Corporate Insolvency and Governance Bill

Lord Stevenson of Balmacara Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 9th June 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I thank the Minister, his colleagues in the department and the Bill team for all the engagement that we have had on the Bill in recent weeks. I am also grateful that a number of virtual meetings have been set up for Members of your Lordships’ House. Several helpful letters have also been received. We are therefore well briefed about this sensible and proportionate Bill and cognisant of the reasons why it is being brought forward on a fast track. I can confirm that, while we will give the Bill good scrutiny, our objective as Her Majesty’s loyal Opposition is to be constructive and to ensure that our businesses get the support they need now and in the long term.  

A large number of Members of your Lordships’ House have signed up to speak in today’s debate, and we look forward to their comments and questions to the Minister. We will put down a range of amendments tomorrow based on today’s debates as well as the submissions that we have received from organisations and bodies concerned with this issue. I also thank the Library for its very helpful note on the Bill. 

The Minister said that although some of the measures in the Bill had been consulted on a few years ago, it is at heart a part of the Government’s package of measures to address the supply shock caused by Covid-19. As the impact assessment for the Bill states, the case is certainly strong:

“Early models of the impact of Covid-19 have suggested that UK GDP growth in 2020 … could range between -3% and -13%, with scenarios for corporate insolvencies ranging from 30,000 to 160,000.”


However, does this not raise the question of what is going to happen to the other corporate insolvency measures which were consulted on in 2018-19? What about the wider policy response arising from various significant corporate failures in recent years such as Carillion, which is now overdue?

We are now entering the end of the lockdown phase, and the challenges ahead are becoming clearer. There will be a huge amount to do to ensure that the recovery is as short and strong as possible so that we minimise the impact on unemployment levels and the wider economy. I agree that it would have been wrong to hold back the measures in this Bill because other proposals were not yet ready to be included, but the last thing we want is for these issues to be dealt with in silos. Provisions in the Finance Bill 2020 ensuring that HMRC is a secured creditor in insolvency proceedings are surely a classic example of this, potentially running a coach and horses through this Bill. Many issues need a cross-government approach, which is appropriate. Our insolvency framework touches almost every part of the economy and helps to create the confidence and public trust which underpin trading, lending and investment.

I turn to the Bill. We support both the permanent changes being made to insolvency law and the temporary changes being made to insolvency law and corporate governance. Others speaking today will undoubtedly make particular points about the Bill, and we look forward to the Minister’s responses. To get us started, I will mention a few areas where we will put down probing amendments.

The position of employees seems unsatisfactory, both in terms of their lack of formal involvement in the processes and in relation to outstanding pay and other claims during the moratorium. The classification of pension scheme deficits, particularly for defined benefit schemes, as unsecured creditors seems unfair and perhaps should be reviewed. Many of the companies likely to take advantage of the new measures will be SMEs, and many SMEs will be unsecured creditors in insolvencies of other companies. The current insolvency regime was introduced in 2003 and is basically unchanged since then. It gives preferential protection to secured creditors and, as noted earlier, HMRC has legislated to protect its position. Is there a case for reconsidering the treatment of unsecured creditors?

On the length of the moratorium, Chapter 3 does not contain a maximum period and there appears no overall limit on the number of extensions available. Is that right? The new position of monitor is welcome but, apart from the requirement that he or she must be an insolvency practitioner, there is no other requirement set out in statute and the appointment is left wholly to the discretion of directors, with no role for creditors. We surely need much more detail here.

As has been said, the Bill helps struggling businesses by temporarily removing the threat of winding-up proceedings where unpaid debt is due to Covid-19; and it introduces temporary measures to void statutory demands against companies during the emergency. We support those. It is important that the measures suspending liability for wrongful trading do not relieve directors of their duty of care to act responsibly and in good faith, as specified in Section 172 of the Companies Act 2006. Should these measures not be put into the Bill?

Given the time that has elapsed since the lockdown, and the continuing reduction of normal economic activity, we would not object if the Government wished to extend the initial period of the effect of the Bill to 30 September 2020, even though, as the Minister said, they have power to extend it using secondary legislation. Some of the issues I have mentioned could be dealt with by inviting the Minister to clarify on the record what the Government mean by the current drafting. In other cases, we would hope to convince Ministers that substantive action may be required in subsequent legislation, and we will be pressing them to take an early opportunity to do so.

I mentioned earlier that the measures in this Bill needed to be considered in the wider context of the changes that will be needed to ensure that our economy recovers quickly and sustainably after Covid-19. One of the most shocking recent corporate collapses was that of Carillion, because it seemed to arrive without warning, despite active monitoring by the Government, and it affected tens of thousands of workers and subcontractors. In recent years, many familiar high-street retailers have closed, leading to devastating implications for workers, their families and wider communities. These collapses raise a number of questions. Why are our systems of auditing and reporting not able to pick up possible corporate failures earlier? Who is to blame? Do we focus enough on restructuring and rescuing companies which get into trouble, and do we have the skills and experience in the professional services needed to do that?

In a recent report, the TUC argued persuasively that the insolvency law is currently too heavily weighted in favour of creditors, often the banks. Other countries, notably Germany, take a very different approach. Staff in companies which crash and burn face substantial financial losses when their firm goes to the wall. Gaps in employment law also mean that those in insecure work, including agency workers, zero-hours contract workers and the self-employed—the so-called gig economy—miss out on even basic protections. Despite promises to enact the recommendations of the Taylor review, we still have the situation in this country where all employees are workers, but not all workers are employees. Why the delay?

One of the reasons that Carillion failed was that it carried huge levels of debt, a situation that is, unfortunately, likely to recur more widely in our economy as we recover from Covid, creating inherent risks to which boards, investors and auditors need to be able to respond. Are we confident that we have the systems in place?

Over the next few years, the Government must bring forward an integrated approach to the issues raised by the recent series of corporate failures, including: more corporate transparency and reform to the role and function of Companies House; training for directors, owners and senior management of public companies; legislation for CMA reforms for the appointment and oversight of auditors, and for the Brydon recommendations on compliance and practice; better insolvency practitioner regulation; the future of “pre-pack” administrations; making the Prompt Payment Code statutory, not voluntary, and giving the Small Business Commissioner real powers to ensure that the code is enforced; and ensuring that consumers have a central role in relation to policy on financial services and decisions on mergers and acquisitions.

Finally, the Bill is aimed at helping businesses, but why are these measures not also available to individuals, millions of whom will be facing unmanageable debt? A report in the papers today suggests that British households are expected to rack up debts worth £6 billion because of the coronavirus crisis. That is on top of figures which show that, at the end of January 2020, UK household debt was around £1,680 billion. Some 12.8 million UK households have no savings or savings of less than £1,500. The Government have committed to introduce a breathing space scheme for personal debt, and to roll out the successful statutory debt management plans which operate in Scotland. We urgently need these to be introduced now.

Covid-19: Businesses and the Private Sector

Lord Stevenson of Balmacara Excerpts

Thursday 21st May 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

I add my thanks to those of others to the noble Lord, Lord Dobbs, for securing this debate. Despite the limitations on speaking time it has been of high quality throughout, with many interesting insights.

Most noble Lords have singled out our magnificent health and care workers for their exemplary work during the crisis. The Motion also allows us to recognise the contribution and generosity that we have seen from businesses and the wider private sector during this crisis. The noble Lord, Lord Dobbs, called it a roll-call of honour, and I think he is right. This has included the crucial role played by corner shops; special opening hours and discounts for key workers in many retail stores; companies deciding to build ventilators to increase capacity; and, as the noble Lord, Lord Bilimoria, reminded us, companies ignoring commercial rivalries to develop services and medicines to assist those afflicted by the virus and in pursuit of a vaccine. We have just heard about the role of the CMA in that.

On the whole, businesses have stepped up when we needed them. Indeed, they could have done much more if their offer of help had not been ignored when it was made, as the noble Lord, Lord Hunt, reminded us. We thank them for their continued efforts. There really is no limit to what can be achieved if we all pull together.

As many noble Lords have pointed out, what the Government have asked from business and the wider private sector during the pandemic is unprecedented in peacetime, and they have complied. However, because of these measures, thousands of businesses face an existential threat and possible closure, with all that that means for millions of workers. This supply shock could have been disastrous in an economy that was already showing strains earlier this year, but it is a credit to the Government that they have provided a range of support measures, including the job retention scheme, various business loans and the self-employment scheme, which has worked very well. Combined with the forthcoming changes to the insolvency laws, which we support, these measures will ensure liquidity, prevent unnecessary bankruptcies and hold jobs open for millions of workers until it is safe for businesses to reopen. In this context, I agree with the noble Lord¸ Lord Fox, that the Health and Safety Executive has been given a major responsibility, and it needs to be supported now and in future.

I hope the Minister will accept that some of the measures have been improved by scrutiny here and in the other place. There are still issues to be resolved, such as schemes for SMEs that are looking to access loans with a 100% guarantee above £50,000. As several noble Lords have pointed out, additional support may need to be provided for companies operating in the tourism, hospitality and cultural industries, particularly where taking on more debt is not a viable option. What plans are the Government considering for these sectors?

Does the Minister agree that where the state has assumed responsibility for providing support to a private sector company, it is absolutely right, as the noble Lord, Lord Balfe, has pointed out, to require all such firms to make the correct tax payments when they fall due; to require that they are not registered in a tax haven; and that they should not pay dividends to shareholders while they are claiming government resources?

I turn to the recovery. Private businesses and the wider private sector will also have a significant role to play after the pandemic. It is true that businesses want to reopen and people want to return to work, but this must be done with maximum safety. It is equally important that such moves have full-hearted public support so that the great pause, as some are calling it, does not turn into a great depression. The Chancellor has said, perhaps rather chillingly, that he cannot save every business, but surely he recognises that every business that goes bust risks deepening the recession and extending the time taken to recover our economic health. We are fast approaching the point where the focus of the Treasury’s efforts has to switch from supply to demand. How are we to persuade people to spend more than they do at present on goods and services, preferably those that are not imported? To do that, people need to feel secure about their income, their employment and, as the noble Lord, Lord McConnell, said, their consumer rights, and they have to be certain that spending today is not going to take them into unmanageable debt. There are both monetary and fiscal aspects to this, and it will need careful planning and timing if it is to work. As the noble Lord, Lord Campbell of Pittenweem, said, threatening a return to austerity will not take this trick.

The Government need to come up with a rescue plan to drive up demand and reduce business uncertainty for the long term, a strategy that focuses on sustainable high-quality jobs and growth. As the noble Lord, Lord Dobbs, said, we particularly need to reach out to young people entering the workforce this year and guard against this becoming a lost generation. However, I believe that recent polling suggests that the public also want something else. They do not want the economy simply to return to where we were pre-pandemic. They want a new deal, with growing support for a green new deal. What could that be composed of? As the noble Lord, Lord Hendy, said, surely we first need to learn the lessons of recent months and get real about the sort of income levels and support that those who have borne the brunt of the pandemic will need in future. It is after all the lowest-paid workers whom we have relied on most, as well as our key workers, and they need a new inclusive approach to employment laws and protection if we are to tackle their insecurity.

But the climate emergency is a challenge that we can simply no longer afford to ignore. I read recently, in an FT editorial last weekend, that

“governments should use their spending power to help stimulate a recovery from the virus that does not lock in a fossil-fuelled economy.”

Such a strategy could create an army of zero-carbon workers planting trees, rewilding our countryside, restoring natural habitats, insulating our existing housing stock and office buildings, and working on green energy technologies. This could help us to achieve our zero-carbon target much earlier than the Government are currently planning, provide people with much-needed job security after a period of such turmoil, and benefit everyone’s financial security through lower energy bills. The public should look back on the support that they have given business over this period with pride, but it would be strange if that investment were not used to return benefits to the public good.

My noble friend Lord Liddle called for a public/private partnership while my noble friend Lord Desai suggested a sovereign wealth fund. I hope that both ideas have been given serious consideration. Another way, which would follow on from the support given to the banks in the 2009 crisis, is that the Government should be willing to consider taking an equity stake in firms that they have supported, particularly where there is a compelling economic, security or environmental reason. Other countries are already doing this—for example, the French and US stimulus packages allow for the Government to take equity stakes in airlines that receive aid—but we could go much further by taking government stakes in line with long-term green new deal goals. We can invest in new technology companies to power the fourth industrial revolution or require energy-intensive industries such as steel to switch to alternative manufacturing methods.

I doubt that many people think the global supply chain will return to its shape pre Covid-19. Indeed, some commentators are saying that globalisation will enter a new phase after the pandemic that will demand a new sustainable trade policy more capable of dealing with the demand and supply shocks caused by Covid-19. Coronavirus has cruelly exposed global inequality, so different priorities for trade need to reflect a reoriented world. A sustainable trade policy could focus on securing opportunities for all sizes of businesses, human and employment rights, consumer interests and climate protection for the whole world long term. It would also provide a proper role for Parliament, something that we will return to in round 2 of the Trade Bill.

Business and the wider private sector have contributed greatly to the work of combating Covid-19. We welcome their contributions. We have supported the Government as they have tried to deal with their concerns during the crisis, and there is more to come. The noble Lord, Lord Dobbs, said it would be a tragedy if we ended this crisis with greater poverty. I agree with him that we must now work with business and the wider private sector to secure the recovery with a green new deal that shares the benefits of cleaner inputs and more sustainable outputs for the benefit of us all.

[The Deputy Speaker (Lord Palmer of Childs Hill) (LD)]

I call the noble Lord, Lord Callanan. Lord Callanan, you need to unmute.

Covid-19: Business

Lord Stevenson of Balmacara Excerpts

Wednesday 13th May 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, we do not underestimate the challenges of lifting the lockdown that has been in place since 23 March 2020. It is in all our interests for it to happen safely and we recognise that there are difficult decisions confronting the Government and the businesses that have to adapt to these unprecedented circumstances.

We are pleased to note that the Government have talked widely to stakeholders, unions, industry bodies and the devolved Administrations about their plans for the removal of the lockdown. I hope that this commitment to solidarity in what has often been a contested area of public life is a harbinger of a commitment to work together on all aspects of industrial life, not just what is required to beat this pandemic.

I have three main questions for the Minister. First, surely the acid test for the five-point plan, across the eight workplace settings identified in the Statement, is whether ordinary working people who cannot work from home will have sufficient protection when they commute to and from their workplace, and in the workplace itself, from the measures announced yesterday. The Statement says:

“First, people should work from home if they can … For those who cannot work from home and whose workplace has not been told to close, our message is clear: they should go to work.”


What have the Government put in place for those who have followed this instruction and returned to work? Can the Minister confirm that there is to be no new legislation for this? Absent that, existing statute and common law means that employers have a duty to assess the risk of workers being exposed to Covid-19 and to implement ways of reducing that risk. In practice, we are told that this will require changes in working practices—screens, barriers, floor markings, signage, hand sanitisers, face masks and potentially a whole range of other interventions. In larger companies the outcome of this assessment has to be shared with employees, although there may well be a case for making this mandatory for all but the smallest premises.

We accept that much of the advice published yesterday is sensible and may be effective in reducing the risk of infection, but does the Minister accept that it will take time to procure and set up, and does he have advice for employees who have serious concerns about whether their workplaces are safe now and will be during the period while the physical adaptations and changes in working practice are being undertaken? Who will decide whether workplaces are safe now and in the future? The answer seems to be the Health and Safety Executive, established under the Health and Safety at Work etc. Act 1974, and reliance on the Management of Health and Safety at Work Regulations 1992, as amended. Can the Minster confirm that this is the statutory provision that the Government are relying on and can he set out for us today the sanctions and penalties for employers who do not comply?

Secondly, can the Minister expand on the scientific advice that underpins this policy? As I understand it, the reproduction rate of the disease—the R number—is currently between 0.5 and 0.9. Given the large variation in the range given, can he explain precisely how this number has been calculated and give us a sense of the confidence limits that presumably must apply to it? More importantly, if we are going to rely on the R number, can he tell us when and how frequently information about R is going to be published and, in particular, what value of R would trigger the Government to review and possibly reverse the instruction to people to “go to work”? Is it when R is greater than 1.0? What R values will be specified before further lockdown relaxation stages can take place?

Finally, the recent ONS figures for sectoral mortality show that men working in the lowest skilled occupations had the highest rate of death involving Covid-19, with security guards having one of the highest rates. Men and women working in social care, a group that includes care workers and home carers, both had significantly raised rates of death involving Covid-19. There are also ethnicity and regional variations of significance. Does the Minister agree with me that these figures suggest that there may be a need to refine the measures recently introduced and that a case exists to go further, so that those currently carrying the highest risks of dying from Covid-19 have better protections from catching the disease in their workplace?

[Lord Fox (LD)]

I thank the Minister for repeating the Statement, and I wholeheartedly thank his department for adding a considerable degree of clarity to the shambles that we were treated to on Sunday. In bagging the “Countryfile” slot last weekend, the Prime Minister may have notched up high ratings, but did the Government really want 27 million people to witness him waffling on about non-specifics? For people to return to work requires confidence. Employees need to know that their employer is doing the right thing, and businesses need to know what they must do to keep employees safe. The Government, particularly the Prime Minister, set the foundations for that confidence. As one businessperson said to me this week, the way this has been sprung on people is ridiculous and shows no understanding of or regard for safety at work.

When these guidelines were published, they were very helpful, and the Statement notes that they have been broadly welcomed by the working world. However, the phasing should have included the drafting process and time for companies to start risk assessments and consult their staff and workers. Only then should the Government have announced a return to work.

I turn to some specifics. The noble Lord, Lord Stevenson, has ably approached the important issue of employee rights, and I endorse his comments. To avoid duplication, I shall probe the position of employers more deeply. Quite rightly, the guidance does not supersede any current legal obligations relating to employers’ health and safety practices. However, it is clear that coronavirus exposes businesses to additional risk beyond their experience. As the guidance states, each business will need to translate the guidelines into specific actions that it will need to take, and there are a great many variables. What is the formal process for checking that a business has translated the guidelines correctly? What constitutes an acceptable risk assessment? Should it be conducted in house or always by an independent third party? For example, can a business request an HSE audit to validate its approach? If it does, who would pay for it? In short, what constitutes sufficient due diligence?

It also seems that the complexity of supply chains has been hard to capture in the documentation. For example, a manufacturing business has many dozens of suppliers. For a tier 1 business to reopen, all those supply chain businesses have to reopen too, and they get smaller as the chain gets longer. The risk assessment process is even more onerous for smaller SMEs, so can the Minister tell us how the department will support SMEs to get back to work? For example, will the Government consider setting up a free service for SMEs to help them draw up their risk assessments? In the event that an employee falls ill and blames the company, who is liable? Have the management acted properly? What about insurance? We have seen problems with business interruption insurance. Have Her Majesty’s Government spoken with the insurance industry? Are compliant employers covered by their current insurance? In the event that the worst happens, how do employers demonstrate that they have done enough to avoid prosecution?

That takes us to the Health and Safety Executive. My noble friend Lord Newby spoke of the need financially to bolster the HSE, and we welcome the extra £14 million for its budget, but does the Minister agree that this sum is piffling compared to the cuts of £100 million or so that that organisation has experienced over the past decade? In the debate yesterday, the Leader of the House was asked whether the HSE is fit for purpose, and I do not think she responded, so I will rephrase that question and break it down. By how much does the HSE need to grow to do this job? What needs to change for it to take on this extra challenge? What is the timeline? When will it be ready to do this new job, and does it have the management capacity to do it? We must remember that, under Brexit, the HSE is already taking on other new, important functions.

Finally, I heard nothing about how the manufacturing and construction sectors will be supported with testing. As it stands, businesses that are deemed critical get particular access to testing. This week’s published advice talks about isolation in the event of an outbreak in manufacturing and construction firms, but what about testing? Can the Minister please acknowledge this challenge? Can he please undertake to deliver sufficient support on testing so that employees of these companies can really be kept safe? This is going to prove to be a really important issue. In the end, the Government need to do everything possible to ensure that back to work does not become back to square one.

Coronavirus Business Interruption Loan Scheme

Lord Stevenson of Balmacara Excerpts

Tuesday 12th May 2020 Lords Chamber

[Lord Callanan]

We have introduced a comprehensive package of measures designed to support any business facing difficulties in this period, including the various loan schemes and grants and support for the self-employed. Start-ups may be able to access CBILS or the bounce-back loan scheme if they fulfil the eligibility criteria. We keep them constantly under review to ensure that as many businesses as possible receive the support that they need.

[Lord Stevenson of Balmacara (Lab)]

My Lords, unlike the pubs that they supply, most of our small breweries are not eligible for grants or business rate relief. As a consequence, over half of them have not been able to access any financial help from the Government. Two-thirds have stopped brewing completely and there have been many redundancies. Will the Minister agree to meet urgently with officers from the small independent brewers association to see whether a satisfactory solution can be found to this problem?

[Lord Callanan]

Small breweries are a subject close to many of our hearts. We are responding rapidly to feedback to ensure that all eligible businesses, including breweries, can feel the full benefit of support that is available through the package. I would be very happy to join the noble Lord in meeting representatives if that is required.

Covid-19: British Business Bank

Lord Stevenson of Balmacara Excerpts

Thursday 30th April 2020 Lords Chamber

[Lord Callanan]

We are constantly reviewing the loan guarantee schemes to make sure that as many businesses as possible can benefit from them. That is why we made the changes that I referred to earlier in the week. As I said to an earlier questioner, although the UK has left the EU, under the terms of the withdrawal agreement we are still subject to EU state aid rules.

[Lord Stevenson of Balmacara (Lab)]

My Lords, does the Minister agree that once the current, very welcome, liquidity initiatives to soften the supply shock to the UK economy have done their work, it will be necessary, as in other economic downturns, to bring forward plans to stimulate demand and to deal with rising unemployment? Will the Minister confirm that such plans are being developed and can he share with us the likely timing?

Covid-19: Business Interruption Loans

Lord Stevenson of Balmacara Excerpts

Wednesday 22nd April 2020 Lords Chamber

[Lord Callanan]

I thank my noble friend for his question. Of course, the issue of 100% guarantees has been raised by a number of other contributors. It is something that we are keeping under review. However, we think that the structure of the scheme at the moment is appropriate to its function. We do not believe that it is right to put all the cost of these loans directly on to taxpayers. Banks should have some involvement in those loans. As I say, we are keeping the scheme under review.

[Lord Stevenson of Balmacara (Lab)]

My Lords, the Government are to be congratulated on the scale of—and, indeed, the welcome adaptations to be made to—the CBILS, but other countries seem to be disbursing more money more quickly to their struggling SMEs. In addition to the point made already about the increase needed to guarantee 100% of loans, will the Government also think of insisting, in the interests of transparency, that the British Business Bank provide details of what loans have been delivered by the 47 accredited lenders?

[Lord Callanan]

It is important to remember that not all SMEs will want debt finance. There is a wide range of different support schemes available to businesses, including the job retention scheme and various local authority grants. We will be looking to publish, in the interests of transparency, the full range of offers that have been made to business in due course.

Parental Bereavement Leave Regulations 2020

Lord Stevenson of Balmacara Excerpts

Tuesday 3rd March 2020 Grand Committee

My third and final point is about the complexity of the regulations in relation to the entitlement to bereavement pay, although one understands the reasoning for that. However, there is a category of worker that I do not believe is catered for in the regulations and that I hope the Minister will consider today, or if not, on a later occasion. I refer to people on zero-hours contracts. It may be that the employment Bill will propose to eradicate zero-hours contracts, but if that is not the case, those workers need the entitlement which is conferred on all other workers by these regulations. The problem is that when a zero-hours worker gives notice that he or she would like to take bereavement leave with pay, they find that the employer will say that there is no work for them for that week or two weeks in any event. Sir Michael Marmot’s report last week shows that there is a large number of zero-hours workers. He points out that, 10 years ago, there were 168,000 such workers while today there are some 800,000. Will their entitlement be given further consideration?

[Lord Stevenson of Balmacara (Lab)]

My Lords, this has been a useful and helpful debate on an uncontentious set of regulations stemming from a Bill which had to be a Private Member’s Bill but did, it should be said, feature in the 2017 Conservative manifesto—which is why it may have got through with the speed it did. This is in no sense to denigrate it, but from listening to the debate, one might have imagined that it would have been a flagship measure in certain circumstances. It was not to be that way, but that does not take anything away from the fact that this is an important social measure which we welcome.

In a sense the narrative, as rehearsed by my noble friend Lord Knight, reflects the fact that the campaign raised by Lucy Herd has been successful in getting movement in this area. The order before us is about the consequences of that Bill, the consultation that took place and the decisions taken as a result. Despite the points already been made today, we can be pleased that the consultation went well. It seemed to cover exactly the points we were nervous about when saw the Bill through both Houses. The results, although they may not satisfy everybody, give enough of a base for introducing the arrangements that we can welcome them.

Having said that, the points made by the noble Lord, Lord Hendy, are valid. Indeed, I was going to make them myself. We need to settle the question of whether we are going to treat fairly and equitably those who work across the various boundaries described by the noble Lord. I hope that the employment law, when it comes forward, will cover the gig economy and benefits for those who are workers but not employees. There will be no question of the Government being able to rely on the EU regulations in force not permitting them to do this because we will be able to do that ourselves, will we not?

Having been welcoming and supportive of what has been said and noting the points made by noble Lords about issues that perhaps still need to be picked up, I want to mention three myself. First, I welcome the fact that that these regulations have a common commencement date. The Minister will have been advised that I have a thing about this. His predecessor managed a score of one set of SIs starting on a common commencement date and 13 SIs that did not. There was never an adequate answer for that. It just seemed to be the way it happened. I am delighted that the Minister is starting his regime with an appropriate commencement date of 6 April.

Secondly, I read both draft instruments looking for the point picked up in previous discussions in the Grand Committee today about uprating arrangements. I assume that it is automatic, but given the experience of those in the previous debate of there being no statutory requirement to uprate, can the Minister confirm that these payments, if successfully claimed, will be uprated annually? If he cannot confirm that today, perhaps he can write to me.

Thirdly, when the Minister introduced the debate, he estimated that there are 7,000 child deaths a year. However, the Explanatory Memorandum has a figure of 10,200 parents a year eligible for parental bereavement leave, with 9,300 of those eligible for the payment. Can he confirm what the figures actually are? We have just discussed whether we should include in the figures gig economy workers who are not employees, so I think the overall figure is probably bigger. However, as the noble Baroness, Lady Brinton, said, it is still a small number and therefore not one that carries political weight, but we should know what we are talking about. Again, if the figures are not available, I would be happy for the Minister to write to me.

We support these regulations. They have been interpreted with sensitive regard to what is required, with the evidence that came forward supporting what we said at Second Reading. They are therefore welcome.

[Lord Callanan]

I thank all noble Lords for their valuable contributions to the debate. I start by reflecting the point made by the noble Lord, Lord Knight of Weymouth. The legislation would not have made it this far were it not for the commitment and support of Lucy Herd, and of Kevin Hollinrake and Will Quince and others in the other place—on both sides of the House, it is fair to say—as well as the work of the noble Lord.

I totally associate myself with the remarks the noble Lord made about the political process. It is often a source of great frustration, even to those of us within government. I am profoundly grateful to have the honour of presenting the regulations, which in no sense were my work, in this place. It shows that occasionally the political process works to the benefit of the people that we are all here to help and it was great to see the support for this measure on both sides of this place. As well as thanking the politicians, I thank all the officials in my department who worked hard to bring these measures before us today.

I hope noble Lords will agree that the Government have carefully considered the needs of bereaved parents, as well as those of employers, in drafting these regulations. I agree with the noble Baroness, Lady Brinton, that the broad definition of a bereaved parent—relying on a parental relationship, rather than biological parentage, to determine eligibility—will ensure that this provision reaches those who need it most. She will get the answer she was expecting to her second point: the policy in this area is not held by my department; it is a matter for the DWP. However, I will ensure that her point is conveyed to that department and that she gets a written reply to her valid concerns.

As I have already set out, the entitlement can be taken flexibly, giving bereaved parents choices about how best to use their time off to support their own, individual grieving process. This is important, as grief rarely follows a predictable path and significant events, even some time after the death, can cause bereaved parents to need time away from work. Wherever possible, these regulations have sought to mirror the existing framework of family-related leave and pay entitlements, which is familiar to most employers. The regulations ensure that an employer has certainty about when their employee will be off, which will enable them to plan ahead. I hope that this will ultimately lead to a more supportive and compassionate response from employers.

These regulations represent a statutory baseline, which should be considered the bare minimum for an employee who has suffered such a tragic loss. Many of us who are parents cannot comprehend the pain that someone in such circumstances will go through. As always, the Government encourage all employers to go further than the statutory minima where they are able to, and to act compassionately and considerately towards their staff. I am happy to say that many employers already provide exemplary bereavement support to their staff. However, there are still a small minority who do not, so I hope that this new legislation will not only ensure a minimum protection for all employees, but lead to better workplace support for bereavement across the board.

ACAS has produced guidance with Cruse, the bereavement specialists, for employers on managing bereavement in the workplace that includes specific advice relating to a parent losing a child of any age. We encourage employers to take notice of the ACAS guidance and to go beyond this statutory minimum in their own workplace policy where possible. I understand the concerns of the noble Lord, Lord Hendy, about the lack of provision for bereaved parents who are self-employed, or who are “workers” as opposed to employees. The Government understand the challenges that the self-employed and other non-employee parents face. We will continue to keep differences in treatment between self-employed and employed people under review with respect to parental leave and pay.

I am happy to reassure the noble Lord, Lord Stevenson, that this payment will be uprated annually, in line with other family payments. Regarding the numbers—we had 7,500 and he quoted 10,500—every child’s death will have a number of parents associated with it. The number in the impact assessment is not exactly twice the number of deaths; the 10,500 takes account of many things, including the number of parents who are not employees. If it would be helpful to him, I can write to him to explain that in more detail.

I hope I have answered all the questions. I commend these draft regulations to the House.

National Minimum Wage (Amendment) Regulations 2020

Lord Stevenson of Balmacara Excerpts

Tuesday 3rd March 2020 Grand Committee

[Baroness Burt of Solihull (LD)]

My Lords, it would be churlish not to congratulate the Government on achieving their target of 60% of median earnings this year. I also welcome the increased funding for enforcement.

The increase in the national living wage will provide a considerable uplift for the working poor in our country. A top rate of £8.72 is getting closer to the Living Wage Foundation’s recommended £9.30—I presume that it will be further uprated in due course—but it is still a way off the London living wage of £10.75. I should probably know this, but can the Minister explain why there is no Low Pay Commission London minimum wage, when clearly it is more expensive to live in London than anywhere else?

The difference between the minimum wage and the living wage is that the living wage is based on a basket of goods and services which should give a basic but acceptable standard of living. It therefore follows that the national minimum wage is not sufficient for someone to live on. Instead, it has to be subsidised by the Government through universal credit and various other benefits.

I can see that different individual and family circumstances will need a different underpinning level of help. The idea of always making work pay was quite a genius move on the part of the Government when it came in, but implementation was, and still is, another story. Fortunately, that does not come within our remit today. We are where we are and there is something to celebrate.

The adult rate for 21 to 24 year-olds received the greatest percentage uplift, at 6.5%, but the youth rate for under-18s has fared proportionately worse, at 4.6%, or the princely sum of 20p an hour. I know that it is argued that these youngsters enter the world of work with very little knowledge, but it cannot help their self-esteem to give them a 20p rise, especially if they and their families need that money.

I wish I had a crystal ball to see whether, in a time of full employment and even greater skills shortages, not helped by this Government’s immigration policies, wage rates will rise above and beyond the minimum. Unfortunately, I do not have a crystal ball, except to predict that we are all likely to meet here next March. Who knows what state the country and wage rates will be in then?

[Lord Stevenson of Balmacara (Lab)]

My Lords, I welcome the SI before us. As has been said, it is interesting to see every year the amount of work that goes into providing the analysis and evidence for it. It is of a very high standard and one enjoys reading the recent literature on these areas. I know that it has been updated this time, although I am afraid that I have not gone to the original texts.

I should have declared my interests. I am the father of a child who is receiving the apprentice wage, being over 19 and still in the first year of his apprenticeship—although I think that comes to an end next week.

Having said that, I want to come back to two questions I have asked previously. The first concerns the disregard for accommodation, which there is not very much detail about. I do not particularly need an answer now, but will the Minister write to me at some point in the not-too-distant future explaining why the percentage used for the disregard for accommodation is still at variance with the figures used for any of the others? My simplistic approach to this is that if there is a broad range of indicators which suggest that pay needs to increase on a particular range, and there are reasons why that might vary across the individual numbers, why do we come to a different figure for the accommodation disregard, even though it affects all those in the sector? It is too complex an issue for the Minister to respond to today, but I would be grateful to receive a letter on that point.

The noble Baroness asked about the work on making sure that employers are paying the national minimum wage, subject to a big increase in funding announced in last year’s Budget. We do not get much detail in these figures about what exactly is happening. A reference on page 37, in paragraph 146, suggests that there will be a change this year, because a greater number of employees are in the lower bands of the national living wage and there will therefore be instances where non-compliance could occur. In fact, there could be an increase in that. There is no explanation given, but if there is anything of significance, perhaps the Minister could write to me about it. I just note it at this stage.

The basic concern is that although the budget has increased and the numbers are down, an alarmingly large number of people are still thought to be affected. In April 2019, it was estimated that 424,000 jobs with pay less than the national minimum wage and national living wage were held by employees aged 16 and over. That is 1.5% of all those aged 16 plus in UK employed jobs. It is true that that is less than last year, when it was 1.6%, but it is still an awful lot of people. Will the Minister say what activity is going to be involved in the expenditure of the greater funds made available for enforcement? Does he judge that it will be successful?

Artistic Content: Copyright Protection

Lord Stevenson of Balmacara Excerpts

Monday 2nd March 2020 Lords Chamber

[Lord Callanan]

Yes, BEIS is responsible for intellectual property and copyright, but of course there is considerable input from DCMS concerning the creative industries. DCMS is taking forward a creative industries forum and various round tables with content providers and social media platforms, et cetera. So it lies across the two departments.

[Lord Stevenson of Balmacara (Lab)]

Does the Minister agree that unless Article 17 or an equivalent measure is introduced, creative personnel in this country are going to be disadvantaged relative to how they would have been had we stayed in the EU, and certainly in comparison with their counterparts in the EU, which was the basis of the Question? Is this not a case of cutting off your nose to spite your face? Why would we not want to make sure that those who are earning benefits from the cultural industries for this country and for themselves are able to earn, and that their copyrights are not being ripped off by the tech giants, as is currently happening?

[Lord Callanan]

We will continue to advocate for the rights of the creative industries. We shall see how the copyright directive is implemented and how the various enforcement regimes within it will work, but of course it is not possible for us to remain part of it, because we will not accept the jurisdiction of the CJEU in these matters. We will see how it works and will continue to keep the matter under review. It is of course a matter for this Parliament to determine how our copyright protection framework goes forward.

British Steel

Lord Stevenson of Balmacara Excerpts

Wednesday 24th July 2019 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am very grateful to the Minister for repeating the Statement. Everybody will have noticed the very optimistic tone that underlies the words, and I hope very much that that optimism will be delivered in due course. I make it very clear that we support wholeheartedly the efforts being made by the Government and all concerned to make sure that there is a sale of the entirety of British Steel, hopefully to a single purchaser, and that the assets will be allowed to continue to develop. This is not just in general terms but also because, as we have heard before, this is a key element of the industrial strategy. This is our second largest steel-maker and a key supplier to many aspects of what will be required if this country is to flourish.

Will the Minister say a little more about the work that has been done by the British Steel support group, which has been exemplary in bringing together all those concerned to make sure that the best result is achieved? In particular, will he say more about how the confidence that the support group has built has been coupled with the government indemnity to the official receiver? How much and for what purposes has such an indemnity been raised? The Statement goes on to say that this is “without precedent”. If it works, why is it without precedent? Can we have an assurance that this might well be the approach taken by the Government in the future?

I have two other questions. First, can we have a commitment from the Government that the priority is to find a buyer for the whole of British Steel, and that the company will not be broken up if at all possible? Secondly, in addition to the cash presumably reflected in the indemnity, one of the key issues here is that the UK’s steel producers pay up to 50% more for their electricity than their EU competitors. What steps are the Government taking to resolve that issue?