Post Office: Horizon Accounting System

Lord Holmes of Richmond Excerpts

Monday 7th September 2020 Lords Chamber

[Lord Callanan (Con)]

I certainly acknowledge the urgency of the situation. We are working as fast as possible to get the review under way and to announce the chair—we will do so as quickly as possible.

[Lord Holmes of Richmond (Non-Afl)]

My Lords, my heart goes out to all the sub-postmistresses and sub-postmasters who have been dragged through this Horizon hell. They have been treated despicably. Will the Government act ahead of this review and pay the legal fees of those brave sub-postmasters and postmistresses who took legal action? They were awarded £57 million; after legal fees that is now down to £11 million. Surely the Government can take that action without having to wait for the review to commence?

[Lord Callanan (Con)]

Of course, there was an agreed settlement for the sub-postmasters who took legal action. It would not be right for the Government to interfere in that settlement.

Corporate Insolvency and Governance Act 2020

Lord Holmes of Richmond Excerpts

Wednesday 29th July 2020 Lords Chamber

[Lord Callanan]

I can certainly give the noble Baroness that reassurance. These are complicated provisions and we accept that they have been in place for only a short period. We will of course continue to keep a close eye on how they are working out in practice.

[Lord Holmes of Richmond (Non-Afl) [V]]

My Lords, I full-throatedly support the comments of the noble Baroness, Lady Kramer, and my noble friend Lord Leigh of Hurley; I spoke to that effect during the passage of the Bill. I want to ask my noble friend the Minister about the role of the monitor, particularly around passivity and partiality. Are the Government considering passing regulations to require the monitor to submit a statement of their independence and meet a test of independence? Are they considering, in certain circumstances, enabling creditors to challenge the appointment of a monitor?

[Lord Callanan]

As my noble friend is aware, we debated these matters extensively only a few short weeks ago when we passed the legislation. We are keeping all aspects of the legislation under constant supervision. It is a complex Act, with lots of new provisions that we think will benefit companies, and we continue to look at how it is working in practice.

Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2020

Lord Holmes of Richmond Excerpts

Wednesday 15th July 2020 Lords Chamber

[Lord Holmes of Richmond (Non-Afl) [V]]

My Lords, I thank my noble friend the Minister for the clear and comprehensive manner in which he introduced these orders. I declare my interests as set out in the register.

I fully endorse the comments of my noble friend Lord Lansley apropos the urgent need for an updated and applicable definition of “media” in the Act, and I ask my noble friend how this work is progressing. Will the Government consider looking at the level of public investment in businesses and at whether they would be in need of, and would take a positive attitude towards having, protection against hostile mergers and acquisitions activity? There have been a number of high-profile cases of incredibly successful businesses that have been well run but built largely on public money. Should there not be the potential to block these takeovers, with the Government, in investing in these companies with public money, taking a more direct stake? This could add to potential work on a sovereign wealth fund. I would welcome my noble friend’s comments on that.

Finally, will the Government consider adding to the list of areas that he set out? Of course it should include AI and cyber, but will he and the Government consider looking at distributed ledger technology, nanotechnology and some specific aspects of financial technology—fintech—which I believe would also warrant being included in the list? Not least of those is distributed ledger technology, which is likely to become one of the most powerful forces globally and on which the UK has a real edge, which is worth protecting. Perhaps in conclusion I may gently point my noble friend towards the report that I wrote in 2017: Distributed Ledger Technologies for Public Good. I would be very happy to discuss this with him and would welcome his comments on these areas.

Contracts for Difference (Electricity Supplier Obligations) (Amendment) (Coronavirus) Regulations 2020

Lord Holmes of Richmond Excerpts

Thursday 2nd July 2020 Lords Chamber

[Lord Holmes of Richmond (Non-Afl) [V]]

My Lords, I congratulate my noble friend the Minister for the clarity and thoroughness of his introduction to these regulations. I also sincerely thank all those key workers in energy and power production, not least everyone at National Grid, who have kept the lights and the heat on through this Covid crisis, often putting themselves in harm’s way to ensure that everybody across the country has power.

I welcome the regs in the sense that they are necessary, given the current construction of the sector, but as other noble Lords have commented, there is an extraordinarily high level of complexity and opacity in the whole energy sector. Does my noble friend the Minister agree that it would be helpful to produce a clear chart showing the real price per kilowatt hour of energy, including everything, from whatever source that energy came?

I appreciate that this is somewhat off-piste, but perhaps my noble friend will indulge me: in this new future that we are embarking upon, does Hinkley C in any sense seem like something we should be doing? A technology unproven and unbuilt, a deal done at a strike price three times the strike price at the time—it was a bad deal then and it looks disastrous now. If he were offered that today, would he say “deal” or “no deal”?

Finally, what are the Government doing to address one of the most pernicious energy issues? Those on meters or pre-paid cards—those in our society who have the least—often find themselves paying the most. Does he agree with me that we still need to do so much to address this inequity?

Corporate Insolvency and Governance Bill

Lord Holmes of Richmond Excerpts

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 23rd June 2020 Lords Chamber

[Lord Adonis (Lab) [V]]

My Lords, after an hour and five minutes of debate, I do not think that there is much more that needs to be said in favour of these amendments. We have heard a succession of powerful speeches. As the noble Lord, Lord Hodgson of Astley Abbotts, said, the speech that matters now is the Minister’s. We need to know why he believes that the amendments are not necessary, as I understand he is likely to say in respect of a number of them, and we might then come back on that, either now or at Third Reading.

I strongly support Amendment 75. I do not think that in practice it would make much difference, as it would simply introduce a right to be consulted. As my noble friend Lord Hendy said, it does not have any of the stronger elements of a requirement to negotiate or to take account of views—points that have been debated—although it is obviously a step in the right direction. However, the really powerful amendment is Amendment 14, and we look forward to the Minister’s response to it. It would, as many noble Lords have said, make it categorically and explicitly clear that the banks and other financial creditors may not seek to accelerate payment.

The Minister’s response here will be crucial. The noble Baroness, Lady Bowles of Berkhamsted, has told us that the Minister said when she met him that the Government expected that banks would behave reasonably and would not seek to enforce repayment requirements unreasonably, whereas a succession of speakers, particularly the noble Lord, Lord Hodgson, and the noble Baroness, Lady Bowles, have made it clear that it is standard practice for them to take every opportunity they can to accelerate payments and that they will do so if the Bill is enacted without Amendment 14.

So the House will want to listen carefully to what the Minister says in response to Amendment 14. If his argument is that it is his expectation that banks will not seek to accelerate payment, what grounds can he offer to the House to support that view when we have been given such strong views to the contrary?

[Lord Holmes of Richmond (Non-Afl) [V]]

My Lords, I am pleased to address the amendments in this group, not least the seven in the names of the noble Lord, Lord Leigh of Hurley, and the noble Viscount, Lord Trenchard. I have not had the benefit of seeing the now-famous letter, but I look forward to considering that in due course.

As the noble Lord, Lord Hodgson of Astley Abbotts, quite properly put it, this is detailed and technical law, but it is rooted in the purpose of protecting people. Similarly, the noble Lord, Lord Palmer, rightly highlighted the importance of meaning and how it changes and can be in the eye of the beholder. More significantly, I will say that everything that we have discussed today is to do with businesses which find themselves in the eye of the storm.

I cannot match the 40 years that the noble Viscount, Lord Trenchard, has spent in this field, but I knocked out just over a decade in it and, like the noble Baroness, Lady Kramer, I was involved with a number of chapter 11, US-side insolvencies, as well as a number of pre-packs on this side of the Atlantic. I ask my noble friend the Minister: why the coolness towards pre-packs? Like all vehicles, they have their annoying whines and dodgy brake lines from time to time, but overall they were pretty successful, as conceived in the original legislation.

Does my noble friend agree that a lot of the difficulty around this Bill and the amendments we are discussing in this group seems to come down to an understanding of the fundamental difference between the company and the business? It seems that much of this legislation has been constructed with the approach of a company staying in business rather than the reality that the business does not need to stay within the company. Can my noble friend assure the House that nothing as currently drafted will impact businesses which find themselves, largely as a result of the Covid pandemic, in distressing situations? If he cannot give that assurance, does he agree that it is prudent to consider a number of these amendments in this group and subsequent groups?

Similarly, on furlough finance, which was incredibly speedily and effectively rolled out by the Chancellor, does the Minister agree that, if we fail to get this legislation right and the clauses amended as proposed, we will fail to gain the wider benefits from the furlough finance and employees who have rightly benefited from furloughing will find themselves with no business at the end of that period?

Finally, does my noble friend agree that there is a real, clear and present danger that, if we do not address the amendments, the reality may be that we save the company, lose the business, fail the purpose and miss the point?

--- Later in debate ---

[Baroness Barker (LD)]

My Lords, a number of Members of your Lordships’ House may wish to claim that it was the force and power of their oratory that caused the Government to think again, but I have a sneaking suspicion that the mere prospect of the noble Baroness, Lady Fookes, leading a band of opposition rebels was enough to concentrate minds—and I am very glad that it did. There was broad consensus around the House that the powers taken within the legislation were far too broad. I am glad that the noble Earl, Lord Howe, has come back and talked in detail about those which have been ceded and those which have not.

Towards the end of his remarks, the noble Earl said that the Government had retained some regulation-making powers to address the needs of different sectors, should it become apparent that regulations need to be made to save businesses in certain sectors. That is the issue to which I draw attention, following on from the remarks of the noble Baroness, Lady Anelay of St Johns. Like me, she has an interest in what happens in the charity and social enterprise sector. Welcome though the letter from the Minister was—exactly as the noble Baroness just said, it talked about charities with wholly owned subsidiary trading companies which give back their profits to the charity—a number of charities have different company forms, and there remains a lack of clarity in the Bill about some of those entities.

I am very pleased that the noble Lord, Lord Callanan, and his officials have talked to me about this. The Bill applies to those charities which are companies limited by guarantee—it is mostly community interest organisations that will fall within this—but it will not apply to charities that are unincorporated, nor to excepted charities and royal charter charities. There is also a big consideration around the extent to which the Bill will apply to community benefit societies, mutuals and co-ops. I am not asking the Minister to reiterate the detail of that today. I merely draw attention to the fact that there may be matters to which it is necessary to return when the Government make regulations under the Bill.

I signalled to the noble Lord, Lord Callanan, one of the issues that has been drawn to my attention by the museum sector. We have a number of independent museums—not the large museums set up under an Act of Parliament, nor those associated with local government—and they are typically charitable companies. They have a very big fear. If they are in danger, and a number of them currently think that they may well be, their collections immediately become part of the assets of any insolvency procedure. The big concern is that, if there is no exemption for those assets in regulations, later on this year a large part of Britain’s cultural heritage may suddenly come up in a fire sale. That would be extremely damaging, not just to those organisations but to the local economies that they support as part of the tourism sector and so on. All they are asking is that, when it comes to making regulations under the Bill, there be consultation with them and with the charity lawyers, accountants and insolvency practitioners who have expertise within what is, I know, a very niche but important part of company law.

That said, I add my support to the noble Baroness, Lady Fookes, and her Amendment 48. What she is asking for seems entirely reasonable.

[Lord Holmes of Richmond [V]]

I am pleased to speak in support of Amendment 48 from my noble friend Lady Fookes. As ever, she makes a point that is pertinent and clear, and that is absolutely required at this stage. In doing so, I also congratulate my noble friend Lord Blencathra and the members of the Delegated Powers Committee on all their work in this area. As other noble Lords have said, the Government are in listening mode on this. That can be only a good thing, and it is largely down to the persuasive power of my noble friend.

[Baroness Neville-Rolfe (Con) [V]]

My Lords, I thank my noble friend the Deputy Leader for his many amendments, designed to moderate the overuse of delegated powers in this important legislation. The legislation is vital to easing the burden of events on businesses, especially smaller or less well-capitalised businesses, of which sadly there are more every day.

I was particularly concerned about the lack of an end date for the use of the emergency powers, but government Amendment 49 appears to meet my concern. I also thank my noble friend Lady Fookes, the noble Baroness, Lady Taylor, and others for their effective scrutiny.

Weights and Measures Act 1985 (Definitions of “Metre” and “Kilogram”) (Amendment) Order 2020

Lord Holmes of Richmond Excerpts

Wednesday 20th May 2020 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, I thank the Minister for his clear, concise and measured introduction. Weights and measures are critical to almost every element of life, not least trade. We are in an enviable position here in the UK because of the National Physical Laboratory and indeed the UK Accreditation System which is ably chaired by my noble friend Lord Lindsay, and I pay tribute to him for all his work in that area. Given that, can my noble friend the Minister say how the Government will use the advantage we have across weights and measures standards in the post-Brexit world? I believe that we have a clear competitive advantage that we can exploit. This demonstrates that weights and measures are not just about quantity; they are also about quality.

I was lucky enough to be one of the directors of the London 2012 Olympic and Paralympic Games. Whenever we were asked to give a sense of how big something was in terms of space, we would use football pitches. If it was for length or height, we used London double-decker buses. This instrument shows that we have clear, accurate and world-leading means of taking measurements, many of them stemming from our history here in the UK. It is perhaps a shame that we are not bringing these regulations into force on the anniversary of the Metre Convention, but it is excellent that this debate is being held on its anniversary, the title for which is “Measurements for global trade”—just so.

Will the Minister consider what the most difficult unit of measurement is and how he would go about measuring it? I refer to the House of Lords minute. I wish these regulations godspeed—however we choose to measure that.

Covid-19: British Business Bank

Lord Holmes of Richmond Excerpts

Thursday 30th April 2020 Lords Chamber

[Lord Callanan]

The noble Baroness makes a good point, but we have provided a generous guarantee scheme and we fully expect that all businesses will benefit from such schemes and that banks pass on the savings to borrowers. We have removed the forward-looking viability test, as I said earlier, but we constantly monitor all these schemes and seek to improve them where possible.

[Lord Holmes of Richmond (Con)]

My Lords, to what extent have the Government involved our fantastic fintech sector and would they consider setting aside a certain percentage of funds for fintechs to distribute, bringing much-needed pace and efficiency to the process?

[Lord Callanan]

My noble friend makes a very good point—fintech has a significant role to play. Funding Circle, as he will be aware, was recently added as a CBILS accredited lender. Along with other alternative finance providers, it will help even more businesses to access the finance they need at this difficult time.

Businesses: Technology

Lord Holmes of Richmond Excerpts

Wednesday 10th April 2019 Lords Chamber

Asked by

[Lord Holmes of Richmond]

To ask Her Majesty’s Government what steps they are taking to ensure the attraction of the United Kingdom as a place to establish and scale businesses based on artificial intelligence, FinTech and distributed ledger technology.

[Lord Holmes of Richmond (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare my interests as set out in the register.

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

My Lords, we are creating an attractive environment, building the foundations and skills, data and ethics to allow businesses based on AI to start and scale. It is encouraging to note that inward investment to the UK AI sector increased by 17% last year—more than the whole of Europe combined.

[Lord Holmes of Richmond]

My Lords, there are obviously many factors involved, not least our excellent higher education institutions and our approach to immigration, to international students and to funding, to name just a few. Does my noble friend agree that we need to optimise all these factors and more if we are to realise this fantastic opportunity for companies to come here to start and scale in the UK?

[Lord Henley]

My noble friend is quite right to draw attention to our strengths, particularly those in the university sector; for example, he will know that on a league table based on research we have three of the top 10 universities, which certainly makes it attractive for businesses to come to this country and for businesses here to upscale their businesses in AI. He pointed to other factors as well, but I assure him that the Government are doing their bit with the AI sector deal, which is worth some £1 billion to the sector—half from the Government and half from the industry—and I hope that we will see yet further support for it.

Unpaid Internships

Lord Holmes of Richmond Excerpts

Tuesday 12th March 2019 Lords Chamber

Asked by

[Lord Holmes of Richmond]

To ask Her Majesty’s Government what plans they have to eradicate unpaid internships in the United Kingdom.

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

My Lords, the Government are working to stop illegal unpaid internships. The law is clear that anyone performing work for an employer must be paid. HM Revenue & Customs has written to almost 13,000 employers in industries which often offer internships to draw their attention to the national minimum wage rules and help them avoid being non-compliant.

[Lord Holmes of Richmond (Con)]

My Lords, last year the Government spent £1.48 million on raising awareness of NMW legislation, and £25.3 million on enforcement. Can my noble friend therefore say what reduction there has been in unpaid internships, and how many prosecutions?

[Lord Henley]

My Lords, I am not aware of any prosecutions, but I can confirm that we have spent considerable sums on enforcement in this area, as well as on other areas relating to the national minimum wage. As I made clear in my original Answer, it is important that we continue to try to enforce these matters but also to offer advice to employers to make sure that they are aware that it is illegal to offer internships that amount to work and not to pay for them.

Artificial Intelligence (Select Committee Report)

Lord Holmes of Richmond Excerpts

Monday 19th November 2018 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Clement-Jones, as it was to witness his excellent chairmanship of the AI Select Committee—not an easy task in such a complex area. There is nothing new in AI. In 1950, the Turing test was coined. In 1956, 12 professors from Dartmouth in the United States were sent off on their summer vacation to “solve the issue of artificial intelligence”. I am not sure whether they are still out there, but there is still plenty to be discussed in this area.

In the short time I have, I shall cover data, talent, clusters and, most importantly, public engagement. As with every element of the fourth industrial revolution—4IR—data is at its core. It is often called the new oil, but this dramatically undersells the quality of data—not least that it is pretty much infinite. Ninety per cent of all data currently out there was created in the past two years, to give noble Lords a sense of the exponential growth of data.

For the Government, there are huge questions about the data that they have, what form it is in and what should be done with it—not least NHS data, to which the noble Lord, Lord Clement-Jones, referred. Indeed, what is NHS data? Crucially, whose data is it? To echo a point that the noble Lord made, I ask the Minister to respond to the House on DeepMind’s recent announcement about moving its health business into Google.

For businesses, the questions are: what data do you have and what do you want to do with it? AI offers such potential, but as with all the other elements of the fourth industrial revolution, it should never be something in search of a solution but more, the potential to solve some of the most intractable problems for business, government and individuals. As I have mentioned individuals, perhaps the most significant point to consider is that we may hold our smartphone in our hands, but it is the size of our data footprint that we should think most about.

Turning to talent, no matter how good the artificial intelligence is, ultimately it is people who will need to be prime throughout the fourth industrial revolution. Not least of these will be international people coming over to be part of building the AI revolution for which the United Kingdom has such a—perhaps unique—potential. However, our immigration system is described as “expensive”, “tedious” and “putting people off”. The Indian Prime Minister, Mr Modi, talking about international students, put it very well: “You want our trade; you do not want our children”. Does the Minister believe that the current immigration system is fit for purpose and optimised to enable us to make a real success of artificial intelligence and all elements of the fourth industrial revolution? Does he agree that it is high time that, as a start, international students were removed from the net migration statistics?

I turn to clusters. AI offers the potential, which has always been present in our society, to enable collaboration across sectors for stunning results. The industrialist, engineer, biologist and neurologist are coming together in fabulous clusters to drive the future. Noble Lords need only go to Pancras Square to see this in action. Yes, it has beautiful buildings, but what you really feel when you step into the square is one great big, beating brain. The golden triangle of Oxford, Cambridge and London offers potential to be the beating heart of AI development and deployment. What is the current situation with the upgrade to the varsity line, which would make such a difference? Infrastructure is key to the success of AI. We can develop algorithms that are as clever as we like, but if we do not have the physical infrastructure, with the fastest broadband, much of this will not achieve its full potential.

Public engagement is the real key. The massive success—or not—of AI will rest upon it. Do people feel part of the AI revolution? Have the public been engaged and do they understand that this is not for a few people in large organisations or government? Everybody has to understand and be positively part of this. If not, AI is likely to be the latest GM in our society. We have reason to believe that we can get this right when we look at the fabulous work on reproductive technology that Baroness Warnock did so many years ago. It was a stunning success because the public were engaged and there was an understanding of who would benefit and where any risks might lie. It will not be enough for a few people in the tech majors or government to believe that the public will just accept AI because they have decided that there are benefits, when there has been no explanation of where those may be felt and, crucially, where the risks may fall.

Shame on us if we do not make a success of AI and the fourth industrial revolution. Without being naive or Panglossian about it—I understand the risks—the possibility of solving some of our most intractable problems is immense, not least in health, mobility and social integration. This is not just about AI: if we get it right we can have a 4IR, fully fuelled, better Britain.