British Steel

Debate between Lord Fox and Lord Henley

Wednesday 24th July 2019 Lords Chamber

[Lord Henley]

My Lords, I am very grateful to the noble Lord for his support. As my right honourable friend made clear, he was grateful for the support from all sides. That was the point behind setting up the support group, which, as I made clear in repeating the Statement, has met eight times and will continue to meet. If he listened to the Statement being made in another place, he will have noticed that those meetings have been taking place in Doncaster. The honourable Member for Doncaster even offered her house as a venue for further meetings of that group, which shows that there has been cross-party support from MPs on all sides, as well as from the unions, local authorities, LEPs and others—I need not repeat what was in the Statement.

The noble Lord also asked about the indemnity. The important point to remember is that my right honourable friend made it quite clear that he will do whatever he legally can. I cannot give the noble Lord the precise figures on how much has been spent, but, while it is possible for him to do that, he will continue to do so because the consequences of a closure are obviously very great. If we close down a steelworks, we cannot just turn it on again the following Monday. It is lost forever.

Finally, it remains the intention of the official receiver —and we also believe this is the right process—to sell the group as a whole if possible.

[Lord Fox (LD)]

My Lords, I associate myself with the comments of the noble Lord, Lord Stevenson, in that we all hope that some resolution can be found and that this business can be sold as a whole. However, this could not come at a worse time for the workers of British Steel and those companies that supply it, because we are seeing a changing of the guard. In this Statement, the Secretary of State makes very clear the level of ongoing activity that is required from government to secure the happy end we all hope for. It is not clear that those coming into the shoes of the Secretary of State have the same agenda. Can the Minister undertake that the Government will provide that unstinting effort that the Secretary of State said is required, and can he tell us a little bit about what planning is in place in the event that this business is not sold? What do the Government plan in terms of funding and rescue efforts for that business?

[Lord Henley]

My Lords, I will not at this stage speculate on what might happen if the business goes under. We are doing what we can to keep that business. My right honourable friend made it quite clear that he has put a great deal of effort into making sure that it can continue.

To answer one other question put by the noble Lord, Lord Stevenson, relating to energy, we have put almost £300 million into compensation for the whole steel sector, trying to help it make energy costs more competitive. We have also offered support, as the noble Lord knows, on the extra costs for high-energy-using businesses and will continue to do so.

Going back to the question of the noble Lord, Lord Fox, I cannot speculate on what my right honourable friend’s successor might do, should my right honourable friend have a successor—it might still be my right honourable friend; it might still be me. I do not know at this stage, but I think the commitment that the Government have made so far is indicative of the process that we would want to continue.

Companies: Parental Leave Practices

Debate between Lord Fox and Lord Henley

Wednesday 10th July 2019 Lords Chamber

[Lord Henley]

My Lords, again it is fair to say that the noble Lord is right to highlight that there has been a low take-up of shared parental leave. We will want to look at this to make sure that people can benefit from it. We will work on that, but I give him an assurance that that is what the department is doing.

[Lord Fox (LD)]

My Lords, picking up on that point, research done this year at the University of Birmingham indicates that it is not just parents or potential parents who have low knowledge of shared parental leave; it is also the managers and HR departments within companies themselves. Will the Minister undertake to have an enhanced information campaign within businesses to improve uptake of shared parental leave?

[Lord Henley]

I am more than happy to look at that because there is no point in introducing new measures to assist new employees if the employers, HR departments and others do not know about them. I am not aware of the research the noble Lord has highlighted but I am happy to look at it.

Rural Post Offices

Debate between Lord Fox and Lord Henley

Tuesday 9th July 2019 Lords Chamber

[Lord Henley]

My Lords, I am not aware of that connection with the closure of banks in rural areas causing an increase in crime, but I am aware that there is a decline in bank services in certain areas. I think of my own small nearby town, where both the banks have gone. The important thing is that with the agreement that the banking industry has come to with the post offices, they can provide a great many of the banking services that people require, such as paying in cheques and so on. I could go on in great detail for the noble Lord but there are agreements between the banking sector and the Post Office to help deal with that.

[Lord Fox (LD)]

My Lords, the Minister speaks a good game but the truth is that sub-postmasters and sub-postmistresses are leaving their jobs in the hundreds, if not the thousands. The review is taking time but by the time it ends, there will be too few post offices and none in many rural areas. What will the Government do that is different from what they are doing now? If they keep doing the same thing, the problem will be worse.

[Lord Henley]

I regret to say that what the noble Lord says is complete and utter nonsense. The Post Office network is broadly stable, at about 11,500 branches. Obviously, there are occasional closures for reasons beyond the Post Office’s control; for example, an individual postmaster might retire for reasons of ill-health or the business behind a branch might not be sustainable. However, the Post Office has the means of providing postal services in those circumstances. The important point is to make it clear that the network, the numbers within it and the coverage of that network are broadly stable.

Environment and Climate Emergency

Debate between Lord Fox and Lord Henley

Monday 1st July 2019 Lords Chamber

[Lord Henley]

My Lords, I am grateful for the support of the noble Lord and the party opposite. I regretted its Motion on Wednesday last week because, as I made clear in the debate on the statutory instrument, I thought that it was unnecessary. We have set realistic targets following the advice that we received from the Committee on Climate Change—targets that we believe we can and should meet—and, as we set out in the order, we will aim to meet them.

[Lord Fox (LD)]

My Lords, in last week’s legislative debate, a number of your Lordships spoke about the need to will the means, as did I, and about the technologies that we will need to deliver zero carbon by 2050. The Minister and I agreed that one technology that is needed is bulk energy storage for our electricity grid. Given that he agrees that we need it, can he please tell us what the Government are doing to will this? How much money is being invested and how is the industrial strategy helping to do this? What is happening in this area?

[Lord Henley]

My Lords, in the time I have available to respond to a Question of this sort, I cannot go into detail on every single bit of research that we are doing into energy storage, carbon capture, use and storage, and a whole range of other things. I am more than happy to write to the noble Lord with greater detail on this—he seems to be signalling to me to do that—but I can say that we are committed to doing all we can to meet the targets. We believe that with existing technology we can meet them, and with advances in technology we can do even better.

Nuclear Energy: Small Modular Reactors

Debate between Lord Fox and Lord Henley

Monday 10th June 2019 Lords Chamber

[Lord Henley]

The noble Lord speaks with great experience on this subject. He was involved in the building of Trawsfynydd, more years ago than he probably cares to remember. I note what he says; he is correct to say that the lake is on the small side for a full-scale nuclear reactor, which might make the small modular reactor more appropriate, but as I said, nothing has been ruled in or out.

[Lord Fox (LD)]

My Lords, any decision on SMRs should be taken within the context of the best possible carbon-free energy system. Does the Minister share my view that nuclear is competing not with windmills and photovoltaics but with energy storage, because in future the baseload can be provided either by nuclear or by effective storage? The Minister paints a picture of activity within his ministry. Can he guarantee that the same amount of effort will go into developing effective methods of bulk energy storage as is going into nuclear power?

[Lord Henley]

I completely agree with the noble Lord. The advantage of nuclear is that it provides baseload but if, as he says, we make further progress on storage, the variables in renewables would have the same effect. Therefore, we will continue to provide equal priority to advances in technology for storing electricity.

National Minimum Wage Naming Scheme

Debate between Lord Fox and Lord Henley

Wednesday 5th June 2019 Lords Chamber

[Lord Henley]

My Lords, naming and shaming is just one of a number of different actions that can be taken, alongside self-correction by employers, the civil penalties that are available, and the criminal proceedings and resulting fines. As the noble Lord said, and as I made clear in the Statement, we will review the naming and shaming scheme and he will have to await further announcements on that. As my honourable friend Kelly Tolhurst made clear yesterday, she considers that it has been effective, but it is obviously quite a draconian measure to use against employers and we should be wary about the effect it might have on them. I think it is quite right that the Government should consider how to operate this in the future: that is what we are doing and I ask the noble Lord to be patient about this and about the other recommendations made by Sir David. In due course, announcements will be made.

[Lord Fox (LD)]

I join the noble Lord, Lord Stevenson, in thanking the Minister for repeating the Statement. I am confused by his answer and the debate in Hansard yesterday in the other place, where no one seemed to be calling out naming and shaming as an issue. Can we get to the nub of what exact problem the Government are seeking to fix here in cherry picking this one recommendation and putting it up for review? Can the Minister tease out that information by telling us what terms of reference this review will have? Is it to make naming and shaming more effective or to find a way of not having naming and shaming? Finally, the last sentence of the Statement says that this will be made public through the national minimum wage enforcement policy document. That is not good enough. Given the nature of this and the interest from both Houses, a Statement from the Minister on what this review comes up with will be important. Will he undertake to do that?

[Lord Henley]

My Lords, as I said to the noble Lord, Lord Stevenson, the noble Lord will have to be patient and wait for the full announcement. Sir David made his comments and my right honourable friend took them on board. We want to review the effectiveness of naming and shaming. My honourable friend made it clear yesterday that:

“It is absolutely right for me, as the Minister responsible, to evaluate the scheme and make sure that any naming and shaming scheme is meaningful, adds value, acts as a tool to aid employers to make sure that they are able to comply with the national minimum wage legislation”.—[Official Report, Commons, 4/6/19; col. 49.]


We want to make sure that that legislation is effective. This is just one tool among many. As I made clear, there is also self-correction by employers and the possibility of civil fines and, as has happened on occasion, prosecuting in the criminal courts. We want to see how effective this is and whether it should be looked at again. That is what my honourable friend and right honourable friend are proposing to do.

British Steel

Debate between Lord Fox and Lord Henley

Wednesday 22nd May 2019 Lords Chamber

[Lord Fox (LD)]

My Lords, I too thank the Minister for repeating the Statement made in the other place. Yesterday, we talked about the environment of uncertainty around Brexit, which has put pressure on this business. It certainly cannot have helped it in its struggle. I will not repeat those points today, because they have been well made.

Yesterday, the Minister stood at the Dispatch Box and metaphorically tapped his nose and said, “Wait and see”. We did not have to wait long, and what we see is really pretty terrible—for the employees and subcontractors, for Scunthorpe and the other areas in this business and, frankly, for the country. The Government can trumpet the proportion of British steel each department buys, but if this company goes down, there will be a significant lack of steel for these departments to buy.

The Minister says that the Government seek “the best possible outcome”. The best possible outcome for this business is the continuing making of steel in these furnaces. As I am sure the Minister acknowledges, the first job of the receiver is to do everything possible to keep this business going for future use. The priority is to keep the furnaces burning; once the furnaces go cold, the hope for those factories goes cold as well. Can the Minister confirm that this is the number one priority the Government have given the receiver? What other assistance will be available from the Government to keep those furnaces burning?

The Statement alludes to a sticking point around what future aid could be given and EU state aid rules, and reference was made to a letter from the accounting office. Can the Minister tell us what consultation has gone on with the European Union and the Commission, what response they have had in those discussions, who they talked to and when? I am slightly concerned that there is a level of scapegoating going on here.

As the noble Lord, Lord Stevenson, pointed out, there are a number of questions around Greybull Capital. I shall not repeat them, but there are suggestions that the private equity owner of Greybull was unwilling to play ball when it came to the amount of money required to show its commitment to this business. Perhaps the Minister would like to set the record straight on that.

Just up the road from where I live, there is an empty former My Local convenience store; some of my friends were stranded when Monarch went bust; and today, we have British Steel. What is the link? The link is that they all went down on Greybull’s watch. That might be unfortunate, it might be a coincidence, or it might be a pattern. Some would say that these kinds of businesses come with an attendant risk and that sometimes, because of that risk, they fail. But who is taking the risk? Is it Greybull, the private equity owner of this business, or is it the Government who are actually absorbing the risk? We heard yesterday and today about the £120 million granted as a bridging loan. We have heard that the negotiations to rescue this company failed. How much risk are the Swedish and Turkish owners of this private equity company prepared to take? For there to be reward, there should also be risk.

Yesterday, the Minister said that no stone would go unturned. Today, he talked about remorseless activity. Could he tell us which stones are being turned? What actions are open to the Government to make sure that they continue to make steel in those blast furnaces?

[Lord Henley]

My Lords, I start by agreeing with both noble Lords. I accept the words they used: the noble Lord, Lord Stevenson, said that this was devastating news and the noble Lord, Lord Fox, said that it was terrible news. It is bad news, as my right honourable friend the Secretary of State made clear only an hour or so ago when he made this Statement in another place. He was very grateful for the positive, cross-party support he had from all round the House for what the Government have done and are proposing to do.

The noble Lord, Lord Stevenson, claimed that I said nothing yesterday. I agree that I said relatively little, but at that stage it was not possible to say much. Despite what he seemed to imply, I can assure your Lordships that the department, my right honourable friend and other Ministers have been involved in this matter for some considerable time. They have been in discussions with, as he made clear, the company and its owner, Greybull, and with the unions, the community, suppliers and others. I will possibly write to the noble Lord, Lord Fox, with details of further discussions they have had with the Commission about these things.

There are, however, obviously limits to what government can and cannot do within the law. Our focus now has to be on working with the official receiver to find new partners and new owners. As the noble Lord, Lord Fox, made quite clear, our focus should also be on working with him to keep the furnaces burning, for the very simple practical reason that they lose their value rapidly if they go cold. There is nothing so worthless as a cold steel works, and therefore, as far as is possible, one thing the official receiver will have to do is try to make sure things can be kept going for as long as possible so that he has an asset that is of value to sell on.

I want to make it clear that obviously, we can act only within the law and that requires any financial support to a steel company to be on a commercial basis. I have been advised that it would be unlawful to provide a guarantee or a loan on the terms of any proposals that the Government have made so far. As the noble Lord, Lord Stevenson, made clear, the company did ask for £30 million, but it did not offer any contribution itself and without that it would not be possible for the Government to act.

The noble Lord, Lord Stevenson, also put forward the idea that we should nationalise the company, but that does not solve any of its problems, such as the need for investment and the fact that it is operating in a highly competitive global market. I have been criticised by both noble Lords for repeating that, but it is a simple statement of fact that a great deal of steel is being produced and it is a highly competitive market. All of us in this House who have been around a long time know that the UK steel industry has changed greatly over the past 40 years. We have a much better industry than we possibly had in the past but, even so, it is a competitive market and it is necessary to recognise that.

As I made clear, we will continue to work with the official receiver, the unions, local government and all the other stakeholders to provide the support that the workforce and the company need to provide continuity for the skills and expertise that we have in the plants in Scunthorpe, Skinningrove and Redcar. I hope that when my right honourable friend next has to make a Statement about British Steel, we can bring better news.

British Steel

Debate between Lord Fox and Lord Henley

Tuesday 21st May 2019 Lords Chamber

[Lord Henley]

My Lords, I do not think I can take the noble Lord very far on this. His first question was whether the ETS £120 million was at risk. I assure him that that is not the case. That was made clear by the various guarantees that my right honourable friend announced when he made the Statement on 1 May this year. I did offer to repeat that Statement in the House but that was declined. That money is secure. The noble Lord asked a number of other questions about how much British Steel was asking for and what our further plans were. As my honourable friend made clear in the Statement, it would be wrong at this stage to say much more, because detailed discussions with the company have been going on and will continue. As my honourable friend made clear, we will update the House as soon as possible and bring further information to another place and this House when it is appropriate.

[Lord Fox (LD)]

My Lords, I thank the Minister for repeating the Statement. Like the noble Lord, Lord Stevenson, I am disappointed by the absence of any actual information. Clearly, there is no point in pressing on those issues, since the Minister either does not know or will not say, but in the Statement the Government say that they are working to strengthen engagement with customers. The steel industry has stated that the uncertainty surrounding Brexit is causing real problems with its customers. The Statement also says that the Government will leave no stone unturned, so perhaps the Minister can stand up and say that he agrees with the Chancellor of the Exchequer that a no-deal Brexit would be catastrophic, both for the steel industry and for the rest of British manufacturing.

[Lord Henley]

My Lords, the noble Lord says that I either do not know or will not say. The fact is that it is not appropriate to say anything at the moment. That is very important and, as my honourable friend made clear in another place, he or my right honourable friend the Secretary of State will come before another place at the appropriate moment and let the House know what is necessary to know at that stage. He went on to make various remarks about Brexit. I appreciate his concerns about the element of uncertainty that is affecting a number of people. All I can recommend is that all parties rally round and support the Prime Minister’s deal, get that deal through another place and let us get on with life.

Climate Emergency

Debate between Lord Fox and Lord Henley

Tuesday 7th May 2019 Lords Chamber

[Lord Henley]

My Lords, the most important thing is that we had the report a few months ago from the IPCC, which we put to our own climate change committee. Last week we received a report from the climate change committee and we will respond to it in due course.

[Lord Fox (LD)]

My Lords, returning to the agricultural issue, one way of reducing the climate change impact of agriculture is to grow fewer crops. We could do that by reducing waste. Tony Juniper estimates that about one-third of food in this country is wasted. That is equivalent to cultivating an area the size of Yorkshire and Lancashire and then throwing all the food away. Does the Minister agree that, for whatever reason, the message is not getting over to the general public, food companies and food services? What are the Government going to do and what can we all do to help the Government get this message across?

[Lord Henley]

The noble Lord makes a good point. The first thing to say is that we should all eat up our greens.

Corporate Governance

Debate between Lord Fox and Lord Henley

Monday 29th April 2019 Lords Chamber

[Lord Henley]

My Lords, the noble Baroness asks a difficult philosophical question. It is important to try to maintain public trust. In my response to the noble Lord, Lord Haskel, I tried to make it clear that we have seen some increase in it, but we also think it important—hence the work of the FRC and others on the UK corporate governance code—to make sure that we have an appropriate code so that companies can operate in a proper manner.

[Lord Fox (LD)]

My Lords, the Minister has talked about openness. I know that the CMA has reported back on the auditing business and I would not expect him to comment on the Government’s response to that yet unless he wishes to do so. Does he agree that business reputation is not in the hands of the auditors? It is the responsibility of company owners, their boards and their managers. I am not sure where the noble Lord is getting his data on trust because there is a crisis of trust between society and big business. If he does not recognise that, he is missing something. What measures are the Government considering taking in order to hold company shareholders, boards and managers to their wider responsibilities to society?

[Lord Henley]

I agree with the noble Lord on the first part of his question, which is that this is a matter for companies, and it is right that they should get it right. On levels of trust, what I have been trying to make clear is that we have seen a growth in public trust in business. It is still too low, but the most recent 2019 Edelman global trust barometer shows a small increase, which is to be welcomed and something we would encourage. As the noble Lord says, it is too early for me to comment on the CMA.

Businesses: Technology

Debate between Lord Fox and Lord Henley

Wednesday 10th April 2019 Lords Chamber

[Lord Henley]

The noble Lord takes a depressingly pessimistic view of that PwC report. It pointed out that advances in that sector could lead to growth of £230 billion between now and 2030. That is to be welcomed. It also pointed out that jobs would disappear, but I think it went on, as did another report to which I referred the other day, to point to a very large number of new jobs in the sector, which would probably be more highly paid and more highly skilled and which we could provide in this country.

[Lord Fox (LD)]

My Lords, will the Minister focus on the scale-up part of the Question? The British Business Bank is there to help the scale-up process. I understand that it loans about £2.5 billion through other institutions. How much of that money proportionately is going into the AI industries to help them scale up, and does he expect that proportion to increase or decrease?

[Lord Henley]

My Lords, I cannot give any precise figures about how much is specifically targeted on the AI industry. The important point is to recognise, as did the PwC and other reports, what will happen in that industry: the advantages for it, how much it will grow and how well this country is doing. That is why I cited in my Answer the massive increase in inward investment—which is obviously an indication of what is happening to not only start-ups but scale-ups—of 17%, which is more than the rest of Europe combined.

Employment: Automation

Debate between Lord Fox and Lord Henley

Monday 1st April 2019 Lords Chamber

[Lord Fox]

To ask Her Majesty’s Government what assessment they have made of the analysis by the Office for National Statistics, published on 25 March, that nearly 1.5 million jobs may be at risk of being lost to automation and that those most at risk are female workers.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, the work of the ONS demonstrates the significant transitional challenge posed by automation but overlooks the considerable opportunity for the creation of new, highly skilled employment opportunities. The industrial strategy sets out the Government’s vision to make the UK a global centre for AI and data innovation, alongside measures to ensure our people are equipped to capitalise on those opportunities.

[Lord Fox (LD)]

I thank the Minister for his Answer, which looks at the benefits—and there certainly are benefits from automation—but there are also risks, not only in gender terms but also in geographic terms. In addition to the study that came out last week, the Centre for Cities last year issued a study highlighting that those economies in the United Kingdom which are already weakest will be the ones whose jobs are most at risk. Therefore, I repeat the Question with a geographical bent. What in the industrial strategy and what in the Government’s plans is focusing specifically on the danger to further diversity and on the danger of putting further issues on to our weakest economies?

[Lord Henley]

My Lords, I am glad that the noble Lord recognises that there are very positive sides to developments in this field. As he will know, the World Economic Forum estimates that, although there might be some 75 million jobs lost globally as a result of change of this sort, another 133 million could be created. However, the noble Lord is right to point out that there will be disadvantages for people, particularly for those who are low-skilled and particularly—he mentioned the gender point—for women. Therefore, as the industrial strategy makes clear, it is very important that we look to retraining. I refer the noble Lord to large parts of the industrial strategy that point in the direction of retraining and upskilling our workforce as much as possible.

State Aid (EU Exit) Regulations 2019

Debate between Lord Fox and Lord Henley

Thursday 14th March 2019 Lords Chamber

[Lord Fox]

We would be satisfied with that kind of comment if we knew what vehicle the debate about these future issues will come in. Will it be in primary legislation brought to this House straight away? Would it be merely a series of Command Papers? If the Minister could explain the structure by which future negotiation or legislation will go ahead, we could perhaps be more satisfied by that.

[Lord Henley]

I will see how I get on in my response to the various remarks made by the noble Lord, Lord Fox, and others. I was going to start with state aid rather than on structural funds but we all know about the shared prosperity fund. I think it was back in July that my right honourable friend made a Written Ministerial Statement on that subject. The noble Lord will know, as that Statement made it clear, that it is designed to tackle inequalities between communities, especially in those parts of the country whose economies are furthest behind. It will achieve that by investing in the “foundations of productivity” and so on, as outlined in our industrial strategy, which is now—gosh, it is a year and a half old. But it will be an integrated, simplified fund, operating across the UK. I do not know at this stage whether it will need primary or secondary legislation, or whatever, and it would be wrong to speculate.

[Lord Henley]

My Lords, I do not accept the point that the noble Lord is making. I made it clear that we believe that state aid is a matter reserved for HMG. As I said, we recognise that there is a difference of view; that can be resolved in due course but I do not think it necessarily needs to be resolved in advance of this SI. He and I will obviously have to continue to disagree on that matter.

I was going to deal with these matters in the order that I originally set out, starting with questions relating to state aid and in particular to the amendment moved by the noble Lord, Lord Stevenson. What is important on this occasion is that we do not conflate the rules that govern the overall aid framework with the provision of aid itself. Decisions by public authorities on how and when to provide funding to business and industry after EU exit are quite separate from the decision in front of the House today, which is on whether to approve a state aid framework to ensure fair and open competition throughout the UK. By keeping the rules as close as possible to how they operate today, compared to what has been the case, will provide continuity and certainty in the immediate aftermath of the UK’s departure from the EU. This will ensure that aid can be provided in a similar way to now.

Individual choices on how and when to give aid within that regulatory framework will obviously be for each public authority to make. That applies equally to successive Governments, the devolved Administrations and local authorities. As with the other public authorities granting that state aid, the Government will of course continue to consult individual spending authorities where it is appropriate to do so after the UK leaves the EU. But our strategy for supporting business and industry before and after EU exit is comprehensively set out in the industrial strategy, which we have debated on various occasions. As I said, it was launched almost a year and half ago and is already having an impact. That is how it should be set out.

As I made clear, and I repeat it, we have engaged constructively and intensively with each of the devolved Administrations on the state aid regime, including discussing the details of the proposed regulations and the accompanying set of commitments to underpin how the regime will operate. I think the noble Lord, Lord Fox, wanted more detail on this—perhaps it was the noble Lord, Lord Purvis—and we hope to conclude a memorandum of understanding in due course with the devolved Administrations. No doubt when we have concluded that, it can be published. Our discussions over the last year have shown a broad alignment on the substance of the policy to establish a UK-wide state aid regime that mirrors the EU’s. We will continue to work with the devolved Administrations and, as agreed, each of them will be responsible for managing communication between their respective aid givers and the CMA. They will not need to go through my department, as is the case at the moment.

[Lord Fox]

I thank the noble Lord for beginning to flesh this out. Rather than continue the debate here, it would be helpful if the Minister could go back to his department and then write to us about the basis for the assertion by Her Majesty’s Government that they have predominance on this issue over Scotland and the devolved authorities. On what basis in law do the Government assert that UK-wide role? Can he also flesh out the mechanics for the CMA operating in Scotland? Rather than detain the Minister at the Dispatch Box, a written response would be helpful.

[Lord Henley]

I am more than happy to offer a written response, but the Government have been clear throughout. My noble and learned friend Lord Keen set out our position in various debates on the withdrawal Bill and so on. I will dig that out and offer it to the noble Lord. Other Ministers, equally learned in the law, have also made similar points in another place. As I said to the noble Lord, Lord Purvis, this is a matter for the Government but we believe we should continue to consult the devolved Administrations.

The noble Lords, Lord Fox and Lord Stevenson, also wanted me to flesh out the role of the CMA and asked whether it would have the power to overturn legislation. I repeat that our intention is to make sure that the regime covers the same sectors, applies to the same actors and does the same job as it does at the moment. It is worth noting that there are very limited circumstances in which aid is granted directly by Act of Parliament. To ensure that aid granted by any future Act of Parliament can be reviewed in a non-binding way by the CMA, which is the domestic regulator, Schedule 3 creates a process for it to consider aid that may be granted directly by an Act of Parliament. It provides for a Minister of the Crown to seek a non-binding advisory opinion on proposals for grant aid by an Act of Parliament. It also provides for interested parties to request the CMA to prepare a non-binding advisory opinion. I hope that explains the matter, but I will expand on it in any letter that I write to noble Lords in future.

The noble Lord, Lord Stevenson, also asked how we were intending to use this provision in future. I will expand on this a little more. The rules are not intended to prevent public authorities supporting industries or businesses, or even—dare I say it—nationalising assets. A rigorous state aid system is good for taxpayers and consumers and ensures an efficient allocation of resources. There is a large degree of flexibility in the rules to ensure that a wide range of interventions can still be deployed, but in a way that minimises distortions to competition. The future regime will still allow the Government to act swiftly if necessary, much as they have been able to under the existing one. EU state aid rules do not prevent, and have not prevented, the UK pursuing its active industrial strategy. In practice, the existing EU rules have always been sufficiently flexible to allow the UK to make innovative state aid interventions where necessary.

--- Later in debate ---

[Lord Henley]

The noble Baroness is too fast for me. I had two final points, one of which was to deal with concerns about match funding and whether that guarantee would underwrite it. The guarantee will underwrite the funding previously received by the EU. Match funding will continue to be provided by existing match-funding providers, such as the National Lottery.

My noble friend also asked about our future participation in Horizon. All I can say at the moment is that decisions on future such EU programmes will come as part of the spending review.

I appreciate I have not answered all the questions that have been put to me, but I believe I have answered most of those that are directly relevant to the statutory instruments before us. I appreciate that the noble Lord, Lord Fox, would like—and will receive—a letter. That letter will set out more about the possibilities for the future, and I will write to the noble Lord, Lord Purvis, in greater detail about our possible disagreement on where responsibility lies.

[Lord Fox]

The Minister may have answered this question, so I apologise if I missed it. In dealing with the shared prosperity fund and its disbursement, we come back to that paradigm of what happens in the United States, for example. Do the Minister and the Government foresee that the CMA will have a role in policing that process? If not, how do we prevent regions bidding up, which we have experienced in some RDAs? The Minister again said we will have ample opportunity to debate this in the future, but it is not clear to me through what vehicle this debate will continue.

[Lord Henley]

I am sure the noble Lord will find it easy to raise the subject, and will do so. Whether there will be the opportunity through primary, secondary or whatever legislation, I do not know. On his broader questions about the shared prosperity fund, he will have to wait for the guidance that the right honourable Secretary of State will provide. That might be his moment to consider such matters. With that, I beg to move.

Brexit: Small Businesses

Debate between Lord Fox and Lord Henley

Tuesday 5th March 2019 Lords Chamber

[Lord Fox (LD)]

My Lords, the overwhelming cry coming from businesses large and small is: “Tell us what our trading environment will be in 25 days’ time”. Does the Minister really think that any of the messages will get through when the credibility of the Government is completely shot if they cannot answer that question?

[Lord Henley]

My Lords, we have been offering advice to businesses as to what they ought to do. We also made it clear in the document we published last week that we think a lot of businesses have not done what they ought to be doing: making preparations in case there is no deal because, as I made clear, no deal is the default position. What is important is that we get behind the Prime Minister and get a deal.

Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2018

Debate between Lord Fox and Lord Henley

Tuesday 26th February 2019 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, these regulations, laid before the House on 23 November last year, will amend the domestic minimum standard provisions within the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. In our clean growth strategy, we set out our ambitions to upgrade the energy efficiency of all buildings by the 2030s. The 2015 energy efficiency regulations, which set minimum energy performance targets for properties in the private rented sector, are an important precursor to that work, helping the Government to deliver our fuel poverty and decarbonisation commitments.

Although I appreciate that noble Lords may already be familiar with the minimum standards, some background on the sector and the 2015 regulations may still prove useful before we discuss the specific effect of these amendments. There are about 4.5 million privately rented homes across England and Wales, making it the second largest tenure after owner-occupation. Most of these properties already have an Energy Performance Certificate, or EPC, rating of E or above. However, about 290,000—that is 6% of the market—have a rating of F or G and, as such, are particularly energy inefficient and costly to heat. In fact, it costs about £1,000 more per year on average to heat an F or G-rated home than one rated at band D. Moreover, many tenants of these properties are among the most vulnerable and approximately 45% are in fuel poverty.

The 2015 regulations were designed to drive energy efficiency improvements to these inefficient privately rented homes and established a minimum energy efficiency standard of EPC E for these properties. Since 2018, the regulations have required landlords who let properties below the standard to improve them to EPC E before granting a new tenancy or renewing an existing one. However, the regulations also state that improvements are required only where they can be made at no cost to the landlord, using third-party funding: notably Green Deal finance. Where a home cannot be improved to EPC E, either because funding is unavailable or because of legitimate technical concerns, the regulations permit the landlord to continue to let it, provided they have registered an exemption on the new minimum standard exemptions register. However, access to no-cost funding, particularly Green Deal finance, is more constrained than was originally anticipated when the regulations were made. This means that most F and G-rated properties now qualify for an exemption.

The key amendment under discussion today addresses this by requiring landlords of domestic properties to invest their own funds in energy efficiency measures where third-party funding is insufficient or cannot be secured. To ensure that landlords are not overburdened, this investment requirement will be capped at £3,500 per property, inclusive of VAT and any third-party funding obtained. Ancillary amendments will also be made to the exemptions framework to ensure that the investment requirement delivers improvements where they are most needed.

I shall now briefly discuss the choice of £3,500 for the cap. At consultation, £2,500 was proposed, with a range of other caps presented for comparison. Following overwhelming calls, from 67% of respondents, for a higher cap, and from the results of further modelling, £3,500 was ultimately selected. Our updated modelling shows that of the caps considered in the consultation, £3,500 was the most effective at balancing the costs to landlords against the benefits to tenants and society. Specifically, that analysis shows that under a £3,500 cap: 48% of F and G properties will reach band E, with an average cost of £1,200; the remaining 52% of properties will be able to receive at least one improvement, at an average cost of £2,000; and tenants in improved properties will save an average of £180 a year on their energy bills. The £3,500 cap strikes the right balance between ensuring that a meaningful number of properties are improved to EPC E while ensuring that those improvements are affordable, particularly for smaller landlords who make up the majority of the sector.

However, I should also highlight that, alongside the clear benefits of thermal comfort for tenants, landlords themselves will benefit from the improved energy efficiency of their properties: specifically, in the form of reduced maintenance costs and increases in property capital value, as well as increased tenant satisfaction and following that, one would hope, shorter void periods.

In conclusion, these amendments will help ensure that the domestic minimum standard regulations can operate effectively in line with Parliament’s original intentions and deliver meaningful energy efficiency improvements to the least efficient homes in the private rented sector. I beg to move.

[Lord Fox (LD)]

My Lords, I thank the Minister for presenting this statutory instrument. The noble Lord, Lord Grantchester, is a world expert in the new Green Deal, so I look forward to his contribution and will defer to him in all ways in this area.

First, in many cases we have had to take the Government to task for not consulting but it seems that there has been an extensive consultation in this process, which should be acknowledged.

I became a little confused when I looked back at when this was debated in the other place. I found a debate that goes back to June 2016; if noble Lords can cast their minds back that far, Andrea Leadsom was then the Secretary of State. It appears that this was debated at that time. What happened to it in between—what has been going on? The then Secretary of State refers to all sorts of dates with regard to launching the register, which have passed. Perhaps I have got terribly confused, but it seems that this is the SI that was being debated and that there has been a very long gap in between. In due course I will refer to something the Secretary of State mentioned in that debate.

As the Minister set out, this deals with some of the least satisfactory housing in the country: nearly 300,000 substandard private rented sector homes. As the Secondary Legislation Scrutiny Committee pointed out:

“The Committee is of the view that, as a significant proportion of tenants in ‘substandard’ properties are in fuel poverty”.


The committee recommends that the,

“Department may wish to monitor whether the proposals lead to any adverse impact on vulnerable tenants”,

and recommends that the department might wish to monitor how the proposals lead to the impact on vulnerable tenants and whether they become less or more fuel poor. I would welcome a response from the Minister to that recommendation.

Moving forward, the fact that we have moved from public investment into the new Green Deal to private finance providers flags up concerns—I do not know whether the noble Lord, Lord Grantchester, will go into more detail. We talk about private finance providers. Private finance initiatives in other sectors are clearly not covered in glory at the moment, so I am interested in and concerned about how those finances are regulated and registered and what level of their returns on their finance we are expecting back. What kind of cap do they have on their returns?

As the Minister set out, the key proposal here is the removal of the no-cost-to-landlord aspects of the legislation. I think that that is right, because it is quite clear that work needs to be done and it will come at a cost. The Minister highlights this as being an important element of the green agenda, and it is very clear that there are big wins to be had for relatively small investment.

--- Later in debate ---

[Lord Fox]

I appreciate that answer. Clearly, if anyone is considering work, it is helpful to get more than one quote. I was implying that this would be a construct to not do the work rather than to do the work cost-effectively. It is not beyond the bounds of human ingenuity to use the high-cost exemption to get out of doing work. On that basis, I ask that the Minister’s department monitor the use of the exemption and come back to Parliament after some time to tell us whether his thought is correct and it is not being used very often, or whether it is in fact becoming a useful loophole for unscrupulous landlords.

[Lord Henley]

I fully accept the noble Lord’s point that the unscrupulous—we are talking about a relatively small number of very small landlords—could seek exemption by getting quotes from friends and all that sort of thing. We all have our views about certain aspects of the building trade and so on, but I do not think it is worth me going any further at this stage. I give him an assurance that we will do what we can to keep an eye on this issue—to monitor it, as he puts it—and if it turns out that too many exemptions are being sought for the sort of reasons that he mentions, I think my right honourable friend would be the first to say, “This is not working as we intended so we’ve got to try something else”.

The noble Lord, Lord Grantchester, made two other points. The first was about houses in multiple occupation. They will be covered if they are legally required to have an EPC and if they are let on a qualifying tenancy. Some HMOs are not required to have an EPC at this time, but that is something that the department is keeping under review. If we think it is necessary that we act, we will do so.

--- Later in debate ---

[Lord Henley]

I offer to write to the noble Lord. I will see if we have the sort of figures that he wants on HMOs and whether I can bring a bit more detail on that.

Finally, I make it clear that the Green Deal has not been cancelled. It still exists. The Government ceased funding it in 2015 but the mechanism remains active and private finance continues to operate in the sector.

[Lord Fox]

I asked one question about the limits on profitability in the private finance investment in the Green Deal. If the Minister wants to write to me on that rather than answering at the Dispatch Box, that is fine.

[Lord Henley]

I apologise to the noble Lord; I am afraid I had not jotted that down. I will write to him in due course and give him an answer on that point. Other than that, I think I have dealt with all the questions.

Electricity and Gas etc. (Amendment etc.) (EU Exit) Regulations 2019

Debate between Lord Fox and Lord Henley

Tuesday 26th February 2019 Grand Committee

[Lord Fox]

That was the point I was trying to make.

[Lord Henley]

We use electricity at different times and, therefore, when we have a surplus, we can export it to them and vice versa. I cannot see that that will not continue to happen and bring benefit to consumers.

I move to the question of registration and the remit of Ofgem. Ofgem and its counterpart in Northern Ireland, the Utility Regulator, intend to continue to recognise registrations made by each other and by EU regulators, so we believe this will have no impact on the regulators’ ability to regulate. I hope that they will continue to be able to do the job that they do very well at the moment. We have engaged extensively with them and are confident that they will be able to meet their obligations within existing budgets. Where new systems are required, such as reporting mechanisms under the remit, the cost can be recouped through fees.

Finally, the noble Lord, Lord Grantchester, asked about Ireland and the single electricity market. We are confident that new arrangements can be put in place for trading in a no-deal scenario that will minimise disruption to the single electricity market. We have been working very closely with colleagues in the Northern Ireland Civil Service, the Northern Ireland Utility Regulator, Ofgem, systems operators and interconnectors to understand what day one arrangements for trading between the SEM would be in a no-deal scenario—not only the SEM within Ireland but interconnectors going to and fro between the two countries.

I think that deals with the points made by both noble Lords, and I therefore commend the first of the five regulations.

Carriage of Dangerous Goods (Amendment) Regulations 2019

Debate between Lord Fox and Lord Henley

Tuesday 26th February 2019 Grand Committee

[Lord Henley]

I will try Corridors of Power as well as The New Men. The one thing I will not do, because it is beyond what I should ask of my officials, who are absolutely wonderful and have looked after me very well through all these debates and others, is ask them to read CP Snow. However, they might also take guidance from the noble Lord, Lord Jones.

The noble Lord also asked about the number of shipments by road. I can give him quite a number of figures. The total number of packages containing radioactive material transported by rail was about 1,500, and that was a total number of about 750 consignments. On road transport, we think that there were around a total of 110,000 packages, but again, you have to halve that because of going to and fro. The total figure we seem to have for road, rail and other means is around 40,000 packages. The majority are transported to nuclear power stations, but the transport of radioactive material by rail arises from the civil nuclear industry and consists of transport between Sellafield and the nuclear power stations, and from Sellafield to the low-level waste depository at Drigg. The road transport includes medical and industrial sources, some of which are moved more than once, hence bringing that figure down to 40,000. PHE estimates that 76% of packages transported by road in the UK are medical, 4% are industrial, and the remaining 20% are in the nuclear industry.

I will quickly deal with the point made by the noble Lord, Lord Fox, about the nullifying part of the regulations. I explained that the provision would be nullified, but the noble Lord asked about how nullification happened. There is no formal process—it just happens because a provision has been nullified, and there is case law which indicates how the courts are to treat such a nullified provision. I presume that if it is nullified, it is treated as if it is not there. If the noble Lord wants the case law, it is Inco Europe Ltd v First Choice Distribution in 2000.

On the question of emergency and who oversees that, the emergency plans, which the noble Lord, Lord Jones, asked for, are a matter for the Office for Nuclear Regulation, which is laid down by the Energy Act 2013. Obviously, any definition of “emergency”, as the noble Lord, Lord Fox, points out, to some extent has to be subjective, but further details will be set out in guidance from the ONR. The reference here is based on the IAEA best practice.

The noble Lord also wanted to know just how we would then manage excessive doses. As I think I set out at the beginning, the regulations make lawful a deliberate exposure at high levels in an emergency. Obviously, in extremis workers might be subject to that higher level of exposure. They could not be ordered into such a situation, but—again, as I set out at the beginning—obviously, if it is a question of life and death, that is a different matter.

On the question asked by the noble Lord, Lord Jones, about the 500 milliSieverts level, the regulations provide that in exceptional situations—in order to save life, prevent severe radiation-induced health effects or prevent the development of catastrophic conditions—the reference level for an effective dose from external radiation for emergency workers may be set above 100 milliSieverts, but not exceeding 500 milliSieverts. In line with this provision, the CDG regulations disapply the IRR 2017 dose limits, subject to a maximum of 500 milliSieverts, providing that the emergency worker,

“is engaged in preventing the occurrence of a radiation emergency; or … is acting to mitigate the consequences of a radiation emergency”.

As I said, further guidance will be available from the ONR. These regulations tightly restrict the circumstances under which an emergency worker may be exposed to that maximum dose. They state that such exposure is possible only if this worker is engaged in activities for the purpose of saving life and with their informed consent.

[Lord Fox]

That is slightly helpful, so I thank the Minister, but I am still troubled by what I call the first first responder, who may well be on the scene without the necessary equipment and monitoring of dosage available. We know that people of that nature run towards danger rather than away from it. These people could be knowingly or unknowingly exposing themselves to high dosages, whether at 500 milliSieverts or not. We will not know, because they are not being monitored. What is the policy on individuals who are exposed to radiation but are not in a position to measure that dosage? Is there a modelling process? How would we know what these people are exposing themselves to? Or does this legislation simply not deal with that situation and take the approach that, frankly, it happens but you cannot regulate for it?

[Lord Henley]

I would prefer to write in greater detail to the noble Lord on that. We are bringing in this limit of 500—for the first time, I think I am right in saying—but obviously, in emergencies of the sort he is talking about, things often go beyond what can be regulated for. Would the noble Lord be happy if I wrote to him in greater detail on this? It would be a pity if I started getting things wrong. Obviously, I will copy that to the noble Lords, Lord Jones and Lord Grantchester.

[Lord Fox]

I would appreciate that.

[Lord Henley]

The final point that needed to be dealt with was that from the noble Lord, Lord Grantchester, about emergency workers suffering from cumulative spikes. Any facility suffering multiple strikes—multiple urgencies—could be shut down by the ONR. That is what the ONR is there for. I do not expect that scenario to occur in practice, but obviously there could be occasions. If I need to add more to that, I will write to the noble Lord. I beg to move.

Shipments of Radioactive Substances (EU Exit) Regulations 2019

Debate between Lord Fox and Lord Henley

Tuesday 26th February 2019 Grand Committee

[Lord Henley]

I think the less said about last Saturday the better, but that is another matter. I shall start, because of last Saturday, by dealing with the noble Lord’s question, which is pretty straightforward. I can assure him that “shipment” refers to any form of transport. It might have the word “ship” in it, but it also covers trains, which, as he knows, have been used a great deal over the years to move nuclear waste and nuclear materials around all parts of England, Wales and Scotland. Whether by road or whatever, “shipment” covers everything.

I note also what the noble Lord said about Wylfa. Now is neither the time nor the place to go over that again. We hope that something will emerge in due course, but he knows the reasons why that could not go ahead.

I turn to the questions asked by the noble Lords, Lord Fox and Lord Grantchester. On whether the measure covers both sealed and unsealed transportation, I know that my honourable friend Mr Harrington is meeting his opposite number, Dr Whitehead, about that tomorrow. I hope they will be able to resolve whatever uncertainties there were between the two of them on that matter. I hope also that they will be able to follow up the confusion relating to tracking and deal with the letter to which the noble Lord, Lord Fox, referred.

[Lord Fox]

I thank the Minister for that. I realise that his colleague is always right, but do we have any inkling as to how this question will be resolved? In other words, is the Explanatory Note that states the measure deals with “unsealed” as well as “sealed” incorrect, or was the impression given in the other place perhaps misunderstood and the Explanatory Note correct?

[Lord Henley]

My honourable friend is always correct, but, as the noble Lord knows, even Homer nods, and he might not have been quite as correct as he normally is on every occasion. As I said, I would prefer to have that dealt with tomorrow, between my honourable friend and Mr Whitehead.

The noble Lord asked also about the impact on exports and the reciprocal nature of this. I am afraid I cannot give him any figures about how much is going the other way. If there are some figures on that, I shall certainly write to him. The position in relation to UK exports into the EU obviously sits entirely within the EU’s competence after exit. Operators have been advised that they should seek guidance from the EU and member states on any future requirements on exports to the EU. In that respect, I assure the noble Lord, Lord Grantchester, that we will continue to maintain close relations with Euratom, just as relations with the International Atomic Energy Agency remain important. It is keen that we bear in mind the standards that it will wish to maintain in this area, just as we have always done. I made it clear throughout the passage of that first bit of Brexit legislation, the Nuclear Safeguards Act—which I am sure noble Lords will agree seems quite a long time ago—that we would continue to maintain close relations with those bodies, and I make it clear it now. I think it was the noble Lord, Lord Fox, who asked whether this was the last bit of EU exit legislation relating to nuclear matters but then thought that the next instrument also dealt with such matters. The next statutory instrument is not technically an EU exit regulation, so I think my honourable friend was correct in saying that this was the last of our EU exit statutory instruments on nuclear matters. As he is aware, we still have to deal with quite a number of other EU exit SIs and legislation.

I think that deals with almost all the questions noble Lords asked. The final one was on the competence of the various environmental agencies and whether they have the appropriate skills. All the environment agencies have been dealing with these matters already, so there will be no extra burden on them and no extra skills to acquire. They will continue to work in this field.

Recognition of Professional Qualifications (Amendment etc.) (EU Exit) Regulations 2018

Debate between Lord Fox and Lord Henley

Monday 11th February 2019 Lords Chamber

[Lord Henley]

My Lords, as the noble Lord, Lord Stevenson, put it, this is not about farriers—I will not deal with that question, unfortunately; my noble friend Lord Gardiner will possibly have to deal with it on some other occasion—or about why they are not regulated in Northern Ireland but are regulated in England, Wales and Scotland. I do not think anyone knows the answer to that question, and I will not try to answer it, just as I do not know why, for example, hairdressers are regulated in Italy but not here. In France, they are doubly regulated; you find that if you want to be a hairdresser who makes home visits you must have one form of qualification, and if you want to operate from a shop, you must have another. Again, we do not consider that necessary, but obviously we have to make provisions for UK citizens who want to work abroad to do so when that is possible.

However, before anyone thinks it is all sunshine out there under the current system—the noble Lords, Lord Fox and Lord Adonis, in their little exchange seemed to imply that as a result of these regulations we would get further restrictive practices—I remind noble Lords of the restrictive practices that happen already. One has only to look at the position of UK ski instructors—to take one example from the 600 or so professions that can be affected—and the problems they have had trying to operate in France, where, for some reason, throughout these wonderful years restrictive practices have always come into effect to try to exclude UK ski instructors from operating.

[Lord Fox]

Does the Minister believe that this statutory instrument will improve the lot of British ski instructors trying to get a qualification in a continental country, or will it make it harder?

[Lord Henley]

No, it will not, but we are making it quite clear that we believe that we will offer that unilateral ability to operate over here—not that there are that many ski instructors here, although I believe there are north of the border. The noble Lord should welcome the unilateral nature of these regulations.

We will talk about no deal; as I said, we hope that with a deal we will be able to cover all the other 600 or so professions or quasi-professions that are covered. However, I make it clear that I will not deal with other professions, which are, quite rightly, a matter for other departments. Therefore I will not answer the point made by the noble Lord, Lord Hunt, about doctors, because that will be a matter for regulations from the Department of Health and Social Care that either might have already gone through or will go through, and the same is true of my noble friend Lady McIntosh’s concerns about legal services. The legal services SI and the BEIS SI are separate legislation, laid by the Ministry of Justice, and are an effect of the legal services directive and the establishment directive. These alternative routes for recognition of lawyers exist now and, as I said, that is a matter for them.

I shall start off with numbers—the noble Lord, Lord Adonis, and other neighbourhoods, expressed concern about numbers. As the noble Lord will be aware, the European Commission maintains a database of the number of qualification recognition decisions awarded to most professions across the EU, the EEA and Switzerland. It does not tell us exactly how many professionals are working in the European Union at any given time, but it gives an indication in the form of the number who have sought recognition of their qualifications. That database tells us that in the 10 years from 2008 to the end of 2017, approximately 20,000 UK professionals have successfully had their qualification recognised in the EU, the EEA or Switzerland, and of those 20,000 decisions, about 12,000 related to qualifications in the scope of this statutory instrument. Further, I can tell the noble Lord that the top five professions having their UK qualifications recognised are: secondary school teachers, with approximately 3,400; lawyers, with approximately 1,600; doctors, with approximately 1,500; primary school teachers, with about 1,500; and, going back to Italy and France, 1,400 hairdressers.

--- Later in debate ---

[Lord Fox]

My Lords—

[Lord Henley]

There is no point in my giving way every time the noble Lord speaks because I must try to answer the points.

[Lord Fox]

It is only one point.

[Lord Henley]

I apologise to the noble Lord.

There has been guidance from the European Commission on this matter. Decisions on the recognition of our qualifications made by another EU member state before exit will not be affected by our withdrawal from the EU. That is what the Commission has said. Therefore those 12,000, should they still be there, will be perfectly all right. Obviously, for any new person it will depend on what arrangements come into effect. We are dealing with our own arrangements for people coming into the UK. I hope that finally answers the noble Lord’s point.

--- Later in debate ---

[Lord Henley]

My Lords, we are bringing these forward in the event of no deal. We are saying, “We will take in all your qualifications”. The Commission, as the noble Lord acknowledges, has said that it will recognise existing qualifications from UK nationals out there.

[Lord Fox]

My Lords—

[Lord Henley]

The noble Lord will have to wait until I have finished answering this point. He can then interrupt me if I decide to give way, but I think I ought to be allowed to answer a point fully before I take another one.

I will now quote from a letter that my honourable friend wrote to his opposite number following the debate on these regulations in another place:

“Therefore, UK citizens living in EU countries who are working in regulated professions or under protected titles, and who are doing so under a recognition decision under the MRPQ directive, will not have their recognition decisions affected by our withdrawal from the EU and they will not seek further recognition in order to be able to continue working or using their title”.


I will now give way to the noble Lord.

[Lord Fox]

I thank the Minister for giving way and apologise for being so enthusiastic. Richard Harrington said in the other place that,

“the Commission has advised holders of UK qualifications living in the EU to obtain recognition in an EU27 member state before exit”.—[Official Report, Commons, Sixth Delegated Legislation Committee, 4/2/19; col. 11.]

Is the Minister saying that that is wrong or is he saying that his colleague in the other place is right?

[Lord Henley]

My honourable friend is always right. On this occasion, he wanted to clarify his thoughts a little, and that is why I am quoting from the letter he wrote. I hope that response answers the noble Lord’s question.

Companies, Limited Liability Partnerships and Partnerships (Amendment etc.) (EU Exit) Regulations 2019

Debate between Lord Fox and Lord Henley

Monday 11th February 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, the changes being made by this instrument relate to the Companies Act 2006 and supporting secondary legislation. In some cases, the changes will have no impact on business; they simply tidy up provisions in the legislation to reflect Brexit. Other provisions will have an impact on business. These provisions are mainly to ensure that certain EEA-based entities will be treated in the same way as other third country entities after exit day. This is an approach that has been taken in many statutory instruments that this House and the other place have considered over the last few months. These changes are made only when necessary to ensure that the UK does not breach the World Trade Organization’s most favoured nation rule upon exit.

I will set out these changes and the impact on companies, but first I would like to briefly highlight two provisions that remove access to EU-based processes and systems. The first is that this instrument revokes the Companies (Cross-Border Mergers) Regulations 2007. This allows the merger of two or more companies or partnerships based in at least two EEA member states. There have been approximately 400 cross-border mergers involving UK companies and a company in another EEA jurisdiction since 2010, around 50 a year. After exit, companies seeking a merger with another company outside of the UK will need to transfer assets and liabilities using contractual arrangements. This already happens now between UK and non-EEA companies, so many businesses will already be familiar with it.

The second provision is that after exit the UK will no longer be part of the Business Registers Interconnection System. This tool connects business registries across Europe. Much of the information that Companies House makes accessible on BRIS is openly available on the UK company register via GOV.UK. Many other member states do the same on their registers for business transparency reasons.

I turn now to how the provisions in this instrument deal with certain EEA entities and EEA—regulated markets. The main practical impacts are around filing changes. EEA companies that have registered with Companies House under the overseas companies regulations will need to provide additional information. This will align the information required from them with that required from non-EEA companies. The additional information is minor, such as the address of the registered office and the law under which a company is incorporated. The same group of companies will also be required to provide more detail in customer-facing material. This includes the location of the company’s head office, its legal form, liability status and whether it is subject to insolvency proceedings.

While these are minor administrative details, they are important for corporate transparency and very useful for the clients and customers of foreign companies with UK operations. These changes apply only to EEA companies that are already registered as overseas companies in the UK. We have provided companies with a three-month notice period to provide the additional information and Companies House will inform them of the requirements. The forms to update their details will be available on GOV.UK on exit day. Further changes affect UK companies which have an EEA corporate appointment—that is, a director or company secretary that itself is an EEA company. Any UK company with this type of appointment will need to provide Companies House with two pieces of additional information within three months of exit. This aligns the filing requirements for EEA and non-EEA corporate appointments.

Another change ensures that EEA credit reference agencies and credit and financial institutions are treated in the same way as those from third countries. After exit the registrar of Companies House will no longer be able to send protected information that they hold on directors to these companies.

I would also like to explain the definitions of the phrases “UK regulated market” and “EU regulated market” within these regulations. These definitions were inserted in the Companies Act 2006 by the Accounts and Reports (Amendment) (EU Exit) Regulations 2019 and are consistent with the definition in the Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018, which we debated in December last year. The definition confers preferential treatment on certain entities listed on EEA-regulated markets such as the London Stock Exchange and the Frankfurt stock exchange. In most instances we have inserted,

“UK regulated market or an EU regulated market”,

to maintain the status quo. However, in two places we have restricted the provisions to companies listed on a “UK regulated market” to avoid breaching WTO rules. The first is the exemption to the prohibition on subsidiary companies owning shares in a parent holding company. This exemption will be available only to companies that have access to UK-regulated markets. The second provides that only companies listed on a UK-regulated market will be able to benefit from some relaxations on controls on their distribution of profits. We are providing a one-year transitional period for those affected.

Overall, these amendments do no more than is necessary, are broadly technical in nature and will ensure that a clear and coherent company law framework is in place after exit. I commend these regulations to the House.

[Lord Fox (LD)]

My Lords, I thank the Minister for bringing this SI to the House. It is another episode in the unravelling process. I have four comments, along with one pro forma comment on consultation.

The Minister mentioned the Business Registers Interconnection System. My understanding is that that is already part of Companies House. Can the Minister assure your Lordships’ House that there is no change in the information available—in other words that the information that was available on BRIS remains available on the new Companies House system?

That takes me to my second point. There are a number of mentions of a role for the company registrar in this instrument, and a lot of them are time-limited over the three months post exit day. What level of capacity will be needed to handle what will be a surge of registration, inquiry and people wanting to know what to do? What level of information will go out to inform companies that they are required to do these things? Who will hold the buck for putting that information out there? It is not clear how companies will find out about this or whether there will be the capacity within Companies House to handle the three-month surge. I would like to know what kind of risk analysis has been done by the Government and what level of communication they are planning.

Thirdly, as the Minister set out there are a number of technical changes around cross holdings of shares between EEA and UK companies. It is not clear to me how many companies this would affect. What intelligence do the Government have on how many companies will be affected in this shareholding? Obviously, there is time for these companies to change that. Does that significantly change the shareholder profile of many companies in this country? If so, how? Does it have any effect overall on market liquidity? What kind of analysis of what this means has gone on?

The final substantive point is on cross-border mergers. The Minister mentioned those in his introduction. He did not explain what the implications are if there are cross-border mergers already under way now or at the time of exit. What regime are these cross-border mergers governed by?

All of this is regrettable, because we have a functioning system that works very well. I am co-operating in so far as I think it is important that we have some sense of where this is going in the regrettable event of exit day. My final point is this: can the Minister outline what level of consultation has gone on? Again, it looks like none. What is the justification for no consultation?

Nissan in Sunderland

Debate between Lord Fox and Lord Henley

Tuesday 5th February 2019 Lords Chamber

[Lord Fox (LD)]

My Lords, I too thank the Minister for repeating the Statement. Just over a year ago Secretary of State Greg Clark launched the automotive sector deal. Things were a bit different then: in a confident, upbeat foreword, he said that,

“the government is investing in a new industry-led programme to raise the competitiveness of UK suppliers to match the best in Europe”.

Today’s Statement underlines how much things have changed. How can the Government claim to be raising competitiveness when uncertainty and delay make it impossible for businesses to plan and invest? Nissan’s comments underline its struggle to plan ahead. Manufacturers do not even know what tariffs they will face at the end of next month, never mind the supply chain friction that will confront them. They are having to plan shutdowns in April to take stock of the situation. That is hardly raising competitiveness, and it is a key reason why confidence in the automotive industry is plummeting and, as the noble Lord on my right said, investment is halving.

One of the foundations of the Government’s industrial strategy was to create the best place to grow a business. It is clear that the abject confusion over Brexit and the surrounding discussions is weakening communities and the strategy. As the Minister said, we had confirmation yesterday that Nissan has decided not to build the X-Trail in the UK. However the Minister and the Secretary of State seek to dress this up, that is not a vote of confidence in the Government’s strategy. As the Secretary of State acknowledged, it injects uncertainty into an industry that is very important for the north-east—uncertainty over 7,000 direct-employment jobs and approximately 35,000 in the supply chain.

In the Statement, the Secretary of State was clear that Nissan had located in the north-east,

“having been persuaded by Mrs Thatcher that the combination of British engineering excellence and tariff-free access to the European Union made Britain an ideal location”.

So, when the chill winds blew in the year before last, the Minister acted fast and secretly to seek to insulate Nissan. In 2016, in order to reassure the company, the Government made a deal, which included public investment of around £60 million, as we heard, and was sealed in a letter that the Government moved heaven and earth not to publish. They cited commercial sensitivity as the reason—until this week, when publishing suddenly suited the Government. I have a number of questions about that letter.

First, what was commercially sensitive before that is not so now, particularly when the Secretary of State goes out of his way to explain that the funding surrounds the Juke and Qashqai ranges but not the X-Trail? That range will continue, so any commercial sensitivity should surely continue, too. Secondly, and perhaps more importantly, did the Government notify the EU competition authorities about their deal with Nissan? If not, why not? I note that in 2001 some £40 million of support for the production of the Nissan Micra was cleared through the EU. What was different about this support?

The Minister stated that the Government’s fourth commitment is to the,

“strong common ground that exists between the UK and other EU member states”.

I suspect that we would question that. He also said that Her Majesty’s Government would,

“pursue a deal that could ensure free trade unencumbered by tariffs or other impediments”.

There is no sign that the Prime Minister’s red lines will allow this to happen—and clearly Nissan no longer believes the Government either. The reduced sector investment tells the same story.

The prime phrase in all this is “damaging uncertainty”. Faith is falling, even in the Minister’s own department. His colleagues in the other place sound increasingly worried about what is going on and whether the right of his party will drive the country over a cliff. Mr Harrington has called no deal a “complete disaster”, while Mr Clark warned that a no-deal Brexit would be “ruinous” to the economy. Can the Minister tell us the adjective he would use to describe it?

[Lord Henley]

My Lords, before I answer any of the questions put to me by noble Lords, may I correct myself? I think I misread from my right honourable friend’s Statement, in that I suggested some 3,000 companies have been supported by the regional growth fund since 2010. In fact, the figure is 30,000. I apologise for that small error.

Nuclear Power: Future Energy Needs

Debate between Lord Fox and Lord Henley

Thursday 17th January 2019 Lords Chamber

[Lord Henley]

My Lords, I am aware of that growth deal, but I do not accept the noble Lord’s suggestion that this in effect scuppers that—I cannot remember what precise words he used. Obviously, it makes life more difficult, and we would not have wished to have to make this Statement, but it is also right that my right honourable friend the Secretary of State looks to the calls on the taxpayer and ensures that we get a good deal for any investment we make.

[Lord Fox (LD)]

My Lords, the Minister said that the market has time to respond. The market has responded. EDF caught a cold and got cold feet, Toshiba has pulled out, Hitachi has pulled out. What is the market in large nuclear generation and what is the Government’s plan B if they fail to deliver the financial engineering, as they clearly are at the moment?

[Lord Henley]

My Lords, in responding to questions of this sort at the Dispatch Box, it is difficult to go into the full details of what was planned. As I said, my right honourable friend the Secretary of State will make a Statement any minute now on the subject—I am waiting for a signal. I would have been happy to have repeated it, but no doubt the noble Lord and I, and others, can discuss it afterwards, and there may be other opportunities to have a wider debate on the subject.

Insolvency (Amendment) (EU Exit) Regulations 2018

Debate between Lord Fox and Lord Henley

Tuesday 15th January 2019 Lords Chamber

[Lord Henley]

My Lords, it is my intention so to do, and I was coming to address the points made by the JCSI. This is a perfectly regular procedure. The noble Lord is very experienced in dealing with statutory instruments and with reports from the JCSI. It often happens that a report will come with criticism from the JCSI. The department then issues its response, and that should deal with the matter. I was going to come to this in my opening remarks and it is right that I should do so. The noble Lord will be able to listen to my explanation and, I hope, will accept that I, and the Government, have dealt satisfactorily with the concerns that the JCSI put to us. We greatly respect the JCSI. It does a very good job and we are very grateful for that. Back in the long-distant past, the noble Lord—like most of us—probably served on the JCSI and, if he had that honour, I am sure that he did a very good job in so doing.

This instrument recognises that, as we leave the EU, our European Union (Withdrawal) Act will automatically retain a version of EU regulation in UK law. However, the safeguards that the regulation provides can no longer be relied upon as the remaining member states will no longer be bound by them in respect of the UK. Many in the professional insolvency sector have argued that reciprocity is an essential part of continuing with this legislation. In the absence of a deal, it is vital that we do not indefinitely continue to apply EU rules that could override our own law and prevent us from dealing effectively with insolvencies in the UK.

The instrument therefore repeals the majority of the EU insolvency regulation, retaining only the small part necessary to keep the right to open proceedings in the UK. It provides for an orderly wind-down of the arrangements by continuing to apply the current EU rules to existing cases where main insolvency proceedings are already open on exit day. But, as a safeguard, the courts may disapply the EU rules where they will lead to a different outcome from that which would have been the case before we left.

I come now to the JCSI report, which the noble Lord, Lord Foulkes, has kindly brought to the attention of the House. I assure the noble Lord that I had every intention of raising this subject. The report refers to a lack of clarity—the noble Lord no doubt has it before him—and an unexpected use of the withdrawal Act power. I am confident that the provisions are an appropriate use of the power in the withdrawal Act. The provisions will give the court the necessary discretion to respond to unexpected outcomes from the interaction between our law and that of EU member states. There are precedents in existing insolvency legislation providing the court with the broad discretion to make orders in insolvency proceedings.

If, following EU exit, UK creditors or others with an interest in the insolvency are being treated unfavourably, it is only right that the court is allowed to apply the powers in our own cross-border insolvency regulations—which are used for non-EU insolvency proceedings—or make some other appropriate order to resolve the situation. The detailed examples that we provided to the JCSI demonstrated just some of the situations in which this might arise, and these examples were included within the JCSI’s report.

The instrument also amends certain employment legislation which ensures that protection for employees is retained following the insolvency of their employer. This ensures that the current financial support given to UK-based employees when their employer in the EU becomes insolvent will continue after exit day. In the absence of a Northern Ireland Executive, the instrument updates and makes similar changes to the law on insolvency and employment rights in Northern Ireland, on behalf of the Northern Ireland Government. I commend the regulations to the House.

[Lord Fox (LD)]

My Lords, in addition to the concerns which were very importantly raised on the nature of the drafting involved here and the use of powers, I have a couple of major technical quibbles. At the risk of treading into what may be the patented territory of asymmetry, which was just discussed, we seem to be back in an asymmetrical relationship here. We are changing our rules in the hope that Europe will reciprocate. That is my interpretation; if it is wrong, perhaps the Minister can update me. How forlorn or optimistic is this hope? What hope do those employees have of their rights and benefits being preserved—the Minister rightly highlighted that we need to have these processes in order to preserve them—for businesses which cross not just into the United Kingdom but into the rest of Europe?

The Minister’s point about courts was very interesting, because that of course was what the European Court of Justice was for: dealing with cross-border disputes over a similar group of rules. What the Minister describes is complicated, expensive and fraught with the possibility of failure. Perhaps the Minister can explain what benefits we will reap from substituting what we have today with what his department has set in front of us. So I have serious concerns that there are major problems with this SI.

Takeovers (Amendment) (EU Exit) Regulations 2019

Debate between Lord Fox and Lord Henley

Tuesday 15th January 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, these regulations will be made under powers in the European Union (Withdrawal) Act 2018. They amend Part 28 of the Companies Act 2006 so that the United Kingdom’s corporate takeovers regime can operate independently of the EU in the event of a no-deal exit. They provide clarity and certainty to businesses and shareholders.

The takeovers regime ensures that shareholders receive fair and equal treatment when the company in which they have invested is subject to a takeover bid. Part 28 of the Companies Act 2006 transposed the takeovers directive, 2004/25/EC, into UK law. The directive was intended to harmonise certain aspects of takeovers supervision across the European Economic Area, creating expectations of reasonable behaviour to which company shareholders could hold bidders.

The Companies Act requires the Takeover Panel to make rules to give effect to the directive in the UK. The panel has done so in the City Code on Takeovers and Mergers. These regulations preserve the statutory underpinning of the code and make only minimal changes to the way the UK regime functions.

In developing the regulations, we have worked closely with the UK’s supervisory authority, the Takeover Panel. It has consulted on the changes it will need to make to the takeover code to reflect these regulations. The takeovers regime is wholly separate from the mergers regime in the Enterprise Act 2002, which considers the competition implications of mergers. These regulations have no bearing on the mergers regime, or the powers and responsibilities of the Competition and Markets Authority.

For the most part, these regulations import and correct provisions from the directive necessary for the independent operation of the UK regime, but do not change how the domestic regime operates. They make only three substantive changes. First, they remove the shared jurisdiction regime. The EEA takeovers regime includes a system of shared jurisdiction for companies registered and listed in different countries. The supervision of a company captured by the shared jurisdiction system is usually by two regulatory authorities, one in the country where the company has its registered office and the other in the country where the company is listed. The shared jurisdiction regime works on a reciprocal basis. Since the reciprocal arrangements will no longer apply to the UK after EU exit, the regulations will remove shared jurisdiction from the UK takeovers regime. The panel has consulted on how the takeover code should apply to UK-registered companies that would otherwise have fallen within the shared jurisdiction regime because they have shares trading on another EEA state’s regulated market. It has proposed that the takeover code should apply to takeover bids for such companies if their place of central management and control is in the UK. Companies not fitting this criteria may be supervised by another authority.

The second feature of the regulations relates to the duty of co-operation. Section 950 of the Companies Act 2006 places a duty on the Takeover Panel to co-operate with its counterparts and certain other regulatory agencies in any country or territory outside the UK. It also imposes a duty to co-operate with EEA supervisory authorities. The duty to co-operate with supervisory authorities in the EEA is derived from the takeovers directive. After exit, EEA member states will no longer be bound to co-operate with the UK under the directive. These regulations therefore remove the obligation to co-operate with EEA supervisory authorities as it will no longer be reciprocal. However, the Takeover Panel will still be required to co-operate with the authorities of EEA member states under the duty in Section 950 to co-operate with any international supervisory authority with an equivalent role.

The third feature of the regulations relates to restrictions on the disclosure of confidential information. Section 948 of the Companies Act restricts the disclosure of confidential information obtained by the Takeover Panel during the course of its duties and sets the conditions under which this information can be shared. It applies to both the panel and the organisations with which information is shared. To breach the Section 948 restriction is a criminal offence. The Companies Act provides an exemption from the Section 948 restriction for EEA public bodies using confidential information disclosed by the panel for the purpose of pursuing an EU obligation. Instead, the EEA framework provides reciprocal protections to prevent the inappropriate disclosure of information and maintain professional secrecy. After EU exit, these reciprocal protections will no longer apply to the UK and the removal of the exemption for EEA public bodies ensures that there is a sanction for inappropriate onward disclosure of confidential information.

In conclusion, corporate mergers and takeovers are an important part of a healthy economy. By encouraging efficiency gains, spreading knowledge and promoting innovation, they drive economic growth and job creation. It is vital that we seek to safeguard the legal framework that gives companies and their shareholders the confidence to engage in merger and acquisition activity. These regulations achieve that goal by making only those changes needed to fix deficiencies in UK law arising from EU exit. They will have a negligible overall net effect on our economy. I beg to move.

[Lord Fox (LD)]

My Lords, this time last year I was engaged in my civilian life on one of the largest contested takeovers in the British Stock Exchange, so I have some first-hand experience of the Takeover Panel and its operations—which I will not regale the House with today. However, after that experience I was left with the realisation that there are major issues around takeover policy in this country and I beg to disagree with the last words of the Minister when he described the beneficial effects of takeovers. Many of them prove not to be beneficial. Although some are, as he says, part of a healthy and vibrant economy, many are driven by the wrong motives and have outcomes that are not necessarily favourable to the economy of the United Kingdom. However, this is not the medium through which to have that discussion or to make those changes, so I will not attempt it.

The role of the Takeover Panel is interesting. While this is not a game, the way in which it operates is very much as a referee. Two sides are contesting and the Takeover Panel acts as a referee. It has a lot of experience—although each takeover is different, so the process of learning is for the Takeover Panel as well. In essence it is a put-together team in terms of the referees as well as the contesting companies. That process of consultation is quite interesting because what kind of response you get will depend on who you speak to from the Takeover Panel. It is the same as taking 10 Premiership referees and asking them how to change the rules of association football; they would all come up with different ideas. So I would like a little more information on the consultation process.

--- Later in debate ---

[Lord Fox]

I thank the Minister for giving way and for his answer. Am I therefore to understand that 35 companies—25 from the EEA and 10 from the UK—come out of UK jurisdiction, or is it 35 companies coming into UK jurisdiction? It is not clear.

[Lord Henley]

I am sorry; I miswrote down what the noble Lord originally said. It does say 35 in the order: 35 EEA companies come out and 10 UK companies go in. I think the noble Lord has got it right. Again, I will write to him on that if I am wrong. He also referred to paragraph 20, on what drove changes to the definition of a takeover and what other amendments have been made. I can give an assurance that there have been no changes to the definition of a takeover, and the scope of companies that can be subject to takeover has been narrowed, obviously, to UK companies. That would be implicit in the order.

My noble friend Lord Leigh asked, very helpfully, about shared jurisdiction. The EEA takeovers regime includes a system of shared jurisdiction for companies registered and listed in different countries. Since the reciprocal arrangements underpinning the system will no longer apply to the UK after exit, the regulations will remove shared jurisdiction from the UK takeovers regime. My noble friend then asked whether that was likely to bring more companies to the UK. He and I are always optimists in these matters and there is every chance it might have that effect, although that is a matter not for the Government but for the companies themselves. I believe I have answered all the points put to me but if I failed to deal with any I will write to noble Lords.

Good Work Plan

Debate between Lord Fox and Lord Henley

Tuesday 18th December 2018 Lords Chamber

[Lord Fox (LD)]

My Lords, I join the noble Lord, Lord Stevenson, in thanking the Minister for repeating the Secretary of State’s Statement. There is perhaps an inverse law here. We are at the end of a long day in a long Session and very few noble Lords are left in the Chamber. Despite that fact, this stands to affect more people than anything else the House has debated this week. It is important and it will genuinely help to improve the lives of millions of UK citizens. For that reason, we welcome the Government’s response to the Taylor review. We welcomed the review when it came out and the Statement sets in motion a number of important steps in the right direction. This has been a long time coming and it is unfortunate that the Minister’s department, along with every other part of government, has a lot of things to do around Brexit, meaning that important work such as this takes too long and is slow to come out.

The Government are right to reject open hostility to flexibility in the job market. Many people want and need the right sort of flexible job environment. Hopefully, these steps will move that forward. Flexibility should not be open to abuse. Workers need real control and choice over the work they take, which means giving them new rights and enforcing existing ones more stringently. The Government’s response has been a bit underwhelming in some cases. If the Minister will excuse me, I will go over a few areas where we think more work should be done.

The Government have said that they will bring forward legislation clarifying employment status and aligning tax and rights, but there is scant detail. Will the Minister fill out the detail or, if not, the process by which it will be forthcoming? The Government have also failed to genuinely address the need for a “dependent contractor”, set out as an employment status for people within the gig economy. The existing status of “worker” needs to be updated and redefined for the sort of 21st-century work that the noble Lord, Lord Stevenson, referred to. We need that status to guarantee gig economy workers minimum earnings, sick pay and holidays. The Government have ruled out a higher minimum wage for hours not guaranteed as part of a contract, and are now going through lengthy consultation. We welcome consultation and, in other environments, the Minister has been criticised for not consulting sufficiently—but it needs to be quick and direct and it needs to get to the point. Action to stamp out abuse of zero-hours contracts must be swift rather than convoluted and kicked into the long grass.

Ministers have refused to rule out reintroducing fees for employment tribunals after the Supreme Court ruled them illegal. They should take that step immediately and rule out reinstating those charges. The Government must show how they will help gig economy workers access occupational pensions. That does not seem to have been addressed and I will come back to it in a moment in relation to sexual equality.

To close, I have three other questions. The Taylor review said that those working in self-employment should receive the same state benefits as those in employment. Why, then, are self-employed workers with fluctuating incomes punished by universal credit? In a good month, their benefit is cut, but in a bad month, their benefit does not rise as much because the minimum-income floor kicks in. Therefore, will the Business Minister undertake to work with the Work and Pensions Secretary to ensure that universal credit is responsive to this kind of fluctuating income, perhaps by measuring incomes over a rolling 12-month period rather than on a month-by-month basis? This unfairness needs to be addressed.

Secondly, around 55% of workers on zero-hours contracts are female. The trade unions warn that the gender pensions gap now stands at about 40%. That means that disadvantages to pensions for zero-hours employees disproportionately affect female workers. Therefore, to avoid further disadvantaging women, the Government must act on Taylor’s recommendation to improve pension provision among the self-employed. What will the Government do to ensure that women in less stable forms of employment will be able to enjoy a secure retirement?

Finally, the University of Greenwich study from 2016 found that disabled workers on zero-hours contracts were often unable to get their bosses to make reasonable adjustments required by the law. They were often afraid to raise the issue because they felt that it might endanger their employment prospects and put them back on to benefits. What are the Government doing to protect disabled people in insecure forms of employment? How will they ensure that the 21st-century economy works for disabled people and not against them? I look forward to the Minister’s response to those questions.

[Lord Henley]

My Lords, I thank the noble Lords, Lord Stevenson and Lord Fox, for their general welcome of this Statement. The noble Lord, Lord Stevenson, said it was a good start and that he was particularly grateful for the stress on quality; my right honourable friend takes pride in being the first Secretary of State to address that issue of quality. I also thank the noble Lord, Lord Fox, for his comments, particularly his opening remark about being rather sad about inverse laws meaning that, although a great many people were being affected by these policies, not many people—sadly, because of the timing and other business—are present for this debate. It reminds me of the remark that people used to make about discussions about money in certain local councils: namely, that the smaller the amount of money that was being discussed, the longer the item took. I will attempt to answer a number of the points, some of which obviously overlap.

First, both noble Lords were concerned about employment status and how we deal with the distinction between workers and employees. I can assure them that we are committed to legislation to improve the clarity of employment status to reflect the reality of modern working relationships. Obviously, more work needs to be done; we will bring forward detailed proposals on how the frameworks for employment and tax statuses could be aligned. It is, as has been made clear by many, very difficult, and I am not sure that we can ever get them completely aligned—but we will do our best. We are one of the first countries in the world to address the challenges in this area. As Matthew Taylor said, there are three levels of status. He believed that that was right and appropriate, but we want to bring a degree of greater clarity in this area.

Secondly, there were concerns from the noble Lord, Lord Stevenson, about the powers and resources available for enforcement in this area. We are increasing the resources available for enforcement: the budget for enforcing the national minimum wage was increased from £20 million in 2016-17 to some £25.3 million in 2017-18. The Employment Agency Standards Inspectorate has also received a 50% increase to hire more inspectors. But again, as my right honourable friend has made clear on a number of occasions, we want to make sure that it can do that job and bring to book those who are not performing adequately. We believe it is right that successful claimants get what they are due fully, which is why yesterday we launched a new naming scheme for employers who do not pay the employment tribunal awards. Again, I believe that a naming and shaming policy is exactly the right approach.

On the question of employment tribunal fees, raised by the noble Lord, Lord Fox, obviously I am aware of the case in the Supreme Court to which he referred. We are reviewing the fees strategy and looking at the balance between charging direct users and using taxpayer subsidy. The fee remission scheme—help with fees—is a crucial element of this strategy, and, again, we are considering whether the scheme needs to be adapted to facilitate better access to the courts and tribunals in the light of that judgment.

Lastly, on the question of zero-hours contracts, the noble Lord, Lord Fox, in particular referred to the position of some women with regard to zero-hours contracts. However, zero-hours contracts can affect all people, of whatever age and gender. I point out to him that, as he will be aware, Taylor noted that banning zero-hours contracts altogether would negatively impact far more people than it would help.

[Lord Fox]

My Lords, I think there is a slight misunderstanding. I mentioned at the very beginning that people welcome flexible working contracts, so I ask the Minister please not to put those words in my mouth. My point was that because more women work on flexible contracts, under which pensions are harder to sort out, naturally more women than men will suffer from a pension point of view because more women are on flexible contracts.

[Lord Henley]

I accept the noble Lord’s point. He will be aware that we made a number of changes to pension arrangements, which one of the noble Lord’s right honourable friends was responsible for as a Minister in the coalition Government, and that will have benefited a great many women and helped them to meet their pension contribution record. I just wanted to make the point that Taylor noted that banning zero-hours contracts would negatively impact more people than it would help. I apologise if I put words in the noble Lord’s mouth, but he accepted that that flexibility in employment is important to a great many people, and I do not think that many of us would like to deny that.

I also note what the noble Lord had to say about disabled workers and the 2016 Greenwich study. I would certainly like to look at that more carefully and if possible write to him. If we go back as far as 1996 and the disability legislation of that year, and amendments and improvements such as the Equality Act 2010, we see that we have made great leaps forward. I hope that what we have set out here, which will be of benefit to all workers, will also be of benefit to disabled workers and to others in due course.

Accounts and Reports (Amendment) (EU Exit) Regulations 2018

Debate between Lord Fox and Lord Henley

Tuesday 18th December 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, the regulations aim to address failures of retained EU law to operate effectively, as well as deficiencies arising from the withdrawal of the United Kingdom from the European Union, in the field of accounts, reports and audits of UK corporate bodies.

I turn first to the EU accounting directive. The law in the UK on preparation and filing of accounts and reports by corporate bodies is compliant with the EU’s accounting directive. There is also a directly applicable EU regulation which relates to preparation of accounts in accordance with international accounting standards—the so-called IAS regulation. Both the accounting directive and the IAS regulation apply throughout the EEA. The department will bring separate legislation to the House that will address how we intend to deal with the deficiencies presented by the IAS regulation after the UK’s withdrawal from the EU.

Although the fundamental elements of the current company accounts and reports legislation will remain the same after our exit from the EU, it still needs amendment to ensure that it remains effective and makes provision which is appropriate to reflect the UK’s new status outside the EU.

The accounting directive provides for reciprocal arrangements for company group structures. For example, exemptions from producing consolidated accounts are permitted to businesses if the parent is registered in the EEA and itself produces consolidated accounts which are compliant with EU law. In the absence of a negotiated agreement about the economic relationship between the UK and the EU containing reciprocal arrangements, it is inappropriate to continue with preferential treatment for EEA entities or UK entities with EEA parents.

This instrument will mean that businesses registered in EEA states will be treated in the same way as those registered in other third countries. UK businesses with EEA parents will no longer benefit from the exemption from having to produce consolidated accounts. However, UK businesses with parent entities registered in the UK will not be affected by these changes.

The regulations do not create new criminal offences. However, the amendments will extend the scope of the pre-existing criminal offences. For example, dormant companies with parent entities listed in the EEA will no longer be exempt from preparing and filing accounts with Companies House. Failure to file accounts on time would mean that they would commit an offence and be liable to incur fines if prosecuted, as well as civil penalties. That is consistent with the approach for similar companies with parents outside the EEA.

The accounting directive sets out certain requirements for businesses to report payments to Governments worldwide relating to the extraction of natural resources, by way of logging and mining. Alongside this, it provides a power for the Commission to grant equivalence to third countries for their system of reporting payments to Governments regarding these activities. This instrument transfers this power to the Secretary of State.

Turning to the second of the two SIs, the law in the UK on regulatory oversight of the audit profession is compliant with the EU audit directive and the EU audit regulation. The audit directive sets out the requirements on the statutory audit of most businesses, as well a framework of standards for auditors’ work and independence. It also sets out the responsibilities of the competent authorities for statutory audit in member states. Meanwhile, the audit regulation sets additional requirements on the statutory audit of those businesses defined as public interest entities. It forms part of retained EU law under the European Union (Withdrawal) Act and will therefore continue to apply to the UK after the UK’s exit from the EU. Our aim is to ensure that the framework for the regulatory oversight of the audit profession in the UK works effectively following our withdrawal from the EU. The statutory instrument under discussion will help to facilitate this.

Under the audit directive, powers are provided to the European Commission to grant equivalence to third countries for their audit regulatory framework and adequacy to third countries’ competent authorities for their framework on audit regulatory co-operation. This instrument transfers these powers to the Secretary of State. Regulations will be made in the months immediately following the UK’s departure to set out a framework for future assessment of equivalence and adequacy by the Financial Reporting Council. In future, equivalence or adequacy decisions will also be granted by regulations. Following the UK’s exit from the EU, EEA states would be treated like other third countries.

This instrument also extends powers granted to the UK’s competent authority, the FRC. Certain powers have previously been granted to the FRC by the Secretary of State but now need to apply more broadly to reflect the UK’s exit. The instrument enables the FRC to enter into mutual recognition agreements to recognise audit qualifications with the EEA states. It also enables the FRC to register EEA auditors as third-country auditors where they audit businesses outside the UK that are listed on UK markets. This instrument transfers the European Commission’s power for the adoption of international auditing standards to the FRC. As the FRC already sets UK standards in line with the international standards, we anticipate no immediate changes.

This instrument provides certain transitional arrangements for the auditors affected and their client businesses. To ensure companies and investors remain confident in UK markets, these will apply until the end of 2020. During this period, we will continue to recognise EEA audit qualifications, firm registrations and approvals, EEA audit regulatory frameworks as equivalent and EEA competent authorities as adequate. These transitional arrangements will mean that there will be no cliff edge for EEA companies that list securities on UK markets. They will also allow the FRC the time to put in place the procedures necessary to assess the equivalence of EEA states, as well as the adequacy of their competent authorities.

The Government have carried out a de minimis impact assessment of these regulations, as the overall costs to business were expected to be small. The assessment confirmed that the impacts on business would be minimal. Only a limited sector will be affected by most of the substantial changes made in the Statutory Auditors and Third Country Auditors Regulations. This is because the amount of cross-border business affected by this instrument is small. The most significant effects are for UK businesses listed on EEA markets, whose auditors will have to register with the FRC, and for UK businesses that only trade securities in the EEA, as their auditors will be subject to less regulation than before.

The Government have worked closely with businesses and regulatory bodies to ensure the regulations achieve continuity wherever possible while addressing the deficiencies arising from the UK’s withdrawal from the EU. The instruments before us incorporate stakeholder views and insights.

In the unlikely event that the UK leaves the EU without an agreement, the measures contained within these regulations will be critical in ensuring that UK accounting, reporting and audit frameworks continue to provide transparency and certainty to investors. They will also ensure that companies operating in the UK have clear guidelines for preparing and filing their accounts. I commend these regulations to the House.

[Lord Fox (LD)]

My Lords, I thank the noble Lord, Lord Henley, and his department for innovating and delivering two SIs in one package. I am not sure that this has been done before, but it is perhaps appropriate that the department that spearheads innovation should be leading on this.

I did a quick count back and I think that over the course of my career I have been responsible for 18 reports and accounts, all of which, I should say, were for UK-domiciled and listed companies, so many of the issues here do not apply. The Minister will be pleased to know that I will not be regaling your Lordships’ House with the benefit of that experience, because it is clear that there are many things that can be improved around financial reporting. There are an awful lot of deficiencies around reporting, but these are not the vehicles by which that improvement should be delivered, so the Minister can be pleased that I will not be using that for a long discourse.

I have two or three points on the annual reporting side and one very important problem that I think we have around the audit area. On the reporting side, the Minister mentioned the reporting protocols around payments to Governments for logging and mining activities. Will the Minister write to me and say what those are and underpin that there is no change planned between the two regimes as we move from one to the other? This is an area where a little more clarity would help.

Paragraph 7.12 of the Explanatory Memorandum covers where this instrument applies and when the change comes. I note that if a business is called on to restate its chart of accounts—which has happened in my knowledge, and happens from time to time—it has to go back through time and restate its accounts. I have to say that this change will make it an extraordinarily difficult activity in the event that any business needs to do that.

The Minister said that the Government have been working closely with business, but when we look at the consultation outcome we see that they have not been able to consult in order to minimise sensitivities in advance. It is not clear to me why they were not able to consult—perhaps the Minister will explain why it was felt not to be appropriate.

I turn to the audit side. This could hardly come on a more auspicious day, when we have the CMA making its comments about audit companies and we have the Kingman report with reflections on the fitness for purpose of the FRC. The Minister mentioned the FRC at least a dozen or 15 times. The role of the FRC in managing this rollover between the two regimes is crucial, yet we have, in the words of a very experienced practitioner in Sir John Kingman, the finding that the FRC is essentially unfit for purpose in how it is operating today, never mind with the extra responsibility that this SI puts on it. I would like to understand how the Minister thinks that this is going to be enacted by an FRC which is short of a leader and clearly short of the resources to manage its day-to-day job, without giving it extra responsibilities. I look forward to his response.

Timeshare, Holiday Products, Resale and Exchange Contracts (Amendment etc.) (EU Exit) Regulations 2018

Debate between Lord Fox and Lord Henley

Wednesday 21st November 2018 Grand Committee

[Lord McNicol of West Kilbride (Lab)]

My Lords, this is one of the more straightforward regulations. We can see that by the fact that we have lost my noble friend Lord Foulkes from our discussion. As was touched on, the main aim is to change references to “the EEA” to “the UK”, and similar changes in language from “official language of an EEA state” to “English”. At this stage, I cannot find much of substance to disagree with. However, I am sure my shadow BEIS colleagues may have some points to raise when this is discussed in the other place. Like my noble friend Lord Foulkes before me, I have just a couple of questions for the Minister.

First, much of the instrument deals only with replacing European references with domestic alternatives. However, the regulations will also ensure that contracts governed by the law of an EEA state will be treated in the same way as contracts governed by the law of non-EEA third countries. Did the Government consider any other option for EEA contracts?

Secondly, prior to the publication of this instrument, the Government chose not to carry out a consultation. This seems fair, considering the volume of secondary legislation and the relatively minor impact that this will have. However, it could be expected that the Government will have held informal conversations with those affected by the regulations. Will the Minister explain whether any such discussions, with industry or others, have taken place?

Thirdly, the Explanatory Memorandum claims that there is no impact on UK businesses. However, as a result of this instrument, businesses dealing with timeshares will surely have to acquaint themselves with the new regulations. Does the Minister not agree that, however minor, there will be some necessary adjustments for business to make?

Finally, on a similar note, does the Minister agree, like me, with the comments of his colleague the Secretary of State for Work and Pensions? This morning, she said that the UK will not be leaving on a no-deal Brexit as there is no majority in the other place for that to pass.

[Lord Henley]

My Lords, I remind the noble Lord that we had a referendum a couple of years ago and we agreed that we were leaving the EU. That was the manifesto that both the party I represent and the noble Lord’s party went to the country on in 2017. We are leaving the EU. It depends on what terms. These regulations are about dealing with the question: what will happen if there is no deal? We hope there will be a deal but if there is no deal, we want to make sure that the proper protections are there.

The noble Lord, Lord Fox, asked a number of questions which went slightly wider than the regulations in front of us. The important thing to say to anyone who is thinking of buying a timeshare, whether in this country or another, is that whatever they do, they must take all the proper legal advice. I have no plans, when I walk round a golf course on the Algarve—which I have never done and have no intention of doing—to buy a timeshare, but there are people who want to buy timeshares and they serve a purpose. Whatever they do, the important thing is to make sure that they are getting the right advice, either in this country, if they are buying it here, or in another country. I think we would all agree on that point. Where people have had problems, it is very often because they have bought in the manner that the noble Lord, Lord Fox, seemed to be suggesting—someone comes up to them while they are on holiday and makes this suggestion.

Now that we are leaving, what protection will UK consumers have when buying timeshares in Portugal? Obviously, it will depend on where the consumer bought the timeshare. UK consumers who buy timeshares under UK law will be covered by the protections in the existing timeshare regime. If they are buying timeshares in Portugal from Portuguese traders, they will generally be subject to Portuguese law and the protections that that member state extends to non-EEA nationals. Consumers will be encouraged to understand the specific conditions of the contract and to take all appropriate advice.

The noble Lord also asked: how do we prevent people being misled? Obviously, I share his concern for vulnerable consumers who are unfairly targeted by manipulative and misleading sales tactics in many industries, but particularly here. I believe that the current timeshare regime, reviewed and updated by the 2010 regulations, provides adequate protections for timeshare consumers. The regulations require that clear and comprehensive information is provided to the consumer before any contract is agreed; that information on termination must also form part of the contract; that timeshare buyers also have the option to change their mind within two weeks of signing a contract, during which no money can be taken; and so on.

The noble Lord, Lord McNicol, asked whether it was possible that there would be further changes. He will be aware that the European Union (Withdrawal) Act does not give us the powers to create any legislation or substantially change any retained EU legislation. The changes that this instrument would bring into effect are made in exercise of those powers, to remedy deficiencies in retained law and not to change the effect of retained law. But we know that many people have concerns about some of the protections. I can give an assurance to the noble Lord that my right honourable friend and others will always keep these matters under review if we feel that there are not the appropriate protections. This will always be a concern. The Government would act if necessary.

[Lord Fox]

I agree with the Minister’s “buyer beware” point, which was very clear, but he did not have the opportunity to address the point on resale.

[Lord Henley]

I agree that resale is a vital point, because when one buys a timeshare one usually feels that one has an asset which, if it is to have value, should be able to be sold.

I was asked where the court of redress would be. If it was a Portuguese contract, the court of redress would be in the Portuguese courts. Perhaps I may double-check what the precise position would be in respect of something sold here that is in another place. If the noble Lord comes to a deal while sauntering around a golf course in the Algarve—so that is just a deal that he has made in Portugal—it is quite clear that the Portuguese courts will deal with it, but I had better write to the noble Lord on what the position would if he bought it here and it was in that EEA state to make sure that I get it absolutely correct.

I hope that that explanation is sufficient. As the noble Lord, Lord Fox, pointed out, the noble Lord, Lord Foulkes, has now felt that he can depart, so I hope that we can move on.

Textile Products (Amendment) (EU Exit) Regulations 2018

Debate between Lord Fox and Lord Henley

Wednesday 21st November 2018 Grand Committee

[Lord Henley]

My Lords, like other speakers, I offer thanks to the noble Lord, Lord Foulkes, for his blessing of this statutory instrument. We are grateful for that. I will deal with most of the points, but it might be that on one or two I need to write to noble Lords with further detail.

Like my noble friend Lady Byford, I understand the extreme importance of labelling, particularly for those with allergies but also those who have other concerns. My noble friend will be aware that, only recently, my noble friend Lord Gardiner and I gave evidence to the EFRA Committee in another place on fake fur and real fur. Some older Members of the Committee may remember a time when people would try to sell fake fur as real fur, whereas it is now the other way round. Given how animals are farmed in other parts of the world, real fur can often be a lot cheaper than fake fur, and in trying to buy fake fur a lot of people do not want to buy real fur. The point I was coming to is that we are currently bound by EU rules on labelling. Both my noble friend Lord Gardiner and I felt that the existing labelling of fur and fake fur was not necessarily quite as clear for the consumer as it should be, which sometimes led to individuals buying real fur or objects with a tiny portion of real fur in the trimming when they did not wish so to do. I agree with my noble friend that labelling is important but I also emphasise that these regulations are there only for a no-deal scenario, so that should there be no deal—I am confident that there will be—we can be in a position to make sure that we have the right arrangements in place.

The noble Lord, Lord Fox, asked who would exercise the Secretary of State’s powers when it came to enforcement. It is an important matter for local authorities and trading standards, but I can give an assurance that we provide funding to National Trading Standards of around £13 million a year, with £1.2 million a year for Trading Standards Scotland, for the co-ordination of regional and national trading standards in England, Wales and Scotland. I will have to write to him on why this is not a devolved matter. I still find it, as no doubt will the noble Lord, Lord Foulkes, extraordinarily confusing as to which matters are devolved and which are not, as was the case when we recently debated the changing of clocks, which seems to be devolved in Northern Ireland but not in Scotland or Wales.

[Lord Fox]

I am slightly confused. For example, if I have invented a fabulous new fibre and wish to start using it in one of the Minister’s sweaters, do I pop into Hereford Town Hall and look for the trading standards person there? How do I know where to go? Who is the agent or person that I go to?

[Lord Henley]

I was trying to make it clear that local authorities deal with the enforcement. The noble Lord is asking about the labelling of his product. Perhaps I may write to him in great detail to make sure that I get exactly right who is exercising the powers of the Secretary of State and that he has the answer he seeks.

[Lord Fox]

While the Minister is writing, will he also explain what happens to existing fibres that are currently on a European ticket, so to speak? If they come in on your labels and have been improved in the European context, is jurisdiction over those fibres passed en bloc to that agency? What is the process, since the transfer of existing fibres to a new UK agency for their management does not appear to be allowed for in this SI?

[Lord Henley]

I will write in greater detail to the noble Lord, just to make sure that he is absolutely clear. In passing, on the question of correspondence, I give an assurance that from now on I will send all letters from my department on matters relating to SIs to the noble Lords, Lord Stevenson and Lord Fox: I will copy letters to one and the other. I am sorry if he has been confused: on some occasions I have written to the noble Lord and on others to the noble Lord, Lord Grantchester. I shall inform my office that in future it will be entirely himself. If the noble Lord, Lord Lennie, would like to receive those letters, I will send them to him too.

Productivity: Work-related Stress

Debate between Lord Fox and Lord Henley

Thursday 15th November 2018 Lords Chamber

[Lord Henley]

My Lords, I am very glad that the noble Lord highlighted the fact that zero-hours contracts have a part to play in our economy. As he suggested, they are of considerable benefit to a great many people, such as students and retired people. They also benefit others. Again, if the noble Lord can be patient, he will hear more from the Government in due course.

[Lord Fox (LD)]

My Lords, I fear that this is beginning to sound a like a shopping list, but another way of alleviating stress in the workplace is for employees to have the tools and the training to be able to meet the requirements of their job. Does the Minister agree that the Government’s plans for industrial and workplace training are in a mess? The apprenticeship levy is falling down and workplace training is at a level lower than it has ever been. What will the Government do to get a grip on training?

[Lord Henley]

I admire the noble Lord’s ingenuity in trying to extend the Question to a great many other subjects. Stress has many causes; we understand that there is a problem with it; that is why we commissioned the review by the noble Lord, Lord Stevenson—not the noble Lord, Lord Stevenson, sitting opposite me—and Paul Farmer. It is also why the Government accepted what they suggested.

Industrial Strategy

Debate between Lord Fox and Lord Henley

Wednesday 31st October 2018 Lords Chamber

[Lord Fox]

To ask Her Majesty’s Government what progress they have made in establishing the governance of their Industrial Strategy.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, the industrial strategy has a fully operational governance framework. Implementation is led by a ministerial task force, which is overseen by the economic and industrial strategy cabinet committee. This is further supported by a cross-Whitehall programme board, which brings together senior officials in government to drive delivery.

--- Later in debate ---

[Lord Fox (LD)]

I thank the Minister for that Answer, but he did not include in his list the Industrial Strategy Council, which is designed to oversee this process. In a letter written to me on 16 February the Minister said, “Our plans to announce the formation of the Industrial Strategy Council by spring are progressing well”. I remind him that British Summer Time has now passed, and I am not aware of more than one member of this council. Can the Minister tell us when the full list of members of this council will be announced and when, at last, it will meet?

[Lord Henley]

My Lords, I am afraid that I cannot give the noble Lord a precise date. I accept that it is not spring and that British Summer Time has ended. I had better say that, as the noble Lord knows, one member, the chairman, has been announced. The remaining members will be announced—dare I say it—shortly. I look forward to being able to share the names of those members with the noble Lord—in due course.

Draft National Policy Statement for Geological Disposal Infrastructure

Debate between Lord Fox and Lord Henley

Thursday 6th September 2018 Grand Committee

[Lord Henley]

I am not going to speculate on what exactly will be found to be suitable—I will give way in a minute if the noble Lord, Lord Fox, will let me answer the question. As the noble Lord made clear, it is not the most exact science. We have to find a suitable area and it might be that it can be adapted in some ways. I cannot speculate on that; it must be a matter for future processes. It is not only the community involvement that we are looking for; it is also getting the geology right. Then we can move ahead.

[Lord Fox]

I was actually rising to help the Minister. The answer is in the appraisal of sustainability report, which specifically states that the geology should,

“isolate and contain the radioactivity for a very long period”.

That wording is dropped in the national policy statement and is replaced merely by “stable”. Will the Minister confirm that the imperative to contain and isolate remains the Government’s definition of the correct geology?

[Lord Henley]

I am fairly sure that that will be the case. I congratulate the noble Lord on spotting a marginal difference in the two—the noble Lord speaks as a greater expert than I am. I would be grateful for the opportunity to write to the noble Lord in greater detail. It is important that we get these things right. That is why I have made it quite clear that no decisions have been made. This is not an attempt to impose something on Cumbria that it does not want; it is not something to impose on the Thames Valley—I am thinking of community involvement in Staines or Heathrow or wherever. It is not something that we are proposing. We want to find somewhere with the right geology and the right community involvement.

Nuclear Sector Deal

Debate between Lord Fox and Lord Henley

Thursday 28th June 2018 Lords Chamber

[Lord Henley]

My Lords, I welcome the welcome of this deal by the noble Lord, Lord Grantchester, and I am pleased to be able to say how happy I am that he is happy that this is good for north Wales and Chester, his part of the world. I cannot give precise confirmation in answer to his question about Trawsfynydd, but I can confirm that there is new money coming in—money for advanced manufacturing and construction programmes from the Government, and money to invest in the national supply chain.

We also expect to see a 30% reduction over the years in the cost of new-build projects and also—very important for my part of the world, west Cumberland—reductions in the cost of decommissioning of some 20% over the years. This is a good deal not just for north Wales but for the whole country.

[Lord Fox (LD)]

My Lords, we generally welcome this announcement, with some reservations. In the Minister’s introduction, not much emphasis was given to decommissioning and waste disposal, which take up a large proportion of our nuclear industry at the moment. Perhaps the Minister can explain how this sector deal will reflect on that.

The Minister also mentioned the number of people employed in the industry, but there is likely to be a shortfall in skills if the expansion, as envisaged by the Government, goes ahead. The need for developing more skills in this industry, as well as many others, is clear. Perhaps the Minister could reflect on that.

Finally, there is a terrible irony in this announcement’s being made in Wales. I feel another Peer twitching behind me because just this week the Swansea Bay tidal lagoon was scrapped by the Government. This was an excellent example of a renewable programme. Does this sector deal reflect on the Government’s cooling even further on renewables?

[Lord Henley]

My Lords, I was wondering when the noble Lord would get on to Swansea Bay. We dealt with that in a Question only the other day. I think there was recognition from all parts of the House, other than on the Liberal Benches, that it would not be wise to go ahead with a project that would cost the consumers of electricity—remember, it is the consumers who pay for that electricity—three times as much as Hinkley Point, which is not a good deal for the people of Swansea or those around it.

As for decommissioning, yes, that is very important. We will continue our work on decommissioning and, as the sector deal makes clear, we are looking, over the next 20 years, or by 2030, for reductions in the cost of decommissioning of some 20%. That is important.

The noble Lord also mentioned the number of jobs in this area and the importance of making sure that we both generate people with the right skills and attract people with the right skills to this country. That is something that we are aware of. Currently, the industry provides long-term employment for some 87,500 people. The deal will potentially support 100,000 highly skilled jobs, in locations from Cumbria to Somerset. We will make sure we have people with the right skills to perform those jobs.

Airbus

Debate between Lord Fox and Lord Henley

Tuesday 26th June 2018 Lords Chamber

[Lord Henley]

My Lords, I and other Ministers take these concerns seriously. That is why my right honourable friend the Secretary of State responded to this point yesterday in another place and made it quite clear that he was listening to the concerns of Airbus, just as I made it clear that we were. The important point to remember is that the analysis put forward by Airbus was based on a no-deal scenario. As the noble Lord is aware, we will continue to negotiate, and we hope that those negotiations will achieve a result that will be good for British business.

[Lord Fox (LD)]

My Lords, the Minister is right to say that, in future, we need the investment of Airbus and companies like it with or without Brexit. However, the tone of the rebuke that came from his government colleagues over the weekend was inappropriate. The Foreign Secretary and the Health Secretary took a tone with Airbus that was absolutely counterproductive to future investment in this country. Will he join his Secretary of State, Greg Clark, in rebuking his colleagues and admit that it was not appropriate language?

[Lord Henley]

My Lords, I do not think that it is for me to rebuke my colleagues somewhat higher up in the pecking order than I am. I am glad, however, that the noble Lord noted the tone used by my right honourable friend in response to a Question in another place yesterday on this subject. He made it absolutely clear that he and other Ministers in the department for business are prepared to listen to the concerns of business; we will continue to make sure that those concerns are taken into account in our negotiations.

Brexit: Science and Research Funding

Debate between Lord Fox and Lord Henley

Tuesday 5th June 2018 Lords Chamber

[Lord Fox]

To ask Her Majesty’s Government what steps they will take to ensure that there will be the same levels of funding for science and research if the UK withdraws from the EU.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, as set out in the Government’s industrial strategy, we are investing an additional £7 billion R&D funding by 2022, and aim to reach 2.4% of GDP by 2027. As my right honourable friend the Prime Minister made clear in her Jodrell Bank speech, we also want to continue our mutually beneficial relationship with the EU on research and innovation. This includes the option fully to associate ourselves with the excellence-based European science and innovation programmes.

[Lord Fox (LD)]

My Lords, I thank the Minister for that Answer. The numbers are to the Government’s credit: we are moving towards our research and development investment being close to where it should be. However, it has not necessarily answered my Question. In the event of the United Kingdom departing from the European Union, as the Minister alluded to, the cost of associating with a number of schemes with which, in his words, we wish to associate ourselves, will be very high. If we wish to participate—pay to play—in Horizon 2020 Future, if we wish to participate in the European defence fund, if we wish our students to participate in the Erasmus exchange programme, they alone will cost many billions of pounds. Will he undertake that there will be money additional to that number for those things to continue? If not, the United Kingdom’s science and technology industry and community will lose out. Will he make that commitment?

[Lord Henley]

My Lords, I am not going to make any commitment in advance of the negotiations. As the noble Lord is aware, it is important that we get a good deal here, and I think it is in the interests of both the United Kingdom and the EU. The noble Lord will be aware of what Pascal Lamy said only a year ago:

“Whatever Brexit modalities are agreed between the UK and the EU by 2019, full and continued engagement with the UK within the post-2020 EU R&I programme remains an obvious win-win for the UK and the EU”.


The UK has one of the strongest science bases of all European countries. We want to continue negotiating on that basis, and we think that the EU does as well.

Proposed Merger of Sainsbury’s and Asda

Debate between Lord Fox and Lord Henley

Tuesday 1st May 2018 Lords Chamber

[Lord Henley]

My Lords, the noble Lord’s first question was about semantics, whether this is a merger or a takeover. It is a merger, but I do not think we need bother about that. Secondly. he asked whether it will squeeze competition. I do not think it will. We are looking for benefits to consumers, but that is a matter for the CMA, and I am confident that the CMA, a body set up by the last Labour Government, has the ability and resources to do that job. Lastly, he asked about working with the Small Business Commissioner. The Statement makes it quite clear that my honourable friend had already spoken to the Groceries Code Adjudicator. If it is appropriate that he talks to the Small Business Commissioner, no doubt he will. I will pass that on to my honourable friend and ask him whether he has.

[Lord Fox (LD)]

Asda and Sainsbury’s both say their HQs will stay, no shops will close or be rebranded and jobs are safe, yet they promise price reductions of up to 10%. That can happen only through exerting their mass to squeeze the supply chain. We have talked about the role of the CMA, but what guarantees will the Government give the British food industry? What guarantees can British farmers expect from the Government?

[Lord Henley]

My Lords, we hoped that the first matter that noble Lords would want to address was savings for the consumer, and that is something that the supermarkets are looking for. The noble Lord said that they have stated that their headquarters will stay and all their stores will stay, and therefore savings can come only through squeezing the supply chain. I do not accept that, but that is a matter for the supermarkets to address. It is something that the CMA will look at when it addresses this matter properly, as was discussed when my honourable friend made his Statement yesterday in another place. Obviously, the CMA might want to look at individual stores and whether it is right and proper that some are kept. That is a matter for the CMA. As I have made clear, my honourable friend has already had discussions with the Groceries Codes Adjudicator and, to the extent that we can play a part in that, my honourable friend will continue to do so.

High Street Retailers

Debate between Lord Fox and Lord Henley

Wednesday 25th April 2018 Lords Chamber

[Lord Henley]

I agree that empty shops make the situation worse. It is up to local authorities to look at what can be done, but we are in a changing environment. Some 10 years ago, 4.5% of retail was online; it is now 17%. That is what the consumer wants and, in the end, the consumer has to be king in a sector such as retail. It is up to the sector itself—that is why the Government want to talk to the sector—to look at the changing nature of what is happening and adapt to that change.

[Lord Fox (LD)]

My Lords, it is not just about empty shops in the high street; it is about people. We are seeing a migration of good retail jobs, some of which had pensions and many of which had long-term prospects. It is an erosion of people’s lives. The replacement jobs are warehouse jobs on zero-hour contracts. The Minister mentioned that his right honourable friend the Chancellor is conducting a review of the situation. Given that shops are going out of business every day, when might we hear the result of this review?

[Lord Henley]

I will leave that to my right honourable friend and he will respond as is appropriate. The point I want to stress—as I did in my original Answer and in the one I just gave—is that this is a changing environment. The noble Lord no doubt buys things online. There is an increase in people buying things online; that is quite simply what is happening. I cited the figures: 4.5% of retail was online 10 years ago and the figure is now 17%. That trend will continue. The retail sector must look at ways of adapting. Having said that, the noble Lord should not think that all online trade is necessarily going to Amazon and other warehouses; a lot of online business is conducted by the shops themselves. It is a varied picture, but it is up to the sector itself to adapt to those changes.

Companies (Disclosure of Address) (Amendment) Regulations 2018

Debate between Lord Fox and Lord Henley

Monday 16th April 2018 Lords Chamber

[Lord Henley]

I will possibly add this to my response to the noble Lord, but I suspect that giving half a postcode provides, as it were, some information without giving details. In other words, if someone added CA6 to my name one would know that I lived somewhere not so far from the noble Lord in Cumberland, but it would not say precisely where I live because it would not give the address. As the noble Lord, Lord Stevenson, said, there are other ways of finding out people’s addresses. We are just trying to provide appropriate protection.

[Lord Fox]

Could the Minister share that information with me as well, and perhaps others, as we are all agog to know why this might be the case?

[Lord Henley]

I will write to the noble Lords, Lord Campbell-Savours, Lord Fox and Lord Stevenson. I will make sure that a copy of the letter is placed in the Library. With those explanations and the general support of the House, I commend the regulations to the House.

Nuclear Safeguards Bill

Debate between Lord Fox and Lord Henley

Report stage (Hansard): House of Lords
Tuesday 20th March 2018 Lords Chamber

[Lord Broers]

My Lords, I will make some brief remarks in answer to the noble Viscount, Lord Trenchard. The research we are talking about here is not necessarily just in fusion—it includes fusion, but that is a great big project—but in areas that are ancillary to a certain extent but terribly important. Research is going on everywhere into radioactive waste disposal, but we happen to lead that. I do not think that this defeats the noble Viscount’s ambition—which is my ambition—that our own industry does a lot and gains a lot from that. It also gains a lot from being accepted by the community, so that when our advances come up, others will use what we did. The same is true of radiological protection, which is always a problem with workers around nuclear plants. So it is not just the new reactors, although the one gap in our knowledge is what is happening to the new generation fission reactors beyond the EPRs that people are working on. We really need international collaboration.

With respect to our own ambitions, I entirely support the noble Viscount in terms of SMRs. We are dying to get going—to be specific Rolls-Royce is dying to get going—on SMRs. In fact, Rolls-Royce tells us they are spending £1 million a month keeping that programme alive and waiting for the Government to make a decision on the competition which I hope will come.

Also, in fusion, there is Tokamak Energy. This is a very ambitious small company which feels it can contain fusion in a spherical tokamak, which is a fascinating thing. I should love to spend a lot of time talking about it. It is a very clever and effective way to up the efficiency of the use of the magnetic field to confine the plasma. So there is more to this research than just a few of the most obvious things. I think that is greatly in support of Amendment 7. I also support Amendment 6. I agree with the noble Lords, Lord Fox and Lord Hunt, who mentioned this. I think the independent review is designed to help the Government and not be a hindrance.

[Lord Henley]

My Lords, I want to begin by adding to something that the noble Lord, Lord Fox, said. He said that I repeatedly say, “I believe, I believe”, and that the House has to take it on trust. I hope this goes beyond me and officials within the department. We have seen what is happening when it comes to nuclear safeguards—

[Lord Fox]

I should say that was not intended in any way to impugn the noble Lord’s integrity in his answers.

[Lord Henley]

I was not suggesting that the noble Lord was doing that in any way whatsoever.

Since Second Reading, I have visited Sellafield—well, obviously I have visited it on occasions in the past because it is in my home county, but I visited it again—just to see what nuclear safeguarding amounts to. After all, Sellafield contains two of the three sites that will be relevant in terms of nuclear safeguarding. I cannot say that a one-day visit has turned me into an expert in any way. I would not want to claim that, but I can say that I can go beyond, “I believe”, and say “I have seen”.

--- Later in debate ---

[Lord Henley]

My Lords, I am grateful to the noble Lord, Lord Teverson, for moving his amendment, and for the contributions of other noble Lords. I accept that it will continue to be important to attract—as the noble Lords, Lord Hunt and Lord Warner, and my noble friend Lord Selborne put it—the brightest and the best, to ensure that we maintain our excellence in the nuclear field. This amendment, however, is somewhat more limited in scope than that. Our future immigration system will be set out shortly and it would not be right for me to go into it. As my right honourable friend made clear in his Statement on 11 January, we will ensure that businesses and communities, as well as Parliament, have the opportunity to contribute their views before any decisions are made about the future system that the Home Office will be developing.

[Lord Fox]

Can the Minister confirm that the issues rehearsed in this debate have been presented by DBEIS to the Home Office and the people drawing up these Immigration Rules?

Public Services: Corporate Governance of Businesses

Debate between Lord Fox and Lord Henley

Tuesday 13th March 2018 Lords Chamber

[Lord Henley]

I am grateful to my noble friend for that response and I am aware of the Lord Mayor’s campaign. In fact, I was present—if I remember the precise event—at the launch of that campaign by the Lord Mayor. My right honourable friend the Prime Minister has also always made her views clear about the importance of corporate governance and reforms thereof. That is why we have brought forward this package and why, as I said, the Financial Reporting Council is consulting on it.

[Lord Fox (LD)]

My Lords, the role of the shareholder is very important in maintaining corporate governance, but increasingly the share registers of Britain’s companies are dominated by passive shareholders who do not have the capacity to oversee the corporate governance of the companies they own. Will the Minister explain who, in the absence of the shareholder, is the prime overseer of the board to maintain corporate governance?

[Lord Henley]

My Lords, as I said, the code and its revisions will be important, but it is also important that shareholders play their part in this process. We have considered that and it is why we have already brought forward certain reforms to increase shareholders’ knowledge. For example, shareholders can now see when companies have significant shareholder opposition to directors’ pay. The Investment Association’s public register was launched in December and a number of investors—that is, shareholders—are already using this information as a tool to inform their voting in the upcoming reporting season. If we can improve shareholders’ knowledge, that will improve what they can do in controlling their companies.

Nuclear Safeguards Bill

Debate between Lord Fox and Lord Henley

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

[Lord Henley]

I think I answered that question at Second Reading and gave a figure to the noble Lord. Rather than trying to guess or remember what I said on that occasion, I will write to him. But I am perfectly happy that we have made that commitment. There will be sufficient funds and then there will be ongoing costs—the noble Lord is right to distinguish between the two—and again, we are happy about that.

[Lord Fox]

When the Minister writes that letter, and assuming we all get it, can he please include some indication of the Euratom assets that will be assumed by the new organisation and some estimate of the liability that comes with those assets?

[Lord Henley]

Obviously the noble Lord is right that assets belonging to Euratom are in there. I do not think I am giving away any secrets if I say that on my visit I saw physical things that were Euratom assets; there will also be software and other things. I am sure that deals will be done as part of the negotiations, and some of those will be transferred over. I do not think I can go any further at the Dispatch Box and I would not want to, but if there is anything more that I can say in a letter then I shall. I will make sure that my letter goes to all noble Lords by whatever means in this inclement weather—we will get it to the noble Lord—and place copies in the Library, which is where people like to find them.

--- Later in debate ---

[Lord Henley]

My Lords, I accept that this is a probing amendment and that the noble Lord wanted to go wider than the Bill itself and beyond safeguarding to problems facing the entire nuclear industry, and in particular the need for skilled workers. The noble Lords, Lord Hunt of Kings Heath and Lord Teverson, are worried about whether I and the department have sufficient backbone to take on the Home Office and others in these matters. I give him an assurance that we accept the importance of getting the right skilled workers in, just as we always have. I understand the importance of that because on my recent visit to Sellafield I saw some of the construction work and how very specialist it is. It is not just the skilled workers but the type of concrete that has to be used and all such matters—other noble Lords will know this far better than me. More generally on that point, BEIS knows that there are shortages in certain areas and will do its bit within government to make sure that the Home Office understands the importance of our being able to attract the right staff more generally.

On the question of having the right staff in the very specialised field of nuclear safeguarding, the amendment attempts to ensure freedom of employment for specialists employed in that area. That is obviously a matter of particular interest in the light of the Government’s preparations for establishing the domestic nuclear safeguards regime which, among other important work, means securing high-quality safeguards staff in the right quantity for the ONR.

We are working very closely with the ONR to ensure that it is in a position to regulate the UK’s new civil nuclear safeguards regime that will follow withdrawal from Euratom. That includes, among other preparations, recruiting and training additional inspectors and building additional institutional capacity. I have already outlined the ONR’s staffing numbers and estimates. I referred to that in the letters sent on 20 February—so all noble Lords should have had copies of those, even the noble Lord, Lord Grantchester.

Given the importance of attracting the right staff to work in this specialist field, the Government are committed to ensuring that the United Kingdom nuclear industry has the required skilled personnel to deliver robust regulatory regimes. The Prime Minister has been clear that we will always welcome those with the skills and the expertise that we need, whether they come from Europe or the rest of the world—as we do now. We will also ensure—if the noble Lord will bear with me—that we manage our immigration system in the way that best serves the national interest. That is why we will be using our best influence with the Home Office—and I am sure that the Home Office in due course will be able to respond. I give way now to the noble Lord.

[Lord Fox]

Picking on the language, the Minister talked a number of times about skilled people. The noble Lord, Lord Hunt, made the point that the definition of “skilled people” is the problem. Will the Minister acknowledge that issue and carry that point in the discussions he is having with other agencies?

[Lord Henley]

As I said, we are in discussions with the ONR in relation to the Bill to make sure that it can get people with the appropriate very specialist skills that we need for safeguarding. That is why we are going to have the right regime in place by next year.

The noble Lord then asked me to go further on the more general point—it might be construction for the nuclear industry or a whole host of other things. Yes, BEIS will continue to operate as it always does and to offer help and guidance to the Home Office as it develops policy in this field.

[Lord Fox]

For information, some of the researchers who work in the nuclear fusion project, for example, are paid below the threshold that gives them the privilege to come into this country. We are not just talking about steel fixers but about quite serious researchers who, because they have taken an academic career, are not paid above the threshold. So it is a very serious issue.

[Lord Henley]

I am fully aware of the concerns of the noble Lord and of the industry. Obviously it is a matter for the Home Office to develop these policies, and I am very grateful that a Home Office Minister—just by chance—happens to be sitting near me; she will listen to this and take it back to her colleagues. I repeat that we are satisfied that we can deal with safeguarding. Our concerns, the noble Lord’s concerns and other concerns will be dealt with. Proposals for a future immigration system will be set out shortly. That is something that my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy will play his part in.

The noble Lord said that his amendment was a probing one. I hope that I have given the appropriate assurances for him to withdraw it.

Retail Trade: Online Suppliers

Debate between Lord Fox and Lord Henley

Wednesday 28th February 2018 Lords Chamber

[Lord Henley]

I do not think I can take the noble Lord much further than I have at the moment. Colleagues in the Treasury and in Revenue & Customs are aware of some of these problems and are looking at them, and he will be aware of commitments that were made in our manifesto. I cannot take it much farther than that.

[Lord Fox (LD)]

My Lords, the Minister is very sanguine about what is going on in our high streets, but today, Toys “R” Us went into administration, putting about 3,000 jobs at risk and Maplin has called in the administrators. There is a crisis on the high street. What are the Government doing to recognise the pressure that the digital economy is putting on the physical shops on our high street?

[Lord Henley]

We recognise this. As the noble Lord will be aware, we have made changes to the rates system to provide some help to the high street and will continue to do so. We have also established the Future High Streets Forum, which is chaired by my honourable friend the Minister for the Northern Powerhouse and Local Growth, Jake Berry. That will look at what we can do with retailers, but it is obviously up to retailers, as I said, to adapt to a marketplace changing as a result of consumer demand.

Nuclear Safeguards Bill

Debate between Lord Fox and Lord Henley

Committee: 1st sitting (Hansard): House of Lords
Thursday 22nd February 2018 Lords Chamber

[Lord Henley]

The noble Lord knows that he always gets wisdom from me. I want also to say that I am not necessarily going to respond to all the points in the course of this debate because an awful lot of them apply to later amendments. Nevertheless I will give a fairly full response, but I shall start by making a pretty fundamental point, made by my noble friend Lady Neville-Rolfe. It is that we are where we are. My noble friend supports this Bill because, as she said, it is very important that we have plans in place for when we leave Euratom. We are going to leave Euratom at the same time as we leave the European Union in March of next year. That was dealt with in the notice of withdrawal Bill, now the European Union (Notification of Withdrawal) Act 2017. The legislation has been through both Houses of Parliament and has the support of the party opposite and others.

What I want to make clear to the Committee is that we are determined to continue to have a constructive and collaborative relationship with Euratom and with all our other international partners. The withdrawal of the United Kingdom from Euratom will in no way diminish our nuclear ambitions, and I make that clear to the noble Lord, Lord Broers, and others. Maintaining the continuity of our mutually successful civil nuclear co-operation with Euratom and international partners is going to be a key priority for us. As a member of the International Atomic Energy Agency, we are committed to have in place nuclear safeguards. I should remind the Committee that these have nothing to do with safety. Nuclear safeguards are reporting and verification processes by which states demonstrate to the international community that civil nuclear material is not being diverted into military or weapons programmes. The United Kingdom has been a member of the IAEA since its formation back in 1957.

Under the Euratom treaty, the civil nuclear material and facilities within member states are subject to nuclear safeguards measures conducted by the European Commission on behalf of Euratom. Euratom also provides reporting on member states’ safeguards to the International Atomic Energy Agency, which conducts nuclear safeguards globally. Nuclear safeguards measures include reporting on civil nuclear material holdings and development plans, inspections of nuclear facilities by international inspectors, and monitoring, including cameras in selected facilities. I repeat that nuclear safeguards are distinct from nuclear safety, which covers the prevention of nuclear accidents, and nuclear security, which covers physical protection measures. Those are the subject of independent regulatory provisions and we shall move on to them in due course.

As was made clear by my noble friend last night and I make clear again today, the European Union and Euratom are uniquely legally joined. Euratom shares a common institutional framework, making use of the same institutions; namely, the Council, the Commission, the European Parliament and the ECJ. For example, the European Commission has an active role in shaping and enforcing Euratom rules and it currently plays a central operational role on safeguards in the UK. As was further made clear by my noble friend last night, Euratom is also subject to the jurisdiction of the ECJ.

When the Prime Minister formally notified our intention to leave the European Union in June, she also commenced the process for leaving Euratom. That notification was debated and authorised by Parliament through the European Union (Notification of Withdrawal) Act 2017 which, as I have said, had the full support of both Houses of Parliament. The United Kingdom will therefore withdraw from Euratom in 2019 at the same time as withdrawing from the European Union. That is why we need the legislation before us now to be in place.

The United Kingdom’s current nuclear safeguards regime operated by Euratom will cease to function in the United Kingdom as a result of our withdrawal from Euratom. The Nuclear Safeguards Bill will ensure that we have the right regime in place for the Office for Nuclear Regulation to regulate nuclear safeguards. I reassure the Committee that the Government are meeting the challenges that clearly lie before us. We have already made great progress in the work that we are doing to secure continuity for our nuclear industry by establishing long-term arrangements to secure nuclear safeguards. The Queen’s Speech on 21 June last year included our intention to take up the powers that will set up a domestic nuclear safeguards regime, and that is what this Bill seeks to do.

[Lord Fox]

My Lords, perhaps I missed them, but what are the long-term arrangements that have already been established?

[Lord Henley]

My Lords, will the noble Lord bear with me? I said that I was going to play a fairly long innings and I want to explain these matters in full. There is no point in the noble Lord interrupting at this stage. I am going through this carefully and slowly in order to explain what we are going to do to make sure that we have the right things in place for when we leave Euratom and the EU in March of next year.

Our intention is for the new domestic regime to exceed the standard that the international community would require from the United Kingdom as a member of the IAEA. It will be run by the Office for Nuclear Regulation which, as the Committee will know, already regulates nuclear safety and nuclear security. We will also be agreeing a new voluntary offer agreement with the IAEA. I believe that we all recognise the special contribution—

Taylor Review

Debate between Lord Fox and Lord Henley

Wednesday 7th February 2018 Lords Chamber

[Lord Henley]

I am sorry that the noble Lord was disappointed with my response, as I think that we went a long way. He failed to recognise that we are announcing further consultation on some of the grey areas in which there is a lack of clarity. The noble Lord will be aware that we have the Employment Rights Act 1996, and the law on the subject has grown and developed as a result of cases in the courts since then. We all accept that there are grey areas in which there is a lack of clarity regarding employment. That is why my right honourable friend wanted to set up this review and why he has responded with the Statement on good work today. He has also responded with a series of consultations, the first and most important of which is the consultation on employment status. We have responded as we did to get that correct so that we can then move on to legislate where it is necessary. We look forward to helpful contributions from the noble Lord and his party in due course.

[Lord Fox (LD)]

My Lords, on employee status, a central part of the Taylor review concerned dependent contractor status. The Government seem to be agnostic on that. They are going into consultation, but what mood are they in? Are they in favour of moving towards dependent contractor status? If not, why not—and how long will this consultation process take? People are already working in this economy and being exploited by it. Will this require primary legislation? If so, what timetable do the Government envisage before we deal with this issue on the Floor of this House?

[Lord Henley]

My Lords, the noble Lord seems to think that we need to look only at dependent contractor status but the whole question of the boundaries between employed status and being self-employed also needs to be looked at. That is part of the consultation and I look forward to hearing his comments on that in due course as part of the consultation. Thinking back to the Employment Rights Act 1996—I do not remember its passage, though it is not that long ago—it is very likely that inclarities, if I may call them that, will emerge as a result of the consultation and will need to be looked at, as has happened since 1996. For that reason we are consulting—just to keep the noble Lord busy, there are three other consultations as well, where we would again be grateful for his comments—and it is quite likely that we will need to legislate as a result. As to the likely timescale for bringing forward primary legislation, I am afraid that I cannot give any assurances to the noble Lord. He will be aware that both Houses are rather busy with quite a lot of legislation at the moment.

Industrial Strategy

Debate between Lord Fox and Lord Henley

Monday 27th November 2017 Lords Chamber

[Lord Fox (LD)]

My Lords, I draw attention to the interests registered in my name. Like the noble Lord who has just spoken, I am pleased that the words “industrial strategy” are coming from the Government’s lips. In the life-cycle of an industrial strategy, we are perhaps at the most optimistic bit before cynicism and despair begin to set in. I shall try not to hasten us down that curve but there are some points that we should perhaps bring out today. It behoves me most of all to point out that the reference to Brexit, made as an aside in the Statement, clearly indicates the effect that the Government believe it will have on our industrial capability—and it is not positive.

This should be set into the context of the OBR’s recent forecast which downgraded GDP by £45 billion by 2021. That is around £700 per person. We would have valued a sense of urgency in the report but there has not been any. It has been a long time in the making. The Minister pointed out that we have been through a long consultation and a long Green Paper, which was almost a year in the cooking. I acknowledge that we need a long-term strategy but, because it is a long-term strategy, that does not mean it needs such a long-term gestation.

For us, the most important part in this—it has received few column inches despite the font size and photographs, as pointed out earlier—is the implementation side. Without implementation, this is just another brochure; another tour of the industrial landscape. It is right that it falls to a Cabinet committee, chaired by the PM, to drive this issue forward. I would welcome the Minister’s comments on how often the committee meets, how much energy we can expect from it and how often Parliament will receive a progress report from it.

Like the previous speaker, we also welcome the establishment of the industrial strategy council—or we think we do because there is so little detail it is almost impossible to know what it is, what it is for, how it will be resourced, how it will be staffed and to whom it will be answerable. Like the previous speaker, we would welcome answers to those questions.

Then we come to the grand challenge. There are noble Lords on many Benches who think this is a rehash of picking winners. I know the Statement went out of its way to decry that view but, however one looks at it, there is an element of picking sectors that we think are needed and can be successful, and investing in them. One can call that something else or picking winners. I urge the Minister to ensure that we are not cutting out funding into the wider exploration and seeking of knowledge because, without investment in that kind of research, graphene would never have been discovered. We still need to seek out the unknown unknowns in order to advance our science and keep us moving forward.

Perhaps I may add another warning on DARPA. This is not a DARPA process for one important reason—there is not the money that DARPA has to throw at these challenges. There is not the huge industrial military complex that sits behind it, which has itself enormous US Government funding for these initiatives. We should be careful when we bandy the word DARPA around.

That said, overall the topics that have been chosen for the challenge are broadly welcome. I note the inclusion of clean growth, which was hardly mentioned in the Green Paper and not at all in the consultation. It was mentioned extensively in the Lib Dem response to the consultation so I shall claim that as a Lib Dem win. However, the Government’s record casts doubt on their commitment to clean growth. They have scrapped subsidies for solar and offshore wind and cut funding for carbon capture and storage—even though we know that kind of support works—and, further, they have sold off the Green Investment Bank. This announcement is either a damascene conversion or just more paper.

I have just one question on the life sciences strategy. The Government commit the NHS to its role in the life sciences strategy: what extra resources will be given to the NHS in order for it to take up the research role it has been set?

The Government want to increase research and development spending to 2.4% of GDP by 2027. That of course is only the average, as has been pointed out, and a more ambitious target would be more sensible. However, there is not very much new money. If you do the maths, you will find that it is about £0.4 billion on top of what has already been announced. Certainly that is what has been said in the other place. The £2.5 billion investment fund to be created by the British Business Bank was not costed in the Red Book, raising questions of where the money will come from. Perhaps the Minister can enlighten us. These commitments are inadequate compared to what is being lost—the £2 billion provided by the European Investment Fund for start-ups and the €3.6 from Horizon 2020, which will disappear after that time.

Catapults are important and I am pleased they have been mentioned. I have two points. The paper mentions that there are poorly performing catapults. Can the Minister enlighten us as to how many are performing well and how many are not? Secondly, I note that the highly-regarded CEO of Innovate has just stepped down. Perhaps we can hear what that is about.

We on these Benches have said before that we will need the right people to implement this strategy. There has to be a joined-up national skills strategy.

[Lord Henley]

I thank the noble Lords, Lord Fox and Lord Mendelsohn, for what I take to be their general welcome of the industrial strategy. The noble Lord, Lord Fox, claimed that parts of it were in response to comments from the Liberal Democrats in their response to the Green Paper. He claimed that there was a lack of urgency, but when one publishes a Green Paper in January, as we did, to produce a response of this kind by December is doing pretty well. If we had produced it any faster, the noble Lord would accuse the Government of hurrying their response. He cannot have it both ways and my right honourable friend has got it just right. I am grateful that I joined the department only four weeks ago, so came in at the tail end of the development of this response, but I can assure the noble Lord that we have been busy these last four weeks going through draft after draft of the White Paper to produce this document, which went to the printers only last night.

The noble Lord, Lord Mendelsohn, worried what the size of the document compared to the Green Paper indicated about productivity gains. He noted that it was so many pages longer than the original Green Paper but then said that the font was larger, although he did not point out that the pages were smaller. I will have to take advice on whether there are more words in this document, when the pictures are taken out, than there were in the Green Paper. All I can say to both noble Lords is that it has been a very considered process with, as I say, some 2,000 responses that had to be carefully considered. We had to talk to many people and develop our policies, as well as take it the whole way around the Government.

I am grateful to the noble Lord, Lord Fox, for emphasising the role of the Prime Minister. It is important to make it clear that the Prime Minister is fully committed to the strategy, as are all members of the Government. If this was a Business, Energy and Industrial Strategy document coming merely from the department, it would be nothing. The fact is that it reaches out to all other departments, which have all played their part and helped to produce it. As we implement the ideas behind it, other departments will contribute, be they the Department of Health, as mentioned by the noble Lord, or education and so on. The point is to get beyond the siloisation that we have seen on many occasions in different Governments of all persuasions; we want to bring a truly cross-government feel to this.

Both noble Lords asked a number of questions, which I will try to address. I hope I can provide responses that will satisfy them, but if not, I will be more than happy to write in due course. The first point made by the noble Lord, Lord Mendelsohn, was that he felt that the White Paper does not deal with regional imbalances. I assure him that this matter is of great concern to me more than most. He will know how activity can vary a great deal across the regions. If he looks at the north and the Midlands, he will find that productivity can be 9% to 14% below the United Kingdom average. We had quite a few speakers from Wales earlier today; productivity in Wales can be around 19% lower than the United Kingdom average. We want to reach out to the regions, to Wales and to Scotland, to ensure that we bring them up to higher levels of productivity. If we fail in that, we will have failed in all other ways.

Both noble Lords also asked about the industrial strategy council and wanted assurances that it would be independent. I can give that assurance and that it will include business leaders and experts. We will be able to give further details about the council in the coming months.

I was asked about British Business Bank investments. I can give an assurance that £2.5 billion of new funding is on offer and that further announcements will be made in due course. I was also asked about what further investment was required and how much new money there is. I have given the figures for what we are seeking to do on research and development so that we get that up to at least the OECD average by 2027. Importantly, that is just the initial target; we would like to get it up to 3% in the longer term. Going back to the question about infrastructure as a whole, we are looking at £31 billion in the pipeline for the future.

The noble Lord, Lord Mendelsohn, asked about measuring our goals and how we will seek to assess the success of the industrial strategy in due course. At the highest level we have a set of goals relating to productivity. We believe that it will be for the industrial strategy council to assess progress on those goals and the others outlined in the strategy.

I am beginning to feel that I am using up time that I should not, but perhaps I may turn to one or two of the questions asked by the noble Lord, Lord Fox, particularly on NHS funding. I refer him to what the Chancellor announced in the Budget when he referred to new funds. The noble Lord also asked about clean growth and whether the Government are cutting funding for renewables. I assure him that we have particularly fast growth in renewables and that we are still committed to a further £557 million for new contracts for different renewables such as offshore wind. We are seeing growth in that area.

As my right honourable friend said in another place, in the Statement and in response to questions, the industrial strategy sets out the long-term strategy that we hope to see. We hope to see developments continue in the manner made clear by my right honourable friend. I thank the noble Lords, Lord Mendelsohn and Lord Fox, for what I think was their cautious welcome. I hope that, as the strategy develops and we continue to bring it forward, that welcome will also continue.

Fourth Industrial Revolution

Debate between Lord Fox and Lord Henley

Wednesday 15th November 2017 Lords Chamber

[Lord Henley]

My Lords, I welcome the noble Lord’s enthusiasm for these matters. I think the House is grateful for his very prompt intervention.

The noble Lord recognises, as I do, that changes are coming and that we must accept them and work for them. He will have seen the Made Smarter Review that we commissioned, published only a week ago by the chairman of Siemens, and I think he would accept that we will see many more jobs; I think the review estimated this could create something in the order of 135,000 new jobs. In terms of what he was saying about greater inequality, which I do not accept, there are estimates that the fourth industrial revolution will not only create new jobs, but create them faster and create better-paid jobs. That is something we need to look at. I will certainly look at the other reviews he mentioned, but there are challenges that we must accept. These changes are happening and we must work to ensure that they happen to our best advantage.

[Lord Fox (LD)]

My Lords, I am delighted that the Minister has mentioned the Made Smarter Review, which highlights that the UK is slow in adopting digital technology compared with our industrial competitors. One of the things it proposes is to run an adoption pilot scheme and to use the north-west of England as the location for it. Does he agree that we need to hurry up the adoption of a digital strategy and that a pilot in the north-west of England would be a good way of moving that forward?

[Lord Henley]

My Lords, I shall not make any firm commitments about that review, which was published only at the beginning of the month. Noble Lords will know that we have already had a Question dealing with it. I confessed that I had not yet read the full 246 pages of the review, but I am making progress under the advice of the Leader of the Opposition, who recommended that I read it with a mug of cocoa. I will look at all recommendations. I will not make promises about the north-west of England but the noble Lord will know I have a particular interest there. I would welcome going back up there as often as possible.

Productivity

Debate between Lord Fox and Lord Henley

Tuesday 7th November 2017 Lords Chamber

[Lord Henley]

Perhaps I may correct one of the noble Lord’s statistics: it is only my fourth department since 2010. It is important to get these things correct. I am glad that the noble Lord, like the Government, welcomes the report; we will certainly take note of it. As I said, we are waiting for the industrial strategy to come out later this month, and I am grateful that he makes it clear that there are matters other than government spending which are important here, particularly in dealing with questions of productivity. We want to make sure that all levers that are available to the Government can be made use of. He mentioned purchasing. We will certainly make that clear, and I hope that other departments will do their bit. He mentioned purchasing within the health service, but there are other things that the Government can do as well, in relation to deregulation and trade policy, as well as procurement, which he mentioned.

[Lord Fox (LD)]

My Lords, I, too, welcome the Minister back to the Dispatch Box. His immediate predecessor gave those of us who are impatient for the industrial strategy White Paper a preview a couple of weeks ago. In that preview he identified three particular strands that will address the productivity issue that this commission has highlighted so well. One of those was skills, and in that he particularly highlighted apprenticeships. I am sure that the Minister has not had much time yet, but he will have noticed that the latest statistics from the manufacturing organisation, the EEF, show a 61% fall in the number of registrations for apprenticeships in the last quarter. Does he agree that this is not just disappointing, it is awful? Can he explain what the Government are doing to improve their lamentable performance over the apprentice levy, which is causing this problem?

[Lord Henley]

My Lords, I am not going to go into detail now but I am grateful that the noble Lord went to the meeting that my predecessor held and listened there. I agree that the figures are disappointing but again, if he can be patient and wait for the launch of the industrial strategy he will see what we are doing and what we are bringing together from all parts of the Government in this area.

European Union: Trade

Debate between Lord Fox and Lord Henley

Monday 28th November 2016 Lords Chamber

[Lord Henley]

My Lords, as my right honourable friend made clear in another place, there has been no compensation package for Nissan. Nissan will continue to produce its vehicles in the north-east, and we hope that all those firms in Wales and other parts of the United Kingdom will continue to produce whatever they are good at in those countries and will continue to trade freely with the rest of the European Union.

[Lord Fox (LD)]

My Lords, I refer to my interests as set out in the register. The Government are pinning an awful lot of hope on their industrial strategy. I think the Minister said that a Green Paper will be published at the end of the year, but when will we have the full-blown, finished, finalised industrial strategy that will help guide us through the Brexit negotiations and on the investments that the Government seem to be planning?

[Lord Henley]

My Lords, the noble Lord is right to point out that the industrial strategy will be a Green Paper. As it is a Green Paper, it will involve a great deal of consultation and further discussion. In due course, further papers will follow from it. I am not going to give a timescale as to when that might be.