Economic Growth (Regulatory Functions) (Amendment) Order 2024

Lord Harris of Haringey Excerpts

Monday 15th April 2024 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

My Lords, it is a pleasure to follow the noble Duke, the Duke of Wellington. I speak at quite a lot of sewage rallies and in sewage debates and I always give him credit for leading the charge against the Government’s laissez-faire attitude to sewage. There is usually a slightly stunned silence that I am congratulating a Duke—but that is life.

We heard some very fine words in the opening statement about the environmental considerations not being affected and so on. I am really sorry, but it is nonsense. If you have growth, you are going to have environmental devastation. It is automatic; it happens everywhere. At the moment, we have torrents of sewage pouring into our rivers, on to our coastlines and into our chalk streams. But, instead of stopping it, this proposal aims to increase it; and instead of giving Ofwat tougher powers to regulate the water industry and turn off the tap of CEO bonuses and shareholder dividends, Ofwat is now being told that economic growth is more important than clean water.

Whenever this Government do anything, I always ask, “Who benefits?” Who benefits here, of course, are Conservative Party donors and the economic growth they are going to experience at our expense and, in this case, developers who provided almost one-third of Conservative Party funds for the previous decade. What the Government mean by “economic growth” is the ability of developers to build cheap, sell high and connect up a lot of new houses to sewerage systems that cannot even cope with existing demand without emptying the excess into our local rivers and streams.

The only way to ensure that new houses are connected to a modern, effective sewerage system is to have public ownership of water companies. The only way to ensure that our water bills are being used to build local sewers rather than offshore bank accounts is to have people in charge who work for the public good and not for private greed.

By asking Ofwat to consider economic growth, the Government are not asking it to make a judgment on whether that growth is desirable, yet a growth in pollution that requires millions to be spent on clearing it up is classed as economic growth. More money spent on medicines that fight off gastric diseases from polluted water is economic growth, as is money repeatedly spent on restocking the fish populations of rivers. Are we really saying to Ofwat that growth at any cost to the health of humans and nature is a desirable thing that it should promote?

Last year, this House defeated the Government’s attempt to allow developers to build new homes that would have added pollution to some of the most sensitive waterways in this country. From the Norfolk Broads to Devon, the Government hoped to let developers pass on the clean-up costs for pollution to local people paying their water bills. We in your Lordships’ House stopped them. I would have liked us to do the same today, but clearly it is not going to happen.

I know that I will be on the Opposition Benches pestering the next Government to change these rules back. It will not take legislation; it is something a Minister can do and I will expect them to do it. Back in 2021, when the Government stripped out the last of our amendments on stopping sewage in the Environment Bill, without timetables and targets, I said, Cassandra-like:

“This will come to haunt MPs”.—[Official Report, 9/11/21; col. 1161.]


As the noble Baroness, Lady Bakewell, mentioned earlier, this piece of legislation is a gift to the three opposition parties. At the rally I was at yesterday, all three opposition parties had a very sympathetic hearing, but, I am afraid, the Conservative MP had a very tough time, even though she was clearly very concerned about the issue. This Bill is a vote loser and the Government should remember that.

[Lord Harris of Haringey (Lab)]

My Lords, I am grateful to the Minister for his introduction to the order. I assume that one of the objectives it to try to bring some rationality to the different range of regulatory functions that exist between the different regulators. That is perhaps a laudable objective. But it is a missed opportunity in this case, as nothing is said in this order—nor has the Minister indicated that he would like to see this—about the regulators collectively trying to do what they can to ensure that the industries for which they are responsible operate so as to be resilient and able to deal with a variety of shocks. I declare my interest as chair of the National Preparedness Commission.

This is not just about environmental sustainability, although that is one element of it. It is about their ability as industries to respond to what may befall them. At a time of heightened international crisis—I appreciate that most noble Lords are here to discuss precisely that—it is extraordinary that the Government are not taking the opportunity to use the regulatory mechanisms to try to improve the ability of our critical national infrastructure to be resilient and to respond. I hope the Minister will be able to explain why the opportunity has not been taken to extend the remit to ensure that there is a broader definition—one not just about economic growth but promoting resilience. This has, for example, been taken on board by the UK Regulators Network as one of its longer-term strategic aims.

[Lord Evans of Rainow (Con)]

My Lords, I will take this opportunity to pause the current business on the SI so that the Leader of the House can repeat an Oral Statement taken in the House of Commons earlier today.

National Minimum Wage Legislation

Lord Harris of Haringey Excerpts

Thursday 21st March 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

Of the 33 million workers in the country, there are 27 million employees; that means that we have a proportion of the workforce which is self-employed. You might say they are the unsung heroes—the ones who put their laptop on at 8 am and close it down at 10 pm—and they deserve our respect.

[Lord Harris of Haringey (Lab)]

My Lords, is it not the case that, two years ago, the Government undertook to close the loophole which enabled P&O Ferries to pay way below the minimum wage? Has the Minister seen the reports in yesterday’s newspapers that many of its employees are currently being paid half the minimum wage? What are the Government doing about this?

[Lord Offord of Garvel (Con)]

Obviously, that case is well known, and P&O was rightly named and shamed. I saw the article but I am not aware of the details of the case. However, I am very clear that we will check to make sure that P&O continues to act within the law.

Regulator of Community Interest Companies

Lord Harris of Haringey Excerpts

Monday 11th March 2024 Lords Chamber

Asked by

[Lord Harris of Haringey]

To ask His Majesty’s Government what assessment they have made of the adequacy of the powers and resources of the Regulator of Community Interest Companies.

[Lord Harris of Haringey (Lab)]

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I refer to my interests in the register as chair of the Fundraising Regulator, which oversees charitable fundraising.

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

The regulator is funded on a cost-recovery basis from fees and has significant powers, including the ability to investigate and dismiss directors. Community interest companies have been an enormous success since their introduction almost 20 years ago. There are now around 31,000 CICs delivering substantial benefits to communities throughout the UK. My department maintains ongoing dialogue with the regulator to ensure that this growing market continues to have the appropriate oversight applied.

[Lord Harris of Haringey (Lab)]

The very phrase “community interest company” generates a warm feeling among the public. It makes the organisations concerned sound like charities. But charities are subject to charity law and to regulation, in particular about how they fundraise or raise money on the street; they require licences and are obliged to follow a code of conduct. Why does the Minister think that there are organisations that decide they do not wish to register as charities but as community interest companies? Why are they trying to avoid that sort of regulation to protect the public? If he wants an example, perhaps he should look at the Inside Success Union, which has ignored a whole series of complaints against it. Why does the Minister think that is adequate?

[Lord Johnson of Lainston (Con)]

I congratulate the noble Lord, Lord Harris of Haringey, if I may, on his work to oversee the Fundraising Regulator. The comments he has made and recent example that he has just given are things that we take very seriously. I have communicated with the registrar at Companies House today and she is also ensuring that she is available for further inquiries relating to this particular situation. However, without giving too long an answer, community interest companies are a fabulous idea. They allow social entrepreneurs to take up opportunities in their community, to distribute dividends back into the company and to incentivise people to invest in social benefit. Communities across the country have benefited from these fabulous concepts, and we want to do more. They have been growing in number every year—we now have just over 30,000; I think that they have doubled in the past four years—and, frankly, this Government will do everything we can to see them continue and flourish.

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

The noble Baroness asks a good question. This is information I requested today, ahead of this Question, but have not yet received, so I will be delighted to provide that to her and other noble Lords. I am also interested in looking at some of the CICs which have become multimillion-dollar enterprises. This is not just a café or a local book-lending club, although those are to be lauded; they are significant community health businesses providing enormous value to the local community and to patients, and sometimes doing things differently and innovatively. This is charity entrepreneurship of the sort that this Government support.

[Lord Harris of Haringey (Lab)]

My Lords, I hesitate to prolong this, but the Inside Success Union is not the only example of a community interest company that has decided that it does not wish to be subject to regulation, in particular concerning raising money directly from the public. The Minister talked about the relatively small number of complaints received by the regulator. Is he aware that the regulator prides herself, in her last annual report, on the fact that she did not open any investigations into the complaints received? Surely we would expect a regulator to take those responsibilities more seriously.

[Lord Johnson of Lainston (Con)]

I am not delighted to hear that phrased in that way, but the noble Lord is right to suggest that these complaints should be properly investigated. I have received reassurance today personally from the registrar, Louise Smyth, who I believe does an extremely good job running Companies House, that any allegations around the behaviour of CICs in relation to their relationship with Companies House will be thoroughly investigated. It is important that we do not confuse this with their work in terms of fundraising, which the noble Lord has done an extremely good job of investigating. Of course, the Government support having a well-regulated fundraising sector so that all charities can operate effectively and the public can have trust in the philanthropic sector.

Digital Markets, Competition and Consumers Bill

Lord Harris of Haringey Excerpts

Committee stage
Monday 5th February 2024 Grand Committee

[Lord Harris of Haringey (Lab)]

My Lords, first, I should apologise to the Committee that this is my first involvement in the Bill. Secondly, I declare my interest as chair of the Fundraising Regulator, which overseas and regulates charitable fundraising. I want to say how important the amendment moved by the noble Lord, Lord Mendoza, is. The number of charities that are potentially affected by this is enormous.

I am quite clear that this is an accidental consequence of what the Government are trying to do in the Bill. It was never aimed at undermining the financial position of charities but the reality is that, because of the rules that exist on the way in which gift aid operates, it would have that effect. It would mean that you would be entitled, as a consumer, to change your mind suddenly. Okay, I believe that people can change their mind, but most people who enter into subscriptions do so on the basis that they have made that decision and want to give money to the charity concerned.

The problem arising is that the HMRC rules would not allow gift aid to be paid on any contribution where there was such an opportunity to return in that way. The whole purpose of a charitable donation is that you have given it to the charity concerned not because you are looking to get a series of benefits back but because you are making a donation. That is why gift aid is allowed. This was an unintentional consequence of what is otherwise a series of sensible protections for consumers. I hope that, when he responds, the Minister will make it clear either that he can accept his noble friend Lord Mendoza’s amendment or that this loophole will be closed.

[Lord Vaizey of Didcot (Con)]

My Lords, I support the amendment of the noble Lord, Lord Mendoza, as well and declare my interest as a trustee of Tate. Everything that has been said is absolutely accurate. This is one of those situations where we are all on the same page, in the sense that I think the Government recognise that this is an issue that needs some clarity. It is certainly not their intention at all to put charities in a position where they will lose access to gift aid based on subscriptions or donations that are given to them on a regular basis by the people who support them.

The noble Lord, Lord Mendoza, indicated that many charities depend on membership subscriptions; that is the vernacular used when you join an organisation such as the National Trust or take out a membership with Tate. Certainly, by my now being poacher turned gamekeeper, as it were, and being on the board of a large museum, I see at first hand just how important subscriptions are to Tate. They are a really important revenue generator; we are very successful in securing memberships. They are a way forward for a lot of our national charities to engage a wide community who may not be able physically to visit the museum or organisation. People who live abroad can also potentially become members, although I appreciate that they would not necessarily be able to give gift aid in that respect. This is a huge way forward and it would be a retrograde step if charities found themselves in a difficult situation.

I gather that the Government have made it absolutely clear that, if you take out a subscription and receive nothing in return, that will to all intents and purposes be an annual or monthly donation on which gift aid can be claimed. However, as the noble Lord, Lord Mendoza, indicated, a lot of ancillary benefits now come with membership as a way of attracting people to take it. Obviously, in the case of museums, that might be free entry to their paid exhibitions and a regular magazine. I was unaware until the noble Lord rose that silent discos are now part of the mix—although I gather that the Natural History Museum calls them dino discos, which makes them even more attractive and means that I will leave this Committee and immediately take out a subscription.

The reason that the amendment has been put forward is to provide clarity in the simplest way. Charities are exempt from VAT and can claim gift aid. This does not provide a Trojan horse, where a private company says “Okay, the way to get around the welcome consumer protections that the Government are bringing in is to claim that we are a charity”. Charities have to go through a lot of hoops to become a charity, so exempting them from Schedule 20 would provide exactly the clarity that is needed.

As I say, we are here to listen to the Government because we know that they recognise that this is—I was going to say “a problem”—an issue. The Government are therefore in a great position to tell us what their thinking is as this is a discussion between those of us who have concerns and the Government who recognise those concerns and want to allay them with either their own amendment or clarity from the Minister.

--- Later in debate ---

[Lord Vaizey of Didcot (Con)]

On that point, if the Minister is saying that charities should not be exempt from the law, of course we all agree. If an employee of a charity is treated badly, they are perfectly entitled to take the charity to court and get compensation. The key point here is that membership subscriptions have been able to have gift aid claimed on them and HMRC has made it clear that gift aid is claimable. Now that charity subscriptions are being brought actively within the scope of the Bill by not being exempted, gift aid will be removed by HMRC as a result.

It would be different if we were starting from a position where charities had never been able to claim gift aid and had, in effect, been offering commercial subscriptions. In the same way, when you go into a shop at Tate and buy something that is defective, you have all the consumer protections available to you. You are not giving a gift aid donation when you buy a mug at Tate; you are buying a mug and if it falls on your cat’s head when you get home, you will be able to sue Tate. That is fine, but subscriptions are clearly gift-aidable donations which are now being actively brought within the scope of this Bill.

[Lord Harris of Haringey (Lab)]

My Lords, the Minister said that he would come back on Report, but it would be helpful if he would come back before Report so that all noble Lords can consider how he does so and table amendments accordingly.

[Lord Offord of Garvel (Con)]

I thank noble Lords for their contributions. I can confirm that we will come back before Report. The objective is to get a solution for this issue and to have a satisfactory outcome, so that we avoid carnage in the other place.

Regulatory Approval for New Products and Services

Lord Harris of Haringey Excerpts

Monday 22nd January 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Baroness for those comments. She is absolutely right: we can never move too fast as long as we can do it in a safe and appropriate way. My noble friend Lord O’Shaughnessy’s report was enormously helpful in driving change, particularly for clinical trials. We want to ensure we are the number one place for trials in Europe, if not the world, because it benefits the patients, the NHS and our economy. I will just touch on some of the reviews that have recently been undertaken; it is worth highlighting them and engaging with noble Lords on them. There were reports on digital technologies—that was published last year—on green industries, on life sciences, on the creative industries, on advanced manufacturing and, fundamentally, there was a cross-cutting report on how we can have pro-innovation policies.

I also refer back to my fundamental role, which is to bring smarter regulation into the Government. I ask Peers on all sides of the House to please come to me with their ideas. Let this not be Oral Questions but oral suggestions on how we can reduce regulatory burdens on business and boost our economy.

[Lord Harris of Haringey (Lab)]

My Lords, in that spirit, I refer to my interest in the register. The Minister said quite clearly that the Government are committed to regulating for growth and innovation. Will he also ensure that regulators have at the forefront of what they are doing ensuring that those they regulate are delivering services, facilities or products that are properly resilient and prepared for the various threats that as a nation we face?

[Lord Johnson of Lainston (Con)]

I completely agree with the noble Lord’s point and I absolutely take it to heart. The point is to see regulation as a service, where we have to take the appropriate action to ensure that the investors, the companies, the consumer and the broader environment of the body politic can work in harmony. It is that balance that we seek to achieve by promoting the growth agenda. Importantly, that is not at the expense of the protection of the consumer or of our overall habitats and environments. It is essential that people realise that we are looking for positive economic growth through better regulation, rather than derogating from our responsibility to ensure that regulation is truly to ensure that the consumer market functions properly.

E-scooters and E-bikes: Battery Fires

Lord Harris of Haringey Excerpts

Tuesday 27th June 2023 Lords Chamber

[Lord Offord of Garvel (Con)]

The consultation has started and will be published imminently. The findings will be made available. Generally, it is not the Government’s position to ban all dangerous items. Some modes of transport are more dangerous than others, but you choose your own mode of transport. Certainly, when it comes to affecting the public and increasing danger, that is exactly why the law prohibits these vehicles other than in a legal trial. With three departments working on this, I can safely say that the Government are alive to these issues.

[Lord Harris of Haringey (Lab)]

My Lords, the Minister will recognise that lithium-ion batteries are used in a variety of products and not just e-scooters. What steps are the UK Government taking to ensure that we have sufficient supplies of lithium-ion, and are those supply chains from sources that do not involve modern slavery?

[Lord Offord of Garvel (Con)]

That is a very far-reaching question. I will be delighted to write to the noble Lord on it.