Trade Marks (Amendment etc.) (EU Exit) Regulations 2018
Lord Henley Excerpts(5 years, 10 months ago)
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Lord Henley
That the Grand Committee do consider the Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018, the Patents (Amendment) (EU Exit) Regulations 2018 and the Trade Marks (Amendment etc.) (EU Exit) Regulations 2018.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, intellectual property plays a vital role in the UK’s knowledge economy, and this will continue to be the case after our departure from the European Union. Ensuring strong and balanced IP protection and enforcement is central to the Government’s aim of encouraging businesses to innovate and develop new ideas and technologies, which forms part of the industrial strategy. As I said in the debates on earlier regulations, our intellectual property system is consistently rated as one of the best in the world. These regulations are part of the work being delivered by the Intellectual Property Office to ensure that the system governing intellectual property rights in the UK continues to function in the event of no deal being agreed when we leave the EU in March. This is essential to ensure a smooth transition for business and to provide maximum certainty and clarity.
It is possible to obtain trade mark protection in the UK under the domestic regime and in the European Union under the European Union trade mark regulation. The majority of UK and EU trademark law is harmonised. Much of our domestic legislation derives from EU directives, which were implemented through the Trade Marks Act 1994. The EU trade mark regulation offers the possibility of retaining EU-wide trademark protection in the form of a single registration at the EU Intellectual Property Office. This system runs in parallel to our domestic system, so prior to exit, protection in the UK may be obtained by registration under both the EU and UK systems. After exit, protection in the United Kingdom for trademarks registered under the EU regulation will be lost. The draft instrument before the Committee today uses the powers provided by the withdrawal Act to address deficiencies in the UK trademark law which would arise from exit. EU directives providing for harmonisation of national law relating to domestic trademarks are also aligned in many respects with the EU regulations providing for EU-wide trademarks.
I shall focus in particular on how the Government are ensuring the continued protection of EU trademark rights in the UK on exit. Noble Lords may recall that the EU Intellectual Property Office was established in 1994 as the Office for Harmonisation in the Internal Market before being renamed in 2016. Its goal is to help further harmonise EU trademark law and provide an EU-wide trademark right. Around 1.3 million EU-registered trademark rights are at present in force. These EU trademark rights have protection in the UK. Indeed, many products and services in this country will bear the names of registered EU trademarks and are owned by UK companies. If we do not act, the protections afforded to those rights will be lost. Many of those in this Room will be familiar with the brands which use these types of trademarks, from food and drink retailers to global clothing firms, luxury car manufacturers and everything in between.
Lord Henley
My Lords, I am going to complete this sentence and then I will give way to the noble Lord.
The instrument ensures that replacement domestic rights will be provided to those who own EU trademarks on exit day. It gives certainty and confidence to businesses who rely on their trademark rights in the UK. I will now give way to the noble Lord.
Lord Adonis
I am grateful to the Minister. He referred to the fees for filing applications, the very large number that will be pending and those which will need to be converted. An issue of real concern that has been raised by those who have looked at the regulations is what those fees will be and whether the fees for filing converted applications will be the same as the normal trademark application fees. Can he tell the Grand Committee what the position will be in terms of the fees that will be charged?
Lord Henley
My Lords, again, I was going to deal with that at the end. There will in fact be no costs to business associated with our creation of new UK rights. However, because the UK comparable right will be independent of the EU trademark, there will be a charge for businesses in relation to future renewal. Businesses that wish to maintain their protection in the UK will need to renew their UK-comparable trademark at an average cost of some £300 for a registration period of 10 years. Applications for EU trademarks that are pending but not yet registered at exit day will need to be examined under UK law. The normal UK fee, whatever that is, will therefore apply to those applications. We have committed to respect the relevant filing dates for those applications under this instrument.
Baroness Crawley (Lab)
My Lords, on future renewal fees, what are we talking about when we refer to the future? Is it beyond the transition period or within it? How are we defining “the future”?
Lord Henley
My Lords, if the noble Baroness will be patient, the trademark is renewed every 10 years. When it is renewed, a fee will be paid. That does not change.
The instrument provides that these new UK rights will be fully independent UK trademarks which can be challenged, assigned, licensed or renewed separately from the original EU trademark. Such new UK trademarks will, however, retain their original EU filing date and therefore any other relevant dates that were filed as part of the original application.
Finally, there are miscellaneous amendments to the Trade Marks Act 1994 and the Trade Marks Rules 2008 to reflect the fact that the UK will no longer be a member state or a member of the European Economic Area.
In conclusion, these regulations are a small but vital part of ensuring that this part of the intellectual property system continues to function if the no-deal outcome arises. I hope that on this occasion, noble Lords will support the draft regulations. I commend them to the Committee.
Lord Adonis
He has not sat down, in the sense that he is perfectly capable of answering a question before he concludes his remarks.
He again has not dealt with the question of consultation, which as he knows is of huge concern to the Grand Committee. We would be grateful if, before we come to our debate, he could set out what consultation has taken place, so that we can discuss whether we think that consultation has been adequate.
Lord Henley
My Lords, I will try to be brief and as always I will offer to write to all appropriate noble Lords. I think the noble Lord, Lord Adonis, knows what I mean by appropriate.
Lord Henley
Appropriate. The noble Lord will be aware that I trust all noble Lords implicitly and explicitly.
On consultation, I again make clear that the IPO has been engaging with businesses on the implications of exit, and in particular on trademarks, since the referendum result. It has also consulted with specific stakeholders on the technical detail of this instrument. It prefers to fully consult whenever possible but, due to the unique nature of EU exit and sensitivities around negotiations at the time of drafting, we felt the best course on this occasion was to limit consultation.
The noble Lord, Lord Clement-Jones, asked what happens if there is a deal and what the point of the regulations are. I repeat that the regulations will only come into force in the event of no deal. If we secure a deal with the EU, the provisions on intellectual property in the withdrawal agreement will come into effect, and that means EU trademarks will continue to have effect in the UK at least until the end of the transitional period. During the transitional period, it is likely that revised regulations will be drafted which will take into account the result of further negotiations reflecting the future economic partnership.
I will touch on possible costs. The noble Lord, Lord Clement-Jones, doubted that the costs could be less than £5 million. The annual revenue cost has been estimated at between £2 million and £2.7 million, based on a 60% renewal rate in the UK between 2008 and 2017. I would prefer to write to the noble Lord in greater detail on that.
Lord Warner
With due respect to my noble friend, I am not so worried about that at the moment. I may become worried when I see the basis on which the consultations are taking place. I think the Grand Committee—and I in particular—would like to see what system the Government are using for consulting on these regulations.
Lord Henley
My Lords, I can make it clear that, throughout all these SIs, the Government have been engaged in what one might call a cross-government approach to consultation, to make sure that we get things right. We obviously cannot consult in the way that we would normally do when there is more time. However, as I made clear on the first and second orders, and now this, there has been a degree of consultation between the IPO and others. If the noble Lord will bear with me, I will expand on that in a letter. The important thing is that we are just dealing with the no-deal option here. When it comes to further arrangements, more consultation will obviously be necessary. I know that the noble Lord has particular concerns. He has come to see me and has been talking to my officials. In the event of there being a deal, we will want to make sure that we continue with those discussions to make sure that we get this right.
Lord Warner
I am sorry to be difficult, but I am still trying to grapple with this. Are the Government actually leaving it to the civil servants to decide how to do the consultations individually, regulation by regulation? Or is some kind of guidance being used for this raft of regulations? Can we be clear whether there have been any directions or guidance to them, or have they been left to make up their own arrangements according to each set of regulations?
Lord Henley
I ought to make it clear that the IPO discusses these matters with DExEU to agree an approach. We want to make sure that there is a similar approach across Government. I can expand on that in any letter I write to the noble Lord. It is not just a matter for this department or that one, as the noble Lord would put it. I am now going wide of my brief, but there is a degree of consistency when dealing with the no-deal regulations to make sure that we get this right. I see that the noble Lord, Lord Stevenson, is itching to get to his feet, so I will give way, but I agree to write to the noble Lord on this point.
Lord Stevenson of Balmacara
I have read similar passages in the SIs from the Treasury which were due to—but will not—be discussed this evening. They reflect a different approach, which the Minister mentioned he would feed back to officials in due course. He talked about an all-of-Government approach to this, but that has not been borne out by what we have in front of us. I will be interested to see the letter which explains what is happening, particularly in relation to the department for which he is responsible. In fairness, that is all he can answer for, but if it is possible to add to that a wider brief about what is happening more generally, Ministers in other departments would find it interesting.
The second point is that I am sure these issues are not being raised on the particularity of these SIs alone. Surely they are being raised because what we are concerned about here is that the Government cannot do their job properly in regulating for the future if they do not have the trust and enjoy the confidence of the sectors that they are engaging with. Here we are in a situation where some advice is being taken from some people, and some are being labelled as “trusted” while others are therefore labelled as not trusted. I do not think this is a very good basis for going forward, and I wonder if the Government might like to reflect on that.
Lord Henley
My Lords, I will certainly look at what the Treasury is recommending. As I say, we have consulted DExEU. I can certainly give an assurance that all those whom we consult will be trusted. I am sure my noble friend Lord Deben would be the first to admit that he was possibly being mischievous when he tried to imply, merely because the word “trusted” appeared in one Explanatory Memorandum but not in another, that there was some element of a lack of trust by this Government. If any noble Lords think that is the case, I would thoroughly refute it.
Lord Tyler (LD)
The Minister said just now that the reason why he could not be confident of the extent of the consultation was the shortness of time. As I understand it from the Explanatory Notes, the major issues that were going to be addressed in this particular statutory instrument were laid out in the technical notice produced by the IPO back in September of last year, so there have been four months where presumably the main issues have been subject to consultation. That is not really a shortness of time; there was quite a lot of time in those four months for the consultation to take place. When he is addressing this issue in his letter, I wonder if he will be able to address why he thinks that the shortness of time in this case has caused so much difficulty in making the consultation as full and comprehensive as it should be.
Lord Henley
I will certainly address that in my letter and ensure that the noble Lord receives it.
I turn to the question of jurisdiction. The noble Lord, Lord Clement-Jones, asked which court has jurisdiction if the validity of the original trademark is challenged. We have made provision as to how pending proceedings before the UK courts on exit day will be dealt with: they will continue on the basis of the EU regulation. New cases brought after exit day will be dealt with by courts in the individual remaining member states.
Lastly, I turn to the point made by the noble Baroness, Lady Bowles, about the Paris convention, a point that I think she described as appealing to lawyers. Well, here is one lawyer that it does not appeal to because I do not particularly understand it. Again, it will have to be dealt with in subsequent correspondence but I am advised that the UK application will in addition enjoy the priority right claimed by the EU trademark application. I hope that helps, but if I can expand on that matter then I shall do so.
I was about to move the Motion but I can see that I am not going to be allowed to, so I will give way for one last time to the noble Lord, Lord Clement-Jones.
Lord Clement-Jones
I am deeply grateful to the Minister. I did not really think that his answer on the jurisdiction point was completely comprehensible. I hope he is going to include it in the letter that he writes because I am not sure about the exit date that he was talking about. He seemed to be saying that a different jurisdiction applied post the exit date as opposed to pre the exit date. I must admit that that is not entirely clear to me because the comparable right, which is derivative, is designed to spring up precisely after the exit date. I would really like to see a full explanation in his letter.
Lord Henley
For once, my Lords, I thought the noble Lord had said that my explanation was completely explicable but I imagine that he said it was inexplicable, so I will certainly include that in the letter that I write. I beg to move.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
The Question is that the Grand Committee do consider the Trade Marks (Amendment etc.) (EU Exit) Regulations 2018.
Patents (Amendment) (EU Exit) Regulations 2018
Lord Henley Excerpts(5 years, 10 months ago)
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Lord Henley
That the Grand Committee do consider the Patents (Amendment) (EU Exit) Regulations 2018.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, I beg to move that the Committee considers the draft Patents (Amendment) (EU Exit) Regulations 2018, which were laid before the House on 28 November.
Intellectual property plays a vital role in the UK’s knowledge economy, and this will continue to be the case after our departure from the European Union. Ensuring strong and balanced IP protection and enforcement is central to the Government’s aim of encouraging businesses to innovate and develop new ideas and technologies, which forms part of the industrial strategy. Our IP system is consistently rated one of the best in the world.
Lord Adonis (Lab)
I am very grateful to the Minister for giving way. Can he tell us—the same issue came up with the previous regulation—what consultation there has been on the regulation?
Lord Henley
I will answer that in due course. The noble Lord will have an opportunity to speak after my speech, and we might make better progress if I take it in that manner.
The regulations are part of the work being delivered by the Intellectual Property Office to ensure that the IP system for the UK continues to function effectively in the event of no deal being agreed when we leave the EU in March. This is essential to ensure a smooth transition for business and provide maximum certainty and clarity.
The draft instrument before the Committee today uses the powers provided by the European Union (Withdrawal) Act 2018 to address deficiencies in UK patent law which would arise on exit. The majority of UK patent law is domestic in origin or derived from various international agreements, so will not be affected by leaving the EU. Only a few specific areas of patent law are governed by EU legislation, and it is those areas which the draft instrument is intended to address.
I shall focus in particular on supplementary protection certificates, which are a special type of IP rights connected with patents. Noble Lords may recall that SPCs were created in the 1990s by way of EU legislation to deal with a growing issue affecting pharmaceutical and agrochemical products. Before such products can be made available on the market, the regulatory body must be satisfied that they are safe for use in order to authorise them for sale. As this process is extensive and often lengthy, it can stop the innovator enjoying the full period of exclusivity which a patent on such products normally provides. The aim of the SPC system is to limit the effect of that by providing up to five and a half years of additional protection to an authorised product after the expiry of the patents. This arrangement gives the maker of the product more time to recoup the costs involved in research and development, which is especially important in relation to pharmaceuticals.
The association representing British manufacturers in the field, the ABPI, has estimated that bringing a new drug to market costs more than £1 billion. SPCs therefore play an important role in encouraging innovators to develop new and more effective medicines by helping to cover those costs and providing additional revenue to put back into research. The framework for SPCs is set out in EU regulations 1610/96 and 469/2009 which will be retained under the withdrawal Act.
Lord Henley
My Lords, I did not say that and the noble Lord should not put words into my mouth. I said that when I come to respond at the end, I would deal with the point. No doubt the noble Lord would like to intervene to make the point and I have now listened to it. If the noble Lord would like to stay until the end of the debate, I will respond to it them.
Lord Adonis
My Lords, I do not think that that is a satisfactory response at all. Our consideration of this regulation, which we are just about to engage in, crucially depends on the Minister telling us what consultation has taken place. It is not good enough for him to say that he will speak at the end of the debate when we raise the issue. I have raised the issue because I wish to respond, as will other Members of the Grand Committee, to what he has to say about the consultation that has taken place.
Lord Henley
The noble Lord intervened more than once during the previous debate. I had a number of responses to give to him but sadly he did not think it necessary to stay until the end.
Lord Henley
Will the noble Lord sit down? I have not given way to him. The noble Lord can make his point when I have given way.
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
My Lords, it might be for the convenience of the Committee if I were to put the Question so that the debate can then continue.
Lord Adonis
My Lords, I do not think it is for the convenience of the Committee, because the noble Lord has just made a direct allegation that I was not present in my place to listen to his response. The reason is that I was speaking in the debate on the EU withdrawal agreement in the Chamber. I have made the point to the Whips, including on our side, that it is highly unsatisfactory for the debate to be taking place in the Grand Committee on regulations concerning exactly the same matters as are being debated in the Chamber. It is not possible, even for the noble Lord with his considerable abilities, to be present in two places at once. It is because I wished to participate to the debate—it is a discourtesy to the House that I am not able to be present for most of it, because I am fulfilling my duties in the Grand Committee—that I was not here. I hope the noble Lord will withdraw the remark he just made, which appeared to imply—maybe because he was not aware that I was in the Chamber—that I was not fulfilling my duties. After he has noted that I was not here because I was in the Chamber, I think he needs to answer this point to begin with. Otherwise, I will continue interrupting until he actually gives us some information on what consultation took place on this regulation—before we can properly consider it and whether we think the consultation that took place was adequate.
Lord Henley
My Lords, I quite understand that the noble Lord was in the Chamber and therefore not able to be there at the end. I merely made a statement of fact that he was not there and that therefore I was not able to respond to him. I similarly make the quite straightforward statement that I have spoken on this, for which I hope the noble Lord is grateful, and I will respond in due course to the points made. I hope the noble Lord will understand that the wide-scale engagement he would like, as we discussed on the earlier amendment, was not possible on a draft no-deal regulation of this sort. I can give the assurance, as I gave on the previous order—this is the important thing—that there will be a proper consultation in the future. The noble Lord should bear in mind that at the moment we are making sure there is a degree of certainty for businesses in the eventuality that there is no deal.
Lord Henley
No; there is no need for noble Lords to get up. I will sit down and give way to the noble Baroness or the noble Lord when I am ready, but I am entitled to speak and give way as I wish.
We will consult as appropriate on whatever the future regime might be, deal or no deal. We are trying to get things right in the eventuality of there being no deal. It is quite right—
Lord Henley
Can the noble Baroness wait just a moment? I am still speaking. It is quite right that we make appropriate contingency plans. I now give way to the noble Baroness, then I will no doubt give way to the noble Lord, Lord Warner, who is itching to get to his feet.
Baroness Kingsmill
I was actually trying to be a little helpful. In the notes on this matter, there is a little more detail about the consultation than on the previous one. They say a consultation was taken with “informal discussions”—informal is always questionable—
“with a small group of selected individuals with expertise in the relevant areas, or in patent law generally”.
I read that to suggest that the consultation was with lawyers, as opposed to people directly affected by this. I wonder if the Minister could make that clear. If it is with lawyers, they will be looking at it on the basis of the law as opposed to the impact on businesses. Once the Minister has clarified who and what it was, I could then understand the impact. In paragraph 12, the Government assert that there is,
“no, or no significant, impact on business”.
If there has been a proper consultation, that is fine and perhaps one has to accept that impact. But at present an informal discussion,
“with a small group of selected individuals”,
does not sound to me like the kind of consultation that is going to give anybody the possibility of saying there is,
“no, or no significant, impact on business”.
Perhaps the Minister would care to clarify.
Lord Warner
May I intervene to be helpful to the Minister? He might wish to consider withholding his remarks about consultation until he has heard what I have to say a little later about the consultation process—if we may venerate it with such a description. I think he might want to hear those before he commits himself too far on what consultation has taken place.
Lord Henley
The noble Baroness, Lady Kingsmill, suggested that it was only lawyers who were consulted. There is nothing wrong with lawyers—I speak as one myself—but others were involved too, including a number of business stakeholders, a representative from the BioIndustry Association and other representatives from the pharmaceutical and generic industries. I imagine this will be confirmed by the noble Lord, Lord Warner, when he speaks; I am looking forward to his remarks. All I can say is that that has happened, but obviously the consultations will continue so as to ensure we get the right process for the future, deal or no deal. At the moment we are dealing just with contingency planning should there not be a deal. I think I have moved, and I think I have now sat down.
The Deputy Chairman of Committees: The Question is, that the Grand Committee do consider the draft Patents (Amendment) (EU Exit) Regulations 2018.
Lord Warner
My Lords, I hope to throw a little light on the subject of consultation during the course of my remarks, which I am afraid will be slightly lengthy. My remarks are based upon a briefing I have received from the BioIndustry Association They relate to its concerns about both the impact and the process by which these regulations were drawn up and consulted upon. Again, I use the term “consulted” in a very loose way.
Before I get down to the business of what the BIA’s concerns are, I want to make a couple of general remarks which came out of our debates in Grand Committee last week about the previous set of regulations, and out of our discussions this afternoon about the first set of regulations. They are two issues which we keep coming back to time and time again. I hope that, for the rest of the proceedings, the Minister might refrain from continuing to run the argument that these documents do not reflect any change of policy. I shall set out the arguments as to why there is a change of policy here. Last week there was a set of policy changes in the regulations that were produced. I understand why there may have been a change of policy, given the circumstances in which these regulations were pursued, but it would be helpful to informed debate for the Government to stop saying that there is no change of policy because there palpably is a change of policy in many of these sets of regulations.
That is request number one to the Minister. The second concerns the Minister saying that somehow these regulations were only hypothetical and relate to a set of circumstances which may not occur. We raised this last week when he was not here and we were dealing with another Minister. The truth is that this is a set of regulations the Government of the day have drawn up and put in the public arena, and they have an impact on the people who may or may not be affected by them. As I said last week, as an ex-civil servant I know that even if these regulations are not used for the purposes for which they have been drawn up, they will be tucked away in a Whitehall cupboard. That is the reality. If we get down to some of these issues subsequent to Brexit day, they will still be there, they will still be a resource which will be drawn upon, and I would be willing to bet a large sum of money that they will be used to some extent in drafting another set of regulations.
The point that we have been trying to make to Ministers, singularly unsuccessfully, is that there are concerns about how they may be used and how the outside world may interpret the Government’s attitude in these areas in the future. That is why it is very important to challenge the Government when there are defects both in the assessment of impacts and in the inadequacy of the consultation process.
Lord Adonis
My Lords, my noble friend has made an extremely grave allegation. Would the Minister care to say whether he is correct that precisely one person in one company was consulted about these regulations? I would happily give way to him if he would like to contradict that statement, because it seems to be of immense importance.
Lord Adonis
I think that the Grand Committee will be extremely concerned to have information on this point. If what my noble friend has said is the case, it would be a situation without precedent in my experience: that on matters of significant impact on a major industrial sector, precisely one person in one company has been consulted and the relevant trade bodies were not even given the opportunity to express their views.
Lord Deben
What is more, that one person was selected but clearly not trusted.
Lord Henley
I was going to leave this to the end and I suspect that any intervention I make will just prolong these proceedings, but for the sake of assisting the noble Lord at this stage, I can assure him that consultation participants on the technical view of the draft instrument included the BIA, the ABPI, the IP Federation, the Chartered Institute of Patent Attorneys, the British Generic Manufacturers Association and the agrochemicals industry.
Lord Warner
I flatly reject the idea that the BIA was consulted on the exclusivity aspects of these regulations. That is the assurance that I was given by it and I put it on the record in my speech.
Lord Adonis
My Lords, we seem to have a serious situation where the Minister has just said that one body of central relevance to these regulations was consulted and my noble friend Lord Warner has flatly denied it. Would the Minister like to elaborate on what he said; otherwise, it might be a matter for other authorities to examine?
Lord Warner
The exclusivity point is a key element in these regulations, as I made clear. If the Minister looks at Regulation 55, he will see that. I made it absolutely clear—I am not usually noted for obfuscation —that on the subject of exclusivity there was no consultation of the BIA. I cannot be any clearer than that. If the Minister has evidence that the BIA was consulted on the exclusivity point, I would be happy to withdraw that and apologise as graciously as I can, but the information it gave me was that it was not consulted on that point, which is at the core of this set of regulations.
Lord Henley
My Lords, I am not sure if it is helpful to continue this discussion. That point is for another regulation, not the ones we are discussing at the moment. We will, no doubt, get to that one—and to that point—in due course. I am not making any accusation that the noble Lord has misled the Committee and I do not think I have misled it. I have made it clear who was consulted and I was hoping I could deal with that in my closing remarks as that might have been a neater and tidier way of dealing with these matters. I will leave it there.
Lord Foulkes of Cumnock (Lab Co-op)
I wonder if the Minister could help me out. I have been listening to the speeches since I came back from the Liaison Committee. In the light of what we have just heard, is the Minister still pressing ahead with this statutory instrument? Would it not be better for him to withdraw it and clear up some of these points before we consider it again?
Lord Henley
My Lords, I will continue with these regulations: I have moved them. No doubt the noble Lord will say, as he and other noble Lords have done with other regulations, that he is not happy for them to be considered by this Committee and they can then be considered in another place. However, we are having a useful discussion at this stage, which I want to be part of, and we should complete what we are doing and deal with as much as is relevant to these regulations as we can. I will continue to do that and I will listen to the noble Lord, Lord Adonis, conclude his speech. The noble Lords, Lord Clement-Jones and Lord Stevenson, and other noble Lords will no doubt wish to intervene. I will then respond to that, as is right, proper and normal. It is up to noble Lords to decide where they wish to take things after that. However, we wish to get this through, to provide continued certainty for this body and to assist the whole life sciences industry, the importance of which the noble Lord, Lord Warner, has just reminded the Committee.
Lord Adonis
My Lords, a situation has arisen where there is a serious difference of view, to put it mildly—
Lord Henley
My Lords, I confess that I cannot begin to answer the noble Lord’s question about the Isle of Man, and promise to write on that and the other issues I did not manage to cover. I note what he says about the advice that my department—the Department for Business, Energy and Industrial Strategy—should take from Her Majesty’s Treasury. As with all departments, we always listen carefully to what our colleagues in the Treasury say, and this time will be no exception.
I was not intending to intervene in the middle of the debate, but I did, and so to get back to this question of consultation and how we set about this with these regulations—which I repeat, are only to deal with the no-deal possibility I think the noble Lord, Lord Adonis, would be the first to agree that we would be irresponsible in not having done something should that eventuality arise. I give way to the noble Lord.
Lord Foulkes of Cumnock
The Minister has been very kind and polite, and I am most grateful to him. Talking about the impossibility of dealing with things, I—like the noble Lord, Lord Deben—have some sympathy with him, and even more with his civil servants behind him. In today’s Order Paper, there are 38 affirmative instruments waiting for consideration by the Joint Committee on Statutory Instruments, 65 affirmative instruments waiting for affirmative resolution and 18 proposed negative statutory instruments made under the European Union (Notification of Withdrawal) Act 2017. Is it not irresponsible to be pressing ahead with this, with no proper scrutiny on things such as conservation, animal health, veterinary surgery, pesticides, employment rights, construction products, insurance distribution, maritime transport, motor vehicles, plant health, air quality? I could go on and on. We are rushing them all through. Is that not irresponsible? Is that not a waste of the Minister’s time and the time of the well-qualified people behind him, in anticipation of something none of us really want to happen? Would it not be better if the Minister came to his senses now, withdrew this order and, along with all his other colleagues, said, “We are not going to take any more of these orders through the Grand Committee and the House of Lords because it is a total waste of time and totally irresponsible”?
Lord Henley
My Lords, I am always kind and polite to the noble Lord. I know he is a delicate flower and does not want me to be too hard on him.
I appreciate there are a lot of no-deal regulations and that we are asking a lot of the Joint Committee on Statutory Instruments. The noble Lord has served on that wonderful committee, as have we all, and it does a very good job, as do the other committees that have this duty. We are satisfied that they have enough time and resources. I think the House feels that it too has enough time. This can be discussed by the usual channels. We are having a very useful debate this evening and I am looking forward to continuing that process. It is difficult, but equally it would be much more irresponsible not to be moving regulations or producing them for the eventuality that there was a no deal, because the noble Lord will be aware that as a result of Article 50 and various other Acts of Parliament that have been through both Houses, if we do not reach an agreement by 29 March, we leave the EU without a deal. This order, the previous order and other orders are designed to provide that certainty businesses need, and we will continue to move the appropriate orders.
Lord Henley
Will the noble Baroness let me finish? I will then give way. She must not be quite so enthusiastic.
As is right and proper, we will then move them so that we can be in that prime position.
Baroness Kingsmill
My Lords, it surprises me that the Minister is not concerned by the extent of the statutory instruments still to be debated, because the question must be asked: why on earth are we rushing through them at this late stage? There have been two years in which we could have been prepared; there were two years when the possibility of a no-deal outcome was on the cards. Why on earth are we and the noble Lord’s civil servants being expected to race through with inadequate research and consultation now at such a late stage when there have been two years when these things could have been prepared?
Lord Henley
My Lords, I simply do not accept that point. The fact is that we are doing them now and giving them proper scrutiny, as the noble Baroness, her noble friend and other noble Lords would accept. There will be other opportunities to debate this and other regulations.
Lord Henley
My Lords, I am on my feet, and I will give way to the noble Baroness when I wish. I will now give way.
Baroness Kingsmill
May I just say that we have been at this for getting on for four hours? If we proceed at this pace with the number of statutory instruments that we have still to debate, we will never get through them and there will be a vote before long to say that there will be no no deal. So what is the point of all this? I referred earlier to Alice in Wonderland; it seems even more peculiar.
Lord Henley
My Lords, the noble Baroness is getting on to wider questions. I cannot remember whether it is in Alice in Wonderland or Through the Looking Glass, but I am a mere pawn on the chessboard of life. I believe that we are having appropriate discussion on the order and I think that it is right and proper that, since we have started, we should continue. I look forward so to doing and, as I said, there will possibly be other opportunities as well. I think we should continue with that. Others, who may be the kings, queens and bishops, will then discuss what is the proper procedure, but at the moment, we are considering the Patents (Amendment) (EU Exit) Regulations, which relate only to no deal. We do not want to broaden it out to other things; others can discuss that issue.
Let me return to the debate and the consultation. As I made clear earlier, the IPO sought the views of a group of individual stakeholders—I shall not go into the slightly different words that my noble friend cited from different letters—and consulted them in their personal capacity to identify any issues with the drafting and raise any concerns with the approach. As I made clear, legal experts—there is nothing wrong with lawyers; the noble Baroness, Lady Kingsmill, is one of them, as am I—and business representatives were present. It was a helpful and constructive review of the draft and it was understood that the regs were designed to maintain continuity. I repeat for the sake of the record that at that meeting, as I understand it, there were representatives from the BIA, the ABPI, the IP Federation, the Chartered Institute of Patent Attorneys, the British Generic Manufacturers Association and the agrochemicals industry. If I can add to that list and give further details, I will certainly include that in any letter I write to noble Lords.
On letters, I believe—I am open to correction—that in advance of these regulations I wrote to the noble Lord, Lord Stevenson, and to the noble Lord, Lord Fox, from the Liberal Democrat Benches. I do not know whether I should have taken that wider and written to others. I will consider that with each order I deal with, as appropriate. I also make clear, on the lack of consultation, that we were not preoccupied with the deal. The IPO had sufficient resources to take both deal and no deal in parallel. It was necessary across Government to treat no-deal preparations sensitively when we were in the middle of negotiating a proper deal. From the perspective of business, retaining the regulations means that both the process for applying for an SPC and the scope of the right for which it is granted would be the same after exit as before.
I turn to the post-exit concerns of the noble Lord, Lord Warner. I appreciate that after exit day there may be new drivers for policy change. I think it was the noble Lord who talked about the possible time it may take to get a UK authorisation compared to now and the potential effects. I hear the noble Lord’s concerns, but we should understand the issues when the time comes then properly consider the right policy solution at that point. As I have already said, I would expect that to involve the more usual open and constructive discussions with stakeholders and interests in this area that the IPA usually enjoys. I can assure the noble Lord and others that our intention would be to fully engage with the BIA, the IP Federation and other similar bodies.
Lord Warner
I just want to clarify for the Minister that the damage to the life sciences will be wider as a result of Brexit, but the point I made in my speech was that it is the result of the approach to exclusivity and SPCs in this set of regulations. It is not a wider set of damage. It is a damage to the industry and the sector arising from this set of regulations.
Lord Henley
The noble Lord is right to point to the importance of the life sciences sector, and I am grateful he did. One should also re-emphasise—I would be grateful if the noble Lord would do so—just how important the life sciences industry is to us and what a great state it is in at the moment. The noble Lord will be aware of the recent stage 2 of the sector deal in life sciences that we published along with that sector. I am sure the noble Lord very much welcomed the fact that a major multinational—one based in Brussels, for that matter—announced at that stage that it was investing a further £1 billion over the next five years in research in the UK. Obviously Brexit is not putting off certain parts of the life sciences industry, and I am sure the noble Lord will welcome that.
I do not share the noble Lord’s view that there is a policy change. The SI maintains precisely the current calculation of the SPC duration, and at present it is calculated from the first marketing authorisation in the EEA, which includes the UK. After exit, without the provisions we have set out in this SI, the duration of an SPC in the UK would be calculated from the first authorisation in the EEA—but that would not include the UK. That would be nonsensical and is exactly the sort of deficiency that Parliament gave Ministers carefully limited powers to fix within the withdrawal Act. We believe we are complying with the powers we have within the withdrawal Act. That is what the SI does. It shows that after exit, SPCs within the UK will continue to be calculated from the first marketing authorisation in the EEA or the UK, and the status quo is maintained.
Finally, I turn to the point made by the noble Lord, Lord Adonis, about the Explanatory Memorandum. He said that there was little impact. If a measure has a net impact to business of less than £5 million then obviously a full impact assessment is not required. The £5 million threshold, as the noble Lord will be aware as a former Minister, is set out in the better regulation framework guidance, and measures below the threshold must be accompanied by a proportionate analysis. The analysis is summarised, as the noble Lord will be well aware, in paragraph 12.3 of the Explanatory Memorandum.
I used the word “finally” but, if noble Lords will bear with me, I will have one or two more “finallys”. I turn to the concerns about the unified patent court. We have set out our proposals for the future relationship with the EU, including exploring continued participation in the UPC and the unitary patent. In the political declaration, the UK and the EU have agreed to co-operate in areas of mutual interest relating to intellectual property, including patents. The future of the UPC and the unitary patent will be a matter for negotiation. It is therefore rather too soon to be setting out the further dovetailing legislation.
The noble Lord, Lord Clement-Jones, also set out the points made by the law firm Bristows. We are aware of the point that Bristows has made. The patents legislation contains a number of references to the comptroller and the court, and all those references will be modified in the event of the UPC coming into force. The patents legislation will fully recognise the jurisdiction of the UPC.
Lord Clement-Jones
I apologise to the Minister but actually it was not the Bristows opinion; the 39-page opinion that I mentioned is actually from Brick Court Chambers, and it is very comprehensive. It makes it very clear that if we are to sign up, or to continue with our intention to sign up, we will have to recognise the jurisdiction of the European Court of Justice and there will be no getting out of that. That is what makes this so ironic in the circumstances.
Lord Henley
I look forward to reading the opinion that has emanated from Brick Court Chambers in due course. I was responding, I thought, to the points that the noble Lord had made about Bristows.
Lord Henley
I apologise to the noble Lord, Lord Adonis. I will no doubt study, as will my officials, both the Bristows letter and the opinion from Brick Court.
Lord Adonis
Before the Minister sits down, he has very kindly said that he will write to respond to a number of the points that he has been unable to deal with. Those points are going to be crucial for the House itself to consider when this regulation goes to the House, particularly the points about consultation that were raised by my noble friend Lord Warner.
I ask that the Minister sends his reply and full statement in response to the debate to all Members of the House together with a copy of the debate itself because of the very unsatisfactory arrangements under which the proceedings of the Grand Committee are now reported. They are no longer in the main body of Hansard, a change that I find inexplicable. I do not know when it happened. It must have been beyond the oversight of that shrinking violet, my noble friend Lord Foulkes. It would never have happened if he had noticed it; he must have been shrinking on that particular day. If the Minister could send his full response, with the full proceedings of this debate, to all Members of the House it would be extremely useful in informing noble Lords before they consider these important matters.
Lord Henley
I think that the noble Lord would not expect me to respond quite as positively as he wishes. It might be an overuse of paper to write to every Member of the House. I will write to the noble Lord and other appropriate Peers, and make sure that a copy of my letter is, as always, available in the Library. The noble Lord and I understand that procedure well. A copy of this debate will be available in Hansard. Even if it is not the same Hansard in which reports of the Chamber appear, I understand that it is still Hansard and open to all noble Lords to read. If we want to be really modern about these things, it is also available for the noble Lord to read online.
Baroness Bowles of Berkhamsted
I have two points before the Minister sits down. First, I do not think he replied to my point about whether there was any intended alignment with the supplementary protection certificates and parallel import points. The Minister may wish to come back to me on that. Secondly, the unified patent court and its relationship to the ECJ has been mentioned. That is inevitable. The unified patent court is an international court. The European patent is not an EU invention—it is external to it—but it has been agreed under the convention to which the UK is a party that it recognises the judgments of the ECJ. As I understand it, our own Intellectual Property Office would therefore have to take those judgments into account. Whatever convolutions there may be, we will not get away from the influence of ECJ decisions, whether or not the unified patent court comes into being.
Lord Adonis
My Lords, a moment ago the Minister mentioned writing to “appropriate Peers”. I have never before heard a Minister in the House using the phrase “appropriate Peers”, presumably as opposed to inappropriate Peers. I suspect that, in the Government’s view, I am probably an inappropriate Peer. Particularly in the light of my noble friend Lord Warner’s remarks about “selected and trusted” consultees, I hope we are not going to start introducing the concept of selected and trusted Peers who are to be made privy to the Minister’s responses to these debates. I strongly suggest that all noble Lords receive his letter, together with the account of the proceedings of the Grand Committee. If he is not able to give that assurance, will he take this matter up with the Leader of the House and let noble Lords present in Grand Committee today know soon what the Government intend to do on this? I and other noble Lords may wish to take this matter up with the Leader of the House and with my noble friend the Leader of the Opposition. It goes to the rights and privileges of Members when the whole House considers these matters.
Lord Henley
This is one occasion where I can give a categorical assurance to the noble Lord, because he merely asks what I meant by “appropriate”. I define it as meaning that I will write one letter to all noble Lords who have taken part in this debate and make that available in the Library of the House, as is the normal convention. By that means, all those who have taken part in the debate will have a copy of my responses to the noble Lords, Lord Warner, Lord Adonis, or Lord Clement-Jones. It would be easier if I wrote one letter to all “appropriate Peers”; that is, Peers who have spoken in this debate.
Lord Adonis
My Lords, I am grateful to the Minister for seeking to define “appropriate”, but I do not think that Members of the Grand Committee think that his definition is adequate. Our job is to advise the House as a whole, but there may be a feeling in the Grand Committee that other noble Lords should receive this letter so that they are aware of the gravity of the issues raised about the whole future of the life science industry, which the noble Lord, Lord Warner, referred to, and the importance of taking note of those issues before the House comes to consider them.
Lord Henley
I am grateful to the noble Lord, because obviously he always considers what is important to the House. He will no doubt make sure that that letter of mine, which will be available in the Library of the House, is made available to everyone else whom he thinks it is right should see it. I cannot go further than that, but it would not be right to write to every noble Lord on this regulation.
The Deputy Chairman of Committees (Baroness Finlay of Llandaff) (CB)
The Question is that the Grand Committee do consider the Patents (Amendment) (EU Exit) Regulations 2018.
Good Work Plan
Lord Henley Excerpts(5 years, 11 months ago)
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The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, with the leave of the House, I shall repeat a Statement made yesterday in another place by my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy. The Statement is as follows:
“I would like to make a Statement on the Good Work Plan, published today, which sets out the Government’s vision for the future of the UK labour market and how we will implement the recommendations arising from the Matthew Taylor review of modern working practices.
The Taylor review was commissioned by the Prime Minister to examine the current labour market and employment law framework to help us understand the opportunities of future working practices as well as to identify areas where it has not been working for everyone.
The Government responded to the review in February, accepting the vast majority of the recommendations. Alongside this response, we also launched four consultations to seek views on how best to implement the recommendations. I am grateful to everyone who took the time to respond; their insights have been invaluable in informing our policy development.
The Good Work Plan that I am publishing today sets out a programme for ensuring that the UK labour market continues to thrive in future. The UK labour market has a very positive record in recent years. Since 2010 we have higher employment and lower unemployment in every region and every nation of the United Kingdom. Wages are now growing at their fastest pace in almost a decade. This success has been underpinned by an employment law and policy framework that combines flexibility with protections for workers. New ways of working and the rise of new employment models offer great opportunities, including innovative products and services for consumers as well as new ways in which individuals can find work, earn a living and develop their talents.
Our industrial strategy set out a long-term plan to embrace the opportunities presented by these changes and to boost the productivity and earning power of people throughout the UK. Good work and developing better jobs is at the centre of the vision of the industrial strategy, so I am proud to be the first Secretary of State to take responsibility for promoting the quality of work as well as the creation of new jobs. I have written to the independent Industrial Strategy Council to ask for its participation in considering the best ways to measure the quality of work in the United Kingdom, and I am very pleased that Matthew Taylor serves as a member of the new Industrial Strategy Council.
Another core element of the quality of work agenda is ensuring that we address the challenges for employment law and policy that the Taylor review identified. Most UK employers do the right thing and ensure that their workers benefit from the rights and protections to which they are entitled. We will not allow these high standards to be breached by a minority who try to deny workers their just entitlements.
Among these reforms are steps to improve clarity for both employers and workers. Matthew Taylor recommended that the Government should do more to help individuals and businesses to understand their rights and obligations. He highlighted that the existing employment status tests have contributed to a lack of clarity for both individuals and employers. We agree with this conclusion and will legislate to make improvements to reflect the reality of modern working relationships.
Matthew Taylor also recommended that a renewed effort should be made to align the employment status frameworks for the purposes of employment rights and tax to ensure that the differences between the two systems are reduced to an absolute minimum. Again we agree, and we will bring forward detailed proposals to align the two frameworks. We are also committed to addressing what Matthew Taylor termed “one-sided flexibility” where too much risk has been transferred to the individual, sometimes to the detriment of their financial security and personal well-being. We will legislate to give all workers a right to request a more predictable contract and address the obstacles that employees can face in building up continuous service. We will also legislate to end the injustice faced by waiters and waitresses and other staff in hospitality whose tips left for them by customers are diverted to their employer.
Another fundamental reform that Matthew Taylor proposed was the repeal of the so-called Swedish derogation, which exempts agency workers from equal pay requirements. The Government are therefore today bringing forward legislation to prevent this type of contract being used to avoid meeting the legitimate rights of agency workers. We are also today laying legislation to extend workers’ rights, including extending the right to a written statement to workers and making this available to all workers from day one. We are also bringing forward legislation to provide workers with a longer reference period for the calculation of holiday pay, and reforming regulations to make it easier for employees to have their voice heard in the workplace. This demonstrates how we are putting the Good Work Plan into action immediately.
We also recognise the vital role that effective enforcement plays in ensuring confidence to challenge when the law and regulations are broken, and in creating a level playing field between businesses. Matthew Taylor called on the Government to improve access to justice in the workplace. We have already committed to extending state enforcement on behalf of vulnerable workers to the underpayment of holiday pay, and the Good Work Plan sets out how this approach will mirror the tough financial penalties and enforcement approach that already apply to the underpayment of the national minimum wage. We are also taking steps to improve the effectiveness of employment tribunals, quadrupling the penalties that they can impose for persistent breaches of employment law.
We want to continue to improve the enforcement landscape further. In the light of forthcoming policy changes, we will also consider the case for creating a new, single labour market enforcement agency to better ensure that vulnerable workers are more aware of, and can exercise, their rights, and that businesses will be able to deal with a single body on matters relating to their workplace.
The Good Work Plan sets out a vision for the future of the UK labour market: a labour market that rewards people for hard work, celebrates good employers and is ambitious about boosting productivity and the potential for everyone in the UK to improve their earnings. I am grateful to Matthew Taylor and his panel, as well to the many other individuals and organisations who have contributed to the review of modern working practices and our subsequent consultations. Their input has been invaluable in helping the Government to ensure that the UK labour market is ready to embrace future opportunities without detriment to workers’ rights. I also thank the Business, Energy and Industrial Strategy Committee, the Work and Pensions Committee and the Scottish Affairs Select Committee for their continued contributions to the scrutiny of the recommendations and for their recommendations.
Alongside the Good Work Plan, the Government are today publishing their response to the first full strategy from the director of labour market enforcement. Sir David Metcalf’s strategy was published on 9 May 2018 and made 37 recommendations on labour market enforcement and raising awareness of employment rights. The Government’s response accepts the vast majority of the recommendations and sets out the steps that we will take on raising awareness of employment rights, improving intelligence gathering on abuses of those rights and on strengthening enforcement efforts. I will be placing a copy of this document in the Library of the House. The Home Secretary and I look forward to working with Sir David as the Government implement the recommendations that we have accepted as he prepares to set clear strategic priorities in the 2019-20 labour market enforcement strategy.
As Matthew Taylor concluded, the British model works. We have high employment, low unemployment and a long-standing and proud record of high standards for workers. We will consistently be in the vanguard of reform to maintain this reputation as new technologies and new opportunities for workers become available. This response to Taylor is in keeping with these high standards, and I commend the Statement to the House”.
My Lords, that concludes the Statement.
Lord Fox (LD)
My Lords, I join the noble Lord, Lord Stevenson, in thanking the Minister for repeating the Secretary of State’s Statement. There is perhaps an inverse law here. We are at the end of a long day in a long Session and very few noble Lords are left in the Chamber. Despite that fact, this stands to affect more people than anything else the House has debated this week. It is important and it will genuinely help to improve the lives of millions of UK citizens. For that reason, we welcome the Government’s response to the Taylor review. We welcomed the review when it came out and the Statement sets in motion a number of important steps in the right direction. This has been a long time coming and it is unfortunate that the Minister’s department, along with every other part of government, has a lot of things to do around Brexit, meaning that important work such as this takes too long and is slow to come out.
The Government are right to reject open hostility to flexibility in the job market. Many people want and need the right sort of flexible job environment. Hopefully, these steps will move that forward. Flexibility should not be open to abuse. Workers need real control and choice over the work they take, which means giving them new rights and enforcing existing ones more stringently. The Government’s response has been a bit underwhelming in some cases. If the Minister will excuse me, I will go over a few areas where we think more work should be done.
The Government have said that they will bring forward legislation clarifying employment status and aligning tax and rights, but there is scant detail. Will the Minister fill out the detail or, if not, the process by which it will be forthcoming? The Government have also failed to genuinely address the need for a “dependent contractor”, set out as an employment status for people within the gig economy. The existing status of “worker” needs to be updated and redefined for the sort of 21st-century work that the noble Lord, Lord Stevenson, referred to. We need that status to guarantee gig economy workers minimum earnings, sick pay and holidays. The Government have ruled out a higher minimum wage for hours not guaranteed as part of a contract, and are now going through lengthy consultation. We welcome consultation and, in other environments, the Minister has been criticised for not consulting sufficiently—but it needs to be quick and direct and it needs to get to the point. Action to stamp out abuse of zero-hours contracts must be swift rather than convoluted and kicked into the long grass.
Ministers have refused to rule out reintroducing fees for employment tribunals after the Supreme Court ruled them illegal. They should take that step immediately and rule out reinstating those charges. The Government must show how they will help gig economy workers access occupational pensions. That does not seem to have been addressed and I will come back to it in a moment in relation to sexual equality.
To close, I have three other questions. The Taylor review said that those working in self-employment should receive the same state benefits as those in employment. Why, then, are self-employed workers with fluctuating incomes punished by universal credit? In a good month, their benefit is cut, but in a bad month, their benefit does not rise as much because the minimum-income floor kicks in. Therefore, will the Business Minister undertake to work with the Work and Pensions Secretary to ensure that universal credit is responsive to this kind of fluctuating income, perhaps by measuring incomes over a rolling 12-month period rather than on a month-by-month basis? This unfairness needs to be addressed.
Secondly, around 55% of workers on zero-hours contracts are female. The trade unions warn that the gender pensions gap now stands at about 40%. That means that disadvantages to pensions for zero-hours employees disproportionately affect female workers. Therefore, to avoid further disadvantaging women, the Government must act on Taylor’s recommendation to improve pension provision among the self-employed. What will the Government do to ensure that women in less stable forms of employment will be able to enjoy a secure retirement?
Finally, the University of Greenwich study from 2016 found that disabled workers on zero-hours contracts were often unable to get their bosses to make reasonable adjustments required by the law. They were often afraid to raise the issue because they felt that it might endanger their employment prospects and put them back on to benefits. What are the Government doing to protect disabled people in insecure forms of employment? How will they ensure that the 21st-century economy works for disabled people and not against them? I look forward to the Minister’s response to those questions.
Lord Henley
My Lords, I thank the noble Lords, Lord Stevenson and Lord Fox, for their general welcome of this Statement. The noble Lord, Lord Stevenson, said it was a good start and that he was particularly grateful for the stress on quality; my right honourable friend takes pride in being the first Secretary of State to address that issue of quality. I also thank the noble Lord, Lord Fox, for his comments, particularly his opening remark about being rather sad about inverse laws meaning that, although a great many people were being affected by these policies, not many people—sadly, because of the timing and other business—are present for this debate. It reminds me of the remark that people used to make about discussions about money in certain local councils: namely, that the smaller the amount of money that was being discussed, the longer the item took. I will attempt to answer a number of the points, some of which obviously overlap.
First, both noble Lords were concerned about employment status and how we deal with the distinction between workers and employees. I can assure them that we are committed to legislation to improve the clarity of employment status to reflect the reality of modern working relationships. Obviously, more work needs to be done; we will bring forward detailed proposals on how the frameworks for employment and tax statuses could be aligned. It is, as has been made clear by many, very difficult, and I am not sure that we can ever get them completely aligned—but we will do our best. We are one of the first countries in the world to address the challenges in this area. As Matthew Taylor said, there are three levels of status. He believed that that was right and appropriate, but we want to bring a degree of greater clarity in this area.
Secondly, there were concerns from the noble Lord, Lord Stevenson, about the powers and resources available for enforcement in this area. We are increasing the resources available for enforcement: the budget for enforcing the national minimum wage was increased from £20 million in 2016-17 to some £25.3 million in 2017-18. The Employment Agency Standards Inspectorate has also received a 50% increase to hire more inspectors. But again, as my right honourable friend has made clear on a number of occasions, we want to make sure that it can do that job and bring to book those who are not performing adequately. We believe it is right that successful claimants get what they are due fully, which is why yesterday we launched a new naming scheme for employers who do not pay the employment tribunal awards. Again, I believe that a naming and shaming policy is exactly the right approach.
On the question of employment tribunal fees, raised by the noble Lord, Lord Fox, obviously I am aware of the case in the Supreme Court to which he referred. We are reviewing the fees strategy and looking at the balance between charging direct users and using taxpayer subsidy. The fee remission scheme—help with fees—is a crucial element of this strategy, and, again, we are considering whether the scheme needs to be adapted to facilitate better access to the courts and tribunals in the light of that judgment.
Lastly, on the question of zero-hours contracts, the noble Lord, Lord Fox, in particular referred to the position of some women with regard to zero-hours contracts. However, zero-hours contracts can affect all people, of whatever age and gender. I point out to him that, as he will be aware, Taylor noted that banning zero-hours contracts altogether would negatively impact far more people than it would help.
Lord Fox
My Lords, I think there is a slight misunderstanding. I mentioned at the very beginning that people welcome flexible working contracts, so I ask the Minister please not to put those words in my mouth. My point was that because more women work on flexible contracts, under which pensions are harder to sort out, naturally more women than men will suffer from a pension point of view because more women are on flexible contracts.
Lord Henley
I accept the noble Lord’s point. He will be aware that we made a number of changes to pension arrangements, which one of the noble Lord’s right honourable friends was responsible for as a Minister in the coalition Government, and that will have benefited a great many women and helped them to meet their pension contribution record. I just wanted to make the point that Taylor noted that banning zero-hours contracts would negatively impact more people than it would help. I apologise if I put words in the noble Lord’s mouth, but he accepted that that flexibility in employment is important to a great many people, and I do not think that many of us would like to deny that.
I also note what the noble Lord had to say about disabled workers and the 2016 Greenwich study. I would certainly like to look at that more carefully and if possible write to him. If we go back as far as 1996 and the disability legislation of that year, and amendments and improvements such as the Equality Act 2010, we see that we have made great leaps forward. I hope that what we have set out here, which will be of benefit to all workers, will also be of benefit to disabled workers and to others in due course.
Lord Henley
My Lords, I will respond to the noble Baroness and I look forward then to responding to the noble Lord. That is the order in which we normally do these things. I welcome the positive approach that the noble Baroness took in her comments on the Statement by my right honourable friend, about where it is going and how it might develop. I am not sure that I can answer her questions in much more detail than I have already set out to the two speakers for the Opposition Front Benches. A lot of this is ongoing work. There is much to be done and there will be further consultation. I appreciate that at times noble Lords feel that there is almost too much consultation but this is the right way forward on this process, having had the Taylor review and consulted on it, and having taken certain things forward.
The noble Baroness started off by talking about the one-sided nature of some contracts. She and I probably come from a very different position in terms of how we think a Government should act. I am sure that she believes that the Government should act a great deal more than is the case with my rather hands-off approach. However, I agree with her that, particularly with employment contracts—although one has also seen it in the past with landlord and tenant contracts—there can be occasions for Governments to intervene to bring in a degree of equality between the two parties. This is the approach that my right honourable friend sets out in his Statement and in the general approach that he has taken to contracts.
The noble Baroness then asked about fees. I do not think that I can go much further than I did in what I said earlier to her noble friend. We are reviewing the fee strategy following the UNISON judgment and are looking at the balance between charging direct users and using taxpayer subsidy. There will be further thoughts in due course on how that will develop and I am sure that we will bring them to her attention.
Lastly, the noble Baroness commented on the new enforcement agency proposals and on the impact that they were likely to have on ACAS. If I could say anything more at the moment, I would, or I will write to the noble Baroness, but, again, I think that that will be ongoing work. I hope that she will be patient and look forward to the completion of that work. I will now sit down and wait for the noble Lord, Lord Lea, to make his intervention.
Lord Lea of Crondall
My Lords, I thank the Minister for his overview. I would like to pick up the point made by my noble friend Lady Drake about the quality of employment contracts. My last few years at the TUC were dominated by an attempt to put flesh and bones on to the quality of the employment contract. This is an important study but there is a very shallow focus, and perhaps I may explain what I mean by that.
If you talk to anybody about the economy—indeed, if you talk to anybody in the Treasury—and you compare our economy with other leading economies across the channel, you will find that our productivity performance is a major source of deep concern. Of course, this is also a matter of statistics. A higher level of employment with a rate of economic growth of, say, 2%, will probably mean lower growth in productivity. The problem of low productivity is a statistical inversion.
The big question facing the country on this front is: what are we going to do about the rate of growth of productivity? Productivity is the basis of living standards. To say that there is a lack of productivity is another way of saying that there is a growth of inequality of outcomes in the British labour force and a growing disenchantment among young people. This might go back to a growing inequality of opportunity in education. It is no criticism of this report and the Government’s response to it to ask the Minister to reflect on the fact that there are some huge problems that are not within the scope of this report, and it is the productivity puzzle.
One of the recommendations—number 14, I think—is about an adjustment to the information and consultation regulations. This interests me, as many continental countries have much more statutory regulation in this field than we do. When the trade unions in this country had double or treble the membership they have now—which is partly to do with the new types of employment relationship—it was very difficult. Does the Minister recognise that although this report ticks a lot of the boxes set up by Taylor, and is a step forward—whether on recognition, zero-hours contract issues, recognition of the IC regulations and so on—it is not as if this country looks as if it has a happy future economically?
There is nothing here about works councils or anything remotely like that; that is a key example. A friend of mine went to Gothenburg in Sweden to visit the company he was going to take over, and was invited to a buffet lunch with the works council, whose leader said, “We have one question, Mr Struthers. If you take over our company, how will that improve our world market share?” He got home to Peterborough or wherever it was and reported this and people were astonished that, at a works council, a workers’ representative had asked that. It is almost inconceivable because the world market share is not brought within the purview of our workers or their representatives—that is true to this day. It is a million light years away. We are looking through the other end of the telescope when it comes to these sorts of questions—the fundamental questions facing Britain, its social inequalities, its morale and so on. That should be the wider template upon which this discussion goes forward.
Lord Henley
I thank the noble Lord for his intervention about the quality of employment contracts, the work he did 20 years ago when he was last at the TUC and his concerns about productivity, which he feels the Statement does not address. He connected those concerns about productivity with high employment, and I am grateful to him for stressing that we have high employment. I think there are now 32.48 million people in work, and that is something one can be very proud of. He is right to address productivity, but this Statement is not about productivity. I refer him back to the industrial strategy, which we published a year ago. He will remember our debate on it just under a year ago, on 6 or 7 January; I think that it was the first one we had when we came back from our Christmas Recess—let this year’s roll on. One of the things that my right honourable friend wanted to point to was the general problem that we have with productivity—to the extent that we can measure it, because it is a very difficult thing to measure. We accept that our productivity is not what it should be. In that industrial strategy we laid out a whole array of policies to address that point.
The noble Lord asked whether I would reflect on the problems of productivity. I give him an assurance and a guarantee that both myself and my right honourable friend—in fact the whole department and the whole Government, because that industrial strategy goes beyond the department and belongs to the Government —have concerns about productivity, and those concerns are addressed in that industrial strategy.
Accounts and Reports (Amendment) (EU Exit) Regulations 2018
Lord Henley Excerpts(5 years, 11 months ago)
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Lord Henley
That the draft Regulations laid before the House on 31 October and 6 November be approved.
Relevant document: 5th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, the regulations aim to address failures of retained EU law to operate effectively, as well as deficiencies arising from the withdrawal of the United Kingdom from the European Union, in the field of accounts, reports and audits of UK corporate bodies.
I turn first to the EU accounting directive. The law in the UK on preparation and filing of accounts and reports by corporate bodies is compliant with the EU’s accounting directive. There is also a directly applicable EU regulation which relates to preparation of accounts in accordance with international accounting standards—the so-called IAS regulation. Both the accounting directive and the IAS regulation apply throughout the EEA. The department will bring separate legislation to the House that will address how we intend to deal with the deficiencies presented by the IAS regulation after the UK’s withdrawal from the EU.
Although the fundamental elements of the current company accounts and reports legislation will remain the same after our exit from the EU, it still needs amendment to ensure that it remains effective and makes provision which is appropriate to reflect the UK’s new status outside the EU.
The accounting directive provides for reciprocal arrangements for company group structures. For example, exemptions from producing consolidated accounts are permitted to businesses if the parent is registered in the EEA and itself produces consolidated accounts which are compliant with EU law. In the absence of a negotiated agreement about the economic relationship between the UK and the EU containing reciprocal arrangements, it is inappropriate to continue with preferential treatment for EEA entities or UK entities with EEA parents.
This instrument will mean that businesses registered in EEA states will be treated in the same way as those registered in other third countries. UK businesses with EEA parents will no longer benefit from the exemption from having to produce consolidated accounts. However, UK businesses with parent entities registered in the UK will not be affected by these changes.
The regulations do not create new criminal offences. However, the amendments will extend the scope of the pre-existing criminal offences. For example, dormant companies with parent entities listed in the EEA will no longer be exempt from preparing and filing accounts with Companies House. Failure to file accounts on time would mean that they would commit an offence and be liable to incur fines if prosecuted, as well as civil penalties. That is consistent with the approach for similar companies with parents outside the EEA.
The accounting directive sets out certain requirements for businesses to report payments to Governments worldwide relating to the extraction of natural resources, by way of logging and mining. Alongside this, it provides a power for the Commission to grant equivalence to third countries for their system of reporting payments to Governments regarding these activities. This instrument transfers this power to the Secretary of State.
Turning to the second of the two SIs, the law in the UK on regulatory oversight of the audit profession is compliant with the EU audit directive and the EU audit regulation. The audit directive sets out the requirements on the statutory audit of most businesses, as well a framework of standards for auditors’ work and independence. It also sets out the responsibilities of the competent authorities for statutory audit in member states. Meanwhile, the audit regulation sets additional requirements on the statutory audit of those businesses defined as public interest entities. It forms part of retained EU law under the European Union (Withdrawal) Act and will therefore continue to apply to the UK after the UK’s exit from the EU. Our aim is to ensure that the framework for the regulatory oversight of the audit profession in the UK works effectively following our withdrawal from the EU. The statutory instrument under discussion will help to facilitate this.
Under the audit directive, powers are provided to the European Commission to grant equivalence to third countries for their audit regulatory framework and adequacy to third countries’ competent authorities for their framework on audit regulatory co-operation. This instrument transfers these powers to the Secretary of State. Regulations will be made in the months immediately following the UK’s departure to set out a framework for future assessment of equivalence and adequacy by the Financial Reporting Council. In future, equivalence or adequacy decisions will also be granted by regulations. Following the UK’s exit from the EU, EEA states would be treated like other third countries.
This instrument also extends powers granted to the UK’s competent authority, the FRC. Certain powers have previously been granted to the FRC by the Secretary of State but now need to apply more broadly to reflect the UK’s exit. The instrument enables the FRC to enter into mutual recognition agreements to recognise audit qualifications with the EEA states. It also enables the FRC to register EEA auditors as third-country auditors where they audit businesses outside the UK that are listed on UK markets. This instrument transfers the European Commission’s power for the adoption of international auditing standards to the FRC. As the FRC already sets UK standards in line with the international standards, we anticipate no immediate changes.
This instrument provides certain transitional arrangements for the auditors affected and their client businesses. To ensure companies and investors remain confident in UK markets, these will apply until the end of 2020. During this period, we will continue to recognise EEA audit qualifications, firm registrations and approvals, EEA audit regulatory frameworks as equivalent and EEA competent authorities as adequate. These transitional arrangements will mean that there will be no cliff edge for EEA companies that list securities on UK markets. They will also allow the FRC the time to put in place the procedures necessary to assess the equivalence of EEA states, as well as the adequacy of their competent authorities.
The Government have carried out a de minimis impact assessment of these regulations, as the overall costs to business were expected to be small. The assessment confirmed that the impacts on business would be minimal. Only a limited sector will be affected by most of the substantial changes made in the Statutory Auditors and Third Country Auditors Regulations. This is because the amount of cross-border business affected by this instrument is small. The most significant effects are for UK businesses listed on EEA markets, whose auditors will have to register with the FRC, and for UK businesses that only trade securities in the EEA, as their auditors will be subject to less regulation than before.
The Government have worked closely with businesses and regulatory bodies to ensure the regulations achieve continuity wherever possible while addressing the deficiencies arising from the UK’s withdrawal from the EU. The instruments before us incorporate stakeholder views and insights.
In the unlikely event that the UK leaves the EU without an agreement, the measures contained within these regulations will be critical in ensuring that UK accounting, reporting and audit frameworks continue to provide transparency and certainty to investors. They will also ensure that companies operating in the UK have clear guidelines for preparing and filing their accounts. I commend these regulations to the House.
Lord Fox (LD)
My Lords, I thank the noble Lord, Lord Henley, and his department for innovating and delivering two SIs in one package. I am not sure that this has been done before, but it is perhaps appropriate that the department that spearheads innovation should be leading on this.
I did a quick count back and I think that over the course of my career I have been responsible for 18 reports and accounts, all of which, I should say, were for UK-domiciled and listed companies, so many of the issues here do not apply. The Minister will be pleased to know that I will not be regaling your Lordships’ House with the benefit of that experience, because it is clear that there are many things that can be improved around financial reporting. There are an awful lot of deficiencies around reporting, but these are not the vehicles by which that improvement should be delivered, so the Minister can be pleased that I will not be using that for a long discourse.
I have two or three points on the annual reporting side and one very important problem that I think we have around the audit area. On the reporting side, the Minister mentioned the reporting protocols around payments to Governments for logging and mining activities. Will the Minister write to me and say what those are and underpin that there is no change planned between the two regimes as we move from one to the other? This is an area where a little more clarity would help.
Paragraph 7.12 of the Explanatory Memorandum covers where this instrument applies and when the change comes. I note that if a business is called on to restate its chart of accounts—which has happened in my knowledge, and happens from time to time—it has to go back through time and restate its accounts. I have to say that this change will make it an extraordinarily difficult activity in the event that any business needs to do that.
The Minister said that the Government have been working closely with business, but when we look at the consultation outcome we see that they have not been able to consult in order to minimise sensitivities in advance. It is not clear to me why they were not able to consult—perhaps the Minister will explain why it was felt not to be appropriate.
I turn to the audit side. This could hardly come on a more auspicious day, when we have the CMA making its comments about audit companies and we have the Kingman report with reflections on the fitness for purpose of the FRC. The Minister mentioned the FRC at least a dozen or 15 times. The role of the FRC in managing this rollover between the two regimes is crucial, yet we have, in the words of a very experienced practitioner in Sir John Kingman, the finding that the FRC is essentially unfit for purpose in how it is operating today, never mind with the extra responsibility that this SI puts on it. I would like to understand how the Minister thinks that this is going to be enacted by an FRC which is short of a leader and clearly short of the resources to manage its day-to-day job, without giving it extra responsibilities. I look forward to his response.
Lord Stevenson of Balmacara (Lab)
My Lords I am very grateful, as was the noble Lord, Lord Fox, to the Minister for giving a very concise and important overview of these two SIs. We are trying out a slightly different method here—trying to cut down on the amount of speaking that the noble Lord has to do at the Dispatch Box. I think that it has worked, so I hope it will be a model for others to come.
The three points I wanted to make have been covered by the noble Lord, Lord Fox, so I will not repeat them, but I want to say one thing in relation to scrutiny. The Secondary Legislation Scrutiny Committee has asked us to look at both these SIs with regard to a couple of points. I am happy that the Minister covered the points, so I do not need to delay the House on those matters. For the completeness of the record I also wanted to ask about extractive industries and whether there would be any impact in the way that those accounts will be treated consequent on the introduction of these SIs, if they are required. Again, a letter will be sufficient on that.
The noble Lord, Lord Fox, is right. It is a bit intriguing to find that the principal body which would have been responsible for this is going to be abolished before it has the chance to implement the changes made in the statutory instrument. I would be grateful if the Minister could confirm that, as I understand it, the independent review of the FRC, which I read with interest—it is a very good read indeed, full of spicy and rather spiky comments—is suggesting that the FRC needs to be replaced by a new, independent statutory regulator with stronger powers. Is that right and, if so, will it be completed in the timescale that is envisaged for this statutory instrument?
There is a letter—which is not the same as the report—which was sent to the right honourable Greg Clark MP by Sir John in parallel with his report, which looks at whether there is a case for a fundamental change in relation to who appoints company auditors. There are a number of extremely interesting ideas, particularly for PIEs—again, accompanied by well-phrased and rather pointed comments about the current state of play. They suggest quite strongly—although it is not clear whether the Secretary of State is going to accept this—that there would be a case for moving away from companies having responsibility themselves for appointing their auditors to a situation in which an independent, strong regulator, presumably the new body replacing the FRC, will have a probably quite significant role.. I assume that this decision will be undertaken by the new review, building on the work on the FRC, and of course the CMA review, which is rather surprising because that was only an interim report. I am a bit surprised that that is being taken forward already. If it is, fair enough—but will that review being undertaken by Donald Brydon, the chairman of the London Stock Exchange and Sage, take on the letter element of the Kingman report we have received today?
I have also looked at the CMA report. There is a considerable interest in how that might work. Obviously, it will considerably affect the viability, profitability and operating activity of the large companies that have been very successful in building up accountancy and audit-related functions in this country. It may not be a fatal change—it may be a necessary change—but, again, I would be grateful to get a steer from the Minister as to what exactly is going on here and what the pace of that would be, if it was decided to move forward.
Lord Henley
My Lords, I am grateful to both noble Lords for their comments. I suspect that I will keep mine pretty brief and will write to them in further detail, which I think they will be grateful for, bearing in mind the hour. Again, I emphasise that the SIs are there for continuity through exit should there be no deal. We need to provide a degree of certainty for businesses at a time of significant change.
I will deal with some of the points that were made. On logging and mining, which both noble Lords raised, I will write to the noble Lord, Lord Fox, and copy that to the noble Lord, Lord Stevenson.
On the question of working closely with business, the noble Lord, Lord Fox, asked why we did not consult more widely. Officials did consult with stakeholder groups, including preparers, users and auditors, but they were not able to consult more widely due to negotiation sensitivities at the time.
I am afraid that both noble Lords are ahead of me in that I have not yet read the independent review of the FRC, but that will be something to look forward to on my Christmas list. The noble Lord, Lord Stevenson, commented on the barbed nature of some of the comments. It certainly adds to the joys of reading these things when they are written in such terms. We will carefully consider and consult on the recommendations and, if there are any, ensure that a smooth transition affects these functions. But obviously the FRC exists at the moment and therefore we have to make these changes.
Lastly, the noble Lord asked whether the SI would be impacted in future by the range of ongoing reviews in the audit market. I recognise that there is quite a range of work going on to ensure that the audit market is as effective as possible, which may lead to later changes, but as I have said on many occasions—and will continue to say—we will consult on those issues in due course.
I think I have answered the questions that both noble Lords have put to me and, there being no further interventions likely, I commend these two Motions en bloc to the House.
Employment: Terminal Illness
Lord Henley Excerpts(5 years, 11 months ago)
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The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, I echo the noble Lord, Lord McNicol, and other speakers, in offering my congratulations to Jacci Woodcock on all that she has done in this area, because so much of what we are talking about is part of that educative process. I also praise the TUC for its campaign and the work it does in this field. I thank my noble friend Lord Balfe for tabling this Question and for securing such speakers as the right reverend Prelate, with his expertise from the Church, the noble Baroness, Lady Finlay, whose expertise in this field needs no repeating, and my noble friend Lord Horam, with his experience of Rowntree’s and other employers of that sort.
My noble friend Lord Horam mentioned that my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy had made a Statement setting out his plans. I can assure my noble friend that the Minister will make a Statement later today but other things will have got in the way, so I am not sure when. I was hoping to repeat that Statement today but it is likely to be tomorrow. In it, we will set out a work plan as a carefully considered and ambitious approach to the Taylor review. I hope that the noble Lord will be there tomorrow, along with others, when that Statement is repeated. I see the noble Lord, Lord Stevenson, nodding, so I am sure he will be there.
The period following a diagnosis of terminal illness is an incredibly difficult time. Noble Lords will agree, I am sure, that employees who suffer from a terminal illness should not have any additional burdens placed on them, particularly any worry that they may be unfairly dismissed from their employment due to illness. For that reason, the Government strongly encourage all employers to treat employees with disabilities and related conditions with sensitivity and compassion. My noble friend raised a number of points during the debate, and I will set out just some of the current protections available to employees suffering from disabilities. We have some of the strongest equalities legislation in the world, and we will continue to make sure that these rights are protected. I think we can say in all honesty that we are recognised as a world leader in this field.
The 2010 Act, which has been referred to, provides protections such that disabled workers with chronic diseases or conditions, whether terminal or not, or debilitating illnesses are fully protected from any discriminatory conduct by their employers. Provided that a person meets the definition for having a disability, they will be protected under the legislation and it will be unlawful for an employer to discriminate against them because of their disability. Under employment law, an employee who is unlawfully dismissed or forced to resign from a job because of a terminal illness may bring a claim of unfair dismissal against their employer, and/or a claim of disability discrimination under the 2010 Act.
More generally, it is the Government’s view that, where an employee is unable to attend work due to an illness, dismissal should be a last resort and an employer should consider as many ways as possible to support the employee back to work. This should be informed, where appropriate, by a medical report from the employee’s GP—with permission—or by arranging an occupational health assessment.
Employees who consider that their dismissal was unfair can complain to an employment tribunal, generally subject to a qualifying period of two years’ continuous service. A tribunal will usually expect the employer to have sought advice on how long the employee was likely to remain absent, or whether he or she was likely to be persistently absent in future. Should the tribunal deem the dismissal unfair, the employee would be entitled to a basic award—set at the same level as statutory redundancy pay—and a compensatory award. The latter would be based on the tribunal’s assessment of the employee’s loss of earnings, pension rights and so on.
My noble friend, and other noble Lords, spoke of the TUC’s Dying to Work campaign. That aims to ensure that terminal illness is recognised as a protected characteristic under the Equality Act so that an employee with a terminal illness would enjoy a protected period against dismissal by an employer as a result of illness. We fully support the objective of enabling employees with life-threatening conditions to continue working for as long as possible. We believe that the workplace rights of people with terminal illnesses are already protected by the Act, and I am not convinced that additional protection is required.
If my noble friend were to look at Schedule 1(8) to the Equality Act, it makes it clear that those with progressive conditions are likely to meet the definition of disability and so be protected. Further, under that Act protection from discrimination is already available to those diagnosed as having a chronic, progressive or life-limiting disease. Terminal illnesses fall within this bracket, and the Act and associated guidance make it clear that those with progressive conditions whose effects increase in severity over time should be regarded as meeting the criteria for having a disability before the condition actually has that effect.
My noble friend also made the point that despite the provisions of the Equality Act, it is still possible for an employer to dismiss a worker on grounds of capability. That is true only to the extent that the dismissal does not breach the protections in that Act. For example, a dismissal will be unlawful if it is based on something which arises from the worker’s disability and is not justified as a proportionate way to achieve a legitimate aim. So, the Government are not persuaded of the need to legislate, whether that be by primary legislation, which the noble Lord, Lord Razzall, thought would take some time, or secondary legislation. Furthermore, the Government’s view is that a new characteristic will not stop bad employers flouting the law, while those merely behaving in ignorance of the law are best addressed through education and guidance.
I note also my noble friend’s point regarding reforms to statutory sick pay. We want to see a reformed statutory sick pay system which supports more flexible working, for example, to help support phased returns to work, including spacing out working days during a return to work, while managing a long-term health condition or when recovering from illness. Offering periods of flexible working may help people to manage or recover from a health condition. However, SSP is currently inflexible and creates a financial disincentive for employees to consider some forms of phased return to work. We are taking forward further policy development and will bring forward a consultation on these changes, as well as any other SSP changes that we identify in our wider work, before introducing this reform. The Government will consult on measures to encourage and support all employers to play their part in this vital agenda and improve access to occupational health.
My noble friend also mentioned the duty on employers to provide reasonable adjustments for those with disabilities. This duty is not a once-only action or consideration. It requires review, adaptation and ongoing support as people’s needs change and develop. An employer will need to anticipate their employee’s evolving needs and adapt the adjustments to the reality of their time in the workplace. However, the duty to provide reasonable adjustments is not limitless; the Equality Act contains qualifications to the protections it provides across the protected characteristics. It makes it clear that the adjustments that should be made and the protections provided have to be reasonable in all the circumstances, taking into account a variety of factors, including the resources and circumstances of the business in question. This concept is well understood in law and generally thought to be working well. Disabled people have brought successful claims under these provisions where employers have got the balance wrong on what is reasonable. We believe that to define in legislation what constitutes “reasonable” in a particular circumstance would begin to undermine the nature of the Act and its ability to apply to the circumstances of individual cases, which has been the backbone of disability legislation since it was introduced in 1995.
Although I am naturally concerned by and sympathetic to the plight of anyone who receives such a diagnosis, I do not believe it would be reasonable to expect an employer to retain people on their books indefinitely if they are no longer able to carry out work once all reasonable adjustments have been made. I fear that the unintended consequences of such a change in the law could be significant.
My noble friend Lord Balfe also talked about the need for better training in HR. He cited the experience of his two daughters. I assure him that guidance and practical workshops are available on the ACAS website. ACAS also published specific guidance on potentially life-threatening conditions in September 2016.
I emphasise that the Government are committed to improving the lives of all people with disabilities, terminal illnesses and related conditions, and to making the UK a country where everyone can achieve their full potential. To achieve this, we believe that it is imperative for all employers to be aware of and fulfil their legal obligations towards their employees, including disabled and terminally ill employees. For this reason, we believe that the guidance and practical training available from ACAS and its website should encourage and assist all employees. I end by recommending that all employers make use of those resources.
Off-site Manufacture for Construction (Science and Technology Committee Report)
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The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, I join with other speakers, particularly those who were not on the committee, in congratulating the committee on its work. I think this is the second report in two months I have had to respond to from the committee run by the noble Lord, Lord Patel—it sometimes feels like the second report in two weeks, but there it is.
As always, I also congratulate the committee on the extraordinary expertise it brings to its work. Those who serve on it are engineers, or from the medical profession or business, but it also has, in my noble friend Lord Renfrew of Kaimsthorn, an archaeologist. Given that some people have suggested to me that some of the practices in the construction industry have not changed much since the pyramids, it is possibly appropriate that he is there. Those who are not on the committee brought yet further expertise, but for the two generalists who spoke in the debate—me and the noble Lord, Lord Stevenson, if I may speak for the noble Lord—listening to the contributions and hearing about what is on offer for this industry and what it should be able to achieve in due course has been very educative.
We welcome the committee’s focus on off-site manufacture for construction and the support it has given to these technologies. The report has come out more or less at the same time as the construction sector deal, soon after the publication of our industrial strategy. I will say a little more about that. When I joined the department I briefly had responsibility for construction. I had the opportunity to see for myself the impact of some of these technologies. For example, I heard about what they could do for Crossrail in building some of the underground at Liverpool Street and other sites, off site, and how these technologies can cut delivery time by half, from 67,000 to 27,000 man hours, delivering time, cost and productivity benefits. Also, major construction projects such as that in London deliver benefits to the regions. My understanding was that some of those stations were being built not in London but in the Midlands. Therefore, whenever people talk about infrastructure gains for London and all that cost going to London, they should remember that such construction techniques benefit other parts of the country.
We believe that technologies such as this should be rapidly commercialised and adopted by the sector. That is an objective the Government are fully committed to. It is at the heart of our strategy for the sector, as set out in the construction sector deal, and I will take this opportunity to set out the Government’s approach.
The construction sector is a vital part of the United Kingdom’s economy. It includes product manufacturing and associated professions, and had a turnover of some £370 billion in 2016. The noble Lord, Lord Stunell, had some doubts about our figures, but as I say, we are including product manufacturing and associated professions. I will certainly look at his figures, see how they compare with ours and whether we are comparing eggs with eggs. The sector accounts for around 9% of United Kingdom GDP. It also employs 3.1 million people—9% of the UK workforce.
The sector’s outputs underpin the UK economy through providing the buildings and infrastructure that firms use, as well as providing the homes, schools and hospitals that deliver a high quality of life for our people. It is a sector that can and should make a major contribution to economic growth and prosperity, but it obviously faces a number of challenges that are particularly pronounced. These include demographic change. The whole of society is changing, but it is even more marked in this industry: a third of the construction workforce is aged over 50, and those workers will not be replaced by those entering the workforce. As a great many noble Lords have underlined, as has the report, it also has to improve its productivity: McKinsey estimates its rate of improvement as being less than 50% of the whole economy’s. It is even further behind sectors such as manufacturing. We also have to look at training, but I will say a little more about that later.
To deliver the Government’s infrastructure investment plans and achieve that homebuilding aspiration of 300,000 new homes a year will require the construction sector to modernise and become more productive. We believe that the adoption of techniques such as off-site manufacturing is a key to this, as does the Construction Leadership Council and other industry leaders. In passing, let me say how much I welcome remarks such as those by the noble Baroness, Lady Young, and others about the Construction Leadership Council. We will continue to work closely with the council to deliver the sector deal. I note that the noble Lord, Lord Fox, said that he works closely with the noble Lord, Lord Stunell, but it did mean that the noble Lord, Lord Stunell, did exactly what he said. I repeat: we will continue to work closely with the council because we do not want to tell it what to do—we want to work closely with and collaborate with it. It is possible that the noble Lord, Lord Fox, wants to take a more Stalinist approach to these things, but I leave that to his discussions with his noble friend.
The advantages of off-site construction are many and have been rehearsed by several noble Lords. They include digital design processes that enable designs to be refined and new materials and products to be incorporated, and improving energy efficiency and building safety performance, as the noble Baroness, Lady Young, made clear. Health and safety is a problem on the average construction site and here is an opportunity to improve it. There is the chance to improve quality and have fewer defects through building components being produced in a controlled environment, rather than on site. Off-site construction is less labour-intensive and produces less waste, thereby improving productivity, as was made clear. There are benefits for training, as the noble Baroness, Lady Young, again made clear, as well as advantages for tree planting, which she emphasised. As for import substitution, I remind the noble Lord, Lord Stevenson, that tree planting is great, and we want to see more wood used, but it takes quite a long time before those trees come on stream. Still, there are many trees that we can make use of in this country.
The noble Lord, Lord Fox, brought up the safety of the buildings themselves. There are benefits that could be addressed, and we want to work towards that. I believe that the Government have already taken action to support that transition by working in partnership with industry through the flagship construction sector deal that we published in July 2018. As always with such a deal, as with the industrial strategy as a whole, it is all very well publishing it—it is all about how you deliver it. Noble Lords were right to stress that we want to be kept informed about progress. I can give an assurance to the noble Lord, Lord Stunell, that we will be publishing an annual report on progress. I presume that the next report will be published in July 2019: I give that assurance now and I hope we can stick to that target.
The noble Lord, Lord Stunell, wanted to know how much we are spending. There is joint investment of £420 million in the transforming construction programme, of which £170 million comes from government and the rest from industry, to drive the development and commercialisation of digital and manufacturing technologies in construction. A key investment from that programme will be £72 million in the core innovation hub, a consortium of the Centre for Digital Built Britain—which the noble Lord, Lord Mair, will know of—the Manufacturing Technology Centre and the Building Research Establishment. That £72 million has already gone out and a further £60 million will be available. I think the noble Lord, Lord Mair, welcomed that expenditure on research. A further £60 million will be available for R&D projects in business and research institutions. The first grants in that field will be announced in January next year.
The sector deal also sets out plans to ensure that those working in the industry are trained in the skills that they will need to support the transition to off-site manufacturing. On training, I can give an assurance that we will work closely with the sector to drive an increased investment in skills development, to adopt a more strategic and co-ordinated approach to recruitment and to equip workers with the skills they will need in the future. That will be achieved through a joint commitment to implement the reforms to the Construction Industry Training Board to make it more strategic and industry led and to enable the sector to make the best use of funding from the apprenticeship levy. The sector deal sets out an industry-led target of increasing the number of apprenticeship starts in the sector to 25,000 by 2020. It is currently at 21,000.
I move on to the question of presumption, particularly the presumption in favour, which was raised by many noble Lords. My noble friend Lord Borwick started off with a certain number of strictures about what the Government were going to do. I will certainly take note of that and pass on those comments, particularly in relation to planning, to colleagues in other departments. He was the first noble Lord to talk about procurement, the work of Government in procurement and the presumption that they would be in favour of using off-site construction. We are taking steps to improve cost effectiveness. As the noble Lord, Lord Mair, made clear, in the 2017 Budget the Government agreed that presumption in favour of off-site manufacturing with five departments: the departments for transport, health, education, justice and defence. I would hope, since I think they were mentioned by another noble Lord, that departments such as the Department for International Development will also take that on board, but that will be a matter for them. The important matter is that we have that presumption in favour.
The noble Lord, Lord Mair, asked what teeth there were in that presumption. My noble friend Lady Neville-Jones asked what this presumption meant and how we would ensure it could develop. The presumption means that the five departments will, at every business-case level, test whether the use of these techniques is an option. It also means that, by including off-site in the early stages of planning, the right environment will be created for off-site techniques to succeed. By doing this we will challenge the cultural bias towards traditional construction and send a strong signal to the supply chain that they need to build their capacity and capability.
The presumption is only one part of a wider range of long-term initiatives to increase innovation and productivity in the sector. To help deliver the presumption, the Infrastructure and Projects Authority has set up a cross-departmental working group which has started developing a library of standardised components, building the capability of procuring departments and leveraging the Government’s purchasing power by aggregating demand from multiple departments. I hope that that will make a difference but I can add that the Government have issued a call for evidence on the implementation of the presumption to use off-site manufacturing, which will enable all stakeholders to contribute to the development of the presumption. Other issues will be considered in the light of the responses that we receive.
Baroness Neville-Jones
In the example that my noble friend has just given, in any competition where there is more than one potential supplier and one of them offers a much higher degree of commitment to off-site manufacturing, will the Government choose that contract even if it is more expensive—not outrageously more expensive, but potentially more expensive than something more traditional?
Lord Henley
I am not going to give any guarantee, if that example was in a competition, but I will certainly pass it on to colleagues as a matter to consider in such an eventuality. I was trying to stress what the presumption was, what it meant and how we will make use of it.
I also give an assurance to the noble Lord, Lord Fox, that we will continue to work with local authorities and housing associations to ensure that they take these matters on board. I hope that he will be content with the words I use about “working with” and consider that that is the right way to go about it.
I thank all noble Lords who have taken part in this debate. If I may make a pun, it has been genuinely constructive. I think I am the first one to make that pun, which rather surprises me given the 12 speakers, but there it was. It has been constructive, but I hope that the Government have also given sufficient assurances that we wish to be constructive in this. We believe that our commitment to the technologies in this field is one that we can be proud of.
Buildings: Energy Performance
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Lord Stunell
To ask Her Majesty’s Government what steps, if any, they plan to take to improve the energy performance of buildings as a contribution towards reducing carbon emissions and achieving the United Kingdom’s climate change obligations.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, the Government are committed to improving the energy performance of buildings—with some speed, I hope. In the clean growth strategy, we set out our aspiration for domestic properties to achieve energy performance certificate band C by 2035, to reduce business energy use by 20% by 2030, and for the public sector to achieve a 30% reduction in carbon emissions by 2020-21.
Lord Stunell (LD)
I thank the Minister for his Answer. He will know, of course, that the UK’s performance is falling well below the targets set in the clean development strategy and, indeed, in the figures he just gave. Buildings account for 30% of the UK’s energy emissions. Is it not time to start a major programme of retrofitting existing buildings, particularly homes, thereby saving people’s energy costs and meeting our carbon targets?
Lord Henley
My Lords, I accept the importance of buildings in achieving our carbon reduction targets. But I remind the noble Lord, as I have previously, that since 1990 we have reduced our emissions by some 43%; that is the fastest decarbonisation of any G20 country, which is something we can be proud of. As the noble Lord correctly states, it is important that we do this particularly for buildings. The clean growth strategy set out our aspirations for as many homes as possible to be upgraded to an energy performance certificate of band C by 2035, and we will continue to pursue that.
Lord Dubs (Lab)
Is the Minister aware that at night many office blocks have the lights blazing all the time? I was in Canary Wharf recently and all the lights were on late at night. Could the Government not take some action on that immediately?
Lord Henley
My Lords, one would hope that the owners of those buildings would have the incentive of the cost of lighting those buildings. But the noble Lord ought to be aware that light does not necessarily always consume that much energy, particularly if the owners have switched to LED lights and other forms of lighting that can reduce their carbon footprint. What the noble Lord sees is not necessarily what is happening in terms of energy consumption.
Lord Krebs (CB)
My Lords, I am sure the Minister will agree that one of the simplest forms of retrofit to improve the energy performance of existing homes is loft insulation, yet the Committee on Climate Change, in its 2018 report, notes that loft insulation installation rates are now at their lowest for 10 years. The committee also sets a target for the Government as part of the trajectory to 2050, and the legally binding commitment we have made, of installing loft insulation in the remaining 2.5 million homes where it can be installed simply and effectively, by 2022. Does he also note, and will he comment on the fact, that the current rate of installation will mean that this target is not met until at least 2080?
Lord Henley
My Lords, I agree with the noble Lord that loft insulation is one of the best ways for any householder to reduce the amount of energy they use and have a warmer house. One would hope that there are two motivators here. One, obviously, is price, which should encourage people to buy their insulation and install it. We also offer advice through the Simple Energy Advice service—a new digital approach offering tailored advice to home owners—which has been available online and by telephone since the spring to encourage people to look at ways of insulating their homes.
Lord Geddes (Con)
My Lords, why is it not mandatory for all new buildings to be fitted with energy-saving devices such as solar or photovoltaics?
Lord Henley
My Lords, I think the owners of most new buildings go to a great deal of trouble to make sure that they are properly insulated. They have to be insulated up to a certain level. I will write to my noble friend in greater detail. Whether they want to go further and whether that should be mandatory is another question.
Lord McNicol of West Kilbride (Lab)
I am sure the Minister will agree that improving the energy efficiency of buildings plays a crucial role in tackling fuel poverty and helping to bring down bills for the most vulnerable. According to the Committee on Climate Change, the Government are “off-track” to meet their fourth and fifth carbon budgets. Can the Minister set out to the House what steps, if any, his Government are taking to get back on track?
Lord Henley
My Lords, my understanding is that we have met our first carbon budget. We are on track to meet our second and third. I will take advice on where we are on the fourth, and write to the noble Lord.
Baroness Jones of Moulsecoomb (GP)
My Lords, obviously I care about all the environmental aspects of these issues, but measures such as home insulation also create huge amounts of business for small and medium businesses, and thousands of skilled jobs. Why are they not at the heart of the Government’s industrial strategy?
Lord Henley
My Lords, we are all fully aware that the noble Baroness cares very strongly about the environmental aspects and I assure her that they are at the heart of our industrial strategy. We want to see people take the business opportunities of selling insulation and individuals then taking the opportunity to insulate their home.
Nuclear Energy
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Viscount Hanworth (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare that I have recently been in China on a trip organised jointly by the Nuclear Industry Association and the China General Nuclear Power Corporation to inspect the HPR1000 nuclear reactor at Shenzhen.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, the Government believe that nuclear power has an important role to play in our future low-carbon energy mix. This is clear from our commitment to Hinkley Point C, the first new nuclear power station in a generation, as well as from the launch of the nuclear sector deal in June, which outlines a new framework designed to encourage industry to bring viable small-reactor propositions to the marketplace.
Viscount Hanworth
I must thank the Minister for that Answer but, notwithstanding his assertion, the Government’s support for the nuclear industry has been half-hearted at best. They have missed the opportunity to establish a joint Anglo-French nationalised nuclear industry in conjunction with EDF, which would have had a global reach in the area of decarbonisation. Moreover, the Government have failed to give sufficient support to Rolls-Royce in its project to create a small modular nuclear reactor that might have had excellent export opportunities. The project has been held in abeyance for far too long. Are the Government content to allow our nuclear facilities to be constructed and owned preponderantly by overseas suppliers?
Lord Henley
My Lords, I think that is a bit rich from the noble Viscount who speaks, I presume, for a party that was in office for 13 years and did absolutely nothing to produce new nuclear power stations. We have produced a new nuclear power station and we have produced a nuclear sector deal that looks to enhance the sector and aims to support the 87,000 jobs in the sector and increase that number to some 100,000 jobs, and aims to see a 30% reduction in the cost of new-build projects and so on—I could go on. We are committed to the nuclear sector and will continue to be so.
Lord Howell of Guildford (Con)
My Lords, can my noble friend give us a little more up-to-date comment on our attempt to develop a new nuclear fleet? He has mentioned Hinckley C. At Moorside, of course, Toshiba has abandoned the situation and no other role can be found to support the consortium. I understand that Hitachi continues to be very worried about the situation at Wylfa, where, although there is talk of agreement, it has not yet been achieved. Meanwhile, EDF is thinking of building Sizewell C and I learn from CGN’s latest papers that it regards that as a joint venture on top of its undertaking to build one at Bradwell B. So the Chinese are really involved in everything. Is this not a rather worrying situation? Should we not have an update to the House on where we are going on the whole programme, since it does not seem to be going very smoothly?
Lord Henley
My Lords, it is unfortunate that Toshiba had to announce that it would wind up NuGen, and as a result the project at Moorside has been lost—but that was a commercial decision for that company. That site will revert to the Nuclear Decommissioning Authority and it and we will consider options for its future. Moorside will remain available and we hope that others will come forward. Discussions will continue on Wylfa. As my noble friend knows, my right honourable friend made a Statement about that last June, announcing the first signing of proposals with Hitachi, and that will continue. We remain committed to nuclear, as we made clear in our nuclear sector deal. CGN, as my noble friend made clear, is committed to Sizewell, to Bradwell B and beyond, and we look also to other companies to come forward.
Lord Broers (CB)
My Lords, I declare my interest as a foreign member of the Chinese Academy of Engineering. I am somewhat encouraged by what the Minister said because, in the situation we find ourselves in now, where storage of carbon dioxide is not going well—we have made scarcely any progress—and it is now obvious that batteries are far too expensive to back up wind on a national scale, we are left with nuclear, so it is extremely important that we proceed as quickly as possible. I have to admit that when I talk to Chinese engineers they feel that if we replicate an EPR we can do it at 30% less money than the initial venture, which means that if we combine that with the cost of wind properly backed up, which is about £60 per megawatt hour, we can do the same with nuclear. So should we not get on with all speed, but maximising our own contribution by including the small modular reactor?
Lord Henley
My Lords, there was an awful lot to answer in the noble Lord’s question, but I think he is right to emphasise the importance of nuclear. It provides some 20% of our electricity requirements, and obviously in a low-carbon manner. We are also looking for cost reductions in new-build projects and I am glad that the noble Lord emphasised that. In our nuclear sector deal we are looking for cost reductions of some 30% over the next 15 years or so, as well as cost reductions in other areas. He is also right to emphasise the role that wind can play and the fact that the cost of wind is coming down.
Lord Teverson
My Lords, I welcome very much the Government being far more questioning about Chinese investment in critical infrastructure in this country, such as 5G telecoms, which is being rolled out. Will they extend that questioning to our critical nuclear infrastructure, not least Bradwell, which is a Chinese-designed system?
Lord Henley
My Lords, we will continue to work with CGN on Bradwell, as they have committed to do, and we hope that Bradwell B will become available in due course.
Lord Cunningham of Felling
My Lords, is it not clear that the news from west Cumbria is bad news not just for west Cumbria but for the United Kingdom as a whole? We have an ageing fleet of civil nuclear power stations, which it is essential to replace in order to maintain a baseload supply of electricity 24 hours a day, 365 days a year. There is almost no other way of guaranteeing that. I compliment the Government on their support for Hinkley Point, which is more than the Labour Government did—the previous Labour Government did not build a single nuclear power station, to my regret—but is it not important for them to make an urgent reassessment of how progress is stumbling, at best, before it is too late?
Lord Henley
My Lords, I will try to be brief. The noble Lord was right to emphasise that it is an ageing industry, in terms of the power stations we have—that is why we want more—but also the workforce. That is why we want to re-equip the workforce to make sure that we can go forward and that we have the right people in the right places, particularly in west Cumbria, to continue to develop that industry.
Carbon Emission Reduction Targets
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The Lord Bishop of St Albans
To ask Her Majesty’s Government what steps they are taking to encourage oil and gas companies to link executive pay to carbon emission reduction targets.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, the Government welcome the announcement by Shell that executive pay will be linked to carbon reduction targets. While executive pay is a matter for the company’s shareholders, the Government have given shareholders new powers to hold companies to account on pay, including a binding vote on the directors’ remuneration policy.
The Lord Bishop of St Albans
My Lords, I thank the Minister for his Answer and I agree that the announcement this week by Royal Dutch Shell is to be welcomed, though it has come after years of investor pressure, not least from the Church Commissioners and the Church of England Pensions Board. Her Majesty’s Government have stated their support for the Task Force on Climate-Related Financial Disclosures. Can the Minister tell us what practical things Her Majesty’s Government are doing to encourage that, and in particular what assessment they have made of whether it should become compulsory?
Lord Henley
My Lords, we believe that it is important that executive pay should be a matter for the companies involved. That is why we leave it to them and why we have given powers to shareholders in the Enterprise and Regulatory Reform Act 2013 to insist, as I said in my original Answer, that they have a binding vote on directors’ remuneration policy. In striving to meet carbon reduction targets, the Government will continue to encourage others to do the same, but that must be a matter for the companies.
Baroness McIntosh of Pickering (Con)
My Lords, does my noble friend agree that this is not just about the principle of executive pay, but that we should all be committed to reducing carbon emissions? How does my noble friend square the fact that if fracking continues in the United Kingdom, we will increase our greenhouse gas emissions and therefore create more carbon emissions?
Lord Henley
My Lords, I do not agree with my noble friend. I believe that there is a very strong case for encouraging shale gas extraction not only in terms of energy security but also in terms of reducing our carbon emissions. It will lead to less use of other, more harmful sources of energy. It can play a role in both reducing carbon and increasing our energy security.
Lord Teverson (LD)
My Lords, I was delighted to learn that the Government have carbon targets for their whole estate under their Greening Government Commitments. Does the Minister agree that, given his welcome for this scheme, Secretaries of State should have their pay varied according to their performance against those greening commitments?
Lord Henley
I do not have absolutely at my fingertips how well each department across the government estate is doing in terms of the Greening Government Commitments, but I can assure the noble Lord that this has been going on through Governments for many years; I remember it happening as long ago as in the 1990s. The Government are moving in that direction. Whether the pay of Secretaries of State should be involved in this is a matter beyond my pay grade.
Lord Forsyth of Drumlean (Con)
My Lords, is it possible that the Church of England might link the stipends of vicars and bishops to making the heating systems in their churches more efficient and greener?
Lord Henley
I am sure that the Benches represented by the right reverend Prelates, which are particularly well occupied today, will have noted what my noble friend has had to say.
Viscount Ridley (Con)
My Lords, research by NASA and at Peking University in Beijing, among others, has shown conclusively that there is now roughly 14% more green vegetation on the planet than there was 33 years ago and that 70% of that is the result of extra carbon dioxide in the atmosphere. Should oil and gas executives be rewarded for increasing the growth rates of forests?
Lord Henley
My Lords, I am going to leave the pay of oil and gas executives to their own shareholders, and what my noble friend has said is something that they can take into account. We will continue to try to meet our own carbon reduction targets and also note the comments of my noble friends. We are making enormous progress and are on track to meet our second carbon reduction target. We are the fastest decarbonating country in the G20. Moreover, as I said earlier, we will look at our energy security and other matters.
Lord Stevenson of Balmacara (Lab)
My Lords, given that the long-term gain must be to try to get to net zero emissions—by approximately 2050—there is a lot to play for in this area. I think that we should all congratulate the Church Commissioners and the Church of England on making sure, through their pressure, that at least one company recognises that it has a responsibility, even if it is a rather novel way of doing it. Indeed, if the Minister has any worries about what other schemes we might have for capping executive pay, I have many of them up my sleeve which I could share with him. However, surely the main point here is that this has to be an all-round effort. What are the Government going to do about affecting investors whose short-term decisions often ruin the plans that they might have?
Lord Henley
My Lords, I believe that the Government have done the right thing in giving the power to the shareholders, who are the investors. They now have the power to look at their executive pay.
Textile Products (Amendment) (EU Exit) Regulations 2018
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Lord Henley
The draft Regulations laid before the House on 10 and 22 October be approved.
Considered in Grand Committee on 21 November.