Start-up Companies: Tax Incentives

Debate between Lord Fox and Baroness Vere of Norbiton

Monday 29th April 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I am grateful to my noble friend. I know that HMRC regularly engages with industry and endeavours to work collaboratively with industry to improve guidance such that EIS applications can get through as quickly as possible. I hear his plea to set up a working group. I am not entirely sure whether a formal working group will be possible, but I will very happily take back his request that perhaps he and some of his colleagues can meet officials from HMRC to outline their concerns.

[Lord Fox (LD)]

My Lords, there appears to be a dissonance between the Minister’s answer and the experience that industry is reporting to us. I spoke to Tech UK this morning and it said it had recently made representations to the Treasury, with worked examples of real-life situations that absolutely uphold the issue the noble Lord has raised today. This is not just about payment; it is about retrospective payments and it really puts businesses in danger when their cash flow dries up in these situations. So I ask the Minister to harness her natural curiosity, go back to her department and dig a little deeper, because it may be publishing results, but the experience on the ground does not match that.

[Baroness Vere of Norbiton (Con)]

I hear what the noble Lord is saying and I will very happily look at the evidence that he has provided to officials in the Treasury. Perhaps he would like to join the meeting with my noble friend Lord Leigh.

Credit Card Invoices

Debate between Lord Fox and Baroness Vere of Norbiton

Tuesday 26th March 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I agree with the noble Lord that those payment machines should be correctly configured. When customers realise that there is a problem, they must raise it with the bank, which will then be able to take further action. It is the case that if there is any suspicion of fraud—whether using a credit card or a debit card—the customer can get their funds back.

[Lord Fox (LD)]

My Lords, we are rightly discussing regulations for credit cards and consumer credit, but an increasing amount of consumer credit is coming from the buy now, pay later app sector, which is unregulated. Does the Minister understand how lopsided that is? It is time that the Government looked into regulating buy now, pay later, so that people have equal safety on both sides of the consumer credit barrier.

[Baroness Vere of Norbiton (Con)]

The Government are considering responses to a recent consultation on draft legislation for buy now, pay later. The Government believe that any regulation of this area must be proportionate, because buy now, pay later can be very useful to a large number of people. There are existing protections in the Consumer Rights Act, and the FCA has powers over the terms and conditions of the buy now, pay later contracts.

Destitution: Low Median Wage

Debate between Lord Fox and Baroness Vere of Norbiton

Thursday 23rd November 2023 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I fundamentally disagree that collective bargaining will be the way to lift wages; I believe that economic growth will be the way to lift wages. What I would like to say—and I would criticise this Government and previous Governments for not making the most of this—is that, when we look at the national living wage, the increases we made yesterday mean that, next year, someone working full time on the national living wage will see their real after-tax take-home pay go up by 30% since 2010. I think that is a very significant achievement.

[Lord Fox (LD)]

My Lords, I welcome the noble Baroness to her new spokesperson role. The Chancellor was very pleased to pull the reduction in national insurance from his chancellorial hat at the end of his speech, and has been going around touting that very much. There is one statistic that I hope the noble Baroness can help me with. The Resolution Foundation notes that the top fifth of earners will receive five times the benefit from that cut than the bottom fifth of earners. Can she confirm that statistic?

[Baroness Vere of Norbiton (Con)]

What we did yesterday—and we were absolutely clear about this—was to reward workers. It is critical that we reduce work-related taxes, because by doing so we increase the number of hours worked, which will lift the number of full-time equivalents by 94,000. We think that the cut yesterday was absolutely the right thing to do.

Jet Zero Strategy

Debate between Lord Fox and Baroness Vere of Norbiton

Monday 14th November 2022 Lords Chamber

[Baroness Vere of Norbiton (Con)]

My noble friend is absolutely right. We want to maintain the benefits of air travel and to harness the various technologies out there. My noble friend mentioned hydrogen; after I leave the Chamber today, I shall be going to meet ZeroAvia, a company that has a hydrogen fuel cell-powered aircraft and is looking to scale that up. Indeed, the Government have invested in ZeroAvia and we will continue to invest in hydrogen or other propulsion technologies going forward.

[Lord Fox (LD)]

My Lords, my noble friend talked about reliance on nascent technology. One way of speeding up technology has been through the Aerospace Growth Partnership—which I am sure the Minister knows is a joint industry and government enterprise—and its Aerospace Technology Institute. Can she perhaps tell us how much of the money being spent in the ATI is devoted to technologies that will help deliver the sorts of results that my noble friend is seeking?

[Baroness Vere of Norbiton (Con)]

I do not have the specifics on the exact investment in ATI, but I can tell the noble Lord that, in total, it is £685 million for aerospace R&D. He mentioned working in partnership with industry; that is what is so important and what underlies the jet zero strategy. It is not just the Department for Transport having a think all on its own. We are working with industry and academia, and we have done a consultation that drew 1,500 responses. We will look at the technology; some of it is nascent and some is more developed than that.

Industrial Action on the Railways

Debate between Lord Fox and Baroness Vere of Norbiton

Monday 20th June 2022 Lords Chamber

[Lord Fox (LD)]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Smith of Basildon. I thank the Minister for repeating the Statement, which opens with a list of those affected by the strikes. I should say that my plans have had to change for the latter part of this week. Potential revellers in Glastonbury have had their plans ruined and people going on holiday have had their plans upset. But it is workers, school and university students, and patients who will be most affected, and whose lives will be most impacted in the longer term by these strikes.

I would take the ministerial hand-wringing about this issue much more at face value if the Government had moved heaven and earth to solve this strike, but they have not. They have not lifted a finger and are making a virtue of this inactivity. Perhaps the Minister could update your Lordships’ House on when the Government last discussed this issue properly with union representatives. What does “doing our utmost” mean in terms of actually doing things? What is the Government’s utmost when it comes to stopping this strike?

This would be bad enough if the railway was being organised under the old franchise system, but as the Minister knows, the Government “took back control” of railways during Covid and essentially imposed a TfL-style service contract system. They are the real employer, and not to negotiate is a dereliction of duty. The Government hide behind the “we are not the employer” excuse, but with the formation of Great British Railways the Government are in charge. They have effectively nationalised the railways. The Government cannot expect this power of owning the railway without responsibility. Their responsibility is to negotiate.

The unions should not be inflicting this misery and should not be in a position to, but Grant Shapps is just as much to blame for failing to have acted to stop it from happening. We should look at the facts. As the Minister said, the railways have suffered throughout the pandemic and passenger numbers are yet to bounce back. This huge interruption will only hurt the recovery of passenger confidence in the railways. Here I agree with the Minister. I also agree with the noble Baroness, Lady Smith, that the Government need to understand that and get everybody around the table and thrash this out. Until that happens, we will not get resolution. Can the Minister please explain why her Secretary of State for Transport is more willing to step into the media and try to save the Prime Minister’s neck than he is to sit around the table and save rail passengers from the problems we are seeing?

Meanwhile, we have seen sabre-rattling about agency workers from the Business Secretary of State, Kwasi Kwarteng. Can the Minister please tell your Lordships’ House when we might expect a statutory instrument to be laid here so we can find out what his plans are? On the face of it, it looks like a political gimmick which is actually deeply impractical. This is a tight labour market; it is a tighter labour market than we have ever known. Agency workers are in really high demand. They can pick and choose the jobs that they take. Agency staff are unlikely to choose a role that causes them to have to cross a picket line rather than a job that does not. Where are these people coming from?

Even if the Government manage to find workers, it will not fundamentally address the underlying issues causing the strike actions and it will not save many of the services. For example, train drivers are trained for weeks to learn a new route. We saw this complication during the Covid crisis. You cannot just swap one driver for another, even if they know how to drive the train. What this looks like is the Government seeking to pour petrol on an already incendiary situation. The tone of this Statement adds to my suspicion that this is what is happening. Inserting third-party agency workers into this scenario is likely to inflame tensions and elongate strike action.

For my part, I think the Government think this is putting pressure on Her Majesty’s loyal Opposition and are not intending to solve the dispute. That is wrong. The Statement laughably urges divisions to end, but the Government’s language is inherently very divisive. It is the people of Britain who will suffer: the cancer patient who misses an appointment, the student who fluffs an exam after having to take a much longer journey to school, and the zero-hours worker who misses a whole week’s wages because they cannot get to work. These are the lives the Government are using to fuel their narrow political aims. Does the Minister agree with me that this is beyond reprehensible?

[Baroness Vere of Norbiton (Con)]

I am grateful to both noble Lords for their contributions on this Statement. I have listened carefully to what they had to say today, and nothing that they said convinced me that there was an alternative way of bringing this dispute to a resolution, because:

“I do not negotiate with a Tory Government.”


Who said that? Mick Lynch. He does not negotiate with a Tory Government. He said that on 23 May. When we are dealing with that sort of attitude—one might say—it is all very well to turn round and say, “Well, have a meeting”. Have a meeting with who, about what? The Government are not the employer here.

--- Later in debate ---

[Baroness Vere of Norbiton (Con)]

I am very grateful that the noble Viscount is taking such a key interest in freight and I look forward to working with his APPG as it takes shape and moves forward. Freight is an incredibly important area that historically has sometimes been slightly forgotten about. We are hugely ambitious for freight on our railways. We have been working closely with the freight operating companies and Network Rail to see what we can do to get as many freight trains as possible moving over this period of disruption. We also had several meetings, in the weeks prior to any potential industrial action, about what is currently carried by rail freight that we would need to make sure continues to be so, so we feel content that we have a good handle on that.

On longer-term ambitions for freight on rail, we are hugely ambitious for it, as set out in the Williams-Shapps plan for rail but also in the Future of Freight strategy. I will have to beg the noble Lord’s patience because, when we come to debate Great British Railways in the transport Bill, I hope we will have many positive discussions about what GBR can do for freight.

[Lord Fox (LD)]

My Lords, I wish to declare an interest: I am a member of the All-Party Parliamentary Group for GWR, whose services I normally use almost every day but clearly will not be using tomorrow.

P&O Ferries

Debate between Lord Fox and Baroness Vere of Norbiton

Tuesday 22nd March 2022 Lords Chamber

[Lord Fox (LD)]

My Lords, I want to talk about business culture, the culture of an organisation that takes action like this, the culture that led the management of P&O to turn these people out of their jobs with no notice because they could, or thought they could—Zoomed out of work after years, decades, of service to that company. There was no empathy or self-awareness in this action, and there was no understanding that it was wrong. The fact that the management was unwilling or unable to see this speaks volumes about the culture of P&O and that of its owner, DP World.

But how about closer to home? It is clear that government officials were warned about this act of corporate brutality, so can the Minister confirm to your Lordships’ House who knew in advance? Can she tell your Lordships why this knowledge rang no alarm bells? That it was apparently waved through also reveals the culture of this Government: they had time. If the Government allow this sort of behaviour to go unchecked, what sort of precedent does it set or reinforce? Will others, yet more in the shipping industry, argue that they are compelled to follow suit in order to remain competitive?

Speaking on the BBC’s “Today” programme on Friday 18 March, the spokesperson for the UK Chamber of Shipping, Peter Aylott, said at the end of an interview that he was content and very confident that P&O had acted properly. Does the Minister agree with the trade body?

Despite their knowing in advance, since the announcement, the Secretary of State and other Ministers have wrung their hands, as the noble Lord, Lord Rosser, pointed out. These displays of remorse are mere crocodile tears unless the Government actually do something. Ideally, the Government should cause P&O to think again. They should use their leverage on the parent company to make it make its company change its mind.

Assuming that that is not possible, here are a few ideas for the Minister and the Government. First, can the Minister say here and now that the Government will make sure that not one penny of the settlement to which these employees are entitled is withheld by P&O using legalistic threats and wrangles? Secondly, has the Minister spoken to the Pensions Regulator and can she assure your Lordships’ House that the pension fund it safe and will not need to be topped up by the Government or under the pension guarantee support scheme? Can she confirm that the huge amount of money P&O owes to the rating pension scheme is still on the hook and it will still pay it?

Thirdly, can the Minister undertake to ensure that every one of the new employees, if this has to go ahead, is reviewed for their qualifications? I fear that unqualified people will take these jobs, and that is a safety issue. P&O Ferries has obligations under the International Safety Management Code, which requires each vessel to have a safety management system. That system is then audited by the Maritime and Coastguard Agency, which produces a document of compliance. Can the Minister explain how on earth P&O can still comply with that vital safety certification if it has made a 100% change of crew?

Then there is the role of the corporate owner of P&O in the UK economy. Please will the Minister undertake to give a list of all the public contracts that are held by DP World, and can she explain how, on the one hand, her Secretary of State can say what he did about P&O and, on the other, those contracts can possibly be retained by its parent company?

Finally, there are freeports. DP World is at the forefront here. The Chancellor of the Exchequer, Rishi Sunak, personally opened the DP World-backed Thames Freeport. Speaking at the commercial launch, at the Saudi Arabian owned Savoy Hotel in London, the Chancellor said he was “thrilled” by DP World’s involvement. His level of thrill will no doubt have been doubled by the fact that DP World Southampton has also been awarded freeport status for the Solent Freeport. There is an inherent danger with freeports. They hold huge potential to be hotbeds of tax evasion and money laundering. For that reason, it is vital that organisations leading such ventures have an impeccable moral compass. After the events of last week, we now know that DP World presides over a culture that fails to understand the moral implications of its actions. It has a wonky moral compass. Is that really the sort of company that we want running our freeports?

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

My Lords, I thank the noble Lords, Lord Rosser and Lord, Lord Fox—the latter standing in for the noble Baroness, Lady Randerson, so well today—for their comments on this very regrettable and mishandled situation. The Government do not support the behaviour of P&O Ferries—clearly at the behest of its owner, DP World. It was an appalling situation for those workers to be in, and it will have had a devastating impact on the corporate reputation of P&O Ferries and DP World. I should like to point out that this is P&O Ferries, not P&O Cruises, which is owned under a different structure and has nothing to do with the ferries. I would not want this regrettable incident to bear too heavily—indeed, at all—on the cruises.

I will turn to the points raised by the noble Lords, Lord Rosser and Lord Fox, in due course, but I will first clearly set out that the Government are exploring all options to hold P&O Ferries and DP World to account. The circumstances are still unfolding. At this point, we need to get a clear understanding of what they are, what rights the seafarers have and what they are being offered by their very recent employer. It is also worth remembering that P&O Ferries still employs well over a thousand people—possibly up to nearly 2,000. We need to make sure that we understand what may happen to them and what P&O Ferries intends for them.

The world of employment law on international routes is hugely complicated. In many circumstances, the jurisdiction of the flag state applies on board vessels on international routes. Occasionally, that can also be a coastal state or the state under which the contract of employment was signed. We believe that was Jersey for some of these workers, but there is an awful lot of information to be found out about the circumstances surrounding the contracts and employment of these individuals. We are working very closely with officials in the department to press P&O Ferries and its owner, DP World, for the information we need to fully get to grips with some of the issues we want to proceed with. As mentioned by the noble Lord, Lord Fox, we are looking very carefully at our contracts with P&O Ferries and DP World. We will immediately review them all.

The noble Lord, Lord Rosser, mentioned furlough. It was, and remains right, that those employers received furlough. It is paid to the employee. It would be absolutely wrong to assume that P&O Ferries would have benefited from furlough, and those workers certainly had their jobs protected for longer because they got it. I still believe that providing furlough was the right thing to do in those circumstances. However, we will very closely consider the relationship of the UK Government with both organisations and put P&O Ferries and DP World on notice that their relationship with Her Majesty’s Government has now changed.

We have instructed all parts of government to do whatever they can to support the workers who have been impacted. Obviously, we are in touch with DWP, which will work with local employers. I am incredibly heartened by some of the messages we have had from local employers across the country looking for these highly skilled individuals and wanting to get them on board.

We have instructed the Maritime and Coastguard Agency to inspect all P&O vessels, including operational drills, to ensure that all new crews rushed through are safe to go to sea. They will not go to sea unless they have passed all those inspections. We have asked the Insolvency Service to look at the notification requirements and the specifics of the case, to consider whether action is appropriate. P&O has assured the maritime Minister that what it did was correct and legal. We are checking that that is the case and will seek further confirmation. There is a requirement to notify the BEIS Secretary of State if a redundancy notice is intended for more than 100 people. Again, we need to check which legislative framework that applies under.

We are calling on P&O Ferries to reconsider its actions, pause changes and start a meaningful dialogue with seafarers. The Transport Secretary has written to the company with an offer to facilitate discussions. There is quite a long way to go, but I share the anger expressed by both Front-Benchers about the manner in which this was carried out. We—the global we, as in my department and officials—were made aware on the afternoon of 16 March, the day before, which might have been a Wednesday, that this was happening. A very factual note was prepared—I often get factual notes telling me what is happening.

I think the noble Lord, Lord Fox, said it was waved through. Nothing was waved through. There was never a decision to be taken and Ministers were not aware of the note until matters became more urgent on the Thursday morning. It is the case that we are working very closely to understand exactly what has gone on here.

I want to point out at this stage because there has been much outrage—and I am outraged and think noble Lords should all be outraged—that the redundancies announced last week were actually much smaller than the redundancies announced in 2020 and in 2021. I missed the noble Lord’s outrage at that time. I am sure he probably felt it, but it did not appear. Why now and not the previous time? It is because it was done so badly and in such a poor fashion that it is outrageous that any company worth its salt would feel that it is okay to treat human beings in this way.

The noble Lord, Lord Rosser, referred to possible breaches in the law, and that is exactly what we are focusing on: which law might there have been breaches of and how are we going to address it? I have mentioned that the law is substantially different on international routes. We work on an international basis within the International Labour Organization’s Maritime Labour Convention, which sets out the minimum standards on some key employment and working conditions policy, but I absolutely accept that there is more to be done. This is an international workforce. It works globally. It works onboard. It is something that the UK Government can only influence internationally.

I will take the noble Lord’s point about the nationality-based pay differential. He noted that the regulations are due for review. I concede that the review has not been completed. The delay will have been due to Covid and other pressing needs on the legislative programme, but I will write to him with further details of what that review will be.

The noble Lord, Lord Fox, asked whether I felt that P&O acted properly. Clearly, I feel that it did not. There is an awful lot of work to be done. I do not know whether it will ever be able to rebuild its reputation because I fear that many people will vote with their feet. He also mentioned something important about the pensions. There is a deficit in the pension scheme and P&O will still be accountable for that deficit.

He asked whether the MCA will be reviewing the qualifications and the systems. As I have said, there will be a—how can I put this?—very thorough review by the Maritime and Coastguard Agency to make sure that these vessels are fit to go to sea. He mentioned a 100% change of crews. Again, I am not sure that there is a 100% change of crews. It could well be that certain crew members have been changed because, of course, P&O Ferries still employs well over 1,000—possibly up to 2,000—people.

I will check Hansard and go through any other points but, for the time being, I will move on to other questions.

Rail Disruption: Social and Economic Impacts

Debate between Lord Fox and Baroness Vere of Norbiton

Thursday 13th May 2021 Lords Chamber

[Baroness Vere of Norbiton (Con)]

I am not sure that I can give my noble friend all the assurances that she seeks on this matter. In general, Hitachi has a very strong track record in this area. The Department for Transport is not in the business of designing the details of trains—but if there is more information in this area, I will certainly get back to her. I reassure noble Lords that the removal of all these trains was carried out because safety is our highest priority; we are taking a very cautious approach to getting these units back on the tracks. However, we believe that we can do so safely and that we can undertake a medium-term forward repair plan to return them to 100% health.

[Lord Fox (LD)]

My Lords, I declare that I am a member of the GWR APPG and a user of GWR’s services. In her Answer to the Question, the Minister said, quite rightly, that the “vast majority” of trains are unaffected, but that seemed to dismiss the experience of those travellers for whom the vast majority of their trains are affected. Perhaps the Minister would like to correct that impression. In doing so, could she outline, in detail, how those passengers will be compensated for this very difficult period?

[Baroness Vere of Norbiton (Con)]

I will not correct the record on that because I was trying to reassure people that the vast majority of train services are actually running throughout the country at this moment. Therefore, it is very important that people do not read the papers and think, “I can’t get on a train”. The most important thing is that you probably can, but check beforehand. However, it is also the case that we experience disruption on our railways periodically, sometimes due to strikes and sometimes to defects in the track—these are incredibly unfortunate. We do not want them to happen; we want our services to run as punctually and effectively as possible.

The operators are offering refunds and delay repay compensation for cancelled and delayed trains. There has been an enormous amount of collaboration with all the train operating companies: I pay particular tribute to CrossCountry rail, which has put on new services to Bristol and Swindon, a route on which it does not normally travel. Tickets are accepted by other train operating companies, and indeed some have offered support by offering rolling stock.

Covid-19: Transport

Debate between Lord Fox and Baroness Vere of Norbiton

Thursday 14th May 2020 Lords Chamber

[Baroness Vere of Norbiton]

I speak to TfL every few days and our call tomorrow will be done together, because we felt that that would be the most appropriate way to get the message across. As I think my noble friend Lord Blencathra said, London sometimes likes to think of itself differently. Adding in national government indicates that this effort has to happen across the entire country, which is why I am talking with the metro mayors as well. I am doing it with TfL, not to TfL, and there are certainly some very capable individuals within TfL who have excellent relationships with the employers. All I am doing is adding my help, but it is with the agreement of TfL.

[Lord Fox (LD)]

In her answers, the Minister has gone through a range of guidance and advice. It has been made clear today that the police have no legal powers to enforce social distancing. Can she tell your Lordships what legal powers transport operators have to enforce social distancing and crowd management in their stations, rolling stock and vehicles?

[Baroness Vere of Norbiton]

The noble Lord is quite right. This is guidance; it is not a legally binding set of requirements and it is not designed to be. If we are to make our fight against Covid a success, to my mind it has to be a partnership between four groups: national government; local authorities, which know their communities; the transport operators that run the transport; and the passengers. If one of those four groups does not step up and fulfil their role, we will fail. That is why communication will be so important as we go forward with the fight against Covid.

Flybe

Debate between Lord Fox and Baroness Vere of Norbiton

Thursday 5th March 2020 Lords Chamber

[Baroness Vere of Norbiton]

The noble and learned Lord is quite right: the Scottish Government have taken a slightly different approach to passenger duty from the UK Government. Discussions with the devolved Administration will be under way this afternoon, and they will no doubt include the future of air passenger duty, but it is for Scotland to decide how they wish to charge it.

[Lord Fox (LD)]

My Lords, the discussion to date has, necessarily, been a sticking-plaster type of discussion; and noble Lords have raised other airports and operators that may in future require such sticking-plaster announcements. Can the Minister confirm that some sensitivity analysis is under way to identify where problems could arise in future? Does she agree that, in the long run, the way to deal with such issues is to have a proper strategic transport plan across the country?

[Baroness Vere of Norbiton]

My Lords, the aviation industry is a highly competitive market, and obviously, private companies operate in it. None the less, the noble Lord makes an important point about the Government’s insight into the financial future and sustainability of airlines. I am sure that he will be pleased to hear that the CAA already undertakes that role. Where potential financial issues are on the horizon, the Government are made aware. Therefore, plans can be put in place.

Air Pollution

Debate between Lord Fox and Baroness Vere of Norbiton

Monday 8th April 2019 Lords Chamber

[Baroness Vere of Norbiton]

Air pollution is a complex area—not only is it about what comes out of cars, but also what comes out of stoves and things such as carpets and paints. We need to move people on from older cars, which are far more polluting, and get them into ultra-low emission vehicles. The way to do that is to provide various grants and other schemes to encourage them in that direction. Eventually, people do change their cars, and I hope that they will look at zero-emission vehicles.

[Lord Fox (LD)]

My Lords, that answer is interesting, because it is older cars—as the Minister and the noble Lord pointed out—that are the trouble. Sadly, it is the poorest people and smallest businesses that own the oldest cars. For them, changing is nigh on impossible. The Minister mentioned grants and encouragement; scrappage schemes, fiscal incentives, better public transport and mobility credits would all be of benefit in moving the poorest people off the most polluting vehicles. Which of these schemes will the Government be introducing, and when?

[Baroness Vere of Norbiton]

I think noble Lords have heard us talk before about the scrappage schemes. In our view, the evidence of their deliverability and value for money simply is not there. We are not pursuing that currently. However, on the other side, the The Road to Zero strategy, published in 2018, sets out a wide range of things that can be done to move people towards ULE cars and to make sure they have the charging points at which to charge them.

Honda in Swindon

Debate between Lord Fox and Baroness Vere of Norbiton

Tuesday 19th February 2019 Lords Chamber

[Lord Fox (LD)]

My Lords, as set out by the noble Lord, Lord Grantchester, last time it was Nissan, this time it is Honda. I wonder how many more such cases we will have to discuss before much longer. The Minister gave a spirited rendition of her department’s attempts to whistle in the dark. This is a blow. Before I go on, I refer your Lordships to my interests in the register.

It is clear that Honda’s Swindon plant has had challenging economics for some years. Last year’s output of 160,000 vehicles was sub-scale, yet Honda avoided closure and kept Swindon open—so why close it now? I am afraid that I do not believe in coincidences. It is no good the Minister saying that the company ruled out Brexit as a cause. Brexit promises to raise costs for parts and reduce access to the EU, which is fatal for an already marginal plant. Honda knows what it is doing, but it is a polite Japanese company that likes to keep out of politics. It also hates to close factories and sack people. The current chaos in this country gave it licence to act.

Beyond the absolute disaster this poses to Honda workers, and many more in the supply chain, this brings into question the Government’s industrial strategy. As Ian Howells, senior vice-president for Honda in Europe, said:

“We have to move very swiftly to electrification of our vehicles”.


Mr Howells also said that the company had to “look very closely” at where to put its investment. He explained that it has to be in a marketplace of the size that Honda requires to make the investment worth while; he emphasised scale. The conclusion that comes out of today’s announcement is that this does not include the United Kingdom.

That throws up at least three questions. First, given Mr Howells’ assessment that the UK market is sub-scale, how does Brexit create a more attractive market for investors? Making the addressable market smaller does not make good sense for future inward investment. Secondly, Dyson is going to Singapore, Nissan is stepping back and now there is this news from Honda. Where does this leave the industrial strategy? The Minister is right to emphasise the very fast pace of technological change, so where does this leave the electrification strategy in particular? Unless what the Government are attempting to do has volume car makers located in this country to deliver future vehicles, it will all come to naught, but volume car makers are departing this country. Clearly, Honda does not buy the Government’s plans, so what does the Minister know that makes her think that she knows better than Honda? Thirdly, Ford has warned the Government, and JLR clearly has issues. To date, Toyota is silent about Burnaston, but that plant is eerily similar to the Honda situation. Perhaps the Minister can tell us what conversations are going on with Toyota.

These are multidimensional problems and I concede that our Minister is not in control of all of the issues out there, but the Government can do some things right now to calm industry nerves. In the Statement the Government have said that they will do whatever it takes. Well, they could rule out a no-deal exit now and they could look again at remaining inside the customs union and the single market because that is what the car industry wants to hear. Today’s announcement is devastating for Swindon, but how many more advanced manufacturing businesses will have to close their doors before the Government finally get this message?

[Baroness Vere of Norbiton]

I thank the noble Lords, Lord Grantchester and Lord Fox, for their comments. Some were very measured indeed—for which many thanks—but others I felt were a little harsh. I hope to explain why.

Let us start with the B-word. Although the leadership of Honda in Japan, Europe and the UK have specifically ruled out Brexit as the cause of this announcement, it is worth considering the impact of Brexit on the wider automotive sector. Of course, it remains our top priority to leave the EU with a deal that is good for business and provides the certainty that it needs. Within the Government and the Conservative Party, we feel that we are coalescing around a pragmatic compromise to achieve this deal. Unfortunately, the Labour Party seems to be more split now than it was 12 months ago, but I implore the remaining pragmatists in the Labour Party to back a deal because it is important for the industrial success of our country in the future.

We are determined to ensure that the UK continues to be one of the most competitive locations in the world for automotive and other advanced manufacturing. We have put forward a precise and credible plan for the future relationship with the EU and we are looking forward to working with the EU to put it into place. I have already made it very clear that Honda has made a series of global decisions. This is not unprecedented; it is a revision of the global manufacturing operations of a very significant automotive organisation. The current model, the Civic, is at the end of its production life cycle so it makes sense for Honda to cease operations in Swindon.

Much has been made of investment and whether that is a good thing by the Government at the moment and whether it is continuing. The Government have announced significant investment in this area. The automotive sector deal was announced in January last year. As a part of that, the Government and industry have committed £1 billion over 10 years to support the Advanced Propulsion Centre. The centre does research and development and it commercialises the next generation of low-carbon technologies, as well as keeping the UK at the cutting edge of low-carbon automotive innovation. We are talking about electrification, which is incredibly important. I beg to differ with the noble Lord: just because we do not manufacture hundreds of thousands of electric vehicles here, although I would very much like us to do so, we can achieve innovations by using this money. Already 44 projects have received £770 million to help them to leverage and get the intellectual property which we can then put into new types of engines and drivetrains that will make sure that these electric vehicles work. That is incredibly important. Also part of the automotive sector deal is £80 million for driving the electric revolution, focusing on power electronics and navigation. There is also the £400 million that the Chancellor announced in the Budget last year for charging infrastructure. That project is coming along well.

It is not just the Government choosing to invest in our country; businesses are choosing to come here. The noble Lord mentioned Toyota. Just last year, in February, Toyota announced that it would build the next generation of its hybrid Corolla model at the Burnaston factory in Derbyshire. The Secretary of State went to visit it, and it is now coming online. The new engines for this model will come from the company’s Deeside factory in north Wales, which will also help secure 3,000 jobs at this site. Toyota is not alone. Aston Martin has announced that the St Athan facility will become the home of its electric vehicle range. In February 2018, Greg Clark opened YASA’s new 100,000-unit electric motor production facility in Oxford. This goes back to what I said earlier to the noble Lord: it is not just about building the entire car nowadays but about building the components. If we have the ability to create these new engines, we must make sure that we use it.

Of course, we are in close dialogue with the car manufacturers; we were in close dialogue with Honda. I am sure noble Lords will understand that Honda’s announcement was hugely market-sensitive but it leaked anyway. That was hugely disappointing, mostly for those families who found out what was going to happen at Honda from the media, which I feel is wrong. The Secretary of State is now in close contact with Honda—as indeed he always is, but now more specifically—on building this task force to make sure that we get the skills and experience that are there into other manufacturing facilities in future.

I felt that some of the comments made by the noble Lords, Lord Grantchester and Lord Fox, were a little harsh. I recognise that there are mixed fortunes in the economy at the moment but all noble Lords who have ever run a business know that it goes up and down. Some businesses are not viable any more; others come to fruition. We must note that employment is at a record high and wages are growing; those are both very good things. Over half of SMEs expect to grow next year, and GDP is growing at 1.4%. I do not believe that this picture is of the dismal nature painted by the noble Lords.

Package Travel and Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018

Debate between Lord Fox and Baroness Vere of Norbiton

Wednesday 28th November 2018 Lords Chamber

[Baroness Vere of Norbiton]

My noble friend is quite right to pick that up. What I have just outlined—in a sufficient amount of detail, I hope—is a de minimis burden. It is a very small, almost negligible amount spread across the entire industry. That is why this is structured as it is. We are talking about £1.4 million to £1.8 million a year for the whole industry, and that is at the highest level because we have assumed a cost for every single one of 1,695 travel agents.

[Lord Fox (LD)]

It is certainly de minimis for the nation but is it de minimis for a small travel agent? What does the Minister regard to be de minimis in terms of margin for an already low-margin business? This is an increased cost for a low-margin business. It may indeed be de minimis for the United Kingdom but the cost for those travel agents that have to take it on board might mean the difference between success and failure.

[Baroness Vere of Norbiton]

I take the noble Lord’s point that there might be certain businesses for which an additional cost of between £3,000 and £5,000 will be very difficult, but I believe that the number affected will be very limited. We will look at whether any implications arise from this, although my view is that they will not. When the system is eventually in place—if indeed it needs to be in place—I think that consumers will take added comfort from the fact that it is all in place and that they are covered.

European Research Infrastructure Consortium (Amendment) (EU Exit) Regulations 2018

Debate between Lord Fox and Baroness Vere of Norbiton

Wednesday 28th November 2018 Lords Chamber

[Baroness Vere of Norbiton]

The rules and regulations are agreed by member states as they come together to form the ERIC, so obviously, those statutes are specific to that ERIC. I take the point made by the noble Lord, Lord Stevenson, concerning if, for some reason, the ERIC regulations fundamentally change. I do not think they have changed since 2008-09 and there is no move to change them whatsoever—let us remember that other non-EU countries would also be impacted by such a change to regulations—so I cannot imagine that there will be a great groundswell to change them. The CJEU is looking at the statutes of the ERIC—not the regulations themselves, the individual statutes of the regulations. Obviously, if a ruling went against us, we would have to consider our position, but we must be realistic: not a single case has ever been taken to the CJEU. We are probably dancing on the head of a pin. We have a mechanism—I do not want to call it a backstop—through which disputes, if there are any, are now resolved and will be in future. We are content to maintain that mechanism and I hope that the noble Lord is too.

I am pleased to say we may well be joining a number of ERICs in the next few years, and I hope that I outlined the process in my opening remarks. BEIS Ministers, using royal prerogative, have authorisation to join an ERIC, but before that happens there is an enormous collaboration process with UKRI, which advises whether it is a good idea for us to join. Securing the funding comes down to priorities, business cases and collaboration between the Department and the Treasury.

[Lord Fox]

Just to be clear, the Secretary of State would exercise the royal prerogative.

[Baroness Vere of Norbiton]

Yes.

That is how, hopefully, we will be getting involved in new ERICs, which may happen soon. I take on board the comments of my noble friend Lord Deben, and I hope I have addressed them in the context of the CJEU and our pragmatic approach to this issue.

The noble Lord, Lord Stevenson, raised the issue of timing—when the legislation will be needed or commenced. Obviously, if we have a deal, we will never need it, and therefore we hope that it will be put to one side. However, there is a possibility that, a scenario in which, we end up with no deal after the implementation period. At that point, this piece of legislation and many others—

Nuclear Safeguards Bill

Debate between Lord Fox and Baroness Vere of Norbiton

Committee: 2nd sitting (Hansard): House of Lords
Thursday 1st March 2018 Lords Chamber

[Lord Fox]

I support Amendments 8 and 13 and do not intend to speak at length. When the Minister was responding to Amendment 6 in the Committee’s previous sitting, he expressed a high degree of approval of the Delegated Powers and Regulatory Reform Committee, and I trust that that continues through these amendments. The case has been set out by the noble Lord, Lord Grantchester, and the DPRRC, and I hope that on these two amendments the noble Baroness can give us similar encouragement to that given by the Minister on Amendment 6. We on these Benches support the restricted use of these measures to give the Government the flexibility that they need. This is a good compromise between untrammelled power and the power they need for the flexibility to ensure the necessary regime.

[Baroness Vere of Norbiton (Con)]

My Lords, I thank the noble Lords, Lord Grantchester and Lord Fox, for their contributions. The amendments apply sunset provisions to two key powers in the Bill, Amendment 8 in respect of new Section 112(1B), which enables the Secretary of State to specify in regulations international agreements relating to safeguards that should be treated as “relevant international agreements”, and Amendment 13 in respect of the Henry VIII power in Clause 2.

I am grateful to the Delegated Powers and Regulatory Reform Committee for its considered report on the Bill. We are considering the recommendations carefully, and my noble friend Lord Henley hopes to respond positively to many of the recommendations soon.

I welcome the principles that appear to be behind these amendments, namely those of scrutiny, certainty and restriction of powers. However, as the underlying purpose behind these powers is very different, the proposed two-year sunset clauses must be considered in each context specifically.

--- Later in debate ---

[Lord Fox]

I thank the Minister for giving way. She has just referred to every time that we have a new agreement, but could she give us an estimate beyond the two-year period of how many additional agreements she would expect to have to insert into the regime?

[Baroness Vere of Norbiton]

Of course, it is very difficult to be specific on that but, as we know, we are focusing on four NCAs in the first tranche. The noble Lord will know that there are many other countries with which we would like to have an NCA in future which perhaps do not fall within the first tranche. The second thing to recognise is that this is not just about entering into new NCAs; it is whether new obligations arise as conditions change within the international community for safeguarding. This gives us the flexibility, but it is not drawn so widely that we can do whatever we like.

While we cannot accept Amendment 8, I would like to provide reassurance of the scrutiny that will be in place to ensure that there is proper oversight in the use of this power. Pursuant to the Constitutional Reform and Governance Act 2010, we would expect any new international treaties relating to safeguards to go through the ratification processes set out in that Act. Use of the power to make regulations specifying agreements as “relevant international agreements” is itself subject to the draft affirmative procedure in all cases, and any regulations made under the power that relies on these agreements must be consulted on. I am therefore confident that an appropriate level of scrutiny and restriction of powers is already in place.

I recognise the principles which lie behind the proposed amendments, and I hope that noble Lords will accept why I cannot accept them today. I therefore hope that the noble Lord, Lord Grantchester, feels able to withdraw his amendment.

Scotland Act 2016 (Onshore Petroleum) (Consequential Amendments) Regulations 2017

Debate between Lord Fox and Baroness Vere of Norbiton

Thursday 30th November 2017 Lords Chamber

[Baroness Vere of Norbiton (Con)]

My Lords, the Scotland Act 2016 implements the Smith commission agreement by devolving a range of powers to the Scottish Parliament and Scottish Government. As recommended by the Smith commission, it was agreed that powers related to onshore oil and gas licensing, aside from those relating to royalties, would be devolved to Scotland.

The Scotland Act 2016 transfers legislative competence for onshore petroleum to the Scottish Government with the exception of matters relating to setting and collecting licence rentals. It also includes provisions for Scottish Ministers to exercise powers currently held by the Secretary of State or the Oil and Gas Authority in relation to onshore licensing in Scotland. These consequential amendments complement the provisions of the Scotland Act 2016 and assist in giving the Scottish Parliament and Scottish Ministers greater control over their onshore oil and gas resources.

The intention is to transfer the existing UK onshore licensing regime, as it applies in Scotland, to Scottish Ministers. This will provide Scottish Ministers with the powers to administer the existing onshore oil and gas licensing regime in Scotland and to create a bespoke licensing regime if they so wish.

To implement the relevant powers in the Scotland Act, we need to make two statutory instruments. First, these affirmative regulations make consequential amendments to the taxation legislation. Secondly, negative regulations will make consequential amendments to the licensing regime. BEIS officials have been working closely with the Scottish Government, HMRC, the Scotland Office and the Oil and Gas Authority to prepare the regulations. Once the Scotland Act 2016 provisions concerning onshore oil and gas are fully in force, onshore oil and gas licensing in Scotland will be the responsibility of Scottish Ministers and they will be responsible for granting relevant licences. Currently there are four onshore oil and gas licences in Scotland. There is no production from any of the licence areas.

I turn now to the detail of the regulations. These affirmative regulations make minor consequential amendments to taxation legislation to reflect the role of Scottish Ministers as the licensing authority in Scotland in order to allow the tax legislation to work as intended in relation to onshore areas in Scotland. The regulations provide for the position both before and after commencement of the Wales Act 2017, which makes equivalent provision for devolution of onshore oil and gas licensing to Wales. As recommended by the Smith commission, it was agreed that powers related to consideration payable for licences and related matters remain reserved and will therefore not be devolved to Scotland. This was set out in Sections 47 to 49 of the Scotland Act 2016.

Taken together with the forthcoming negative regulations, these provisions transfer responsibility for onshore petroleum in Scotland to Scottish Ministers, including responsibility for existing licences. The provisions provide Scottish Ministers with the powers necessary to administer the existing onshore oil and gas licensing regime in Scotland and to create a bespoke licensing regime. Furthermore, with the commencement of Sections 47 and 48 as part of the devolution of onshore petroleum licensing, mineral access rights will also be devolved, transferring responsibility for the process by which rights of access to private property are determined, delivering another key recommendation of the Smith commission.

This affirmative statutory instrument could be laid in Parliament only after the Wales Bill received Royal Assent in January 2017, as it makes amendments that anticipate amendments made by the Wales Act 2017. The negative regulations will follow these affirmative regulations to make consequential amendments to the licensing regime. There has been no specific consultation on these technical amendments, since they are necessary to the effective operation of the provisions set out in the Scotland Act 2016, which was consulted on separately. Additionally, transferring powers from the UK Administration to a devolved Administration does not count as a regulatory provision, so we are not required to do a regulatory impact assessment.

To conclude, the regulations assist in giving the Scottish Parliament and Scottish Ministers greater control over their onshore oil and gas resources, complementing the provisions of the Scotland Act 2016. These regulations make minor amendments to legislation governing taxation to ensure a smooth devolution of powers for onshore oil and gas licensing to Scottish Ministers. This measure is an important step towards delivering a recommendation of the Smith commission agreement. I beg to move.

[Lord Fox (LD)]

My Lords, I broadly welcome the devolutionary nature of this instrument. I think that my noble friend beside me would not forgive me if I did not say that we prefer an expansion of renewable energies rather than hydrocarbons, whether in Scotland or in the rest of the United Kingdom, and that should be put on record.

I am slightly confused and I may have misheard, so perhaps the Minister can guide me. I thought that the Minister said that consultations in drawing up these regulations had gone ahead with the Scottish Government, but the briefing says that there was no consultation. I would hope that these measures have been brought forth with the full understanding and consultation of the Scottish Government and I expect that they have. In that measure, I have nothing else to add.