Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Conferral of Functions) Regulations 2026
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Lord Stockwood
That the draft Regulations laid before the House on 26 January be approved.
Considered in Grand Committee on 25 February.
Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Conferral of Functions) Regulations 2026
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Lord Stockwood
That the Grand Committee do consider the Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Conferral of Functions) Regulations 2026.
The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, I will speak also to the Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Consequential Amendments) Regulations 2026.
These instruments relate to the alternative dispute resolution, or ADR, chapter in the Digital Markets, Competition and Consumers Act 2024—the Act—which received Royal Assent in May 2024. The Act repeals the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 and replaces it with a strengthened framework in Chapter 4 of Part 4.
In most instances, disputes between consumers and businesses can be resolved without the need for any formal action. But when consumers and the trader cannot come to a resolution, ADR is an effective means to secure redress for the consumer without resorting to litigation. All ADR providers are independent third parties offering dispute resolution that is usually less confrontational to the consumers and businesses involved. But not all ADR providers have the same accreditations and standards, so consumers can experience inconsistent quality of services.
For ADR to be effective, it must be of high quality and meet certain standards. The Act aims to strengthen the quality of ADR available to consumers by: introducing a mandatory accreditation framework for ADR providers for consumer contract disputes; providing a robust set of accreditation criteria to ascertain ADR providers’ expertise, transparency, independence and accessibility prior to their being accredited; and providing ongoing monitoring and review to ensure that accredited ADR providers continue to meet those high standards. The Act includes the power to revoke or suspend accreditation, limit accreditation, or impose further conditions if a provider is found to be non-compliant.
The intention of mandating accreditation of ADR providers is to strengthen the ADR framework in the UK. The Government believe that these changes will help deliver a trustworthy, timely and fair service that consumers and businesses can trust to resolve consumer disputes, with improved oversight to monitor standards and ensure consistency.
Section 307 of the Act allows certain ADR functions to be conferred on another person. The regulations before the Committee confer on the Chartered Trading Standards Institute—CTSI—responsibility for managing the provision of ADR in consumer contract disputes in non-regulated sectors, including the functions of accreditation, monitoring and reporting on the operation and effectiveness of ADR provision.
This includes upholding the standards of ADR providers in the UK through powers to compel or sanction ADR providers to improve performance in the event that they do not meet their obligations. It also requires the CTSI to prepare quarterly and annual reports for the Secretary of State for the Department for Business and Trade.
The reports will contain information and metrics on the performance of the CTSI, ADR providers, and the ADR landscape in the UK to ensure accountability and transparency and enable the Secretary of State to maintain oversight of the operation of the system of accreditation and the provision and quality of ADR carried out in the UK. The decision to confer these functions on the CTSI has been taken in recognition of the CTSI’s authority, track record and expertise in this area, including its long-standing and constructive relationships with ADR providers.
Separately, the Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Consequential Amendments) Regulations 2026 make amendments to primary and secondary legislation in consequence of Chapter 4, Part 4 of the Act coming into force, and the revocation of the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015.
The consequential amendments deal with the redundant references to the 2015 alternative dispute resolution regulations and, in some cases, replace them with a reference to Chapter 4 of Part 4 of the Act. These amendments do not materially change the policy or affect the underlying law; they simply keep the statute book up to date in the usual way.
As I hope is clear from these remarks, the intention of both sets of regulations is to support and strengthen the ADR framework in the UK. They will put it on a stronger footing that provides a consistent, trustworthy, timely and fair service that consumers and businesses can trust to resolve disputes amicably, with improved oversight to monitor the service standards. I invite noble Lords to support the passage of these instruments.
Lord Stockwood (Lab)
I thank noble Lords for their contributions to the debate. As I stated in opening, the purpose of these instruments is to place the UK’s ADR framework on a stronger footing and to provide a more effective service for consumers and businesses alike. This feeds into the broader work of the DMCCA to bring greater fairness to digital markets and to bolster consumer protections.
I will try to respond to the questions raised by noble Lords today. The most important question, raised by the noble Lords, Lord Stevenson and Lord Sharpe, was about durable mediums. I am reliably informed that this includes digital. We do not have to go as far as stone tablets, as the noble Lord, Lord Fox, suggested. The digital medium is included in that, so that is the acceptable format.
The noble Lord, Lord Stevenson, raised an important question around extra burdens on consumers. Accredited ADR providers can charge a fee only if provisions for doing so are agreed by the CTSI and published. The purpose is to limit fees that consumers may be charged, thereby incentivising the use of ADR. At the same time, this is intended to discourage frivolous claims. Those fees should be up front and should be clear. There is a balance to be struck between ensuring that consumers have adequate access to ADR and that the core costs of the service are covered. We hope that this addresses that balance.
The noble Lord, Lord Stevenson, also mentioned reviewing the regulations. The Government have no specific plans to conduct a post-implementation review of this instrument or the reforms to which it relates, but we will continue to monitor and evaluate the operation of the system of ADR accreditation under the 2024 Act and the provision of the quality of ADR carried out in the UK through the quarterly and annual reports that this instrument requires the CTSI to provide.
The noble Lord, Lord Fox, asked about the capacity of the CTSI, the number of practitioners, how many will have to reregister, the processes and the costs. Those currently registered will go through a light-touch process to transfer their original registration across to the new system. We recognise that this transition period will place some burden on the ADR providers and aim to minimise this. The transition period will be in the region of six months, when ADR providers can continue to operate without the accreditation. In part, this will ensure that current providers and cases can continue without disruption. It will also give the CTSI time to manage the transition. We recognise that this will cause some extra elements of burden, but this seems like the lightest-touch way of transitioning to the improved system.
The noble Lord, Lord Fox, also asked about the CTSI register and about promoting the process. The CTSI currently hosts a list of accredited providers on its website. This will be maintained under the new regime so will remain in place. On the question about how the CTSI is monitored, it is required to provide reports to the DBT SoS on a quarterly and an annual basis. We hope that will be sufficient, but we will be happy to review that if it proves not to be an adequate way of keeping an eye on how things are going.
To conclude, I am grateful for the Committee’s support for this instrument. I beg to move.
Lord Fox (LD)
Before the Minister sits down, perhaps he could take this away: simply putting something up on the website—the “If we build it, they will come” approach—is probably not the best way for consumers to know that they have this service. You have to know it exists before you can find it. I suggest that the Minister takes away and discusses with the CTSI and others whether there is some sort of consumer marketing process that can follow once the capacity for ADR is there, so that people actually know it exists. I suspect that nobody knows the organisation exists—or very few people do—and certainly very few people know that ADR is a service on which they can call.
Lord Stockwood (Lab)
The noble Lord makes a really important point. Let me take that away and consult with the team and I will come back to him with a response on that.
Lord Stevenson of Balmacara (Lab)
The Minister answered very fully the question about the fees and how they would be monitored, but those were the fees to the consumers. I asked a separate question about why it did not seem to be a cost to the provider of the services, who would also benefit from the ADR. If he does not have the answer, perhaps he could write to me.
Lord Stockwood (Lab)
I think I did cover that but, if I did not, I will come back. The accredited providers will charge only a fee that is agreed already with the CTSI. That will be agreed up front and that will be published so that consumers know the charges they will be subject to. Perhaps we can pick this up afterwards. If that is not sufficient, I am happy to take further questions and to come back with a more detailed answer.
Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Consequential Amendments) Regulations 2026
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Lord Stockwood
That the Grand Committee do consider the Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Consequential Amendments) Regulations 2026.
US Tariffs
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Lord Lamont of Lerwick
To ask His Majesty’s Government what assessment they have made of the impact on the UK economy of the announcement by President Donald Trump of increased tariffs, and what representations they plan to make to the government of the United States.
The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, the Supreme Court ruling does not affect the majority of trade under the economic prosperity deal, including the sectoral tariffs agreed on steel, pharmaceuticals and automotives. The Business Secretary spoke to his counterpart at the weekend and underlined his concerns about uncertainty for businesses and reinforced the need to honour the UK-US trade deal. We continue to engage with the Administration at all levels. Our priority remains to secure the best possible outcome for British businesses.
Lord Lamont of Lerwick (Con)
I thank the Minister for that helpful reply. Does he agree that, following the Supreme Court judgment, the decision of the United States President to impose, even on a temporary basis, tariffs of up to 15% is deeply damaging to confidence, both in this economy and in that of the United States? Can the Minister say a little more about what now remains of the trade deal negotiated by the Government less than a year ago, which was supposed to give us a preferential advantage over other European countries, but now we all face a universal global tariff of 10%?
Has the Minister also seen the warning over the weekend from the United States trade representative that, in order to assess what tariffs are necessary for the future, “most major trading partners” of America will face accelerated investigations into trading practices, which, of course, could include things such as pharmaceutical pricing, which were excluded from the agreement before? Will the Government undertake not just to defend Britain’s actions and Britain’s interests vigorously but also to ensure that the outcome of these discussions leaves us no worse off than we were before these unfortunate announcements?
Lord Stockwood (Lab)
The noble Lord raises a number of challenging and fast-moving issues, and I will try to respond as fully as I can. It is worth stating that the UK secured that preferential deal last year, driven by the Prime Minister’s direct engagement with President Trump. That was trying to give British businesses certainty and competitive advantages. The ruling at the weekend does not affect our preferential treatment in the key sectors such as pharma, cars and steel that the noble Lord mentioned.
The Business Secretary spoke to US trade representative Jamieson Greer this weekend, making clear our concerns about uncertainty and our degree of confidence in the honouring of those agreements that we needed, and he had those reassurances. UK officials across Whitehall and Washington are engaging intensively with the US as we speak, and those discussions will continue all of this week, at which time we can update the House. It is worth stating that we have always had a cool-headed and pragmatic approach to trade deals, and while I would not comment on other Governments’ policies, we do have a competitive advantage globally in the sectors we set out in the original negotiation. The biggest beneficiaries of this weekend’s announcements are those trade barriers coming down for other countries, but we still have the best deal globally, and we continue to negotiate to retain that preferential position.
Lord Hannay of Chiswick (CB)
My Lords, would the Minister say whether the Government’s information leads them to suppose that the President’s choice of 15% and its differential impact on countries was deliberate or inadvertent?
Lord Stockwood (Lab)
As a Minister only six months into the job, I have uncertainty in my own mind sometimes; I am certainly not going to comment on the US President. What I can say is that we remain the only country that has secured a 10% tariff on auto, securing hundreds of thousands of jobs; we are the only country in the world with a 0% tariff on pharmaceuticals; and we are the only country in the world to benefit from a 25% tariff on steel, aluminium and other derivatives. We believe that we will retain those competitive positions, but our position is to control the controllables that we have today and negotiate to retain those benefits for UK businesses.
Lord Fox (LD)
My Lords, I am sure that industry is grateful for the sympathy the Minister has expressed from the Dispatch Box, and we are all encouraged by the hopes that the Government have expressed. But we all know that the opinions of trade officials often differ from those of the President. The uncertainty that is now surrounding all of British manufacturing is huge. What advice are the Government now giving to manufacturing businesses? What conversations have been had with the manufacturers, and how should they behave in the light of this huge uncertainty?
Lord Stockwood (Lab)
The question of certainty, raised by the noble Lords, Lord Lamont and Lord Fox, is critical to business. We live in a world that is changing rapidly and evolving minute by minute—I just checked my BBC feed on my way into the Chamber this afternoon. What I can say is that this Government have a plan: for the first time since the 1960s, we have an industrial strategy that focuses on our competitive advantage in automotive, technology and pharmaceuticals. It remains important to have clarity on our comparative advantage, and we remain in negotiation with all those key sectors; indeed, the pharmaceutical sector has the most preferential deal globally. I was due to have a meeting at 3 pm today with the pharmaceutical sector, and this has overridden that. These are fast-moving events. We remain cool-headed, trying to negotiate on behalf of UK businesses, and we are confident that our preferential relationship with the US will bear dividends as things develop this week.
Lord Howell of Guildford (Con)
My Lords, I know that history does not always repeat itself, but would it be a kindness at this stage to remind President Donald Trump that the American tariff protections of the 1930s by Smoot and Hawley played a major part in accelerating the onset of the Second World War?
Lord Wigley (PC)
My Lords, the Minister quite rightly referred to pharmaceuticals and their importance. Can he clarify whether the derogation regarding pharmaceuticals will include the equipment and technology used for testing the need for and application of pharmaceuticals?
Lord Stockwood (Lab)
I will have to come back to the noble Lord on that question. The pharmaceuticals deal was for medical exports to the US for at least three years.
Baroness Royall of Blaisdon (Lab)
My Lords, while we welcome the industrial strategy that was mentioned by my noble friend the Minister, does he agree that, in these deeply uncertain times when there is much instability, the reset with the European Union on which our Government have embarked grows in importance by the day?
Lord Stockwood (Lab)
As I mentioned, the cool-headed approach that the Government are taking includes many of our global trading partners. It is worth reminding the House that, while the US is a critical trading partner, with £330 billion of bilateral trade, the EU makes up 40% of our global trade and is an incredibly important partner, so those negotiations are ongoing. We have to redefine our position in the world, not just with the EU but as we have done with our trade deal with India and as we are doing with the Gulf states et al. It is undeniable that our relationship with Europe will be critical to our economic growth over the coming decades.
Lord Londesborough (CB)
My Lords, somewhat bizarrely, the trading partners of the US that are the greatest beneficiaries of President Trump’s new regime are Brazil, China and India, which are currently looking at net falls in their tariffs of 5% to 13%, while the UK, in spite of our preferential status, will see a net average tariff increase of 2.1%. That is the highest rate in Europe and compares with the eurozone’s 0.8%. I am quoting figures from Global Trade Alert, a trade monitoring service. Does the Minister recognise these figures, and what is his reaction to them?
Lord Stockwood (Lab)
I recognise the figures quoted, but they are speculation at this stage. The deals on preferential rates for farmers, automotive, et cetera were agreed terms, but that was the beginning of the negotiations, not the end. The preferential deal that was secured was brought about by direct engagement between the Prime Minister and President Trump. The EPD negotiations remain ongoing, and we will look to further protect the UK’s interests with further announcements over the coming weeks. It is worth reminding the House that the UK was the first country to see tariffs removed for civil aerospace goods, and we remain the only country to retain those secured 10% tariffs on automotive, steel and aluminium. We are prepared to fight for British businesses from here on in as well.
Lord Wallace of Saltaire (LD)
My Lords, we all know that President Trump is extremely transactional in his international relations and respects only those who bargain hard with him. Are His Majesty’s Government considering imposing a new and hard tax on foreign-owned golf courses?
Lord Stockwood (Lab)
I am not aware that that is part of the negotiations.
Lord Sikka (Lab)
My Lords, is there a role for the World Trade Organization in this tariff-led turmoil?
Lord Stockwood (Lab)
At the moment, these are bilateral conversations. We are acting in good faith and hope that they will come to a successful resolution.
Lord Hunt of Wirral (Con)
My Lords, the Government are trying to reassure the nation that they do not expect the ruling to affect the majority of trade under the economic prosperity deal, but as the noble Lord, Lord Fox, pointed out, there is huge uncertainty. Can the Minister clarify precisely what proportion of UK exports to the United States that represents and which sectors now fall outside that protection?
Lord Stockwood (Lab)
The confidence that I am trying to relay is not unfounded. As we saw from last week’s announcements, part of the macroeconomic situation that we are trying to turn around has seen inflation fall and the largest recorded government surplus since the 1990s. That is the overall message that we are trying to relay. In terms of specific industries, the negotiations are ongoing. I do not have the specific numbers to hand, but I remind the House that, globally, we have the most preferential deal with the rates that we have secured for industries, and we will continue to fight on behalf of British business.
Lord McNicol of West Kilbride (Lab)
My Lords, one way to deal with this issue is by the acceleration of the free trade agreements. Under the last Government, we had agreements with New Zealand, Australia and then the CPTPP. Under this Government, we have accelerated those agreements. The Minister mentioned the six Gulf states and the GCC free trade agreement. Is there any update on the GCC FTA negotiations and what comes next?
Lord Stockwood (Lab)
My noble friend raises a really important question about our current trading relationship based on the new world order that we find ourselves in. I do not have a specific update on the GCC deal; my noble friend knows that I was out there a couple of weeks ago, and we are incredibly close to an agreement. I should like to reassure the House that, in my travels around the globe, I find that we are still seen as a major place for investment globally. We have competitive advantage in our industrial strategy, in our rule of law and in our talent base. The trade deal that we did with India was significant, and the trade deal with the US remains the first and best trade deal that the US has negotiated. While this weekend has thrown up some bumps in the road, we remain confident. The negotiation with the Gulf states is ongoing but remains very positive, and we hope to have some good news in the coming weeks.
Lord Johnson of Lainston (Con)
My Lords, I read somewhere that the Department for International Trade is going to be reducing the number of experts in the field from 1,600 to 1,000. Is now really the time to be reducing our global staff by a third when our businesses need all the support they can get at this time of tariff turmoil?
Lord Stockwood (Lab)
I thank my noble predecessor for the question. We are trying to balance the pressure from the public world to right-size our Civil Service more broadly to make it more effective—technology and information are tools that can help us with that. We are also trying to balance the public purse to ensure that we have the right quality of people to address the significant challenges that we have as a Government. It is not a zero-sum game. We have very talented people; I addressed the team in the Gulf when I was out there a couple of weeks ago, and I remain impressed by the quality of the people that we have in this sector. But it is undeniable that we must make sure, based on the advantages that we have in technology and information flows these days, that we also have the right number of people in markets at the same time.
Lord Skidelsky (CB)
My Lords, is there anyone in the Government thinking about alternatives to trade wars or trade deals as a way of organising the economic affairs of the world? The noble Lord, Lord Howell, is quite right: historically, tariffs tend to set the ground for war. That was also true before 1914, when there was a big increase in world tariffs. Who in the Government is thinking about alternative ways of organising the trade relations of the world? I am asking this not as a matter of policy but as a matter of thinking about the world we seem to be drifting into.
Lord Stockwood (Lab)
The noble Lord raises a really important philosophical question. From my personal experience during the last six months, we are trying to readjust to both a post-Brexit world and a new world order with what we are seeing in the US, China and the EU in particular. We have to make sure that we are protecting our own economic interests. I am seeing a high regard still for our soft power in the world. We play that card particularly well, whether it is the institutional base of our universities, our talent base or our research. We are trying to make sure that we play to the assets and capabilities that we have. Trade remains important, but we also have to react to the new world order and be responsive to it in order to make sure that we are not left behind.
Post Office Capture and Horizon Scandals
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Lord Sahota
To ask His Majesty’s Government whether they will provide an update on the Post Office Capture and Horizon scandals.
The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, as of 31 January 2026, over £1.4 billion has been paid to more than 11,300 victims of the Horizon scandal. The Government are also making strong progress in implementing recommendations from volume 1 of the Horizon inquiry, strengthening the operation of the schemes and accelerating the delivery of redress. As of the same date, DBT had received 153 complete applications under the Capture redress scheme. Of these, 30 have been deemed eligible, with the remaining 123 undergoing eligibility assessment. Five individuals have received their full payment.
Lord Sahota (Lab)
I thank the Minister for his Answer. My friend, Kuldip Gill, ran a post office in 1995 in my neighbourhood. He was accused by the Post Office of stealing £5,000. He protested but had to pay. A few months later, his contract was terminated by the Post Office. Without a job, and with financial pressure and shame in the community, he started to drink and became an alcoholic. Within a year, he died of a brain haemorrhage induced by alcohol. He was only 53.
When, 30 years later, his wife was in a care home, I asked her whether she had put in a claim for compensation. She said that she had been told that she was not entitled to any. I told her that the Capture system was as faulty as the previous one, and she put in a claim and last year received her compensation. How many more postmasters and their families have died or left the country and have not put in their claim, or are simply not aware of their rights? Do the Government have any plan or policy to find them so that they can put in their claims?
Lord Stockwood (Lab)
I am grateful to my noble friend for his question and am truly sorry to hear about the terrible ordeal faced by Mr Gill and his wife. We remain firmly committed to ensuring that those affected by the Capture and Horizon systems receive the redress they fully deserve. The Government and the Post Office have proactively contacted postmasters to confirm their eligibility and to encourage them to come forward.
On the Horizon convictions redress scheme, for example, DBT has written to 142 people who have had a conviction quashed but may not have yet applied to the scheme, encouraging them to apply. This has led to 29 new HCRS registrations. On Capture, I am happy to hear that redress has now at least reached the family referred to by my noble friend. The scheme has been designed precisely to ensure that others in similar circumstances are not missed.
The long time that has passed since the software was in use means that the full cohort of users is not known. That is why we continue strongly to encourage anyone who believes that they used Capture and experienced a shortfall to come forward. This includes family members applying on behalf of postmasters who have sadly passed away and cannot apply themselves.
Lord Arbuthnot of Edrom (Con)
My Lords, the Capture system was the predecessor of the Horizon system. The Government are paying compensation to all the Capture sub-postmasters—except those who have convictions. Given that the Post Office’s behaviour towards the Capture sub-postmasters was every bit as bad as that towards the Horizon sub-postmasters, and that we cannot expect Capture sub-postmasters to have retained documents for over 25 years to present to the Criminal Cases Review Commission, will the Minister acknowledge that for us to fail to overturn the Capture convictions perpetuates the most ghastly injustice?
Lord Stockwood (Lab)
My Lords, I thank the noble Lord, Lord Arbuthnot—and the noble Lord, Lord Beamish—for supporting the Horizon Compensation Advisory Board; it is very much appreciated and important work. The noble Lord will know that the legislation followed over 100 successful Horizon conviction appeals through the existing processes. However, as he mentions, no convictions related to Capture have been overturned to date. However, we must therefore allow the independent judiciary to consider safety of convictions through the established process, and we continue to support the work of the CCRC. It would be inappropriate for me to comment further, as that process needs to be independent and run its full course.
Baroness Brinton (LD)
My Lords, I am very grateful to the Minister for that response, but noble Lords in yesterday’s Committee stage of the Victims and Courts Bill debated the urgent need to change the courts’ presumption that computer system evidence is always reliable. Everyone in that debate, including the Minister, agreed that this must be changed, not least following the Horizon scandal. Despite what the Minister said, will he and the Minister in yesterday’s Committee please work together to ensure that this change happens as soon as possible?
Lord Stockwood (Lab)
I can confirm to the noble Baroness that the department will work to try to ensure that that comes to its logical conclusion.
Lord Beamish (Lab)
My Lords, as the person who first exposed the Capture system, I welcome the fact that victims are now being paid. That was in spite, for example, of the Post Office, which, with all the publicity around Horizon, never publicly pointed out that the Capture system existed. There are 29 cases of individuals who were prosecuted. The Government’s stance has been to refer them to the CCRC, which I do not think is the appropriate way of doing it. Can the Minister tell me why, in the one case that has now been referred to the Court of Appeal, which is Patricia Owen’s case, the Post Office is going to defend against it? Given the fact that, when I first exposed it, I and the campaigners had more information about the system than the Post Office, I would like to understand on what grounds the Post Office is going to resist that case. Also, how much money—public money, we should remember, at the end of the day—will be spent defending the indefensible?
Lord Stockwood (Lab)
Again, I thank the noble Lord for his work overall on the Horizon and Capture scandals. While, again, it would be inappropriate for me to comment on a specific case, I can say that the Post Office was the original prosecutor in the criminal case on this specific Capture conviction—not this department, obviously. Therefore, the Post Office has responsibility for responding, and for conducting the case and the appeal. Again, it would be inappropriate for me to comment on the ongoing case.
Lord Magan of Castletown (Con)
My Lords, I ask the Minister whether Fujitsu has yet paid a single penny to the sufferers in this terrible saga. If it has not, why not? Secondly, has Fujitsu been awarded further government contracts since that time, and if so, why? This is a national scandal that has lasted far too long. The noble Lord, Lord Beamish, and my noble friend Lord Arbuthnot are the two people who have really tried to find justice for these very unfortunate people who have suffered, as we heard in the introductory remarks.
Lord Stockwood (Lab)
I share and acknowledge the noble Lord’s passion for the subject. Accountability for Fujitsu will be rooted in evidence and due process. Wyn Williams’ inquiry is the proper mechanism for establishing what went wrong and who is responsible, and for the financial commitment. Fujitsu has acknowledged a moral responsibility to contribute to the costs of that redress, and Minister McDougall met with the European CEO in December last year and, in the recent Select Committee, the CEO confirmed the commitment to follow that moral responsibility with financial responsibility.
To the secondary question about government contracts, Fujitsu rightly said that it will not be applying for new government contracts unless the Government ask it to, where those services are necessary. In researching this question, I imagined this would come up: the Government have 68 live contracts with Fujitsu in some critical services, which include HMRC’s self-assessment tool and the Home Office’s border control systems. Walking away from these contracts instantly would do serious damage to important public services, so this is not a viable option. However, it has committed to the new software for the Post Office being completed in the middle of next year. If we were to stop that software service today, all postmasters would have to close. That is not pragmatic, unfortunately.
Lord Hunt of Wirral (Con)
My Lords, the Minister will already be aware that there is considerable concern in this House, on all sides, that there are still victims who have not received financial compensation. Beyond that, what specific non-financial support is being provided to those victims who have suffered significant mental health harm, and how are the Government ensuring that appropriate psychological and restorative support will remain available?
Lord Stockwood (Lab)
The noble Lord reminds us all that, behind each of these numbers, there is an individual family that has suffered, as my noble friend so rightly highlighted today. The process that has been set out is careful to ensure that we are not retraumatising people going through the redress system. A new scheme called the family members redress scheme is currently in consultation with the Lost Chances group. We expect announcements shortly to ensure that the noble Lord’s question is fully answered.
Land Covenants: Supermarket Chains
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Lord Kirkhope of Harrogate (Con)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and, in doing so, I declare my interest as a holder of a number of loyalty club cards with various supermarket chains and also my membership of the Co-op.
The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, the Competition and Markets Authority is currently assessing whether additional retailers should be designated under the controlled land order and brought within its scope. We continue to engage with the CMA and will consider its findings carefully once it has concluded its assessment later this year.
Lord Kirkhope of Harrogate (Con)
I thank the Minister for that incomplete reply. The situation is absolutely unsatisfactory in that the seven main supermarket chains have been obliged to adhere to strict requirements on restrictive covenants in their area, preventing others from opening shops nearby, whereas newcomers such as Aldi and Lidl, which have now grown to an enormous size—a commensurate size—are not required to fulfil those obligations. That surely is wrong. If the Competition and Markets Authority has any role in life, surely it must be to have a level-playing field in retailing.
Lord Stockwood (Lab)
I am assuming from the noble Lord’s question that he does not have Aldi and Lidl advantage cards as well. Just to acknowledge, the CMA is currently doing its work, including on a consultation to get feedback on how Aldi and Lidl should be treated. We acknowledge that the argument for exemption does distort the market, but the independence of the CMA must be respected. I share the noble Lord’s views that it seems right on face value that Aldi and Lidl should be brought into that same regime.
Lord Fox (LD)
My Lords, as well as the issue of Aldi and Lidl, there is also the issue of almost complete non-compliance with the 2010 order system. The CMA has identified multiple repeated breaches across all of the seven majors, as mentioned by the noble Lord. So, in addition to having this system, it is entirely unenforceable because the CMA has no legal powers to fine on this issue. The whole thing is being brought into disrepute by the absence of any real enforcement. Can the Minister confirm that the digital markets Act gives powers that could be taken by the CMA to fine on this issue, and will that be one of the issues that the CMA will be reviewing?
Lord Stockwood (Lab)
The CMA has a broad primary and competition regulatory framework. It is equipped with the powers to investigate and to act against anti-competitive conduct. On the specific question about the digital Bill, I will have to consult with colleagues and come back to the noble Lord; I am not familiar with it.
Lord Sharpe of Epsom (Con)
My Lords, we all recognise the importance of competition, not just for economic growth but for the competitive pressure that keeps prices low for consumers. As the Minister has acknowledged, it is obviously not fair that some large retailers operate under different rules. At the same time, however, the fairness test fails when one considers this Government’s business rate policies. Does the Minister think it is fair that business rates will rise by 115% on hotels over three years but only 4% on supermarkets?
Lord Stockwood (Lab)
Taking a broad perspective on the question, I came into government to support the pro-business agenda. What the Government are trying to enact is the ability to stabilise the economy based on fiscal rules, to create an investment environment that is investable from all parts of the market, and then, importantly, to look at regulation to enforce that fairness and sense of competitive tension. The Government are committed to reforming the business rates regime, and that work has already begun. At the Budget, the Chancellor announced a permanent 5p cut in the business rates multiplier for over 750,000 retail, hospitality and leisure properties, which is also funded by the higher tax rate for the most expensive 1% of properties. We continue to take feedback to try to create the right fiscal conditions for businesses to be able to thrive.
Lord Watts (Lab)
My Lords, like most regulators, this one is failing the general public. Do we not need to review all our regulators to make sure that they are doing the job that they are supposed to do? If the legislation needs strengthening, then strengthen it—but also hold the regulators to account for the work that they do.
Lord Stockwood (Lab)
I share some of the views that the noble Lord put over. As I have learned from my 20-plus years in business, the role of government is to set the regulatory conditions so that business can do the work in growing the economy. What we are seeing from the Government is a commitment to reduce the regulatory burden overall. Our Regulation Action Plan commits to reducing the £22 billion annual burden by 25%. There are reforms in place, and the unlocking business consultation means that we will take direct feedback from the market. It is beholden on us to ensure we set the conditions for businesses to thrive, while also ensuring that we have the right regulation in place so that we do not see the abuses of power that have been suggested by these particularly restrictive covenants.
Baroness McIntosh of Pickering (Con)
My Lords, does the Minister agree that the CMA also has a role to play in looking at the work of the Groceries Code Adjudicator? There is a great imbalance of power between the big supermarkets and the very small horticultural businesses and fruit growers in this country. Does he agree that it would be better if the Groceries Code Adjudicator could take an own-initiative inquiry off its own bat, rather than waiting for a producer to come forward with a complaint? That producer could so easily be identified and possibly lose their contract with the supermarket.
Lord Stockwood (Lab)
In my relative newness to government, I thank the noble Baroness for her questions. Overall, it is correct that the CMA’s regulatory framework should have independence. I would love to pick up that discussion outside the Chamber; I do not know the detail of that, but it sounds like an important thing that we should follow up on.
Lord Evans of Rainow (Con)
My Lords, I will pick up from my noble friend’s question comparing hospitality and retail on the high street. Recently, a pub closed on a high street that was paying £67,000 in business rates. It was taken over by a supermarket, which now pays £16,000 in business rates—and, of course, supermarkets sell alcohol at cost price. Can the Minister look into this and provide much-needed help for hospitality on our high streets? Without hospitality, our high streets will become deserts.
Lord Stockwood (Lab)
Again, the noble Lord raises an important issue about our high streets. While it is not within the range of this Question, I am willing to follow it up. The Government announced a £150 million package for supporting our high streets, but I agree that we should go further on this.
Baroness Wheatcroft (CB)
My Lords, in considering the use of land by supermarkets, does the Minister agree with me that there is huge acreage sitting unused on top of supermarkets throughout the country? Given the housing shortage, would it not make sense to put pressure on supermarkets to use that space to provide housing, perhaps in a prefab state so that it is made easily, quickly and accessibly? After all, the shops are nearby.
Lord Stockwood (Lab)
It is important to state that the reason for some of these restrictive covenants in business is that they are commercially negotiated and should be mutually agreed in the bounds of setting up a contract. This is quite a normal course of action, so I want to make sure that I am not stood here in any way demonising the large retailers entirely. However, particularly pertinent to the point of the homes target, the Government, through the Planning and Infrastructure Act, are looking at how we streamline all our planning for homes and critical infrastructure, and I suggest that land usage by the major retailers would come within that review as well.
Lord Hunt of Wirral (Con)
Following on from the question of the noble Lord, Lord Watts, does the Minister share my concern that, over recent months, there is increasing evidence that delays from the Competition and Markets Authority are having a serious effect on a number of key areas? The noble Lord, Lord Fox, mentioned the digital markets regulation side, but there are also outstanding decisions on veterinary services, cloud computing and legal services. The Minister may be aware that the authority is now looking at what it calls the four Ps project—pace, predictability, proportionality and process. Is he happy with its progress?
Lord Stockwood (Lab)
In preparation for this Question, I spent a bit more time than I should have done learning about the CMA’s role. I agree that, as we look to create a regulatory framework that is both agile and appropriate, it is only right that we ask the same questions of the CMA. There is a strong strategic steer from this Government about making sure that we have the right regulation and application for growth and pace. On price, product, place and promotion, I suggest that we have to reverse that and apply it to the CMA, so I will be asking that question and will come back to the noble Lord on that.
Hospitality Businesses
Lord Stockwood Excerpts(1 month ago)
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Lord Sharpe of Epsom
To ask His Majesty’s Government what steps they are taking to support hospitality businesses.
The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, hospitality businesses are fundamental to the life of our communities. As such, we are introducing permanently lower business rates for eligible retail, hospitality and leisure businesses, and a £4.3 billion support package over three years to shield rate payers from bill increases following the revaluation. In addition, the Chancellor announced earlier today that every pub and live music venue will receive 50% off their new business rates on top of this support, and bills will be frozen for two years. Moving forward, we will review the valuation methodology for pubs and hotels as well.
Lord Sharpe of Epsom (Con)
My Lords, the Government’s announcements are welcome, as far as they go, and will provide some short-term relief to three out of four pubs, but in three years’ time, when the discounts and the freeze end, bills will still rise by 76%. Also, there was nothing for hotels beyond a review of valuation methodology, despite the fact that hotels’ rates will rise by 115% over three years. Why do the Government not just apply the 20p discount that is allowed in legislation across the entire hospitality sector, instead of the current 5p? That proposal has the virtue of being much simpler and cleaner than endless reviews and freezes. Why is this relief restricted to three years, and when will the review of hotel rates be delivered?
Lord Stockwood (Lab)
Business rate reform has been on the agenda for the last number of Parliaments and this Government have taken it on. Since I came into government six months ago, I have been proud that our overall objectives have been about stability in our economy, bringing down inflation—it is on target for next year—and making sure that consumers have more money that they can spend in the hospitality industry. Alongside that, the review of overall business rates and the commitment of £4.3 billion mean that over a third of businesses will pay no business rates, over half of ratepayers will see no increases and 23% will see their bills going down. This is funded by targeting those with higher rateable values. Overall, while the main thing is bringing stability to the economy and bringing inflation down to make sure that consumers are spending, reform of revaluation is increasingly important as well.
Lord Fox (LD)
My Lords, while, of course, there is a need for holistic reform of business rates—the Liberal Democrats have long proposed a commercial land- owner levy—in the short term, just as the noble Lord, Lord Sharpe, suggested, reducing the retail, hospitality and leisure multiplier by 20p, as opposed to the Government’s 5p, would make a big difference. The whole retail and high street sector has been hit by this—not just pubs or hospitality—so does the Minister recognise that the current proposals, while welcome, are too small and narrow to help our high streets?
Lord Stockwood (Lab)
I clearly acknowledge that there are challenges in the economy that are not of the making of the last 18 months alone. Changing consumer behaviours post Covid are a challenge for our overall economy. However, to restate what I said before, we need to get the economy back on track overall and ensure that we have fiscal responsibility. This package alone will cost us £4.3 billion. The additional announcements today on pubs and live music venues take that even further. On average, that relief will be more than £1,600 per pub. We have to do all that while balancing the overall needs of the economy with fiscal responsibility, which the Government set out as major proposals.
Lord John of Southwark (Lab)
My Lords, in my maiden speech last week, I spoke about the important role that local government can and should play in creating and curating place. With that in mind, does my noble friend the Minister agree that local authorities can be good and effective champions for the hospitality and retail sectors in their areas?
Lord Stockwood (Lab)
I welcome the noble Lord to the Chamber and thank him for his question. The national government policy that has been announced since we came in is critical, and local government is an even more critical part of leadership in our communities. Not only do local authorities offer the vision and ability to enact what is relevant to each community but they are close enough to the hospitality sector and individual high streets to know what is needed. I thank the noble Lord for his contributions so far and look forward to working with him.
The Earl of Devon (CB)
My Lords, hospitality businesses across the south-west of England, particularly those in our coastal and rural areas beloved of tourists, suffer from an inability to attract staff in specialist roles. A major cause of this is a chronic lack of suitable housing, particularly due to planning restrictions and the popularity of second homes. What steps are His Majesty’s Government taking to ensure that housing is available for those seeking a career in hospitality in our rural and coastal communities? I note my interest as the owner of a hospitality business in Devon.
Lord Stockwood (Lab)
I believe the original Question was about helping the hospitality sector. The comment about housing is outside the purview of my domain of expertise as Minister for Investment. However, the Government are investing in young people’s futures holistically. We have seen a sharp decline in apprenticeships. We are trying to implement a new foundation apprenticeship to give young people a route into critical sectors. While I acknowledge that housing is a critical part of that, making the economy grow more holistically is a way that we can ensure that the hospitality sector works in its own right.
Lord Harper (Con)
I am grateful to my noble friend. I listened very carefully to the Minister, but he did not answer the question about hotels, particularly family-run hotels. Their rates bills are going to rise by even more than pubs’ and there is no help coming for them. What are they to do? They run fantastic businesses, which attract people to rural areas in particular, but they face rises in their business rates of over 100% in April.
Lord Stockwood (Lab)
The department is in constant dialogue with all industry sectors, including the hotel sector. We are trying to balance support for the overall economy with the need to be fiscally responsible in this Parliament as well. We continue to take feedback and will respond to that, but today we are focused on cutting rates overall, which, as I have said, has been on the agenda within the last couple of Parliaments, but we have taken it head on.
Lord Brennan of Canton (Lab)
My Lords, I note the rather grumpy welcome from the Opposition for the measures that the Government have taken. I say, let the good times roll. This is a tremendous announcement, particularly for pub-goers and for gig-goers. However, is any consideration being given to add to these measures with some relief for recording studios, which are very much part of the R&D of the music industry and are generally accessible to the public as places that they can book for their private use?
Lord Stockwood (Lab)
I share the noble Lord’s optimism for the positive steps taken today and generally, in the last five months of being in government, for the way that the economy is shaping up after the last couple of decades. The announcements made today were on the back of the £4.3 billion for rate revaluation and really focused on live music venues and pubs as well. Perhaps I could refer everyone to the Statement made an hour ago. If there are specific follow-ups, I can come back to that, but I do not have any further detail on those venues at the moment.
Viscount Thurso (LD)
My Lords, the wider visitor economy, of which the hospitality industry is such a valuable part, is worth some £127 billion a year to the economy and 3.9% of all jobs. It is therefore a valuable export industry. Last year, for the first time for several years, the number of international visitors was down, and the ForwardKeys data for VisitBritain show an 11% drop in long-haul flights. This, as the Minister will know, follows on from several years of cuts to the VisitBritain grant in aid and the Great programme. What are the Government going to do to reverse that?
Lord Stockwood (Lab)
There are a number of difficult choices that we are trying to make. The visitor economy is clearly a huge part of who we are and what we should be proud of in this country. The industrial strategy we have set out is around eight key sectors that have comparative advantage to us, but, again, all those are about how we can make the economy stronger overall so that we can have an attractive proposition for all our industries, including our hospitality and the tourism sectors.
Lord Swire (Con)
My Lords, given that road safety must be paramount, would the Minister share with us the Government’s current thinking on drink-driving levels? Does he accept that drink-driving campaigners will never cease campaigning until they have zero drink-driving? What assessment have the Government made of the effect on our beleaguered and hard-pressed rural hubs if the levels were to be reduced further than they are now?
Lord Stockwood (Lab)
I will have to come back and write to the noble Lord specifically about the drink-driving regulations; I do not have that to hand for this Question. I can tell the noble Lord that this Government are committed to supporting the great British pub. Like many Peers who started their careers in the industry, I worked both as a waiter and as a barman. The Budget is looking not just at the commitments we can make financially but at positive licensing reforms overall, including the first national licensing policy framework. However, I will come back specifically to write to the noble Lord on the question of drink-driving.
Israel: Trade
Lord Stockwood Excerpts(1 month, 3 weeks ago)
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The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, I am pleased to respond to this Question for Short Debate. I start by saying that I have visited Israel on many occasions over the years, both for personal and business reasons. Some visits started many years ago, as mentioned by the noble Lord, Lord Livingston. I still have a number of friends who live in the country, and in particular, as someone who has spent decades as an entrepreneur, I am a huge advocate and admirer of its tech sector, which many noble Lords mentioned in the debate.
Israel is without doubt a vibrant, dynamic democracy and a fast-growing economy. While this Government have consistently made our concerns with the conduct of the Israeli Government known, Israel remains a trading partner that plays a significant role in the UK’s economy, with business and personal ties that we continue to value greatly. The UK is committed to our existing trading relationship, and we retain the services of the noble Lord, Lord Austin, our trade envoy, to maintain our relationships with Israeli businesses and attract inward investment in key sectors of the industrial strategy. I express my personal thanks to him for bringing this debate to the Committee today and echo his comments about the British Embassy in Tel Aviv and His Majesty’s Ambassador Simon Walters, who provided me with some helpful advice in our meeting in December.
Israel’s innovative, high-tech economy is well aligned with our own, providing an avenue for critical imports in key sectors mentioned, such as healthcare, medicines for respiratory care, neurology, oncology and pain management to support the treatment of chronic and high-burden diseases. Our economies are highly complementary, with clear parallels in services, technology and advanced manufacturing sectors. We have seen Israeli firms expand in the UK across strategic sectors such as cyber security, climate and energy, fintech and the automotive sector. These all fit neatly into our industrial strategy, as mentioned, and our trade strategy, and as such support our economic growth as a nation. Trade with Israel supports thousands of jobs across the UK. This is especially true across the north and the Midlands, which benefit from Israeli investment, and firms in the advanced manufacturing sectors.
Reflecting our shared heritage as tech-savvy and innovative entrepreneurs, more Israeli tech companies operate in the UK than anywhere else in Europe, as was mentioned by the noble Lord, Lord Austin. Co-operation between our nations is extensive, particularly in the sphere of scientific research and development. British and Israeli scientists collaborate on research and development projects, resulting in new products, industrial processes and services. This has led, for example, to the Leeds-Israel Innovation Healthtech Gateway, a collaborative initiative designed to strengthen ties between the UK and Israel in the health sector.
We continue to build on these relationships, including, as mentioned by the noble Lord, through the recently launched ScaIL UK initiative, a first of its kind programme led by DBT and the British Embassy in Tel Aviv. It is designed to help scale-ups establish a strong UK presence by unlocking opportunities in the aforementioned eight priority sectors of the UK industrial strategy, from advanced manufacturing and clean energy to digital technology and life sciences. As a result, these selected high-growth companies will gain practical insights, strategic guidance and direct connections to drive physical expansion, job creation and impactful commercial activity in the whole UK market.
All this is supported under our current trade agreement with Israel. The UK-Israel Trade and Partnership Agreement rolled over, post Brexit, from the 1995 EU-Israel Association Agreement. Accordingly, in line with our European friends and partners, the UK-Israel TPA does not grant preferences to goods from illegal Israeli settlements. Furthermore, we neither support nor condone commercial or financial activity undertaken by British businesses with entities in these illegal settlements. Government guidance is absolutely clear that trading with these settlements brings significant risk and that businesses should seek legal advice before undertaking such activity.
It remains this Government’s firm belief, as set out in the trade strategy last year, that more trade with dynamic and fast-growing partners will generate economic growth in the UK, supporting British jobs and providing the prosperity we need and everything that is foundational to this Government’s growth mission. However, we have also been clear that an enhanced trading relationship with Israel cannot come at any cost. That is why, as the Committee will be aware, we took the decision to pause negotiations on an enhanced trade free trade agreement in May this year in response to the Israeli Government’s rhetoric and actions in Gaza and the West Bank. Since that announcement, we have been, and continue to be, clear that we would need to see sustained change in the Israeli Government’s position before we could resume trade negotiations—and to answer the question from the noble Lord, Lord Stevens, that extends to the RCDS courses.
However, we welcome the moment of significantly profound relief and hope that the ceasefire agreed early this year, after two years of devastating suffering, has brought to all. This Government will continue to do all we can to support an enduring ceasefire, and the UK will continue to play our part in supporting not just the implementation of phase 1 of the peace initiative but the crucial work going forward now in phase 2. In line with this, we will continue to monitor the situation in Israel and Palestine and work to support long-term peace and stability in the region. The UK clearly believes that a two-state solution is the only path to justice for Palestinians and enduring security for Israelis. A two-state solution, with a safe and secure Israel alongside a viable and sovereign Palestinian state, is the only path to lasting peace for the Israeli and Palestinian peoples.
Before I conclude, I would like to take the opportunity to address some of the outstanding topics raised by noble Lords during the debate that I have not yet referred to. Several noble Lords raised the issue of antisemitism. Let me be really clear on this: the UK Government are absolutely committed to combating antisemitism in the UK and globally. We will not tolerate antisemitism on our streets.
On the issue of BDS, I say to the many noble Lords who raised it today that the UK Government are committed to promoting our trade and business ties with Israel and strongly oppose boycotts.
We will continue to monitor the situation in Israel and Palestine and work to support long-term peace and stability in the region. If it remains the case, in the long term, the UK and Israeli economies are strongly compatible, with plenty of significant opportunities for our businesses. To that end, we will continue to support and encourage the business-to-business and people-to-people connections that underpin any successful trading relationship and maintain our frank and open dialogue with the Israeli Government, which is important between trading partners.
Lord Leigh of Hurley (Con)
Can the Minister say exactly what he wants to see, further than a ceasefire, to restart the trade talks?
Lord Stockwood (Lab)
We are waiting to see phase 2 of the ceasefire put in place. At that point, the dialogue can continue.
Employee Car Ownership Schemes
Lord Stockwood Excerpts(2 months, 3 weeks ago)
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Lord Woodley
To ask His Majesty’s Government what assessment they have made of the potential impact on the economy of changes to Employee Car Ownership Schemes announced on 21 July.
The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, at the Budget 2025 the Government announced that, to allow more time for the automotive sector to prepare for and adapt to the proposed changes in treatment for employee car ownership schemes, its implementation will be delayed until 6 April 2030, with transitional arrangements until April 2032. The tax impact and information notice have been updated to reflect the impact of these changes.
Lord Woodley (Lab)
My Lords, I welcome the Minister to the Dispatch Box, as I am sure all colleagues do. I thank him for his positive response, having listened to the motor industry’s concerns. However, while welcome, this delay to wiping out ECOS, a 40 year-old industry leasing scheme, begs the obvious question: what assessment was made when these proposals were mooted, given that they would reduce production by 100,000 vehicles a year, cost 5,000 automotive jobs and hardly put a penny extra into the Treasury’s coffers? Would the Minister agree to meet me and industry colleagues to discuss whether these proposals should be scrapped entirely?
Lord Stockwood (Lab)
I thank my noble friend for the question. The Government are firmly committed to their modern industrial strategy and to the automotive sector. We have listened carefully to these concerns, which is why we have delayed the proposed changes until 2030, with a transitional period to 2032. There has been an additional commitment of £2.5 billion for automotive investment into R&D, increased flexibilities around the ZEV mandate and the funded rollout of more charge points, and we have announced plans to cut electricity costs for energy-intensive industries. Further, this measure is not expected to add any significant overall macroeconomic impacts. However, after April 2030, it is expected to have some economic impact on businesses and employers that provide this scheme and afterwards sell on those vehicles to new market entry. This impact is predominantly concentrated on the motor manufacturer and motor dealerships industries. The Government are committed to their overall tax policy of fairness to fund and balance the public services.
Lord Harlech (Con)
My Lords, I declare an interest as an owner of a hybrid vehicle. The Minister will know from the recent Budget about the plan to tax EVs for road use per mile. Can he tell the House how this is going to work in practice?
Lord Stockwood (Lab)
As the owner of an EV, I have a vested interest in this. The taxation of motoring is a critical source of funding for public services and investment infrastructure, including the upkeep of our roads. Fuel excise duty is £24 billion to the national tax take, and it is important, as we transition to our climate change initiatives, that we balance this fairly so that everyone who uses the roads pays their equal share. Historically, motoring taxation has been structured around two elements: taxation on usage of the vehicle and taxation on the ownership of the vehicle. This transition means that all vehicles shall contribute fairly to the wear and tear of the roads, but drivers of petrol and diesel will pay fuel duty, whereas drivers of electric vehicles will not pay the current equivalent. I refer noble Lords to the Government’s policy on the specifics of how that shall be taxed and taken.
Lord Watts (Lab)
Mr Lords, this is a difficult time for the British car industry and it is a welcome announcement that this matter has been put off for some time. Will the Government continue to monitor car production problems in the car industry and review whether this policy should be implemented at the appropriate time?
Lord Stockwood (Lab)
I thank the noble Lord for the question. As I stated previously, as part of our modern industrial strategy we are committed to the automotive sector. Our ability to defer the start date for this particular policy shows that we are in open dialogue. We will continue with that dialogue.
Baroness Kramer (LD)
My Lords, I recognise that there has been an element of contrivance in the usage of the present employee car ownership schemes which the Government are closing down, although the delay is welcome. Right now, so many businesses are under stress, as well as the automotive sector generally. Will the Government be providing some sort of road map for those who are not using this in a contrived way but have a legitimate practice to be able to find a new mechanism to enable them to keep their businesses going? For example, would he find the salary sacrifice scheme approach an acceptable one?
Lord Stockwood (Lab)
The Government are committed to fairness in our tax system, so we are open to all those conversations. At the moment, we have set out the policy we intend to commit to.
Lord Forsyth of Drumlean (Con)
My Lords, I appreciate that the Minister is new to his post, but would he have a word with his colleagues? The car industry in our country is being destroyed by this determination to prevent it manufacturing vehicles with internal combustion engines beyond a particular date. I know that the Government are keen to be in step with Europe, so will they follow Europe and extend that period? What we are doing is creating a market for cheap Chinese electric vehicles, at the expense of some of the best engines in the world, and there are many jobs associated with that.
Lord Stockwood (Lab)
I thank the noble Lord for recognising my novice status—I appreciate it. I am in constant conversation with my colleagues. The Government are firmly committed to the automotive sector and intend to make sure that we fulfil our commitments to the sector and to the Climate Change Committee.
Lord Wallace of Tankerness (LD)
My Lords, going back to the question of mileage taxation on electric vehicles, does the Minister acknowledge that, in many rural areas, where there is often precious little public transport, there is a greater need for people to have a car, and therefore it would be disproportionately burdensome on those who live there? Have the Government any thoughts about finding a way of rebating the tax for those who are obliged to use a car in rural areas?
Lord Stockwood (Lab)
We believe that the tax system that has been applied is fair and balanced, but we are happy to take those points under consideration.
Lord Sentamu (CB)
My Lords, I welcome the Minister to the Front Bench of His Majesty’s Government. The noble Lord from the Official Opposition asked a question about the taxation of cars. I understand taxation for electric cars—that is pretty straightforward—but he asked about hybrids, which use both petrol and electricity. How will that work? Is it going to be a double whammy of taxation? I too drive a hybrid vehicle.
Lord Stockwood (Lab)
I thank the noble and right reverend Lord for declaring his interest. I believe that hybrid vehicles are going to be taxed at half the rate, which is 1.5p a mile, as opposed to 3p a mile.
Baroness Neville-Rolfe (Con)
I welcome the Minister to his first Question. He will be glad to know, returning to the original Question, that we agree that benefits in kind should be taxed at the appropriate level to avoid distortions. We also welcome the pragmatic delay in this new measure, to give individuals time to adjust. However, there are claims from the motor industry that there could be a substantial loss to the Exchequer, when job losses, lost VAT and excise duty are taken into account. With his new perspective, is the Minister confident that the Treasury has got its sums right on this?
Lord Stockwood (Lab)
Some three months into a new role, I am as confident as I can be about anything. The current projections are that it should not have a negative impact.
Lord Johnson of Lainston (Con)
My Lords, I welcome the Minister to his role. I seem to remember that being Investment Minister is an important part of government. One of our triumphs was that we succeeded in creating the new gigafactory for Tata, in Somerset, which was clearly a landmark event. What are the Government doing to build on that success?
Lord Stockwood (Lab)
I thank my predecessor, who did an excellent job in the Office for Investment. He will understand that we are looking at many different projects that enhance the investment attractiveness of the UK and at our commitment to our climate goals, in which the gigafactories are large and proportionate players.
Lord Hunt of Kings Heath (Lab)
My Lords, on the issue of climate goals, will the Minister remind the noble Lord, Lord Forsyth, that the CBI report in February 2025 showed that, since 2023, the net-zero economy had grown by 10.1%, which compares favourably with the general level of growth? Should we not celebrate the net-zero economy and the potential it brings to this country?
Lord Stockwood (Lab)
I thank my noble friend for the reminder. I agree that the net-zero transition creates the most attractive and best use of our capabilities in the UK. I am happy to support his comment.
Baroness McIntosh of Pickering (Con)
My Lords, given the distances in rural areas to charging points for those with electric cars, is it not a bit of an own goal to impose an upper mileage charge at this stage?
Lord Stockwood (Lab)
I thank the noble Baroness for her question. I do not believe that that is the case. We have a commitment to our climate goals, while balancing fairness in our tax take.
Trade Act 2021 (Power to Implement International Trade Agreements) (Extension to Expiry) Regulations 2025
Lord Stockwood Excerpts(3 months, 2 weeks ago)
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Lord Stockwood
That the draft Regulations laid before the House on 16 September be approved.
Relevant document: 37th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 10 November.