Carer’s Leave Regulations 2024

Lord Fox Excerpts

Tuesday 6th February 2024 Grand Committee

[Baroness Pitkeathley (Lab)]

My Lords, I too thank the Minister and his officials. I declare an interest as vice-president of Carers UK. As my friend the noble Baroness, Lady Tyler has said, I have been working on this issue for many decades. I first put forward the idea of a carer’s leave Bill in 1990. When I am at my most pessimistic, I ask whether all I have achieved in 30-odd years is five days’ unpaid leave for carers. When you look at it like that, it ain’t much—but it is a very important step, as the noble Baroness said. When I am feeling optimistic—mostly, I am a glass-half-full person— I recognise what an important step this is in looking at the needs of working carers. Their need is not only for finance, although many of them are struggling with the cost of living; they need extra money now, so they need to keep on working in their jobs. If they do not, they build up future poverty for themselves for the future, because they cannot contribute to pensions. That causes a problem for society down the line. It is also of tremendous psychological import and benefit to carers to remain in the workplace as long as they can. This will help them do it.

The carers’ movement has always been opportunistic. I see this very much as a stepping stone. We now have unpaid leave—the next step is paid carer’s leave. Believe me, we will not give up on that. This is a very good time to be doing this, as we have elections coming up and manifestos to be written in which we might think about paid carer’s leave.

When thinking about new employers who will look through this legislation, we should remember the excellent employers who already do this. Employers for Carers, an organisation convened by Carers UK, has many wonderful examples of employers who already recognise carers without the need for legislation and recognise that a small change in working practices—the kind of flexibility that the Minister mentioned—makes a very big change to carers’ lives. Sometimes just allowing a carers’ group in the workplace will provide a very adequate method of support.

Those employers have recognised that carers are among the most dedicated people in their workforce and that retaining them and enabling them to continue their paid work will save a fortune in recruitment and retention. These employers and the new ones who will come into the fold following this legislation and the regulations will very much be beneficiaries, as carers will be, of this Act. They will understand that making carers the subject of this Act and giving them these extra rights makes sound economic sense. We are not just making a moral case for carers; there is a very sound economic case for keeping 2 million carers in work longer than they would otherwise be. As I always remind your Lordships, carers save the nation £162 billion every year, the cost of another health service, through their unpaid work.

I too was going to raise the issue of parent carers with the Minister, but my friend the noble Baroness, Lady Tyler, has already done it. Do the Government have any plans for an awareness campaign to ensure that carers, who are often isolated, will have the opportunity of working with the voluntary organisations in the field? Carers must be made aware of this new and very welcome right.

[Lord Fox (LD)]

My Lords, so much of life on these Benches feels a little like pushing water up a hill. If you will excuse me for mixing the medium, this was like pushing an open door; it really has been a delight. I feel very lucky because, as both the previous speakers pointed out, they have been operating in this field for decades whereas I, in a sense, picked this Bill up by luck. My friend, Wendy Chamberlain, in the Commons, won the ballot and chose this Bill to bring forward. As I am representing that particular department, I got the good fortune of sponsoring the Bill. I am very pleased, but also humbled, as I came late to this piece.

This is also, I think, the third Minister we have had during the course of the Bill. This, of course, allows me to repeat all the speeches I made to the previous Ministers as a novelty. The Minister’s explanation of the effects of the Bill were excellent. We all, in our different ways, understand the impact it will have on people’s lives and on employees’ lives.

The point I emphasise, though, is that it creates a conversation that carers can safely have with their employer for the first time on this subject. It means that carers who have been in the workplace can come out as carers in the workplace—because they have previously had to worry about whether it would affect their relationship with their employer. The Bill allows them to have a conversation where they can be safe to have that conversation in the place they are.

The points made about the benefits to the economy and the employer are huge. During the run up to this Bill, we talked to a number of large, medium and small employers that were already doing it voluntarily. They found that the benefits far outweighed the very small expense they had to stump up. Simply having to recruit someone is an extremely expensive exercise. We know there is a shortage of skills anyway, but to lose an employee because they have to stay at home and care for someone is a very expensive loss to a business, if the employee is a long-standing and well-established person.

The point about communication is vital. It is not just about communicating to the carers, who need to know this is available to them; it is also about communicating to the employers that it is now on the statute. I am sure the department has a plan, but it would be interesting to hear something about it, either today or in writing. For example, Make UK, which used to be the EEF, has a strong HR support division. It is one of their businesses and what they do. Part of the service that businesses get from being affiliated to Make UK is HR support, and legal and regulatory support. That organisation should be hit really hard with the information on the Bill—if it has not been already—so that it understands the role of employers in not just allowing it but promoting it across their workforce.

There is still a lot of work to be done in terms of getting the information out there. It should not just be employees demanding it—employers should be fully aware of what is now available. So who is going to be accountable for the communication process? In the end, that is going to be the success, of otherwise, of this measure. If people have to find it out through the ether, there is going to be a very slow take up. I am sure that Carers UK will put it out there, but there is a lot of extra work to do.

Once again, I thank the Government for supporting it. It has been a pleasure to help the Government to meet one of the things in their manifesto, although I doubt I will be making a habit of it. For this one, however, thanks to the Government and His Majesty’s loyal Opposition. Most of all, I thank the campaigners who got us this far. The reason we were able to do this is because it was unpaid; it cut out all of the small print that would have been in the legislation, but it establishes a point. I take the point made by the noble Baroness and I hope, in future, that we will be able to take that and move it forward to a bigger and better thing—but we should not diminish the significance of this particular provision.

[Lord Leong (Lab)]

My Lords, first, I thank the Minister for setting out these regulations and the correction. Correct me if I am wrong, but is it now two weeks instead of one week?

Digital Markets, Competition and Consumers Bill

Lord Fox Excerpts

Committee stage
Monday 5th February 2024 Grand Committee

[Lord Offord of Garvel (Con)]

I hope that the noble Lord did not misunderstand me. I think we said that this is already covered in legislation. The definition is capable of including a vehicle that is or may be being used to store goods that may disclose a breach of legislation. We are being clear that the definition of “goods” is sufficiently broad to include goods or vehicles. I was coming on to say that an enforcer may inspect products under paragraph 25 of Schedule 5 for the purposes of checking the compliance of those products with relevant legislation, so we are tying this back to the relevant legislation. We believe that the definitions are already sufficiently wide and therefore there is no need to further legislate.

[Lord Fox (LD)]

That is beginning to be helpful, but the Minister will be aware that different local authorities are receiving different legal advice. Some are comfortable with the definition that he has given and others are uncomfortable with it. At some point, possibly during Report, a Pepper v Hart definition that solidly allows legal officers in local authorities to make the decision that a car is a container in particular circumstances would, at the very least, be helpful. Perhaps adopting the amendment of the noble Lord, Lord Lucas, would be even more so.

[Lord Offord of Garvel (Con)]

I was not aware that there are different definitions in different local authorities. That seems a valid point to address, so we will look at it before Report.

Amendment 124C is on fines for obstructing enforcement officers, for which I again thank my noble friend Lord Lucas. This addresses the question of the appropriate level of fines for the offence of obstructing an enforcement officer, under paragraph 36 of Schedule 5. Currently, the fine must not exceed level 3 on the standard scale, which is £1,000. Amendment 124C would increase that to level 5—an unlimited amount. I fully agree with my noble friend that any sort of obstruction, whether intentionally failing to comply with instructions or knowingly giving misleading information, is a serious matter that must be subject to criminal enforcement.

The current level of the fines was subject to previous government consultation ahead of the introduction of the Consumer Rights Act 2015. It was set to reflect the deterrent purpose of the offence, proportionately and consistently with comparable criminal offences. For example, the penalty for obstructing a police officer or an officer of His Majesty’s Revenue and Customs is set at a maximum of £1,000, which is level 3. We consider that the current level of these fines continues to be proportionate to the offence, consistent with comparable regimes. I once again thank my noble friend for his consideration of this issue and hope that my explanation persuades him not to press his amendment.

I thank my noble friend Lord Lindsay and the noble Baronesses, Lady Bakewell and Lady Crawley, for tabling Amendment 125, which was presented by the noble Lord, Lord Clement-Jones. It would end the prohibition on enforcers to use information provided by a person in response to a written information notice in criminal proceedings against that person. Prohibitions of this sort apply throughout the UK legal system and serve to help protect a person from self-incrimination when enforcement authorities are given broad powers to send information notices to compel the production of information.

The Government have listened carefully to trading standards departments, which consider that removing this prohibition would enable them to gather evidence needed for consumer prosecutions more easily. We have been told that using other information-gathering powers comes with operational challenges, such as having to resource travel outside the local area to carry out investigations. We are keen to work with enforcers to address these challenges. However, this prohibition is an important protection. It safeguards a right that is recognised under English common law and the Human Rights Act.

In summary, Amendment 125 stems from an operational issue that does not justify rolling back well-established legal protections. I therefore hope the noble Lord will feel able not to move this amendment.

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[Lord Bassam of Brighton (Lab)]

The noble Lord is such a strong unionist that I would be surprised if that were not the case.

[Lord Fox (LD)]

When the Minister writes that letter, perhaps he could extend it to include the United Kingdom Internal Market Act because that seems not to have been taken into consideration. Some of us here today—at least two of us—participated in the lengthy discussions about differing standards across borders and how they might be enforced, and this seems to fall well into that territory. What consideration has been made of that Act in drawing up the terms of the Bill? It would be helpful if the letter set out the various positions within the internal market Act and how they have been represented in the Bill.

[Lord Offord of Garvel (Con)]

I thank the noble Lord. I share his interest in this matter, and that was exactly what I was intending to examine. The United Kingdom Internal Market Act is a fundamental new piece of architecture that, on us exiting the EU, allows us to trade as one single nation, and I will always be promoting that.

Digital Markets, Competition and Consumers Bill

Lord Fox Excerpts

Committee stage
Wednesday 31st January 2024 Grand Committee

I hope very much that my noble friend will be able to respond positively to this idea. If not, I hope that he will agree to meet me and others who would like to encourage him to think positively about this as a way to open up a discussion on an area about which there are many concerns.

[Lord Fox (LD)]

My Lords, I know the Minister is a big fan of innovation, so the introduction of some innovative procedure by the noble and learned Lord, Lord Thomas, will no doubt have filled him with delight. We all look forward to seeing how that wheels out.

It is a pleasure to follow the noble Lord, Lord Hodgson, who seemed, if he does not mind me saying so, to list second-order problems. How much split of the award you get depends on whether you can bring the case in the first place. If there is no case, there is no 50:50 or 75:25. Earlier, as memory serves, we talked about individual litigants and their ability to form groups, and the Government were set against that process. Here, we are again talking about a system that avoids or stops people getting together to fight the fight. We should remember clearly the power balance that we are talking about here. In the digital field, I used the example of the top five platforms. Their revenue is on the level of that of nation states. In order to fight battles with people, companies and organisations such as that, there needs to be some ability to come together and find the funding.

I am not a lawyer, but I am persuaded by the arguments advanced by the noble Lord, Lord Sandhurst, and the noble and learned Lord, Lord Thomas. When it comes to what the noble Lord, Lord Hodgson, said, there are of course code of conduct issues; generally speaking, when I have been involved in legislation, things such as codes of conduct arrive in secondary legislation, not as part of the primary legislation. I hope that he can join in debating the principle. He is right that the details of the principle are important, but I suggest that they are a second-order issue. With that in mind, what the noble Lord, Lord Hodgson, said, combined with his amendment, looks a little like long grass—

“Make me pure, Lord, but not yet”.


We need to have the debate that will be initiated by the noble and learned Lord, and others, before we start worrying about the industry code of conduct that comes behind it.

[Lord Bassam of Brighton (Lab)]

My Lords, the Committee should be enormously grateful to the noble Lords, Lord Sandhurst, Lord Arbuthnot and Lord Carlile, and to the noble and learned Lord, Lord Thomas, for bringing forward this group of amendments dealing with litigation costs in group actions. There is real and practical importance for those who will potentially benefit from this when seeking redress. The noble Lords have persuasively argued the case for the amendments in their names. Indeed, the noble Lord, Lord Sandhurst, gave notice that he would bring forward such an amendment with others at Second Reading. He has been good to his word.

At the time, the Minister, the noble Viscount, Lord Camrose, argued that the Government had,

“urgently addressed the potential implications of the judgment”,—[Official Report, 5/12/23; col. GC 1452.]

in the PACCAR case, which had then recently been decided by the Supreme Court. However, the Government’s solution to the problem is, as we have heard from noble Lords this evening, limited to addressing the issue for some claims in the Competition Appeal Tribunal, leaving a big problem for litigation funding agreements—LFAs—used in other proceedings. We note the Government’s view that the Bill is not the right place to deal with the wider issues, but, as currently drafted, this will create a two-tier system in the UK, whereby claimants would have different rights and different access to financial backing, and therefore different legal support, depending on the court in which they pursued their claims. Having listened to noble Lords, that cannot be right if we are to ensure equal access to justice. As the noble and learned Lord, Lord Thomas, argued, the proposed amendment to Clause 126 goes some way to addressing the issue, by widening the scope of agreements that will be placed in the pre-PACCAR position, but it does not solve the problem for cases outside the CAT.

Of course, back in early December, few of us understood the true import of LFAs, but that was before the TV drama, “Mr Bates vs The Post Office”. Now, of course, we are far more conversant with them, and so are the public. Without such arrangements, the sub-postmasters and sub-postmistresses would not have been able to challenge the Post Office in the courts, and that cannot be right.

Currently, for an LFA to be enforceable by the funder for opt-in and opt-out cases, it must comply with the Damages-Based Agreements Regulations 2013. Those regulations were introduced to deal with contingent fee agreements between claimants and lawyers, not funding arrangements with third-party funders. As I have already said, Clause 126 deals with only CAT opt- out cases. I am persuaded that we need a comprehensive solution to the problem.

We understand, as the noble and learned Lord, Lord Thomas, explained, that the noble Lords who have tabled these amendments were unable to bring forward a more comprehensive solution to the PACCAR ruling at this stage of the Bill. I was very interested in what he said because he referenced the Standing Orders of the House and the ability of your Lordships’ House to determine a Bill’s scope. It is, as he said, done rarely but we certainly did it once or possibly twice in my time as Opposition Chief Whip, to the benefit of the House. On those occasions, we sought counsel’s legal opinion, which we posted in the Library of the House. I do not think that we need counsel’s opinion on this case, having a former Lord Chief Justice and other eminent lawyers making the argument.

Assuming that the Minister is unable to offer a solution today, I assure the noble Lords behind this amendment that we will willingly support amendments brought forward to resolve the issue. Since the “Mr Bates vs The Post Office” drama, government Ministers have suddenly woken up to the salience of the issue. There is surely enough goodwill in the political system for colleagues to agree a way forward on this. Legislative time is at a premium, as the Minister will no doubt tell us, and we see this as an opportunity not to be missed and to be used.

I turn to the amendment in the name of the noble Lord, Lord Hodgson, on which he gave a very brilliant exposition. I tried to follow most of it, but I can see the force of his argument. His amendment is eminently supportable. As the noble Lord, Lord Fox, points out, it has the upside for the Government of kicking the issue into the long grass, but there is clearly a need for some review at some stage. However, I hope that the amendment in the name of the noble Lord, Lord Hodgson, becomes otiose if we can see a way forward with the route that has been pointed out by the noble Lord, Lord Sandhurst, and the noble and learned Lord, Lord Thomas, this afternoon. We should be very grateful for those noble Lords, and it is nice to know that, in the noble Lord, Lord Arbuthnot, we have a star of the silver screen in our midst. I am sorry that he is not here to hear the arguments put to his benefit. With that, I look forward to the Minister’s response.

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Moved by

[Lord Fox]

108: Clause 147, page 93, leave out lines 3 and 4 and insert—
““consumer” means—(a) a person (“P”) acting for purposes that are wholly or mainly outside P’s business, or(b) a person acting in the name of, or on behalf of, P in relation to P’s purposes;”Member’s explanatory statement
This amendment would expand the definition of a consumer to make it explicit that it includes third parties working on behalf of a consumer, as is the case for traders.

[Lord Fox (LD)]

My Lords, I congratulate the Deputy Chairman of Committees, who once again did a magnificent job. I speak on behalf of my noble friend Lord Clement-Jones to move Amendment 108 and speak to all the other amendments in this group that are in his name—seven in total. Talk has rightly centred on the CMA’s role in standing up for consumers. This whole group focuses on an important area where consumers are in danger of not getting the best possible treatment as a result of the flexing of market power. The amendments are designed to probe the competitive relationship between providers of a service and legitimate third-party agents who sell those services on.

Online intermediaries in marketplaces can serve a valuable role, helping consumers exercise choice and explore a wider range of options for their needs, ultimately supporting competition and innovation, as long as this is done in a transparent manner. Perhaps the most obvious arena for this sort of activity is the travel industry: flights and hotel bookings. There is of course a natural struggle between the provider of services—the airline, for example—online travel agencies or OTAs, and the third player, which is the platform. This is usually Google.

The question that this group poses is: what is the CMA’s role in the competition between these parts of the industry? It also asks: how is consumer choice maintained or enhanced in that activity? My noble friend’s amendments are designed either to explore the need to protect consumers who make bookings through a third-party agent, or to ban activity that could mislead consumers about the merits of booking through a third-party agent. There are of course other elements to these relationships, and I hope this debate can flesh those out as well.

There is certainly evidence that some low-cost airlines are extensively using their market power to advance their own commercial gain while potentially eroding protection and choice and inflating prices for millions of UK holidaymakers. For example, since December 2023, most OTAs have been prevented by Ryanair from booking flights on behalf of consumers. This rendered the OTAs unable to fulfil holidays that include a Ryanair flight. I understand that a consequence of this is that it is almost impossible for consumers to book an ATOL-protected package holiday that includes a Ryanair flight. I do not have full confirmation of that, but that is my belief. It is difficult not to conclude that this blocking was designed to push customers towards booking hotels as well as flights through Ryanair, rather than as part of a package holiday through an OTA. It is easy to conclude that Ryanair was able to do this because of the market power it holds over its routes.

For its part, in a regulatory announcement Ryanair welcomed the removal of its flights from OTA websites, promising lower fares “where necessary” to encourage all passengers to book directly on ryanair.com. The fact that it did not reference the fact that it had caused the removal of the OTAs in the first place, and its use of the phrase “where necessary” regarding pricing, are clear indications of its instinct in this move. I use this example to demonstrate how serious and real things are for this sector and the consumers it serves.

The question for debate here is: how could and should the CMA act to balance the relationships that surround service providers and third-party agents? The relevant provisions here are in Clause 223, on the prohibition of unfair commercial practices, and Schedule 19, on

“Commercial practices which are in all circumstances considered unfair”.


Together, these provisions set out a list of conduct to which the consumer protections in Part 4 will apply automatically in all cases.

The list in Schedule 19 is relatively granular, so it can be extended in scope easily to deal with these issues. For example, as set out in Amendment 136, Schedule 19 could include:

“Refusing to enter into (or otherwise blocking) a transaction with a consumer on the basis that the consumer is acquiring the trader’s product through a third party acting on its behalf”.


Secondly, it could include:

“Refusing (or otherwise blocking) third party agents, acting on a consumer’s behalf, the necessary means to make or manage the consumer’s purchase”,


thereby degrading the consumer experience. Thirdly, it could include:

“Making a materially inaccurate or disparaging claim about third party alternatives through which a consumer could otherwise acquire the trader’s product”.


Fourthly, it could include:

“Imposing higher prices for a consumer who chooses to acquire a trader’s product through a third party acting on its behalf than for a consumer who acquires that product directly, in particular without providing such consumer with a clear, accurate and complete explanation as to the reason for such a price increase”.


Fifthly, it could include:

“Any act or omission which deprives a consumer of sufficient freedom to make an informed choice as to whether to purchase a product directly from a trader or to engage a third party to make such purchase on their behalf”.


We then need to ensure that the protections afforded by Part 3, on enforcement of consumer protection law, and Part 4, on consumer rights and disputes, apply equally to consumers irrespective of whether, for example, they have made flight bookings through OTAs acting as consumers’ agents or they have booked directly with the airline. The relevant provisions of the Bill relating to the definition of a “consumer” are in Clause 147, on relevant infringements, and Clause 223, on the prohibition of unfair commercial practices.

In both cases, the definition of “trader” is already explicitly extended to circumstances in which a person is acting personally or through another third party on their behalf. This concept of indirect consumer-trader relationships should be extended to the definition of “consumer”. A new paragraph should be introduced in Clauses 147 and 223 to make it explicit that it is immaterial for the purposes of that definition whether a consumer chooses to engage with a trader directly or through a third party acting on the individual’s behalf as an agent. These proposed changes are set out in Amendments 108 and 129.

Other references to indirect booking need to be provided for—again, to include the provision that it is immaterial whether a consumer engages with a trader directly or through a third-party agent. The relevant clauses here are Clause 230, on rights of redress, and Clause 243, on the meaning of “transactional decision”. Amendments 145 and 146 would make it explicit that the protections in Part 4 apply to contracts entered into by the consumer with traders, both directly and indirectly.

Given the sort of behaviour already in the market, we also need to introduce the concept of misleading or aggressive commercial practices by a trader, which are designed either to deter consumers from booking through third parties—including OTAs, which book flights on consumers’ behalf as their agents—and/or to prevent such third parties from making such bookings. In other words, we need to outlaw those practices.

This time, the relevant provisions of the Bill are in Clause 224, “Misleading actions”, and Clause 226, “Aggressive practices”. These clauses deem commercial practices to be unfair if they involve misleading actions or aggressive practices that cause the average consumer to take a transactional decision they would not have taken otherwise. A new subsection should be introduced in each of Clauses 224 and 226 to make explicit that, for the purposes of Clause 224(1)(a), “misleading information” includes

“an action where the overall effect is to deter the average consumer from using third party agents to conclude transactions on their behalf, including disparagement relating to such third parties”.

For the purposes of Clause 226, in the context of determining whether a commercial practice uses harassment, coercion or undue influence, account should be taken of

“whether the practice significantly impedes the average consumer’s freedom of choice in respect of whether they choose to make a booking directly with a trader or to use a third-party agent to conclude transactions on their behalf”.

This is the effect of Amendments 139 and 141. The Minister will understand that this is an important example of the potential misuse of market power, to the detriment of consumers. We await his response.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank the noble Lord, Lord Fox, for that introduction. He made an excellent argument about why we should include third parties working on behalf of consumers in the remit of the Bill. As he described, this particularly relates to package travel firms.

Whether using a legacy airline or a low-cost carrier, all of us will have booked flights online. These days we have unprecedented freedom to fit our travel arrangements to our specific requirements and then pay for them at home, at the office or on our phones. But how many of us have had the far less welcome experience of discovering, a few minutes later, that our deal was not as good as we thought and that there were cheaper fares for the same flight? This is frustrating and unfair, and, unfortunately, it is due to deliberate anti-competitive practices, many of which the noble Lord described.

Low-cost airlines—LCAs—have transformed the aviation landscape. They have disrupted the market, offering travellers unprecedented choice and competition. Their rise in the UK has empowered consumers, democratising air travel and making it affordable for a much broader demographic than used to be the case. The greater availability and lower cost of flights to and from the United Kingdom has, in turn, led to the rise of online travel agencies and tour operators, known as OTAs. These offer travellers a wide array of pre-packaged holiday options, which include flights, accommodation and add-on activities. The convenience of being able to plan and book an entire trip from the comfort of one’s home has fuelled the popularity of online package travel. OTAs are becoming extremely popular and convenient ways for families to plan, book and pay for their holidays.

However, in recent years the low-cost airlines, themselves once the industry disruptors, have felt threatened by the newer online travel agencies. The industry is witnessing a growing trend of complex anti-competitive actions aimed at stifling competition. One such tactic is curtailing seat availability to specific destinations, which renders them inaccessible through OTAs or individual bookings unless bundled as airline packages. Another anti-competitive tactic is to introduce cumbersome verification procedures for passengers who book through OTAs rather than directly with the airlines, adversely affecting the consumer experience. Unfortunately, in this battle for market share between the LCAs and the OTAs, the consumers are often the casualties.

The situation is made still more opaque for consumers by the existence of 13 different types of airfare. I am grateful to my noble friend Lord Leong, who has looked into this. He tells me—I will mention only the most common six—that there are normal fares, point-to-point fares, excursion fares, APEX fares, PEX and super-PEX fares, and branded fares. Additionally, some come with specific restrictions, some are non-refundable, others cannot be exchanged or transferred, and none of these restrictions is immediately obvious or consistent with ticket types.

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[Lord Offord of Garvel (Con)]

My Lords, this group of amendments concerns package travel. I will address Amendment 108, along with Amendments 129, 136, 139, 141, 145 and 146. I thank the noble Lord, Lord Clement-Jones, for tabling them and the noble Lord, Lord Fox, for speaking to them so eloquently. These amendments cover the same theme: the use of third parties in contracts between consumers and traders.

I reassure the noble Lord that the protections sought in these amendments are mostly provided for in other parts of consumer law, which I will detail. For example, Clauses 224 and 226 prohibit traders using misleading information or aggressive practices. This prohibition would already cover situations involving a consumer’s decision on whether to use a third-party agent. Similarly, Amendments 145 and 146 seek to make clear in the legislation that a consumer enjoys consumer rights, whether they purchase from a trader directly or via a third-party agent. However, in either situation the contract is between the trader and the consumer, and therefore the consumer benefits from the relevant consumer rights. Amendment 146 focuses on the transactional decisions related to purchases from a trader. Whether the decision is carried out by the consumer themselves or a third party is not relevant. The consumer that the contract is with will receive the relevant consumer rights. The practical effect of Amendments 145 and 146 is already achieved through consumer law.

I shall record two instances in which these amendments would have an adverse and unintended effect and thus why the existing wording of consumer law is set out the way it is. Consumer protection requires a consumer-to-trader relationship for consumer rights to apply. If, as suggested in Amendments 108 and 129, the definition of a consumer were changed to include third-party agents, they would in effect also become consumers in the eyes of the law. That means that the consumer’s relationship with the agent would be classed as a consumer-to-consumer relationship instead. Should there be an issue between the consumer and the third-party agent, the consumer would then no longer benefit from the same consumer rights as ordinarily apply. The amendment suggested by the noble Lord would broaden a very established principle of consumer law with this unintended effect.

I shall conclude my response—including the matters raised by Amendment 136—with reference to travel agents and the sale of package travel holidays, as I believe that may have inspired some of the noble Lord’s amendments. This is a sector in which it is common for consumers to use agents on their behalf. I am aware that issues have arisen between online agents and flight operators. Ministers in my department were pleased to meet representatives from an online travel agent and an airline recently to understand the issues from all perspectives.

Through our markets regime, the Government have ensured that the CMA has significant powers to investigate and act if it finds that businesses are behaving anti- competitively in a market. It is right that those matters are for the CMA to determine itself.

Separately, the Department for Business and Trade carried out a call for evidence on the Package Travel and Linked Travel Arrangements Regulations 2018 during September-December 2023. Those rules set the consumer protection framework for package holidays. It is vital that consumer protections for package holidays, as a key consumer leisure activity and expense, provide strong protections and that regulations support consumers to access choice and a competitive market. I am pleased to confirm that we are now analysing a substantial volume of responses, including from consumer groups, package organisers and suppliers, such as airlines. The operation of airlines and travel agents is governed by PTRs and ATOL. Those are being reviewed. That is the appropriate way to consider these issues.

Given the noble Lord’s interest, once further analysis has been undertaken, I will be eager to share with him the Government’s response to that consultation. I hope that, in light of what I have set out, he will be comfortable to withdraw his amendments.

[Lord Fox (LD)]

I thank the Minister for his response and for his offer to look through the data, which we will be happy to pick up. I thank the noble Baroness, Lady Jones, for her support and for enlightening me on the intricacies of airline ticketing. I suggest that there may well be a new class Z, which she and I will get, where our luggage gets lost as a result of what we have been saying here today.

Central to the Minister’s response is that all this exists already in some form or other, or the words have not been quite crafted correctly. Saying that the existing protections are there belies the fact that there are problems today. If those existing protections were 100% where they should be, doing what they should, the noble Baroness and I would not be able to stand up and list the problems that exist. It behoves us and the Minister to talk between Committee and Report, including my noble friend Lord Clement-Jones, to set out where there are clear issues at the moment and where there could be changes, even if we did not use the words contained in these amendments.

There are problems, and it would help if the Minister acknowledged that. The existing wording and the use and interpretation of those laws is not solving those problems, so there is something to sort out here, one way or another. With that said, I beg leave to withdraw the amendment.

Amendment 108 withdrawn.

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[Lord Offord of Garvel (Con)]

My Lords, on this group of amendments on net zero and the collective interests of consumers, I thank the noble Baronesses, Lady Jones and Lady Bennett, for their Amendment 109, which would explicitly provide that consumers’ collective interests include avoiding any detrimental effects that they may incur by not reaching net-zero carbon emissions by 2050. I am grateful to the noble Baronesses for raising the important issue of protecting consumers during the transition to net zero. At present, where environmental issues arise, the court or enforcers already have the requisite powers to take action, including by tackling misleading green claims which affect consumers’ purchasing decisions. In addition, in its annual plan, the CMA listed

“helping to accelerate the UK’s transition to a net zero economy”

as one of its priorities.

We are already making strong progress towards net zero by 2050. The UK has reduced its emissions further and faster than any other major economy. To that end, we feel that there are sufficient measures already in place to protect consumers during the transition to net zero. I hope that the noble Baroness, Lady Jones, will feel sufficiently reassured to withdraw her amendment.

On the right to repair, I thank my noble friend Lord Holmes and the noble Baroness, Lady Hayman, for their Amendments 128A, 145A and 201 and, in the latter case, for our recent discussion on the issue, where we had much of a meeting of minds.

The Consumer Protection from Unfair Trading Regulations 2008 are being restated in the Bill and prohibit unfair commercial practices. These include misleading actions which are likely to affect a consumer’s decision-making, so consumers are already protected from misleading statements made by traders on the availability of spare parts. Furthermore, there is a range of activity across government presently which support the aims of the proposed amendments, which in summary focus on sustainability and ensuring that products are repaired, where feasible.

The Department for Energy Security and Net Zero’s eco-design initiative aims to encourage the uptake of products which use less energy, resources and materials through product-specific regulations. The Department for Environment, Food and Rural Affairs is responsible for waste and resources policies, including preventing waste occurring in the first place. Both departments work with the DBT to ensure that, over their lifetime, products use less energy. This ultimately saves carbon, reduces waste and helps households and businesses to reduce their energy bills.

New and updated eco-design measures introduced in summer 2021 have, for the first time, included requirements for manufacturers to make spare parts available and replaceable with commonly available tools, as well as to provide information to professional repairers to assist with repairs. These new requirements cover dishwashers, washing machines and washer-dryers, refrigeration appliances, televisions and other electronic displays. The measures will help to establish a “right to repair” for consumers, as part of a more resource-efficient economy. Defra has recently set out aims in its new waste prevention programme to move to a circular economy by keeping goods in circulation for as long as possible and at their highest value. This includes increasing the reuse, repair and remanufacture of goods. We are consulting now on reforms to the Waste Electrical and Electronic Equipment Regulations and will consult later this year on reforms to the batteries regulations. We have also launched a separate call for evidence on reforms to the WEEE regulations to seek views on how they can further support the circular economy by incentivising more sustainable product design and higher levels of reuse of electrical products.

Further, from 29 April 2024, the new product security regulatory regime will require manufacturers to publish information on the minimum length of time that security updates will be provided for consumer connectable products. However, mandating a minimum security update period before the impact of these measures is known could run the risk of imposing obligations on businesses disproportionate to a product’s lifespan and any associated security benefits. The Government have committed to a post-implementation review of these new measures to understand their impact before any further action is considered.

Similarly, adding rights to repairability to consumer law now will oblige retailers to pre-emptively seek information from the manufacturers of products that they sell. More work is required before this is suitable for the Government to ask. In the meantime, it would mean greater costs and a reduction in choice for consumers. It may also have implications for our WTO and international treaty compliance, as it would constitute a new technical barrier to trade about which we would need first to notify and consult partners.

[Lord Fox (LD)]

I welcome what the Minister says, in some respects. Will the issue of updating electrical and electronic products be part of that review, too? In other Bills, we have discussed who has the obligation to maintain software updates for equipment from the perspective of safety as well as longevity. I hope that the review takes that into consideration, too.

[Lord Offord of Garvel (Con)]

I thank the noble Lord, Lord Fox, for that. There is a lot of information, and it is reasonable that I write to the noble Lord about the gamut of the consultation that is going on. As I said in response to the noble Baroness, Lady Hayman, a lot of consultation work is going on in the two main departments—business and Defra. It is therefore only fair that we spell that out, and we are happy to do so.

To finish what I was saying, I hope, on the basis of what I have said and those assurances, that noble Lords will not press their amendments.

I turn now to Amendment 134, on greenwashing, for which I am grateful to the noble Baronesses, Lady Jones of Whitchurch, Lady Kidron and Lady Bennett of Manor Castle, and the noble Lord, Lord Clement-Jones. The amendment would add specific greenwashing claims to the list of banned practices in Schedule 19. Misleading consumers about the environmental qualities or impact of goods and services so that it leads them to take a different purchasing decision is already against the law. Further, initiatives are under way, including the CMA’s draft guidance on sustainability agreements between businesses, which are aimed at helping to achieve environmental goals. The CMA has also published guidance on environmental claims on goods and services to help businesses understand how to communicate their green credentials without misleading consumers.

Part 3 of the Bill will strengthen consumer protection enforcement by allowing public enforcers to make applications to the court, which will not only stop the infringing conduct but allow the imposition of financial penalties. In addition, the Bill introduces new powers for the CMA to take action more quickly against bad business practices, without needing lengthy court action, and to give penalties of up to 10% of turnover for those breaking consumer law.

In summary, given that greenwashing is already prevented in law, our priority is to keep these existing interventions under review to observe their impact before rushing into further legislative action. For these reasons, I hope that noble Lords will feel comfortable not to press this amendment.

UK-EU Trade: Small and Medium-sized Enterprises

Lord Fox Excerpts

Wednesday 31st January 2024 Lords Chamber

[Lord Fox (LD)]

My Lords, the Minister will have seen yesterday’s reports in the FT that average businesses are facing extra costs of £100,000 to navigate this friction. The Minister has painted a very optimistic and active picture of what his department is doing, but the effects do not seem to be working through. The British Chambers of Commerce and Make UK say that nine out of 10 organisations have seen little progress over the last three years. Does the Minister accept that more has to be done and that perhaps he does have to engage with those committees he just derided?

[Lord Offord of Garvel (Con)]

I thank the noble Lord. We have 5.5 million companies in the UK, of which 3 million are sole traders which operate underneath the VAT threshold. We have 2.5 million SMEs, of which 300,000 export. I meet exporters regularly and what I find when I do the Made in the UK, Sold to the World roadshows in Cardiff, Belfast, Lisburn, Glasgow, Dundee, Birmingham and around the country is that the SMEs are the most innovative when it comes to selling internationally. They are getting around these problems. DBT is working with them. We have a network of international trade advisers who come to their businesses regularly. We have the in-house teams in the embassies. We are working through these issues and, when we move through it, trade will be greatly expanded.

Post Office Ltd

Lord Fox Excerpts

Tuesday 30th January 2024 Lords Chamber

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

I thank the noble Lord for that question. To clarify, the question was whether the Post Office brand was damaged. Many people would say that it was a toxic brand. My argument was simply that if one believes that the real Post Office is actually the postmasters, they are the heroes of the day. If anything, their brand has been enhanced but there is no doubt that the management and oversight of the Post Office has been seriously compromised over many years.

Perhaps we should remind ourselves how this company operates, which is on an arm’s-length basis. It is owned by the Government—the taxpayer—and there is one shareholder: HMG. Yet, like many of our public bodies, it is now managed on an almost separate, arm’s-length basis. In doing so, a board is created that looks like a public company, but when is a public company not a public company? It is when there is a board that does not do the job it is meant to be doing.

There was an executive management team, and the role of non-executive directors is to challenge that team. The role of the chairman is, principally, to represent the shareholders and to call the executive management to account. Clearly, that has not happened here. Since 2015, a whole new set of executive managers has been put in place, as well as a new board. In 2023, there were three new independent directors. We have the chair, and through the increased scrutiny resulting from the Government perhaps being more interventionist, some disagreements within the board have come to light. The Secretary of State believes that the current arrangements are not working, so it was agreed by mutual consent to part company. We have taken decisive action to change course and improve, rather than to wait and hope that the situation improves.

[Lord Fox (LD)]

The Minister’s answer is really helpful, because the question is, when is arm’s-length not arm’s-length? It is clear that it has ceased to be an arm’s-length operation, rightly or wrongly. His Majesty’s Opposition asked for a timetable, and it would be helpful if the Minister gave it to us. How much leeway will the new chair have to do what he or she needs to do, in their mind, to achieve the objectives, and how much will that arm’s-length relationship be pulling the chair back?

[Lord Offord of Garvel (Con)]

To clarify, the Post Office is constitutionally set up to be arm’s-length and will remain so. We are now talking to the Secretary of State about tightening the governance of that. The key position is the chair, who runs the board and is accountable to the shareholders. We will appoint an interim chair as soon as possible, with a view to getting a new person in post this year. That will coincide, I hope, with the inquiry coming through at the end of the year.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that. A key part of making these appointments is to make sure that we have the right people, in the right place, and the right leadership. In this case, we agreed to part company by mutual consent. The point is that there are issues with the governance of the Post Office beyond Horizon. There needs to be further reform of the Post Office and we have to start with the chairman to move that forward.

[Lord Fox (LD)]

My Lords, the Minister said that it was hoped that the appointment would be made as soon as possible, hopefully this year. In the meantime, this organisation is a burning platform; it needs leadership. Where does the Minister expect that leadership to come from until the appointment is made?

[Lord Offord of Garvel (Con)]

The assessment at the moment is that, with the strengthening of the non-executive directors and the current executive team in place, we have a team that can continue to manage the Post Office. We believe that we have a situation that is stable, but it now needs to be improved. That is the challenge before us.

Digital Markets, Competition and Consumers Bill

Lord Fox Excerpts

Committee stage
Monday 29th January 2024 Grand Committee

If this amendment were passed, it would ensure that resources are made available to make happen the kind of committee that we need in Parliament for us to perform the kind of parliamentary oversight that is becoming increasingly needed and urgent. I urge my noble friend the Minister not just to support what is proposed—it is in the Government’s interest to support this—but, as I said on the last group when I did not seem to have much luck, to adopt the amendment as the Government’s own, as they did when the Financial Services and Markets Bill was going through the House. Parliament would then see that this kind of extra responsibility and resource has the full support of the Government. We have to be better equipped to discharge our responsibilities and I hope that this attracts widespread support from the Committee today.

[Lord Fox (LD)]

My Lords, I speak to Amendment 82 in my name. Through the medium of parliamentary reports, it seeks to probe the Government’s position on standards—as was previewed by the noble Lord, Lord Bassam. Why am I interested in standards? My experience of other sectors is that the UK’s approach to engagement in international standards is often—in my case, always—a technical approach. Technical people are sent to the relevant bodies to do the work. This flies in the face of what I have witnessed when other countries, on their own account and that of their national champions, used the process of negotiating new standards to further the strategic aims of their country and its national standards. I want to have this discussion so that I can hear how the Government view this and where the responsibility lies. Without a real handle on standards, competitivity and competition will be playing catch-up.

During the first day in Committee, when I was in the Chamber, your Lordships discussed the importance of interoperability. By my definition, interoperability has to enable both vertical interconnection between systems and horizontal interconnection with the web. The internet is a web of interconnected sites, so interoperability has to be both one to one, for example between servers and systems, and among servers and systems.

During that debate, the Minister, the noble Viscount, Lord Camrose, said that there was no need to define interoperability and that doing so might unhelpfully narrow the definition. That would be true if, when he was speaking, he had covered all types of interoperability, including web interoperability. Separately, he referred to interoperability and data access. This might be helpful if he meant interoperability generically, covering different subsets. Can the Minister clarify whether his department’s definition covers many-to-many, one-to-many and one-to-one interoperability?

To be more technically clear, this would cover interoperability among and between websites, using JavaScript and web data such as URLs, as well as one-to-many interoperability, such as browser interactions with websites, and one-to-one interoperability, such as covering apps and operating systems. At present, the language of Clause 20(3) is limited only to interoperability with a platform, so it would not address abuse by interfering with web interoperability.

This may sound too detailed, but it is deliberately detailed, because the detail of standards establishes who wins commercially. Somebody has to be inside all this to make sure that we can avoid businesses locking out their competitors, because what has happened over the past 20 years is increasing amounts of locking in.

Microsoft tried to use its operating system to lock in its media player app and its browser. Google is locking in online advertisers to its systems. Apple locks in apps through the payments and App Store terms and conditions. Amazon sought to lock people into its buy box. Facebook does not allow people to cross post, and each company runs messaging platforms that work better when plugged together than when plugged in with one of their rivals. Lock-in reinforces the network effect in communications and increases each platform’s separate monopoly. Standards define which software components work with other components, while definitions help to decide which software can work with which. Definitions of what is in the browser and what is elsewhere right across the internet are critical.

As the Committee knows, there are three principal players setting these definitions. What the browser does is overseen by the World Wide Web Consortium—W3C. Other internet standards are defined by the Internet Engineering Task Force—IETF. Telecoms standards are defined by the International Telecommunication Union—ITU, which is part of the UN in Geneva. All are relevant to interoperability and it is critical that the CMA has a role in policing interoperability, not least to ensure that standards are not rigged for the benefit of the bigger players, as I have just illustrated.

The ITU is a public body, but W3C and IETF are run by private entities for their own benefit. There is a serious risk and current concern that the definitions that are vital to avoid the intermediation of the future web are being rigged for the benefit of the big tech players. Promoting interoperability between browsers and websites means that browsers are not websites and do not operate in a way that prefers the website of the browser owners. They should render websites whoever owns the website. Different functions have to be standardised and policed for this to happen. To promote online competition, businesses need to be able to compete with the dominant browser owners. To be clear, Google and Apple own or control browser engines for all Apple, Google and Microsoft devices sold worldwide—essentially, almost everything apart from Chinese systems.

It is central to digital competition that the CMA promotes open and fair interoperability, thereby ensuring that browser owners do not give themselves discriminatory preferences or otherwise use their control over one part of the system to benefit themselves at the expense of their rivals. As we go forward and technology changes, we have an opportunity to nip this in the bud rather than trying to reclaim it in the opposite direction.

I am in danger of labouring this point, but I am going to: wallets offer storage for online payment cards. Someone running a wallet business would expect that the wallet’s operation would be discrete from the browsers. You would expect a browser to operate in a non-discriminatory way, enabling all types of wallets and cards to be used. Well, in 2022, W3C passed a standard that clearly benefits the two dominant browsers by allowing them to prefer their own wallets, casting a shadow across the whole online wallets and payments business world. This happened because Google and Apple play a considerable role in the development of standards for their own benefit. If we actually want an open market, this all needs to be actively policed; I suggest that the CMA has to be central to that policing process. Without this effort, much of the other work of the DMU will be closing empty stables’ doors while chasing bolting horses.

I note that the noble Lord, Lord Lansley, had some interesting things to say about interoperability and data in the previous debate, so I will be interested in his response and those of other noble Lords to this amendment. I of course will not be moving it, but I want a full reply from the Minister and possibly some further dialogue before Report, just to see the department’s view of how the engagement on this highly technical and important issue is to be done at international level. If it is not the CMA, who and how?

Alan Bates and Others v Post Office Limited

Lord Fox Excerpts

Wednesday 24th January 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank the noble and learned Baroness. This is exactly the issue we need to get to the bottom of. It goes back over a large number of years. We will be going back through files, ministerial appointments and meeting notes to find out exactly what notice was given and when. A ridiculous level of faith was given to the Horizon computer. Fujitsu has acknowledged culpability in this matter. Once the Williams report establishes the facts, we will be able to take necessary action to hold people accountable.

[Lord Fox (LD)]

My Lords, to date, all the talk has been around what happened to sub-postmasters, but we should remember that Horizon was being used in the Crown offices, the branches that Post Office Ltd managed, so it would have seen the shortcomings of this system through its own management. It is not just a question of having to read the papers, as the noble Lord, Lord Forsyth, said; it was happening to its own businesses, and it was covering it up. Is this not further evidence that things should be done now, rather than waiting for some far judgment?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his question. The Horizon system has been upgraded—and upgraded again since 2017—and we now have a reasonable audit that it is now working satisfactorily. It will now be further replaced by a cloud system that will run alongside the current system, so I think there is now a feeling that there is efficacy in that system. What the noble Lord refers to is why there was an unshakeable belief in the computer system that went on for so long. We need to understand exactly how that happened, what the role of Fujitsu was in that, whether this was corporate malfeasance or the role of one or two individual bad actors, et cetera. We need to get to the bottom of that, and that is what the Williams inquiry will do.

Regulatory Approval for New Products and Services

Lord Fox Excerpts

Monday 22nd January 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Baroness for her points. This is clearly a topic of much broader debate, and I am very grateful to have been given the regulatory reform agenda in my portfolio. We have three core priorities. The first is to minimise the regulatory burden and to future-proof regulations, which means looking at the current regulatory stock and seeing what we can do to make it more effective. The second is to work out the mechanisms that will allows us to better understand and establish how we can measure the cost of regulation on business when it comes through Chambers such as this. The third is to work with regulators to get them to promote the duty of growth and to look at regulation as a service, rather than simply a block, as we do sometimes.

I will answer two other quick points on the health side. My noble friend Lord O’Shaughnessy wrote an excellent report on getting clinical trials to operate more effectively; the Government have accepted most of those points. On innovation, my noble friend Lord Camrose pointed out to me, on the way in, the extraordinary number of initiatives he has taken with the various Bills we are bringing through and the co-ordinating function of the DRCF, which means that we are one of the most innovative regulatory environments in the world for AI and new tech.

[Lord Fox (LD)]

My Lords, we are grateful to the noble Baroness for bringing up the issue of innovation, which I know the Minister also considers to be very important. Last week, I spoke with representatives of the highly innovative UK tech industry. Worryingly, they reported that tech start-ups that should be starting up in the UK are being very effectively lured to France. I think the Minister will agree with me that this needs to be nipped in the bud, so can he undertake to dispatch his department to find out what France is doing and how it is getting some success here and to make sure that the UK is doing at least as well if not better?

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Lord for his comments and am always stung by comparisons with our near and dear neighbour. But I can reassure him that our global investment summit raised over twice as much in terms of commitments as the one in Versailles. There are three trillion-dollar tech economies in the world: one is the United States, one is China and one is the UK.

[Lord Fox (LD)]

Complacent.

[Lord Johnson of Lainston (Con)]

We should celebrate the fact that we are raising more money for tech in this country than Germany, France, Spain and Italy combined in many sectors—but we are not complacent. I totally accept the need to ensure that organisations such as UKRI are given the firepower that we have given it to ensure that we can provide funding for these businesses. I personally take this very seriously and would be delighted to have further conversations with the noble Lord on how we can ensure that every tech company in the world sees this country as their international HQ.

Horizon: Compensation and Convictions

Lord Fox Excerpts

Wednesday 10th January 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, in preparing for today, I had a look back over previous Statements, debates and Written and Oral Questions that we have debated in your Lordships’ House. What shocked me the most was just how repetitive it all is: the same interventions, the same problems, the same people and the same lack of solutions. I have raised questions and spoken in debates on this issue many times since 2019, and I am just a newcomer. We have all known about the scandal for years, thanks to some great campaigning by individual sub-postmasters and by parliamentarians across the political divide and across both Houses. They include the noble Lord, Lord Arbuthnot, and Kevan Jones MP in the other place, to name just two.

The scandal is an absolute disgrace on so many levels: financially, judicially and on a human level. Most worryingly, it is a governmental oversight failure as well. We all know the details: thousands of sub-postmasters sacked or prosecuted in the space of 16 years and wrongfully labelled as thieves and fraudsters by the Post Office, Fujitsu and our judicial system. Their lives were made hell, and all because of an IT glitch in the system. What makes this so shameful are the lengths to which Post Office Ltd went to cover it up. The fact that it spent £32 million denying these claims and bullying those wrongfully accused into false guilty pleas is bad enough. But what makes this story even worse is that we got the national moral outrage not when the cases went to the highest court in the land and were won, three years ago, but only when ITV produced a drama on the scandal. As my noble friend Lady Chakrabarti asked earlier, where has the moral outrage of the state been in the last two decades?

Many postmasters and postmistresses have so far received only a fraction of their costs and expenses. Can the Minister guarantee that compensation payments will immediately follow any exonerations under the terms of the scheme as they stand today, and can he indicate any sort of timescale for this? We have waited so long. I know that he, like his predecessors, appreciates that victims cannot continue to wait for years for payments. Sixty sub-postmasters have died since the scandal, four of them taking their own lives. The final compensation is critical, but so too is overturning the convictions. Justice must be served for those workers and their families, which is why Labour has called for all sub-postmasters to be exonerated in full. As my colleague Jonathan Reynolds MP said in the Commons,

“I extend our support for any actions that may be required to overturn these convictions as quickly as possible”.—[Official Report, Commons, 8/1/24; col. 84.]

One of the lessons we have learned—the Minister touched on this—is the trauma and lack of trust that the whole process has caused for the victims. We want to ensure that no victim has to re-enter litigation and relive the traumas that they have experienced. We also welcome the announced review into private prosecutions, because the public want assurances that nothing like this can ever be allowed to happen again. One of the most alarming and shameful aspects of the whole scandal is the failure of our courts and our judicial system. In all the cases of the sub-postmasters being wrongfully found guilty, the courts believed the computer. There were originally 640 legal cases, although I think there are more now. How did that not ring alarm bells at the time? I hope the inquiry will also look into the legal processes that exacerbated the problem.

In conclusion, I will press the Government on a few of the key matters. First, can the Minister confirm the timescale on the overturning of those wrongly convicted so that they can carry on with their lives? Secondly, this is not just a Post Office issue; Fujitsu as the provider has its share of culpability. What plans do the Government have to hold Fujitsu to account for its actions? Thirdly, how much money has the Post Office spent on prosecuting the sub-postmasters and then on defending itself against them over the last 20 years? Fourthly, have the Government made any assessment of the impact of the 2014 law changes on the ability of people wrongly convicted and imprisoned to claim compensation in a scandal? Fifthly, are there any plans to seek redress from the chief executive, the Post Office board and the senior management at the time who oversaw this scandal? Finally, why did it take a TV drama for the Government to act so decisively when parliamentarians in this place and others have been raising this scandal for more than a decade?

[Lord Fox (LD)]

My Lords, as we have heard, it has taken a television drama to set light to what has been smouldering for a very long time. I suppose that all those associated with that drama should be congratulated, because they have managed to do what we failed to do: to ignite public indignation to such an extent that the Government had to move. In that respect, they deserve a great deal of congratulations. Of course, the script has been played out here and, thanks to the noble Lord, Lord Arbuthnot, at the start, and others, we are very familiar with it.

I have a few questions about where we are now. First, we welcome the news that Scotland Yard is looking into potential offences in relation to the Post Office overall, but can the Minister confirm that this will be able to progress in a speedy way in a twin-track approach alongside the public inquiry? It is very important that both these things can happen as fast as possible. We do not want one to impede the other, so can the Minister assure us that this twin-track approach will be pursued?

Turning to compensation, in the case of individual assessment, can the Minister please enlighten your Lordships’ House on the role of retired judge Gary Hickinbottom’s panel? This was announced only on Monday and, according to the Minister then, this panel is apparently going to assess the pecuniary losses for those with overturned convictions if there is a disagreement. Is this now obsolete, or will it still be operating? If it is still operating, why does it deal with only pecuniary issues when the Secretary of State has on a number of occasions said that this harm goes way beyond simply those? How is this to be incorporated into the two announcements spread over three days?

In the Commons, the Father of the House, Peter Bottomley, said that

“the titanic error was a belief in technology”—[Official Report, Commons, 8/10/24; col 86.].

It was that belief, coupled with zero faith in the decency of the sub-postmasters, that set the problem going. In that, the role of Fujitsu was central, and it is clear that the failure of its technology was at the heart of the issue. It remains to be seen how it perpetuated the myth of its technology, and that is what the public inquiry will address; but however you look at it, it continues to benefit from UK consumers’ and taxpayers’ money. It is still operating Horizon for POL, and benefiting as a result to the tune of tens of millions of pounds annually. That is not all: further government contracts have been issued. Is this right? Is it appropriate that this should continue?

Speaking yesterday, the Work and Pensions Secretary, Mel Stride, is quoted as having stressed that not only the taxpayer will be on the hook for this compensation. The spirit of that was reiterated by the Parliamentary Under-Secretary, Kevin Hollinrake, today. So, does this now signal that the Government are going after Fujitsu for money to support the compensation of these people?

It is a terrible saga, but it has demonstrated characteristics of other sagas we have seen. For example, the process of compensating the victims of the Windrush scandal has been achingly slow. The contaminated blood scandal has dragged on and on. Another terrible example is the way the Hillsborough tragedy victims have been denied justice. There is a pattern of denial, cover-up, and then redress being delivered at a very slow pace. Does the Minister agree that there appear to be institutional problems that we ought to try to address?

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

I thank the noble Lords, Lord Nicol and Lord Fox, for their contributions and detailed questions. It is worth reminding ourselves of the timeline of this sorry story. The Horizon accounting system was introduced in 1999, and between 1999 and 2013—a 14-year period—the 700 postmaster direct prosecutions in England were brought. In 2017, the group litigation order was got together and in 2019 the High Court judge discovered that the case was flawed and the judgment was made, whereupon 75% of the settlement money had to go to fund the litigation.

In 2020, the then Prime Minister committed to holding an inquiry into the Horizon scandal, so that starts the clock on government action. The Criminal Cases Review Commission then began its work and referred the initial 39 cases to the Court of Appeal. In 2020, the Horizon shortfall scheme was set up, designed on the understanding that compensation was going to have to be made. So at that moment, there was an understanding that there was a major problem.

In 2021, the High Court quashed the 39 convictions in a landmark judgment, and the Government announced funding for Post Office Ltd to pay the compensation. On 19 September, my predecessor, my noble friend Lord Minto, made the announcement in this House on the £600,000 upfront offer, so that pre-dates the TV series.

My DBT colleague in the other place, Minister Hollinrake, was vocal on this issue when he was on the Back Benches, and now, as a Minister, he has committed entirely to getting justice. He has come up with the £600,000 scheme, which is saying to people, “You don’t need to go through any more trauma or see any more lawyers. Here is an interim payment of £163,000, and you can get up to £600,000 without seeing another lawyer, get your conviction overturned and be done and dusted”. Yes, it is clear that the TV series brought this to light and to public attention. However, it has been acknowledged in government that this is a big problem that needs to be sorted. I commend my colleague, Minister Hollinrake, for what he has done so far.

In the process going forward, time is of the essence. The timeline will involve a triple track. First, there is overturning the convictions, which will require primary legislation. This breaks a lot of precedents in terms of legal procedure; ordinarily, convictions are given by a court and should then be overturned by a court on an individual basis. It is possible that in respect of some individuals, an otherwise safe conviction in another matter will be overturned. We do not have the time to dwell on that. We talked about the Blackstone principle: it is better that we get justice for the many as fast as we can. That process will be immediate.

The second part of that process is accountability. We need to know what happened; we need the facts and to get to the bottom of this. We cannot repeat the mistake the Post Office made, which was to go half-cocked, without evidence, against people who cannot then defend themselves. We need to go through a process to understand who is accountable; people are innocent until proven guilty. We will take this on with the Williams inquiry, which is determined to report through the rest of this year and will get to the bottom of the accountability issue. The third track, as the noble Lord, Lord Fox, mentioned, is the police making their own inquiries. It is fair to say that, post the TV series, this is uppermost in all minds, and the timeline will be expedited considerably.

Going back to accountability and culpability, there are a number of players in this: the Post Office management, Fujitsu and, obviously, the role of various Ministers. That is why the Williams inquiry must do its work and get to the absolute bottom of this, in order to understand what we are dealing with. In the case of Fujitsu, are we dealing with rogue employees, corporate malfeasance, or was the Post Office instructing its client to do what it wanted it to do? We do not know the answers to these questions, so we must get to the bottom of that. That process will run through and when we have that, we can then discuss accountability. As the noble Lord has said, Fujitsu has been involved in many government contracts across many departments for the last 20 years and continues to do its business according to the contracts it has with the Government. I am sure that there is heightened awareness now around some of its performance. But this process will continue until such time as we find evidence to suggest that it has been outside of its contract, and if so, the consequences will follow.

We have to separate out the payment of compensation, speeding this process up and making it as painless as possible. Today, my colleague in the other place, Minister Hollinrake, announced that the 2,100 postmasters who were not convicted and who were not part of the GLO 555 have already had a compensation scheme, which is running though; 80% of those claims have now been met, and we see that process continuing. Retired judge Sir Gary Hickinbottom is there to deal with those sub-postmasters who feel despondent at being back in dialogue with this thing called Post Office Limited: “Why is the compensation being done by Post Office Limited?” Therefore, to give assurances around that relationship, with Post Office Limited paying compensation through the HSS, the presence of Sir Gary Hickinbottom ensures some level of independence and an appeal process, which will come through.

So I believe that everything is being done now to expedite the process on the compensation side. In terms of accountability—as was asked by the noble Lord, Lord McNicol, and the noble Lord, Lord Fox—we will let the Williams inquiry move through. As far as the timeline is concerned, this has to happen with all speed and, again, we are very grateful that we have my noble friend Lord Arbuthnot and Kevan Jones MP, who are so vital to this and have the trust of the sub-postmasters. That advisory committee will be clear in making sure that everything is done as fast as possible.

Horizon: Compensation and Convictions

Lord Fox Excerpts

Wednesday 10th January 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank the right reverend Prelate. The consequences of this are absolutely wide-ranging and beyond just the immediate financial matters. Our Government are working hard to make the process full, fair and quick. Interim payments have already been made to GLO members, and those with lower-term convictions are having their full claims processed. The emphasis now is on speed and supporting the victims with the immediate issue of compensation. The second issue is getting to the bottom of this awful matter; that is where the Williams inquiry will do its detailed work, and we will get detailed answers to these questions.

[Lord Fox (LD)]

My Lords, we welcome the Prime Minister’s announcement that primary legislation will be brought forward, but we still would like to have some more details. Given the speed with which this has been moving, I understand that it is difficult to be specific, but it would help if the Minister could tell your Lordships’ House whether it is the intention that the pardons will come en bloc or still have to be pursued individually. Will these people actually receive pardons? They have been publicly humiliated for years, so the process of exonerating them has to be more than just the stroke of a pen. It is very important that, more than just receiving a pardon, they are seen to be pardoned.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that very important question. I can clarify that this is not a case of being pardoned; these convictions are being overturned. The primary legislation will take account of all of these convictions en bloc; it would take too long to go through each individual case and it would be too stressful. Of the 983 convictions, only 20% of the victims have actually come forward—so many people are just scunnered with the situation that they are in. Therefore, this will be a blanket overturn of convictions.