Post Office (Horizon System) Offences Bill

Lord McNicol of West Kilbride Excerpts

Committee stage
Thursday 23rd May 2024 Lords Chamber

[Baroness Butler-Sloss (CB)]

My Lords, I remain extremely unhappy about this Bill and the way in which it has arisen, but I recognise the overwhelming importance of, at long last, doing justice to sub-postmasters. I assume that the evidence given to the Court of Appeal would have been similar to the evidence given to the original court. In those circumstances, it seems that the noble Lord, Lord Arbuthnot, is absolutely right and they should not be treated differently.

[Lord McNicol of West Kilbride (Lab)]

My Lords, I am obviously dealing with this in wash-up. The priority is to ensure that we get this Bill through. The arguments have been very well rehearsed across your Lordships’ House and in the other place about Horizon, the Post Office, Fujitsu and the outcomes of that. At Second Reading, I was struck by the contributions from all sides of your Lordships’ House and the language that was used about making sure that we do, and are seen to do, the right thing. The Labour Front Bench has submitted no amendments at this stage for that simple reason. We looked at purpose, but we think the issues around the Bill are clear enough that it deals just with this set of circumstances, which is obviously one of the big issues from across the judiciary.

On the relationship with the Government and the department on the Bill, I thank the noble Lord, Lord Offord, and the team for those discussions. If we can get to a situation, following the Minister’s response and conversations with the Minister down the other end, where these amendments go through and are accepted by the Government, the Bill will be in a better place and all of us will have played our part in delivering that. We support where we are at just now. We intend this to go through, to be dealt with in the other place tomorrow and then to be legislated for. I look forward to the Minister’s response so that we get the warm words and assurances that the noble Lord, Lord Arbuthnot, has worked so hard to achieve.

[Lord Forsyth of Drumlean (Con)]

My Lords, I briefly intervene to thank the noble Lord, Lord McNicol, who has done really sterling work on this, together with my noble friend. I very much agree with his optimism that this matter can be adjusted. I think all of us realise that 13 is an unlucky number and 13 people were going to suffer a degree of injustice. This is an important matter. It is a very good example of what we were talking about earlier: how this House can work consensually to deliver the right result. I look forward to what my noble friend the Minister has to say.

Post Office (Horizon System) Offences Bill

Lord McNicol of West Kilbride Excerpts

Report stage & 3rd reading
Thursday 23rd May 2024 Lords Chamber

[Lord Beith (LD)]

My Lords, we would not be considering an amendment like this on Report but for the foreshortening that the general election has imposed. But it is valuable that the point has been brought forward. A little earlier, the Minister gave us a pretty blood-curdling description of some of the offences that might have been covered or have secured convictions as a result of DWP prosecutions.

However, that should not frighten us off looking carefully at the point that bothers me: a person mixing up money, who is in a state of desperation because he or she is told that they owe £10,000 because of the Horizon system and who then commits an offence involving the DWP’s money and is prosecuted by the DWP. The Minister may be able to give me some assurance that this combination of offences, or this mixed offence, can be satisfactorily dealt with within the present terms of the legislation. He may have checked a number of cases already to see whether there are any examples where somebody has been driven to commit a relatively minor offence, prosecuted by DWP, because of the position they were in in relation to Horizon. Can he give us any helpful clarifying points on that?

[Lord McNicol of West Kilbride (Lab)]

My Lords, this Bill has always been about justice and getting it quickly for the victims of the Post Office/Fujitsu scandal. We can all agree—and have all agreed—that they have waited far too long.

I am glad that, in wash-up today, we are pushing this Bill through before the end of this Parliament, so that the individuals affected by it will receive the responses that they deserve from across Parliament as a whole—the Government, Opposition and other Benches. I am conscious that there are other important Bills that need to be debated today and tomorrow, so I will keep my comments brief. I know that there is a consensus across the House to see the overwhelming bulk, if not all, of the convictions overturned as soon as possible.

--- Later in debate ---

Amendment 1 withdrawn.

[Lord McNicol of West Kilbride (Lab)]

My Lords, as the Bill reaches its final stages, I have a few thank yous from my side. I put on record my thanks to my colleague and friend, the noble Lord, Lord Leong, for his support during the Bill’s passage, to our team in the Labour Lords office—Milton Brown and Cameron Iverson—for their support, to James Fisher in my office and to the Bill team. I also thank the Liberal Democrat Benches and the Government for the collective nature of our work on this.

Paternity Leave (Bereavement) Bill

Lord McNicol of West Kilbride Excerpts

2nd reading
Friday 17th May 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, I start in the same way as my noble friend Lady Taylor of Bolton, by thanking my noble friend Lady Anderson of Stoke-on-Trent and Chris Elmore MP for sponsoring this vital piece of legislation. I am very glad to see that the Government have given their support to the Bill, and thank the Minister, although it should not have needed a Private Member’s Bill for action to be taken. We believe that the Government could and should have legislated this change as part of a wider package to help the most vulnerable when in a difficult situation. Nevertheless, we wholeheartedly back my colleagues’ Bill. As was said earlier, the Bill represents the very best of Parliament, and reflects Labour’s and, if the Government support it, the Government’s commitment to strengthening the rights of workers, as well as our desire to see equality pursued in every area of life.

The Bill and the campaigning around it have illustrated the fact that bereaved fathers have been allowed to fall through the legislative gap. It is unjust that consequently they do not receive the same protection as their counterparts; I am glad that we now have an opportunity to change that. The current qualification period of 26 weeks is too high, as we have heard, and a day one right to paternity leave in the case of bereavement is very much needed. This is important not only for grieving fathers and partners but for newborn babies, who require the kind of close care they would otherwise receive from a mother on maternity leave.

We have heard a number of heartbreaking stories of bereaved fathers with newborns, but there are many more out there. Like others, I thank the charity Gingerbread, which supports single parents, for its work in helping raise awareness around this issue. It is cruel that fathers who have the absolute horror of losing a partner are then at the discretion of their employers. Now, we know that most employers show compassion and support, but this is legislating to protect against the worst of employers, who either do not or cannot show that compassion or give that support. The horrors of losing a partner are often compounded by the administrative burden that then surrounds death and, in many cases, the financial impact of losing a second household income.

We need to ensure equality, and that is what the Bill does, equalising the rights of partners and fathers with those of a mother. Those who are going through the most unimaginable grief, and who are placed in the most difficult of circumstances, deserve our help. It is right that the state and employers are there for people going through the worst moments of their lives, and who experience that trauma while also needing to care for a newborn baby. If we cannot, as a Government or Parliament, care for those people, then what can we do?

The debate surrounding this issue has also highlighted the fact that employers must do more to advertise to their employees existing rights around maternity, paternity and shared leave. Both the number of people aware of their rights and the take-up rates for them are shamefully low. Much more needs to be done, and the Government need to be the driving force behind it.

I am glad today to stand here and speak in support of the Bill, particularly as this is all too sadly a relevant issue. A report in April this year found that the number of women dying during or soon after pregnancy is at 13.4 per 100,000 women. This is the highest level it has been at for 20 years, despite the Government’s stated ambition of halving maternal deaths between 2010 and 2025. We stand ready to work with the Government in that ambition. However, this is an issue that does not affect all parts of society equally: women from ethnic minority backgrounds are four times more likely to die in childbirth than white women. More needs to be done on this; I suppose that is for a different debate, and we will deal with it later.

The Bill before us today represents the start of a process of strengthening employment rights for everyone, including parents. The Bill is very much the beginning of that debate. In her comprehensive introduction to the Bill, my noble friend Lady Anderson of Stoke-on-Trent talked about the grief, pain and fear being unimaginable. They are. We will not be able to do anything about those issues, but today we can legislate to remove one of the worries, to ease the pressure on individuals and make their lives that little bit easier when they are dealing with such difficult circumstances.

Craftspeople: European Union Travel and Trade

Lord McNicol of West Kilbride Excerpts

Monday 13th May 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for that. The craft sector is being supported. My own department, DBT, is delivering a programme of trade promotion activity in Europe and elsewhere. We also have a new means of trade, by way of digital, as well as by having to go there. Perhaps our carbon footprint has been reduced by making fewer trips to some of those shows. For example, we will be doing one in Dubai in July, for Middle East design and hospitality week. We are taking a group of craftspeople to sell their wares.

[Lord McNicol of West Kilbride (Lab)]

My Lords, one of the other great issues facing the skilled craft industry today is that 98% of skilled practitioners are solo traders or microbusinesses, as we have heard. That means that without effective apprenticeship schemes, their skills and knowledge will retire with them— knowledge and skills such as clock-making, Scottish carpentry, paper marbling, tinsmithing and cricket ball making. Despite this, apprenticeship starts have fallen by a third over the past decade, and £1 billion raised by the apprenticeship levy goes unspent each year. What steps are the Government taking to address this decline and to save some of those 150 varieties of craft apprenticeships or craft businesses?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that. He is basically describing the characteristics of this sector, which is populated by a large number of small, individual microbusinesses, quite often sole traders, all of whom are passionate about what they do and many of whom come to this as a second or third career. Therefore, it is a difficult sector to organise with a top-down approach from government. There is no question that many schemes are available to help and encourage people, not least in the charitable sector. I was a trustee of DofE, which does a lot around the crafts sector, and we know what the King does in terms of his programme at Dumfries House. We see how popular “The Repair Shop” is on television; the most popular charity in my town of Greenock is called the men’s shed.

Post Office (Horizon System) Offences Bill

Lord McNicol of West Kilbride Excerpts

2nd reading
Monday 13th May 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, I thank the Minister and the departmental team for their work on this Bill and for being available to meet me, my noble friend Lord Leong and others from across the House.

In reading back over some of my speeches from 2019, 2020 and 2021—I am just a newbie to this—one theme shines through, and that is the sheer injustice of the Post Office Ltd and Fujitsu scandal. I use Post Office and Fujitsu rather than Horizon, as Horizon is just a faceless IT system. The Post Office Ltd is culpable, with senior management to blame, the board negligent and the department and its representatives missing. There are two main parties to this: Fujitsu and Post Office Ltd. I am sure we will come back to the board, the individuals, the non-execs and the department representatives, as the noble Lord, Lord Forsyth, has raised many times in previous debates.

Naturally, I pay tribute to the many sub-postmasters and mistresses who have campaigned tirelessly for justice. Their resolve in the face of unimaginable levels of abuse and suffering is testament to their courage. It was their stories that galvanised the country behind taking the urgent and unprecedented action in this Bill. Although it may have been a television drama that finally ignited public consciousness on this issue, I also want to reiterate the tributes to the noble Lord, Lord Arbuthnot, and to Kevan Jones MP, for their years of work in Parliament and outside to lay bare the great injustices and the fight of the sub-postmasters and mistresses.

This is not an academic debate; this is fundamentally about people’s lives. I am not a lawyer, but I understand the focus on legal precedents, the debate around the judiciary, Executive and Parliament, and the inference on the constitution and the independence of the judiciary. But this is about people. That is the balance this House needs to reach.

I made a speech in 2020 in response to the court case Bates v Post Office, which was settled in 2019, in which I mentioned a number of individual cases. My noble friend Lord Sahota has touched on two of those, but it is worth putting on record what happened to those individuals. There was Seema Misra, who ran a post office with her husband in Surrey. Time and again she had to put her own money into the till. A shortfall of £80,000 was ultimately found and she was sentenced to 15 months in jail while pregnant with her second child. Rubbina Shaheen was jailed for 12 months in 2010 after she was accused of stealing over £40,000 from the Greenfields post office in Shrewsbury. We all know Jo Hamilton’s story. Jo was accused of taking £36,000 from a village shop she ran in Hampshire. After pleading guilty to false accounting to avoid a more serious charge, she gave up her shop and found it difficult to get a new job due to her criminal record. During today’s debate, we must not lose sight of the impact of the failures on those families.

This is an important Bill, and those of us on these Benches support it wholeheartedly. Labour committed itself to working with the Government to ensure the best possible outcome for the victims. I am glad that the Government agree with us that these wrongful convictions ought to be quashed and that compensation needs to be delivered urgently.

I am particularly encouraged by the Minister’s desire to see convictions overturned prior to the Summer Recess. That deals with a number of the legal arguments about other options. If we followed those, the overturning of convictions would not happen before the Summer Recess. I am glad that the Government have worked constructively with Members of the other place to expand the terms to include Northern Irish sub-postmasters in the Bill. It is our hope that the Scottish Parliament also soon passes a similar Bill, as my noble friend Lord Browne touched on, so that victims all across the UK can benefit from having their convictions overturned.

This is one of the most egregious miscarriages of justice in British legal history, and I am heartened to see people from across all parties and none working together to deliver justice for those innocent people who have served at the heart of our communities. The many stories we have heard in this debate in this House and the other place never fail to shock me, and they emphasise the sheer scale of the suffering that this scandal has caused.

The noble Lord, Lord Arbuthnot, touched on Justice Fraser’s judgment in 2019. We have come a long way since 2019, but we have not come that far, and it is worth reminding ourselves. I was very struck by the vivid language that Justice Fraser used in his judgment, stating that Post Office Ltd demonstrated

“the most dreadful complacency, and total lack of interest in investigating these serious issues …”

amounting to

“the 21st century equivalent of maintaining that the earth is flat”.

The judge concluded that sub-postmasters were treated in

“capricious or arbitrary ways which would not be unfamiliar to a mid-Victorian factory-owner”.

It does beg the question, though: how did our judicial system allow so many sub-postmasters and sub-postmistresses to be found guilty over so many years? It is deeply shameful that justice did not come quickly enough for those sub-postmasters who died or killed themselves before they could find redress. We want now to see justice for all victims. How confident is the Minister—this has been a theme throughout the debate—in the identifying criteria? Can he assure the House that all those affected are included in it?

It is important that we recognise the impact on sub-postmasters’ families, as the Lost Chances for the Children of Sub-Postmasters campaign group has highlighted. I also look forward to the publication of Wyn Williams’ inquiry report, as it will give an important opportunity to reflect more broadly on how we may be able to resolve further issues in a timely and dignified manner.

It will be vital for the legal system and the Government, as well as corporate bodies, to learn the lessons of these cases. As I said in a debate on this issue in January, we need to see a cultural change that sees an end to the constant stream of scandal after scandal. The destruction of people’s lives, the cover-ups, the vindictive way in which victims were treated once they came forward, the lethargic way in which justice is served, the culture of not being held responsible for failure and instead even being rewarded—that must all end. It remains my hope that this brings about a serious shift in the way that those in positions of power are permitted to act.

I am glad that the Bill can give sub-postmasters and sub-postmistresses some relief, dignity and official acknowledgment of their innocence. However, it is important to note that this is an exceptional Bill and an isolated case. The House’s agreement on this Bill must never be misconstrued as any kind of desire to set a precedent. The independence of the judiciary must be upheld. I welcome the Government’s reassurances on this particular concern, but I ask for more. Will the Minister consider a more explicit element in the Bill? In addition, can he elaborate on the decision to include CPS prosecutions but not the DWP ones or the 13 Court of Appeal cases, as outlined by the noble Lord, Lord Arbuthnot, and touched on by a number of noble Lords and noble Baronesses?

We on these Benches welcome this vital piece of legislation, but of course this is not the end: there is more to be done to right the wrongs. The Bill is a positive step on the road to justice for victims. It may not be the final destination but it is nevertheless an important milestone. I will finish with the words of the noble Lord, Lord Arbuthnot, which are a great subtitle for the Bill: “the price that we pay for the exoneration of the innocent”. They are fine words.

Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill [HL]

Lord McNicol of West Kilbride Excerpts

2nd reading
Friday 10th May 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, I start by thanking the noble Baroness, Lady Young of Hornsey, for bringing such an important Bill before the House and for giving all of us an opportunity to debate this significant topic. I also thank the many trade unions—particularly Unison and the TUC—who have campaigned so strongly in this area.

I echo the concerns raised, and that is why I am proud that Labour wants to see our businesses do all they can to make sure that they are not profiteering from the misery of others or the degradation of our environment. It is why we work both at home and internationally on this. It is why it is so important that we not only keep pace with but lead on human rights, the environment and ESG, with nations not just in Europe but across the globe.

As the noble Baroness, Lady Young of Hornsey, and my noble friend Lord Browne of Ladyton pointed out, many other nations—France, Norway, Germany and recently the EU—have been developing policy within this area. It is important that we look at the lessons they are learning and their experiences from the implementation of similar policies. We must, as the noble Lord, Lord Deben, said, be a champion for justice on the global stage, promoting human rights and environmental sustainability in everything that we do.

That is why, looking wider, Labour is committed to protecting and embedding workers’ rights in future FTAs and trade deals, including by using human rights protection clauses to tackle the use of modern slavery. The next Labour Government’s trade strategy will deliver economic growth at home, while building security and resilience into global supply chains and driving progress on fundamental issues such as climate change, anti-trafficking and workers’ rights. In line with international standards, we will assess the best ways to prevent environmental harms, modern slavery, and human and labour rights abuses in both private and public sector supply chains, including the use of due diligence rules.

As such, we are supportive of the principles of this Bill. In recent discussions on the CPTPP and other free trade agreements, we have been arguing to include them within those trade deals. Nevertheless, we have some concerns around the potential burden that this Bill could place on both businesses and public bodies, without full and proper consideration. That is why we want to properly assess the best ways to prevent these harms, while ensuring new legislation is not overly burdensome.

On the specifics of the Bill, I am keen to seek clarification from the noble Baroness, Lady Young of Hornsey, on what kind of annual worldwide turnover thresholds she envisaged for the regulations mentioned in Clause 5(1). Would it follow something like the Modern Slavery Act’s £36 million figure, for example, or would the duty be placed on a broader number of businesses? It is in no one’s interest to overly burden our SMEs or smaller organisations, which often lack the capacity to report under this or a similar duty. We must ensure that reporting mechanisms are as straightforward as possible. Currently, supply chain and scope 3 reporting is often nothing more than a guesstimate, and, as the noble Baroness, Lady Young, mentioned, there are no standards for auditing or reporting. We must look to deliver on this.

We would like to see more work done within this area, and I want to see further consultation with trade unions, businesses, NGOs and other organisations to review how best to bring this policy into action in a timely and considered manner. We want to balance the needs of these regulations with the need to minimise the burden on businesses. Although at this stage we will not be supporting the Bill, we support the principles of it. I am sure we will be back here—sooner rather than later, I hope—to put these principles into action.

UK Trade Performance

Lord McNicol of West Kilbride Excerpts

Tuesday 7th May 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, the Secretary of State’s facts and figures Statement to the Commons last week said nothing new. It was as if one of her advisers had opened up ChatGPT and asked it to cherry-pick statistics and make reference to the Brexit trade bonus, as if that were anything other than a slogan without substance. In some ways, I am not sure where to start. It was, after all, not aimed at us in Parliament or the wider international trade community; rather, it was aimed internally, at the Conservative Party, and the jostling for post-election leadership positions.

Let us take a look at the detail—a proper look at the statistics that lie beneath the facts and figures Statement. Figures released earlier this year by the Office for National Statistics showed that the volume of goods, imports and exports, last year had fallen by 7.4% since 2018—the single largest five-year decline since comparable records began in 1997. In the words of the OBR:

“Growth in UK goods trade … has fallen well behind the rest of the G7”.


While the rest of the G7 saw an average increase of 5% from 2019 to 2023, in the UK we saw a 10% decrease.

I want to share her optimism but I fail to see the success story that the Secretary of State in the other place assures us of. Ed Conway, the economist and data editor at Sky News, pointed out that the document the Secretary of State referred to in her speech fails to adjust for inflation, so in real terms goods exports remain well below the pre-Brexit levels. British businesses, manufacturers and farmers need consistency and leadership, but all this Government have been consistent about is failing British producers and exporters.

As my honourable friend Gareth Thomas MP pointed out when this was debated in the other place last week, the Government’s own figures show that FDI—foreign direct investment—is down by a third since 2016-17. Under the previous Labour Government, the UK accounted for an average 8% of the world’s FDI, but since the Conservatives entered government in 2010 they have managed to halve that to only 4% of world foreign direct investment. Business investment is now lower in the UK than in any other G7 country, and the UK ranks among the lowest in the OECD for investment as a share of GDP. Does the Minister recognise this decline since 2010? If so, what plan does he have to bring FDI up to the levels last seen under the previous Labour Government?

I also found it bizarre that the Secretary of State chose to mention accession to the CPTPP. In our debates and discussions on the CPTPP, we in this House seemed to conclude that the impact on the UK was minimally positive at best. If that is the most we can hope for from this Government, we really are in need of a new one.

In her speech, the Secretary of State made no mention of the Government’s MoU—memorandums of understanding—programme with individual US states. Do the Government now consider them to be a success—I am sure that the Minister will want to point to some of the US individual state MoUs and outline their wins—or have they accepted that they are not substantive Brexit wins but rather, in the words of the FT’s senior trade writer, Alan Beattie, “pointless pieces of paper”?

In conclusion, I have a number of questions for the Minister. Business investment is lower in the UK than in any other country in the G7, and the UK is among the worst performers in the OECD38 for investment as a share of GDP. What steps do His Majesty’s Government intend to take to increase business investment in the UK?

UK exports have grown at a slower rate than in every other G7 country except Japan, far behind Canada, Germany and the US. Many UK businesses want to know what steps the Government will take to support them to export their goods and services. Given that this House has repeatedly been promised an amazing trade deal with India, usually by Diwali—that is, last Diwali—will the Minister update your Lordships’ House on the state of the free trade agreement negotiations with India?

As the devastating news of south Wales continues to come, we have heard next to nothing from the Government on the damage that has been allowed to be inflicted on the British steel industry. Does the Minister still think that spending millions of pounds of taxpayers’ money to make thousands of people redundant and leave us as the first developed country with no primary steel-making capacity is, in the words of his Secretary of State, “a great deal”?

I agree with the words of the Nissan CEO, referred to by the Secretary of State in the Statement, that the UK has

“both great people and great talent here”.

It is a shame that both are being greatly let down by this Government.

[Lord Purvis of Tweed (LD)]

My Lords, as this month we are likely to see the UK economy moving from recession to stagnation, I can imagine that there were briefings in the department a few weeks ago to show some of the trade figures. There will probably be a collective view from Ministers, saying, “We don’t like those facts and figures; bring us some different ones”, so I am grateful for the alternative facts and figures of the state of British trade to be presented to Parliament.

Unfortunately, as I read the Statement, it had a degree of pathos. It is quite sad that Ministers keep banging on about Brexit, and have not got over some of the grievances they had before and immediately after the referendum. It is rather a pathetic sight to see them making a Statement such as this, with very few people listening.

Many people in some of the key sectors of our economy are looking for action, not rhetoric and Parliamentary Statements. Many of our exporting partners in our key markets are looking for reduced barriers and burdens. I shall come to that in a moment. Primarily our businesses are looking for reduced costs, less bureaucracy and the Government knuckling down to ensure that what has been claimed to be “the world’s best border” actually functions as just a decent one, not one with its processes 20 miles from Dover for likely checks, for whose introduction there has been delay upon delay upon delay.

Any good news about British trade is good news, and I welcome it. I seek the best for our exporting businesses. However, that will not come about through rhetorical Statements such as this. For example, we are told that the UK economy has grown faster than those of Germany, Italy and Japan—without the obvious context that we fell the sharpest and the deepest after Brexit and as a result of Covid. Any recovery at all over that timeframe would be faster. The question is not the speed, but the totality of whether our economy is likely, at the end of this decade, to be bigger than it was before the referendum, or would have been if there had not been a referendum. Every indicator, including the Government admitting this to the OBR, says that on a compound basis, after 4% a year, our economy will be considerably smaller. To say that is not to do down our country; that is just, as the Government might put it, a fact.

The Government have issued a Statement. It would have been useful to have some footnotes with links to the documents. I commend the officials for scouring the UN and UNCTAD, as well as our official government statistics. As the noble Lord said, they have done a grand job of cherry-picking. The UNCTAD trade briefing for the UK shows, for example—this is one indicator—that since 2015 exports are up from £467 billion to £533 billion. That is good, and the Government refer to an increase in exports. What they do not say, however, is that UK imports have gone up much more, from £630 billion to more than £823 billion. The United Kingdom trade deficit in goods has gone up—and not only gone up, but doubled as a percentage of GDP. UNCTAD says that in 2015 it was 1.59% of GDP, whereas in 2022 it was 3.01% of GDP.

The Minister might say that talking about trade deficits is old fashioned, and that our economy is a service-sector economy. However, the trade deficit is very important when we analyse who that deficit is with. It is primarily with China. Yes, that is an indication of the growth in the economy of Asia, but the UK now has the biggest trade deficit with a single country ever in our history. The deficit with China is more than £40 billion. The Minister heard me refer to that.

That puts all the individual references, such as to access to the Mexican market, of £18 million, in perspective. Access to the Mexican market of £18 million is good; I welcome that. But I am more concerned about the fact that the UK has not done a resilience analysis of our key sectors, with an enormous trade deficit of £40 billion—that is £40,000 million—with China. In the context of President Xi visiting Europe, but also Hungary and Serbia, UK trade in the world is now a geopolitical consideration.

The Government have indicated that, as the Statement says:

“We are tearing down the barriers to trade”.


The Minister will probably not be surprised to hear that I disagree with him, and I will not be surprised that he will disagree with me, so we might want to settle with regard to the independent Regulatory Policy Committee, which advises Ministers on this very issue, and its analysis since the period referred to in the Government’s Statement. We can take one example from the 2017-19 Parliament, and I quote directly from the committee. It said:

“For the 2017-2019 Parliament, the relevant government set a … target of a £9 billion reduction in direct costs over the length of the Parliament, however the final position was an increase in costs of £7.8 billion. Similarly, the government has set a holding target of £0 for the current Parliament”—


zero was the holding target for the Parliament we are in—

“but in the first year of the Parliament, there was an increase of £5.7 billion (excluding the very significant impacts of temporary COVID-related measures)”.

This Government have presided over the biggest single increase in business burdens—bigger than any of their predecessors—and the fact that some have been removed, without any reference to the totality of the sum of the 500 referenced in the Statement, is pointless to put in.

My final point concerns what Governments can do to reduce burdens. My noble friends Lord Fox and Lady Randerson have raised repeatedly the increased costs now per British business, of £145 per consignment. This is, I remind the House, “the world’s best border”, and it is a typical cost per business of £100,000 since the new measures have been put in place—but it is also about friction of trade, when it comes to safety and security certificates, customs declarations, evidence of origins of goods, VAT requirements, health certificates and chemical certificates. These are all barriers. I hope the Minister can give an indication now of what the estimated net reduction in British business for trade will be. We have seen that the increase has been £100,000; what is the trajectory down? As I started, British businesses are not looking for boosterism, they are looking for bureaucracy and costs to be reduced and, unfortunately, nothing in this Statement would suggest that they are.

Accounting Standards (Prescribed Bodies) (United States of America and Japan) (Amendment) Regulations 2024

Lord McNicol of West Kilbride Excerpts

Tuesday 26th March 2024 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Offord of Garvel) (Con)]

My Lords, I beg to move that these regulations, which were laid before the House on 21 February 2024, be approved.

The Accounting Standards (Prescribed Bodies) (United States of America and Japan) Regulations 2015 provide a regulatory easement of the UK’s company reporting rules for US-listed or Japanese-listed parent companies that have chosen to re-domicile in the UK. The easement was originally introduced in 2012 and provides qualifying companies with extra time to transition from their national accounting practices to UK-recognised accounting standards. Following their UK incorporation, parent companies listed in the US or Japan may take up to four financial years to make the transition in order to prepare their group accounts in line with UK accounting principles.

At the original time of introduction in 2012, this was deemed especially helpful for companies using US and Japanese accounting standards that might otherwise have struggled to adapt to UK accounting standards when domiciling to the UK.

In 2023, the department published a post-implementation review of the 2015 regulations. The review took evidence from a small number of previously US-listed and Japanese-listed, now UK-domiciled, firms about their cost savings from the easement. The survey responses confirmed that the regulatory easement provided flexibility and enabled cost savings by the businesses using it. Businesses responding to the survey estimated that the regulations’ accounting conversion easement had reduced the scale of their conversion costs significantly. One company also said the regulations made possible the “most prudent and efficient” way for it to submit while listed in the US.

Although the post-implementation review found that the regulations were a helpful feature of the UK’s regulatory environment, it also identified a small risk of abuse of the easement. In particular, the review noted that more could be done to improve understanding that the easement was a transitional, time-limited concession, not a permanent exemption from the UK’s company reporting rules.

Having conducted the post-implementation review, the Government decided to extend the regulations, believing them to be a small, but useful, contribution to a pro-growth regulatory regime that supports inward investment. To give this decision effect, the Government laid the Accounting Standards (Prescribed Bodies) (United States of America and Japan) (Amendment) Regulations on 6 September 2023. These regulations extended the easement in recognition of its evident benefit to businesses that have used it so far. The easement would have expired without the regulations, with the result that newly domiciled US and Japanese companies would have been required to convert accounting practice immediately when they filed their first set of UK accounts.

When extending the regulations, the Government also took the opportunity to reduce the risk of the easement being misused or misunderstood by its beneficiaries. Specifically, regulation 4 of the 2023 regulations introduced an obligation on companies using the easement to include a note in their accounts stating when the easement ceases to apply. This additional requirement on companies was deemed a simple and proportionate mechanism to reduce the risk of abuse.

Regrettably, my department, the Department for Business and Trade, made a parliamentary procedural error in laying the latter provision by mistakenly using the negative resolution procedure rather than the correct affirmative resolution procedure. The new statutory instrument, which I beg to move today, is intended to correct the error. It removes regulation 4 of the 2023 amending regulations and substitutes a new regulation 5A in the 2015 regulations, doing this by the correct affirmative resolution procedure. The remainder of the 2023 amending regulations were made correctly, but the Government are grateful to the Joint Committee on Statutory Instruments for drawing their attention to the procedural error.

Driving growth in the UK economy requires attracting inward investment. These regulations are just one example of how we can make it easier for overseas companies to incorporate in the UK and create jobs in the UK economy. I beg to move.

[Lord McNicol of West Kilbride (Lab)]

I thank the Minister for introducing this statutory instrument, which remedies the Government’s mistake from last year. It is obviously a very short one and we on this side are not going to oppose it. I welcome any opportunity to speak in favour of regulations that seek to make businesses more likely to domicile in the UK. Making sure that Britain is open for business is vital and something that we want to push the Government to do in all areas.

As the Minister said, the 2023 post-implementation review found these regulations to be a positive although not decisive factor in encouraging companies to domicile here. The review also encouraged the Government to put forward Regulation 5A, which we now have an opportunity to welcome.

The Minister talked about abuse. What amount and type of abuse does he believe the regulation will counter? I could not quite understand that. What response has there been from the relevant UK companies to the regulations, given that they have already been introduced and implemented? Are those businesses satisfied with the level of clarity?

The Minister referred to the 2012 regulations but the draft instrument and the Explanatory Memorandum talk about the 2015 regulations, so I was not quite clear what he was referring to. Some clarity on that would be much appreciated.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his comments on this statutory instrument, and I welcome his enthusiasm for a pro-growth regulatory environment in the UK, which we have in common on both sides of the House. These regulations provide an easement of the UK’s company reporting rules, specifically to US and Japanese-listed parent companies.

I emphasise that this is a minority sport; not many companies participate in it, but where they do, among the major economies, there is perhaps more divergence in accounting standards in the US and Japan, because they are the biggest in the G7. That is why we have accommodated them with this legislation. I point out that this is a transitional concession simply to give companies more time and scope to convert their accounts to UK-recognised accounting principles. It is also designed to help safeguard the integrity of the UK’s accounting systems and reduce the risk of abuse.

On the concept of abuse, the post-implementation review found one instance in which a company was at risk of using regulations beyond the allotted four-year period. This is a minor risk, with only one instance, but the Government thought it prudent to address the concern while we have this opportunity.

The companies using this easement found it to be a small but useful intervention, citing cost savings of tens of thousands of pounds in some instances. For several larger companies, it amounted to millions of pounds.

The Government now propose to correct the procedural error made in laying Regulation 4 of the 2023 regulations by means of this affirmative statutory instrument. I therefore commend it to the Committee.

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

Lord McNicol of West Kilbride Excerpts

Monday 25th March 2024 Lords Chamber

[Lord Fox (LD)]

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

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

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

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

[Lord McNicol of West Kilbride (Lab)]

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

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

Comprehensive and Progressive Trans-Pacific Partnership (IAC Report)

Lord McNicol of West Kilbride Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, like many others who have spoken, I pay tribute to my noble friend Lady Hayter of Kentish Town and to the International Agreements Committee for its contribution to this debate and its members’ tireless work on this matter and so many others. On these Benches, we support the accession to the CPTPP. I echo the kind words of the noble Lord, Lord Purvis of Tweed, about the energy, the exuberance, the drive and the openness of the Minister, Lord Johnson of Lainston, in these discussions.

In our debates on CPTPP accession over the last year, we have made our concerns clear—at Second Reading, in Committee and on Report—about the threats of ISDS provisions and the need to safeguard our own food standards and environmental protections while also ensuring that other nations comply with international labour laws and other best practices. The committee’s report echoes our opinion on the limited financial impact of the CPTPP, noting that it was “underwhelmed” by the specific trade benefits. As my noble friend Lady Hayter of Kentish Town said, we have sought to ensure that what is, in reality, a modest change in our ability to do trade does not come at the expense of our ability to regulate and maintain our own high standards. I am glad that, throughout our debates, the Minister was able to make several assurances to this House and in Grand Committee. He said in one reply that such amendments were

“unnecessary because we are doing this anyway”

and that he

“would be surprised—that is the language I wish to use—if the evaluation and monitoring reports did not cover information on … ISDS cases”

and other relevant issues. He went on to say that

“an overview of the work of the committees under the agreement to facilitate co-operation and implementation … is particularly relevant when it comes to labour standards, environmental standards, reduction of the risk of deforestation and many other areas”.—[Official Report, 16/1/24; cols. 362-63.]

Those are the Minister’s words, and we will come back to them when we look through the evaluation and monitoring reports and the areas they cover. I sincerely hope that the effects will be positive, as the Minister has repeatedly assured us.

The report raises a number of important issues, a few of which I will reiterate and drill down on. The Federation of Small Businesses rightly makes the point that a significant barrier to the UK taking full advantage of new free trade agreements remains a lack of knowledge and capacity among small and medium-sized enterprises. I echo its and the committee’s recommendation that the department engage a CPTPP taskforce with undertaking a regional roadshow aimed at engaging businesses, demystifying aspects such as rules of origin provisions, and raising awareness of how companies and businesses might take advantage of this new trade deal when it is finally acceded to at the end of this year after the last country accepts us in.

The current system, which effectively requires businesses to seek out information from government, does not do enough in itself to stimulate trade. Although, in his oral evidence to the committee, the Minister said he was “agnostic” about how best to approach cutting through to business, I hope he becomes a believer in the recommendations from the FSB and the committee. Small businesses face far too many barriers to trade. That is why I was glad when the Labour shadow Secretary of State for Business and Trade announced in November that Labour will be working in collaboration with the Federation of Small Businesses, the FSB, as part of a small business export task force to find practical ways in which we can best support SMEs in their desire to access foreign markets.

The noble Lord, Lord Fox, touched on Dr Leonelli of the LSE and I want to echo the concerns she raised giving evidence to the committee on sanitary and phytosanitary controls. She spoke of the possibility that the threat of dispute settlement provisions may lead to our high standards not being enforced due to fears of legal action. This was raised many times both in Committee and on Report. Like the IA committee, I would like to see the Government set out how they intend to address the threat, as the noble Lord, Lord Fox, said, of regulatory chill, where our Government or companies make decisions not to push forward for fear of being challenged by other Governments.

I was glad that the report echoes the point that I and many others have made in the House about ISDS and the threats to the environment, such as deforestation in Malaysia as a result of palm oil production. In particular, it echoes the points on labour standards and the fact that arbitration does not concern itself with breaches of any workers’ rights, but only focuses very narrowly on where a breach has impacted trade and the effect that that had on workers’ rights. That is just wrong. The focus on pure trade over labour standards is something that we on these Benches find deeply unsettling.

The noble Lords, Lord Kerr and Lord Purvis, and the noble and learned Lord, Lord Goldsmith, touched on CRaG. The noble and learned Lord, Lord Goldsmith, specifically talked about the other place not having a Rwanda debate. I understand that, in the Commons, the Secretary of State previously promised a CRaG debate and the Minister of State in the other place promised one in the Bill Committee, but the leader in the Commons has just confirmed that there will be no such debate on the CPTPP. Time, through the managers down the other end, has not been made available. If we are going to properly debate and deal with these issues, time needs to be available, both in this House and in the Commons for the debates to take place.

I also wish to raise concerns made by my colleagues in the other place about the vote on the substantive Motion. At each stage of the debates in this House and in debates on other agreements, there has been a call from across the political Benches—from Cross-Benchers, the Conservatives, Liberal Democrats, Labour and the Greens—for proper substantive debates on trade deals. The words the noble Lord, Lord Kerr, used about scrutiny, being able to shine a light and actually giving the department itself a greater ability to push back in negotiations, are wise words. This is something that we should look to enhance and deal with, rather than leaving—we all understand why the finer details of the negotiations need to take place behind closed doors—the setting of the parameters. Whether this is at the start of the discussions or monitoring them as we follow through the discussions, it should be before we are given a fait accompli, as we have been in so many cases. It is so important.

I will finish by again thanking the IAC and the seven members of the committee who have spoken today, for their time, consideration and hard work in dealing with the points that were raised in Committee and on Report, and for their deliberations and the report. I look forward to the Minister's response.