Rural Post Offices

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Tuesday 9th July 2019 Lords Chamber

[Lord Henley]

My Lords, I am not aware of that connection with the closure of banks in rural areas causing an increase in crime, but I am aware that there is a decline in bank services in certain areas. I think of my own small nearby town, where both the banks have gone. The important thing is that with the agreement that the banking industry has come to with the post offices, they can provide a great many of the banking services that people require, such as paying in cheques and so on. I could go on in great detail for the noble Lord but there are agreements between the banking sector and the Post Office to help deal with that.

[Lord Fox (LD)]

My Lords, the Minister speaks a good game but the truth is that sub-postmasters and sub-postmistresses are leaving their jobs in the hundreds, if not the thousands. The review is taking time but by the time it ends, there will be too few post offices and none in many rural areas. What will the Government do that is different from what they are doing now? If they keep doing the same thing, the problem will be worse.

[Lord Henley]

I regret to say that what the noble Lord says is complete and utter nonsense. The Post Office network is broadly stable, at about 11,500 branches. Obviously, there are occasional closures for reasons beyond the Post Office’s control; for example, an individual postmaster might retire for reasons of ill-health or the business behind a branch might not be sustainable. However, the Post Office has the means of providing postal services in those circumstances. The important point is to make it clear that the network, the numbers within it and the coverage of that network are broadly stable.

Environment and Climate Emergency

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Monday 1st July 2019 Lords Chamber

[Lord Henley]

My Lords, I am grateful for the support of the noble Lord and the party opposite. I regretted its Motion on Wednesday last week because, as I made clear in the debate on the statutory instrument, I thought that it was unnecessary. We have set realistic targets following the advice that we received from the Committee on Climate Change—targets that we believe we can and should meet—and, as we set out in the order, we will aim to meet them.

[Lord Fox (LD)]

My Lords, in last week’s legislative debate, a number of your Lordships spoke about the need to will the means, as did I, and about the technologies that we will need to deliver zero carbon by 2050. The Minister and I agreed that one technology that is needed is bulk energy storage for our electricity grid. Given that he agrees that we need it, can he please tell us what the Government are doing to will this? How much money is being invested and how is the industrial strategy helping to do this? What is happening in this area?

[Lord Henley]

My Lords, in the time I have available to respond to a Question of this sort, I cannot go into detail on every single bit of research that we are doing into energy storage, carbon capture, use and storage, and a whole range of other things. I am more than happy to write to the noble Lord with greater detail on this—he seems to be signalling to me to do that—but I can say that we are committed to doing all we can to meet the targets. We believe that with existing technology we can meet them, and with advances in technology we can do even better.

Climate Change Act 2008 (2050 Target Amendment) Order 2019

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Wednesday 26th June 2019 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

I point out to those Members who wish to argue about this that it is freezing in here and I do not have a cardigan. Could we speed up a little?

[Lord Fox (LD)]

My Lords, I will take that as my cue. I fear that I am intruding on a domestic, and of course we do not like to comment on domestic disputes. I assure the noble Baroness that I will attempt and indeed succeed to be somewhat more economical in time.

We welcome this debate and the tabling of the amendment. We understand the point made by the noble Lord, Lord Grantchester, and, in a different way, the point the noble Lord, Lord Deben, made in his very powerful speech—that we ought to understand more about how the means of this delivery will be willed. In the end, that is the key to achieving this objective.

This SI is the equivalent of sitting around a kitchen table, unfolding a map, pointing at it and saying, “That’s where we want to go”. It does not in any way get us any further down the road unless we understand how we are going to get there. I will try to maintain a practical end to this speech.

Call it self-indulgent or self-referential behaviour to point this out, but in September 2017 the Lib Dems approved a policy called “A Vision for Britain: Clean, Green and Carbon Free”, one of those great slogans we come up with. Its mission was to push the Government further and to push them to ask the question of the CCC about zero carbon in 2050. It was a milestone, and the reason I mention it is that it was an achievement for my colleague who cannot be here today, the noble Baroness, Lady Featherstone. I wanted to acknowledge her role in some of this.

New Liberal Democrat policies will continue to press the Government harder and will be further refined. They will also seek to outline some of the challenges and issues that need to be addressed to meet this incredibly exacting target. It is not just about stopping doing things; we will have to take carbon, CO₂ and greenhouse gases out of the system to achieve this. Although I respect the point the noble Lord made about using existing technologies, I challenge that it is the outer edge of existing technologies that will enable us to do some of those things. There is a lot of work for the Government to enable us to be in that position.

That is why we need the Government to explain how we are going to go forward. We should be approaching this problem multilaterally. We are talking about the United Kingdom, but we sit in the continent of Europe. It would be much more sensible if we were doing this as a bloc and a group in the European Union. Noble Lords would expect me to say that.

We need to be very clear on what we are trying to do and we need to be very honest about how we measure what we have achieved. That means basing it on our real footprint. There cannot be fudging of figures. We cannot disregard our imports, where we are simply exporting our footprint, and we need to be very careful about things such as offsets. The CCC sets out some big technologies, but I will pick on a few in no particular order, and not an exhaustive number. I will talk about low-carbon power, energy efficiency, electric vehicles, domestic heating, and air travel and shipping.

We of course need to accelerate the development of renewable and low-carbon power. As Liberal Democrats, we will be setting forward a much more ambitious target than we have even achieved now. It should be said, in the spirit of self-congratulation, that the level we have now was very much laid down through the work the coalition Government did, notwithstanding some dismantling around offshore wind, which occurred in the succeeding Government. The fact we have been able to have coal-free generation over the past few weeks is very much a credit to them. But creating the right investment environment for zero-carbon or low-carbon generation is a real challenge—I do not have to tell the Minister that—and we need to understand how the Government will work with industry to deliver the right investment vehicle with some idea of a framework. From a personal point of view, as I have said before, I think that included in that should be effective energy storage, because without that we will not have a flexible, low-carbon grid.

Everybody talks about energy efficiency; we have already heard about it twice. We have to introduce a major programme. We already have much of the legislation we need; we need to enforce the regulations.

On the subject of building, and not just conventional techniques, there is a revolution out there. I sat on the Science and Technology Select Committee. Off-site building can deliver much higher-specification buildings. The Government need to lead on that process with the buildings they commission.

Electric vehicles are interesting, because they are an important personal commitment for people. They are a big acquisition that people make in their commitment to the environment. Actually, it is quite hard. The waiting lists are long. One of the problems, as has already been mentioned, is battery technology. We have the Faraday challenge, but we are importing many of the batteries we need for current electric vehicles. We need a much stronger supply. Can the Minister tell us where we are on the Faraday Challenge gigaplant? When will the spades be wielded, because it will take years before it is working? How is the Road to Zero going? Where are we on it and will we firm up the targets? Things such as on-street charging remain behind the game. There needs to be consumer certainty around the plug-in car grant. Can the Government give a long-term view on that, rather than just to the end of the year?

Decarbonising heating is a very important point that has already been mentioned. There are options, such as hydrogen and heat exchange. How are the Government going to frame this? The last time we had a big domestic switchover, it was between coal gas and natural gas, and a single national monopoly delivered it. What is the means by which this process will be delivered? Will it be locally, through LEPs, by private enterprise? We know how well—or not well—the smart meters process has gone, so what is the thinking within the Government to deliver this?

Nuclear Energy: Small Modular Reactors

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Monday 10th June 2019 Lords Chamber

[Lord Henley]

The noble Lord speaks with great experience on this subject. He was involved in the building of Trawsfynydd, more years ago than he probably cares to remember. I note what he says; he is correct to say that the lake is on the small side for a full-scale nuclear reactor, which might make the small modular reactor more appropriate, but as I said, nothing has been ruled in or out.

[Lord Fox (LD)]

My Lords, any decision on SMRs should be taken within the context of the best possible carbon-free energy system. Does the Minister share my view that nuclear is competing not with windmills and photovoltaics but with energy storage, because in future the baseload can be provided either by nuclear or by effective storage? The Minister paints a picture of activity within his ministry. Can he guarantee that the same amount of effort will go into developing effective methods of bulk energy storage as is going into nuclear power?

[Lord Henley]

I completely agree with the noble Lord. The advantage of nuclear is that it provides baseload but if, as he says, we make further progress on storage, the variables in renewables would have the same effect. Therefore, we will continue to provide equal priority to advances in technology for storing electricity.

National Minimum Wage Naming Scheme

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Wednesday 5th June 2019 Lords Chamber

[Lord Henley]

My Lords, naming and shaming is just one of a number of different actions that can be taken, alongside self-correction by employers, the civil penalties that are available, and the criminal proceedings and resulting fines. As the noble Lord said, and as I made clear in the Statement, we will review the naming and shaming scheme and he will have to await further announcements on that. As my honourable friend Kelly Tolhurst made clear yesterday, she considers that it has been effective, but it is obviously quite a draconian measure to use against employers and we should be wary about the effect it might have on them. I think it is quite right that the Government should consider how to operate this in the future: that is what we are doing and I ask the noble Lord to be patient about this and about the other recommendations made by Sir David. In due course, announcements will be made.

[Lord Fox (LD)]

I join the noble Lord, Lord Stevenson, in thanking the Minister for repeating the Statement. I am confused by his answer and the debate in Hansard yesterday in the other place, where no one seemed to be calling out naming and shaming as an issue. Can we get to the nub of what exact problem the Government are seeking to fix here in cherry picking this one recommendation and putting it up for review? Can the Minister tease out that information by telling us what terms of reference this review will have? Is it to make naming and shaming more effective or to find a way of not having naming and shaming? Finally, the last sentence of the Statement says that this will be made public through the national minimum wage enforcement policy document. That is not good enough. Given the nature of this and the interest from both Houses, a Statement from the Minister on what this review comes up with will be important. Will he undertake to do that?

[Lord Henley]

My Lords, as I said to the noble Lord, Lord Stevenson, the noble Lord will have to be patient and wait for the full announcement. Sir David made his comments and my right honourable friend took them on board. We want to review the effectiveness of naming and shaming. My honourable friend made it clear yesterday that:

“It is absolutely right for me, as the Minister responsible, to evaluate the scheme and make sure that any naming and shaming scheme is meaningful, adds value, acts as a tool to aid employers to make sure that they are able to comply with the national minimum wage legislation”.—[Official Report, Commons, 4/6/19; col. 49.]


We want to make sure that that legislation is effective. This is just one tool among many. As I made clear, there is also self-correction by employers and the possibility of civil fines and, as has happened on occasion, prosecuting in the criminal courts. We want to see how effective this is and whether it should be looked at again. That is what my honourable friend and right honourable friend are proposing to do.

British Steel

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Wednesday 22nd May 2019 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am grateful to the Minister for repeating the Statement on British Steel made in the other place by his right honourable friend the Secretary of State for BEIS. It rather neatly demonstrates that there is a bit of a gap between what is happening in Parliament, with our discussions on Brexit, and the real world, in which our current political difficulties are causing real and lasting damage to our economy and to our country. If I may say so, the noble Lord rather gave the game away yesterday when his response to the Urgent Question on this same issue contained no information whatever about the state of play in what were ongoing negotiations with the company at the time and merely repeated the hollow sounding platitudes even he must get tired of hearing himself say about how, “Global economic conditions continue to be challenging for the industry”, and that the Government, “are working with the sector, unions and the devolved Administrations to support a sustainable, productive and modern UK steel sector”. Indeed, today’s Statement is almost a repeat of yesterday’s speech with a few added platitudes.

This is absolutely devastating news for the workers, their families and the communities who rely on British Steel directly in Scunthorpe, Skinningrove and on Teesside, and all the way through the supply chain. At least 25,000 people will have been worried sick this morning, wondering whether they will have a job this time next week and what the future holds for them. What plans do the Government have to support the 4,500 people employed directly by British Steel and the 20,000 or so employed by companies in the supply chain?

British Steel is our second-biggest steel-maker and one of only two integrated steel-making sites in the UK. It is the only UK steel plant that produces the rails we use on our tracks, providing almost all those procured by Network Rail and supplying ScotRail, TfL and Translink in Northern Ireland. It also exports a large volume of products across Europe. Surely, in any industrial strategy worth its name, British Steel would be one of the main pillars of our manufacturing capacity and the department would have detailed knowledge of its business plans, finances and operating strategy. Does the Minister agree that it seems to have been blindsided on this?

Yesterday’s UQ response was largely a rehash of an earlier Statement on how BEIS has put £120 million into the company as part of the ETS bailout. We have heard the same story again. The only question the Minister answered yesterday was the one I asked about whether the ETS bailout money would be at risk in an insolvency; he said that the money would be repaid. What due diligence did the Government carry out before agreeing that bailout? Were they really unaware that there were likely to be cash-flow problems in the company sufficient to cause it to go into administration within three weeks of this deal? Does he want to reflect on what he said yesterday?

Secondly, it is surely imperative now that the Government ensure that this business is stabilised and that confidence is given to customers, workers and businesses right across the supply chain. In this context, can the Minister tell us whether the Government have considered taking over the company? My understanding of the situation is that, given the strategic importance of the sector, this would almost certainly be allowed under state aid rules. It would be a good deal, given that it has been estimated that allowing British Steel to collapse could lead to about £2.8 billion in lost wages over a 10-year period and cost the Government about £1.1 billion in lost tax revenues and increased benefit payments.

Thirdly, it is reported that the owner, Greybull Capital, was asking the Government for a loan of £30 million, although there have also been reports that it wanted £75 million. The Minister refused to name a figure yesterday. Can he confirm today what the asks of British Steel were in the negotiations? Was it just the reported £30 million or more? Was a wider package of measures requested, including government action to support steel production? If so, why was that refused?

Finally, Greybull Capital acquired the asset now known as British Steel in 2016 for £1. It is reported that the plant returned to profitability within 100 days of that sale. Of course, the directors of Greybull Capital owe a duty of care to the company and its creditors in an insolvency. Can the Minister confirm whether it is likely that an investigation into possible wrongful or fraudulent trading under the Insolvency Act 1986 will be considered, with particular reference to the substantial management fees paid to directors since 2016, the accrued interest charged at 9% on £17 million of loans made by Greybull to the company, and the £42 million acquisition only last week of a company based in France?

[Lord Fox (LD)]

My Lords, I too thank the Minister for repeating the Statement made in the other place. Yesterday, we talked about the environment of uncertainty around Brexit, which has put pressure on this business. It certainly cannot have helped it in its struggle. I will not repeat those points today, because they have been well made.

Yesterday, the Minister stood at the Dispatch Box and metaphorically tapped his nose and said, “Wait and see”. We did not have to wait long, and what we see is really pretty terrible—for the employees and subcontractors, for Scunthorpe and the other areas in this business and, frankly, for the country. The Government can trumpet the proportion of British steel each department buys, but if this company goes down, there will be a significant lack of steel for these departments to buy.

The Minister says that the Government seek “the best possible outcome”. The best possible outcome for this business is the continuing making of steel in these furnaces. As I am sure the Minister acknowledges, the first job of the receiver is to do everything possible to keep this business going for future use. The priority is to keep the furnaces burning; once the furnaces go cold, the hope for those factories goes cold as well. Can the Minister confirm that this is the number one priority the Government have given the receiver? What other assistance will be available from the Government to keep those furnaces burning?

The Statement alludes to a sticking point around what future aid could be given and EU state aid rules, and reference was made to a letter from the accounting office. Can the Minister tell us what consultation has gone on with the European Union and the Commission, what response they have had in those discussions, who they talked to and when? I am slightly concerned that there is a level of scapegoating going on here.

As the noble Lord, Lord Stevenson, pointed out, there are a number of questions around Greybull Capital. I shall not repeat them, but there are suggestions that the private equity owner of Greybull was unwilling to play ball when it came to the amount of money required to show its commitment to this business. Perhaps the Minister would like to set the record straight on that.

Just up the road from where I live, there is an empty former My Local convenience store; some of my friends were stranded when Monarch went bust; and today, we have British Steel. What is the link? The link is that they all went down on Greybull’s watch. That might be unfortunate, it might be a coincidence, or it might be a pattern. Some would say that these kinds of businesses come with an attendant risk and that sometimes, because of that risk, they fail. But who is taking the risk? Is it Greybull, the private equity owner of this business, or is it the Government who are actually absorbing the risk? We heard yesterday and today about the £120 million granted as a bridging loan. We have heard that the negotiations to rescue this company failed. How much risk are the Swedish and Turkish owners of this private equity company prepared to take? For there to be reward, there should also be risk.

Yesterday, the Minister said that no stone would go unturned. Today, he talked about remorseless activity. Could he tell us which stones are being turned? What actions are open to the Government to make sure that they continue to make steel in those blast furnaces?

[Lord Henley]

My Lords, I start by agreeing with both noble Lords. I accept the words they used: the noble Lord, Lord Stevenson, said that this was devastating news and the noble Lord, Lord Fox, said that it was terrible news. It is bad news, as my right honourable friend the Secretary of State made clear only an hour or so ago when he made this Statement in another place. He was very grateful for the positive, cross-party support he had from all round the House for what the Government have done and are proposing to do.

The noble Lord, Lord Stevenson, claimed that I said nothing yesterday. I agree that I said relatively little, but at that stage it was not possible to say much. Despite what he seemed to imply, I can assure your Lordships that the department, my right honourable friend and other Ministers have been involved in this matter for some considerable time. They have been in discussions with, as he made clear, the company and its owner, Greybull, and with the unions, the community, suppliers and others. I will possibly write to the noble Lord, Lord Fox, with details of further discussions they have had with the Commission about these things.

There are, however, obviously limits to what government can and cannot do within the law. Our focus now has to be on working with the official receiver to find new partners and new owners. As the noble Lord, Lord Fox, made quite clear, our focus should also be on working with him to keep the furnaces burning, for the very simple practical reason that they lose their value rapidly if they go cold. There is nothing so worthless as a cold steel works, and therefore, as far as is possible, one thing the official receiver will have to do is try to make sure things can be kept going for as long as possible so that he has an asset that is of value to sell on.

I want to make it clear that obviously, we can act only within the law and that requires any financial support to a steel company to be on a commercial basis. I have been advised that it would be unlawful to provide a guarantee or a loan on the terms of any proposals that the Government have made so far. As the noble Lord, Lord Stevenson, made clear, the company did ask for £30 million, but it did not offer any contribution itself and without that it would not be possible for the Government to act.

The noble Lord, Lord Stevenson, also put forward the idea that we should nationalise the company, but that does not solve any of its problems, such as the need for investment and the fact that it is operating in a highly competitive global market. I have been criticised by both noble Lords for repeating that, but it is a simple statement of fact that a great deal of steel is being produced and it is a highly competitive market. All of us in this House who have been around a long time know that the UK steel industry has changed greatly over the past 40 years. We have a much better industry than we possibly had in the past but, even so, it is a competitive market and it is necessary to recognise that.

As I made clear, we will continue to work with the official receiver, the unions, local government and all the other stakeholders to provide the support that the workforce and the company need to provide continuity for the skills and expertise that we have in the plants in Scunthorpe, Skinningrove and Redcar. I hope that when my right honourable friend next has to make a Statement about British Steel, we can bring better news.

British Steel

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Tuesday 21st May 2019 Lords Chamber

[Lord Henley]

My Lords, I do not think I can take the noble Lord very far on this. His first question was whether the ETS £120 million was at risk. I assure him that that is not the case. That was made clear by the various guarantees that my right honourable friend announced when he made the Statement on 1 May this year. I did offer to repeat that Statement in the House but that was declined. That money is secure. The noble Lord asked a number of other questions about how much British Steel was asking for and what our further plans were. As my honourable friend made clear in the Statement, it would be wrong at this stage to say much more, because detailed discussions with the company have been going on and will continue. As my honourable friend made clear, we will update the House as soon as possible and bring further information to another place and this House when it is appropriate.

[Lord Fox (LD)]

My Lords, I thank the Minister for repeating the Statement. Like the noble Lord, Lord Stevenson, I am disappointed by the absence of any actual information. Clearly, there is no point in pressing on those issues, since the Minister either does not know or will not say, but in the Statement the Government say that they are working to strengthen engagement with customers. The steel industry has stated that the uncertainty surrounding Brexit is causing real problems with its customers. The Statement also says that the Government will leave no stone unturned, so perhaps the Minister can stand up and say that he agrees with the Chancellor of the Exchequer that a no-deal Brexit would be catastrophic, both for the steel industry and for the rest of British manufacturing.

[Lord Henley]

My Lords, the noble Lord says that I either do not know or will not say. The fact is that it is not appropriate to say anything at the moment. That is very important and, as my honourable friend made clear in another place, he or my right honourable friend the Secretary of State will come before another place at the appropriate moment and let the House know what is necessary to know at that stage. He went on to make various remarks about Brexit. I appreciate his concerns about the element of uncertainty that is affecting a number of people. All I can recommend is that all parties rally round and support the Prime Minister’s deal, get that deal through another place and let us get on with life.

Climate Emergency

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Tuesday 7th May 2019 Lords Chamber

[Lord Henley]

My Lords, the most important thing is that we had the report a few months ago from the IPCC, which we put to our own climate change committee. Last week we received a report from the climate change committee and we will respond to it in due course.

[Lord Fox (LD)]

My Lords, returning to the agricultural issue, one way of reducing the climate change impact of agriculture is to grow fewer crops. We could do that by reducing waste. Tony Juniper estimates that about one-third of food in this country is wasted. That is equivalent to cultivating an area the size of Yorkshire and Lancashire and then throwing all the food away. Does the Minister agree that, for whatever reason, the message is not getting over to the general public, food companies and food services? What are the Government going to do and what can we all do to help the Government get this message across?

[Lord Henley]

The noble Lord makes a good point. The first thing to say is that we should all eat up our greens.

Corporate Governance

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Monday 29th April 2019 Lords Chamber

[Lord Henley]

My Lords, the noble Baroness asks a difficult philosophical question. It is important to try to maintain public trust. In my response to the noble Lord, Lord Haskel, I tried to make it clear that we have seen some increase in it, but we also think it important—hence the work of the FRC and others on the UK corporate governance code—to make sure that we have an appropriate code so that companies can operate in a proper manner.

[Lord Fox (LD)]

My Lords, the Minister has talked about openness. I know that the CMA has reported back on the auditing business and I would not expect him to comment on the Government’s response to that yet unless he wishes to do so. Does he agree that business reputation is not in the hands of the auditors? It is the responsibility of company owners, their boards and their managers. I am not sure where the noble Lord is getting his data on trust because there is a crisis of trust between society and big business. If he does not recognise that, he is missing something. What measures are the Government considering taking in order to hold company shareholders, boards and managers to their wider responsibilities to society?

[Lord Henley]

I agree with the noble Lord on the first part of his question, which is that this is a matter for companies, and it is right that they should get it right. On levels of trust, what I have been trying to make clear is that we have seen a growth in public trust in business. It is still too low, but the most recent 2019 Edelman global trust barometer shows a small increase, which is to be welcomed and something we would encourage. As the noble Lord says, it is too early for me to comment on the CMA.

Businesses: Technology

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Wednesday 10th April 2019 Lords Chamber

[Lord Henley]

The noble Lord takes a depressingly pessimistic view of that PwC report. It pointed out that advances in that sector could lead to growth of £230 billion between now and 2030. That is to be welcomed. It also pointed out that jobs would disappear, but I think it went on, as did another report to which I referred the other day, to point to a very large number of new jobs in the sector, which would probably be more highly paid and more highly skilled and which we could provide in this country.

[Lord Fox (LD)]

My Lords, will the Minister focus on the scale-up part of the Question? The British Business Bank is there to help the scale-up process. I understand that it loans about £2.5 billion through other institutions. How much of that money proportionately is going into the AI industries to help them scale up, and does he expect that proportion to increase or decrease?

[Lord Henley]

My Lords, I cannot give any precise figures about how much is specifically targeted on the AI industry. The important point is to recognise, as did the PwC and other reports, what will happen in that industry: the advantages for it, how much it will grow and how well this country is doing. That is why I cited in my Answer the massive increase in inward investment—which is obviously an indication of what is happening to not only start-ups but scale-ups—of 17%, which is more than the rest of Europe combined.