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

Debate between Lord Fox and Lord McNicol of West Kilbride

Monday 25th March 2024 Lords Chamber

[Lord Fox (LD)]

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

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

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

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

[Lord McNicol of West Kilbride (Lab)]

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

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

Post Office Horizon: Compensation and Legislation

Debate between Lord Fox and Lord McNicol of West Kilbride

Tuesday 27th February 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, victims of the Fujitsu Horizon scandal have lacked justice for more than 20 years now. Lives and livelihoods were taken away, victims were told that it was only them and were not believed, and little progress has been seen until recently. Better late than never is little consolation, especially when, in numerous cases, the victims are no longer with us. Nonetheless, the Government’s progression of the legislation to rightly exonerate those wrongly convicted is welcome and I commend the work that has been done to get us here. I also appreciate the regularity with which the House has been updated, and the Minister has come here to answer our questions. The legal work needed to make this legislation happen will require cross-party work and support, so I urge the Government to continue in the manner that has brought us here.

I turn to the Statement. What further details can we expect on the legislation being tabled, and when? Do the Government have a timeline for the exoneration to be fulfilled and for full compensation to be delivered to all those who deserve it?

Our legal system played a huge part in this scandal. Time and again, the courts believed the Fujitsu computer rather than the individual sub-postmasters and sub-postmistresses. As my noble friend Lord Browne of Ladyton has asked on many occasions—and I am sure he will again today—when will His Majesty’s Government look at overturning the premise that it is for the individual to prove that the computer was wrong rather than the opposite?

Many postmasters and postmistresses have waited far too long for redress. As we all know, justice delayed is justice denied. Dealing with that point, will the Minister tell us whether there will be an opportunity within the legislation for the 66 postmasters who have died, and the four who have committed suicide, to have their convictions overturned and quashed? Surely it is only fair for their families to also have justice and closure.

Looking at the reach of the legislation, is there a specific reason why it does not cover Northern Ireland? As we know, the Northern Ireland Justice Minister has said that she supports the Government’s line of approach, calling it the fastest and most equitable legislative solution. Would it not make sense to apply it directly across Northern Ireland? On a similar note, would the Minister update your Lordships’ House on conversations that the Government have had with their Scottish counterparts regarding overturning convictions that took place under the Scottish jurisdiction?

I would also be keen to hear whether any prosecutions were made using data from the precursor to Horizon, Capture? Did any sub-postmasters or sub-postmistresses lose money due to Capture failings? If so, surely these should also be included in the scope of the legislation.

I turn to the legal ramifications. The Statement makes it clear that a precedent will not be set for the future regarding the relationship between the judiciary and the legislature, but that is easier said than done. In future, what is to stop this case being treated as a precedent where Parliament can pass law to overturn judicial decisions?

In the case of other similar scandals, would not the Government consider taking a similar approach, especially as some people are asking whether we consider that this example could be relevant in other historic or other worthy causes? I would be particularly keen to hear what specific safeguards the Government are putting in place to protect this stance, and what advice they have received to provide them with the appropriate assurances regarding their approach.

On a slightly separate note, the Government have now confirmed with the Post Office that no investigators involved in this horrendous scandal remain working for the Post Office. This is progress, but can the Minister provide us with an update on progress not on the Wyn Williams statutory inquiry but on the Government’s own investigations?

Finally, last Monday the Business Secretary told the other place that

“while Mr Staunton was in post, a formal investigation was launched into allegations made regarding his conduct, including serious matters such as bullying”.—[Official Report, Commons, 19/2/24; col. 474.]

Today, Mr Staunton told the Commons Business and Trade Select Committee that it was Nick Read, not him, who was the subject of the misconduct inquiry. Can the Minister confirm that that is correct and, if so, where it leaves the Secretary of State?

[Lord Fox (LD)]

My Lords, I thank the Minister for allowing this Statement to be debated in your Lordships’ House. We welcome its direction of travel.

Everything that could be said about the horror and unfairness of this scandal has been said, but we need to remind ourselves, as the noble Lord did, of the crushed human lives that sit beneath this issue. The move to quash these wrongful convictions at the point of the forthcoming Act’s commencement without the need for people to apply to have their convictions overturned is welcome, and the fact that it is being designed to reduce or eliminate the bureaucratic application process is promising. But clearly we need to understand it.

To qualify for this, as I understand it, there is an understandable list of criteria that have to be met, including the offence, the contract that people had, the timings, their exposure to Horizon, technology and other things. Here I have concerns. Can the Minister confirm that it will not be Post Office Ltd that will be sifting through who qualifies to have their conviction overturned? Experience has shown that it cannot be trusted; it has neither the good faith nor the processes to do this effectively and efficiently. But even if it is removed from this part of the process, it is Post Office Ltd that owns and controls most of the documentation and information that is needed to decide who qualifies for exoneration. As such, the upcoming legislation must include a duty on POL to provide documentation within a timeframe, with sanctions if they do not.

There is an overall communications issue that needs to be engaged with around those victims—what is happening to them, and how is the process going forward? If people who believe that they should be on the exoneration list are not on it, we need to know what the appeals process for them will be.

Of course, once their convictions are quashed, then we move into the compensation zone. Minister Hollinrake agreed yesterday that compensation has been delivered too slowly—I think we can all agree with that. We welcome the Minister’s comments about attempts to speed up payments, but it is clear that having three separate schemes and five different classes of victims has been a nightmare for those victims when it comes to getting through the system, and they have not been helped by Post Office Ltd—quite the opposite.

The chair of the Horizon Compensation Advisory Board, Professor Chris Hodges, speaking on the radio today made it clear that in his view POL should be completely removed from the role of processing and setting compensation payments. We agree, so can the Minister confirm that that is the Government’s intention? Of course, as the noble Lord said, this announcement covers only England and Wales, so we need to know intentions in respect of the two remaining countries. As the noble Lord asked, what is happening in Scotland and Northern Ireland? We understand the issues around devolved authorities, but what is the timing going to be and when could we see it?

There is also the issue of those who have been convicted in relation to the Capture system. Kevan Jones MP has been very clear on this, and we would like to know where that is going to go and how fast it is going to move, as with people who paid back sums to avoid the scandal that the Post Office was hanging over their heads. How will they move into the compensation zone? It is still not clear.

When will the legislation happen? The Minister talks about a July Royal Assent, which was my understanding. Given the sell-by date of this Parliament, that is running things a little fine. If possible, we need to move much faster.

As the noble Lord said, this legislation is unprecedented, and we will need time to get into the detail of what the Government are proposing. Your Lordships’ House needs time properly to assess both the effectiveness of the legislation and its constitutional implications. That is not to hold it up, but it is to do our job properly. Can the Minister tell your Lordships’ House when it will be tabled in the Commons and when we are likely to see it here? We need time for proper scrutiny, but let us get on with it. Victims are dying, victims are in financial need and victims need closure.

Paternity Leave (Amendment) Regulations 2024

Debate between Lord Fox and Lord McNicol of West Kilbride

Monday 26th February 2024 Grand Committee

[Lord Fox (LD)]

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

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

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

[Lord McNicol of West Kilbride (Lab)]

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

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

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

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

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

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

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

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

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

Post Office Governance and Horizon Compensation Schemes

Debate between Lord Fox and Lord McNicol of West Kilbride

Wednesday 21st February 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

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

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

“rip off the band aid”

in terms of the Post Office’s finances; that

“politicians do not necessarily like to confront reality”;

and, finally, that

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

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

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

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

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

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

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

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

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

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


we know that, but she goes further—

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

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

[Lord Fox (LD)]

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

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

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

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

Staunton

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

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

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

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

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

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

Horizon: Compensation and Convictions

Debate between Lord Fox and Lord McNicol of West Kilbride

Wednesday 10th January 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

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

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

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

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

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

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

[Lord Fox (LD)]

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

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

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

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

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

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

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

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

Construction Contracts (England) Exclusion Order 2022

Debate between Lord Fox and Lord McNicol of West Kilbride

Monday 13th June 2022 Grand Committee

[Lord Fox (LD)]

As the Minister knows, I am no lawyer—perhaps I should have taken a law degree before attempting this statutory instrument. I note that it is not just the European Union that can amass red tape; we seem to be doing it very well on our own, so I am not sure it can refer us to the WTO for competition.

This is a very complex model. I was caught by the idea that we appear to have been progressing without it for a while. In a sense, is this closing a loophole that has been spotted, or does this reflect a trend in how the market is going about delivering these projects? What drove the decision to table this statutory instrument now? In other words, what has caused this to happen now when it clearly could have happened some time before or in future?

In passing, the Minister mentioned benefits to consumers. I think he outlined that there would be some sort of competitive tendering process, and therefore the price of a particular project would go down in cost. I am interested in the very sharp end of the consumer experience—the connection and that kind of thing. I assume that this applies to that as well as to the larger projects. If it does not, how will a new consumer attempting to join the system experience it? As I understand it, at the moment they are given a “take it or leave it” price by the water supplier. Does that continue to be the case? Will there be an opportunity for consumers to drive down the cost to them of an individual connection or is this focusing only on much larger projects?

The other point is how this flows through the supply chain. The Minister mentioned that the tier 1 contractors are potentially liable to be most affected. However, this marks a change right down through the chain to tiers 2, 3 and others. I would be interested to know how low down their tier structure the department intends to bring suppliers up to speed on how they address their role in this change in the supply chain. Other than that, I think I welcome this and certainly look forward to the Minister’s answers.

[Lord McNicol of West Kilbride (Lab)]

My Lords, I again thank the Minister for his introduction to another very technical SI. Until his introduction, the only real question I had was around the consultation. He touched on it at the end of his introduction, but I could not find any of the details of the responses to it online. That is probably me, but could he say a little more about the feedback received as part of the consultation?

Following on from the themes of the general public and who will benefit from this SI, the Minister said there were some concerns and worries from the first-tier subcontractors. I think we all agree that the removal of “pay when paid” was good. I worry a little, if we are bringing back special circumstances which in reality are “pay when paid”—although under slightly different processes in terms of certificates and completions—whether we are opening it up. Is the Minister worried about this at all or is the SI tight enough to prevent “pay when paid” returning to the construction sector?

The final point has been touched on by the noble Lords, Lord Berkeley and Lord Fox, and is about fair competition and the general public. Does the Minister believe there will be any increase in price or unitary charge for the general public in this SI? With that, I will leave my questions.

Subsidy Control Bill

Debate between Lord Fox and Lord McNicol of West Kilbride

Lords Hansard - Part 2 & Report stage
Tuesday 22nd March 2022 Lords Chamber

[Lord Fox (LD)]

My Lords, as the Minister has set out, this group includes a number of concessions around the transparency issue. Again, we should thank him for coming some of the way towards the arguments that surfaced in Committee.

We welcome the reduction in the reporting threshold from £500,000 to £100,000. We recognise that that is some way short of the level that many external organisations were calling for and indeed that we wanted, but we also understand that it is a big step for the Government and they have come a long way towards where we think it should be.

I put my name to Amendment 20, tabled by the noble Lord, Lord McNicol, and I am looking forward to hearing his proposal. I am still not 100% convinced by what the Minister said, although he worked hard to explain to us why it would not be an issue. I think some of the points he made were right—sorry, acceptable; I am sure they were all right.

On the Minister’s first point about multiple payments to different branches, if they all have the same parent company, I start to get concerned about that issue. However, the biggest point was that if nefarious activity is going on and a £99,999.99 subsidy is being paid out by this mythological nefarious authority, the Minister said that that would no doubt surface. I am not sure how it would do so, given that there is no reporting requirement, unless that extra penny is forthcoming. Apart from sleuthing, submitting freedom of information requests and citizens’ activity, how does the Minister expect this information to surface—or indeed is he going to have an investigative unit at his side, ready to swoop on such nefarious organisations? I am interested to hear how this disclosure or uncovering process will work.

Other government amendments mean that the declaration of subsidies scheme is being improved in time terms, and that is also very welcome. The Minister was talking about a review process. I think he would be wise to maintain a rolling review in the department to be able to surface any issues and problems. This is a new process and a lot of different organisations will be trying to bed into it. The sooner that any misunderstandings or misapprehensions are understood, the sooner the department and the Government can do something about it.

In closing, I have a personal request. I probably should really understand this but I still do not: could the Minister clarify the rules regarding the declaration of subsidies awarded within subsidy schemes? I have heard different wordings at different times throughout the process, so perhaps the Minister could clarify once and for all how and if individual subsidies awarded under subsidy schemes will or will not be reported.

Overall, we are pleased with the amendments in this tranche. The Minister has moved on transparency, but we hope he will keep that situation under review with a view to more transparency in future rather than less.

[Lord McNicol of West Kilbride (Lab)]

My Lords, this group of concessions, as the Minister has outlined, is significant because of both the number of amendments and, more importantly, their text and practical effect. We are grateful to the Minister and the Bill team for their engagement on these issues over many weeks now; our discussions have been very useful, and although we have not achieved everything we wanted, as the noble Lord, Lord Fox, said, the new subsidy control scheme will be far more transparent than the Bill initially proposed. There are 31 amendments in this large group, 30 from the Government and one from me. I still think mine is a good amendment but I understand the Minister’s points, which we will come on to in a second.

The main issue is that we remain somewhat unconvinced of the Government’s argument in relation to the £100,0000 threshold. Given that many public authorities already have to publish details of spending at much lower levels—in many cases, it is £500 for local authorities—the £14 million cost quoted by the Minister to take the transparency threshold down from £100,000 to £500 would be well spent because that transparency would then sit across the whole of the subsidy controls and subsidies issued. However, an 80% reduction, coupled with the universal requirements across different subsidy types, is a clear step in the right direction.

To be fair, the noble Lord, Lord Fox, has already stolen a lot of my thunder in relation to Amendment 20. The points he made were absolutely spot on so I will not repeat them; I look forward to the Minister’s response. I tabled Amendment 20 in an attempt to deal with the potential for public authorities to award multiple payments that fall under the £100,000 disclosure threshold. As the Minister outlined in his opening remarks, there are a number of possible reasons why a subsidy may be given at that level. The noble Lord, Lord Fox, is right: it is the final one of those three points, about a nefarious reason why an individual in a local authority would encourage a local authority to give multiple awards under the reporting threshold. A fundamental question still sits there: how will we and, more importantly, businesses and organisations that are or could be affected by a subsidy, challenge it if we have no sight of it?

We would be delighted if the Minister accepted this amendment but he explained in his opening remarks why he will not. If the Government are not willing to accept it, can the Minister outline any other safeguards that could be brought in to check this possible kind of behaviour? He did not touch on safeguards in outlining the three points; his response was that the Government do not expect this to happen or do not believe that it could happen. I hope that the Minister can also confirm, because this is important, that the ministerial delegated powers to amend the transparency thresholds will not be used before—I would prefer that they were not used at all, but especially before—the CMA and other interested parties are able to see the new system in operation. We appreciate that any future increases are subject to a cap but it would make a mockery of the process and the concession package if any of the thresholds were increased before the new system was up and running and had been tested and checked by the CMA.

One area not subject to amendments today but which we see as incredibly important is the process around MFA subsidies. At present, beneficiaries in receipt of MFA subsidies must maintain paper records, which not only increases the bureaucracy involved but goes against the grain of the general transition to paperless record-keeping. We do not believe that moving this system to a digital process would require any amendments to primary legislation, so can the Minister commit today to looking at the available options for digitising the MFA process, either as part of the department’s existing subsidy database workstream or as a stand-alone project?

I will touch on one final point about the move on upload from six months to three months. Again, I fully support this. The sooner this information is uploaded on to the database, the better for all, but we still have concerns about the right to appeal against a subsidy that a business or an organisation could be affected by. That is limited to one month; the Minister and the department have not moved that to six weeks or two months. I have some concern that we could have gone a bit further. With the reduction from six months to three months, we could have increased the ability for someone—or an organisation—adversely affected by a subsidy awarded to a competitor to challenge this by giving them a little more time. I understand the Minister’s argument about wanting the subsidy to be in place, agreed and unchallengeable, before the business will spend it, because it then has certainty. None the less, we could have given a bit more time to those who could possibly be adversely affected by it to make a challenge. With that, I again thank the Minister for the 30 amendments—it is just a shame that he could not go one more and make it 31.

Subsidy Control Bill

Debate between Lord Fox and Lord McNicol of West Kilbride

Committee stage
Monday 7th February 2022 Grand Committee

[Lord McNicol of West Kilbride (Lab)]

My Lords, it is a pleasure to follow my noble friend Lord Whitty. I agree with all his comments. I am grateful to the noble Baroness, Lady Randerson, for tabling this amendment to enable further and deeper discussion on another of the many concerns that were raised by colleagues across the House at Second Reading.

As we have already debated, although relatively briefly, the new subsidy regime will operate alongside certain legacy schemes, including, but not limited to, basic payments given under the EU’s common agricultural policy. As we have heard, the Government’s decision to include agriculture and fisheries in the scope of the new subsidy regime is an interesting one. BEIS asserts that there is logic in applying the same rules across the board. While that might make sense in some areas, doing so raises other significant issues. As we have heard from my noble friend Lord Whitty, agriculture is fundamentally different and therefore so are the issues relating to the subsidies and the subsidy control systems. That is before we even touch on the issue of devolved responsibilities.

As we know from many hours following debates on the Agriculture, Fisheries and Environment Bills, these are areas of devolved competence. Some of those matters have been addressed in discussions on the UK-wide common framework arising from the Brexit process. However, due to Her Majesty’s Government’s treatment of subsidy control as an entirely reserved matter, there is no common framework on this topic, something that we have already touched on in Grand Committee and will be returning to in later groups.

Specific nations and regions of the UK have very different interests from those of their neighbours. Public authorities will of course be able to do what they deem appropriate in the context of overarching subsidy control principles, but this is one of the areas where we may end up seeing subsidy battles and/or legal appeals. If we can reach agreement in your Lordships’ House, then we may be able to reduce the chances of some of that happening. One potential solution to some of these issues may be for the Secretary of State to establish one or more streamlined subsidy schemes covering agriculture. I ask the Minister: is that one of the department’s intentions?

I want to ask a couple of practical questions that have been subject to initial exchanges between my advisers and the Minister’s office. I thank her office for that information, but it raises some questions. Is it the case that schemes already made under the Agriculture Act, for example, will be treated as legacy schemes for the purposes of this legislation? If the environmental land management scheme, which has already been rolled out, is treated as a legacy scheme but the Defra Secretary of State later introduces a separate agricultural scheme using powers under either Act, will that new scheme be subject to the subsidy controls? If the answer is yes, will that not make it harder for everyone involved to keep track of which requirements apply and when? If so, how exactly does the decision to include agriculture in the new subsidy control regime meet the target of making the new process more straightforward and less burdensome?

A number of other issues arise around devolved authorities, many of which have been touched on. We will come on to them when we look at the CMA but, if we do not make changes to the Bill as it is currently written, we could end up with a situation in which the devolved authorities have responsibility for these delegated areas but no oversight in the Bill—no engagement with the CMA or the subsidy advice unit—and will not be at the heart of the decision-making. I look forward to the Minister’s response.

[Lord Fox (LD)]

My father spent half his working life milking other people’s cows and the other half milking cows in a small, tenanted farm. Farming is a way of life across the United Kingdom. You must be committed to it to make it work, so people are anxious when they see this subsidy scheme in such turmoil.

At Second Reading, the Minister said that including agricultural subsidies in the subsidy control regime would

“help to protect competition and investment”—[Official Report, 19/1/21; col. 1749.]

in agriculture and fisheries. First, will the Minister acknowledge that the agricultural subsidy scheme has much wider objectives than simply competition and investment? There is a range of social and other economic benefits that the schemes are supposed to be designed to protect. Secondly, how does including agricultural and fisheries subsidies in the subsidy control regime protect competition and investment better than leaving them where they are: outside the scheme?

--- Later in debate ---

[Lord Fox (LD)]

I think we are comfortable starting again on Wednesday and giving this proper time.

[Lord McNicol of West Kilbride (Lab)]

The noble Lord, Lord Lamont, has yet to respond as well. It will not take long on Wednesday.

Subsidy Control Bill

Debate between Lord Fox and Lord McNicol of West Kilbride

Committee stage
Wednesday 2nd February 2022 Grand Committee

[Lord Fox (LD)]

My Lords, those on this side welcome these three amendments. It is always hard to get those first government amendments out; after then, you can keep them coming, Minister. We have one or two suggestions about what you might like to put in them.

It is good to have a consistent approach; indeed, a consistent approach to how you value a subsidy is a good starting point. Perhaps we can then have a consistent approach to how local authorities evaluate the need for a subsidy, and to how they are regulated and managed within areas. Consistency is what we are calling for. This is clearly the first baby step towards having a control system operated from a level playing field.

[Lord McNicol of West Kilbride (Lab)]

I echo the points of the noble Lord, Lord Fox: it is interesting to see government amendments at this early stage, even though none of these issues was raised at Second Reading. Likewise, we are not going to oppose any of these amendments.

Similarly, not just on consistency but on transparency, a good number of amendments were tabled in Committee on which we are more than happy to work with the department and the Minister to bring them back on Report. This will hopefully deal with a number of issues on which we have concerns, so that we do not object to them at that point.

--- Later in debate ---

[Lord McNicol of West Kilbride (Lab)]

My Lords, I shall speak also to the other three amendments in this group. Without wanting to do the Minister’s job for him, let me start by acknowledging that there is a rolling programme of improvements to the subsidy database which I think all sides would acknowledge does not yet meet the standards one would expect a database of this importance to meet. Irrespective of that rolling programme of improvements, the introduction of a new subsidy control regime affords us an opportunity to look again at how subsidies are reported by public authorities so that they can be looked at by possible economic competitors and the public at large and be held to a higher account. The most obvious and effective way of ensuring the database fulfils its purpose is to ensure that it is subject to periodic audits with any recommendations being acted upon within a reasonable timeframe. We see no reason why the Minister would not want to accept Amendment 37. As the Government have freely admitted, the quality of the data has not been sufficient.

I turn to Amendments 44, 45 and 46. I thank the noble Lord, Lord Fox, for putting his name to them. Amendment 44 would require relevant authorities to include in the entry to the database the exact date on which the information was submitted. One of the fundamental differences from the previous scheme, the European state aid scheme, was that agreements were made before the scheme came into effect. The flipside of this is that that obviously speeds it up, but the schemes or the subsidies will already be in place. Putting into the database the specific date on which the information was submitted will again help with the transparency around it. It is hard to think of any case against such a requirement so I hope the Minister will be able to confirm that. It increases transparency and provides clarity for those gathering the information from the database. It may also allow identification of those authorities that are particularly good or bad at submitting their entries.

Amendment 45 would require information on domestically sourced content to be posted on the database. While Clause 17 prohibits subsidies contingent on the use of domestically produced content, nothing in the WTO provisions or elsewhere, including the TCA, would prevent basic reporting requirements. Some organisations, including the GMB trade union, believe that regular reporting of the use of domestic content could drive—but, importantly, not compel—contractors to make better use of UK supply chains. Indeed, in specific cases such as steel procurement, the Government have set a benchmark of 60% domestic content for the offshore wind sector, so some of these requirements already exist. Putting them inside the database and shining a light on them could help encourage more.

Finally, Amendment 46 would require authorities to demonstrate the terms and conditions of their subsidy schemes. When I first read it, I thought Amendment 46 may well have fitted into the group we dealt with three groups previously, but because it is relevant to the database it probably sits within this debate. The argument, however, is very similar to the debate we had three groups ago.

All the amendments are intended to improve the quality of the database and the amount of information available to practitioners operating in that field. Interestingly, Chapter 3 of the Bill is headed “Transparency”, so a bit more transparency may help.

One point not covered by the amendments, but to which we may well come back, is that the chapter on transparency, especially Clause 34, uses the word “may” a lot. To take one example, Clause 34(3), at line 28, says:

“In relation to subsidy schemes, the regulations may require a public authority’s entry to include”.


When the Minister responds, I wonder whether he could give us just a bit more detail. These are partly probing amendments but, on the use of “may”, when would those regulations and requirements on the public authorities have to be followed and when would they not have to be followed? Again, I think the use of “may” in there does not help. With that, I beg to move.

[Lord Fox (LD)]

My Lords, I rise to speak to Amendments 44, 45 and 46, to all of which I have added my name. It is a pleasure to follow the noble Lord, Lord McNicol. Amendment 44 requires the date a subsidy scheme is entered into to be put into the database, Amendment 45 is about domestically sourced content and Amendment 46 is about other areas of specifying the date. All three of these amendments come together to play to the word that we have been using in these groups, which is “transparency”.

I shall briefly focus on Amendment 45 because it is an interesting point. The nature of what we are talking about hinges around Clause 17(1), which I assume is a WTO-driven point that we cannot favour domestic content over external content. I accept that we need to follow WTO rules. However, as the noble Lord, Lord McNicol, said, that does not stop us collecting the data. Why collect the data if you do not have an actionable need to use it? Therefore—never mind the subsidy that is running, for which we are collecting the data—if it turns out that all that subsidy leads to imports only rather than domestic benefit to the supply chain, when we come to extending or repeating that subsidy or using it in a similar way in another sector, I assume that it is perfectly legal within WTO for the Government to take the benefit and the learnings of that data, having of course given themselves the power to collect it through Amendment 45, to modify future schemes which would still be legal within WI and benefit the domestic supply chain. WI? Jam for all. I meant WTO.

It is a legal question. The Minister may not have the answer straightaway. That data having been collected, I assume, and I would like confirmation, that it is perfectly legal to use that data to design repeat or future schemes so that the UK economy benefits more from that subsidy. That is my main question on these amendments.

Telecommunications (Security) Bill

Debate between Lord Fox and Lord McNicol of West Kilbride

Committee stage
Tuesday 13th July 2021 Grand Committee

[The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)]

I have received one request to speak after the Minister, from the noble Lord, Lord Fox.

[Lord Fox (LD)]

The Minister brought up the review, which was very clear that there are huge potential market failures within the security and resilience telecoms market, the reason being that security is not valued by the networks. It is other things, such as network connectivity and price, which are of maximum importance to those networks—things that might come under the word “anything”, for example.

Let us be clear about the four reasons given by the review that security is undervalued by networks: insufficient clarity on cyber standards and practices; insufficient incentives to internalise the costs and benefits of security; lack of commercial drivers, because consumers of telecoms services do not tend to place a high value on security; and the complexity of delivering, monitoring and enforcing contractual arrangements in relation to security. All four of those issues, which I think are driving the purpose of this Bill, involve the word “security”. Far from these amendments watering down the intent of the Bill, the Minister is watering it down herself by including the word “anything” and ignoring the word “security”. I do not expect her to accept these amendments now, but I would like the department to go away and think about this very carefully, because a catch-all Bill catches nothing.

National Security and Investment Bill

Debate between Lord Fox and Lord McNicol of West Kilbride

Committee stage
Tuesday 16th March 2021 Lords Chamber

[The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)]

I have received two requests so far to speak after the Minister—from the noble Lords, Lord Fox and Lord Clement-Jones.

[Lord Fox (LD)]

My Lords, I thank the Minister for his thorough answers. In his answer on Clause 30, the Minister referred to “affected parties” and did not rule out the aggressor, as well as the target, from potential compensation—or mitigation, as I think the Minister described it. Am I right in assuming that the aggressor might also feel that they are eligible for mitigation?

Secondly, the nature of that mitigation seems to rule out the Government taking a share in a potential company, rather than simply bailing it out. Given that this Government have already spent $500 million taking a 20% share in OneWeb, which was not even strategic, why would they not leave themselves open to taking a share in a company so important that they felt they needed to prop it up?

United Kingdom Internal Market Bill

Debate between Lord Fox and Lord McNicol of West Kilbride

Consideration of Commons amendments
Monday 14th December 2020 Lords Chamber

[The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)]

Does anyone else in the Chamber wish to speak?

[Lord Fox (LD)]

There is almost no one left in the Chamber who has not spoken. This has been an interesting debate and, no doubt, the Minister is carrying away lots of advice from some of the Benches. I thank the noble Lords, Lord Adonis and Lord Liddle, for their passion. If that passion is matched by votes in the event that the noble and learned Lord, Lord Thomas, decides to ignore the advice of the noble Baroness, Lady Noakes, and press this to a vote, I will have more excitement because otherwise, it is merely a rhetorical gesture.

The noble and learned Lord set out his view on devolution. It is quite clear, as was set out a number of occasions, that in the structural fund process, which this will herald the replacement for, the devolved authorities were in the driving seat of deciding where and on what the money was spent. It is not clear from anything the Minister said today, or in answer to questions last time, that the Government will not seek to impose things on the devolved authorities. The Minister said there would be governance structures; it would be interesting to hear how those governance structures will be introduced and what the Government envisage. In other words, do central Government have the veto in deciding what goes where? In the end, that is the difference between this being genuinely consultative and, as we have heard described around the House, a Westminster-knows-best process. Consultation is fine but only if it is adhered to.

My final point on the quantum of money and its distribution comes back to a question I asked earlier. I think the Minister said that the amount of money envisaged to go into the shared prosperity fund is equivalent to that which came through the structural fund. The Minister also indicated a much broader remit for spreading that money around than was the practical reality of the structural fund. How will the Government manage the process of certain areas that have been particularly well funded through the structural fund, such as Cornwall and Wales, getting less money if there is no increase in funds and they are spread more widely? Furthermore, the European Union distributed that money using classifications of need, so how will the UK Government develop those? Do the Government envisage that they will be different, and can they undertake that they are transparent?

In conclusion, if the noble and learned Lord, Lord Thomas, decides to call a vote, we on these Benches would support it, but there are a lot of questions we would be grateful if the Minister could answer.

Telecommunications Infrastructure (Leasehold Property) Bill

Debate between Lord Fox and Lord McNicol of West Kilbride

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Tuesday 2nd June 2020 Lords Chamber

[The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)]

As no further Members have indicated that they wish to speak, I call the noble Lord, Lord Fox.

[Lord Fox]

I thank the Minister for his comprehensive response, which I will come to in a minute. I also thank all noble Lords for their response to the debate; it has been an interesting one, which has very much given evidence of the fact that we need a much wider Bill and a much wider level of discussion across the piece, whether we agree or otherwise.

I thank the noble Lord, Lord Blencathra, for introducing at the beginning the lies and sleights of advertising. To be clear, if someone is offering 1 gigabit and you are getting only 750 megabits down the line, that is a lot better than what I am getting now. To some extent, the bigger the target, the closer we get to what we need.

There is another issue, to do with empowerment, which none of us talked about: upload speeds. Noble Lords did talk about issues in rural areas, however. We heard voices from west Cumbria, Wales and Northern Ireland—and here I will of course play my Herefordshire card. For businesses to be empowered, and to plug into the recovery of our economy, they need to be able to upload, because that is how they sell things to other people and make money.

As the noble Lords, Lord Blunkett, Lord Bhatia and Lord Liddle, said, this is about equality and fairness. As a Parliament, we must stand up for the people who have the very worst delivery. The noble Lord, Lord Adonis, introduced the idea of the USO, and the Minister responded. We have a USO of 10 megabits, but compare that to the postal service. We have only a first and second-class postal system, but a fifth-class stamp would be needed to reproduce the levels of service in some parts of the areas I have just described. So I say yes to a USO, but it has to be a USO that really delivers.

The noble Lord, Lord Empey, also introduced some industrial nostalgia, which I sign up to. But in this context, I add Plessey, GEC and Marconi. Where are they when we need them? The answer is that we did not have an industrial strategy when we needed it. We have to recover ground on some of those issues.

The noble Baroness, Lady Falkner of Margravine, seemed to sign up to the Government’s target of 2025 but then pushed out for six months, on the basis that it was too soon. The longer she leaves it, the more it becomes a self-defeating exercise, because 2025 is coming over the hill. We talked about rural, but it is not just rural. The noble Lord, Lord Kennedy, and others raised the issue of multioccupancy and the large proportion of the urban poor who need access to get the equality referred to by the noble Lords, Lord Blunkett and Lord Bhatia.

I have one response to the Minister’s overall Second Reading comments. I am pleased that he reaffirmed 2025 and talked about the £5 billion investment programme. That underlines the Government’s leverage in this area, which should be used to the overall advantage of the United Kingdom and not sold off to the cheapest bidders. We have to look at that.

In his response to Amendment 21, the Minister said that it addressed a specific issue. It is so narrow in its ambition that it actually addresses a specific issue within a specific issue. The point made forcefully and helpfully by the noble Lord, Lord Stevenson—for which I thank him—is that the operators are not dancing down the street in response to this measure. They are all saying that it misses a trick; it misses an opportunity. Between now and Report, if the Government have a chance to go back and talk to those operators and listen, as they say they are doing, they will hear that there is a lot more to do. The Minister seems to be hiding behind Ofcom. It is the Government’s job to lead—to direct and point the direction of this policy. This point was made forcefully and ably by the noble Lord, Lord Liddle. My argument is not with Ofcom: it is with the Government’s lack of leadership. To push Ofcom in front of the Government is to use it as something of a human shield, whereas it is the Government who have to push this and deliver it. I am sure Ofcom would be fully able to support that.

My final point is about inconsistencies. This seems incredibly well confected. Well done to the Government, because my amendment says “access”. It does not say that there has to be a pipe and it does not say that there cannot be 5G. “Access” is a technology-neutral word. If the Minister has a problem with that and wants to use a word that the department feels is more consistent with existing legislation, I am sure we are all big enough to take that on. On Amendment 22, does it seem so scary for the Government to switch to the affirmative approach? I shall leave that where it lies.

In conclusion, I am grateful to the noble Lord, Lord Liddle, for introducing the idea of the Government’s planned “raft” of legislation. At best, this is a plank, and these amendments seek to varnish it a bit. We need a lot more evidence of the Government’s legislative determination to deliver on their goal. We will look closely at the Government’s response on Report. Listening to other Members and the outside world, I think it is clear that the Government have got the tone of the Bill wrong. That said, I beg leave to withdraw the amendment.

Nissan in Sunderland

Debate between Lord Fox and Lord McNicol of West Kilbride

Tuesday 5th February 2019 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, I thank the Minister for repeating the Statement made in the other place and must declare an interest as having bought a Qashqai for the very reason that it was made in the UK.

Nissan’s decision that the new X-Trail will no longer be built in Sunderland but instead in Japan is a bitter blow to the people of Sunderland and to the wider north-east. Close to 7,000 people are employed at the plant in Sunderland, with many thousands more along the wider supply chain and support services. Although the X-Trail decision does not impact directly on the existing workforce, it sets a worrying trend for the future.

What is interesting in the Secretary of State’s Statement is that the Government, as far as we are aware, are trying to pursue an industrial strategy that looks to develop a co-operative partnership approach with such an important sector—an initiative that we support and something that this side of the House has been calling for for many years.

Of course, Brexit was not the only factor in Nissan’s decision, and it would be dishonest to suggest that the issue of diesel did not play a part in Nissan’s thinking. However—and this is important—Nissan for the first time, through its European chairman, Gianluca de Ficchy, has brought to the fore the uncertainty of Brexit as a key factor. He said on Sunday:

“The continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future”.


That is a damning statement. The continued uncertainty is not helping.

What is more worrying is that the Government could help by ruling out the worst aspect of that uncertainty: that of a no-deal Brexit. The Government have the ability, the authority and the duty to do all they can to protect the interests of our businesses and economy.

Can the noble Lord confirm that the Government will actively engage with the trade unions and automotive manufacturers to protect what is now left? The truth is that the news of Nissan’s departure is not isolated and, in the coming months, more jobs and investment could well be lost in industries elsewhere across the UK. Only last week the Society of Motor Manufacturers and Traders announced that car production is down to its lowest level in five years: in total it has now slumped by 9%; and in the past year alone new investment has halved. What considerations are being given through the industrial strategy to ensure that other parts of the industry, such as Bridgend or Ellesmere Port, do not suffer in the same way?

Our automobile industry and wider manufacturing sector is in desperate need of assurances from the Government. They must finally rule out a no-deal Brexit, which in itself is the single most important decision they could take to remove that uncertainty.

Finally, why has no discernible progress been made on trade agreement negotiations, despite pledges otherwise? Where are we with the commitment that there will be no tariffs on British-made vehicles entering the EU?

[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?

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

Debate between Lord Fox and Lord McNicol of West Kilbride

Wednesday 21st November 2018 Grand Committee

[Lord Fox (LD)]

My Lords, this appears to be so uncontroversial that the noble Lord, Lord Foulkes, has left the room. However, I have a couple of questions. The Minister has done a great job in describing the limitations as well as the extent of this move. It is of course the limitations that concern me. One of the main ways in which timeshares, particularly non-British timeshares, are sold is in situ. In other words, people are sold to by people who literally come up to them in the street. It will not be clear to those individuals, who have been used to the process of being sold to and, in some cases, buying such products that the legal basis on which they are buying property will change. No longer will the contract be unified across the state. They will have bought a property in a foreign legal environment.

I make the same point as I made on the previous SI. That foreign legal environment will gradually diverge. It will diverge slowly or quickly, but it will change. It is clear that if that is how it goes, the Government and the industry have to work very hard to explain the legal complications that can arise from buying a property from a EU 27-based seller in an EU 27 country. It is not clear to me what is the legal redress if you buy a property from a UK-based seller in an EU 27 country. My suspicion is that it probably depends. That is another point on which serious information will be required to avoid people being mis-sold on that basis.

The Minister did not to any great extent address resale. Where does this leave the UK owner of an EU timeshare bought from an EU seller who comes to resell? It does not appear to me that this SI addresses this issue at all, but it is of great concern. Say the Minister had, in a fit of excitement, bought a timeshare on a golf course in the Algarve several years ago. He is shaking his head, but perhaps he should have done that—he would be relaxed. If he had bought that timeshare from a Portuguese seller, where does this leave him when it comes to the contract and process of resale? Where is the court of redress? Where is the process?

The SI is good as far as it goes, but it does not address the key consumer issues. Once again, it is consumers who will suffer. Whether we crash out or have a deal, the divergence will potentially create a significant downside for consumers. I would like to hear the Minister’s view on that.

[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.