Nuclear Power: Future Energy Needs
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Lord Henley
My Lords, I am aware of that growth deal, but I do not accept the noble Lord’s suggestion that this in effect scuppers that—I cannot remember what precise words he used. Obviously, it makes life more difficult, and we would not have wished to have to make this Statement, but it is also right that my right honourable friend the Secretary of State looks to the calls on the taxpayer and ensures that we get a good deal for any investment we make.
Lord Fox (LD)
My Lords, the Minister said that the market has time to respond. The market has responded. EDF caught a cold and got cold feet, Toshiba has pulled out, Hitachi has pulled out. What is the market in large nuclear generation and what is the Government’s plan B if they fail to deliver the financial engineering, as they clearly are at the moment?
Lord Henley
My Lords, in responding to questions of this sort at the Dispatch Box, it is difficult to go into the full details of what was planned. As I said, my right honourable friend the Secretary of State will make a Statement any minute now on the subject—I am waiting for a signal. I would have been happy to have repeated it, but no doubt the noble Lord and I, and others, can discuss it afterwards, and there may be other opportunities to have a wider debate on the subject.
Takeovers (Amendment) (EU Exit) Regulations 2019
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The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, these regulations will be made under powers in the European Union (Withdrawal) Act 2018. They amend Part 28 of the Companies Act 2006 so that the United Kingdom’s corporate takeovers regime can operate independently of the EU in the event of a no-deal exit. They provide clarity and certainty to businesses and shareholders.
The takeovers regime ensures that shareholders receive fair and equal treatment when the company in which they have invested is subject to a takeover bid. Part 28 of the Companies Act 2006 transposed the takeovers directive, 2004/25/EC, into UK law. The directive was intended to harmonise certain aspects of takeovers supervision across the European Economic Area, creating expectations of reasonable behaviour to which company shareholders could hold bidders.
The Companies Act requires the Takeover Panel to make rules to give effect to the directive in the UK. The panel has done so in the City Code on Takeovers and Mergers. These regulations preserve the statutory underpinning of the code and make only minimal changes to the way the UK regime functions.
In developing the regulations, we have worked closely with the UK’s supervisory authority, the Takeover Panel. It has consulted on the changes it will need to make to the takeover code to reflect these regulations. The takeovers regime is wholly separate from the mergers regime in the Enterprise Act 2002, which considers the competition implications of mergers. These regulations have no bearing on the mergers regime, or the powers and responsibilities of the Competition and Markets Authority.
For the most part, these regulations import and correct provisions from the directive necessary for the independent operation of the UK regime, but do not change how the domestic regime operates. They make only three substantive changes. First, they remove the shared jurisdiction regime. The EEA takeovers regime includes a system of shared jurisdiction for companies registered and listed in different countries. The supervision of a company captured by the shared jurisdiction system is usually by two regulatory authorities, one in the country where the company has its registered office and the other in the country where the company is listed. The shared jurisdiction regime works on a reciprocal basis. Since the reciprocal arrangements will no longer apply to the UK after EU exit, the regulations will remove shared jurisdiction from the UK takeovers regime. The panel has consulted on how the takeover code should apply to UK-registered companies that would otherwise have fallen within the shared jurisdiction regime because they have shares trading on another EEA state’s regulated market. It has proposed that the takeover code should apply to takeover bids for such companies if their place of central management and control is in the UK. Companies not fitting this criteria may be supervised by another authority.
The second feature of the regulations relates to the duty of co-operation. Section 950 of the Companies Act 2006 places a duty on the Takeover Panel to co-operate with its counterparts and certain other regulatory agencies in any country or territory outside the UK. It also imposes a duty to co-operate with EEA supervisory authorities. The duty to co-operate with supervisory authorities in the EEA is derived from the takeovers directive. After exit, EEA member states will no longer be bound to co-operate with the UK under the directive. These regulations therefore remove the obligation to co-operate with EEA supervisory authorities as it will no longer be reciprocal. However, the Takeover Panel will still be required to co-operate with the authorities of EEA member states under the duty in Section 950 to co-operate with any international supervisory authority with an equivalent role.
The third feature of the regulations relates to restrictions on the disclosure of confidential information. Section 948 of the Companies Act restricts the disclosure of confidential information obtained by the Takeover Panel during the course of its duties and sets the conditions under which this information can be shared. It applies to both the panel and the organisations with which information is shared. To breach the Section 948 restriction is a criminal offence. The Companies Act provides an exemption from the Section 948 restriction for EEA public bodies using confidential information disclosed by the panel for the purpose of pursuing an EU obligation. Instead, the EEA framework provides reciprocal protections to prevent the inappropriate disclosure of information and maintain professional secrecy. After EU exit, these reciprocal protections will no longer apply to the UK and the removal of the exemption for EEA public bodies ensures that there is a sanction for inappropriate onward disclosure of confidential information.
In conclusion, corporate mergers and takeovers are an important part of a healthy economy. By encouraging efficiency gains, spreading knowledge and promoting innovation, they drive economic growth and job creation. It is vital that we seek to safeguard the legal framework that gives companies and their shareholders the confidence to engage in merger and acquisition activity. These regulations achieve that goal by making only those changes needed to fix deficiencies in UK law arising from EU exit. They will have a negligible overall net effect on our economy. I beg to move.
Lord Fox (LD)
My Lords, this time last year I was engaged in my civilian life on one of the largest contested takeovers in the British Stock Exchange, so I have some first-hand experience of the Takeover Panel and its operations—which I will not regale the House with today. However, after that experience I was left with the realisation that there are major issues around takeover policy in this country and I beg to disagree with the last words of the Minister when he described the beneficial effects of takeovers. Many of them prove not to be beneficial. Although some are, as he says, part of a healthy and vibrant economy, many are driven by the wrong motives and have outcomes that are not necessarily favourable to the economy of the United Kingdom. However, this is not the medium through which to have that discussion or to make those changes, so I will not attempt it.
The role of the Takeover Panel is interesting. While this is not a game, the way in which it operates is very much as a referee. Two sides are contesting and the Takeover Panel acts as a referee. It has a lot of experience—although each takeover is different, so the process of learning is for the Takeover Panel as well. In essence it is a put-together team in terms of the referees as well as the contesting companies. That process of consultation is quite interesting because what kind of response you get will depend on who you speak to from the Takeover Panel. It is the same as taking 10 Premiership referees and asking them how to change the rules of association football; they would all come up with different ideas. So I would like a little more information on the consultation process.
Lord Henley
I am sorry; I miswrote down what the noble Lord originally said. It does say 35 in the order: 35 EEA companies come out and 10 UK companies go in. I think the noble Lord has got it right. Again, I will write to him on that if I am wrong. He also referred to paragraph 20, on what drove changes to the definition of a takeover and what other amendments have been made. I can give an assurance that there have been no changes to the definition of a takeover, and the scope of companies that can be subject to takeover has been narrowed, obviously, to UK companies. That would be implicit in the order.
My noble friend Lord Leigh asked, very helpfully, about shared jurisdiction. The EEA takeovers regime includes a system of shared jurisdiction for companies registered and listed in different countries. Since the reciprocal arrangements underpinning the system will no longer apply to the UK after exit, the regulations will remove shared jurisdiction from the UK takeovers regime. My noble friend then asked whether that was likely to bring more companies to the UK. He and I are always optimists in these matters and there is every chance it might have that effect, although that is a matter not for the Government but for the companies themselves. I believe I have answered all the points put to me but if I failed to deal with any I will write to noble Lords.
Insolvency (Amendment) (EU Exit) Regulations 2018
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Lord Henley
My Lords, it is my intention so to do, and I was coming to address the points made by the JCSI. This is a perfectly regular procedure. The noble Lord is very experienced in dealing with statutory instruments and with reports from the JCSI. It often happens that a report will come with criticism from the JCSI. The department then issues its response, and that should deal with the matter. I was going to come to this in my opening remarks and it is right that I should do so. The noble Lord will be able to listen to my explanation and, I hope, will accept that I, and the Government, have dealt satisfactorily with the concerns that the JCSI put to us. We greatly respect the JCSI. It does a very good job and we are very grateful for that. Back in the long-distant past, the noble Lord—like most of us—probably served on the JCSI and, if he had that honour, I am sure that he did a very good job in so doing.
This instrument recognises that, as we leave the EU, our European Union (Withdrawal) Act will automatically retain a version of EU regulation in UK law. However, the safeguards that the regulation provides can no longer be relied upon as the remaining member states will no longer be bound by them in respect of the UK. Many in the professional insolvency sector have argued that reciprocity is an essential part of continuing with this legislation. In the absence of a deal, it is vital that we do not indefinitely continue to apply EU rules that could override our own law and prevent us from dealing effectively with insolvencies in the UK.
The instrument therefore repeals the majority of the EU insolvency regulation, retaining only the small part necessary to keep the right to open proceedings in the UK. It provides for an orderly wind-down of the arrangements by continuing to apply the current EU rules to existing cases where main insolvency proceedings are already open on exit day. But, as a safeguard, the courts may disapply the EU rules where they will lead to a different outcome from that which would have been the case before we left.
I come now to the JCSI report, which the noble Lord, Lord Foulkes, has kindly brought to the attention of the House. I assure the noble Lord that I had every intention of raising this subject. The report refers to a lack of clarity—the noble Lord no doubt has it before him—and an unexpected use of the withdrawal Act power. I am confident that the provisions are an appropriate use of the power in the withdrawal Act. The provisions will give the court the necessary discretion to respond to unexpected outcomes from the interaction between our law and that of EU member states. There are precedents in existing insolvency legislation providing the court with the broad discretion to make orders in insolvency proceedings.
If, following EU exit, UK creditors or others with an interest in the insolvency are being treated unfavourably, it is only right that the court is allowed to apply the powers in our own cross-border insolvency regulations—which are used for non-EU insolvency proceedings—or make some other appropriate order to resolve the situation. The detailed examples that we provided to the JCSI demonstrated just some of the situations in which this might arise, and these examples were included within the JCSI’s report.
The instrument also amends certain employment legislation which ensures that protection for employees is retained following the insolvency of their employer. This ensures that the current financial support given to UK-based employees when their employer in the EU becomes insolvent will continue after exit day. In the absence of a Northern Ireland Executive, the instrument updates and makes similar changes to the law on insolvency and employment rights in Northern Ireland, on behalf of the Northern Ireland Government. I commend the regulations to the House.
Lord Fox (LD)
My Lords, in addition to the concerns which were very importantly raised on the nature of the drafting involved here and the use of powers, I have a couple of major technical quibbles. At the risk of treading into what may be the patented territory of asymmetry, which was just discussed, we seem to be back in an asymmetrical relationship here. We are changing our rules in the hope that Europe will reciprocate. That is my interpretation; if it is wrong, perhaps the Minister can update me. How forlorn or optimistic is this hope? What hope do those employees have of their rights and benefits being preserved—the Minister rightly highlighted that we need to have these processes in order to preserve them—for businesses which cross not just into the United Kingdom but into the rest of Europe?
The Minister’s point about courts was very interesting, because that of course was what the European Court of Justice was for: dealing with cross-border disputes over a similar group of rules. What the Minister describes is complicated, expensive and fraught with the possibility of failure. Perhaps the Minister can explain what benefits we will reap from substituting what we have today with what his department has set in front of us. So I have serious concerns that there are major problems with this SI.
Lord Stevenson of Balmacara (Lab)
My Lords, I thank the Minister for introducing this issue. The SI seems to be welcomed by many in the industry and deals with a particularly difficult issue in a very constructive way, according to reports from those who have written to us. I agree with the points made by the noble Lord, Lord Fox. When the Minister responds, it would be interesting if he could be quite clear about whether the SI covers the minimum necessary to get the statute book in order if there is no deal, or whether, as he suggests, the Government will go a little further and lay out some sort of attractive regulatory pas de deux for the EU post Brexit which would make it easier to legislate for an asymmetrical solution. That is probably not quite what is happening here, but it would certainly be interesting to get the Minister’s response.
Given that the results are coming in of the vote in another place in which the Government’s proposals have been roundly defeated, we may be witnessing a transition to a slightly different arrangement, which we do not need to comment on just yet. In the circumstances it would perhaps be best to let the Minister respond to the points made. I hope to hear from him very shortly.
Good Work Plan
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Lord Stevenson of Balmacara (Lab)
My Lords, I am grateful to the Minister for repeating the Statement made yesterday by his right honourable friend the Secretary of State.
Taken together, the Good Work Plan and the response to the first full strategy from the Director of Labour Market Enforcement make a very good start to putting flesh on the bones of the aspiration in the industrial strategy to put good work and developing better jobs at the centre of the vision for a full employment Britain. There is a lot to welcome in these documents. However, I venture to suggest that the most important decision announced yesterday was to accept the Taylor recommendation that the Secretary of State should take responsibility for promoting the quality of work. That should transform policy in the department, and we will be keeping a close eye as things go forward.
Indeed, Matthew Taylor should be very pleased that the Government have accepted the vast majority of his recommendations, and Sir David Metcalf ought to be similarly delighted that most of his 37 recommendations have also been accepted. Something must be happening in the water that they are drinking at 1 Victoria Street—or maybe that is the result of all this good news.
It is worth remembering, however, that nearly 4 million people are in insecure work in this country and 1.1 million work in the gig economy. At a time of low wages, stagnating productivity and growing insecurity because of Brexit, families across the country need reassurance and action so that our workforce feels valued and secure.
Some of the decisions announced yesterday—the introduction of labour market enforcement, abolishing Swedish derogation and ensuring that workers keep their tips—were originally Labour Party policies, but we welcome them without quibbling. We still have concerns about a number of points, which I hope that the Minister will be able to deal with when he responds.
First, although there has been some movement, can the Minister confirm that the question of abolishing the absurd difference between workers and employees in their employment status has been kicked into the long grass? If so, why? On zero-hours contracts, the Government will apparently legislate to allow workers to request a more predictable and stable contract, but the ability to request more stable hours exists already. Will the Government commit to placing an obligation on the employer to meet this request and, again, if not, why not? The agreement to the labour market enforcement recommendations is very welcome, but there is very little detail. Can the Minister confirm that the enforcement agency has the necessary powers and resources?
Finally, we welcome the increased penalties for successful employment tribunal claims, but these will make no difference if the current system for enforcing awards is not also strengthened. Some 35% of successful claimants currently do not receive their compensation. What additional action are the Government going to take to address the efficacy of tribunal award enforcement?
The Statement contains a very large number of instances of proposals for primary legislation to bring these announcements into being. I would be grateful if the noble Lord will confirm that, welcome though that is, realistic time will be made available for this in the near future. If so, can he give a recognised timetable?
Lord Fox (LD)
My Lords, I join the noble Lord, Lord Stevenson, in thanking the Minister for repeating the Secretary of State’s Statement. There is perhaps an inverse law here. We are at the end of a long day in a long Session and very few noble Lords are left in the Chamber. Despite that fact, this stands to affect more people than anything else the House has debated this week. It is important and it will genuinely help to improve the lives of millions of UK citizens. For that reason, we welcome the Government’s response to the Taylor review. We welcomed the review when it came out and the Statement sets in motion a number of important steps in the right direction. This has been a long time coming and it is unfortunate that the Minister’s department, along with every other part of government, has a lot of things to do around Brexit, meaning that important work such as this takes too long and is slow to come out.
The Government are right to reject open hostility to flexibility in the job market. Many people want and need the right sort of flexible job environment. Hopefully, these steps will move that forward. Flexibility should not be open to abuse. Workers need real control and choice over the work they take, which means giving them new rights and enforcing existing ones more stringently. The Government’s response has been a bit underwhelming in some cases. If the Minister will excuse me, I will go over a few areas where we think more work should be done.
The Government have said that they will bring forward legislation clarifying employment status and aligning tax and rights, but there is scant detail. Will the Minister fill out the detail or, if not, the process by which it will be forthcoming? The Government have also failed to genuinely address the need for a “dependent contractor”, set out as an employment status for people within the gig economy. The existing status of “worker” needs to be updated and redefined for the sort of 21st-century work that the noble Lord, Lord Stevenson, referred to. We need that status to guarantee gig economy workers minimum earnings, sick pay and holidays. The Government have ruled out a higher minimum wage for hours not guaranteed as part of a contract, and are now going through lengthy consultation. We welcome consultation and, in other environments, the Minister has been criticised for not consulting sufficiently—but it needs to be quick and direct and it needs to get to the point. Action to stamp out abuse of zero-hours contracts must be swift rather than convoluted and kicked into the long grass.
Ministers have refused to rule out reintroducing fees for employment tribunals after the Supreme Court ruled them illegal. They should take that step immediately and rule out reinstating those charges. The Government must show how they will help gig economy workers access occupational pensions. That does not seem to have been addressed and I will come back to it in a moment in relation to sexual equality.
To close, I have three other questions. The Taylor review said that those working in self-employment should receive the same state benefits as those in employment. Why, then, are self-employed workers with fluctuating incomes punished by universal credit? In a good month, their benefit is cut, but in a bad month, their benefit does not rise as much because the minimum-income floor kicks in. Therefore, will the Business Minister undertake to work with the Work and Pensions Secretary to ensure that universal credit is responsive to this kind of fluctuating income, perhaps by measuring incomes over a rolling 12-month period rather than on a month-by-month basis? This unfairness needs to be addressed.
Secondly, around 55% of workers on zero-hours contracts are female. The trade unions warn that the gender pensions gap now stands at about 40%. That means that disadvantages to pensions for zero-hours employees disproportionately affect female workers. Therefore, to avoid further disadvantaging women, the Government must act on Taylor’s recommendation to improve pension provision among the self-employed. What will the Government do to ensure that women in less stable forms of employment will be able to enjoy a secure retirement?
Finally, the University of Greenwich study from 2016 found that disabled workers on zero-hours contracts were often unable to get their bosses to make reasonable adjustments required by the law. They were often afraid to raise the issue because they felt that it might endanger their employment prospects and put them back on to benefits. What are the Government doing to protect disabled people in insecure forms of employment? How will they ensure that the 21st-century economy works for disabled people and not against them? I look forward to the Minister’s response to those questions.
Lord Henley
My Lords, I thank the noble Lords, Lord Stevenson and Lord Fox, for their general welcome of this Statement. The noble Lord, Lord Stevenson, said it was a good start and that he was particularly grateful for the stress on quality; my right honourable friend takes pride in being the first Secretary of State to address that issue of quality. I also thank the noble Lord, Lord Fox, for his comments, particularly his opening remark about being rather sad about inverse laws meaning that, although a great many people were being affected by these policies, not many people—sadly, because of the timing and other business—are present for this debate. It reminds me of the remark that people used to make about discussions about money in certain local councils: namely, that the smaller the amount of money that was being discussed, the longer the item took. I will attempt to answer a number of the points, some of which obviously overlap.
First, both noble Lords were concerned about employment status and how we deal with the distinction between workers and employees. I can assure them that we are committed to legislation to improve the clarity of employment status to reflect the reality of modern working relationships. Obviously, more work needs to be done; we will bring forward detailed proposals on how the frameworks for employment and tax statuses could be aligned. It is, as has been made clear by many, very difficult, and I am not sure that we can ever get them completely aligned—but we will do our best. We are one of the first countries in the world to address the challenges in this area. As Matthew Taylor said, there are three levels of status. He believed that that was right and appropriate, but we want to bring a degree of greater clarity in this area.
Secondly, there were concerns from the noble Lord, Lord Stevenson, about the powers and resources available for enforcement in this area. We are increasing the resources available for enforcement: the budget for enforcing the national minimum wage was increased from £20 million in 2016-17 to some £25.3 million in 2017-18. The Employment Agency Standards Inspectorate has also received a 50% increase to hire more inspectors. But again, as my right honourable friend has made clear on a number of occasions, we want to make sure that it can do that job and bring to book those who are not performing adequately. We believe it is right that successful claimants get what they are due fully, which is why yesterday we launched a new naming scheme for employers who do not pay the employment tribunal awards. Again, I believe that a naming and shaming policy is exactly the right approach.
On the question of employment tribunal fees, raised by the noble Lord, Lord Fox, obviously I am aware of the case in the Supreme Court to which he referred. We are reviewing the fees strategy and looking at the balance between charging direct users and using taxpayer subsidy. The fee remission scheme—help with fees—is a crucial element of this strategy, and, again, we are considering whether the scheme needs to be adapted to facilitate better access to the courts and tribunals in the light of that judgment.
Lastly, on the question of zero-hours contracts, the noble Lord, Lord Fox, in particular referred to the position of some women with regard to zero-hours contracts. However, zero-hours contracts can affect all people, of whatever age and gender. I point out to him that, as he will be aware, Taylor noted that banning zero-hours contracts altogether would negatively impact far more people than it would help.
Lord Fox
My Lords, I think there is a slight misunderstanding. I mentioned at the very beginning that people welcome flexible working contracts, so I ask the Minister please not to put those words in my mouth. My point was that because more women work on flexible contracts, under which pensions are harder to sort out, naturally more women than men will suffer from a pension point of view because more women are on flexible contracts.
Lord Henley
I accept the noble Lord’s point. He will be aware that we made a number of changes to pension arrangements, which one of the noble Lord’s right honourable friends was responsible for as a Minister in the coalition Government, and that will have benefited a great many women and helped them to meet their pension contribution record. I just wanted to make the point that Taylor noted that banning zero-hours contracts would negatively impact more people than it would help. I apologise if I put words in the noble Lord’s mouth, but he accepted that that flexibility in employment is important to a great many people, and I do not think that many of us would like to deny that.
I also note what the noble Lord had to say about disabled workers and the 2016 Greenwich study. I would certainly like to look at that more carefully and if possible write to him. If we go back as far as 1996 and the disability legislation of that year, and amendments and improvements such as the Equality Act 2010, we see that we have made great leaps forward. I hope that what we have set out here, which will be of benefit to all workers, will also be of benefit to disabled workers and to others in due course.
Accounts and Reports (Amendment) (EU Exit) Regulations 2018
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The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, the regulations aim to address failures of retained EU law to operate effectively, as well as deficiencies arising from the withdrawal of the United Kingdom from the European Union, in the field of accounts, reports and audits of UK corporate bodies.
I turn first to the EU accounting directive. The law in the UK on preparation and filing of accounts and reports by corporate bodies is compliant with the EU’s accounting directive. There is also a directly applicable EU regulation which relates to preparation of accounts in accordance with international accounting standards—the so-called IAS regulation. Both the accounting directive and the IAS regulation apply throughout the EEA. The department will bring separate legislation to the House that will address how we intend to deal with the deficiencies presented by the IAS regulation after the UK’s withdrawal from the EU.
Although the fundamental elements of the current company accounts and reports legislation will remain the same after our exit from the EU, it still needs amendment to ensure that it remains effective and makes provision which is appropriate to reflect the UK’s new status outside the EU.
The accounting directive provides for reciprocal arrangements for company group structures. For example, exemptions from producing consolidated accounts are permitted to businesses if the parent is registered in the EEA and itself produces consolidated accounts which are compliant with EU law. In the absence of a negotiated agreement about the economic relationship between the UK and the EU containing reciprocal arrangements, it is inappropriate to continue with preferential treatment for EEA entities or UK entities with EEA parents.
This instrument will mean that businesses registered in EEA states will be treated in the same way as those registered in other third countries. UK businesses with EEA parents will no longer benefit from the exemption from having to produce consolidated accounts. However, UK businesses with parent entities registered in the UK will not be affected by these changes.
The regulations do not create new criminal offences. However, the amendments will extend the scope of the pre-existing criminal offences. For example, dormant companies with parent entities listed in the EEA will no longer be exempt from preparing and filing accounts with Companies House. Failure to file accounts on time would mean that they would commit an offence and be liable to incur fines if prosecuted, as well as civil penalties. That is consistent with the approach for similar companies with parents outside the EEA.
The accounting directive sets out certain requirements for businesses to report payments to Governments worldwide relating to the extraction of natural resources, by way of logging and mining. Alongside this, it provides a power for the Commission to grant equivalence to third countries for their system of reporting payments to Governments regarding these activities. This instrument transfers this power to the Secretary of State.
Turning to the second of the two SIs, the law in the UK on regulatory oversight of the audit profession is compliant with the EU audit directive and the EU audit regulation. The audit directive sets out the requirements on the statutory audit of most businesses, as well a framework of standards for auditors’ work and independence. It also sets out the responsibilities of the competent authorities for statutory audit in member states. Meanwhile, the audit regulation sets additional requirements on the statutory audit of those businesses defined as public interest entities. It forms part of retained EU law under the European Union (Withdrawal) Act and will therefore continue to apply to the UK after the UK’s exit from the EU. Our aim is to ensure that the framework for the regulatory oversight of the audit profession in the UK works effectively following our withdrawal from the EU. The statutory instrument under discussion will help to facilitate this.
Under the audit directive, powers are provided to the European Commission to grant equivalence to third countries for their audit regulatory framework and adequacy to third countries’ competent authorities for their framework on audit regulatory co-operation. This instrument transfers these powers to the Secretary of State. Regulations will be made in the months immediately following the UK’s departure to set out a framework for future assessment of equivalence and adequacy by the Financial Reporting Council. In future, equivalence or adequacy decisions will also be granted by regulations. Following the UK’s exit from the EU, EEA states would be treated like other third countries.
This instrument also extends powers granted to the UK’s competent authority, the FRC. Certain powers have previously been granted to the FRC by the Secretary of State but now need to apply more broadly to reflect the UK’s exit. The instrument enables the FRC to enter into mutual recognition agreements to recognise audit qualifications with the EEA states. It also enables the FRC to register EEA auditors as third-country auditors where they audit businesses outside the UK that are listed on UK markets. This instrument transfers the European Commission’s power for the adoption of international auditing standards to the FRC. As the FRC already sets UK standards in line with the international standards, we anticipate no immediate changes.
This instrument provides certain transitional arrangements for the auditors affected and their client businesses. To ensure companies and investors remain confident in UK markets, these will apply until the end of 2020. During this period, we will continue to recognise EEA audit qualifications, firm registrations and approvals, EEA audit regulatory frameworks as equivalent and EEA competent authorities as adequate. These transitional arrangements will mean that there will be no cliff edge for EEA companies that list securities on UK markets. They will also allow the FRC the time to put in place the procedures necessary to assess the equivalence of EEA states, as well as the adequacy of their competent authorities.
The Government have carried out a de minimis impact assessment of these regulations, as the overall costs to business were expected to be small. The assessment confirmed that the impacts on business would be minimal. Only a limited sector will be affected by most of the substantial changes made in the Statutory Auditors and Third Country Auditors Regulations. This is because the amount of cross-border business affected by this instrument is small. The most significant effects are for UK businesses listed on EEA markets, whose auditors will have to register with the FRC, and for UK businesses that only trade securities in the EEA, as their auditors will be subject to less regulation than before.
The Government have worked closely with businesses and regulatory bodies to ensure the regulations achieve continuity wherever possible while addressing the deficiencies arising from the UK’s withdrawal from the EU. The instruments before us incorporate stakeholder views and insights.
In the unlikely event that the UK leaves the EU without an agreement, the measures contained within these regulations will be critical in ensuring that UK accounting, reporting and audit frameworks continue to provide transparency and certainty to investors. They will also ensure that companies operating in the UK have clear guidelines for preparing and filing their accounts. I commend these regulations to the House.
Lord Fox (LD)
My Lords, I thank the noble Lord, Lord Henley, and his department for innovating and delivering two SIs in one package. I am not sure that this has been done before, but it is perhaps appropriate that the department that spearheads innovation should be leading on this.
I did a quick count back and I think that over the course of my career I have been responsible for 18 reports and accounts, all of which, I should say, were for UK-domiciled and listed companies, so many of the issues here do not apply. The Minister will be pleased to know that I will not be regaling your Lordships’ House with the benefit of that experience, because it is clear that there are many things that can be improved around financial reporting. There are an awful lot of deficiencies around reporting, but these are not the vehicles by which that improvement should be delivered, so the Minister can be pleased that I will not be using that for a long discourse.
I have two or three points on the annual reporting side and one very important problem that I think we have around the audit area. On the reporting side, the Minister mentioned the reporting protocols around payments to Governments for logging and mining activities. Will the Minister write to me and say what those are and underpin that there is no change planned between the two regimes as we move from one to the other? This is an area where a little more clarity would help.
Paragraph 7.12 of the Explanatory Memorandum covers where this instrument applies and when the change comes. I note that if a business is called on to restate its chart of accounts—which has happened in my knowledge, and happens from time to time—it has to go back through time and restate its accounts. I have to say that this change will make it an extraordinarily difficult activity in the event that any business needs to do that.
The Minister said that the Government have been working closely with business, but when we look at the consultation outcome we see that they have not been able to consult in order to minimise sensitivities in advance. It is not clear to me why they were not able to consult—perhaps the Minister will explain why it was felt not to be appropriate.
I turn to the audit side. This could hardly come on a more auspicious day, when we have the CMA making its comments about audit companies and we have the Kingman report with reflections on the fitness for purpose of the FRC. The Minister mentioned the FRC at least a dozen or 15 times. The role of the FRC in managing this rollover between the two regimes is crucial, yet we have, in the words of a very experienced practitioner in Sir John Kingman, the finding that the FRC is essentially unfit for purpose in how it is operating today, never mind with the extra responsibility that this SI puts on it. I would like to understand how the Minister thinks that this is going to be enacted by an FRC which is short of a leader and clearly short of the resources to manage its day-to-day job, without giving it extra responsibilities. I look forward to his response.
Lord Stevenson of Balmacara (Lab)
My Lords I am very grateful, as was the noble Lord, Lord Fox, to the Minister for giving a very concise and important overview of these two SIs. We are trying out a slightly different method here—trying to cut down on the amount of speaking that the noble Lord has to do at the Dispatch Box. I think that it has worked, so I hope it will be a model for others to come.
The three points I wanted to make have been covered by the noble Lord, Lord Fox, so I will not repeat them, but I want to say one thing in relation to scrutiny. The Secondary Legislation Scrutiny Committee has asked us to look at both these SIs with regard to a couple of points. I am happy that the Minister covered the points, so I do not need to delay the House on those matters. For the completeness of the record I also wanted to ask about extractive industries and whether there would be any impact in the way that those accounts will be treated consequent on the introduction of these SIs, if they are required. Again, a letter will be sufficient on that.
The noble Lord, Lord Fox, is right. It is a bit intriguing to find that the principal body which would have been responsible for this is going to be abolished before it has the chance to implement the changes made in the statutory instrument. I would be grateful if the Minister could confirm that, as I understand it, the independent review of the FRC, which I read with interest—it is a very good read indeed, full of spicy and rather spiky comments—is suggesting that the FRC needs to be replaced by a new, independent statutory regulator with stronger powers. Is that right and, if so, will it be completed in the timescale that is envisaged for this statutory instrument?
There is a letter—which is not the same as the report—which was sent to the right honourable Greg Clark MP by Sir John in parallel with his report, which looks at whether there is a case for a fundamental change in relation to who appoints company auditors. There are a number of extremely interesting ideas, particularly for PIEs—again, accompanied by well-phrased and rather pointed comments about the current state of play. They suggest quite strongly—although it is not clear whether the Secretary of State is going to accept this—that there would be a case for moving away from companies having responsibility themselves for appointing their auditors to a situation in which an independent, strong regulator, presumably the new body replacing the FRC, will have a probably quite significant role.. I assume that this decision will be undertaken by the new review, building on the work on the FRC, and of course the CMA review, which is rather surprising because that was only an interim report. I am a bit surprised that that is being taken forward already. If it is, fair enough—but will that review being undertaken by Donald Brydon, the chairman of the London Stock Exchange and Sage, take on the letter element of the Kingman report we have received today?
I have also looked at the CMA report. There is a considerable interest in how that might work. Obviously, it will considerably affect the viability, profitability and operating activity of the large companies that have been very successful in building up accountancy and audit-related functions in this country. It may not be a fatal change—it may be a necessary change—but, again, I would be grateful to get a steer from the Minister as to what exactly is going on here and what the pace of that would be, if it was decided to move forward.
Off-site Manufacture for Construction (Science and Technology Committee Report)
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Lord Fox (LD)
My Lords, this has been an extensive debate and for that we should thank the support team that helped draw up the report, and the characteristic leadership of the noble Lord, Lord Mair, but I think we missed a trick. Clearly we should have co-opted the noble Earl, Lord Lytton, and my noble friend Lord Stunell on to the committee before we wrote the report. As their contributions have shown, they have a lot to add to the debate.
It may come as a surprise to your Lordships but I was trusted with the task of talking to the media when we launched this report. I had low expectations of interest, which was completely wrong—there was huge interest among the building media and trade. While I was giving those briefings, the noble Lord, Lord Mair, was hosting a reception at the Institution of Civil Engineers, and there was a fantastic turnout from across the industry. It is clear that there is a strong energy around this issue. And no wonder.
The sector deal says that we have to double capacity to meet the infrastructure and housing needs for the country and, as others have said, that we are already lagging behind in productivity. At the same time, we face a labour shortage, with an ageing population and people leaving the industry due to the Brexit drain. Clearly, energy is focused on this area because off-site manufacturing holds the prospect of increasing productivity, reducing or changing labour demands, improving the quality and efficiency of buildings, and removing some of the environmental impacts. So, all other things being equal, why are we not doing it? That is the question we are debating today.
There are barriers. As the chairman and the noble Lord, Lord Mair, said, the take-up is limited. At the heart of this are the commercial relationships within the industry itself. With architects, clients, designers, contractors, subcontractors, and subcontractors to the subcontractors, it is an extraordinarily fragmented industry, and one that has survived with that fragmented nature for a very long time. To change the way we build we have to change the culture of the industry. But this is an industry that has resisted cultural change better than most, and so it is no mean challenge. The noble Baroness, Lady Neville-Jones, pointed to one way that this might happen: money. If the prospect of profitability is dangled, perhaps it will encourage change.
As a number of noble Lords mentioned, there is a huge skills deficit, and it is only going to get worse. At the same time, the image of the industry remains one of dirt, muck, difficulty and very male. Through off-site manufacturing there is a great opportunity to create another, digital world for the future employees in this industry. That will attract people from different areas of the community, with different sorts of brains, and of course women and those from underrepresented communities. That will itself change the culture, because currently, its people are monocultural.
At the heart of this is the Government’s commitment to the presumption of off-site manufacturing through the sector deal, which we welcome. However, as was asked by the noble Lord, Lord Mair, and the noble Baroness, Lady Neville-Jones, what does that mean? We need to understand what it will mean in practice. Will the Government go along with the report and publish key performance indicators and score performance against those? What will happen if the presumption of using OSM is not met? How will the reasons for not manufacturing off site be reported? We recommended that the Government, through Homes England, should put pressure on housing associations and local authorities to also have that presumption. It would be helpful if the Minister could tell us a little more about that. There is an answer in the response but it seems relatively lukewarm.
There are a couple of other minor matters relating to the report. I will not comment on the small modular reactors, but the noble Lord, Lord Borwick, introduced the issue of planning, which was not covered. I beg to disagree with his wisdom. There are, of course, planning issues, but his argument would hold much more water if the main developers were not sitting on such huge land banks. That discredits that argument. If they were not more interested in building higher-priced houses close to green belts rather than on brownfield land, it might be more convincing. There is a perception, rightly or wrongly, that they control supply in order to control the price. So planning is an issue, but that argument does not work when we look at what the major housebuilders are actually doing.
That is why the Government—or at least, the public sector—as a housebuilder will be the driving force to deliver the 300,000 houses that the Government have set themselves as a target. That will not be achieved through private sector builders alone. The Government have a role but, as the noble Baroness, Lady Neville-Jones, rightly said, local authorities and housing associations will become extremely important. I hope that more local authorities will be driving the public sector housing agenda, and we need to know that the Government will be working with those organisations to promote that agenda. If the Minister would let us know what conversations Her Majesty’s Government are having with housing associations and local authorities on this issue, that would be enormously helpful.
I agree with the noble Lord, Lord Borwick, on the issue of cash and cash flow. The Government do, in part, respond to our point on that. They mention the British Business Bank, and say that they will work with it. Well, I work with my noble friend Lord Stunell, but he does not necessarily do what I want him to do. What does “work with” mean? What will the Government instruct, or ask, the British Business Bank to do, and how will they help to make sure that it does it?
Several speakers, not least the noble Lord, Lord Mair, and my noble friend Lord Stunell, talked about the quality of build and the through-life of buildings—the whole life approach. The noble Earl, Lord Lytton, also spoke about that. The whole life approach is central to the benefit that can be derived from off-site manufacture.
One issue that has not been raised is the response to the Hackitt review. As well as the environmental performance, the safety performance of multioccupied housing is central to the Hackitt recommendations. Part of the idea is to treat a multioccupancy building as a system, which can happen when it is handed over to the tenants and the owners only if it is built as a system in the first place. Building a building as a system is much easier using the sort of techniques that we talk about in the report. Not only can environmental performance be enhanced, but the safety performance of buildings can be assured through this approach. The delivery of what I think we all agree is a beneficial way of doing things is at the heart of this, and it involves many different actors. It involves government, and it is important for government not just to say the words but to demonstrate, through how it measures and how it enforces some of its measurement, what is going on.
It is important for the industry to work together, and the role of the leadership council has been mentioned several times. It would be helpful to hear from the Minister how the Government, who are part of the leadership council, will support that council. It has a big job to do here, and this is not its only job; it has a number of other things to do. I have worked in leadership councils for other industries, and it is a tough job to bring any industry together—but to bring this one together is even tougher. What are the Government going to do to help the leadership council deliver what it needs to deliver? Relationships will have to change, and they will do that only if people want to change. How are the Government going to help people to want to change?
Textile Products (Amendment) (EU Exit) Regulations 2018
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Baroness Byford (Con)
My Lords, I support my noble friend in his introduction of this important legislation. As someone whose family was in the textile business for many years, I know that the definition of what makes up the product is hugely important. Labelling is key for people when they want to buy, particularly those with allergies. With modern technology, such a cross-section of mixtures is used in clothing, and so I welcome the statutory instrument. In the old days, there was botany wool, lamb’s wool, Angora and cashmere and that was it. Today, a multiplicity of ingredients is used in textile production.
I thank the Minister for introducing the instrument. I understand that it does not create extra responsibilities or burdens for the industry, but will allow us to move forward. In future, labelling will be in English, which is an additional bonus to those of us who used to export 50% of what we produced. I have great pleasure in supporting this statutory instrument.
Lord Fox (LD)
My Lords, the noble Lord, Lord Foulkes, is right to point out what he did. When giving us his blessing to consider this, he said that it seems relatively uncontroversial, and I have only one comment and one detailed question.
The comment is about labelling. The Minister rightly pointed out that there will be great similarities at the point of exit between regulation on this side and regulation in the EU 27. However, that will not remain the case for long. Divergence of regulation will start to change the labelling needs on this side versus that side. I point out that, whether we crash out or leave with a deal, that divergence will happen, suddenly or over time. It will mean that the label of a garment here and a similar garment in, say, France, will inevitably diverge. That is a cost, and one that over time will be borne by consumers in this country. It should be remembered clearly that, like many other measures we will see in SIs, in this Room and others, we are putting the cost on consumers.
My question relates to paragraph 7.10 and the approval of fibres. I should perhaps know the answer to this question, but clearly the Secretary of State is a busy person and will not personally deal with a new generic fibre name. Therefore, which agency in BEIS will deal with this? Is that agency being prepared for the arrival of this new process? What will happen to existing fibres that have been accepted within the European context? Will they be transferred to this agency overnight in the event of a crash, or will they be somehow left over the water and administered still by the European Union? What is the process by which these fibres are recognised and administered, and how are the tests validated? Who will do that and where will it happen? What is the scale of this operation? Is it three people in an office somewhere, 300 people or 3,000 people? I have no sense of the scale.
With those reservations, I should like to hear what the Minister says.
Lord Henley
My Lords, like other speakers, I offer thanks to the noble Lord, Lord Foulkes, for his blessing of this statutory instrument. We are grateful for that. I will deal with most of the points, but it might be that on one or two I need to write to noble Lords with further detail.
Like my noble friend Lady Byford, I understand the extreme importance of labelling, particularly for those with allergies but also those who have other concerns. My noble friend will be aware that, only recently, my noble friend Lord Gardiner and I gave evidence to the EFRA Committee in another place on fake fur and real fur. Some older Members of the Committee may remember a time when people would try to sell fake fur as real fur, whereas it is now the other way round. Given how animals are farmed in other parts of the world, real fur can often be a lot cheaper than fake fur, and in trying to buy fake fur a lot of people do not want to buy real fur. The point I was coming to is that we are currently bound by EU rules on labelling. Both my noble friend Lord Gardiner and I felt that the existing labelling of fur and fake fur was not necessarily quite as clear for the consumer as it should be, which sometimes led to individuals buying real fur or objects with a tiny portion of real fur in the trimming when they did not wish so to do. I agree with my noble friend that labelling is important but I also emphasise that these regulations are there only for a no-deal scenario, so that should there be no deal—I am confident that there will be—we can be in a position to make sure that we have the right arrangements in place.
The noble Lord, Lord Fox, asked who would exercise the Secretary of State’s powers when it came to enforcement. It is an important matter for local authorities and trading standards, but I can give an assurance that we provide funding to National Trading Standards of around £13 million a year, with £1.2 million a year for Trading Standards Scotland, for the co-ordination of regional and national trading standards in England, Wales and Scotland. I will have to write to him on why this is not a devolved matter. I still find it, as no doubt will the noble Lord, Lord Foulkes, extraordinarily confusing as to which matters are devolved and which are not, as was the case when we recently debated the changing of clocks, which seems to be devolved in Northern Ireland but not in Scotland or Wales.
Lord Fox
I am slightly confused. For example, if I have invented a fabulous new fibre and wish to start using it in one of the Minister’s sweaters, do I pop into Hereford Town Hall and look for the trading standards person there? How do I know where to go? Who is the agent or person that I go to?
Lord Henley
I was trying to make it clear that local authorities deal with the enforcement. The noble Lord is asking about the labelling of his product. Perhaps I may write to him in great detail to make sure that I get exactly right who is exercising the powers of the Secretary of State and that he has the answer he seeks.
Lord Fox
While the Minister is writing, will he also explain what happens to existing fibres that are currently on a European ticket, so to speak? If they come in on your labels and have been improved in the European context, is jurisdiction over those fibres passed en bloc to that agency? What is the process, since the transfer of existing fibres to a new UK agency for their management does not appear to be allowed for in this SI?
Lord Henley
I will write in greater detail to the noble Lord, just to make sure that he is absolutely clear. In passing, on the question of correspondence, I give an assurance that from now on I will send all letters from my department on matters relating to SIs to the noble Lords, Lord Stevenson and Lord Fox: I will copy letters to one and the other. I am sorry if he has been confused: on some occasions I have written to the noble Lord and on others to the noble Lord, Lord Grantchester. I shall inform my office that in future it will be entirely himself. If the noble Lord, Lord Lennie, would like to receive those letters, I will send them to him too.
Timeshare, Holiday Products, Resale and Exchange Contracts (Amendment etc.) (EU Exit) Regulations 2018
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Lord Fox (LD)
My Lords, this appears to be so uncontroversial that the noble Lord, Lord Foulkes, has left the room. However, I have a couple of questions. The Minister has done a great job in describing the limitations as well as the extent of this move. It is of course the limitations that concern me. One of the main ways in which timeshares, particularly non-British timeshares, are sold is in situ. In other words, people are sold to by people who literally come up to them in the street. It will not be clear to those individuals, who have been used to the process of being sold to and, in some cases, buying such products that the legal basis on which they are buying property will change. No longer will the contract be unified across the state. They will have bought a property in a foreign legal environment.
I make the same point as I made on the previous SI. That foreign legal environment will gradually diverge. It will diverge slowly or quickly, but it will change. It is clear that if that is how it goes, the Government and the industry have to work very hard to explain the legal complications that can arise from buying a property from a EU 27-based seller in an EU 27 country. It is not clear to me what is the legal redress if you buy a property from a UK-based seller in an EU 27 country. My suspicion is that it probably depends. That is another point on which serious information will be required to avoid people being mis-sold on that basis.
The Minister did not to any great extent address resale. Where does this leave the UK owner of an EU timeshare bought from an EU seller who comes to resell? It does not appear to me that this SI addresses this issue at all, but it is of great concern. Say the Minister had, in a fit of excitement, bought a timeshare on a golf course in the Algarve several years ago. He is shaking his head, but perhaps he should have done that—he would be relaxed. If he had bought that timeshare from a Portuguese seller, where does this leave him when it comes to the contract and process of resale? Where is the court of redress? Where is the process?
The SI is good as far as it goes, but it does not address the key consumer issues. Once again, it is consumers who will suffer. Whether we crash out or have a deal, the divergence will potentially create a significant downside for consumers. I would like to hear the Minister’s view on that.
Lord McNicol of West Kilbride (Lab)
My Lords, this is one of the more straightforward regulations. We can see that by the fact that we have lost my noble friend Lord Foulkes from our discussion. As was touched on, the main aim is to change references to “the EEA” to “the UK”, and similar changes in language from “official language of an EEA state” to “English”. At this stage, I cannot find much of substance to disagree with. However, I am sure my shadow BEIS colleagues may have some points to raise when this is discussed in the other place. Like my noble friend Lord Foulkes before me, I have just a couple of questions for the Minister.
First, much of the instrument deals only with replacing European references with domestic alternatives. However, the regulations will also ensure that contracts governed by the law of an EEA state will be treated in the same way as contracts governed by the law of non-EEA third countries. Did the Government consider any other option for EEA contracts?
Secondly, prior to the publication of this instrument, the Government chose not to carry out a consultation. This seems fair, considering the volume of secondary legislation and the relatively minor impact that this will have. However, it could be expected that the Government will have held informal conversations with those affected by the regulations. Will the Minister explain whether any such discussions, with industry or others, have taken place?
Thirdly, the Explanatory Memorandum claims that there is no impact on UK businesses. However, as a result of this instrument, businesses dealing with timeshares will surely have to acquaint themselves with the new regulations. Does the Minister not agree that, however minor, there will be some necessary adjustments for business to make?
Finally, on a similar note, does the Minister agree, like me, with the comments of his colleague the Secretary of State for Work and Pensions? This morning, she said that the UK will not be leaving on a no-deal Brexit as there is no majority in the other place for that to pass.
Lord Henley
My Lords, I remind the noble Lord that we had a referendum a couple of years ago and we agreed that we were leaving the EU. That was the manifesto that both the party I represent and the noble Lord’s party went to the country on in 2017. We are leaving the EU. It depends on what terms. These regulations are about dealing with the question: what will happen if there is no deal? We hope there will be a deal but if there is no deal, we want to make sure that the proper protections are there.
The noble Lord, Lord Fox, asked a number of questions which went slightly wider than the regulations in front of us. The important thing to say to anyone who is thinking of buying a timeshare, whether in this country or another, is that whatever they do, they must take all the proper legal advice. I have no plans, when I walk round a golf course on the Algarve—which I have never done and have no intention of doing—to buy a timeshare, but there are people who want to buy timeshares and they serve a purpose. Whatever they do, the important thing is to make sure that they are getting the right advice, either in this country, if they are buying it here, or in another country. I think we would all agree on that point. Where people have had problems, it is very often because they have bought in the manner that the noble Lord, Lord Fox, seemed to be suggesting—someone comes up to them while they are on holiday and makes this suggestion.
Now that we are leaving, what protection will UK consumers have when buying timeshares in Portugal? Obviously, it will depend on where the consumer bought the timeshare. UK consumers who buy timeshares under UK law will be covered by the protections in the existing timeshare regime. If they are buying timeshares in Portugal from Portuguese traders, they will generally be subject to Portuguese law and the protections that that member state extends to non-EEA nationals. Consumers will be encouraged to understand the specific conditions of the contract and to take all appropriate advice.
The noble Lord also asked: how do we prevent people being misled? Obviously, I share his concern for vulnerable consumers who are unfairly targeted by manipulative and misleading sales tactics in many industries, but particularly here. I believe that the current timeshare regime, reviewed and updated by the 2010 regulations, provides adequate protections for timeshare consumers. The regulations require that clear and comprehensive information is provided to the consumer before any contract is agreed; that information on termination must also form part of the contract; that timeshare buyers also have the option to change their mind within two weeks of signing a contract, during which no money can be taken; and so on.
The noble Lord, Lord McNicol, asked whether it was possible that there would be further changes. He will be aware that the European Union (Withdrawal) Act does not give us the powers to create any legislation or substantially change any retained EU legislation. The changes that this instrument would bring into effect are made in exercise of those powers, to remedy deficiencies in retained law and not to change the effect of retained law. But we know that many people have concerns about some of the protections. I can give an assurance to the noble Lord that my right honourable friend and others will always keep these matters under review if we feel that there are not the appropriate protections. This will always be a concern. The Government would act if necessary.
Lord Henley
I agree that resale is a vital point, because when one buys a timeshare one usually feels that one has an asset which, if it is to have value, should be able to be sold.
I was asked where the court of redress would be. If it was a Portuguese contract, the court of redress would be in the Portuguese courts. Perhaps I may double-check what the precise position would be in respect of something sold here that is in another place. If the noble Lord comes to a deal while sauntering around a golf course in the Algarve—so that is just a deal that he has made in Portugal—it is quite clear that the Portuguese courts will deal with it, but I had better write to the noble Lord on what the position would if he bought it here and it was in that EEA state to make sure that I get it absolutely correct.
I hope that that explanation is sufficient. As the noble Lord, Lord Fox, pointed out, the noble Lord, Lord Foulkes, has now felt that he can depart, so I hope that we can move on.
Productivity: Work-related Stress
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Lord Henley
My Lords, I am very glad that the noble Lord highlighted the fact that zero-hours contracts have a part to play in our economy. As he suggested, they are of considerable benefit to a great many people, such as students and retired people. They also benefit others. Again, if the noble Lord can be patient, he will hear more from the Government in due course.
Lord Fox (LD)
My Lords, I fear that this is beginning to sound a like a shopping list, but another way of alleviating stress in the workplace is for employees to have the tools and the training to be able to meet the requirements of their job. Does the Minister agree that the Government’s plans for industrial and workplace training are in a mess? The apprenticeship levy is falling down and workplace training is at a level lower than it has ever been. What will the Government do to get a grip on training?
Lord Henley
I admire the noble Lord’s ingenuity in trying to extend the Question to a great many other subjects. Stress has many causes; we understand that there is a problem with it; that is why we commissioned the review by the noble Lord, Lord Stevenson—not the noble Lord, Lord Stevenson, sitting opposite me—and Paul Farmer. It is also why the Government accepted what they suggested.
Industrial Strategy
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The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, the industrial strategy has a fully operational governance framework. Implementation is led by a ministerial task force, which is overseen by the economic and industrial strategy cabinet committee. This is further supported by a cross-Whitehall programme board, which brings together senior officials in government to drive delivery.
Lord Fox (LD)
I thank the Minister for that Answer, but he did not include in his list the Industrial Strategy Council, which is designed to oversee this process. In a letter written to me on 16 February the Minister said, “Our plans to announce the formation of the Industrial Strategy Council by spring are progressing well”. I remind him that British Summer Time has now passed, and I am not aware of more than one member of this council. Can the Minister tell us when the full list of members of this council will be announced and when, at last, it will meet?
Lord Henley
My Lords, I am afraid that I cannot give the noble Lord a precise date. I accept that it is not spring and that British Summer Time has ended. I had better say that, as the noble Lord knows, one member, the chairman, has been announced. The remaining members will be announced—dare I say it—shortly. I look forward to being able to share the names of those members with the noble Lord—in due course.