Life Sciences Industrial Strategy (Science and Technology Committee Report)
Lord Fox Excerpts(6 years ago)
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Lord Fox (LD)
My Lords, I had the pleasure of serving on the Select Committee during this inquiry and join the noble Lord, Lord Patel, in thanking the advisers, clerks and assistants for the sterling work that they put in. I commend the noble Lord not just for his speech but for his handling of a complex and long inquiry. As we know, it produced a comprehensive report and a long response from the Government. I shall try to restrict my comments to implementation, innovation, data, R&D spend and people.
It was entirely predictable—and we have already heard it in preceding speeches—that a lot of what we would be debating today is the nexus between this strategy and the National Health Service. For that reason, while it is always a pleasure to see the noble Lord, Lord Henley, sitting on the Front Bench opposite, I am a little disappointed that we do not have a representative of the Department of Health, which, largely speaking, will be called on to answer 90% of the questions raised in this debate.
On implementation, as you can tell from the report, the Select Committee was exercised by a fear that implementation would be a real problem, and the complexity of the NHS only added to that fear. As the noble Baroness, Lady Neville-Jones, set out, we made some serious attempts at clarifying the accountabilities and governance for that implementation, but it is quite clear that the Government have not picked up on very much of it. I join the noble Baroness in asking the Minister to undertake to publish what the milestones are for the implementation process and regularly to update us on what one hopes will be the achievements commensurate with them.
On a separate issue, it is also clear that the industrial strategy challenge fund is being used to push certain elements of this strategy. I would like the Minister to clarify how decisions around the industrial strategy challenge fund are taken. What is the process for pointing that fund at particular projects and issues?
On the subject of independent scrutiny, the recommendation of the Select Committee was for the creation of a new statutory “Office for Industrial Strategy”, something along the lines of the Office for Budget Responsibility. Clearly, the Government have not picked up on this, but they should understand that the need for involving Parliament in the scrutiny of this strategy is very important. The whole point of having the industrial strategy is that it spans different parliamentary periods: it has to last more than the lifespan of one Government. To have a scrutiny process that is independent and reports to Parliament is part of the way in which we will sustain that strategy through several or many Governments. I ask the Government to look again at the independence and make sure that whatever emerges in terms of scrutiny is fully independent and reports to Parliament.
On the subject of innovation, this is clearly a keystone for the success of the strategy. I am sure there is general agreement that the UK is gifted many great innovators. As we have just heard from the noble Baroness, Lady Young, the challenge is to get these innovations into the NHS as routine NHS care. Innovative treatments improve the long-term prospects of patients and, while sometimes costing more today, reduce the need for future expense. Thereby hangs the Catch-22 that we have just heard about in detail: the NHS routinely accounts for the initial cost of the treatment, not the long-term savings that accrue in treatment that does not have to happen. This has to change and the process by which the NHS accounts for its success has to be better managed.
In response to our recommendation, the Government say that work is under way to address the challenge of supporting “proven innovations”. Perhaps the Minister will outline what an innovation needs to do to be proven before it is adopted in the NHS. What are the proof points that the NHS needs for this implementation? Meanwhile, how are budgets actually being flexed to make this happen?
No one reading the Government’s responses to recommendations 9 to 14 can be anything other than confounded by the complexity. I have to say that I knew the NHS was complex, but I did not have the scintilla of an idea of how complex, as already alluded to by the noble Baroness, Lady Neville-Jones. As well as AHSNs there are ITT/ITP, AAC, AAP, CQUIN, NHSI—not to be confused with NHSE—DHSC, LSC and no doubt as many acronyms as you can pull up. I note that the noble Lord, Lord O’Shaughnessy, is leading a review to simplify this innovation landscape: perhaps that explains why he is not sitting on the Benches opposite. Put simply, how much, in total, are the Government spending on genuine innovation within the NHS? Do they even know?
Turning to data, clearly the new Health Secretary has focused on this of late. Without sounding patronising, most people in a new job concentrate on what they know. The proof will be whether this enthusiasm survives when other issues take over on his agenda, but his current energy in that area is welcome. I am also pleased that the Government seem to agree with the Select Committee’s recommendations around data. I remind noble Lords that those recommendations can be summarised as: the collection of usable data; standard format for that data—and I would add, on my own account, a standard taxonomy within that format; linkage between different systems, as our chairman alluded to; rules for commercial exploitation, and we will come back to that; and a programme to gain public acceptance. These are very important. This is not trivial and not without cost, so how is this going to be accounted for within our archipelago of health systems?
Key to the public acceptance of the use of data—this is really important—is that the public understand that the commercial use of this data will benefit the NHS, and therefore society as a whole, rather than just individual commercial concerns. In their response, the Government say they have identified three exemplar areas to start working on this and two more were going to be identified in June. Perhaps the Minister can let us know where those areas are. What I am more interested to know is when this work will be assessed, who will be doing the assessing and, more importantly, how the lessons learned from these exemplars will be distributed across the whole system. Once again, with respect to the capture and use of the data, the government response outlines a complex set of solutions and we have to try to simplify. I realise that we are starting from a complex position, but adding more to an already complex situation is never usually a solution.
As the noble Lord, Lord Patel, pointed out, there is another really important element around commercial exploitation and the contracts around how these are delivered. It is vital to ensure that the benefits of this data are properly reaped by the NHS itself. So can the Minister set out how the Government view the balance between the commercial interests of the private sector and the needs and the benefits that the NHS can derive from ownership of that valuable data? There is a balance: who is working on that balance and how will it be articulated in terms of contracts going forward?
With regards to informed consent, the Government have said they will give patients the ability to opt out of data. That in itself is important, but it works only if they know what they are opting out of: if they understand what their data is, what it is going to be used for, and how anonymisation will work for them. Serious energy must be put into a public education process, so that people understand the nature of their data and how it could be used. Just to give people an opt-out without understanding that is to squander their data and perhaps to lose value for society and for the NHS. Can we have an undertaking of a process of public education and know who will be leading that process?
On the plan to devote 2.4% of GDP to R&D, which fits around this, we welcome the Government’s undertaking to drag the United Kingdom back up to around the average of where we ought to be, but clearly, in this strategy and many others, a lot of the money is going to be coming from the private sector. In this case, what is the balance? How much money is expected to come from the private sector and how much from the Government? I reinforce the idea that the thoughts of Sir Paul Nurse should be required reading. I do not know whether noble Lords heard the “Today” programme, where Sam Gyimah, the Science Minister, and Sir Paul Nurse had a very reasoned and interesting debate. It was very good that the Minister was put up to have that debate—it was commendable by the Government and it was a good debate—but he was not able to explain where the £1 billion that we will not be getting from the European science programmes, from Horizon 2020, will come from. Which budget will it come from? Undertakings have been made in a general sense, but at the moment there is no specific budget to replace that money, and that will make the 2.4% not just difficult but impossible.
Finally, for the strategy to work, the UK needs to have the very best people working on it. We are all agreed on this. The Government have to understand that raising a quota is not the solution to this. A reduction in the size of the form that has to be filled in is not a solution. They are replacing free movement of Europe’s top scientists with a form. To use a phrase used in other contexts, it would be putting friction into that system—and that friction will put people off and prevent them coming in. Again, Sir Paul Nurse was very clear on this issue, as were the other Nobel laureates who signed the letter that was sent around. Further, unless future plans for this new immigration process also include the families of those people—the same can be said for healthcare workers, by the way—then we will lose very many people.
In conclusion, I got an overall sense from the Government’s response that they were fairly grumpy about this report, and I would say, “Please don’t be”. The report was based, as the chairman set out, on a great deal of evidence. All of us genuinely want the life sciences strategy to succeed; we all think it vital and pivotal to the future of this country. At the very least, this will require four conditions to be met. First, we have to have an implementation process and protocols that drive it forward. Secondly, the NHS has to be empowered and resourced to raise its head above the daily issues and be able to introduce innovation. Thirdly, the structured gathering of patient data, signed off by the patients themselves, must be made available to be used for the benefit of the whole of UK society and not just the private sector. Finally, sustained and consistent investment in research and development, and full access to the best possible people around the world, are needed. If we meet those four criteria, the strategy will be a success and Great Britain and the United Kingdom will be healthier and will also be wealthier.
Draft National Policy Statement for Geological Disposal Infrastructure
Lord Fox Excerpts(6 years, 1 month ago)
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Lord Fox (LD)
My Lords, it is a great pleasure and an honour to follow three such distinguished and wise speakers. I find myself in the rare position of not considering myself to be a Luddite, although I will perhaps speak in a way that sounds like it. To give your Lordships a little context, I shall burden the Committee with a bit of biographical detail, for which I apologise. For nearly 15 years, I worked for Schlumberger, which, as many of you will know, is the world’s largest reservoir evaluation company and has provided much of the technology that has evaluated those wells that have been drilled to date, in terms of working out what is going on below ground. Subsequently and for a much shorter period, I worked for the privatised part of UKAEA. This is not a declaration of interest nor is it a claim of expertise; it is to explain where I am coming from and what my disposition is.
Schlumberger taught me that reservoir evaluation and downhole logging is an inexact science. Even when you are as good as Schlumberger, you are always wrong, so you never really know what is going on down there. Working in the nuclear industry was a more salutary experience. For example, the facility at Dounreay went from being in the white heat of technology to being virtually a white elephant inside a generation. It demonstrates how neglected things become once they stop being new. By the time I was in the industry, plutonium pellets were washing up on Dounreay beach and people could not account to me how many there were and where they were coming from.
The issue of geologic disposal has been around for about 40 years—almost as long, I think, as the Minister has been in the House of Lords. As we have heard, many Governments have sought to solve this problem and stepped back from doing so. So why now and with this Government? New nuclear has been mentioned on a number of occasions. It offers the prospect—if “offers” is the right word—of a great deal more material to be disposed of and, clearly, the decision to go ahead with new nuclear was predicated on the assumption that there would be downhole geologic storage. However, we should also remember that this new nuclear stuff will be hanging around on the surface for a very long time and the point made by the noble Lord, Lord Liddle, about addressing some of the surface storage issues as well is something that I would ask the Minister to consider.
I want to make a point on semantics that may cast me in a Luddite mode. We use the term “disposal”—I have used it several times—but of course what we are actually doing is not disposing of it; we are either burying or hiding it. We are concentrating the hazard and putting it in a place where it will remain more or less for ever and to all intents and purposes it will be toxic to organic life for ever. So it is not disposal, it is hiding it by putting it in a downhole cupboard, closing the door and hoping that it stays shut.
The evolution of this quest has been referred to by other speakers, but in the beginning the primary mover was geology. We have heard a little bit about geology but I am going to come back to it again in a moment because after flirting with salt and indeed clay, which would be the London solution, the focus came down on to granite because it was seen to offer the best opportunity to make a seal. Permeability, as the Minister knows, is the extent to which fluid can flow through a rock. Granite is more or less impermeable, but as two of the previous speakers have mentioned, it is susceptible to fractures and faulting. Fractures facilitate the movement of water, and I think that generally everyone agrees that that is a very bad thing. A campaign involving boreholes which looked in that direction was started, having been based on the geological rather than the sociological opportunity. Even then, volunteers were called for to some extent, and as we heard from the noble Lord, Lord Judd, the focus was quickly on west Cumbria, or an area that we could call greater Sellafield. I am sure that it is to the Government’s regret that the geology of the areas proved to be less hopeful in prospective terms than they had hoped. The point made just now about fractures and water flow is completely apposite. It was apposite then because it started to put people off and it remains very central to the suitability of this location.
At the time, the Government met with a lot of planning objections when they tried to drill prospective boreholes in England and Scotland. The reclassification as a national infrastructure project changed that, which I suspect was the objective of making the change. It is possible that it made it easier for the proponents to get the opportunity to drill prospective wells. Part of that process has necessitated the Appraisal of Sustainability Report, produced by Amec Foster Wheeler. I know that the Government have welcomed the report in their draft policy, but there are two obvious and significant diversions. First, the report sets out some key considerations that any repository needs to follow. There is a list and then there is a description. The Government just about pick out that list, although inexplicably they have changed the order so that water comes lower down it than other issues. However, there is a significant difference when it comes to the geology. The report states:
“The geologic formations around the engineered facility will isolate and contain the radioactivity for a very long period, thus preventing any harmful amounts of radioactivity being released into the environment in future”.
That is clear. The Government’s equivalent sentence in the same place at the bottom of the list is:
“The stable geological setting (rock) in which the facility is sited”.
I put it that stability and sealing are fundamentally different, and there was knowledge of that when those words were changed because it opens up different available geology.
Secondly, on a point already clearly alluded to, the appraisal of sustainability report explicitly recommends that national parks be omitted from the process. The Government do not accept this, as we know. As we heard, the Select Committee pointed out that,
“despite the Appraisal of Sustainability report concluding that an exclusionary criterion would have the most positive effect, the Government decided against excluding National Parks and AONBs on the grounds that it did not ‘wish to foreclose future possible locations that could be more advantageous in addressing safety over the lifetime of the facility’”.
In his response the Minister, Richard Harrington, told the Select Committee that,
“the Government were not in favour of exclusionary criteria as they would preclude proposals from communities who may be interested in hosting GDI and that would have been designated to minimise the environmental impact”.
It is very clear where the Government are pointing their eyes on this occasion—on national parks. This is not an accident.
I mentioned that when the west Cumbrian studies were done there were two possible exceptions where there might been slightly more advantageous geology. Both of those exceptions, Eskdale and Silloth, are in the Lakes and in a national park. It is not hard to see what is going on in the clockwork brain of the Government for where they think the answer to this problem is. That is why the speeches from the noble Lords, Lord Judd and Lord Liddle, were so important.
So, to date, the principle of community consent has led us to only one place. As we know, it did not get very far, but as the Minister set out, we now have seven-figure bribes to back it up. I have two problems with this. First, it is immoral, and secondly, it fails to recognise what the community of these particular areas is. First, why is it immoral? It is because it is the reverse effect of demutualisation, which crystallised the values of centuries for one generation looking back. This crystallises value for essentially one generation looking forward. What about subsequent generations? Do not forget that this will be here for thousands of years, probably right until the end of the existence of our species. Despite saying that there will be money every year, the Minister cannot speak for Governments going forward. Quite frankly, using the Dounreay example, interest will fade.
Secondly, who is the community in this? The noble Lord, Lord Judd, alluded to this. Groundwater does not respect county council barriers—as far as I know that is the problem. Also, who is the community in the case of a national park? I declare an interest: I spent a lot of my youth running up—or crawling up and down—the mountains of the Lakes. If it is a national park then I am part of its community, but I will not be consulted. Indeed, a very small number of people will be, relative to the population of this country.
Time is passing, but I have a couple of other points. One technical point is that I sense that the technology for this is depicted as a one-way street: we put it in and we cannot get it out. It seems inexcusable that we create something that we cannot reverse. There has to be the technology to reverse this if we find that there is a problem. We should not go down this one-way street without the ability to come back.
Secondly, the noble Lord, Lord Liddle, raised investing in future research. Time has moved on. There has been further research. Frankly, if we threw as much resource that needs to be put into building this repository—or indeed a fraction of that resource—into future research into ways to use this material, I feel sure that we could elicit results. I would like an undertaking by the Government that they will invest in the current surface technology—the holding tank, if you like—to make it safe and not use it as a reason for hastening downhole disposal, and that they will invest in real future technologies.
The Minister talked about technical feasibility and dismissed all other technologies as not being technically feasible. I am not clear that this is technically feasible. I know that it is the preferred option, and it is kind of more understandable because it is about building something, so therefore we think it is technically feasible. As my noble friend pointed out, we know that digging a tunnel under London is pretty difficult. It is technically feasible, but it is very difficult and very expensive. Technical feasibility is an interesting phrase to use because most things are technically feasible if you throw enough money at them. Once again, how much money makes this technically feasible and does that in the end make it economically unfeasible?
Going back to my point about Dounreay—I am sorry to mention it—how is this facility going to be operated? Who is going to be in charge? How is it going to be managed? This matters. The draft national policy states:
“Implementing geological disposal, including identification and characterisation of potential sites, is the responsibility of the developer, working in partnership with a community”.
Bearing in mind that the Government expect this site to be active for 150 years and then to be sealed for many thousands of years, who do the Government envisage being the developer and the operator of this site? Again, this matters. We need to know what is happening a generation ahead because we can see what happens when we do not have a plan. What are the financing and the funding for this going forward? It is not just how much money we spend on building it, it is the operational expenditure because once we start clipping back on the operational expenditure, that is when we start to have problems. Let us face it: is this a private sector operation or a public sector operation? Carillion could not run a hospital for six years, so who is going to run this for 150 years and then several thousand years? How on earth do the Government plan to put in place the institutional support to deliver a functioning facility for generation after generation? Perhaps the Minister can describe to me in a few words—there is no need to go into every detail—how this will be done.
The Select Committee in the other place produced a very useful report, but I had one quibble with it in that it stated that safety trumps all. I understand why the Select Committee said that, and safety is vital, but environment is also very important and there should be a double key, not a single key, on this issue. It is about safety and environment.
Finally, the Government have yet to convince that this is a route we should be taking. They have to restore the geological imperative to isolate and contain because without that they are being extremely disingenuous, and they need to rule out national parks, as per the sustainability report which they themselves commissioned. They should make safety and environment the double lock for further progress. They should undertake to make the repository reversible rather than a one-way street and demonstrate good faith by continuing to invest in research into alternative options for reprocessing and decontaminating this waste. They should explain how this site is going to be operated and managed. Until these points are addressed, it is impossible to support the process going forward.
Lord Henley
I am not going to speculate on what exactly will be found to be suitable—I will give way in a minute if the noble Lord, Lord Fox, will let me answer the question. As the noble Lord made clear, it is not the most exact science. We have to find a suitable area and it might be that it can be adapted in some ways. I cannot speculate on that; it must be a matter for future processes. It is not only the community involvement that we are looking for; it is also getting the geology right. Then we can move ahead.
Lord Fox
I was actually rising to help the Minister. The answer is in the appraisal of sustainability report, which specifically states that the geology should,
“isolate and contain the radioactivity for a very long period”.
That wording is dropped in the national policy statement and is replaced merely by “stable”. Will the Minister confirm that the imperative to contain and isolate remains the Government’s definition of the correct geology?
Lord Henley
I am fairly sure that that will be the case. I congratulate the noble Lord on spotting a marginal difference in the two—the noble Lord speaks as a greater expert than I am. I would be grateful for the opportunity to write to the noble Lord in greater detail. It is important that we get these things right. That is why I have made it quite clear that no decisions have been made. This is not an attempt to impose something on Cumbria that it does not want; it is not something to impose on the Thames Valley—I am thinking of community involvement in Staines or Heathrow or wherever. It is not something that we are proposing. We want to find somewhere with the right geology and the right community involvement.
Nuclear Sector Deal
Lord Fox Excerpts(6 years, 4 months ago)
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Lord Henley
My Lords, I welcome the welcome of this deal by the noble Lord, Lord Grantchester, and I am pleased to be able to say how happy I am that he is happy that this is good for north Wales and Chester, his part of the world. I cannot give precise confirmation in answer to his question about Trawsfynydd, but I can confirm that there is new money coming in—money for advanced manufacturing and construction programmes from the Government, and money to invest in the national supply chain.
We also expect to see a 30% reduction over the years in the cost of new-build projects and also—very important for my part of the world, west Cumberland—reductions in the cost of decommissioning of some 20% over the years. This is a good deal not just for north Wales but for the whole country.
Lord Fox (LD)
My Lords, we generally welcome this announcement, with some reservations. In the Minister’s introduction, not much emphasis was given to decommissioning and waste disposal, which take up a large proportion of our nuclear industry at the moment. Perhaps the Minister can explain how this sector deal will reflect on that.
The Minister also mentioned the number of people employed in the industry, but there is likely to be a shortfall in skills if the expansion, as envisaged by the Government, goes ahead. The need for developing more skills in this industry, as well as many others, is clear. Perhaps the Minister could reflect on that.
Finally, there is a terrible irony in this announcement’s being made in Wales. I feel another Peer twitching behind me because just this week the Swansea Bay tidal lagoon was scrapped by the Government. This was an excellent example of a renewable programme. Does this sector deal reflect on the Government’s cooling even further on renewables?
Lord Henley
My Lords, I was wondering when the noble Lord would get on to Swansea Bay. We dealt with that in a Question only the other day. I think there was recognition from all parts of the House, other than on the Liberal Benches, that it would not be wise to go ahead with a project that would cost the consumers of electricity—remember, it is the consumers who pay for that electricity—three times as much as Hinkley Point, which is not a good deal for the people of Swansea or those around it.
As for decommissioning, yes, that is very important. We will continue our work on decommissioning and, as the sector deal makes clear, we are looking, over the next 20 years, or by 2030, for reductions in the cost of decommissioning of some 20%. That is important.
The noble Lord also mentioned the number of jobs in this area and the importance of making sure that we both generate people with the right skills and attract people with the right skills to this country. That is something that we are aware of. Currently, the industry provides long-term employment for some 87,500 people. The deal will potentially support 100,000 highly skilled jobs, in locations from Cumbria to Somerset. We will make sure we have people with the right skills to perform those jobs.
Airbus
Lord Fox Excerpts(6 years, 4 months ago)
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Lord Henley
My Lords, I and other Ministers take these concerns seriously. That is why my right honourable friend the Secretary of State responded to this point yesterday in another place and made it quite clear that he was listening to the concerns of Airbus, just as I made it clear that we were. The important point to remember is that the analysis put forward by Airbus was based on a no-deal scenario. As the noble Lord is aware, we will continue to negotiate, and we hope that those negotiations will achieve a result that will be good for British business.
Lord Fox (LD)
My Lords, the Minister is right to say that, in future, we need the investment of Airbus and companies like it with or without Brexit. However, the tone of the rebuke that came from his government colleagues over the weekend was inappropriate. The Foreign Secretary and the Health Secretary took a tone with Airbus that was absolutely counterproductive to future investment in this country. Will he join his Secretary of State, Greg Clark, in rebuking his colleagues and admit that it was not appropriate language?
Lord Henley
My Lords, I do not think that it is for me to rebuke my colleagues somewhat higher up in the pecking order than I am. I am glad, however, that the noble Lord noted the tone used by my right honourable friend in response to a Question in another place yesterday on this subject. He made it absolutely clear that he and other Ministers in the department for business are prepared to listen to the concerns of business; we will continue to make sure that those concerns are taken into account in our negotiations.
Trades Union Congress 150th Anniversary
Lord Fox Excerpts(6 years, 4 months ago)
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Lord Fox (LD)
My Lords, I too congratulate the noble Baroness, Lady Prosser, on securing this debate and I also congratulate the TUC on reaching 150 years. By the time the noble Lord, Lord Monks, sits down, we will have had the benefit of at least 150 cumulative years of trade union representation.
For my part, I can contribute only five to that sum. My period as a trade unionist coincided with another period of new technology. We have heard a number of Peers mention the implementation of new technology, but as father of the chapel, my job was to negotiate the implementation of single entry key journalism. So far, so good, but when I tell noble Lords that the person I was negotiating against was Lord Howie of Troon, they will understand that it was a challenging job. Will sadly passed from this House last week, but the fact that we managed to reach agreement and remained friends is perhaps also credit to the fact that trade unions have to be about relationships. A good trade union is about having a relationship between workers and management.
I will not be telling the noble Lord, Lord Sawyer, that trade unions are no longer needed. One of the saddest things about this debate has been the number of times people who so strongly support trade unions have had to qualify that by saying, “We still need them”. Actually, it should be taken as read that we need trade unions to represent people. The Liberal Democrats are absolutely committed to sustaining, improving and supporting the work of trade unions. We defend free speech and the right of association, and the rights and interests of employees, who should be properly represented. Obviously, the unions are a very important part of that. That said, a number of speakers, including the noble Baroness, Lady Prosser, have talked about the weakness of the unions. We need to think about how public life can embrace unions to take them forward into the next phase. As a number of your Lordships have said, capitalism has changed. Clearly, unions are changing and must continue to change to represent that.
The noble Lords, Lord Hunt and Lord Brooke, highlighted the internationalism and Europeanism of the trade unions. Your Lordships would expect a Liberal Democrat to say that we appreciate the way in which trade unions have consistently made the case within the Labour Party for closer co-operation with the European Union, going right back to the 1980s. This really did help usher in the Social Charter and policies such as the working time directive, which have made significant improvements to the lot of many workers in this country. It is a shame that the Labour leadership continues to ignore the trade unions’ urge to remain part of the single market and the customs union, but no doubt we can discuss that in another debate.
Trade unions have been under fire. We can talk about a lot of legislation. I will mention only the Trade Union Act 2016, which was a partisan measure designed to weaken the influence of trade unions. It created unusual and unique barriers to the ability of unions to make decisions. The Liberal Democrats blocked many of those provisions in coalition, which the then general secretary of the TUC acknowledged. But I ask the Minister: what has this Act achieved, other than creating even more of a “them and us” attitude? The Conservative Party is wrong to think that business does not want unions and that good business excludes unions. We know that some of the country’s best businesses are the ones that have good, functioning, strong unions. It is very sad that that attitude still seems to prevail.
Looking forward, there is a lot of work to do. We have talked of some things today. As Liberal Democrats, we are happy to work with the unions to try to bring about some of the changes we think will embrace the new future that a number of your Lordships have mentioned. Worker representation and corporate governance are absolutely central. We read and talk about a crisis of confidence in big business in this country. One way of addressing that is to modify the way in which business is run, boards are constituted and the wider stakeholder group, beyond shareholders, is represented in that. Of course, employees are a major stakeholder in any business. Unions are not there to wreck the business. Trade unions have as much interest in the success of a business as the owners. I would like to think of trade unions representing the owners in the case of more employee share ownership.
Trade unions can work, and in my experience have worked, to eliminate unproductive working practices but of course the benefits of that process have to be shared equitably across the concern. A well-functioning economy is one where the stakeholders of a business are much better represented within the management of that business. Liberal Democrats support bringing management and employee interests together; for example, by promoting different models of enterprise such as mutuals or co-operatives. As we move forward into the new world, we should look at how those new models can be encouraged. Perhaps the Minister can say what the Government’s position is on those kinds of business models.
At the same time, as a number of speakers have said, we have to develop new categories of workers. The Supreme Court judgment yesterday is one element of that. Again, I think there was a union involved in bringing that case. But there needs to be a categorisation of employees that recognises the nature of the gig economy. Unions, political parties and perhaps the legal system have to fight to make that real. When there is a downturn, workplaces are happier, more productive and more resilient if employees are treated as partners in those enterprises. Unions, working properly, can of course help to create that.
Strengthening worker participation is important. We strongly support staff representation on remuneration committees. We believe that has to be part of narrowing the gap mentioned just now by the noble Baroness, Lady Prosser. All UK-listed and private companies with more than 200 employees should have at least one employee representative on the board.
The noble Lord, Lord Hunt of Chesterton, pointed to the German and Dutch models of supervisory boards. I have had quite a lot of experience working in businesses that had those kinds of models, which deliver a much more considered type of management. It sometimes takes longer to make decisions, but the need for management to bring consensus into decision-making is really important. The trade unions within the supervisory boards have that important role. Perhaps the Minister can tell us what has happened to some of the proposals that the Prime Minister brought with her when she entered 10 Downing Street. She talked a good story about changing corporate governance and about worker representation. So far, we have seen none of that.
My final point is about ownership. We on these Benches are committed to giving staff in listed companies more rights to request share schemes. Worker share ownership is a liberal, pro-business response, which certainly helps address low productivity and inequality. I conclude, for the first time in my career as a Peer, by quoting John Stuart Mill, who was a passionate advocate of workers owning their own companies. In his words—not mine, please—he said that,
“the relation of masters and workpeople will be superseded by partnership”,
and,
“association of the labourers with the capitalist”.
There is a strong liberal tradition that runs through trade unions. We continue to support the need for trade unions and congratulate the TUC on its first 150 years.
Brexit: Science and Research Funding
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The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, as set out in the Government’s industrial strategy, we are investing an additional £7 billion R&D funding by 2022, and aim to reach 2.4% of GDP by 2027. As my right honourable friend the Prime Minister made clear in her Jodrell Bank speech, we also want to continue our mutually beneficial relationship with the EU on research and innovation. This includes the option fully to associate ourselves with the excellence-based European science and innovation programmes.
Lord Fox (LD)
My Lords, I thank the Minister for that Answer. The numbers are to the Government’s credit: we are moving towards our research and development investment being close to where it should be. However, it has not necessarily answered my Question. In the event of the United Kingdom departing from the European Union, as the Minister alluded to, the cost of associating with a number of schemes with which, in his words, we wish to associate ourselves, will be very high. If we wish to participate—pay to play—in Horizon 2020 Future, if we wish to participate in the European defence fund, if we wish our students to participate in the Erasmus exchange programme, they alone will cost many billions of pounds. Will he undertake that there will be money additional to that number for those things to continue? If not, the United Kingdom’s science and technology industry and community will lose out. Will he make that commitment?
Lord Henley
My Lords, I am not going to make any commitment in advance of the negotiations. As the noble Lord is aware, it is important that we get a good deal here, and I think it is in the interests of both the United Kingdom and the EU. The noble Lord will be aware of what Pascal Lamy said only a year ago:
“Whatever Brexit modalities are agreed between the UK and the EU by 2019, full and continued engagement with the UK within the post-2020 EU R&I programme remains an obvious win-win for the UK and the EU”.
The UK has one of the strongest science bases of all European countries. We want to continue negotiating on that basis, and we think that the EU does as well.
Proposed Merger of Sainsbury’s and Asda
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Lord Henley
My Lords, the noble Lord’s first question was about semantics, whether this is a merger or a takeover. It is a merger, but I do not think we need bother about that. Secondly. he asked whether it will squeeze competition. I do not think it will. We are looking for benefits to consumers, but that is a matter for the CMA, and I am confident that the CMA, a body set up by the last Labour Government, has the ability and resources to do that job. Lastly, he asked about working with the Small Business Commissioner. The Statement makes it quite clear that my honourable friend had already spoken to the Groceries Code Adjudicator. If it is appropriate that he talks to the Small Business Commissioner, no doubt he will. I will pass that on to my honourable friend and ask him whether he has.
Lord Fox (LD)
Asda and Sainsbury’s both say their HQs will stay, no shops will close or be rebranded and jobs are safe, yet they promise price reductions of up to 10%. That can happen only through exerting their mass to squeeze the supply chain. We have talked about the role of the CMA, but what guarantees will the Government give the British food industry? What guarantees can British farmers expect from the Government?
Lord Henley
My Lords, we hoped that the first matter that noble Lords would want to address was savings for the consumer, and that is something that the supermarkets are looking for. The noble Lord said that they have stated that their headquarters will stay and all their stores will stay, and therefore savings can come only through squeezing the supply chain. I do not accept that, but that is a matter for the supermarkets to address. It is something that the CMA will look at when it addresses this matter properly, as was discussed when my honourable friend made his Statement yesterday in another place. Obviously, the CMA might want to look at individual stores and whether it is right and proper that some are kept. That is a matter for the CMA. As I have made clear, my honourable friend has already had discussions with the Groceries Codes Adjudicator and, to the extent that we can play a part in that, my honourable friend will continue to do so.
High Street Retailers
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Lord Henley
I agree that empty shops make the situation worse. It is up to local authorities to look at what can be done, but we are in a changing environment. Some 10 years ago, 4.5% of retail was online; it is now 17%. That is what the consumer wants and, in the end, the consumer has to be king in a sector such as retail. It is up to the sector itself—that is why the Government want to talk to the sector—to look at the changing nature of what is happening and adapt to that change.
Lord Fox (LD)
My Lords, it is not just about empty shops in the high street; it is about people. We are seeing a migration of good retail jobs, some of which had pensions and many of which had long-term prospects. It is an erosion of people’s lives. The replacement jobs are warehouse jobs on zero-hour contracts. The Minister mentioned that his right honourable friend the Chancellor is conducting a review of the situation. Given that shops are going out of business every day, when might we hear the result of this review?
Lord Henley
I will leave that to my right honourable friend and he will respond as is appropriate. The point I want to stress—as I did in my original Answer and in the one I just gave—is that this is a changing environment. The noble Lord no doubt buys things online. There is an increase in people buying things online; that is quite simply what is happening. I cited the figures: 4.5% of retail was online 10 years ago and the figure is now 17%. That trend will continue. The retail sector must look at ways of adapting. Having said that, the noble Lord should not think that all online trade is necessarily going to Amazon and other warehouses; a lot of online business is conducted by the shops themselves. It is a varied picture, but it is up to the sector itself to adapt to those changes.
Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No. 2) Order 2018
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Lord Monks (Lab)
My Lords, people may not have noticed that the TUC is 150 years old this year. In that long and rather chequered history, it has not been too often that the TUC has warmly welcomed a step taken by a Conservative Government, but there are exceptions—and one of them is certainly today. I recall the apprenticeship levy in recent years, but not too many other cases where there has been some rapprochement between the TUC and a Conservative Government. I hope that it is the start of further progress on the good work agenda, as has just been said, and that we see other areas where things are done constructively and not in a confrontational manner.
The order extends the right to a written pay statement to dependent workers who are not employees; there are plenty of those, and they are growing in number in the so-called gig economy at the moment. We can see the growth of temporary agency work, some self-employment that is not really self-employment, and zero-hours contract workers. Currently, employees must get a statement of gross pay, deductions and net pay and, when hours vary, have that recorded too. The extension of this is very welcome to this group of workers who are not employees, who live outside the present scope of employment law. That is a very important step for a group which is often the most vulnerable to the underpayment of the national minimum wage. The particular problem area has been in the social care sector, where we have come across quite a lot of problems, but there are other areas where there are some problems.
As the Minister correctly said, many employers are already doing it and progress has already been made, but there are some who still do not. It is important that the workers concerned find out exactly what they are paid and that they can check they are paid correctly. This order will make it harder to underpay workers, whether by mistake or design, and I warmly welcome it today.
Lord Fox (LD)
My Lords, the Minister may find himself bathed in warmth from this corner of the House as well: we welcome this step forward. He raised a couple of points which we would like some clarity on. Will the Minister confirm whether the payslip itself will detail different hourly rates within the gross hourly performance, or simply an average number, as this was not clear? He also referred to raising with an employer the question of whether payment has been fair. Raising such an issue with an employer, and perhaps ultimately going to a tribunal, would be much easier if the burden of proof was on the employer rather than the employee. Have there been any thoughts about looking at the burden of proof in employee tribunals? Otherwise, the Minister’s injunction to raise the matter with an employer is unlikely to yield the sort of result that he is implying.
Overall, the gig economy and the sort of jobs set out by the noble Lord, Lord Monks, have created a group of employees who sit between full employment and self-employment. This goes some way to reaching out and giving them rights. Noble Lords on this side of the House would be pleased if a new, clearer status of dependent contractor was carved out from the Taylor report. That would give rights such as this, as well as a variety of other employment rights, to workers who are neither fully employed nor fully self-employed but sit between the two. Where are we in terms of fuller implantation of the Taylor review?
Lord Anderson of Swansea (Lab)
My Lords, to ensure that the provisions of this welcome order are fully complied with, have the Government considered the case for having some form of uniform payslip?
Companies (Disclosure of Address) (Amendment) Regulations 2018
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Lord Fox (LD)
My Lords, before commenting and asking some questions, I declare an interest in that I have been having personal communication with Companies House on an issue not unadjacent to this.
The Minister set out what we see as a pragmatic balance between what is practical and what is desirable—trying to balance what is needed to retain security and privacy while at the same time doing something that is both technically and administratively possible. For those reasons, we welcome the regulations. I have a couple of questions about the criteria and process for assessing applications within Companies House. Can the Minister give your Lordships’ House some idea of how the applications will be received and processed, and what criteria will be used to decide to remove a person’s private address and insert a holding address?
The Minister set out that a holding address would not be required for dissolved companies or directors who have stepped down. Would he consider a cooling-off period? After a company is dissolved, there is a period when its activity remains salient and therefore the activities of those past directors remain salient. Then there is a point at which, clearly, it is a dormant company and there is no fallout from its activities. A cooling-off period would be from the time at which the company is wound up until the time at which directors’ communications are removed.
It behoves me on these Benches to make the point that we still have a strong policy and we call for public registers of beneficial ownership to be extended to include British Overseas Territories. I understand that this SI does not necessarily cover that area, but I feel beholden to make that point. With those questions, we welcome the regulations.
Lord Campbell-Savours (Lab)
My Lords, I have just a couple of questions. In the regulations under the title, “Effect of a section 1088 application”, paragraph 13(4) states:
“In any other case the registrar must make the specified address unavailable for public inspection by removing all elements of that address, except—(a) for a United Kingdom address— (i) the outward code from the postcode”.
The Minister referred to “leaving the first part of the postcode”. What is the relevance of keeping that first part? Why any part of the postcode?
My second question relates to the Explanatory Memorandum, which states:
“Amendments have also been made to the 2009 Regulations by regulation 3 to ensure that one of the grounds on which an individual is able to make an application under section 243 of the Companies Act 2006 (to prevent disclosure of their address by the registrar to credit reference agencies) is that they are or have been a constable”—
that is, a policeman. Why is a special category of persons defined here in the legislation? Why do constables have this exemption?
Lord Henley
I will possibly add this to my response to the noble Lord, but I suspect that giving half a postcode provides, as it were, some information without giving details. In other words, if someone added CA6 to my name one would know that I lived somewhere not so far from the noble Lord in Cumberland, but it would not say precisely where I live because it would not give the address. As the noble Lord, Lord Stevenson, said, there are other ways of finding out people’s addresses. We are just trying to provide appropriate protection.
Lord Henley
I will write to the noble Lords, Lord Campbell-Savours, Lord Fox and Lord Stevenson. I will make sure that a copy of the letter is placed in the Library. With those explanations and the general support of the House, I commend the regulations to the House.