Life Sciences Businesses

Lord Fox Excerpts

Monday 26th February 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

The noble Lord is absolutely right to raise this as a core issue. I am quite frustrated myself at some of our planning points, which certainly delay the building of these essential facilities. I am glad that life sciences wet lab space has been coming on stream in significant quantities, not least recently in Canary Wharf, which I hope he will join me in celebrating. However, there is more to be done; I totally agree with the noble Lord.

[Lord Fox (LD)]

My Lords, the Office for Life Sciences reports to the DHSC and the DSIT. The Office for Investment is a joint No. 10 and Department for Business and Trade unit. I spoke to a major biotech investor in this country, which said that the lack of communication between these two organisations is hampering its progress in building new biotech capacity in this country. Does the Minister agree that these two organisations ought to work closely together? There ought to be an explicit link, so that when companies are trying to scale up and invest in this country there is a proper joined-up approach.

Reporting on Payment Practices and Performance (Amendment) Regulations 2024

Lord Fox Excerpts

Monday 26th February 2024 Grand Committee

[Lord Aberdare (CB)]

My Lords, I welcome these regulations, although I would have liked them to go even further. Prompt payment, as the Minister said, is vital to smaller construction firms, particularly at present, when a recent report from the Begbies Traynor Group found that the construction sector had the highest number of at-risk businesses in the UK, more so than any other industry. That is 83,000 firms in significant financial distress. Late payment and retentions are key issues exacerbating these problems for small construction firms, as larger companies higher up the supply chain seek to hold cash in their accounts for as long as possible, thereby adding to the challenges for smaller firms of inflation and increased costs of materials, energy and other necessities. Borrowing is often no longer an option for many SMEs. Therefore these regulations, requiring greater transparency of payment reporting, represent a step forward in keeping larger companies accountable and reinforcing the Government’s efforts to support SMEs by establishing prompt payment as the norm, not the exception.

The requirement to report on invoices both paid and unpaid by value, not just by volume, is particularly welcome. Even if the number of invoices paid within the time specified—30 days, 60 days or more than 60 days—represents a high percentage of all invoices, the total percentage value of those invoices may be significantly lower, because lower-value invoices tend to be paid more quickly. The requirement for senior management to sign off on the figures reported is also a laudable step forward.

However, there are some disappointing omissions from the regulations. The Government’s consultation response last November promised to introduce “reporting on retention payments”—that is, the withholding of a proportion of payments due to subcontractors for work they have completed—for businesses in the construction sector. Perhaps the Minister can tell us something about when and how this will happen, even if it may be too much to hope that he might give an indication of how the Government might move towards ending the pernicious practice of retentions altogether. It is high time that happened, after so many years of government consultations and considerations but no conclusions.

The consultation response also promised more active and visible enforcement of payment practice reporting requirements, but there is no reference to this in the regulations before us today. Reporting by itself will not solve prompt payment issues, so how will it be backed up by the enforcement measures promised by the Government? What will happen if a supplier to a government construction project reports consistent lateness in paying its supply chain, especially for higher-value invoices? Can the Minister say something about how and when this enforcement commitment will be met, including the plans for implementing changes to the role of the Small Business Commissioner to broaden its powers and increase its effectiveness in supporting small businesses?

I welcome the regulations as far as they go, but I look forward to hearing from the Minister how the Government plan to finish the job by introducing further regulations, hopefully quite soon, to ensure that reporting requirements are actually monitored and enforced and, above all, to begin finally to deal with the far too long-standing bane, blight, canker, plague, scourge—or whatever other synonym one may choose—of retentions.

[Lord Fox (LD)]

My Lords, we, too, welcome this statutory instrument in as far as it goes. When I saw that my friend the noble Lord, Lord Aberdare, was speaking, I knew that my speech would get shorter, because he has already covered much of the ground that I wanted to talk about. Late payment is just about the number one issue facing SMEs. If you listen to the organisations that represent them, it is the issue they always come back to. It will not be solved merely by transparency; we know that is the case. We have some transparency, but we are not getting solutions.

There is a culture in certain sectors. As the noble Lord, Lord Aberdare, just set out, some sectors are worse than others. SMEs rely on a small number of large customers. The Minister said that publishing information would help SMEs to make informed decisions about whom they would work with. However, in many cases SMEs do not have the luxury of a decision about whether to sell their product or service to one company or another. That is the market and those are the businesses that operate; if there is a culture of late payment or retention in that business and, if those SMEs want to continue to trade, they have no choice about with whom they will trade. There is very little jeopardy for those companies that continue to practise late payment. That is the point the noble Lord made about enforcement.

I will make one other point about the building sector. Although it is a somewhat dated example, we can go back to 2018 and the Sandwell hospital project, which was managed and run by a company called Carillion. When that company went bust, it was very clear that its entire cash flow was managed through the late payment and retention of its contractors and subcontractors. The transparency situation has not appreciably changed since then.

A big issue that has to change is the Government’s view to their management of public procurement. The issue of late payment came up a number of times when we considered the public procurement Bill. Can the Minister ask his department what it can do, using the new Procurement Act, to help bolster enforcement on these issues? From our point of view, we would make it compulsory to sign up to a prompt payment code then seek ways to enforce it. Without that, the small improvement of this statutory instrument will continue to leave many of our small and medium-sized businesses in a position where their cash flow is used for the benefit of their customers’ cash flow.

[Lord Leong (Lab)]

My Lords, I thank all noble Lords who have spoken. I declare my interests, as set out in the register, as a director of several businesses and companies. I thank the Minister for setting out the regulations and welcome the Government’s campaign, declaring 2024 as the year of the SME.

I have advocated for provisions such as those provided by this instrument since long before I became a Member of your Lordships’ House. As a businessperson, I welcomed the original instrument’s introduction in 2017, and support the extended sunset clause and the expanded reporting requirements contained in this legislation.

As noble Lords have said, for too long and far too often, SMEs that have supplied goods and services to larger companies and public sector organisations have not been properly respected regarding payment terms. A relatively small amount of money for a large organisation can be, for many SMEs, a question of whether wages or rents are paid on time. It is stressful enough running a business, and late payments from large customers, whether through inefficient systems or the deliberate withholding of payments, are an all too common factor. Late payments can lead to additional borrowing costs for SMEs. Further, some SMEs may be reluctant to chase late payments for fear of jeopardising the business relationship. When payments have to be chased, good will, time and energy are unnecessarily wasted on both sides.

In tough economic times, as costs rise and margins are squeezed, SMEs are particularly vulnerable to cash-flow problems. Yet, in 2022, SMEs were owed an average of £22,000 in late payments. This has massive negative impacts on reinvestment, liquidity and market operation.

We know that we have a serious productivity problem in our economy. We can also agree that SMEs are the lifeblood of a healthy economy. So I am unsurprised that a consultation on these regulations last year strongly supported their extension and expansion. The expansion requires companies to publish additional information on both the proportion of disputed invoices resulting in payments exceeding the agreed times and the value of invoices paid late, in addition to the number of such invoices—an important improvement, in my view. It also requires companies to report on the percentage of invoices paid before 30 days, within between 31 and 60 days, and after 61 days or longer.

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

I thank the noble Lord, Lord Aberdare, for those points. The timeline is genuinely as soon as possible. We felt it was more important, given the timing of the cliff edge and the sunset around this legislation, to make sure that we extended that to 2031. I am aware, without speaking on behalf of my ministerial colleagues, that retention payments and issues around construction are absolutely on top of the priority hopper, so I hope the noble Lord will be satisfied with that.

[Lord Fox (LD)]

My Lords, finally—I am not to be outdone—the Minister sets a lot of store on the public embarrassment issue. I come back to the balance of jeopardy: the Minister is a businessman of the world and he knows that, if you have a publicly listed company, it can make sure it reaches its numbers by the end of the year by extending its outgoings into the following year—it happens all the time. Which is more embarrassing to the board, not meeting its financial projections to the Stock Exchange or having a rather dirty note in its annual report 12 months later?

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Lord for the direction of his question. I do not necessarily think that I can answer it specifically. It would be unfair to deviate away from the main thrust of what we have been discussing today: a very sound extension of the right type of legislation for gathering information and including new areas within which to gather information, such as on value, to ensure that the supply chain funding and the data from companies using that system are not distorted. This is sensible, frankly, and has the support of everyone here.

However, the Committee is absolutely right to put pressure on the Government regarding potential payments around the construction industry and, importantly, the Small Business Commissioner. The plan is that the commissioner will be given significantly more powers—and not simply to publish the league tables, which I agree with the noble Lord is soft power. As I understand it, we are looking at opportunities to give the Small Business Commissioner, or whatever office it evolves into, real teeth when it comes to ensuring that companies are fulfilling their obligations.

There is more work to be done. This is a quite a new concept for the UK economy. We are looking at legislation that is just under 10 years old whereas, previously, we did not have any such legislative structures.

Economic Crime and Corporate Transparency Act 2023 (Consequential, Supplementary and Incidental Provisions) Regulations 2024

Lord Fox Excerpts

Monday 26th February 2024 Grand Committee

[The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)]

My Lords, it is a pleasure to see the same team back again. We have covered late payments of paternity leave and now we are on economic crime; I hope that they are not linked. I believe these are to be consequential, which in plain English means inconsequential. I hope that we can cover this quite smoothly but of course, as always, I am very open to hearing noble Lords’ views on how we can improve our legislation to reduce economic crime in this country and get Companies House to work more effectively. At the risk of being slightly repetitive, I urge noble Lords to look at my interests in the register.

These regulations were laid before the House on 30 January under the Economic Crime and Corporate Transparency Act 2023, which I will refer to as the 2023 Act. This Act makes changes to the Companies Act 2006, which, among other things, reforms the role and powers of the Registrar of Companies.

Last week, I brought forward the first four affirmative statutory instruments to begin the long-awaited process of enabling the registrar to become a proactive gatekeeper of company information. Those regulations and the powers in the 2023 Act equip the registrar with the ability to compel answers about suspicious information, remove or change information on the UK company register, as well as analyse and disclose data available to her to law enforcement agents. I am pleased to say that, by next week, the registrar will be able to begin using her new powers. This will be an important step in improving the integrity of the company register for investors and businesses alike and will help in the fight against economic crime.

This statutory instrument will make minor consequential amendments to the Companies Act 2006 and the Economic Crime (Transparency and Enforcement) Act 2022. It also introduces changes to eight pieces of secondary legislation. The changes are very technical in nature but are designed to ensure that the reforms apply coherently and the registrar’s new powers are exercised effectively.

The key purpose of this statutory instrument is to ensure that the changes introduced into the Companies Act 2006 will extend, where possible, to law governing other business entities registered in the UK. It also lifts restrictions on the use and disclosure of certain data by the registrar and allows her to share it more widely, especially with public authorities for purposes connected with the exercise of these functions. The changes are necessary to ensure consistency across the statute book pertaining to business entities, as well as to provide clarity and accessibility to users of legislation.

Although this statutory instrument does not make any policy changes, these regulations are an important effort to ensure that the registrar’s objectives and powers are applied consistently to all business activities registered at Companies House. I am sure that noble Lords have read some of the background notes but these are grandfathered in European companies, called Societas, and various other types of companies; I will be happy to write to noble Lords in greater detail but we are comfortable in wanting to make sure that we have not let any peculiar formation through the net.

Looking ahead, there will be greater opportunities to consider the more substantial parts of the reforms. My department will continue to bring forward further statutory instruments to implement the reforms to Companies House fully. These instruments will strengthen the role and powers of the registrar, help tackle economic crime and make the company register one of the most trusted in the world. I beg to move.

[Lord Fox (LD)]

Those are laudable aim, Minister. Those of us who laboured long and hard into the night on the then Economic Crime and Corporate Transparency Bill welcome the arrival of this statutory instrument. When we considered the other ones last week, I asked when the commencement statutory instrument was due. I think that this is what I was asking for, so that is good news.

I have nothing to add. As I say, we debated long and hard on the Bill, now the Act. The proof of the pudding will be in Companies House and how it gets motoring on its new mission. I know that the Minister and the department know this; anything that we can do together to help it get there is to the benefit of all of us. We wish this statutory instrument godspeed and we wait hopefully for the other 50-something that will come hard on its heels.

[Lord Leong (Lab)]

My Lords, as stated earlier, I declare my interest as a director of several companies, as set out in the register. I thank the Minister for clearly setting out this set of regulations. I agree with the noble Lord, Lord Fox: we on these Benches are content to support this set of technical regulations and have nothing further to add.

Paternity Leave (Amendment) Regulations 2024

Lord Fox Excerpts

Monday 26th February 2024 Grand Committee

Given all that, I beg to move this statutory instrument.

[Lord Fox (LD)]

My Lords, I thank the Minister for his presentation, which was very clear, and I welcome the movements that this statutory instrument represents. It is important to add more flexibility, to do things such as reducing notice, and to extend the period by which this leave can be used. The Minister is correct: the ability for fathers to spend time with their babies at this early stage is an extremely vital part of improving the level of parenting going forward.

However, we have to be a bit realistic, in that we have an economy that is gradually moving towards an informal employment model, whether it is gig economy or zero hours, which means that an increasing number of people are missed out by this sort of measure. Then, of course, we have straightforward self-employed people, who are not part of this, and people who have not been working for long enough for their business. That starts to leave out a large number of people. I cannot give the exact number, but at least a quarter of fathers are not eligible because of those issues; it is probably more because the gig economy is increasing. I urge the Minister and the Government to consult with all of us about ways those fathers can be brought into the system, because at the moment there is a danger that they will slip through the net.

We will be going into the election with a manifesto commitment to an increase in the amount of paternity leave that is available and in the level of flexibility. I am sure that His Majesty’s loyal Opposition will say something similar in a minute, perhaps with more specificity. However, I will make a special mention of those businesses that go beyond the law. Many businesses go way past the legal minimum, and one way of moving this forward is for the Government to recognise, praise and celebrate businesses that do far more than the current legal limit. They recognise that the fathers in their business benefit, not just as fathers but as employees. I think the Government and all of us can spend time celebrating that.

[Lord McNicol of West Kilbride (Lab)]

My Lords, like the noble Lord, Lord Fox, I welcome this SI, as far as it goes. As he said, it is welcome, but this is not groundbreaking; we are talking about small moves in timescale, the length of leave, when it can be taken and the number of opportunities to take it. On the previous SI, we were all declaring our interests. My interest in paternity leave finished 21 years ago, when my youngest child passed his first birthday, but I declare my interest in a number of businesses that I advise, all of which treat their employees at a better and higher level than the legal minimum that this sets—and I shall come back to that.

The SI, Explanatory Memorandum, impact assessment and the Minister’s introduction are all very clear. As I said at the start, this is welcome, but I have a few questions to raise. If the Minister cannot answer them, I am more than happy for him to write to me and place a record of that letter in the Library with answers to some of the specifics—but we support this SI going through.

To work through the regulations, one thing that I was not clear about is the territorial application, which is England and Wales and Scotland. Why does it not also cover Northern Ireland? I was interested in that.

Let us look at flexibility. When I did take paternity leave—Jeez, 23 or 24 years ago—my employer at the time, GMB trade union, offered two weeks, which could be taken within the first year, but there was no period that you had to take. These regs will cover two one-week blocks. Twenty-four years ago, I was able to take the first week, then my wife and I decided that I would take every Friday for the next five weeks, because she had help and support earlier in the week, and Fridays were the time that I could take to spend time with our child and allow her some respite. That flexibility of having one day a week for the next five weeks was a different way of taking it, but that is not covered by the regulations. So, just to take the point from the noble Lord, Lord Fox, a bit further, did the department look at widening that flexibility so that it could be taken as individual days?

I fully welcome it being within the first year, and the notice period is also more than welcome. The Minister noted that the first consultation was post the general election following a manifesto commitment in 2019. We are now in 2024, so I am wondering why it took so long to get here, because this is a positive move. The impact assessment, again, is spot on and covers all the right issues.

I am looking at flexibility for a reason. If we look at page 9 of the impact assessment, it looks at the take-up assumptions. Right now, we are on 74% for week one and 66% for week two. A large number of partners and fathers are not taking the second week, so this is about redressing that. However, the assumption is that the second week will move up to a central figure of 70%, which is an increase of only 4%. Even if we get to the high-end assumption of 74%, it is an increase of only 8%. Any increase is welcome, but is there more that the department can do to help general uptake on the first week? With these changes, there is no expectation that week one uptake would increase. Is there more that we could do on advertising and marketing to show and share the benefits of this? Looking at the finances of it, they are relatively small.

The Minister touched on the neonatal issue as well. I have a genuine question for information. Obviously, when there is a notice period, it is for four weeks. If you have a premature birth, or it is an adoption and things move quicker, that four-week period may be too much. The Minister touched on this but I did not quite get the detail of it. If there is a premature birth, what are the rules in terms of the partner or father being able to move quickly in order to take time off? I presume that many premature births end up in hospital but I am sure that support from the partner or father would be very willing. Can the Minister say anything on that?

The noble Lord, Lord Fox, touched on the gig economy so there is no need for me to repeat what he said.

With that, as the noble Lord, Lord Fox, said, we will come back to the manifesto in due course, but now is not the time to set out what our policy would be for the next election. We on these Benches support these regulations.

National Minimum Wage

Lord Fox Excerpts

Wednesday 21st February 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that reminder. I think all of us in this place and the other place can be very proud of what has happened over the past 25 years on the minimum wage. This wage increase will benefit 3 million workers. Remember, we have 33 million people working in the UK, out of 66 million, so those in the bottom 10% are getting a 10% increase. That has a knock-on effect for further formulae. This is a big impact. If we look at the past eight years, since it came in in 2015, the national living wage has gone up by 60% versus inflation at 30%, so there has been a real increase in wages for those at the lower end of the wage scale.

[Lord Fox (LD)]

My Lords, I think the noble Lord, Lord Bird, would agree that there are too many working people who have to rely on the minimum wage in this country and that those at the bottom of the wage cycle are the ones who suffer most when there is low growth. A key statistic, if the Minister wants to trade statistics, is GDP per capita, which is falling. Our productivity is falling because there is insufficient investment in skills and capital machinery. The reason there is insufficient investment is because businesses do not have stability or confidence going forward. Does the Minister agree that this Government do not have a plan and are not providing the facility that can deliver the growth that will help the people the noble Lord, Lord Bird, is talking about?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that. We have record levels of employment in this country, with 33 million out of 66 million people working. Average public sector pay is £19 an hour and in the private sector it is £16. We are now taking the minimum wage up to £11.44. The noble Lord is quite right to indicate that if we want to ask businesses to invest more money, perhaps we should be asking them to invest in more productivity per employee rather than just more wage per employee, and perhaps more inclusion and diversity, along the lines of John Lewis and Timpson.

Post Office Governance and Horizon Compensation Schemes

Lord Fox Excerpts

Wednesday 21st February 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, the Horizon scandal is widely accepted as one of the worst miscarriages of justice in British history. Given the magnitude and duration of the scandal, it is quite astonishing that it seems that every day we get more and more revelations. We get further from the truth and further from true justice for all those who have been victims of it.

Sunday’s allegations could not have been more serious, and the same applies for everything that has emerged since then, not least the memo that was unearthed last night showing Henry Staunton’s recording of a meeting with the then Permanent Secretary at BEIS, Sarah Munby, on 5 January 2023. In that, he was allegedly told to “hobble” into the election; not to

“rip off the band aid”

in terms of the Post Office’s finances; that

“politicians do not necessarily like to confront reality”;

and, finally, that

“now was not the time for dealing with long-term issues”.

This new evidence appears to endorse Mr Staunton’s claim made at the weekend. It is of the utmost importance that both the public and Parliament know the truth. Do the Government continue to deny that any of those conversations took place, as was stated categorically on numerous occasions throughout this week? Given the new evidence, will the Department for Business and Trade now commit to a Cabinet Office investigation into the serious and continued allegations that Mr Staunton has made?

Earlier this week, it was welcome that the Government agreed to publish copies of the letter from Sarah Munby to Henry Staunton on his appointment as chair of the Post Office in December 2022, but that does not go far enough. Given the Secretary of State’s own willingness now to place part of the record in the House Library, I ask once again what I asked on Monday, when we debated this—unfortunately, before the Statement had been made. Given the new evidence that has come to light, will the Government publish all correspondence and minutes of meetings between the relevant departments, UKGI and the Post Office, and put them all in the parliamentary Library?

Earlier this week, it was also suggested by the BBC that the Government knew that there was a cover-up in the Post Office eight years ago—in 2016—with Ministers having been told that an investigation was happening into how often and why cash accounts on the Horizon system had been tampered with remotely. Will the Minister comment any further on those claims about when that was known by the Government? How will the Government investigate those claims? Following that, will this matter also be handed over to Wyn Williams for full investigation? I am sure that we all agree that the secrecy must end, and that the full sunlight of public scrutiny should be brought to bear.

On the compensation itself, has the £1 billion figure referred to in the Statement already been allocated, and is it therefore ready to be paid to those who will receive it? Subsequently, if that is not the case, will the payments be specifically itemised and timelined within the next Budget?

Although Monday’s Statement and today’s repeat are rightly about the Post Office, people’s faith in government has already been damaged by scandals such as Hillsborough, infected blood, Bloody Sunday and Windrush. Victims of other scandals—especially the contaminated blood scandal—feel that they need to ask whether they have been the victims of deliberate inaction as well. Will the Government provide assurances that no such obstacles have been put in the way of any payments of this kind; and if so, how exactly do they explain the delays in so many cases?

The Post Office miscarriages of justice alone have shown the devastation that can occur when institutions are allowed to operate without oversight or are shrouded in secrecy, and I know the Minister shares everyone’s view on this. Throughout all this, we must not lose sight of the sub-postmasters and sub-postmistresses themselves, so I make no apology for returning to the issue of convictions and the overturning of them. Can the Minister update your Lordships’ House on the progress in this area? Have His Majesty’s Government set a timescale for delivering the legislation needed to quash the convictions?

Finally, the Minister often talks about compensation packages and money being paid in thousands, tens of thousands and hundreds of thousands of pounds to wrongly convicted—I would describe them as not just wrongly but malignly convicted—sub-postmasters and postmistresses. However, is he aware that the vast majority of Post Office payments for the specific issue of “damage to reputation and stress” are still generally only around the £5,000 mark?

Finally, again—I feel a bit like Columbo—there is a discrepancy between the Secretary of State’s speech in Hansard and the Statement. Would the Minister like to comment on it, and if not, will he write to me and place a letter in the Library? There is no mention in the Department of Business and Trade Statement of bullying by Mr Staunton, yet the Secretary of State says:

“I should also inform the House that while Mr Staunton was in post, a formal investigation was launched into allegations made regarding his conduct”—


we know that, but she goes further—

“including serious matters such as bullying”.—[Official Report, Commons, 19/2/24; col. 474.]

I am just a bit confused as to why it was in the Statement delivered in Parliament but not in the departmental Written Statement.

[Lord Fox (LD)]

My Lords, as we have heard, with every day that passes, more questions seem to come up.

In Parliament, the Secretary of State’s Statement was strident—I would say unusually strident—but no matter how loudly and aggressively she asserts her side of the issue, it will not go away without answers and evidence. I support fully the questions that the noble Lord, Lord McNicol, just asked—I will try to interrogate some other areas—but we need answers in order to support or otherwise the Secretary of State’s position. These are answers that the Government can give, not ones they can push into the Wyn Williams inquiry.

Minutes from a call on 27 January show that Kemi Badenoch said to Henry Staunton that she had received

“a briefing on the governance issues at the Post Office and that the complaints against”

Staunton

“are so serious that the government need to intervene”.

The Secretary of State said in Parliament that this included issues raised by other directors on the board. From whom did she receive the briefing on the governance in POL, and where are the notes on its contents? When were the directors’ issues first raised with the Secretary of State, and what form did these complaints take? Were they, for example, letters, emails, calls or meetings? Were any directors’ complaints submitted formally, and how many directors were involved in those submissions?

The Secretary of State’s public statements and comments conflate two issues. One is the possible disquiet as to Staunton’s progress on tackling governance within POL, and the other is an entirely separate accusation of bullying. Does the Minister agree that these two need to be properly separated? The conflation is adding to the confusion. As far as I can see, as yet, there is no documentation to support the bullying part of the Secretary of State’s response. The Secretary of State said that a “formal investigation” was under way into the complaint against Staunton. Who is leading this investigation and when was it started? Staunton says that he was not informed of this bullying complaint, so can the Minister confirm if, when and how Staunton was informed of this bullying complaint and whether he has yet to be contacted by an investigator?

Government, departmental and Post Office capacity is only so large. This very public and bitter argument is a major distraction. Given the huge quantity of energy that is being expelled on this dispute, all other activities suffer. Today, the Prime Minister declined to repeat the Secretary of State’s accusations, and if the Secretary of State misled Parliament, she clearly breached the Ministerial Code. Therefore, does the Minister agree that if we do not get a Cabinet Office inquiry, the Government’s ethics adviser should be asked to investigate this issue now?

Without publishing all the personal correspondence with the various intermediaries that link the Post Office with the Government, it cannot be established beyond any doubt who is telling the truth in this very public dispute. The problem for the Secretary of State and for the Government is that Mr Staunton’s central accusation has credibility. What we see is glacial progress in settling the Horizon victims’ cases. That was his central point. In one answer on Monday, the Minister outlined the bureaucratic appeal process open to those offered unacceptable settlements, and of course, these appeals slow things down considerably. Can the Minister at least acknowledge that this time-consuming and energy-sapping appeal process could largely be avoided if the original offers were at an acceptable level in the first place?

I have one final question. All pretence of an arm’s-length organisation has gone; the Government have the power to intervene and control. Will the Government step in and speed things up by making the process simpler, probably by collapsing the three schemes into one? Overall, will they ensure that the offers of compensation are realistic in the first place, so that all the sub-postmasters who have offers can accept them and move on?

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

There is a lot to unpack there. I will take it in three pieces, if your Lordships do not mind. I will start with the Henry Staunton spat; then we will talk a little bit about the compensation; and then we can talk about the convictions, overturning them, and general progress on that matter.

On the dismissal of Henry Staunton and the following row that has ensued, as I said before, it is a shame that we are doing this in public because obviously, there are HR matters here. A senior director has been removed from his post, and due process needs to be delivered and his confidentiality respected.

However, I can shed light on this. This has been helped by further documents today being put in the public domain. In addition to the file note of the Secretary of State’s conversation with Henry Staunton at the weekend, we now have Mr Staunton’s file note to himself after his meeting in January 2023 with Sarah Munby and very helpful clarification from Sarah Munby of her recollection of what happened, with back-up notes. Accordingly, all the minutes are now at the disposal of the public and in the Library.

In summary, the row here is on two allegations that have been made by Mr Staunton—that he was sacked because someone had to “take the rap” and that he was instructed by a senior civil servant, the Permanent Secretary, to slow down the process of compensation and justice for postmasters. It is now absolutely clear from the correspondence and the notes published, and even from reading Mr Staunton’s own note, that the reason for his dismissal was not that he had to take the rap, but quite the opposite. He was in post for just 14 months—from December 2022—and was given three specific priorities by Sarah Munby. The first was to accelerate and expedite the compensation to the postmasters. Therefore, he was not there to take the rap. His dismissal, which was designed to be done in private but has now come out in public, was simply because there were governance issues around his chairmanship.

Interestingly, taking account of the various discussions that we have had in this House on this matter, noble Lords, especially on the other Benches, have been quite clear that they feel that there has obviously been a breakdown in governance and that the Government were not exercising their governance powers appropriately. That is what Sir Wyn Williams will look at in detail. We have a new board. Three new non-execs of a higher calibre were appointed in 2023. There are now two postmaster directors on the board. A senior independent director is required to be appointed and, most importantly, the government shareholder, UKGI, is represented on that board.

In addition, you can imagine the amount of public and departmental scrutiny that is happening. There are monthly meetings with post office executives. A lot of conversations are going on with Post Office management. Within those conversations, quite rightly, without naming names, non-exec directors and UKGI have raised concerns on the governance and chairmanship of the Post Office.

Under previous regimes, it would appear that, when concerns were raised on other matters, they were ignored. In this case, concerns have been raised and not ignored but taken into serious consideration. That demonstrates that we have a different sort of governance now in the Post Office. If I was coming at this from a private sector basis, as a shareholder, I would want to know what is going on inside the company. If non-exec directors came and told me there was a problem on the board, I would take that very seriously. That was then discussed between the Secretary of State and Henry Staunton and specific governance issues and concerns were raised by the board. As I said, the board is run by the chair. If the board is at odds and therefore not functioning properly, we must change the chair. It is as simple as that.

So, on the first point, that he was there to take the rap, the memos and meeting notes clearly show that he was dismissed because we had a governance issue.

[Lord Fox (LD)]

That is fascinating and helpful. Given that there is not a SID and that it was the chairman, what was the conduit of the director’s disquiet from the board to the Secretary of State? How did the Secretary of State learn these things?

[Lord Offord of Garvel (Con)]

As I said, we are in a situation now where dialogue quite rightly is happening—and minuted, as always—between officials and representatives of Post Office Ltd. The appointment of the senior independent director was one of the issues that the board were at odds over. The chairman wished to promote an internal candidate and the Department for Business and Trade wanted to bring in an external candidate—which was also the advice of the UK Government, the shareholder executive.

In this situation, when an investigation of why this was happening was brought to bear, that too was blocked by the chair. So there was a situation where the board was not working properly and we had to change the chair. It was as simple as that. The chair had to be changed to make sure the board worked properly. There was no concept of him being there to take the rap for the Horizon scandal.

He has made a second claim, and I advise noble Lords to read the notes carefully to understand this. The conflation going on here concerns the discussion with Sarah Munby in January. The chairman was appointed in December 2022. There was a discussion with the Permanent Secretary in January 2023. That was the first discussion after she wrote the letter saying “Here’s your three priorities”. It was the first meeting between the Permanent Secretary and the newly appointed chair, to say, “Right, you’ve been in post for a month, you’ve looked under the bonnet, what have you found?”

Registered Office Address (Rectification of Register) Regulations 2024

Lord Fox Excerpts

Monday 19th February 2024 Grand Committee

[Lord Sikka (Lab)]

My Lords, it is pleasure to follow the insights of the noble Lord, Lord Vaux. I will speak to the second SI, the Limited Liability Partnerships (Application of Company Law) Regulations 2024. I broadly welcome the thrust of the proposals but I have a number of questions; I hope that the Minister will be able to answer them.

First, the words “company law” appear in the statutory instrument, obviously, but can the Minister tell the Committee whether there is in the UK any central enforcer of company law—or for LLPs, for that matter? I have not been able to find one in all these years, so it would be helpful to know where the buck stops. Who, in the final analysis, is responsible for regulating these entities? This matters, especially when companies and LLPs engage in unlawful practices such as paying dividends without sufficient distributable reserves—something that damages the interests of creditors, including pension schemes with a deficit.

Let me go back a little while, because I have always been interested in this topic. In a Written Question on 14 September 2017, Kelvin Hopkins, the then Member of Parliament for Luton North, asked the Business Secretary

“what checks his Department carries out to ensure that dividends paid by companies do not exceed their distributable reserves”.

This was the reply, on 12 October 2017:

“The Department is not responsible for carrying out checks on dividends paid by companies to ensure that they do not exceed their distributable reserves”.


That is still the position. Nothing has changed. We still do not know who is responsible for looking at these things.

In recent years, companies such as Domino’s, Dunelm, Games Workshop and Hargreaves Lansdown have admitted to paying dividends that were, strictly speaking, unlawful; after a while, they noticed that they were unlawful. They therefore paid illegal dividends but, in the absence of an independent enforcer of company law, no one really examines such instances. The Business Department has long washed its hands of such matters. I hope that the Minister can tell us where the buck stops and which external agency is responsible for enforcing both company law and LLP law. That is my first question.

Secondly, LLP and company financial statements are prepared in accordance with what are sometimes called generally accepted accounting principles—or GAAP, although there are many variations on that—and are promulgated by the Financial Reporting Council in the form of accounting standards. They have an important bearing on whatever counts as an asset, a liability, income, an expense, wages, a tax, liquidity, accountability and much more. Ultimately, the rules or standards have a bearing on the distribution of income, wealth and risks.

In a democratic society, only Parliament has the social mandate to adjudicate on competing claims concerning the distribution of income and wealth. However, that authority has been subverted by the Government, and none of the accounting standards issued by the Financial Reporting Council is ever debated in Parliament. Why is that? Why has Parliament’s authority been subverted? I hope that the Minister can explain why the Government do not bring accounting standards to Parliament for approval because they affect the distribution of income and wealth and form the basis of taxation.

Thirdly, through the FRC, committees dominated by partners of LLPs make their own accounting and disclosure rules. They operate through a private company, which is named CCAB Ltd and is dominated by the accountancy bodies. No one in the Government has ever suggested that the hungry should set food standards, the homeless should set housing standards or the poor should set the minimum wage, but the partners of LLPs are allowed to make their own accounting rules without any kind of parliamentary oversight.

If noble Lords look at LLPs’ accounts, they will see that these LLP partners do not like transparency. For example, LLPs are not required to disclose their partners’ share of profits, which is the nearest equivalent to director remuneration in limited liability companies. We do not know their exact share of the profit, even though they may be enjoying government or other public contracts. Why is the partners’ share of profits not disclosed in LLPs’ financial statements, and why is setting the rules for LLP accounting and disclosure considered private? Surely it is not.

[Lord Fox (LD)]

My Lords, as someone who has spent a lot of his professional life working on annual reports, I have often had questions about GAAP, but the Minister will be pleased to know that I will not ask them today.

The four SIs before us are to be welcomed. They are steps on the way from our discussions on both the last economic crime Bill and the one before that. We are moving forward, in a sense. I am glad that the noble Lord, Lord Vaux, introduced what I call the Knighton collection of companies that were registered to a terraced house in the Welsh borders, not far from where I live—as I believe does the noble Lord, Lord Bourne. I would like some reassurance that the statutory instrument on registered office addresses would deal with that.

As the noble Lord, Lord Vaux, eloquently set out, there are a lot of steps to go through to eliminate falsely registered companies. It comes back to the question of whether Companies House is capable of really handling this, ceasing to be a filing cabinet and starting to be an investigative organisation. To echo the point made by the noble Lord, Lord Vaux, it would be very helpful to have an update on how the huge cultural change that Companies House needs is going. Many of us were impressed by the team that we saw, but also a little frightened by the huge task that it has in front of it to make these SIs and the next 51—or however many there are—come to life.

I have some trepidation on the second of these SIs, on limited liability partnerships, because the noble Baroness, Lady McIntosh, seated opposite, is our Scottish legal expert. I wondered where Scottish partnerships come in, because the territorial extent of that statutory instrument is the whole UK. Where do Scottish partnerships sit within that?

The service address and principal office address regulations are useful and important too, but expose the central weakness that is still within our system. After all the work we did on the Bill, those with control still have the ability to hide that control. We welcome the Service Address (Rectification of Register) Regulations and the Principal Office Address (Rectification of Register) Regulations, but can the Minister set out, either now or in writing, how we are going to eliminate the cancer within this system of people obscuring the real ownership of assets to the authorities and wider society? With that, we welcome these four statutory instruments.

[Lord Leong (Lab)]

My Lords, I thank the Minister for setting out these regulations and everyone who has spoken in this short debate. I will take these instruments one at a time.

Under the current system, criminals can—often by using data unwittingly shared or stolen and for sale on the dark web—fraudulently register an individual residential address as a registered office with Companies House, without the knowledge of the actual residents. Since 2011 it has been possible for companies to be incorporated within 24 hours for as little as £12, with Companies House making no checks on the veracity of the address. Once this has been done, the perpetrators can apply for credit, business loans and other financial arrangements. This fraud often does not come to light until the individual wants to apply for credit and finds that they are unable to do so, often resulting in considerable problems.

This instrument relates to where individuals have had their residential address hijacked. It allows the registrar to change the address to a default address and to strike the company from the register of companies if a genuine new address is not provided. It establishes criminal offences for companies and officers where they do not comply. We welcome the streamlining of this process and expansion of the registrar’s powers that this instrument provides, including that, as well as acting on the basis of applications, the registrar can when necessary act unilaterally based on any information in their possession to move swiftly to change a company’s registered office address without giving notice in advance.

However, I would like to know how the Government seek to protect and support victims of these fraudulent practices, as mentioned earlier by the noble Lords, Lord Vaux and Lord Fox. Can the Minister say how they will be informed of developments? Will victims be supported if issues continue for them beyond the changing of the registered address—for example, if they have negative notes or ratings on their credit file? If so, how will this be addressed?

Given that this is clearly a widespread practice, does the Minister have any information about provisions to actively check business addresses? There could be existing situations in which fraudulent addresses are in use but currently unchanged or undetected; they may not come to light until the innocent victims have their lives blighted by the discovery of a fraudulent registration of which they were unaware, as in the case in Wales that was mentioned. Does the Minister have accurate figures for how many addresses are registered? Surely it must be in the millions. If, as I suspect, it is on that scale, what analysis has been done on whether this instrument will create an influx of work for the registrar? Has resource been allocated for this?

I move on to LLP. This instrument will ensure that the reforms to company law made by the Economic Crime and Corporate Transparency Act 2023 also apply to the law governing limited liability partnerships. It will ensure that company law applies without arbitrary differences between companies and LLPs. It pertains to straightforward administrative amendments relating to a company’s name, registered office and email addresses, its directors, annual confirmation of accuracy on the register, information about persons with significant control and so forth. We support this legislation, which seems both reasonable and straightforward, and so on this occasion I do not have any further questions for the Minister.

I move on to the Service Address (Rectification of Register) Regulations 2024. As many noble Lords will know from personal experience, directors and secretaries of companies and persons with significant control over companies are required to notify the companies registrar of their service address—that is, a location where documents may be deemed effectively served on that person.

This instrument empowers the registrar to change the registered service address to a default address nominated by the registrar where the registrar is satisfied that the registered service address does not meet the necessary legal requirements. The registrar may change the address by their own motion or on application and may also, at their discretion, change the address without notice or after a period for objections, the length of which may also be at the registrar’s discretion. Clearly, the situation in which company directors, secretaries and persons of significant interest could attempt to delay or evade being held to their legal responsibilities by providing non-compliant addresses would be unsatisfactory.

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

As always, I thank noble Lords for a very powerful and constructive debate around this essential legislation. I genuinely think it will make an enormous difference to the quality of Companies House activities and of our business activities, reducing crime in a magnitudinous way and making the data that companies provide far more valuable in terms of them being able to operate legitimate businesses, to borrow money and to give confidence to customers. Markets are based on trust, so the more the Government can do—and have done, I am pleased to say, with the support of all Peers in the House—the better the business operations underneath that framework.

I will briefly go through some of the significant points. If I have missed anything I will be delighted to follow up after this discussion, but I am keen to make sure that everyone is answered as broadly as possible. If I do not have specific data requested, I will write and copy in all noble Lords.

I thank my noble friend Lord Bourne for his contribution; I hope I understood his question correctly. I do not have to hand a number for the instances of PO boxes being used as registered addresses, but I would be comfortable supplying it to him. The whole point is that this legislation will end the practice of having PO boxes. I think that only about 21,000 or 22,000 addresses are classed as default; of course, that is in effect the registrar’s own address. If you think about the however many million companies that are registered—perhaps 5 million or so—that is a very small proportion. A lot of these figures sound high—when you talk about tens of thousands, it seems an enormous number—but the reality is that, in proportion, they are relatively small. A lot of these default addresses—I am covering several points at the same time—are not for nefarious purposes. They might exist simply because, for example, an individual who had a company has died or the accountant who was registering it has gone out of business. So there are administrative reasons why default addresses are used.

Forgive me but I cannot remember whether it was the noble Lord, Lord Vaux, or another noble Lord who made the point about advertising—that because it is a default address, issues around concern and risk may be raised. I have some sympathy with that, although it is not for me to say. A default address does not necessitate that there is nefarious activity; it is often administrative. Clearly, if noble Lords go on Companies House, they will be able to see the date on which an address became the default address, which would potentially give one an indication of the situation.

It is worth talking about the chronology here. I so enjoyed the passage of the Economic Crime and Corporate Transparency Bill. The time went by so fast; it feels like only yesterday that we finished it. It became an Act towards the end of last year. As I said, I am pleased that, following a helpful conversation with the registrar, Louise Smyth, she has been extremely co-operative with my office in promoting our ambitions for Companies House. I am sure that—the noble Lord, Lord Vaux, asked a question about this—it would be extremely helpful for us all to arrange an update. I found speaking to Louise today, ahead of this debate, very helpful. It is important that we have an element of checking to see whether the resourcing is appropriate and whether the speed of activity is there, but I have the fullest of confidence in Louise and her team.

Let us look at the chronology going forward. Assuming that everything today goes to plan, these powers will come into force on 4 March. That will in effect enable the registrar to have far more discretion over how she acts.

I turn to the points made by the noble Lord, Lord Leong, about multiple registrations, how the registrar will effect her duties and the appellate process around that. It is clearly listed in the statutory instrument that you will not have to have 21,000 to the power of however many different applications, as the noble Lord, Lord Vaux, may have suggested. The point is this: currently, people may register my address as their company address. This is one of the core sparks that lit the blue touchpaper, or the rocket, that was the Economic Crime and Corporate Transparency Bill—this iniquitous situation in which any of us could be registered as a director and our address could be used as a company address. It is a completely bizarre situation that will come to an end on 4 March.

It will then be up to the registrar to make those inquiries; at the stroke of a pen, she will be able to cancel out however many thousands of companies registered to one address. How are we going to do this? The registrar will use the intelligence hub; it is already in existence, as far as I am aware, and is being significantly resourced and expanded. I am encouraged that she will have—this is what we discussed in great detail as the Bill passed through the House—the discretionary powers to do the work and do what is clearly the right thing.

The noble Lord, Lord Leong, rightly mentioned the appeals process. It would be unreasonable to suggest that a single agent of the Crown should be able to, at their whim and discretion, change the fortunes of businesses; that is simply not the case. There is a clear appeals process and, ultimately, the courts would adjudicate. Let me be clear: it is not in the interests of Companies House or the registrar to strike companies off if they believe that they are doing legitimate business. That would be a highly unusual scenario, but there are safeguards and checks and balances around that.

I hope I have covered some of the questions asked by my noble friend Lord Bourne and the noble Lord, Lord Vaux. I will cover two other short points on the chronology. These powers will come into effect on 4 March. In May we will get the statutory instrument for the fees—I believe it is being laid in Parliament, in the other place, today—which will go to £50 for incorporation and £34 for verification at the end of every year. The increase is quite significant in percentage terms, but I think all noble Lords in the Committee will agree that, in real terms, that is not a significant amount of money for the incorporation of a company, with all that that entails. I think we have reached quite a good place there.

The all-important work on verification is the real meat of the additional hard work by the noble Lords, Lord Vaux and Lord Fox, and other noble Peers. Our friends the ACSPs hope, as do Companies House and the registrar, that by the end of this year they will have begun the process of ensuring that the verification process around ACSPs is well under way. They expect to bring in the appropriate processes for individual verification in 2025. As noble Lords know, these include photo identity card and passport verification and so on; we have done so much work on this.

[Lord Fox (LD)]

On chronology, am I right in thinking that there is a commencement statutory instrument that needs to be brought forward for the overall Bill? When might we see that being tabled?

[Lord Johnson of Lainston (Con)]

That will happen next week, I am told. I look behind me hopefully on questions like that, but we will do that next week and I hope we stick to this timetable. As I have said, various SIs relating to fees and so on are being laid in the other place today.

I believe I have answered most of the questions from the noble Lord, Lord Vaux, and my noble friend Lord Bourne. The noble Lord, Lord Sikka, made some important points about dividend payments and the stability of our company system. I would not necessarily say that they are relevant to the Companies House regulations that we are looking at today. They are separate from Companies House’s requirement to make sure that the proper accounts are filed. The noble Lord asked who the enforcer for company law is; the court system is. It is important to stress that.

There have been discussions about when company law will be reviewed. As far as I am aware, we have no specific plans to do a full review, but I am happy to take all the noble Lord’s comments and issues back to the Department for Business and Trade, which has particular responsibility over certain reporting areas, to make sure that he is content that the work we are doing is effective.

I believe I covered the points from the noble Lord, Lord Leong, related to ensuring that the Registrar of Companies can operate effectively and the appellate process. Very importantly, on his comment about the powers of the registrar, these are new powers, so we will have to see how they develop. It is absolutely right that the House and the Government continue to keep a close watch on Companies House and the team there to ensure that they have the necessary powers and resources to deliver on a truly transformative regime for how companies are registered and how Companies House operates. As the noble Lord, Lord Fox, rightly said, it needs to move from simply being a repository of information to becoming a truly dynamic activator in overseeing how companies operate. This is exactly what these statutory instruments allow.

I am happy to follow up with any noble Lords who have specific requests, but I very much hope that I have their support on these statutory instruments.

Post Office Horizon Scandal: Racism

Lord Fox Excerpts

Monday 19th February 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank the noble Lord. We are all deeply distressed by the events that have happened during this 25-year sorry saga. The noble Lord refers to one of the documents that was used by Post Office Ltd, which was released in 2023 under the Freedom of Information Act. That did have language in it using descriptors that were very much out of date and should have been updated; it was offensive language and the Post Office has now, rightly, completely changed its methodology. But, once again, Sir Wyn Williams will go into this in great detail.

[Lord Fox (LD)]

My Lords, it is easy to see why the noble Lord was shocked by the racist terms uncovered, which were used by the investigating team in Post Office Ltd. It is even more shocking to note how recently those terms were being used, and still more shocking that many of the people who were using those terms are still employed by Post Office Ltd. We do not need the conclusion of the inquiry to know that Post Office Ltd is rotten to the core. When will the new chairman be appointed and when will the work start on cleaning this rotten business out?

[Lord Offord of Garvel (Con)]

I share the noble Lord’s frustration with this process. There was indeed offensive language used in the official documentation, which had not been updated since the 1980s and for which the Post Office has clearly apologised. As far as the culture in the Post Office is concerned, there is a rebuilding job required. The chairman has been removed and live conversations are going on right now to appoint a new chairman. My department is fully focused on rectifying this sorry situation.

Post Office Horizon Scandal: Compensation Payments

Lord Fox Excerpts

Monday 19th February 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

The sadness about this is that the Secretary of State said that she did not want to conduct HR in public, and this is now the situation that we have got ourselves into. We are very clear that no civil servant made that statement; perhaps it is up to Mr Staunton to provide a name, and we can then investigate whether that was the case. In the meantime, it does not make sense, given that the Post Office has been fully funded for compensation already—before the programme “Mr Bates vs The Post Office”, two-thirds of postmasters had had their claims met in full. Indeed, of the £160 million paid out so far to sub-postmasters, £138 million was paid out by December, before the television series. Therefore, it was fully funded, and there is no basis for the allegation.

[Lord Fox (LD)]

My Lords, clearly the public statements of the Secretary of State and the former chair, Staunton, are mutually exclusive, and we look forward to hearing the Secretary of State’s version, which I hope will be repeated in your Lordships’ House. It would be easier to understand in full if it was supported by transcripts of all the relevant meetings. In her social media rebuttal, the Secretary of State said that she

“dismissed Staunton due to very serious allegations about his conduct while Chair of the Post Office”.

Can the Minister confirm that that is true and explain to your Lordships’ House why those allegations were not in fact investigated, rather than simply dealt with through a summary dismissal? If the Minister is unable to do so now, can he come back when the Statement is repeated and tell your Lordships’ House the answer to those questions?

[Lord Offord of Garvel (Con)]

As I have said, a detailed Statement on this will be given in the other place, and there will also be transcripts and meeting notes put in the House of Commons Library for full interrogation. It is clear that there were very serious concerns about governance. The noble Lord himself mentioned a toxic culture in the earlier Question on this issue, and the Government’s requirement to clean it up and change it. The most important figure on any board of any company is the chair, and, if the culture is wrong, perhaps the best place to start would be to remove the chair, which is what has happened. A full Statement will be given as to the circumstances of that, but it was not done on a whim and it was not a summary dismissal.

Post Office Appointments: Ministerial Responsibility

Lord Fox Excerpts

Wednesday 7th February 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank my noble friend for his question and for all his efforts on behalf of the postmasters. We have to realise that this is a limited company owned entirely by the Government, with one share owned by the Secretary of State. It separated from Royal Mail Group when that went private, but the Post Office is actually classified as a public non-financial corporation. Public corporations include, for example, Ordnance Survey, Royal Mint and British International Investment. They are typically owned by the appropriate Secretary of State in that department, the reason being that they are hybrid: the Post Office has commercial activity, it makes revenue through the post offices, but it also receives public money to support the network. As a result, the governance is such that the chief executive reports to the chair, the chair reports to the Secretary of State, and the chief executive also reports to the Permanent Secretary when it comes to public money.

[Lord Fox (LD)]

My Lords, I am not sure that the Minister answered the question from the noble Lord, Lord Arbuthnot. We agreed that the Post Office needs leadership, and last week the Minister said:

“We will appoint an interim chair as soon as possible”.—[Official Report, 30/1/24; col. 1122.]


Perhaps with another week, the Minister can dwell a little more on the process. When will the details of the process be published? How will the job description of this appointment differ from the job description that was used by Business Secretary Kwasi Kwarteng when he appointed Henry Staunton as recently as September 2022? What will change in the job description of the chairman from the last appointment?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that question. The corporate answer is that the chief executive reports to the chairman; the job of the chairman is to fire the chief executive on behalf of the shareholder; the shareholder is the Government and, since these matters came to light in 2020, we have had the new shareholder relationship document that outlines all the governance on this. Indeed, the Minister for the Post Office has had monthly meetings, starting with Minister Scully through to the current Minister, Minister Hollinrake, with the chief executive. When the new chair is appointed, that chair will step into the position and continue to run the board on behalf of the Government.