that we have announced. This consultation will inform our future approach to subsidy control, including the role of oversight and enforcement.

The Government have been clear that the UK will have its own approach to subsidy control; we want a modern system for supporting British business in a way that fulfils our interests. The amendment is therefore premature, as it seeks to confer specific regulatory functions on the OIM in respect of subsidies before the wider details of any legislative UK domestic subsidy control regime, including the appropriate mechanism for oversight and enforcement, have been developed and brought before this House or the other place.

On another point that we will discuss in more depth in our next debate, the Government’s view is that state aid—the EU’s approach to subsidy control—is a reserved matter. Therefore, the effect of the amendment’s provisions for consent from the DAs would be to create unacceptable uncertainty over the extent to which subsidy control is a reserved or devolved competence. As an issue of national importance, it should be treated in the same way as other nationally significant areas of economic policy, which are reserved. Having a single unified approach to subsidy control across the United Kingdom is vital to ensure that we continue to have fair and open competition across our internal market.

Finally, proposed new subsection (4) would require a review of the OIM’s competences within two or three years after Clause 30 enters into force. I recognise the need to ensure that the CMA’s new functions are undertaken effectively, but the broadness of this proposed review is unprecedented and unhelpful.

For the reasons that I have set out, therefore, I am obviously unable to support this amendment. I ask—perhaps more in hope than in expectation—the noble Baroness to withdraw her amendment.

--- Later in debate ---

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, like the noble Lord, Lord Purvis, I agree with the case that has been made so well by the previous speakers. I put my name to the amendment put forward by the noble and learned Lord, Lord Thomas, and we would support him if he chooses to divide the House.

It is very simple: we agree that there has to be a UK-wide policy on state aid—or subsidy, if that is what it is to be called. The question that hangs around but never seems to get answered is: why has it not yet been articulated what this policy would be? It cannot be a question of timing. This suggests yet another shroud of mystery that surrounds this increasingly perplexing Bill.

It is certainly a novel way of developing policy for a Government to remove policy that is in force and that everybody knows and understands, increasing the uncertainty and making it more difficult for businesses. However, as the noble and learned Lord, Lord Thomas, said in his opening speech, the statutory instrument removing the current rules—taking us out of the current system that has been operating for a great number of years—has already been laid and will be debated next week, and we will not be able to stop it.

We therefore seem to be heading towards WTO rules, which are not well respected and do not seem to be applied properly, and there is no policing or organisational structure in which they can be dealt with properly. If that is where we are, we would at least have a period of stability during which we can sort out how we want to set up the rules that will apply to the internal market and how, if necessary, they are to be policed. This could all be part of the yet-to-be-announced deal with the EU—and it may be that is the case, because it is clear that this is a significant area of interest within the negotiations. But without any further detail on that, it is hard for us to speculate.

However, as others have said, the Welsh Government have come forward with an extraordinarily generous offer to expedite work on a common framework that relates to state aid and make a voluntary agreement to pause any legislation that would impinge on that in the intervening period. That is almost too good an offer, and I hope that the Minister has an adequate response to it.

[Lord Callanan (Con) (Con)]

I thank noble Lords who have contributed to another admirably brief debate. We are making good progress this afternoon.

As I outlined in Committee, Clause 44 reserves to the UK Parliament the exclusive ability to legislate for a UK-wide subsidy control regime. I greatly enjoyed the many contributions on this matter. I particularly liked the suggestion of the noble Lord, Lord Purvis, that I should take defeats as a silver lining, which prompts the obvious response that the Liberal Democrats have been defeated in the last three general elections and therefore have some experience of that.

Our debate in Committee on this clause served to highlight that, while some noble Lords might disagree on the approach taken, we all recognise the importance of ensuring that the UK continues to take a clear and consistent approach to subsidy control as we move away from EU state aid rules. The Government have always been clear in their view that the regulation of state aid—the EU’s approach to subsidy control—is a reserved matter. The Government are clear that they want to maximise the economic opportunities available to us when we are no longer bound by EU state aid rules. To achieve this economic ambition, it is important that, as now, we take a coherent approach to the system that governs how public authorities subsidise businesses across the United Kingdom. Reserving subsidy control is the best way in which to guarantee that a single, unified subsidy control regime could be legislated for in future.

In previous debates, there has sometimes been a misplaced conflation between the devolved spending powers and the systems that regulate the potentially harmful and distortive effects of this spending. To be clear, these are two distinct and separate responsibilities. Although the devolved Administrations can and should make spending decisions on subsidies, the wider rules in which they operate are, and should continue to be, consistent across the whole nation. In response to the intervention from the noble Baroness, Lady Randerson, I reiterate that the reservation does not change the devolved Administrations’ position in practice. They have never previously been able to set their own subsidy control regime, as this was covered by the EU state aid framework, but they will continue to make their own spending decisions on subsidies as they do currently.

The effect of the amendment would be to create unacceptable uncertainty regarding the extent to which subsidy control is a reserved or devolved competence. That would potentially give rise to inconsistency if there were different regimes to regulate subsidies across the UK. Ultimately, it could undermine fair and open competition across our internal market and inevitably discourage investment in the United Kingdom, bringing additional costs to supply chains and consumers.

The reservation will enable the UK to design a bespoke subsidy control regime that meets the needs of the UK economy. The Government have been clear that any future domestic regime will operate in a way that works best for all UK businesses, workers and consumers. In the coming months, as I said in Committee, we intend to publish a consultation on whether we should go further than our World Trade Organization and international commitments, including whether further legislation on this subject is necessary.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Monday 23rd November 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, this has been a very interesting debate for a number of reasons, which I shall come back to as I conclude. The noble Baroness, Lady Noakes, as she often does, focused on the key issue in play here: where we best situate the balance in an internal market that is as integrated as we currently have, which needs and respects clearly harmonised rules but also allows for joint processes which allow individual parts of the market to develop at different rates in different places. I think we agree that that is the key issue but differ on where the balance must lie and whether it has to be uniform as much as the Bill seems to suggest it will be.

The main interest in this debate has been in focusing our minds on areas that we have not really touched on in recent groups. We have looked at goods and services and at qualifications and how they might be harmonised, and we are coming back to services and qualifications later in our debates this evening. The points made by the noble Lord, Lord Wigley, about whether current policy might be adapted because of the impact of this Bill when it becomes an Act need an answer, and I would be grateful if the Minister could respond in particular to that point. Is there a particular hook in this Bill that will cause difficulties across the devolved authorities?

Secondly, on the point made by my noble friend Lord Hain, could it have an adverse effect on current processes so that, for instance, we would lose the local benefit policies to which he referred? Thirdly, on the point raised by my noble friend Lord Liddle, if there are good and valuable initiatives on local growth and support for sectors that are perhaps subsets of the national economy that are appropriate and best organised and run from a local point of view, how will they be affected by the way in which the Bill imposes a straitjacket on the various initiatives that we want to see come forward? I look forward to hearing from the Minister.

[Lord Callanan (Con)]

My Lords, as the Government set out in Committee, we intend to consult shortly and deliver measures on procurement through a wider package of procurement reform. The aim is for primary legislation to be made in the second Session. Therefore, I hope that this will offer some reassurance to noble Lords that this amendment is unnecessary, because the market access principles will not typically operate in the area of public procurement, as they are about how business is regulated. The procurement rules cover how public authorities carry out their procurement activities. Therefore, I reassure the noble Lords, Lord Wigley and Lord Liddle, the noble Baroness, Lady McIntosh, and others that there will be no impact on public procurement.

Turning to Amendment 23, we have obviously had these debates before; in fact, I recall having them during the passage of the various Brexit Bills with many of the same speakers. As we explained on previous occasions, the exclusions we have drafted for goods in Schedule 1 are narrow and tightly defined to protect the functioning of important policy areas. This protects the ability of the devolved Administrations and the UK Government to preserve the proper functioning of important policy areas, while at the same time avoiding any harmful or costly barriers to trade within the UK internal market.

More generally, I understand that this amendment is designed to strengthen the devolved Administrations’ ability to take different approaches to public policy related to aspects of the environment. We have made it clear that the Bill contains derogations for the protection of the life of humans, animals and plants, which aligns with protection of the environment in many cases.

Secondly, the Government support and respect the devolved Administrations’ right to set policy in their areas of devolved competence. The Government also recognise the benefits of locally targeted policy and the potential for policy innovation. For example, on the environment, between 2018 and 2019 the UK nations all introduced a ban on microbeads in rinse-off personal care products, working together to take a landmark step in the fight against plastic waste. There is no reason why the provisions in this Bill would hinder similar collaborative initiatives.

However, it is important to acknowledge the unprecedented and significant flow of powers to the devolved Administrations, as well as the incoming ability of the UK legislatures to create new policy in areas previously overseen by the EU. This Bill aims only to ensure frictionless trade, movement and investment between all nations of the UK. The policies that different parts of the UK choose to pursue in future is a matter for each Administration.

A number of noble Lords, including the noble Baronesses, Lady Boycott and Lady Randerson, raised yet again the sale of coal across the English-Welsh border, and my noble friend Lord Randall introduced the new issue of peat. The same thing applies in both cases: there is a clear distinction between sale and use. Under mutual recognition, the use of coal or, indeed, peat—it is probably a form of coal, is it not?—could be banned, regardless of its origin in the UK. Requirements related to the use of goods are not within the scope of the mutual recognition principle. If the requirement instead relates specifically to the sale of coal or peat, the interaction with mutual recognition is slightly more complex and depends on whether the requirement in question counts as a relevant requirement for the purposes of mutual recognition. Broadly speaking, mutual recognition captures requirements that are intrinsic to the good itself, such as requirements for the composition of the good, whereas non-discrimination captures, among other things, requirements for the circumstances or manner in which a good can be sold. I clarified these matters in detail in a letter to the noble Lords, Lord Purvis and Lord Fox; it is in the House Library, I think, if Members require further details.

My noble friend Lord Randall asked me about the situation in the EU and whether we could ban the sale and use of such things. As noble Lords know, the machinery in the EU is wholly different: for example, there are technical notification requirements through which a member state may be delayed in implementing its legislation; or, indeed, the European Commission may step in and open negotiations on a harmonising measure. Any derogation applied by a member state is open to challenge, of course; the Scottish Government had to fight very hard to get their minimum unit alcohol pricing accepted.

The system established under this Bill is different. Pricing and other manner of sale requirements are totally out of scope. Furthermore, requirements governing how a consumer can use a good that may originally have been caught by Article 34 of the Treaty on the Functioning of the European Union are also totally out of scope.

The noble Baroness, Lady Ritchie, asked whether the Bill is a threat to devolution. No: the proposals are designed to ensure that devolution can continue to work for everyone. All devolved policy areas will stay devolved. The proposals ensure only that there are no new barriers to UK internal trade.

The noble Baroness also asked about the Interparliamentary Forum on Brexit. Of course, the clue is in the name: it is an interparliamentary forum. Such decisions are for the legislatures rather than the UK Government to take forward directly, so it is not my place to comment on that.

For all the reasons I have set out, I hope the noble Lord feels able to withdraw his amendment.

--- Later in debate ---

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, this has been an interesting debate. It has revealed many gaps in our knowledge and understanding of the Bill, which, perhaps, is very comfortable for the Government. I would go a bit further than some of the previous speakers and say that the Government are making heavy weather of this part of the Bill, not displaying to their best advantage the knowledge and understanding they should have in this area. I presume that the starting point must have been that if there is to be an internal market, it must be regulated so that it works well. It is therefore necessary for the legislation to have regard to our services sector, which, as the noble Baroness, Lady Neville-Rolfe, said, accounts for some 65% of our economy. If that is right and it is such an important part of our economy, why is this Bill so sketchy about it? Do the Government not know much about our services sector? Is it not important that we get that right? The noble Baroness, Lady Noakes, again put her finger on it: is this just a protection against possible future unknowns? If so, does that explain why there is so little in the Bill itself to reflect that?

Others have made these points very well. The noble Lord, Lord Purvis, was right to say that we have to think harder than the Bill does about the way modern companies operate in providing goods. Companies are rarely without a service component, and the Bill does not deal with that bipartisan, hybrid approach. The noble Baroness, Lady Bowles, asked about services that are licensed or rented. In the virtual space of the internet, one is rarely talking about purchase. One is talking about usage, and there is nothing here about intellectual property, copyright or associated interests. What about those companies? Do they get affected by this legislation?

What sort of world are we living in if our Bills cannot embrace the fact that, in the digital world, services are not delivered by companies based in specific parts of the UK? That point was made by a number of speakers. Most operate in more than a single place, and it would be difficult to drill down to a point where the physical geography can be identified—the “brass plate” question that was raised earlier.

At the end of the day, it would be more helpful to the House if the lists given in Schedule 2 did not try to discriminate against services. The services listed in the schedule are not covered by the Bill, and it would be more of a challenge but more interesting for us if the Bill listed the services to which the Bill does apply, thereby making it easier to discuss this issue. I challenge the Minister to write to us before Third Reading with a comprehensive list of the services he believes are caught by this Bill and to explain to us, in simple language that we can understand, the impact the Bill will have if implemented.

[Lord Callanan (Con)]

I thank my noble friend for tabling this amendment, which seeks to clarify the extent to which we have considered how the provisions of the Bill in respect of services will work in practice. I shall endeavour to do my best to answer my noble friend’s concerns, because I know that she appreciates and promotes just how critical the services sector is to the United Kingdom, and I share that view. It is vital, constituting more than 80% of our GDP and four out of five jobs nationwide.

The principles of mutual recognition and non-discrimination in Part 2 underpin an internal market framework which will limit the emergence of new barriers following the return of powers from the EU. This will support UK businesses trading services in other parts of the UK, and authorities regulating these services. The Bill will complement the existing services regulatory framework while building in certainty for businesses and regulators.

The mutual recognition principle means that businesses authorised to provide services in one part of the United Kingdom will not need to satisfy further authorisation requirements to provide those services in the other parts of the United Kingdom. This principle of mutual recognition applies to authorisation requirements. It does not cover matters such as non-mandatory membership of organisations, which cannot prevent a service provider from offering a service but which might be desirable to join for other reasons.

A similar form of mutual recognition already operates as part of the existing UK-wide regulatory framework for services under the Provision of Services Regulations 2009. Regulators complying with that legislation will already be subject to the principle of mutual recognition. Similarly, the non-discrimination principle is a fundamental safeguard for businesses, ensuring equal opportunity for companies trading in the UK regardless of where in the UK that business is based, from where it provides services or where its staff are based.

As my noble friend Lady McIntosh highlighted, with the non-discrimination provision, regulators have until now had to follow rules in the Provision of Services Regulations 2009 which prevent discrimination towards service providers from other European Economic Area states. These rules will be revoked at the end of the year when the transition period comes to an end, as they will no longer be relevant to the UK’s situation. It is only right that rules that have previously prevented discrimination towards businesses from the other EEA states should now be applied to ensure the continued flow of services across our United Kingdom.

To help provide clarity, Clause 16 sets out a list of requirements and provisions that are neither regulatory nor authorisation requirements and therefore are not covered by the principles in Part 2. First, those requirements dealt with in other parts of the Bill—namely the mutual recognition principle in Part 1, which relates to goods, and provisions covered by Part 3, on professional qualifications—are not within scope of Part 2. This is because it is not desirable for one set of requirements to be subject to several rules from different parts of the Bill.

Secondly, existing requirements are out of scope because Part 2 applies only to new or substantively modified requirements that come into force, or otherwise come into effect, after this section comes into force. However, for the mutual recognition principle only, existing requirements will be brought within scope of the Bill where a corresponding authorisation requirement in another part of the UK introduces a new or substantively changed requirement.

Thirdly, a requirement which applies both to service providers and non-service providers is not in scope of Part 2. This part of the Bill is concerned only with the requirements which seek to regulate service providers and not all requirements which might affect service providers.

Finally, there are administrative requirements on service providers that we consider are reasonable in all circumstances, and therefore they are also not in scope of this part. Such administrative requirements could include, for example, where a service provider may be required to notify a local regulator of their presence, or where they are required to provide proof that they are in fact authorised to provide that service in another part of the UK. These requirements are necessary for regulators to continue operating effectively under the rules in this part, but it is our view that they are limited enough in scope so as not to create any unnecessary barriers to trade.

I can therefore assure my noble friend that the Government have considered carefully how the provisions in Part 2 will work in practice, and that Clause 16 is an essential part of their operation.

My noble friend asked whether penalties apply to businesses that are excluded from the Bill. If a given matter is out of scope of Parts 1 to 3, it is also by definition out of scope of the OIM’s functions and responsibilities.

My noble friend Lady McIntosh raised the four weeks’ consultation, as did a number of other noble Lords. The consultation followed the principles for a government consultation and represented an ambitious plan to engage businesses of all sizes across all four nations, as well as many academic experts and representatives of the devolved Administrations.

My noble friend Lady Neville-Rolfe asked also about Schedule 2, which lists a number of services with the aim of reflecting those outside the scope of the Provision of Services Regulations 2009, which is the current services framework. The Government also recognise that it is appropriate for legal services to be excluded from the provisions on the mutual recognition of services to reflect the separate legal systems in England, Wales, Scotland and Northern Ireland.

The noble Lord, Lord Purvis, asked whether service providers from the Isle of Man were subject to the measures in Part 2. The answer is no. Part 2 applies only to businesses and individuals that a have a permanent establishment in the United Kingdom as defined by the Corporation Tax Act 2010, which does not include of the Isle of Man. It is also the case for all Crown dependencies.

The noble Lord also asked when the services principles apply and when the goods principles apply. The services principles apply only where the goods principles do not. Only one set of principles will apply as to a particular requirement.

I hope that I have answered the questions of noble Lords and of my noble friend. I hope that she feels able to withdraw her amendment.

--- Later in debate ---

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the general theme here, I suggest, is that we need the Minister to respond very clearly and precisely on this matter. My noble friend Lord Foulkes used the rather nice and elegant Scottish word “fankle” to describe where we are at, suggesting that this needs to be undone. I was going to use the Gaelic word “bùrach”. I suddenly thought that Hansard might have difficulty with it, so I checked it on a handy electronic device close to me—and came up with a rather interesting extension, which I leave with the Minister. You can use the word “bùrach”, which in Gaelic means a “right mess”, but I think a more appropriate term in this case is a “clusterbùrach” which, as the article on my device goes on to say, is

“a Scottish term for a hopelessly intractable mess made by hapless politicians.”

[Lord Callanan (Con)]

The noble Lord, Lord Stevenson, has been very helpful, adding to my knowledge of grammar. The north-east version of that would be “cluster”, followed by a word I cannot use in the House, which would not be “bùrach”. If only I had known, I would have brought my thesaurus along to aid noble Lords in their pursuit of these matters.

These amendments seek to ensure that the drafting of the non-discrimination clauses means that the discriminatory requirement is of no effect only to the extent that the requirement discriminates against the service provider in question. However, I am pleased to tell my noble friend Lady McIntosh that Amendment 39 is already addressed by this clause and is therefore unnecessary. In the case of Amendment 40, as this clause concerns indirect discrimination in the regulation of services, the amendment as drafted would make Clause 20 entirely inoperable and leave indirect discriminatory requirements to take effect.

I start with Amendment 39, which obviously concerns direct discrimination. Direct discrimination is where a regulatory requirement treats a service provider less favourably than other service providers; the reason for that is their connection, or lack of connection, to a certain part of the United Kingdom. Clause 19 already limits the application of these measures—this addresses the point made by the noble Lord, Lord Purvis—so that only the affected service provider may benefit from the requirements having no effect. While I understand my noble friend’s concern, the definition of a regulatory requirement already ensures that only the offending requirement is of no effect. This amendment therefore replicates what is already drafted in Clause 19, so I am sure she will understand that I am unable to accept it.

Turning to Amendment 40, the test for indirect discrimination requires that a requirement is not directly discriminatory, and the amendment would mean that indirectly discriminatory requirements are of no effect only to the extent that they directly discriminate. This would render Clause 20 entirely ineffective. Therefore, I am sure that my noble friend will accept that I cannot accept either of her amendments for the reasons I have set out, and I hope that she will agree to withdraw them.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Wednesday 18th November 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the noble Baroness, Lady McIntosh, and my noble friend Lord Foulkes have made the case clearly around the issue raised in Clause 5(3), and I hope the Minister will be able to respond. I join them in thanking the Scottish Law Commission for its considerable work in scrutinising some of the detail of the Bill—as always, it has been very helpful. I put on record our thanks to the noble Baroness, Lady Ritchie, for her very comprehensive and clear explanation of Amendment 24 in her name, and to others who have spoken.

We on this side had the benefit of a presentation by the Equality and Human Rights Commission and the Northern Ireland Human Rights Commission on this point, and I was seized by the fact that this is very important indeed to them and a matter that really has to be dealt with. The ground has been covered very fully and I just want to make sure that it is clear that we support this important amendment. It is designed to ensure that the non-discrimination principle in Clause 5 cannot be used to challenge the statutory provisions introduced in Northern Ireland after the end of the transition period to fulfil the obligation set out in Article 2 of the Northern Ireland protocol. That is relatively easy to say, but it is rather difficult to see how it translates into legislation. I hope that, when he responds, the Minister will be able to give us clarity on this.

As my noble friend Lord Hain said, the stakes here are very high. If you have not been to Northern Ireland, it is sometimes very difficult to get why it is so important to the people there and to the institutions that have to operate within Northern Ireland. There is a very widespread respect for human rights and equalities issues in Northern Ireland; it is something that comes up in conversations wherever you have them, in relation to employment, services, goods and operating in the commercial sector in Northern Ireland. Once you have had that conversation, and once it has been explained to you why it is so important, it is very clear that this is a matter that cannot be left. It is up to the Government to explain now how it is going to happen, and I look forward to hearing from the Minister.

[Lord Callanan (Con)]

My Lords, I thank all noble Lords who have contributed to this debate.

Amendment 6, in the names of my noble friend Lady McIntosh and the noble Lord, Lord Foulkes, seeks to clarify the meaning of Clause 5(3). This subsection explains that

“A relevant requirement … is of no effect in the destination part if, and to the extent that, it directly or indirectly discriminates against the incoming goods.”


This wording was chosen by the Government because it targets discrimination, while leaving intact other elements of a regulation that may be perfectly useful or serviceable. For example, consider the case of one requirement covering two products. One of those products is not discriminated against, but the other faces indirect discrimination due to the particular market structure for that product. Clause 5 ensures that the regulation of the product which is not facing discrimination continues. This would not be the case if the requirement were struck down in its entirety when any part of it is discriminatory.

This amendment gives rise to a risk that a court would read this as attempting to oust its jurisdiction on normal grounds of challenge. That is clearly not the intention of this provision, which is to target the mischief of discrimination without going further or interfering with other legislation. I am sure that it goes without saying that we would not want to invoke any such confusion, nor do I think that that is what my noble friend and the noble Lord are trying to achieve. For these reasons, I hope that my noble friend will feel able to withdraw her amendment.

On Amendment 24, from the noble Baroness, Lady Ritchie, and others, I am very happy to accept a letter from the noble Baroness, and I will ensure that it gets a full reply. The Government are fully committed to Article 2 of the protocol—that goes without saying. We have demonstrated this by making the necessary amendments to the Northern Ireland Act to establish the dedicated mechanism and by working closely with the Northern Ireland Human Rights Commission and the Equality Commission for Northern Ireland to operationalise the dedicated mechanism, ready for the end of the transition period.

The Article 2 commitment is about protecting the specific rights that individuals are afforded under the Belfast/Good Friday agreement and non-discrimination in this regard. It is supported by six EU equality directives that are all designed to tackle discrimination because of specified protected characteristics of individuals and to promote equal treatment. It will be part of the role of both commissions, through the dedicated mechanism structure, to monitor, advise, report on and enforce the Article 2 commitment and report to the Government and the Executive Office in Northern Ireland in this regard.

As I have said, we have already delivered the relevant legislative measures to give effect to Article 2 of the protocol, and no further amendments are required in this regard. I can assure noble Lords that the rights for individuals in Northern Ireland captured within the scope of the Article 2 commitment will continue to be protected going forward and will not be impacted by the outworkings of this Bill.

In reply to the noble Baroness, Lady Suttie, I can say that, for statutory requirements to be relevant requirements under Clause 6, they must be requirements that apply to, or in relation to, goods sold in the nation in question. If the employment law requirement were to meet that test, they would not be disapplied because they had discriminatory effects.

I hope that, with those assurances, that the noble Baroness, Lady Ritchie, will not press Amendment 24.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Committee stage & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Monday 9th November 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I thank the noble Baroness, Lady Rawlings, for introducing her amendment. She made her case extremely well: R&D is important, and the Government could easily, with advantage, accept all three of the amendments as they stand. However, her introductory speech raised all the issues that have subsequently been picked up by other speakers, because we are facing what appears to be another black hole in this Bill. The noble and learned Lord, Lord Thomas, the noble Baroness, Lady Finlay, the noble Lord, Lord Fox and I have signed up to an amendment more in frustration than any genuine feeling that the existing clause is wrong, although the noble and learned Lord, Lord Thomas, does make a very good case for how the procedures adopted there are not the ones that should be seen in the final version of this Bill.

The question really seems to be about what our state aid regime is going to be. Is it going to be central or devolved in terms of both its process and delivery? Is there going to be a central body that will be charged with making sure that all those participants who benefit from state aid do so on a fair and open basis, and are they going to be able to review and make recommendations for how it is taken forward?

It seems to me this is another area where common frameworks have an opportunity to provide the solution to a problem the Government are facing. I hope that whichever way we go on this, time will be taken to make sure we get it right, do it properly and come forward with something that will justify the effort that has been placed in it, because it will be worth it.

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

My Lords, I thank noble Lords who have taken part in this debate. I recognise that the hour is late, so I will attempt to be as brief as possible. I begin by setting out why Clause 50 should stand part of the Bill, before moving on to discuss Amendments 169A, 169B and 169C.

Clause 50 reserves for the UK Parliament the exclusive ability to legislate for a UK subsidy control regime in future. The Government have always been clear in their view that the regulation of state aid, which is the EU approach to subsidy control, is a reserved matter. Let me say in reply to the noble Lord, Lord Fox, that the devolved Administrations have never previously been able to set their own subsidy control reviews, as this was covered by the EU state aid framework. Now we have left the EU, we have an opportunity to design our own subsidy control regime that works for the UK economy.

It is important, in our view, that there continues to be a uniform position across the United Kingdom. Reserving will ensure we take a coherent and consistent approach to the way public authorities within the UK subsidise businesses, supporting the smooth functioning of the UK’s internal market. A unified approach will reduce uncertainty for UK businesses and prevent additional costs in supply chains and to consumers.

Also in reply to the noble Lord, Lord Fox, I say this reservation does not impact the devolved Administrations’ existing spending powers. The devolved Administrations will continue to make decisions about devolved spending on subsidies—how much, to whom and for what—within any future UK-wide subsidy control regime.

The Government announced in September that the UK will follow World Trade Organization rules for subsidy control from 1 January. These are internationally recognised common standards for subsidies. Before the end of the year, the Government will publish guidance for UK public authorities to explain these rules and any related commitments the Government have agreed in fair trade agreements. We will also publish a consultation in the coming months on whether we should go further than those existing commitments, including whether or not legislation is necessary, because we want a modern system for supporting British business in a way that fulfils our interests. We do not want a return to the 1970s approach of Government trying to run the economy or bailing out unsustainable companies. We will take the necessary time to listen closely to all those with an interest in this subject.

UK government officials have been meeting, and will continue to meet, their devolved Administration counterparts on a regular basis. We are keen to ensure that the devolved Administrations are involved in the upcoming consultation process. I hope that noble Lords will agree that this approach is the best, and indeed the only, way to ensure that the whole of the UK can benefit from having a consistent and coherent system of subsidy control, which is necessary to support the smooth running of the UK internal market. I therefore commend that Clause 50 stands part of the Bill. I hope that I have answered at least some of the questions from the noble Lord, Lord Fox. If not, I will write to him to confirm the other points.

I turn to Amendments 169A, 169B and 169C, in the name of my noble friend Lady Rawlings. They seek to amend the definition of a subsidy for the purpose of their reservation. They would add to this definition that a subsidy will also include “research and development grants”. The interpretation provisions contained in Clause 50 set out what is classed as a subsidy for the purpose of this reservation. We define a subsidy as including assistance provided to a person, directly or indirectly, financially or otherwise. The definition includes examples of this assistance as income or price support, grants, loans and guarantees.

For the purpose of the reservation of subsidy control, the definition of a subsidy is deliberately broad to ensure that we have sufficient scope to design a future domestic regime that meets the needs of the United Kingdom. To ensure that we cover a broad range of financial interventions, the definition is not currently limited by reference to any specific policy purpose or sector. Subsidies may be given for a variety of purposes, and it would be anomalous to single out just one of them here. The current wording in the clause already encompasses assistance provided to a person directly or indirectly by way of grants and is therefore sufficient to cover research and development grants as my noble friend intends. Therefore, the Government do not think that the amendments are legally necessary. I hope that, in the light of that information, my noble friend will be able to withdraw her amendment.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 4th November 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, this debate has raised some interesting and important issues. I have listened with care to all the speakers and particularly to the contribution of the noble Baroness, Lady McIntosh, based on information provided by the Scottish Law Commission, whose help I also acknowledge. I look forward to the Minister’s response. The noble Baroness, Lady Bowles of Berkhamsted, raised a number of issues to which I wish to return. Other speakers have made small but important points on SMEs and the role of Northern Ireland.

The noble Lord, Lord Fox, picked up on the recent letter from Ministers about university fees, particularly in Scotland, and questioned whether this could constitute indirect discrimination. This was also raised in an earlier group. Like the noble Lord, I wonder why this could not be better dealt with by the common frameworks approach. This should be applied to all aspects of managed divergence, in relation not just to goods but also to services and the regulation of professions. We will return to this on Report.

In respect of the amendments tabled by the noble Baroness, Lady Bowles of Berkhamsted, the powers included in Clauses 38,39 and 40 are quite extensive and detailed. Do they go beyond the existing powers of the CMA? Are they new because of the responsibilities that will accrue to the CMA or the office for the internal market under this Bill? Or do they simply repeat existing powers reframed in some way to suit the new circumstances? I would appreciate the Minister’s response. As other speakers have said, this additional activity is very detailed and gives specific examples of what can and cannot be done and how it is to operate. Does this not play to the concerns raised by the noble Baroness, Lady Noakes, in an earlier amendment that asking the CMA to extend its focus and the range of its work might blur the good work it does at the moment? Does the Minister accept that there might be a problem here?

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

My Lords, I thank all noble Lords who have taken part in this debate. The noble Lord, Lord Fox, raised issues around university tuition fees and water services. As he said, I have written to him and to the noble Lord, Lord Purvis, about the points they raised in earlier debates. I am told that these letters have been submitted to the Library but there may be a slight delay in their publication. I confirm what I said there about the exemption in the legislation for public services. More details are set out in the letters. If for some reason they have not yet been published, the noble Lords, Lord Fox and Lord Purvis, should get in touch with my office, which will be happy to furnish them with a copy.

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[The Deputy Chairman of Committees (Baroness Henig) (Lab)]

The noble Lord, Lord Stevenson, and the noble Baroness, Lady Neville-Rolfe, also wish to speak after the Minister.

[Lord Stevenson of Balmacara (Lab) [V]]

I asked the Minister a specific question on whether the framing of Clauses 38 to 40 was exactly the same, or differed from, the existing powers of the CMA. He did not answer that. I do not want to delay us too much today but perhaps he could write to me about it.

[Lord Callanan (Con)]

I would be happy to write to the noble Lord but, as I said, the powers to date have functioned effectively and are based on the CMA’s existing powers.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd November 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, it will be interesting to hear how the Minister responds to this request, which has been well described as a bit of a coda. On the other hand, it also contains teeth, which would be there to be used, if someone wished to. It is important to get this right and understand, if it is rejected, why it is. I look forward to that.

Ministers know that we on the Labour side think that the common frameworks are at the centre of the managed divergence that we want to see and allow to happen across the devolved Administrations. It is important that the process continues and that is at the centre of the Bill, because it is not at the moment; it is hardly mentioned, except in passing. If that is the case, we look for some additional reassurance from the Minister that the powers that might be available to the Government, when they feel the common frameworks are not working, are not used too early or vicariously just to show the devolved Administrations who is in charge. As we were reminded by the noble Lord, Lord Dunlop, on day one, the Government already have powers to deal with any default they feel is present in the common frameworks. The questions raised by this amendment are important, and I look forward to hearing the Minister’s response.

[Lord Callanan (Con)]

I thank those hardy souls who have stayed for this brief debate. Amendment 143, tabled by the noble Baroness, Lady Finlay, is concerned with a proposed role for the CMA in the laying of regulations on the application of the market access principles. It builds on the earlier Amendments 6, 78 and 104, which concerned the scope within which the UK market access principles proposed in the Bill will apply. I understand that the noble Baroness has tabled this amendment on behalf of the Welsh Government, and I thank the Welsh Government for their positive engagement on the Bill so far. The UK Government look forward to continued and constructive future engagement with them on more aspects of these proposals.

Before I turn to the detail of this amendment, I note the previous discussion on similar amendments also tabled by the noble Baroness, Lady Finlay, which would have narrowed the scope of the market access principles. As I set out then, those amendments would, in combination, prevent the market access principles from applying in time, at the end of the transition period. Earlier, I set out that the lengthy process the amendments put in place before the principles can apply, including the need to exhaust the framework discussions first, would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. Amendment 143 would add an additional layer of bureaucracy to that process.

In our view, it would also problematically risk bringing the CMA into potentially contentious decision-making and mean its role was weighted towards supporting the Secretary of State over the devolved Administration counterparts. This contrasts sharply with our vision for this, which is to ensure that the OIM’s expert reporting is available to all four administrations equally. Above all, however, the advice provided by the OIM will be economic in nature. Its panel will have expertise across intra-UK trade, regulatory impacts on business and competition effects, which is one reason why the Government chose to establish it within the CMA. We had that debate earlier.

The office for the internal market will not be equipped, therefore, to opine on matters related to animal welfare or environmental protection. To lay this obligation on the OIM would bring a significant risk of duplication of the remit of other public bodies, which would cause considerable confusion for the many stakeholders in this field. For these reasons, and the uncertainty and confusion that this and other related amendments would generate for businesses and citizens, the Government regretfully cannot support them, and I hope the noble Baroness is able to withdraw.

Covid-19: Small Businesses

Debate between Lord Callanan and Lord Stevenson of Balmacara

Thursday 29th October 2020 Lords Chamber

[Lord Callanan (Con)]

Again, the noble Baroness is tempting me to enter the territory of the Chancellor. We have been clear that the digital services tax is temporary, and businesses are liable to it only when they have worldwide revenues of more than £500 million, and more than £25 million of those revenues is derived from UK users. So it applies only to the very largest businesses.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the AAT reports that during the pandemic more than 50% of businesses have seen an increase in late payments, and nearly one-third admit to delaying payments that are contractually due. The Government have taken emergency powers, so this is a matter for BEIS, and these powers do help businesses. The FSB says that sorting the scourge of late payments would be a huge boost in these difficult times, and would aid the recovery when it comes. Will the Government act?

[Lord Callanan (Con)]

I totally accept the noble Lord’s point; he raises an important issue. But accepted payment terms vary from sector to sector, and a one-size-fits-all approach is not, in our view, the best way to deliver a culture change. Government would be restricting businesses’ ability to negotiate terms, which could have a negative effect on the UK economy by making business more difficult to do.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 28th October 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I have mainly technical, minor drafting points, which do not require much discussion. The Minister was consumed during his speech because of the hypothetical tin of biscuits that he brought into play. I am so glad that we do not have details of what pig semen is carried in. I much prefer us sticking with the tin of biscuits as our main metaphor in these issues.

Like the noble Baroness, Lady McIntosh, I wonder why these amendments are being tabled now. After all, the Bill has been through the other place and been republished. Only now are we getting evidence of “scrubbing the text” to ensure that the sorts of issues raised in this group of amendments will not get into the final version of the Bill. It is a minor criticism of a very minor issue, and I am happy to await the answers to the questions raised by the noble Lord, Lord Purvis, which would bear substantial response and will need to be dealt with at the appropriate time.

[Lord Callanan (Con)]

My Lords, I apologise to noble Lords for hesitating in my answer earlier. There is a danger of this “tin of biscuits” example assuming the same significance that the maiden aunts of the noble Lord, Lord Lisvane, did, during the EU withdrawal Bills. I see smiles from noble Lords who were involved in those debates. However, I am not sure that we should pursue the “pig semen” argument of the noble Lord, Lord Stevenson.

To answer my noble friend Lady McIntosh, these are technical changes relating to drafting errors that became apparent in further studying the text following amendments tabled by noble Lords. Following further examination by government lawyers, the Bill was drafted fairly speedily over the summer. Our intention was to avoid government amendments, but we wanted to hear the replies to the consultation and the White Paper. They are technical and legal clarifications that change none of the policy intent.

I assure the noble Lord, Lord Purvis, that the minimum unit alcohol pricing policy is unaffected, because it is an existing measure that is excluded, and because it is specifically excluded in addition to that, via various clauses. I will write to reassure him of that. Regarding his points about gin and vodka, I am not an expert on the Scottish measure, but I think it affects the retail price of the sale and not wholesale prices, and therefore the product would need to be sold at a different price, as specified in the Scottish measure. However, I consulted officials when we first debated this legislation and was assured that the Scottish measure would be unaffected by this legislation. I am happy to write reassuring the noble Lord on that point.

--- Later in debate ---

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, like other speakers, I welcome the idea that this is a clarification of the language currently used in the Bill. However, like the noble Baroness, Lady Neville-Rolfe, I wonder whether what we have got is in fact any clearer, or makes us any more clear about what we are supposed to be doing with this part of the Bill.

The language is, in places, incredibly archaic and obscure. There seems to be no recognition of the digital world. Services provided through the internet are not going to be provided locally; they are not going to be provided “in a region” and there are not going to be local service providers, and yet there seems no reference to them or how they are to be treated. Even if that were not that case—even if we were not living in the virtual world—the idea that somehow a service provider has a relevant connection to a part of the United Kingdom if it has a registered office seems to ignore hundreds of years of the use of brass plates outside solicitors’ offices which provide registered offices but no services, no people, no contribution and no economic effect. Where is all this heading?

[Lord Callanan (Con)]

I thank noble Lords for the brevity of their contributions, particularly given the late hour, and I shall endeavour—they shall be pleased to hear—to match that brevity.

We think that these amendments make the test significantly clearer. The relevant concepts are unpacked in distinct subsections, and the new subsections more clearly express policy intention on how the test for indirect discrimination will function. The additional clarity ensures that businesses can operate with certainty, which is what this Bill is intended to ensure.

I have noted the requests from my noble friend Lady Neville-Rolfe—the noble Lord, Lord Purvis, repeated them several times—for details of how the service provisions will operate in things like marketing, language tests, et cetera, and for the legal definition of what “adverse market effect” means in practice. I will, of course, provide those for them in writing. With that, I commend these amendments to the Committee.

Covid-19: Financial Support for High Street Retailers

Debate between Lord Callanan and Lord Stevenson of Balmacara

Tuesday 27th October 2020 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness makes a powerful point, and I point out that we do not have these restrictions in England. I almost felt sorry for the Welsh Government yesterday in trying to navigate a way through this self-imposed error.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, with visits to the high street falling and the prospect of Christmas and new year being digital at best, why are the Government asking local authorities to pay back support originally designated for the high street fightback fund? Should not the focus be on reopening the fund to help businesses struggling under the new restrictions?

[Lord Callanan (Con)]

As the noble Lord will be aware, the retail, hospitality and leisure sectors have been helped considerably. We allocated £12.3 billion to local authorities in England to pay grants to businesses under the small business grants fund. This support will continue and we need to do all we can to help our high streets.

United Kingdom Internal Market Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 26th October 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, as the noble Lord, Lord Dunlop, said, this debate is a sort of appetiser for the main course to come in later groups, when we will dig much deeper into the right approach to ensuring that our current well-functioning internal market continues after the transition period ends and that we can manage the necessary and inevitable policy divergences that we need across the United Kingdom and should welcome.

The noble Lord, Lord Bruce, said that the key questions are why we need the Bill at all, let alone now, why the Government are ignoring the evident successes of the co-operation and constructive progress which have been hallmarks of the common framework programme, why threaten the devolution settlement so directly, and what it is about the top-down approach that the Government wish to introduce that is so attractive, given the huge risks to devolution. Those are very important questions and I look forward to hearing what the Minister says when he comes to respond.

The noble Baroness, Lady Neville-Rolfe, said that she recognised the value of proposed new subsections (1) and (2) in the amendment but was worried that proposed new subsections (3) and (4) made it a wrecking amendment. I do not think that it is. Indeed, I make the same points about the need for a pause before we implement in my Amendment 178, which is in a later group.

I hope that the Government will think very hard about the clear message that seems to come from this debate. We need to carry on down the road well travelled in recent years, encouraging the devolved Administrations to continue to collaborate, to work together with mutual understanding until agreement is reached, and then to go further so that there is agreement on all the issues that need to be agreed and a way of resolving any issues that are left over. This is the way in which we make progress—not by imposing a top-down solution. Indeed, anything else risks destroying the complex but pretty successful devolution settlement that we currently enjoy.

[Lord Callanan (Con)]

My Lords, Amendment 4, tabled by the noble Lords, Lord Fox and Lord Purvis, would prevent the market access principles applying by the end of the transition period. As my noble friend Lady Neville-Rolfe pointed out, that would produce a considerable delay in providing certainty to businesses that free trade can continue within the UK’s internal market.

I heard the noble Lord, Lord Bruce, query my assertion at Second Reading about business support for these measures, but over 270 businesses and organisations responded to the public consultation on our proposals and, overwhelmingly, businesses supported our approach. Particularly as they look to recover from the impacts of Covid-19, businesses need certainty, and that is what this Bill, as drafted, seeks to provide.

I repeat that the aim of the Bill is to ensure that there are no internal barriers to trade within the UK, while respecting the devolution policies. All devolved policy areas will stay devolved. The proposals ensure only that no new barriers to UK internal trade are created. The Bill aims only to procure frictionless trade, movement and investment between all nations of the UK. The policies that different parts of the UK choose to pursue in the future is a matter for those Administrations. The Bill ensures that these local policies can be pursued while, at the same time, maintaining seamless trade in the UK internal market.

The noble Lord, Lord Bruce, asked me specifically about barley, and indeed the noble Lord, Lord Purvis, has written to me on the same subject. We believe that this provides a good example of the risks that businesses could be exposed to. Food produce placed on the market must comply with rules on pesticide maximum residue levels. These are currently set at EU level, and so are consistent across the United Kingdom, meaning that food can be traded across the devolved Administrations. This is an example of a policy area which will be devolved after 1 January. At the moment, all Administrations are supported by the same regulator—the Health and Safety Executive. That will, to a certain extent, aid consistency, and we are of course committed to working closely with the devolved Administrations to jointly agree consistent maximum residue levels across Great Britain.

However, without the Bill’s mutual recognition provisions, there would be the possibility of divergent decisions being taken, which would then introduce new trade barriers on food between different parts of our country. Depending on any particular decision, this could affect any agricultural or horticultural produce that has been previously treated with pesticides. For example, different residue rules might mean that it is not lawful to sell in Scotland barley grown in England.

More broadly, without the principles set out in the Bill, harmful divergence would be possible, in spite of the important protection provided by industry standards. That is because industry standards are voluntarily agreed between private economic actors and so cannot provide the same certainty for businesses and investors as the legislative principles set out in the Bill.

The consent process proposed in the amendment would remove that certainty and make operating conditions for businesses across the UK dependent on a number of fairly onerous conditions. These conditions include matters that would cut across ongoing collaborative work with the devolved Administrations. I say to the noble Lord, Lord Bruce, that these include the common frameworks programme and the intergovernmental relations review, both of which the Government are fully committed to pursuing. Indeed, in the next group, we will examine the common frameworks principles in more detail, and my noble friend Lord True will explain our position in more detail.

However, I assure noble Lords that the Government have already committed to appropriate consultation with the devolved Administrations on these matters. Furthermore, we are engaging them in all suggestions for how practically to improve intergovernmental relations, including both the machinery, such as dispute resolution, and the way in which these joint forums are run.

The noble Lords, Lord Fox and Lord Purvis, asked a question about dispute resolution. I can tell them both that the office for the internal market will support existing arrangements for dispute resolution. Its non-binding reporting will ensure that evidence-based dispute resolution takes place in line with the current memorandum of understanding on devolution. The OIM’s reporting will be available to all four Administrations and legislatures on an equal and purely advisory basis. It will provide information and support separate political processes to resolve any disagreements and enable intergovernmental engagement. The amendment would cut across all ongoing collaborative work with the DAs and remove our ability to give businesses the certainty they need at this time.

The noble Baroness, Lady Randerson, said that the Government would override the rest of the UK when legislating for England. That is certainly not our intention. The nature of our constitution is that the UK Parliament will be able to legislate over existing legislation, but the Bill aims to treat all domestic legislation in the same way. Her Majesty’s Government will be cognisant of the importance of market access principles in supporting any extra legislation.

Rolls-Royce

Debate between Lord Callanan and Lord Stevenson of Balmacara

Wednesday 14th October 2020 Lords Chamber

[Lord Callanan (Con)]

The noble Lord has correctly predicted that the energy White Paper will be out shortly to provide more details on these schemes. We are extensively supporting Rolls-Royce. It has received £300 million from the Covid corporate financing facility, it has made extensive use of the job retention scheme for almost 5,000 employees, and we are providing it with large amounts in R&D support from the £26.8 million in grant funding for research activities. We think Rolls-Royce is a key company for the future of the UK, and we are supporting it extensively.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, Rolls-Royce is one of the world’s premier engineering companies. Despite substantial government support, the Barnoldswick site’s workforce has been slashed from nearly 1,000 two years ago to half that today. Now, 350 more jobs are on the line, threatening the future of not just the site itself but local communities, given the impact it will have. Once highly skilled jobs are gone, they are gone. What is the Minister doing to protect those important jobs, not just for the current workforce but as an investment for the workers of the future?

[Lord Callanan (Con)]

As I said in previous answers, we are supporting Rolls-Royce extensively, but Covid-19 has had a devastating impact on the aerospace industry globally—Airbus and Boeing, the two largest companies, have reduced production by around 40%. We are doing all that we can to help companies such as Rolls-Royce at this difficult time—as its chief executive, to be fair, made clear when making this announcement.

Post Office: Horizon Accounting System

Debate between Lord Callanan and Lord Stevenson of Balmacara

Tuesday 6th October 2020 Lords Chamber

[Lord Callanan (Con)]

The CPS is already examining the conduct of Fujitsu in this case, but the noble Lord will understand that it would not be appropriate for me to comment on those proceedings.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, in earlier responses to questions on this issue, the Minister has confirmed that, although the review is not a statutory inquiry under the Act, the reviewer—we now know his name—will get full access to the Post Office’s and Fujitsu’s papers and personnel. Can the Minister confirm that the reviewer will have similar rights of access to Ministers and civil servants involved in this case?

[Lord Callanan (Con)]

Yes.

Retail Businesses: Financial Support

Debate between Lord Callanan and Lord Stevenson of Balmacara

Monday 21st September 2020 Lords Chamber

[Lord Callanan (Con)]

The noble Lord will be aware that, by 16 August, the Future Fund to help businesses had supported 590 investments with a total of £588 million.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, a number of measures aimed at preventing company insolvencies, included in the recent Corporate Insolvency and Governance Act, expire at the end of this month. What plans do the Government have to extend those provisions? Can the Minister set out the new timetable?

[Lord Callanan (Con)]

The noble Lord makes a good point. We are urgently considering the need to extend these measures and will announce a decision shortly.

REACH and CE

Debate between Lord Callanan and Lord Stevenson of Balmacara

Thursday 17th September 2020 Lords Chamber

[Lord Callanan (Con)]

We have put in place a new UK REACH IT system, closely modelled on the European system to make the process as simple and as easily replicable as possible. The HSE has been provided with the appropriate resources to police the new system.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, can the Minister confirm that, when the transition period ends, health and environmental protection in Northern Ireland in respect of chemical and pesticide imports will be considerably better than in the rest of the United Kingdom because Northern Ireland will still be covered by the existing EU REACH rules and regulations under the withdrawal agreement?

[Lord Callanan (Con)]

No. We intend the system in the UK to be as safe and as effective as the EU REACH system.

Post Office: Horizon Accounting System

Debate between Lord Callanan and Lord Stevenson of Balmacara

Monday 7th September 2020 Lords Chamber

[Lord Callanan (Con)]

I agree with my noble friend on this: we need to get on with it. There have been a number of delays, for various reasons, but I am hoping that an appointment can be made imminently, because we all want to see this under way as quickly as possible.

[Lord Stevenson of Balmacara (Lab) [V]]

Can the Minister confirm that the review will not have the powers under the Inquiries Act 2005? Therefore, how will the reviewer compel witnesses, including Ministers, to give evidence, or see the papers necessary to assess, for example, whether lessons have been learned and that whistleblowers in the Post Office will not be treated in such a disgraceful way again in the future?

Small and Medium-sized Enterprises: Public Procurement Contracts

Debate between Lord Callanan and Lord Stevenson of Balmacara

Monday 7th September 2020 Lords Chamber

[Lord Callanan (Con)]

Of course, I cannot speak for the devolved Governments, but I am sure they are doing all in their power to ensure that as many small businesses as possible receive contracts.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, as you know, the Federation of Small Businesses is running a campaign called “Fair Pay Fair Play” about what it calls the scourge of late payment. Can the Minister enlighten the House as to when key components of this campaign, such as putting the Prompt Payment Code on a statutory basis and giving powers to the Small Business Commissioner, will ever be introduced?

[Lord Callanan (Con)]

We are completely focused on fulfilling the Government’s manifesto commitment to clamp down on late payments and strengthen the powers of the Small Business Commissioner to support small businesses that are exploited by their larger partners. At the Spring Statement, as the noble Lord will be aware, the Government announced that they will require large companies’ audit committees to review payment practices and report them in their annual accounts.

Corporate Insolvency and Governance Act 2020

Debate between Lord Callanan and Lord Stevenson of Balmacara

Wednesday 29th July 2020 Lords Chamber

[Lord Callanan]

As my noble friend is aware, we debated these matters extensively only a few short weeks ago when we passed the legislation. We are keeping all aspects of the legislation under constant supervision. It is a complex Act, with lots of new provisions that we think will benefit companies, and we continue to look at how it is working in practice.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the success of this new system will depend significantly on the courts being able to deal efficiently with new requests for a moratorium from the new court officer, the monitor. Can the Minister confirm that appropriate support and training has been made available to the court system across the country, now and for the future?

[Lord Callanan]

The noble Lord makes a very good point. I can certainly reassure him that the courts have taken all practical measures within the resources available to accommodate a likely increase in the workload before them. Specialist seminars have taken place to ensure that judges are up to speed with the changes and the processes that have been introduced by the Act. Resources include the numbers of, and the deployment of salary to, fee-paid judges and courtrooms, where required.

OneWeb

Debate between Lord Callanan and Lord Stevenson of Balmacara

Wednesday 8th July 2020 Lords Chamber

[Lord Callanan]

Our membership or otherwise of the European Union is not relevant to this discussion. The other shareholders are, as I said, Bharti Global Ltd and some small shareholders. We have an equal shareholding with Bharti Global Ltd and a small shareholding is held by existing OneWeb creditors.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, this is a very intriguing initiative, although a lot of the details remain opaque. Can the Minister confirm whether the Government intend to transfer some or all of the satellite manufacturing, which is currently based in the USA, to the UK? If so, how many jobs would that generate?

[Lord Callanan]

The noble Lord asks a very good question. Through this investment we will look to leverage our influence to set the strategic direction of the business, and of course we want to see direct manufacturing the UK by both the company and its supply chain expanded.

Environmental Projects

Debate between Lord Callanan and Lord Stevenson of Balmacara

Thursday 2nd July 2020 Lords Chamber

[Lord Callanan]

The noble Lord is correct: the net-zero challenge is fundamentally cross-cutting. That is why in the run-up to the COP 26 summit we will bring forward ambitious plans across key sectors of the economy, including an energy White Paper, a transport decarbonisation plan and a heat and building strategy. We need to avoid siloed thinking in government across these endeavours.

[Lord Stevenson of Balmacara (Lab) [V]]

My noble friend Lord Snape drew attention to the fact that the Prime Minister’s recent speech made no mention of plans to insulate homes, although this was a £9.2 billion spending commitment in the Conservative manifesto. The Committee on Climate Change noted recently that retrofitting insulation would be the most effective measure in the race to get to zero carbon. Of course, as we have acknowledged in previous exchanges, this would be an excellent and inexpensive new job creator. Has the manifesto pledge been abandoned?

Covid-19: High Street Retailers

Debate between Lord Callanan and Lord Stevenson of Balmacara

Thursday 2nd July 2020 Lords Chamber

[Lord Callanan]

We recognise the vital role played by retailers operating in sparsely populated and isolated areas in the UK, including those in Northern Ireland. As I said, they have benefited from cash grants of up to £25,000, for rateable values of between £15,000 and £51,000. Many rural retailers have also benefited from the business rates holiday, and the doubling of the small business rate relief and changes to thresholds, but we keep these matters under constant review.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, does the Minister agree that we face a fundamental change in behaviour? The survey figures for future use of the high street make grim reading, with data pointing to a near halving of physical visits post pandemic. What plans do the Government have to anticipate this new normal?

[Lord Callanan]

The noble Lord is right to highlight the difficulties that many retailers are facing. There has been a big shift to online retailing as well—of course, many high street retailers do both—but we need to keep these matters under review. The high street is vital to many local communities, so we want to offer them as much support as possible.

Corporate Insolvency and Governance Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 23rd June 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, this has been a very good debate and I thank all those who have contributed. In a sense, the debate around this group of amendments reflects the problem that we have had with the Bill. The Government, rightly, want to progress and to press ahead, but the issues that we are covering are of such substance that they vastly outstrip the time that has been made available for us to do it—hence our needing the Minister to address at the Dispatch Box a wide range of points before many of us can decide how we will deal with our amendments.

The noble and learned Lord, Lord Hope, and the noble Baroness, Lady McIntosh of Pickering, asked about the exchange of letters over the simple question about whether a list of creditors should be provided. The noble Lord, Lord Leigh, and the noble Viscount, Lord Trenchard, asked a justifiable question about whether rescuing a business is the same as rescuing the company, given that in many cases the business is the important issue, particularly when it is linked to the jobs that would be involved. Does the Bill adequately deal with that?

My noble friends Lady Drake and Lady Warwick want to know from the Minister directly at the Dispatch Box whether Amendment 80 goes far enough to recognise the gaming and perverse behaviours that will inevitably follow the moratorium arrangements. In addition to that, my noble friend Lady Warwick specifically asked about the issue of super-priority for financial funds in relation to defined-benefit pensions. Will the Government, with their power, stay alert to the dangers? We need to know.

The noble Baroness, Lady Bowles, made a persuasive case about the way in which the breathing space set up by the moratorium would effectively be destroyed by accelerated payments, and the following speaker, the noble Baroness, Lady Kramer, made that point exactly by explaining why gaming is natural, or even appropriate, behaviour for banks and other lenders, which of course have to maximise the return they are likely to get. If that is inevitable, are the measures in the Bill sufficient? Will the Minister do what he can to reassure us about that? And the noble Lord, Lord Hodgson, whose extensive experience and anecdotes flowed through his speech, rightly raised the Pepper v Hart concern and the issues that will come through in future legislation in relation to what has been said today.

I suppose what I am getting at is that it would have been better if we had had proper amendments and time to debate them in individual groups—not all clumped together in different areas—and did not have to rely on the Minister’s very difficult task of covering all the points raised in today’s hour and a quarter of debate and being convincing about how the words that appear in the Bill, and in the Act when it is published, will be sufficient. However, we are where we are and we need to make progress.

Amendment 75 may be a rather modest issue, as has been said, but it is important in itself as well as for what it might say about the future. I thank the noble Lords, Lord Kerslake and Lord Fox, and the noble Baroness, Lady Altmann, for supporting me in this amendment, and I thank my noble friends Lady Bryan of Partick, Lord Hendy, Lord Hain, Lord Adonis and others for speaking in support. At heart, the amendment seeks to recognise that workers in a company care about its future and, like all other stakeholders, should be informed about what is going on. It supports the view that in a crisis situation all those who work in a company are in it together, and employees may have as much at stake as others who have a financial stake in the company. It also makes the point that those who work in the company in the round, or in the business that the company is carrying out, can and should make a contribution to save it if it is in crisis. Only good can come from a proper process of engagement, information exchange and an exchange of ideas.

I recognise that in a moratorium situation speed may be of the essence. Any arrangements set up that would slow that down also carry the risk that information will be fed out into the public, and that may promote creditor action. We must guard against that but, on the other hand, we should also aim to bring everyone together, not to split off certain groups who, as I hope to argue, could contribute. However, and I wait to hear the Minister deal with this issue when he comes to the Dispatch Box, there may be other ways of dealing with this—measures that could perhaps take into account evidence gained as we go forward. As we discovered in Committee, there may indeed be other issues that need to be wrapped into this first step—the beginnings, perhaps, of a movement to rebalance the relationship between employers and employees and to promote collective bargaining. This may not have been the right amendment or even the right Bill for that approach, but maybe this can be the first step on that journey.

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

My Lords, I thank everyone who has contributed to this excellent debate. The noble Lord, Lord Stevenson, correctly characterised this as a number of different subjects loosely grouped together under the heading of moratorium provisions, and I gladly accept his challenge to try to satisfy the House and deal with all the points that have been raised.

First, to start at the beginning, Amendment 1 was moved by the noble and learned Lord, Lord Hope of Craighead. I thank him for his letter following Committee; as I conveyed in my response to him, I confirm that a copy of that has been placed in the House Library. I agree with him that the monitor needs the details of the company’s creditors at an early stage to enable the monitor to comply with their duty to notify the creditors. I also confirm to him that I agree with the explanation that he provided in his speech. We have recently published draft guidance for monitors that would include that the proposed monitor is expected to ascertain the assets, liabilities and ongoing financial commitments of the company when judging its likelihood of rescue, and that would of course include details of creditors.

I turn to the amendments tabled by my noble friends Lord Leigh of Hurley and Lord Trenchard. I thank them for raising these issues and tabling the amendments, which I know derive from their enormous experience in this area. I wrote to my noble friend Lord Leigh on 17 June. I hope he received a copy of that letter; if he did not, I apologise and will gladly give him another copy. The amendments seek to expand the focus of the moratorium from the rescue of the company to the rescue of the company’s businesses or parts of that business. I am grateful to them, particularly my noble friend Lord Leigh, for taking the time to meet me and officials to discuss that with his various restructuring experts and for them to highlight their concerns to us. In response to my noble friend Lord Trenchard, the moratorium is intended as a company rescue procedure upstream of a formal insolvency procedure. If a pre-pack is the settled intention of the company and its adviser, the moratorium is clearly not for them.

It has long been the Government’s policy that the new moratorium be built around a company in financial difficulty—that is, companies having access to a breathing space before such time as the company itself is beyond rescue. For that reason, the statements made by the monitor on entry to the moratorium and, similarly, the requirements at extension and termination of the moratorium are indeed focused on the rescue of the corporate vehicle. This policy was widely consulted on and received significant support. However, I recognise the point made by my noble friends that the amendment is supported by some rescue professionals working in that field. Still, I reassure them today by telling them that we will be monitoring the operation of the moratorium closely once the Bill comes into force, and we will not hesitate to take action if that is required.

I turn to Amendments 13 and 14, tabled by the noble Baronesses, Lady Drake and Lady Bowles, which seek to change how financial services debts are treated in a moratorium. This is a complicated area so I hope the House will bear with me. The Government want to avoid lenders exercising their rights to accelerate their pre-moratorium debt, thereby potentially gaming the system through a moratorium. That is why amendments have been tabled in my name, and I will talk more about them later, to exclude financial services’ pre-moratorium debts from super-priority or protection from compromise where the debt has been accelerated during the relevant period. The amendments in my name do not prevent a financial services creditor exercising a termination or acceleration clause; nor do they remove the requirement that if the accelerated debt is not paid then the monitor must bring the moratorium to an end. These are important provisions that will encourage lending to companies in difficulty and support the operation and stability of financial markets. The Government want to encourage financial services firms to keep lending to companies in distress. Including debts to these firms in the payment holiday concept could disincentivise them from doing so. That could leave some companies in a moratorium without the finance that they need to recover. In other words, it could jeopardise the very purpose of the moratorium in the first place.

In addition, we have excluded certain financial services contracts from the prohibition of termination clauses. This is vital to ensure that financial markets continue to operate as they do now. To not exclude these contracts could carry wide-reaching, systemic risks to market stability, as market participants could find their transactions suddenly terminated. Legal certainty over how transactions will be treated is vital to the operation of these markets. I appreciate that many noble Lords have raised concerns about this matter, but I hope that the amendments tabled in my name will allay at least some of their concerns. I will talk in a little more detail about those amendments shortly.

--- Later in debate ---

[Lord Stevenson of Balmacara [V]]

My Lords, my name is on Amendment 46, as I strongly support the noble Baroness, Lady Neville-Rolfe, in her attempt to revive the powers taken in the small business Act 2015. We supported her in 2015 and pressed then for action to be taken against the abuses which were occurring in the pre-pack cases that came to light at the time.

However, as the noble Baroness said, thanks mainly to the rhetoric of the noble Lord, Lord Hodgson, and my noble friend Lord Mendelsohn, the Government have done a U-turn. Therefore, purely on consistency grounds, it is logical and right that we should support Amendments 37 and 38 in the name of the noble Lord, Lord Callanan. When he responds, I hope that he will confirm that he intends to use these powers and to act urgently.

I have been in discussion during the past couple of weeks with the noble Lord, Lord Hodgson of Astley Abbotts, about his Amendment 45. In the absence of government Amendments 37 and 38, I would have backed his proposal. However, I have an old-fashioned view about statutory powers being operated by non-statutory bodies such as the pre-pack pool. Given that the powers sought by Amendment 45 are contained within those to be taken under Amendments 37 and 38 and that, as the noble Lord, Lord Hodgson, admitted, there are some problems with the existing arrangements —the noble Lord, Lord Vaux, called them “murky” and denigrated the standards being achieved—I am minded to support the Government on this issue.

[Lord Callanan]

I thank my noble friends Lord Hodgson, Lady Altmann and Lady Neville-Rolfe, as well as the noble Lords, Lord Vaux and Lord Stevenson, and the noble Baroness, Lady Bowles, for their amendments, which would regulate pre-pack sales in administration.

It goes without saying that pre-pack sales have been a contentious subject during debates on this Bill in both Houses and, as some Members have indicated, on previous Bills. There was an impassioned debate about pre-packs in Committee, and I am grateful for the helpful contributions made during that debate by many of the aforementioned noble Lords, as well as the noble Lord, Lord Mendelsohn. I have certainly benefited from speaking to many of them in separate meetings with officials in trying to plot a route forward on this issue.

During that debate, I briefly explained some of the reasons why I did not think that Amendment 45, now brought back on Report, would be suitable. These included that the need for a positive opinion from a member of the pre-pack pool might create a potential conflict with the statutory objective of the administrator, which is to achieve a better result for creditors as a whole than if the company were wound up. There would also be a problem in that the amendment would prevent a sale without an opinion from the pre-pack pool even where the creditors had agreed that it should go ahead.

Moreover, whether a sale went ahead would be entirely dependent on a member of the pool assessing that it was not “unreasonable”, but the amendment provides no guidance on what “unreasonable” means in this context. This is likely to create significant uncertainty for businesses as to what is allowed and, of course, a significant risk of legal challenge.

Amendment 45 would capture only pre-pack transactions that had been negotiated with an associate before a company entered administration. The definition of “connected person” in paragraph 60A of Schedule B1 is drawn more widely than the definition of “associate” in Amendment 45, so the scope of the government amendment is in this case broader.

I also mentioned in Committee that there could be a difficulty in restricting supply of opinion to the pre-pack pool. I know that my noble friend Lord Hodgson expressed scepticism about my reasoning, but it is a proper concern that this could raise issues regarding anti-competitiveness.

My noble friend also suggested that pension liability could be removed. I point out to him that the Pension Protection Fund has confirmed that it does not generally see any evidence that pre-pack sales are being used to abandon pensions liabilities. Further, it considers that the Pensions Regulator has sufficient anti-avoidance powers to act as a deterrent against the misuse of pre-pack sales for the purposes of dumping a pension scheme.

I can say in response to a number of noble Lords who asked me questions—for instance, my noble friend Lady Neville-Rolfe, the noble Baroness, Lady Bowles, and the noble Lord, Lord Stevenson—that, if the government amendment is passed, we will publish in the summer a review of the existing voluntary measures to reform pre-pack sales and will set out in that report proposals for when and how we will regulate.

The amendment in the names of my noble friend Lady Neville-Rolfe and the noble Lord, Lord Stevenson, took a different approach—it would partially resurrect a previously lapsed power to regulate sales to connected persons in administration. The amendment does not quite go far enough to be workable but, as I set out earlier, we now have government amendments in that space, which I hope will work well; we have decided to table our own amendments to regulate pre-pack sales.

Having said that, and with the reassurances that I have given to the House, I hope that noble Lords will accept the assurances and information that I have been able to provide and will therefore not move their amendments when the time comes.

Emissions: Housing

Debate between Lord Callanan and Lord Stevenson of Balmacara

Monday 22nd June 2020 Lords Chamber

[Lord Callanan [V]]

Of course. I am always willing to have meetings with stakeholders and others about this important area. As I said in response to a previous question, we continue to investigate with other people—for instance, boiler manufacturers—how hydrogen can contribute to our climate goals in the future. It is an important point to make.

[Lord Stevenson of Balmacara (Lab) [V]]

I shall follow up the question asked by the noble Baroness, Lady Boycott. Given the low cost of creating a job retrofitting loft and wall insulation in our housing stock, can the Minister confirm that this green new deal approach will feature in the Government’s forthcoming economic recovery plan?

[Lord Callanan [V]]

I can confirm that we will do that. The noble Lord makes a very good point. We noted with interest the analysis in the Smart Growth America report that a job in home insulation could be created for £59,000, which is less than for comparative jobs, such as road maintenance. The most recent release by the Office for National Statistics shows that in 2018 energy-efficiency products supported the largest number of full-time jobs—about 114,000—of any sector in the low-carbon and renewable energy economy.

Corporate Insolvency and Governance Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 17th June 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, we have had a very good debate on this issue today. It is an accident of the way things went yesterday that we have been given this time, and I am grateful to the House authorities for allowing us to spend some time on this important topic.

The noble Lords, Lord Hodgson and Lord Vaux, gave brilliant exposés of why pre-packs are causing more harm than good, as they put it, although both were valiant in suggesting that it remained on the agenda or was a “valuable tool in the toolbox”, which was another phrase used, although the noble Lord, Lord Hodgson, said that it has been a very loose end recently. Increasingly, perhaps we need to think hard about how this should go forward.

Like my noble friend Lord Mendelsohn, I have had an interest in pre-packs since we were involved in the quite intensive discussions on the small business Act in 2015. Like him and many people, I regret that the power that was inserted into that Act has lapsed, because that seems a missed opportunity and we should be thinking hard about how that might go. Perhaps when the Minister responds he could explain again why he thinks that the amendment in the name of the noble Baroness, Lady Neville-Rolfe, should not be brought forward again. It seems that it would give him the powers that he might need in the future to take action.

The key issue here is not whether the pre-packs will continue to cause trouble but the damage that they might do to the Bill. I hope that the Minister will recall that, when we had our first meeting on the Bill and we were going through some of the main issues, I raised the question of whether the Bill would have an impact on pre-packs and vice versa. The answer I got was that, in the view of the drafters of the Bill, it would not materially have an effect one way or another. However, the evidence we have heard today suggests that that is not the case. Although the Teresa Graham report of a few years ago and its suggestion of a pre-pack pool has been working reasonably well in practice, it is still a voluntary scheme, as was picked up, and if it is indeed rewarding the good guys but not catching the bad ones, the Government are on notice to do something about that. Additionally, if the Pre Pack Pool itself falls into desuetude, obviously a major issue is looming.

The amendments here are very much autonomous, and it has been a useful debate. Of course, if they were accepted, they would effectively be saving a bad system and not introducing good regulation. As the noble Baroness, Lady Altmann, said, we need to think about a mandatory approach here. When the Minister responds, we will be looking for guidance from him about whether this is the opportunity to do so. Would he be prepared to reconsider his initial view on the amendment proposed by the noble Baroness, Lady Neville-Rolfe, to give powers back to the Government to act if they are required, or will we have to seek another opportunity?

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

I thank and pay tribute to my noble friend Lord Hodgson for ably introducing this grouping and speaking so powerfully on this subject. In fact, such is the power with which he speaks that when he spoke, claps of thunder echoed around the Chamber. We do not have any of our right reverend Prelates here to advise us, but perhaps my noble friend’s amendments have support from authorities even higher than those in this House. I am also grateful to the noble Lord, Lord Vaux, for speaking so eloquently on this topic, and grateful to him, my noble friend and the noble Lord, Lord Mendelsohn, for the time that they made available for us to discuss these issues in the last couple of weeks.

At the risk of further increasing my noble friend’s blood pressure, I say to him that the measures in the Bill are indeed intended to help companies to maximise their chances of survival during the Covid-19 emergency, to protect jobs and support the recovery of the economy. That is why other measures, which would not necessarily alleviate the impact of the current emergency, have not been included in the Bill.

I will reply also to the points from the noble Lords, Lord Adonis and Lord Mendelsohn. The Pre Pack Pool wrote to me on this subject a few weeks ago, and I responded on 29 May. I understand its concerns; officials will be meeting the pool and the Insolvency Service to take forward the discussions and the concerns that it has rightly raised.

I also see that the Small Business, Enterprise and Employment Act 2015 has provided some inspiration for these amendments, which would require mandatory reference to the aforementioned Pre Pack Pool. Aside from specific considerations as to whether a requirement for a positive opinion from the pool might conflict with the strategy duties of the administrator, I would be concerned that the amendment might impose an additional burden on businesses at this difficult time. Furthermore, as my noble friend Lord Hodgson reminded us, the Pre Pack Pool operates as a limited company, and I ask whether it is right to restrict the required opinions to one source of supply.

There are already legislative and professional regulatory requirements in respect of pre-pack sales. When deciding whether to go ahead with any sale in administration, the administrator is required to take into consideration the statutory objectives of administration, which include rescuing the company as a going concern and achieving a better result for creditors as a whole. The administrator must also send a detailed narrative explanation to creditors, justifying why a pre-pack sale was undertaken. That is sent to the administrators’ regulatory body, which monitors it to ensure that administrators comply with the spirit as well as the letter of this requirement. At Second Reading, I explained that we continue to work with regulators and industry stakeholders to discuss the options for strengthening the professional regulatory requirements. I can tell noble Lords that if that fails to give greater assurance to creditors, we will consider bringing forward further legislation.

For the reasons that I have set out, I am therefore unable to accept these amendments and I hope that my noble friend and the noble Lord, Lord Vaux, will therefore be able to withdraw and not press their amendments.

Corporate Insolvency and Governance Bill

Debate between Lord Callanan and Lord Stevenson of Balmacara

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 16th June 2020 Lords Chamber

[Lord Callanan]

I thank the noble Baroness. I am sure she understands that her comments about the hybrid House are not a matter for me. I have responsibilities in a number of areas, but the operation of this House is not one of them, so I will allow her to take those up with those Members who are responsible. I am merely a servant and am prepared to operate in whatever way the House sees fit.

Addressing the noble Baroness’s points about the Bill, it is important to recognise that permanent provisions have not been developed just in the short time since Covid-19. Some of the temporary provisions have, but the permanent provisions were the subject of a considerable period of consultation and engagement dating back to 2015. The 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, so there has been extensive consultation. The intention to legislate in this area was announced in 2018, but this crisis has made it imperative. The Bill offers important new flexibilities and rescue opportunities that may help many businesses to continue trading during this crisis, which I hope the whole House would agree is the ultimate objective

[Lord Stevenson of Balmacara [V]]

I thank all noble Lords for the huge range of points that have been brought to bear in this debate. It was inevitable, given the way that the amendments are grouped, that we would range far and wide over the Bill. It was not a repeat of the criticism at Second Reading, because we were drilling down into important areas which in other times might have been picked up for further consideration during the later stages of the Bill, but cannot be because of the short timescale we are talking about.

The Minister made only two substantial points in his response. He is going to bring forward amendments to protect the way that debts are accrued during the moratorium period. I very much look forward to seeing those—we welcome the news. There is a concern around the House about this particular area, where we step into uncharted territory with the idea of a moratorium, and we want to protect it as much as we can. More statutory-based procedures on this will be helpful.

I disagree with the Minister that workers and employees are well looked after in this Bill. The evidence does not support that. I leave it to others to judge from the contributions that were made by my noble friends Lord Hendy and Lord Hain; they made an unanswerable case for further consideration, but if it is not to be, it is not to be and we will just have to wait for another opportunity. However, the Government are well out of step here, and that is going to cause trouble further down the track.

My original amendment, which headed the group, was not the only point raised, as I made clear, but it was about an issue that picked up a lot of support. I am grateful to those who spoke in support of it, particularly those who also had amendments down which were spoken to during the debate. This is the question of how we are going to support the new position of monitor. During the debate I was alerted to the fact that the Government had published their draft guide for monitors. It is a pity that it was not available before this debate, but at least it is now. On a quick read-through, it is interesting that it is based very much on the current IP regulations, and goes so far as to suggest some formal amendments to those regulations, to allow for the role played by the monitor to be given a backing. However, it also makes it clear that these are very temporary statements by the Government, pending further work through statutory instruments, and I am sure that is right.

--- Later in debate ---

[Lord Stevenson of Balmacara [V]]

My Lords, I am grateful to all noble Lords who have spoken in this interesting and wide-ranging debate. In contrast to that on the first group, it was quite well focused. There are only a couple of things that escaped the broader consideration of the two advisory committees we have been hearing from: the DPRRC and the Constitution Committee. Amendment 62, in my name, is oddly grouped in this debate but was meant to be helpful. I hoped that the Minister could reassure the Committee that all that needed to be done was being done to make sure the courts played their part appropriately—it is nothing to do with Parliament and, as the noble and learned Lord, Lord Thomas, said, nothing to do with the Government either.

Nevertheless, the funding needs to be there and the resources need to be available to ensure that the work is done properly to support the legislative attempts that have been made within the Bill. If it is of any interest, we tried in our amendment to add not just the judiciary but the staff of the courts, because they too have a part to play, but we found that that was out of scope, so the amendment focuses purely on the judiciary. But it should be understood to be about the court system as a whole helping and supporting the legislation moving through.

The noble Baroness, Lady Anelay of St Johns—who should know a thing or two—said very clearly that only a brave Government would ignore the DPRRC or Constitution Committee reports, and I am sure that it is not in the mind of the Minister to take them on at this stage. Our amendments are largely an attempt—and I acknowledge considerable assistance from the Public Bill Office—to put the aspirations of the DPRRC into a form that could be considered as amendments. They are not meant to be a statement of where we want to get to. They are probing amendments to provoke a response from the Government. I also think that the recommendations of the Constitution Committee, as outlined by my noble friend Lady Taylor and her supporters in Amendments 66 and 70, are exemplary because they quickly get to the heart of what we are about. They contrast slightly with the approach taken by the noble Lord, Lord Blencathra, whose excellent speech belied the fact that his way was simply to delete the clause. That would not achieve very much except make this Committee very happy but it would obviously remove the impulse which has led to where we are.

We are obviously in a situation where we need clear agreement between the various interests displayed in this debate. It really is up to the Government to assure the Committee that, in the words of the noble Baroness, Lady Neville-Rolfe—and I agree with the line she is taking—the analysis has been done properly. We need to better understand the interaction between the lengths and temporary measures—how long the temporary parts of the Bill will last and under what arrangements they can be sunset. If they are not to be sunset, what assurances and safeguards are available to this House and to Parliament as a whole? We need a full and mature consideration, but all that has to be done in a matter of days because the date for the final submission of amendments for Report is looming fast. Indeed, it will have to be the end of this week so that we can debate them in the middle of next week.

We are in a quandary. The Government need to give us an assurance about that, but I make it clear that we are happy to discuss with the Government any way in which we can help, and I am sure that others who have contributed would also do that. We are clearly at a bit of an impasse if we do not find a way out of this, but there seem to be solutions on the ground. The amendments tabled by my noble friend Lady Taylor are attractive and the idea, as the noble Lord, Lord Blencathra, put it, of taking up sensible safeguards such as making the “made affirmative” procedure the default position on this is probably the right way to go. We will need assurances that the Government will not attempt to ride straight through the long and distinguished history of Parliament trying to make sure that abuses are not perpetrated within legislation which it then cannot involve itself with. I look forward to hearing from the Minister on this and hope that he is able to reassure us.

[Lord Callanan]

I thank all noble Lords for their contributions on this group. I will make a few general comments before I look at the detail of the amendments tabled.

I shall comment first on what I thought was the most important contribution to the proceedings, which of course was the noble Lord, Lord Mann, making a football analogy, which is more important than this legislation. I joke, of course, because it is not, but many of us are looking forward to the recommencement of the Premier League season tomorrow. I suspect that we support different clubs, but nevertheless I am sure that we will both welcome the resumption of football. The serious point is that many of these provisions will apply to football clubs. We hope, as is the purpose of this legislation, that it will enable any of them which are struggling to be saved. The Government have already announced a substantial package of aid and support for many businesses, including football clubs; I think that the Premier League has announced a package of £125 million that is to go to other clubs. We welcome that, and of course many clubs have taken advantage of our other business support measures.

The noble Lord, Lord Howarth, asked why there are so many delegated powers and Henry VIII provisions in the Bill. It is important to address this issue directly. We introduced new procedures to help companies in financial difficulties, in particular the moratorium which we debated earlier, and the new restructuring arrangements, and there are considerable powers to enable these provisions to be reviewed and adjusted if necessary. This point was recognised by the noble and learned Lord, Lord Thomas, and I am grateful for his support. Insolvency legislation is indeed very complex. The Bill has been drafted at pace to respond to the Covid-19 emergency and it contains powers to enable its provisions to be adapted to different types of corporate body or bodies which are subject to special insolvency procedures. It will also ensure that the detail of such procedures can be amended swiftly in the light of these reforms.

My noble friend Lord Blencathra opposed the Question that Clause 1 should stand part, in order to facilitate a wider debate on the Bill’s delegated powers. I know that he wishes to understand the Government’s position across the amendments related to delegated powers and I hope to be able to respond to his points throughout my response. I note that many of these amendments have been drawn from the report on the Bill by his committee. The Government are carefully considering that report, which we received following Second Reading. I have considered the report and I have listened carefully to the views of noble Lords throughout the debate.

My noble friend Lady Neville-Rolfe opposed the Question that Clause 39 should stand part of the Bill. I will explain. The clause enables the Secretary of State to make regulations either to extend or to curtail the periods during which the temporary provisions in the Bill operate. This is important to ensure that the temporary provisions are not in place for longer than necessary, but also that they do not expire at a time when they are still needed to protect the economy from the impact of the coronavirus emergency. Clause 40 makes similar provisions for Northern Ireland. Clause 41 ensures that where regulations are needed urgently as a result of the insolvency measures being introduced by this Bill, they can be made using the negative procedure for a six-month period after commencement. I therefore commend that these clauses stand part of the Bill.

I turn now to the amendments which seek to remove the powers to make secondary legislation conferred on the Secretary of State in relation to the moratorium. These powers enable the Secretary of State to amend, for example, definitions, defined lists and the circumstances in which the monitor can bring the moratorium to an end. In our view, these powers are required because in the future, it is possible that the Government may wish to address any unforeseen issues efficiently to ensure that the conditions for entry into a moratorium remain fit for purpose and to keep definitions up to date as new activities and entities come within the relevant regulated regimes.

Amendment 52, tabled by the noble Lord, Lord Stevenson, seeks to remove the power conferred on the Secretary of State to amend the list of exclusions set out in Schedule 4ZZA. The Government must retain this power in order to be able to react quickly to evolving situations in business and the financial world and to maintain legal certainty. Without the ability to do this, there is a risk that the Government would not be able to keep pace as new firms or types of contract emerge.

Amendment 62 would require the Government to review the impact of certain measures in the Bill on the High Court and to publish a plan to ensure that judges are appropriately trained in their implementation. I hope that it will reassure noble Lords if I confirm that we have engaged extensively with the judiciary in the course of developing these measures with the aim of ensuring that the impact on the courts is minimised. As always, the Government are extremely grateful to members of the judiciary for sharing their insights into these matters.

--- Later in debate ---

[Lord Stevenson of Balmacara [V]]

My Lords, I had the benefit of a brief discussion with the Minister yesterday on these amendments. If we can get a response to the points made by my noble friend Lord Mendelsohn and the questions asked by the noble Lord, Lord Fox, we will be well served.

[Lord Callanan]

I am grateful for the patience of noble Lords. I propose to deal with the points raised by the noble Lord, Lord Mendelsohn. As for the technical amendments talked about by the noble Lord, Lord Fox, and other noble Lords, if it is acceptable to them, I shall write to them with the details of what we are proposing and how we propose to do it—soon, as the noble Lord, Lord Fox, reminded me. I shall get an email out to them as quickly as possible which I hope will resolve their issues, but there are no issues of principle or policy involved, since these are simply technical amendments that I think reflect the reality that the Bill, and the many temporary provisions, were drafted at pace. It is a long and complicated Bill and these issues have arisen that we wish to correct.

The noble Lord, Lord Mendelsohn, asked about the reporting structures through which the effectiveness of the measures in the Bill can be monitored. I can tell him that the Insolvency Service has for many years published quarterly national statistics, covering both corporate and personal insolvency, approximately four weeks after the end of the quarter. In response to the pandemic, the Insolvency Service now additionally publishes monthly official statistics, covering corporate and personal insolvency, approximately two weeks after the end of the month. Data on the use of company moratoriums and flexible restructuring plans will be published regularly, either by the Insolvency Service or by Companies House through their existing schedules of national and official statistics. Under the Better Regulation framework, the Government are required to publish a post-implementation review of all these measures not more than five years after commencement and the Insolvency Service is currently considering its plans for monitoring and evaluation. We will, of course, publish further guidance as needed.

With that—and I am grateful for the patience of the Committee, I know that time is getting on—I beg to move.

Horizon: Sub-postmaster Convictions

Debate between Lord Callanan and Lord Stevenson of Balmacara

Thursday 11th June 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the whole country owes a considerable debt of gratitude to Kevan Jones MP, Andrew Bridgen MP and the noble Lord, Lord Arbuthnot, who have been campaigning tirelessly to expose this appalling scandal for over seven years. Too many sub-postmasters, often respected and hard-working pillars of their local community, have been imprisoned and many have been ruined financially, physically and mentally. By settling in mediation before the Horizon trial judgment was made public, the Post Office avoided public scrutiny and the facts of its transference of operational risk to sub-postmasters, persistent denials of fault and coercive behaviour were covered up. Thanks to recent TV and radio programmes we now have a lot of detail, but much more clearly needs to be uncovered.

The question that we have to answer first is whether the proposed independent review will do what is needed, as it is not a public inquiry under the Inquiries Act 2005. Can the Minister confirm that the review will have the same powers that a public inquiry would have had under statute to compel the disclosure of documentary evidence and to compel witnesses to come before it to give evidence in public?

Secondly, can the Minister confirm that the review, which presumably is being set up by Ministers, will have sufficient power to investigate the same Ministers who were responsible for the Post Office over the relevant period? Can he confirm that all the costs of the victims of this scandal who may be asked to testify and provide evidence, many of whom have yet to receive the full compensation that they seek, will be met?

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

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.

Coronavirus Business Interruption Loan Scheme

Debate between Lord Callanan and Lord Stevenson of Balmacara

Tuesday 12th May 2020 Lords Chamber

[Lord Callanan]

We have introduced a comprehensive package of measures designed to support any business facing difficulties in this period, including the various loan schemes and grants and support for the self-employed. Start-ups may be able to access CBILS or the bounce-back loan scheme if they fulfil the eligibility criteria. We keep them constantly under review to ensure that as many businesses as possible receive the support that they need.

[Lord Stevenson of Balmacara (Lab)]

My Lords, unlike the pubs that they supply, most of our small breweries are not eligible for grants or business rate relief. As a consequence, over half of them have not been able to access any financial help from the Government. Two-thirds have stopped brewing completely and there have been many redundancies. Will the Minister agree to meet urgently with officers from the small independent brewers association to see whether a satisfactory solution can be found to this problem?

[Lord Callanan]

Small breweries are a subject close to many of our hearts. We are responding rapidly to feedback to ensure that all eligible businesses, including breweries, can feel the full benefit of support that is available through the package. I would be very happy to join the noble Lord in meeting representatives if that is required.

Covid-19: British Business Bank

Debate between Lord Callanan and Lord Stevenson of Balmacara

Thursday 30th April 2020 Lords Chamber

[Lord Callanan]

We are constantly reviewing the loan guarantee schemes to make sure that as many businesses as possible can benefit from them. That is why we made the changes that I referred to earlier in the week. As I said to an earlier questioner, although the UK has left the EU, under the terms of the withdrawal agreement we are still subject to EU state aid rules.

[Lord Stevenson of Balmacara (Lab)]

My Lords, does the Minister agree that once the current, very welcome, liquidity initiatives to soften the supply shock to the UK economy have done their work, it will be necessary, as in other economic downturns, to bring forward plans to stimulate demand and to deal with rising unemployment? Will the Minister confirm that such plans are being developed and can he share with us the likely timing?

Covid-19: Business Interruption Loans

Debate between Lord Callanan and Lord Stevenson of Balmacara

Wednesday 22nd April 2020 Lords Chamber

[Lord Callanan]

I thank my noble friend for his question. Of course, the issue of 100% guarantees has been raised by a number of other contributors. It is something that we are keeping under review. However, we think that the structure of the scheme at the moment is appropriate to its function. We do not believe that it is right to put all the cost of these loans directly on to taxpayers. Banks should have some involvement in those loans. As I say, we are keeping the scheme under review.

[Lord Stevenson of Balmacara (Lab)]

My Lords, the Government are to be congratulated on the scale of—and, indeed, the welcome adaptations to be made to—the CBILS, but other countries seem to be disbursing more money more quickly to their struggling SMEs. In addition to the point made already about the increase needed to guarantee 100% of loans, will the Government also think of insisting, in the interests of transparency, that the British Business Bank provide details of what loans have been delivered by the 47 accredited lenders?

[Lord Callanan]

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.

Parental Bereavement Leave Regulations 2020

Debate between Lord Callanan and Lord Stevenson of Balmacara

Tuesday 3rd March 2020 Grand Committee

[Lord Stevenson of Balmacara (Lab)]

My Lords, this has been a useful and helpful debate on an uncontentious set of regulations stemming from a Bill which had to be a Private Member’s Bill but did, it should be said, feature in the 2017 Conservative manifesto—which is why it may have got through with the speed it did. This is in no sense to denigrate it, but from listening to the debate, one might have imagined that it would have been a flagship measure in certain circumstances. It was not to be that way, but that does not take anything away from the fact that this is an important social measure which we welcome.

In a sense the narrative, as rehearsed by my noble friend Lord Knight, reflects the fact that the campaign raised by Lucy Herd has been successful in getting movement in this area. The order before us is about the consequences of that Bill, the consultation that took place and the decisions taken as a result. Despite the points already been made today, we can be pleased that the consultation went well. It seemed to cover exactly the points we were nervous about when saw the Bill through both Houses. The results, although they may not satisfy everybody, give enough of a base for introducing the arrangements that we can welcome them.

Having said that, the points made by the noble Lord, Lord Hendy, are valid. Indeed, I was going to make them myself. We need to settle the question of whether we are going to treat fairly and equitably those who work across the various boundaries described by the noble Lord. I hope that the employment law, when it comes forward, will cover the gig economy and benefits for those who are workers but not employees. There will be no question of the Government being able to rely on the EU regulations in force not permitting them to do this because we will be able to do that ourselves, will we not?

Having been welcoming and supportive of what has been said and noting the points made by noble Lords about issues that perhaps still need to be picked up, I want to mention three myself. First, I welcome the fact that that these regulations have a common commencement date. The Minister will have been advised that I have a thing about this. His predecessor managed a score of one set of SIs starting on a common commencement date and 13 SIs that did not. There was never an adequate answer for that. It just seemed to be the way it happened. I am delighted that the Minister is starting his regime with an appropriate commencement date of 6 April.

Secondly, I read both draft instruments looking for the point picked up in previous discussions in the Grand Committee today about uprating arrangements. I assume that it is automatic, but given the experience of those in the previous debate of there being no statutory requirement to uprate, can the Minister confirm that these payments, if successfully claimed, will be uprated annually? If he cannot confirm that today, perhaps he can write to me.

Thirdly, when the Minister introduced the debate, he estimated that there are 7,000 child deaths a year. However, the Explanatory Memorandum has a figure of 10,200 parents a year eligible for parental bereavement leave, with 9,300 of those eligible for the payment. Can he confirm what the figures actually are? We have just discussed whether we should include in the figures gig economy workers who are not employees, so I think the overall figure is probably bigger. However, as the noble Baroness, Lady Brinton, said, it is still a small number and therefore not one that carries political weight, but we should know what we are talking about. Again, if the figures are not available, I would be happy for the Minister to write to me.

We support these regulations. They have been interpreted with sensitive regard to what is required, with the evidence that came forward supporting what we said at Second Reading. They are therefore welcome.

[Lord Callanan]

I thank all noble Lords for their valuable contributions to the debate. I start by reflecting the point made by the noble Lord, Lord Knight of Weymouth. The legislation would not have made it this far were it not for the commitment and support of Lucy Herd, and of Kevin Hollinrake and Will Quince and others in the other place—on both sides of the House, it is fair to say—as well as the work of the noble Lord.

I totally associate myself with the remarks the noble Lord made about the political process. It is often a source of great frustration, even to those of us within government. I am profoundly grateful to have the honour of presenting the regulations, which in no sense were my work, in this place. It shows that occasionally the political process works to the benefit of the people that we are all here to help and it was great to see the support for this measure on both sides of this place. As well as thanking the politicians, I thank all the officials in my department who worked hard to bring these measures before us today.

I hope noble Lords will agree that the Government have carefully considered the needs of bereaved parents, as well as those of employers, in drafting these regulations. I agree with the noble Baroness, Lady Brinton, that the broad definition of a bereaved parent—relying on a parental relationship, rather than biological parentage, to determine eligibility—will ensure that this provision reaches those who need it most. She will get the answer she was expecting to her second point: the policy in this area is not held by my department; it is a matter for the DWP. However, I will ensure that her point is conveyed to that department and that she gets a written reply to her valid concerns.

As I have already set out, the entitlement can be taken flexibly, giving bereaved parents choices about how best to use their time off to support their own, individual grieving process. This is important, as grief rarely follows a predictable path and significant events, even some time after the death, can cause bereaved parents to need time away from work. Wherever possible, these regulations have sought to mirror the existing framework of family-related leave and pay entitlements, which is familiar to most employers. The regulations ensure that an employer has certainty about when their employee will be off, which will enable them to plan ahead. I hope that this will ultimately lead to a more supportive and compassionate response from employers.

These regulations represent a statutory baseline, which should be considered the bare minimum for an employee who has suffered such a tragic loss. Many of us who are parents cannot comprehend the pain that someone in such circumstances will go through. As always, the Government encourage all employers to go further than the statutory minima where they are able to, and to act compassionately and considerately towards their staff. I am happy to say that many employers already provide exemplary bereavement support to their staff. However, there are still a small minority who do not, so I hope that this new legislation will not only ensure a minimum protection for all employees, but lead to better workplace support for bereavement across the board.

ACAS has produced guidance with Cruse, the bereavement specialists, for employers on managing bereavement in the workplace that includes specific advice relating to a parent losing a child of any age. We encourage employers to take notice of the ACAS guidance and to go beyond this statutory minimum in their own workplace policy where possible. I understand the concerns of the noble Lord, Lord Hendy, about the lack of provision for bereaved parents who are self-employed, or who are “workers” as opposed to employees. The Government understand the challenges that the self-employed and other non-employee parents face. We will continue to keep differences in treatment between self-employed and employed people under review with respect to parental leave and pay.

I am happy to reassure the noble Lord, Lord Stevenson, that this payment will be uprated annually, in line with other family payments. Regarding the numbers—we had 7,500 and he quoted 10,500—every child’s death will have a number of parents associated with it. The number in the impact assessment is not exactly twice the number of deaths; the 10,500 takes account of many things, including the number of parents who are not employees. If it would be helpful to him, I can write to him to explain that in more detail.

I hope I have answered all the questions. I commend these draft regulations to the House.

Artistic Content: Copyright Protection

Debate between Lord Callanan and Lord Stevenson of Balmacara

Monday 2nd March 2020 Lords Chamber

[Lord Callanan]

Yes, BEIS is responsible for intellectual property and copyright, but of course there is considerable input from DCMS concerning the creative industries. DCMS is taking forward a creative industries forum and various round tables with content providers and social media platforms, et cetera. So it lies across the two departments.

[Lord Stevenson of Balmacara (Lab)]

Does the Minister agree that unless Article 17 or an equivalent measure is introduced, creative personnel in this country are going to be disadvantaged relative to how they would have been had we stayed in the EU, and certainly in comparison with their counterparts in the EU, which was the basis of the Question? Is this not a case of cutting off your nose to spite your face? Why would we not want to make sure that those who are earning benefits from the cultural industries for this country and for themselves are able to earn, and that their copyrights are not being ripped off by the tech giants, as is currently happening?

[Lord Callanan]

We will continue to advocate for the rights of the creative industries. We shall see how the copyright directive is implemented and how the various enforcement regimes within it will work, but of course it is not possible for us to remain part of it, because we will not accept the jurisdiction of the CJEU in these matters. We will see how it works and will continue to keep the matter under review. It is of course a matter for this Parliament to determine how our copyright protection framework goes forward.