Stellantis Luton

Lord Fox Excerpts

Thursday 28th November 2024 Lords Chamber

[Lord Fox (LD)]

My Lords, I feel that the onus is on me to concentrate on the Statement at hand. This is undeniably a sad announcement for a business that stretches back to the start of the previous century. It is a sad day for Luton, which has a proud tradition in vehicle manufacturing. Most of all, it is a sad day for the 1,000-plus men and women who are potentially losing their jobs.

There are people in your Lordships’ House who know Vauxhall better than I do, but although I no longer have a pecuniary interest in the automotive industry, my past work in that sector led me to value the skills and ingenuity of the people around whom I worked. My first question is this. Many businesses in other sectors are crying out for the skills possessed by the people being laid off, but in many cases those jobs are not in Luton. How do the Government plan to help retain those skills and channel those people, who are skilled workers, into well-remunerated, vital jobs? My second question concerns the town of Luton itself. What is being done to support the local community that is being denied an important driver of its local prosperity and economy? The Government need to work with Vauxhall and others to mitigate this, as it will be a major shock for the area.

This sad announcement is at the leading edge of a wider set of issues that face UK vehicle manufacturers and the Government’s plans to electrify personal transport in the UK, their so-called ZEV mandate. There are important questions regarding this ZEV mandate. As we know, 22% of cars sold this year have to be electric vehicles, EVs, rising to 28% next year. If a business fails to meet that target, either it pays a £15,000 fine on each internal combustion car it sells or it buys credits. This is handing cash to usually foreign competitors, such as Mr Musk’s Tesla. This system was put in place by the previous Government. Is it a sensible industrial strategy?

Successive Governments have taken a largely supply-side approach to this, and initially it had some success. Does the Minister agree that unless the Government address the demand side, UK manufacturers will not achieve their mandate targets? Added to that, the previous Government sent out mixed messages that caused many people who might have bought their first EV to opt for one more internal combustion engine. Demand needs to be stimulated. Infrastructure remains patchy, pavement charging is expensive for users—inhibiting the spread of EVs to people who do not have a drive on which to charge their vehicle—and sensible subsidies are being phased out. Can the Minister confirm that her department is now discussing incentives—for example, cutting VAT on EVs—with the Treasury?

Lib Dems have repeatedly called for it to be made easier and cheaper to charge vehicles by rolling out far more residential on-street chargers, ultra-fast chargers at service stations and the electricity grid infrastructure needed to support them. Additionally, VAT on public charging should be cut to 5% and all charging points should be accessible by a bank card, rather than the collection of different smart cards required.

Meanwhile, as demand stalls, the market for UK firms is getting harder. UK car makers are already competing with Chinese EVs that benefit from inbuilt domestic subsidies. In the EU and the US, these Chinese businesses are likely to face high tariffs in future. If both these huge potential markets erect such barriers, the likelihood is that Chinese EVs will flood into their remaining markets. Can the Minister set out the Government’s position on possible UK tariffs on Chinese EVs?

Yesterday the Secretary of State referred to the £2 billion for research and capital funding that was announced in the Budget. Can the Minister tell us the split between R&D and capital for that money? What is the phasing of that money—for example, how much will the industry see this financial year?

In summary, for the UK car industry basic costs have risen, energy costs have rocketed and labour costs will rise following the Budget. In the meantime, UK manufacturers are trying to sell more EVs than UK consumers want to buy, with a backdrop of cheap, subsidised imports. Does the Minister recognise that these are existential issues? When will the industry get to know what the Government’s response to these issues will be?

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I thank noble Lords for their responses to the Secretary of State’s Statement in the other place. The news on Tuesday that Stellantis was commencing a consultation with staff on the future of the plant at Luton will have been very difficult to hear for the hard-working staff, their families and the wider Luton community. We have asked the company to share the details of its plans with us so that we can put in place the right support across government to help them through this process. Luton has a proud history. While this is disappointing news, we are confident that the town has a bright future ahead. We will work closely with Stellantis, trade unions, Luton Borough Council and other partners to look at the impact of this decision.

I heard the points made by the noble Lord, Lord Fox, about the zero-emission vehicle mandate and how it links to this decision. Ministers met Stellantis within days of coming into office to discuss the pressures it was facing in its business, including concerns on the zero EV mandate, but that was not the only concern it raised. Noble Lords will know that this is a complicated area. The automotive industry is operating under a lot of different pressures, and this is just one of them that we are seeking to address.

The noble Earl, Lord Effingham, asked about consultation. The Statement made clear that the Secretary of State has been in constant discussion with Stellantis and others in the automotive industry to address their concerns. The Secretary of State for Business and Trade and the Secretary of State for Transport are listening closely to the concerns of the industry and the wider sector about the transition to electric vehicles. This included the round table earlier this month to hear directly from major automotive companies, the Society of Motor Manufacturers and Traders and the charging sector. In response, we will shortly be fast-tracking a consultation on our manifesto commitment to end the sale of new pure petrol and diesel cars by 2030, but the question here is the transition rather than the endpoint. I think we are clear about what we want to achieve by 2030. We will use this consultation to engage with industry on the previous Government’s zero EV transition mandate and the flexibilities within it, and we will welcome the industry’s feedback as we move forward.

We want to do everything we can, together with industry, to secure further investment in the British automotive sector now and over the longer term. That is why in the Budget the Chancellor committed £2 billion to research and development and capital funding to support the zero-emission vehicle manufacturing sector and the supply chain. The noble Lord, Lord Fox, asked about this support. The Government are already backing the wider industry with more than £300 million to drive uptake of zero-emission vehicles, and we have also committed long-term funding of more than £2 billion of capital and R&D funding to 2030 for zero-emission vehicle manufacturing and its supply chain as part of a comprehensive offer to attract strategic investment and deliver real growth. There is a real opportunity for the UK from the transition to zero-emission vehicles, and we welcome the commitment Stellantis made to expand its production of electric vehicles at its other plant in Ellesmere Port by adding a second van model.

This is a complicated issue. An expansion of electric vehicle production is going ahead. I make clear that, at Luton, only diesel vans are being produced, so, if anything, production is switching to electric vehicles and not the other way around. Our automotive sector is at the heart of UK manufacturing and the global and British brands that make vehicles here are central to unlocking further growth and investment. Our industrial strategy will address these issues and ensure that further growth and investment is absolutely at the heart of what we intend to do. As the Secretary of State said yesterday, the Government are clear that decarbonisation must not mean deindustrialisation, and that winning the race to net zero and having a world-leading automotive sector must go hand in hand.

The noble Earl, Lord Effingham, asked about the Budget. I do not need to take any lessons from the previous Government, since they left a £22 billion black hole that we inherited. I am sorry to remind them—I know they would rather we forgot that—but let us be honest: that is what we have inherited and have been struggling with ever since. The Budget dealt with that black hole in the Government’s finances, and—as the noble Earl mentioned—over this Parliament the Government will transform business rates into a fairer system that protects the high street, supports investment and is fit for the 21st century. The Government are permanently lowering business rates for retail, hospitality and leisure properties from 2026-27—so we are addressing business rates.

The noble Earl mentioned the employment Bill. I am proud that we are bringing modern employment practices to this country—the previous Government promised this, but it was never delivered. The noble Lord, Lord Fox, asked about imports, and several noble Lords mentioned Chinese EVs. Again, this is a complicated area, but we are closely analysing how imports of Chinese EVs will impact the UK’s economy and industry. It is worth stressing that the UK’s economy and industry differ from other countries in both ownership and markets. We export 80% of what we make, compared to, for example, the US and EU, where a greater proportion of production is sold domestically. So we need to adapt our approach to what is appropriate for our situation here in the UK. When we need to act, we will do so, but any action taken on Chinese EVs has to be the right one for the UK industry.

We are also looking at unfair trading practices on an international basis by supporting global initiatives at the WTO and G7, and domestically through our industry-led trade remedy systems. Here, we already apply 44 trade remedy measures, 28% of which are on China. I hope I have addressed the main points that noble Lords have raised today, and I look forward to further questions.

Post Office Horizon

Lord Fox Excerpts

Wednesday 24th July 2024 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank the noble Lord for his kind comments and welcome him to his new role. I echo his congratulations to Alan Bates on his very well-deserved knighthood.

Obviously, we are awaiting the details of the scheme, but once they are in place the follow-up letters will go out at pace. As the noble Lord knows, in the meantime we are implementing the £75,000 fixed sum awards and we will set out further plans for that in due course. I take note that the beginning of the Recess is next week, and I hope to come back with further information in the meantime.

[Lord Fox (LD)]

My Lords, I also welcome the noble Baroness to her position, which I believe spans two departments. I am not quite sure what she has done to deserve that. I associate myself with the remarks made by the spokesperson for His Majesty’s Opposition and credit him for the energy he brought to this subject in the latter half of the last Parliament.

In those discussions, there was a group of people who are still not covered by what we are doing: the unsuccessful appellants of the case. There was a small but significant number who had the courage to take their case to appeal, lost their appeal and are now hanging outside this scheme. I spoke to the last Government in both this place and the other place about the reasons for that. I understand the reasons around the judicial nature of what has gone on, but can the Minister assure us that these people are not forgotten and that a route is being sought to make sure they get the same of level of redress received by the others as a result of the legislation?

[Baroness Jones of Whitchurch (Lab)]

My Lords, of course we are mindful of those cases and are carefully watching the numbers that remain in that camp. The usual routes of appeal remain for those cases. In particular, those individuals can apply to the Criminal Cases Review Commission to be referred back to the Court of Appeal, if it considers that

“there is a real possibility that the conviction would not be upheld were a reference to be made”.

I hope that advice will be taken by a number of those individuals.

Post Office (Horizon System) Offences Bill

Lord Fox Excerpts

Committee stage
Thursday 23rd May 2024 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, I briefly intervene to thank the noble Lord, Lord McNicol, who has done really sterling work on this, together with my noble friend. I very much agree with his optimism that this matter can be adjusted. I think all of us realise that 13 is an unlucky number and 13 people were going to suffer a degree of injustice. This is an important matter. It is a very good example of what we were talking about earlier: how this House can work consensually to deliver the right result. I look forward to what my noble friend the Minister has to say.

[Lord Fox (LD)]

My Lords, I will follow on and, I hope, echo that spirit of consensus. One of the spin-offs from the decision to call the election is, of course, that this Bill will make the statute book quicker than it would have in the event that it had gone through a normal process. This is a good thing. However, it will have lost some of that scrutiny. The amendments set out some of the abiding issues that I hope the Minister will address from the Dispatch Box, bearing in mind that we will not have the legislative routes to do that.

The noble and learned Lord, Lord Falconer, raised the DWP in his Amendment 1, which may or may not be an issue, but the core issue that he, along with the noble Lord, Lord Arbuthnot, raised is the 13 appellants. If the Government stay firm in not accepting Amendments 2, 4 and 6, we really have to hear from the Minister at the Dispatch Box what they are going to do instead.

When my noble friend Lady Brinton and I met the Minister and his team—I thank them for that—it was clear to me that the Minister understands the injustice that is built into this. I understand that there is a wrestling about how much judges are offended in this, but the noble and learned Baroness, Lady Butler-Sloss, made it clear that the point has been made already in the substance of the Bill. The 13 are merely an extension of the same issue and have to be included in the same way, because they were the people who had the best case to defend and bravely went to law to do it, and now they are in danger of being hung out to dry. I know that is not what the Minister wants and I believe that a way must be found.

My noble friend Lady Brinton made the point that it is not for this Bill to legislate on this. However, it is for the Minister to say that, in the event that Capture proves also to have lured people into situations where they have been unjustly prosecuted, the Government of the day will act promptly and properly to make sure that they are not dragged through the same mess as those trapped by Horizon.

The noble Lord, Lord Holmes of Richmond, raised three issues in his amendments; unfortunately, he is not here to speak to them. They are all important issues for the future. I suggest that they are not substantive to this Bill, but they are issues that I hope, whichever party is in government, will be looked at going forward. The inviolability of computer evidence has clearly been compromised. The ability of organisations to make their own prosecutions has raised concern and a thorough review is needed. There is also the role of corporate governance within the Post Office to be considered. I know the noble Lord has also made comments on this on a number of occasions. Clearly, there is something wrong. Whoever is running the Government needs to understand that Post Office governance has been broken.

I would just like to say a word to the Minister, the noble Lord, Lord Offord. He came to this relatively late and picked up the issues very quickly. He has humanely and swiftly dealt with them, and he should be praised, along with the Bill team and all of those working on it. With the inclusion of the 13, I hope we can put this thing to bed.

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Offord of Garvel) (Con)]

My Lords, I will be moving the amendments tabled in my name. I will also discuss the other amendments tabled ahead of Committee.

Amendments 7 and 8 in my name are about condition E. They are technical amendments concerning condition E in Clause 2(6) to ensure that it is clear how the condition should operate. Condition E requires that, to be in scope of the Bill, at the time of the alleged offence, a relevant version of the Horizon software was being used in the branch where the individual was carrying out Post Office business. Currently, this condition does not have the same provision for overlapping dates, which we have in condition A relating to the offences falling within the Horizon period.

The provision in condition A ensures that convictions meet the condition if the date of an offence overlaps with the specified dates, even if it does not fall entirely within it. The absence of an overlapping dates provision for condition E means that it could be possible for a Horizon case conviction to meet condition A but not condition E, even though both are intended to relate to a relationship between the use of Horizon and the date of offending in the same way. This makes condition A less effective so, to remove this inconsistency of approach and ensure that the criteria are clear and operate as intended, we seek to amend condition E to include an overlapping date provision similar to the one included in condition A.

This approach allows us to include within the quashing the possible circumstance where, following the installation of Horizon, an alleged shortfall was identified and the Pose Office concluded that this shortfall must be as a result of theft or some other offending over a period leading up to this installation, leading to a charge offence date overlapping with the period of installation.

Turning to DWP cases, I will now address Amendment 1 in the names of the noble and learned Lord, Lord Falconer of Thoroton, and the noble Lord, Lord Sikka. I thank them for their careful consideration of this issue. It is the Government’s view, however, that the cases the DWP prosecuted are of a very different character from the cases in the scope of this Bill. Therefore, the Government’s position on this matter is unchanged. These cases were investigated and prosecuted between 2001 and 2006 by DWP investigators using different processes from those used by the Post Office. They are of a fundamentally different character.

--- Later in debate ---

[Lord Forsyth of Drumlean (Con)]

I may have misunderstood but, when I spoke earlier, I understood that there had been agreement between the various parties, as my noble friend Lord Arbuthnot indicated. My noble friend said that there are “two sides to this”, but I understood that that was part of the agreement and the understanding. This is very important for 13 people.

[Lord Fox (LD)]

May I suggest that we have a 10-minute break to discuss this, please?

[Baroness Williams of Trafford (Con)]

My Lords, I suggest that consideration on this amendment be adjourned for 10 minutes while we seek clarification.

Post Office (Horizon System) Offences Bill

Lord Fox Excerpts

Report stage & 3rd reading
Thursday 23rd May 2024 Lords Chamber

On the amendment from the noble Lord, Lord Sikka, there is a concern around the DWP’s understanding of, and how much information it has on, those individual cases, as they are not part of this legislation. Looking at what happened in those cases will be very important.

[Lord Fox (LD)]

My Lords, first, I apologise for arriving slightly late; I beg the leave of the House to speak.

It is an honour to follow the noble Lord, who has been very much engaged in this issue for so long, as have other noble Lords here. I echo the point about the noble Lord, Lord Arbuthnot—it is a shame that he is not here.

To address the amendment of the noble Lord, Lord Sikka, I think I heard the Minister say in Committee that, in the event that such cases did start to involve the Horizon issue, these issues would be reviewed and brought to your Lordships’ House. I hope that my understanding is correct. There is a deeper issue around finding the people who have been affected by this, because there are quite a number who are essentially missing.

That brings me to a wider point: how this Bill, when it becomes an Act, will be administered by the department. The efficient, humane and understanding administration of the Act will be central to the feeling people have of finally getting justice. I am sure that the intentions will be good, but speed is really important. Although process is important, that process needs to be expedited in order to make sure that those people find some peace at last.

I want to pick up the point we discussed in Committee, about which the Minister and others had conversations afterwards, on the subject of the 13 cases. As was touched on by the noble Lord, these people have been burned by the legal system not once but twice. To persuade them to once again put their hand in the fire may be difficult. If the only way they can get justice is to go back one more time through the legal system, it is vital that all friction is removed from it by the department and the legal system—a representative of which I am pleased to see here. If we cannot use the Act to finally exonerate these 13 then we have to rely on a humane, rapid and frictionless legal system. Anything that the Minister can say about how that can be done would be the start of being reassuring. These people will have to have a metaphorical arm put over their shoulder to persuade them once more to enter the legal fray. It is important that they get that and as much help as possible.

In closing, I echo the point that this is a really important Bill. It has taken a very long time to get to where we are. The Ministers, His Majesty’s Opposition and, I hope, these Benches have done our best to make sure that it moves as fast as possible. Once it becomes an Act, I hope very quickly, the ball passes to the administration of it. Let us get that done as quickly as we have been able to get this Bill.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

My Lords, I will make a statement on the legislative consent process in relation to this Bill. In the other place, the Government tabled amendments to bring Northern Ireland within the scope of the Bill and sought legislative consent from the Northern Ireland Executive to do so. Unfortunately, due to the existing expedited timescales, we have not yet been able to secure a legislative consent Motion from the Northern Ireland Assembly for this piece of legislation.

However, my department has received a letter today from the Northern Ireland Justice Minister confirming the Executive’s support for the Bill as it relates to Northern Ireland. The Justice Minister wrote: “In the absence of the Assembly’s legislative consent, it is important to note that on 9 May 2024 the Executive Committee agreed an extension of the provisions of the Bill to Northern Ireland. The Justice Committee has also considered this matter at two meetings and has informally indicated its support for Northern Ireland’s inclusion on both occasions. Finally, as noted in previous correspondence, to date there has been unequivocal support for Northern Ireland’s inclusion within the Bill from all executive parties”. I am grateful for the work of counterparts in the Northern Ireland Executive and their officials for their constructive engagement on this Bill.

[Lord Fox (LD)]

My Lords, I have some brief thank yous. I will not delay your Lordships long. I thank the Front Bench of His Majesty’s Opposition for working collaboratively, the Minister, the Whips and, in particular, the Bill team, who have had to scramble on this. The noble Lord, Lord Arbuthnot, needs a special mention in all this. I thank my noble friend Lady Brinton for her work on this issue and Sarah Pughe in our Whips’ office, who has been behind much of our work. We have worked well on this Bill together. Let us now pass it.

Company Directors: Identification

Lord Fox Excerpts

Wednesday 22nd May 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am afraid that I will push back slightly on the noble Lord’s point. We have had extremely high degrees of collaboration with the overseas territories. We are now very clear on who the beneficial owners are of land in this country, and, as I said, we have just completed a consultation that will allow us to go further in ensuring that everything is extremely transparent. I truly believe that real progress has been made, without impinging on the ability of legitimate businesspeople to open companies, run their businesses, make profits and grow the economy.

[Lord Fox (LD)]

My Lords, I agree with the Minister that some progress has been made, but a great deal more is required. There are somewhere between 4.5 million and 5 million companies registered with Companies House, and they also need to be cleaned up. Can the Minister tell us how Companies House is getting on with that and when we will know for sure that all those companies are what they say they are?

[Lord Johnson of Lainston (Con)]

I appreciate the noble Lord for pointing back to my previous answer about the 12,600 or so companies that have had their identities checked, expunged, changed or verified. That is clearly a significant starting number, which we expect will increase over the next year or so as Companies House deploys the £50-odd million that we gave it to introduce new systems to hire new people. That goes hand in hand with the 475 new economic crime prevention officers we have hired and the £400 million we have dedicated to fight economic crime between 2023 and 2026.

Product Safety and Metrology etc. (Amendment) Regulations 2024

Lord Fox Excerpts

Monday 20th May 2024 Grand Committee

To conclude, recognition of the EU requirements, including CE marking, in Great Britain is due to end on 31 December 2024 for the product regulations in this instrument. The instrument removes this deadline. The main objective of this instrument is to provide businesses with choice, certainty and clarity, giving UK manufacturers the flexibility to use either UKCA or CE for placing products on the Great British market. I beg to move.

[Lord Fox (LD)]

My Lords, I thank the Minister for this important announcement. I do not think that the Minister was in your Lordships’ House when we discussed the retained EU law Bill. If he was, he was very wise not to be on the Front Bench at the time. As your Lordships will recall, we were marched forcibly three-quarters of the way up the hill only to be marched back down again.

This statutory instrument is very much indicative of the position that we arrived at after we had marched back down the hill and is infinitely more sensible than where we would have been had we enacted the original retained EU law Bill, and for that the Government and Ministers need some credit.

I have a slight concern—I may have misunderstood. My understanding is that the deadline for recognition of CE is pushed to one side and that CE will be recognised indefinitely, except the Government retain the right to impose non-CE regulations if they decide that they want to do so. That leaves an air of uncertainty, so it would be interesting to hear a response to that.

The Minister hinted at the overall future of CA. Industry has been pushing hard not to have a dual standard, and the department has done well to bow to that. However, the point that was not being made—which we were trying to make at the time—was that it would be expensive. It is good to hear that it would have cost half a billion pounds for industry to conform to that and it is glad that it did not have to do so. Why are we retaining CA? How much resource will the Government commit to the process of having a separate standard, even though the market will inevitably drive most of the players into the CE camp for accreditation? I would like some more clarity around the future of CA.

The Minister mentioned the product safety review. I think we would all like to know when it will be published, as it was promised some time ago and is still not among us. It would be really interesting to know when it will be. I have one final question around Northern Ireland. My assumption is that this solves any potential cross-border issues between the Republic and Northern Ireland, but could the Minister confirm that?

[Lord Leong (Lab)]

My Lords, I thank the Minister for introducing this SI and setting out its purpose and the noble Lord, Lord Fox, for his contribution. I, too, was not in the House when the retained EU law Bill was debated, although I read sections of Hansard in preparation for today’s debate.

It would be churlish of me not to welcome this instrument, which effectively extends indefinitely the looming deadline of 31 December 2024—a deadline already extended twice since it was first legislated for in 2020. Business will welcome this move. It will save it time and money by not having to comply with two different and, in some cases, largely completely overlapping regulatory regimes. Consumers will welcome this move too. It removes the potential double whammy of higher prices and less choice for GB consumers that would have resulted from some manufacturers deciding it was not worth their while or the cost to meet the additional bureaucracy of the UKCA regime.

Of course, the Government have welcomed their own move. It is estimated that this SI will save businesses more than £500 million in the next decade, as the Minister stated. At the risk of being churlish, I must observe that attempts to present this as an example of their being a great friend of business stretch credulity somewhat. One would not herald the captain’s decision to change course at the last minute to avoid sailing into an iceberg that everyone else knew had been looming for a long time as a “titanic success”.

This instrument will mean that businesses can now use either CE or UKCA markers when placing goods on the GB market—although not, of course, in Northern Ireland because of its unique situation. The Venn diagram of the CE regime and the UKCA regime will become concentric circles, with the former completely enclosing the later. Despite this, paragraph 6.8 of the Explanatory Memorandum states:

“The UKCA requirements which are not, however, treated as being satisfied by the above steps are the manufacturer’s obligations to … Draw up a UK Declaration of Conformity … and … Apply UKCA product marking”.


Perhaps the Minister can explain why this remains necessary for goods which are sold in the GB market. Is this not a textbook example of meaningless rubber-stamping?

Not unrelated to this, what is the Minister’s response to conformity assessment bodies that have raised concerns with the Department for Business and Trade that demand for their services in respect of the UKCA mark will fall due to this statutory instrument? How does he intend to work with the sector to support a domestic route to market for relevant UKCA marked products?

Finally, as the Minister knows, SMEs are always at the forefront of my concerns. They will have been disproportionately affected by the costs of now unnecessary preparation for conformity to a regime that was due to come into force in less than eight months’ time. While we welcome this SI, can the Minister say if there has been any assessment of the costs that will already have been incurred across different sectors, especially those with longer lead times, and SMEs in particular? There seems little value in trumpeting potential savings if the businesses that may have benefited have already scaled down, or even closed down, their export capacity.

While we welcome this sensible SI, I do hope the Minister can illuminate the Committee with answers to my questions.

--- Later in debate ---

[Lord Fox (LD)]

I asked about the quantum of continued public investment in CA, and whether the Minister can give an idea of how much investment will be going into what may become a dwindling standard going forward.

[Lord Offord of Garvel (Con)]

The noble Lord also asked about the date of review. Those are two technical issues on which, if he does not mind, I will write.

I beg to move.

Steel: Port Talbot

Lord Fox Excerpts

Monday 15th April 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I thank my noble friend for that point, and she is absolutely right. If we look back six months or a year, there was very little future for steel-making in this country, and now we have one; we have a truly advanced manufacturing plan for this entire industry. This is something we should celebrate. It is a true industrial policy backed by government money, in partnership with the private sector, and supported by the extraordinary and brilliant talent of the people at Port Talbot.

[Lord Fox (LD)]

My Lords, the Minister will have noticed that the Prime Minister and the leader of the Opposition visited Barrow-in-Furness recently. The reason they went there, as he knows, is to see its submarine manufacturing process. Submarines need high-strength steel—the sort of steel that comes from blast furnaces and not from electric arc ones. Where will that steel come from? From which countries will we import it?

[Lord Johnson of Lainston (Con)]

It is very important that we have a strong defence basis; there is no question about that. The UK industry uses only about 1% of British steel. A quantity of the steel comes from Sheffield Forgemasters, which is owned by the Ministry of Defence. This plan will actually produce the right level of steel from recycled scrap, which is far more efficient for the environment, to enable us to provide for our defence needs.

Economic Growth (Regulatory Functions) (Amendment) Order 2024

Lord Fox Excerpts

Monday 15th April 2024 Lords Chamber

[Lord Fox (LD)]

My Lords, the Minister is the latest government Minister to wade into the sewage debate, but having previously tried to crack a joke about wading into sewage, I will not do it again.

Having had that interlude, we have had a chance to reflect on some of the comments that the Minister made. Some of the tricks of good government are timing and self-awareness. Those two things are absent from the extremely maladroit introduction of this order. At the centre of it is the conflation of Ofgem, Ofcom and Ofwat. As we heard from the noble Duke, the Duke of Wellington, these are very different markets. The communications market and the energy market are distinctly different from the privatised regional monopoly system which is the water industry. Because of that, the role of the regulator is substantially different. The idea, for example, of causing competition in the water market is irrelevant—there is no competition in the water market. This puts into focus the problem that is central to this order: it is inappropriate in the markets that it is seeking to address. That is at the heart of what your Lordships have said today.

We look forward to the Minister’s White Paper on competition. When the Truss Administration had their brief flurry, a whole bunch of stuff was said about growth and the “anti-growth coalition”. I am sure the Minister is smarter than the people who were using that language then. The role of growth in amongst the role of regulation is an important issue; the Minister is right to have broached it. On its seeking to influence the water market at this time—coming back to timing—this is not the moment to seek to rein back on regulation. This is the moment when we need to target regulation in the places where it is quite clearly breaking down.

The Minister sought to calm us about the effect of growth on environmental enforcement. Again, the noble Duke gave the lie to that issue by very clearly pointing out what I was going to point out in this document: that the two are very much conflated.

I will suggest a hypothetical issue: I am a regulator. I am about to implement an environmental order. This will undoubtedly affect the growth prospects of some companies in the region. Am I now inhibited by this order? The answer is: it seems so. Moreover, can the companies that receive the downside of this environmental order take it to judicial review? I believe they can. The Minister can confirm that or otherwise. So, at the very least, the environmental order is delayed.

We do not have a problem with the water industry restricting growth; we have the opposite. I cite my home river, the River Wye, as evidence of that. The unrestrained growth of the poultry industry has killed part of that river—not polluted it or made it a little bit dirty but killed it biologically. That is the effect of unrestrained growth. We need the opposite of what the Minister is talking about.

With these thoughts, I am very pleased that my noble friend has brought this amendment, and I am pleased to hear the contributions of your Lordships today. I hope the Minister will stand up and say, “We will set this aside”. If he does not say that, I hope he will say that these rules will be rewritten to make sure that the number one priority for the water industry is to solve the environmental crisis that is currently in our midst.

[Lord Leong (Lab)]

My Lords, I thank the Minister for introducing the regulation and all noble Lords who have spoken. Every day, we hear of sewage dumping. On average, a sewage dumping event now takes place every two and a half minutes. The lack of investment in our water systems over the past 14 years is a scandal that is increasingly hard to ignore. Billions have been extracted in shareholder dividends and millions in bosses’ bonuses, all while delivering a deteriorating system.

During the passage of the Environment Act, Conservative MPs had the opportunity to support a Labour-backed amendment that would have brought an end to sewage dumping. Of course, they did not do so. We should be extracting sewage from water supplies, not extracting value in unjustified dividends and overleveraged debt. Let us imagine the economic growth, the skilled jobs and supply chains that could have been created if, instead, this money had been funnelled into developing creaking infrastructure, repairing and upgrading pipelines, and preparing for the predicted increase in demand and increasing rainfall.

The Labour Party has long been making the case for the increasingly urgent need to invest for the long term and to improve quality in the short and medium term. So on this issue we agree with the Government that bringing these three regulators within scope of the growth duty will help to ensure they consider how best to promote growth in their sectors.

However, making the changes required by this instrument will obviously require dedicated resources within Ofcom, Ofwat and Ofgem. As the amendment to the Motion makes clear, these regulators already have a lot on their plates, so can the Minister indicate how they are expected to juggle this as well? Are the Government confident that the regulators have the capacity to deliver to the full extent that the order demands?

Like the regulators, we want to support businesses and stimulate the vital investment needed to ensure a quality service to current and future consumers. For example, Labour’s plan to establish “GB Energy” would create half a million new skilled jobs in the industries of the future, rebuild the strength of our industrial heartlands and reduce energy costs and carbon pollution. Labour is already thinking ambitiously about the long-term future of this country.

Given that the Government’s order is about long-term growth, could the Minister explain over what timeline they expect to see the benefits of the change, and over what timeline they will be reviewing its impact?

As far as Ofcom is concerned, the growth duty will also not apply to its regulatory functions under Part 3 of the Enterprise Act 2002, which concern mergers. In particular, it will ensure that Ofcom is not required to consider other factors when providing advice to the Secretary of State on the public interest considerations on media merger cases. Can the Minister explain the reasoning for that very specific exception?

In this regulator’s sector in particular, many noble Lords will know that I am passionately interested in the enormous potential for growth in our telecoms industry, especially in AI, but the world will not wait for us. We risk missing out on exploiting the potential commercial benefits from our world-leading research base if we do not have a clear industrial strategy, if we do not encourage and invest in tech start-ups and scale-ups, and if we do not develop a serious regulatory presence alongside the USA and the EU as global standards are being established.

To conclude, we support bringing the three regulators within the scope of the growth duty, but we regret—who could not?—the failure of the Government to prioritise the sanctioning of polluters and the cleanliness of waterways. Just last month, rowers in the world-famous boat race, some of the fittest people in the nation, fell sick because of their exposure to the water in the Thames. I would be hard pushed to invent a metaphor more apt to sum up why this Government have so comprehensively failed—on regulation, on public health, for young people today and in investing in their tomorrows. Labour stands ready to deliver the decade of national renewal that this country self-evidently needs.

While we support the regulation, we acknowledge the amendment to the Motion tabled by the noble Baroness, Lady Bakewell. We must address the sanctions needed against short-term profiteering by the CEOs of utility companies enriching themselves. I look forward to the Minister’s response.

Code of Practice on Dismissal and Re-Engagement

Lord Fox Excerpts

Monday 25th March 2024 Lords Chamber

The other would be to give the option to the union to obtain an injunction to prevent dismissals where there had been inadequate consultation and inadequate disclosure. For the reason that the committee’s recommendations do not find any reflection in the code of practice, I share my noble friend’s sense of regret at this code.

[Lord Fox (LD)]

My Lords, I regret that I did not have the pleasure of being present when the Bill of the noble Lord, Lord Woodley, received its Second Reading a month or so ago. I clearly understand that the nature of that debate reflects very clearly on what we are debating today.

The Minister was not in your Lordships’ House when we debated the P&O issue. Had he been, he would have experienced outrage and hand-wringing, not just from these Benches but from the Benches behind him and indeed from the Dispatch Box itself. That outrage was felt across the whole of your Lordships’ House. As we have heard, this code was supposed to help embrace that issue and try to make sure that such outrages are not repeated. As we have heard in three well-made speeches from the Opposition Benches, we do not believe that this code comes close to doing that.

The code takes a very optimistic view of human nature: it infers that there are two willing parties with reasonable actions and beliefs. That is not the case that a code of conduct needs to deal with. When reasonable people negotiate with reasonable people, we do not need this code. This code is, essentially, how normal, reasonable people would act, and, as the Minister said, most companies are reasonable companies, and most employees operate with reason. That is why this code, in a sense, merely codifies what normal, civilised behaviour should be.

That is not what a code is for. A code is to deal with the people trying to operate outside normal, reasonable behaviour. On several occasions, the Minister used the word “ensure”. This does not ensure anything, and noble Lords do not have to take my word for it. Paragraph 12 says:

“A failure to follow the code does not, in itself, make a person or organisation liable to proceedings”.


In other words, any teeth it might have had in the first place have been removed by paragraph 12. I share the belief it really had no teeth.

Many other provisions in the code—for example, paragraphs 21 and 22—use the term “reasonable”. How would we test “reasonable” in this circumstance? In Section C, around information, I would be interested to know: what is reasonable? We then move to paragraph 27, which is about commercial sensitivity and confidentiality. In every case of fire and rehire, there will be commercial sensitivity. Therefore, it makes sure that no information ever gets put forward. I am old enough to remember when the United Kingdom was part of the European Union, and we were part of the European Works Council system. That excuse is not allowable within the European Works Council. There is a system within that whereby the works councils are brought into the confidence of the management about their intentions in such circumstances. This does not allow such reasonable behaviour to occur.

Given the genuine and heartfelt comments made opposite during the P&O issue, I am disappointed that this is the result. It is toothless, as the noble Lord, Lord Woodley, said on several occasions; it does not ensure that something such as P&O could never happen again. As the noble Lord, Lord Hendy, put it, the 25% uplift is not worth a hill of beans when you look at the financial gain it has made by the actions it has taken.

[Lord Leong (Lab)]

My Lords, I thank the Minister for setting out the code of practice and express my gratitude to all noble Lords who have spoken.

Last week saw the two-year anniversary of the P&O Ferries dismissals, the highest-profile abuse of fire and rehire in recent years—but, sadly, not the only one. The Minister might say that the P&O case is not fire and rehire, but many will not agree with that sentiment. If it looks like a duck, swims like a duck and quacks like a duck, it probably is a duck. Today the replaced workers are paid less than half the national wage, as my noble friend Lord Woodley referred to, in conditions that one described as like being in jail. Workers’ pay and conditions horrendously diminished. Meanwhile, the company and its parent, DP World, was awarded £230 million in UK government contracts between March 2022 and July 2023.

This injustice has driven me to extraordinary lengths: it has made me agree with the Member for Welwyn Hatfield, the right honourable Grant Shapps. When he was Secretary of State for Transport, he described the company as

“pirates of the high sea”.

I am even minded to agree with the then Prime Minister, Boris Johnson, who said that fire and rehire was

“unacceptable as a negotiating tactic”.

The code does nothing to prevent any employer treating workers in a shabby way in the months and years to come.

Noble Lords who have run businesses, as I have, know what it is like to face difficult financial decisions. We understand that, in extreme cases, sometimes the only way to continue operating is to consult with employees on renegotiating contracts. If the company goes bust, nobody wins; everybody loses their job. Only in that situation can fire and rehire possibly be justified. Yet in court, employers do not have to prove that the fire and rehire policy would mean the difference between the life and death of the business. That widely criticised omission acts as a cloak of unaccountability, permitting employers to present unscrupulous decisions as unavoidable. All the well-intentioned recommendations in the code—that the employer “take into account” employee objections; that they engage in “all reasonable steps”; and that they do not raise the spectre of job losses too early in the process—are, in effect, neutered by this loophole.

Furthermore, several noble Lords have referred to the potential sanctions—a 25% uplift in fines at the end of a long David and Goliath legal battle—that could be factored in as a cost of doing business, as the noble Lords, Lord Fox and Lord Hendy, stated. We could see companies rewarding executives who are prepared to brush off a few bad PR headlines while making workers’ lives worse. That is appalling in principle and in practice.

The P&O Ferries example should serve as a warning; even the then Prime Minister Johnson thought so. The code does not prevent a race to the bottom; it could lead to a hollowing out of secure jobs. Roads paved with good intentions—whether labelled promises, pledges or non-binding codes of practice—lead only in one direction. It is the workers, threatened with either losing their jobs or accepting worse conditions, who end up feeling the heat. The code currently makes no reference to a necessary qualifying period of employment before it becomes applicable to an employee. Can the Minister tell the House whether the code is applicable from day one for all employees?

In light of the range of concerns raised from only 50 responses to the consultation, I hope that the Minister and the Government will address the shortcomings of the proposal. To that end, my noble friend Lord Woodley’s amendment sets out clearly why the Government should reconsider.

Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024

Lord Fox Excerpts

Monday 25th March 2024 Lords Chamber

[Lord Fox (LD)]

My Lords, I think, the mantle having passed through several Ministers, that this is an economic crime debut for the noble Lord, Lord Offord, so I welcome him to our world. He is ideally suited to bearing down on economic crime.

We welcome this statutory instrument; it is part of the process of having debated the economic crime Bill. Many of us had high hopes for what the economic crime Bill would and could achieve, but at the centre of what we ended up with was the performance of Companies House and its strength to uphold what we need. This is another important step.

I have a couple of questions on the first part of the statutory instrument: first, the potential for multiple penalties. If we were to use the real-life Knighton example of literally hundreds of companies being registered to an unwitting property owner, in theory could Companies House levy a £10,000 penalty for each and every one of those companies registered? It would, clearly, have discretion over whether do that. My second point is on the right to appeal. If Companies House is levying those penalties on the wrongful registration of a company, what is the right of appeal? Is it judicial review—a long period of review and appeal—or is it a relatively swift action?

The Minister mentioned the opportunity to update us when the next tranche of statutory instruments comes through; this would be good. We had a very useful briefing from the Companies House representatives while we were debating the Bill, and it was clear that there was a tremendous amount of resolve there but also an awful lot to do. A full update on where Companies House is on capability and capacity—for example, on recruitment and on starting to implement these measures; I saw reports that it has taken actions that it was not able to before the passing of the Act—would be very helpful. But with those provisos, we look forward to the next 50 statutory instruments.

[Lord McNicol of West Kilbride (Lab)]

My Lords, I draw the attention of your Lordships’ House to my registered interests as director and shareholder of McNicol Consulting Limited, which is registered at Companies House.

I have read the Commons debate on this SI, and I have gone through the Act and the Explanatory Memorandum—the memorandum was very helpful, so I thank the Bill team. We will support this SI on these Benches. I have a few questions for the Minister. Will Companies House require more resources if these cases are to be dealt with internally rather than passed on to the criminal justice system? If more are resources needed, will the Government be fulfilling those needs?