Net Zero Strategy: High Court Ruling

Lord Stoneham of Droxford Excerpts

Thursday 21st July 2022 Lords Chamber

[Lord Callanan (Con)]

I would need to look at the details of the noble Lord’s amendment before giving him an answer. As the Climate Change Committee recognises, the net zero strategy is a comprehensive plan for meeting our climate targets, which outlines measures to transition to a green and sustainable future, helping businesses and consumers move to clean power. We think we are on strategy; as I said, we will look closely at the judgment and decide whether or not to appeal.

[Lord Stoneham of Droxford (LD)]

My Lords, one of the problems is that the Government have been very good on targets but much less good on delivery. Can the Minister comment on the view of the former Chancellor, Rishi Sunak, that we should not relax the restraints on onshore power or encourage it? Is that how we will achieve delivery against these targets?

[Lord Callanan (Con)]

I think the noble Lord is wrong in his first statements; we have so far met, or indeed exceeded, all our carbon budgets and we are on track to meet the latest one. This is a reference to a carbon budget in 12 or 17 years’ time, so of course we will look closely at the implications of the judgment. On the noble Lord’s question, we have said that we are not against the expansion of onshore wind, but we will need to do it in close co-operation with, and with the support of, local communities. Meanwhile, as he will be aware, we have massively expanded the ambition of our offshore wind, which during the latest contracts for difference round is now coming in at record low prices.

Small Modular Nuclear Reactors

Lord Stoneham of Droxford Excerpts

Tuesday 28th June 2022 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness makes an important point; these are long-term decisions. Most energy policy decisions are longer term, as it takes many years to bring on stream new energy infrastructure projects in whatever field we are looking at. In the short term, however, the answer to the noble Baroness’s question relies principally on renewables: we are advancing the hydrogen strategy and accelerating the rollout of offshore wind, which has proved immensely successful. In this country, we have the second-largest offshore wind capacity in the world and it is a world-beating industry.

[Lord Stoneham of Droxford (LD)]

Could the Minister confirm whether the Government consider regulated asset base—RAB—funding appropriate for something as experimental as these small reactors?

[Lord Callanan (Con)]

We have not made a decision on the relevant business case model—it could be either the RAB or the CfD model—but we will consult on this shortly.

Domestic Gas and Electricity (Tariff Cap) Bill

Lord Stoneham of Droxford Excerpts

Wednesday 18th July 2018 Lords Chamber

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

My Lords, I spoke against Amendment 1 on Report, so I will not repeat my detailed arguments. However, I remind the House that the amendment would insert provisions for an indefinite relative price cap. The Government cannot accept a permanent price control being put in place. Members in another place have returned the Bill, having removed this House’s amendment, but with an amendment in lieu, which was agreed without a Division. I will now speak to that amendment in lieu, and I hope that the House will agree with me that it is a sound and sensible amendment.

Amendment 1A will ensure that Ofgem must conduct a review before the removal of the price cap into the pricing practices of suppliers and where there are categories of consumers who are currently paying, or may in future pay, excessive charges for SVT and default tariffs. In reviewing the practices of suppliers, and where the consumers are paying excessive charges, the regulator must consider whether there are consumers who will be excessively negatively affected when they move from fixed rates to SVTs and default rates, and whether vulnerable consumers require protection. If the regulator’s review concludes that protections are indeed required, they must take necessary steps to provide those protections, using their existing powers under the Gas Act 1986 and the Electricity Act 1989. The amendment rightly provides the regulator with the discretion to consider the form that any protections may take so that Parliament does not prescribe a solution today for what may well be a distinctly different concern in the future. The Government view Amendment 1A as striking the most appropriate response to the concerns that were articulated by noble Lords in this House during the Bill’s preceding stages.

I thank noble Lords across all Benches for their interest in the Bill and for their constructive engagement in its development, both in the Chamber and outside. I believe that the Bill is now in the best shape it could be, which is due in no small part to the work put in by this House. I hope that we may swiftly agree with the amendment made in another place so that the Bill may proceed and the price cap can be in place by the end of the year. I beg to move.

[Lord Stoneham of Droxford (LD)]

My Lords, I am speaking on behalf of our Front Bench spokeswoman, my noble friend Lady Featherstone, who unfortunately cannot be here tonight.

We too do not believe that the retail energy market currently operates to the advantage of customers. This Bill is a very blunt instrument, and one that is intentionally temporary—a sticking plaster while the Government desperately search out for a long-term solution. In coalition, we were proud to stimulate switching to a level way beyond what had happened before. But while successful, it is not sufficient. We still believe that a part of the solution lies in a relative price cap mechanism. That is why we supported the original Lords amendment, although we would have preferred it to have been stronger.

The fundamental issue is one of the “tease and squeeze” sales tactics used by energy suppliers, which would be far better tackled by a relative cap. However, we acknowledge the Government’s Commons amendment in lieu has recognised some of these concerns. We also recognise that, however imperfect this Bill might be, it is important to get it on to the statute book in good time before the winter weather and the escalation of consumer energy consumption. It is for these reasons that these Benches do not intend to call a Division this evening.

[Lord Grantchester (Lab)]

My Lords, I am grateful to the Minister and I very much welcome this amendment in lieu of the amendment passed in your Lordships’ House on Report.

This is necessarily a Labour-inspired amendment. It addresses our concerns over the domestic energy market at the termination of tariff-capped conditions. On Report, the House supported the contention that there should be ongoing monitoring through the implementation of a relative tariff differential. The incoming chairman of Ofgem, Martin Cave, whose appointment is very much welcomed, has expressed scepticism before the BEIS Select Committee that a fully competitive market will have returned by the end of 2023, when tariff-capped conditions will ultimately end. He has expressed doubt that vulnerable customers will be able to access competitive deals within this timeframe.

Furthermore, the amendment on Report was explicitly designed to deal with the exploitative behaviour of suppliers, known as “tease and squeeze”, whereby customers are moved over time from a competitive deal on to a much higher rate. This behaviour operates now and could continue even if the market be deemed later to be operating under competitive conditions. There is the twin effect that vulnerable customers could continue to be at risk post 2023 and that this particular behaviour of “tease and squeeze” across the market will not be dealt with.

I am very grateful to the noble Lord the Minister, and to the Minister for Energy and Clean Growth in the other place, Claire Perry, for considering this most carefully and engaging with our team so constructively. I thank them for considering that Ofgem must continue to monitor the market and to take appropriate action, should pricing practices of suppliers continue to put customers under disadvantage through excessive charges. Too often in the past, Ofgem has not used the powers it has in order to combat anti-competitive behaviour and excessive pricing.

The temporary nature of the Bill is to correct a clear existing fault in the present operation of the market. But the action to be taken through this Bill must take account of all anti-competitive behaviour, including “tease and squeeze”, and once concluded under the terms of the Bill on or before 2023, to continue to make sure all customers will be protected, including special measures for vulnerable customers.

Most people admit that they find the monitoring and switching of tariffs cumbersome and confusing. The debate over energy market intervention has run for several years, and certainly for too long. I am very pleased that, last year, the Conservative Government finally conceded that action is urgently needed to tackle unfair practices and excessive charges. Customers have been paying up to £300 per annum more than they might have done under a more competitive market.

Both the Conservative Government and the Labour Opposition are committed to have this legislation on the statute book to bring real benefits to consumers this winter. Ofgem must fulfil its functions and be seen to take appropriate action. The industry must realise that unfair behaviour will not be tolerated. Consumers will be protected.

I would like to pay tribute at this stage to all the staff who have worked so hard at both ends of Parliament, and especially the Bill team at the department. I would like to thank my Front Bench colleagues, my noble friends Lord Stevenson of Balmacara and Lord Lennie, for their support and attention, especially at the early stages of the Bill when I was absent due to ill-health. I am very grateful to my noble friend Lady Crawley, who spoke so passionately about the need to tackle the “tease and squeeze” tactics so prevalent in the energy market, and on the Liberal Democrat Benches to the noble Baroness, Lady Featherstone, and the noble Lord, Lord Teverson, for championing vulnerable customers, where we are very much aligned. I certainly do not want to forget or underplay the crucial legislative support of our opposition adviser, Rhian Jones.

I very much support the amendment and the Bill and look forward to the benefits it will bring.

National Minimum Wage (Amendment) Regulations 2018

Lord Stoneham of Droxford Excerpts

Thursday 15th March 2018 Grand Committee

[Lord Stoneham of Droxford (LD)]

My Lords, I have two or three points to make on these regulations. We welcome the move to increase the rates and we support that policy. Obviously, evidence over the past few months has shown that the economy is slowing. We have some quite serious problems in the retail sector and cutbacks in catering, with a lot of chains in financial difficulty. The other sector I would like to mention—here I must declare an interest as the chair of Housing & Care 21, a housing association with considerable care interests—is the whole care sector, which is under huge pressure. Obviously, this is a further burden in terms of costs—and not just for the operators because, given that the health service does not protect a lot of people in this sector, those costs are coming straight out of the pockets of consumers. I hope that the Government are paying some attention to these sectors and I should like to ask the Minister what they are doing.

A key issue is the degree to which productivity will increase in order to absorb some of the significant costs that are being imposed on these low-wage sectors. What are the Government doing? We have various estimates of productivity, but what initiatives are the Government taking to encourage productivity growth in these sectors? What case studies are they implementing to judge the impact of labour costs in these sectors? What policy initiatives are being speeded up—particularly, I hope, in the care sector—to address the fact that the sector is very labour-intensive and that inevitably the costs will impact directly on some very needy people who are not catered for by the National Health Service? The Government’s delay in producing their social care policies is a major consideration as this policy of increasing the living wage continues towards the Government’s targets.

Finally, as we seek to improve to improve rates of low pay, the best scenario in which to do it is one in which the economy is growing well, living standards are increasing and we have no undue pressures. We know, however, that we are now facing a period of low growth and that, because of the movement in the exchange rate and the rise in costs—particularly those imposed by these measures—living standards will be squeezed. On top of that, the Government will impose on the economy the huge costs of Brexit. The Prime Minister has admitted that Brexit will affect jobs and standards of living, regardless. I would therefore like to know what specific measures and initiatives the Government are taking to deal with these problems, which could undermine their low-pay strategy.

[Lord Henley]

My Lords, I thank both noble Lords for their helpful contributions to this debate and their broad welcome for these regulations. I will deal with the regulations and their attached documentation, and the concerns of the noble Lord, Lord Stevenson, that they were not set out exactly as they should be. I will ask the officials to send him a more readable version. More importantly, we take note of what he said. I will make sure that we do somewhat better at setting these documents out and making them clear to the noble Lord and other noble Lords taking part.

The noble Lord was also rather worried about why I used the expression “subject to economic growth”. The important point here is that the Low Pay Commission makes its recommendations in the light of an array of matters, and—as the noble Lord will know—it includes representatives of employers, employees and others. Ultimately, it makes recommendations and it is for the Government to make the decision. Those who are somewhat higher up in the Government—the Chancellor and others—have to take into account the effect on the economy of the Low Pay Commission’s recommendations, though we hope that it will also have considered the effect its recommendations might have on increasing unemployment by making it less affordable to employ people. The matter is, therefore, considered by the Low Pay Commission but, more importantly, my right honourable friend the Chancellor and others consider what lies ahead.

I join the noble Lord, Lord Stoneham, in wishing to see greater growth, but—as my right honourable friend the Chancellor set out recently—we are seeing steady growth over the coming years and I see no particular red lights in this area. We are still on track to achieve the target that we wanted to achieve—I think the noble Lord asked about this—which is 60% of median earnings by 2020. The Low Pay Commission will take all evidence into account in trying to get there.

The noble Lord also asked about the bigger change in the disregard for accommodation. Again, the Low Pay Commission took evidence to determine that off-set and its report summarises its view that the rate is a fair balance of the employer’s and the worker’s interests. Obviously I am happy to write to the noble Lord in greater detail on that if he so wishes.

I move on to the comment of the noble Lord, Lord Stoneham, that this imposes particular pressure on certain sectors. He singled out one that he knows particularly well, the care sector, for which we accept it can be difficult, and similarly for retail and other areas where wages tend to be on the lower side. That is why we are very grateful that there are representatives of employers on the Low Pay Commission to make sure that that point is made. There is no point raising rates too far if it will increase unemployment or create difficulties for certain businesses. Obviously it means that there will be extra costs for businesses but, as I think the noble Lord will accept, we want to make sure that workers are fairly rewarded.

There are certain things that Governments can do to recognise the increased costs for businesses. We give employers up to £3,000 off their employer NICs bill through the employment allowance. Last year more than 1 million employers benefited from that, saving some £2 billion. That will apply in all sectors. We cut corporation tax, as the noble Lord will be aware, from 28% to 19%, and that again benefits a large number of firms. As the noble Lord will remember, my right honourable friend announced reductions to business rates in the Budget.

I appreciate that things can still be difficult. The point behind having the Low Pay Commission, with representatives from both sides and others, is to make sure that we try to take all factors into account and, I hope, achieve greater balance. The noble Lord would like me to discuss the Government’s care policies more generally, but I do not think I am the right person or that this is the right place for me to do that at this stage, so I shall restrain myself from being tempted to take up his offer. No doubt he will find other opportunities to raise this matter with others in due course.

With what I take to be the support of both noble Lords, I commend these regulations to the Committee.

Better Regulation

Lord Stoneham of Droxford Excerpts

Thursday 7th December 2017 Lords Chamber

[Lord Stoneham of Droxford (LD)]

I, too, thank the noble Baroness, Lady Neville-Rolfe, for leading this debate. She has huge experience in this field, starting as a government official, then working at Tesco, particularly in retailing and consumer protection law. I suspect that she spent a lot of her life in Europe dealing with regulatory matters, and she has now gained the skill of leading legislation in this House.

Those of us who have spent a lifetime in industry should and do understand the importance of regulation to ensure that fair and free competition exists and that staff and consumers are protected. I have worked in three industries—the coal industry, construction and newspapers. The one Act in my generation that stands out is the Health and Safety at Work etc. Act. I worked for the Coal Board in the 1970s and had the task of drafting the letters for the chairman of the Coal Board to send to the families of miners who were killed in accidents. I reckon that they averaged about 40 a year. Looking back, it was an unacceptable figure, but it shows that we required in this country a substantial movement in health and safety practice. In the coal industry, we probably used to assume that accidents were inevitable, but in my working career I have never assumed that any accident should happen.

Construction has already been mentioned in this debate. Compared with 40 years ago, construction has undergone a transformation. Grenfell is obviously a failure, and we will find out much more from the investigation currently taking place. However, it is not a question of less regulation but of getting better regulation to deal with some of the problems that will clearly be unearthed when the inquiry is conducted and completed. Every incident that we have in health and safety has to be tested and examined so that we can develop regulation and improve what we are doing. Just as important as regulation is the culture, which is one of the things that the Health and Safety at Work etc. Act changed. I particularly admire the culture of the aviation sector with its drive to examine every incident and encourage a culture of no scope for improvement in its safety audits—because it knows the consequences of having a margin of error.

My principal industry of newspapers was not unsafe. But I particularly appreciated the area of competition regulation in a sector that was consolidating through mergers at the time. There were considerable opportunities for price fixing, collusion and muzzling competitive forces. They were endemic—but for the fact that there were regulations and competitive authorities to keep an eye on what was being done.

As someone who has worked in industry through most of my career, I certainly believe in keeping regulation simple, up-to-date and easily understood. But it needs to be said, as was stated in the briefing material, that the OECD regards this country as having relatively low levels of regulation compared with other member states. One of the principal sources of comparative advantage for this nation in attracting foreign investment is the system of fairly low-level regulation compared with other countries. That is what has attracted foreign investment into this country, from companies needing to sell their goods in the European market.

It is particularly important for small businesses that we keep regulation simple and effective, because they have the most difficulty in keeping up with regulation. We need their powers of innovation, growth and transformation to contribute to our economy. I certainly am not one of those who propose—indeed, we should strongly oppose—any concept that this country should develop down a Singapore route, with less regulation and unrestricted free enterprise, as a way of developing comparative advantage once and if we come out of the EU.

The coalition made some progress in trying to simplify our regulation policies. There are times when you need slightly more PR-type initiatives such as “one in, two out” or “one in, three out”, because that is a quite effective way of bringing about change in organisations that are not facing up to the need for it. But actually you need more effective long-term measures rather than simply changing the name of the campaign from “Cutting Red Tape” to the “Red Tape Challenge”. Having business impact targets and trying to improve government departments from within are important initiatives.

However, there are a number of problems, one of which is that in order to set realistic targets, you need to include in them the things that matter. I know that the Government have resisted this for a long time, but tax administration being outside the initial impact assessments is ludicrous because most small businesses certainly see the burdens of tax administration as being probably the largest impact that they have to face. They are not going to take much notice of campaigns that try to sideline the things that add most to their costs. Although I support them, we also have to include the national living wage and the national minimum wage so as to indicate where burdens are being put on business in order to get a true impact analysis of what regulation is doing—even when there are downsides to measures that most of us strongly support.

Finally, I want to say a little about the global dimension. The future for this country is very much about international trade and data. This week, I took myself off to look at the impact studies that the Government have produced. It was an amazing experience. You must make an appointment and be met at the Treasury. You have to give up your phone and sign your life away and promise that you will behave yourself, and then you get to see these studies. There is absolutely nothing new in those studies apart from emphasising the huge complexity of what the Government are leading us into with Brexit.

One phrase did catch my imagination. I started at A and looked at agriculture. It stated: “A key consideration is that the cross-border trade between Northern Ireland and Ireland is particularly complex and sensitive. The food and drink industry between the UK and Ireland is fully integrated and treated as a single trading unit by business”. Some 10 European systems apply across the agricultural sector, along with 15 relevant agencies. Good regulation will be vital to the flow of goods in the future. Regulation is particularly essential in this industry because when there is a problem, it helps to have good regulation so that businesses can recover quickly and continue to have free movement.

The Government are facing a huge task of converting all the European regulations which apparently are now going to come under our own auspices; it will be a huge enterprise. When moving house, most people clear out the loft first—but we will have a system where the withdrawal Bill will come in, then we will amend it so that we have a transition Bill, and presumably then we will then have to work through all the regulations to ensure that we are in control. What we also have to decide is which European regulatory agencies will apply and which we will participate in. We are half way to Brexit, with 18 months to go. Do the Government have a plan as to which of these agencies they are going to participate in and which they will duplicate? In my experience, it can take two or three years to set up a new department or regulatory agency, and I think that the country deserves to know.

The country could do with increasing scrutiny of regulation, but in a debate with the noble Baroness, Lady Neville-Rolfe, when she was in the Government and defending against various amendments that we had proposed, I said that she was Stonewall Jackson in her defence of the Government. However, I warned her at the time that Stonewall Jackson was killed by his own troops. For all her aspirations on regulation, the difficulty is that, with the huge mountain of work that the Brexit operation will involve, simplifying regulation will be put very much on the back burner.

Energy Price Caps

Lord Stoneham of Droxford Excerpts

Monday 3rd July 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, in my right honourable friend the Secretary of State for BEIS’s letter to Dermot Nolan, the chief executive of Ofgem, he says:

“You will have seen that the Conservative manifesto proposed to ‘extend the price protection currently in place for some vulnerable customers to more customers on the poorest value tariffs’”.


That is what my right honourable friend has asked Ofgem to do. It will now go through a period of consultation and decide how best to do that.

[Lord Stoneham of Droxford (LD)]

My Lords, on this side of the House we appreciate and welcome the measures that are obviously designed to help poorer customers. I will ask the Minister two questions. How much of this £1.4 billion does he assume is going to be redistributed back to customers as a result of these measures, and what is the shortfall on that? Secondly, his party, despite its election manifesto, has never seen a way of resolving these problems by price cuts. What is he going to do to improve competition? That is the way to control prices in this sector, and clearly they are not going to be controlled when you have a six-body cartel that is operating against customers’ interests.

[Lord Prior of Brampton]

My Lords, the Secretary of State has made it clear that, in judging whether Ofgem’s proposals go far enough, he will be looking at that figure of £1.4 billion—which, as the noble Lord knows, was identified in the CMA report of 2014. Clearly that is the figure that the Secretary of State has in mind. The noble Lord is absolutely right, though, that for the long term getting real competition into the market will drive prices down. Some 20% of the market is now supplied by companies other than the big six. I think that they now number 50, so there are signs of growing competition. The CMA is quite categoric in its diagnosis that customers are not yet feeling sufficiently well informed or enabled to make the switch. I went on to uSwitch today to have a look and I can understand that—one’s brain sort of hazes over a bit when you go into this sort of field. So I think it will take some time before competition really works in this market—which is why the Secretary of State decided to ask Ofgem to review the situation today.

Steel Industry

Lord Stoneham of Droxford Excerpts

Tuesday 25th April 2017 Lords Chamber

[Lord Stoneham of Droxford (LD)]

My Lords, it has been a very full debate and we have all appreciated particularly the personal experiences we have heard from the noble Lords, Lord Jones and Lord Brookman, the noble Baroness, Lady Redfern, and the noble and learned Lord, Lord Morris. There are a couple of themes that I would like to pick up in contributing to the debate. The noble Lord, Lord Bhattacharyya, said that we had wasted three decades for this industry through poor decision-making and a lack of long-term thinking. The noble Lord, Lord Bilimoria, spoke very much about the dangers of the distraction of Brexit and the impact it will have on this industry by damaging the whole sector. I would like to deal with both those points.

In the general election, the Government will promise the country strong government and stability. I would agree with that if it was being applied in the steel industry. The only problem is that the Government promised that at the last election and, within a year, we no longer had an economic plan and we have had all the uncertainty that followed the referendum, which will continue over the next couple of years. What we want in this debate—what everybody has spoken about—is a commitment to a modern, innovative manufacturing sector in which steel will play a full part and where we can genuinely compete with Germany. Steel should be an important component of that future. As we know, currently, our whole automotive industry depends on a huge output of steel from the Port Talbot works.

The other area where we have to look at our competitive advantage is that of specialised steels, which the noble Lord, Lord Bhattacharyya, mentioned. But that needs a long-term plan and long-term commitment. I give some credit to the Government for identifying the problems and raising the questions, but will they address those? They have looked at energy costs, but we know that there are huge problems with energy costs in the sector. They are looking at business rates. I do not know whether the Minister will say anything on that and what help they will provide for manufacturing. To be fair, the Government have also published various documents on improving procurement planning, which are all important. But as we go forward, like every other industrial sector in this country, improving R&D investment and getting a return from that, raising productivity and concentrating on skills development will see this sector prosper.

But what will we get in the next two to five years? We will get complete uncertainty. We have seen that just in the last year with the devaluation of the pound. That creates further uncertainty in the steel sector. Okay, it improves its competitiveness on pricing, but it also adds to its costs. We have no idea what will emerge from the single market free-trade negotiations. As we know, steel components cross borders repeatedly as they find their way into the final manufactured goods.

When the European Community was first set up, I thought that steel was at the heart of it, and so was coal. One of the reasons for that was overcapacity and unproductive resources in both those sectors. To actually get rationalisation was going to be difficult unless there was co-operation and partnership. We know in this sector particularly that if we do not have some form of international co-operation and understanding, the owners, who are huge international combines, will simply pick off individual Governments. Some 52% of steel exports go to Europe. What will happen when we start negotiations on our access to the single market in the Brexit negotiations? The Germans, Spanish, Italians and French will defend their interests. We will lose the co-operation that we have built up over the past few years in Europe trying to address some of these problems.

Those in favour of Brexit will argue that we can take action ourselves against uncompetitive practices and we can get involved in dealing with dumping. But the reality of that is a myth, frankly. If we look at Chinese dumping, China’s total exports exceed the total production of the top five European steel-producing countries. We know that the British Government themselves resisted supporting protection orders in the EU because they were worried about a future relationship for other trade with China. What will happen when everything is up for grabs? Will the steel industry be one of those that will be cast aside in the desperate interests of trying to improve exports to China in other sectors? Brexit is a major distraction for this industry at a vital time. It will encourage the continuation of short-term thinking when we need long-term thinking and it will provide a distraction from trying to deal with the issues that have been raised in this debate.

Greg Clark has done some good work on the industrial strategy, continuing the work done by the coalition, but unless we actually get involved in the detail and deliver the answers to some of the questions and problems that that work is raising, we will not make the progress industrially that this country and particularly the steel industry want. The major problem going forward will be that the Government themselves will be totally distracted by the Brexit negotiations when they should be dealing with some of the problems in this sector.

Important Public Services (Border Security) Regulations 2017

Lord Stoneham of Droxford Excerpts

Tuesday 24th January 2017 Lords Chamber

The reputation of political parties and the whole political process depends on us cleaning it up. The Government think they have cleaned up the trade union contribution to the Labour Party to some extent but there is a much deeper and wider problem than this. It is about time the body politic as a whole addressed it. I hope the Minister can tell us that, at least, he and his colleagues are preparing to address it. If not, then once again we are at an impasse. This has been exposed as a hugely partisan, unilateral decision by one political party to try to bankrupt another.

[Lord Stoneham of Droxford (LD)]

My Lords, I am pleased to join in this debate. I was involved in the original proceedings on the Act. A number of points have already been made which I do not need to repeat. I should like to concentrate on a couple of aspects, taking through some of the thinking that has already been displayed in this debate.

As the Government’s own record on contingency planning is very poor—as shown in the European issue—we have to ask whether they have prepared for some of the implications of these regulations. I hope that the Government have consulted ACAS on whether it has sufficient resources to deal with some of the problems to which these regulations will give rise. In the coming year, with inflation rising probably ahead of earnings, the Government are going to experience quite a lot of problems in the public sector. Resolving them will be further complicated by these regulations. They are going to have quite turbulent times. My noble friend Lord Foster quoted what I said in the original debate—that trade unions will have to invest extra resources into getting appropriate support in ballots. That has a danger in respect of strikes. As the Minister will have seen in the doctors’ dispute, where 90% support was achieved in the ballot, it was extremely difficult to get it settled and prolonged negotiations were needed. We will have much more of that in the public sector.

A further issue is bargaining units. I mentioned in the original debates what I called the winding-engine men syndrome. Those were the people in the coal mining industry who used to work the lifts. They had immense bargaining power. If you have all sorts of legal restrictions on thresholds for strike ballots, all that will happen is that you will have smaller bargaining units and therefore a greater ability to manipulate strike ballots to get the results that you want. It will be more difficult to resolve those sorts of disputes. I hope that the Government have looked at the consequences of what they are doing.

The noble Lord, Lord Kerslake, mentioned electronic ballots. It is in the Act; we passed an amendment that we would have an independent review of electronic balloting. I do not think that anybody who was involved in the debates at that time ever thought that we would implement those regulations. The understanding was that they would not be implemented until we had had the outcome of the electronic balloting review. What is the Government’s thinking on this? What is the purpose of the review and when exactly are we going to see the details of it?

I should like to re-emphasise—and it is important coming from our party—that this is a very partisan act, certainly on political funding. We deserve to hear from the Government what further action they are going to take on the Burns committee recommendations, which have silently been discarded and forgotten. As we have to agree these regulations, we should know what the Government are going to do. What are they doing on the whole issue of the unfair financing of political parties, in the context of a very one-sided act against the principal opposition party? Everybody knows that this measure is partisan and will lead to a continuing imbalance in our political system.

The Government try to portray themselves as consulting and as a so-called party of one nation but, frankly, is it not incredibly insensitive to implement these regulations? The officials, or whoever did the consultation, must have known that the union conference system runs from April until July. Everyone knows that. To implement regulations that start in March is clearly therefore going to cause upset. That seems to be totally insensitive and unnecessary, and shows the total contempt that the Government have had for the trade union movement in this country in planning this legislation and in the way they are now trying to implement it.

[Lord Mendelsohn (Lab)]

My Lords, I associate myself with the contributions that have been made. They have been pretty outstanding and have got to the very nub of the issues.

I thank the Minister for coming forward. We have had some very engaging discussions on other issues, and it is unfortunate that he has to deal with this issue in this particular way. I hope he is absorbing what we are saying and will respond adequately to it, but we do not hold him personally culpable for what has come before us.

It is important to understand that the conventional wisdom is that the Act was originally in the manifesto merely as some barking mad idea to negotiate away when the coalition was formed and that it would not stand. It is unfortunate that the circumstances evolved as they did and we ended up with something that was so partisan and vengeful. The debates that we had in this House were very significant; indeed, the size of the majorities against the Government’s proposals—certainly, there were calls for some balancing measures for the democratic mandate so accorded—was very large, and expressed the deep concern across the whole House at these measures. We ended up passing legislation not because people were happy or because they understood it but because there was broad agreement in the legislation, in discussions with Ministers and in assurances to the House that, in the spirit of trying to pass this legislation, there would be balancing measures. It is unfortunate that the partisan approach has returned with these instruments. It is important to understand that that is at the very heart of the statutory instruments.

I spent some time—after the Act had been passed, regrettably—looking at the nature of the strikes and what caused them, and analysing some of the strikes that took place in private companies and the public sector. The issue that came up during that time was that in most of these cases it was not that there were a series of workers who just militantly desired to withdraw their labour; there were massive issues of competency of management. In fact, although I did not do an exhaustive piece of research and I cannot say I necessarily had an adequate sample, in 85% of the cases that I looked at you could identify management failures, especially in the public sector, where arbitrary decisions are announced and workers are displaced because there is no consultation or preparation. In those circumstances, we have to understand that measures need balance.

To take the example of disputes at Southern rail, at the heart of that dispute is a contract that does not work. I know the Minister has been in business before. On many occasions we have seen the consequences of poor contracts. A variety of the issues at the very heart of why there is a difficulty in resolving a problem where there are problems of the competency of management are about contracts. It is wrong always to look through the wrong end of the lens. We are looking to the Government to restore the sense of balance that we believe we had when this Act was passed.

I read the Prime Minister’s speech at Davos when she talked about the notion of the rights and the voice of people who had not been adequately covered by these sorts of things, and the importance of strong institutions. In that context, I just do not understand why the institutions that the Government seem continually to want to stress, attack and undermine are those that represent working people. It is just not the right sense of balance.

It is our belief that trade unions are a force for good and equality in our society, especially in the increasingly insecure world of work. We remain fundamentally opposed to an approach that establishes restrictions on industrial action without balancing provisions to ensure that participation can be increased.

--- Later in debate ---

I shall resist the temptation to be drawn into a debate with the noble Lord, Lord Whitty on political funds.

[Lord Stoneham of Droxford]

So there is going to be a review. Does the Minister intend to implement the recommendations that were implied by the House when it asked for the review to be done?

Brexit: Single Market and Workers’ Rights

Lord Stoneham of Droxford Excerpts

Monday 16th January 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, I think the Prime Minister, in a speech tomorrow, will be setting out the strategic objectives of our negotiations and what we are trying to get out of the negotiations that will take place over the next two years. It would be foolish of me to speculate in any more detail today about what those objectives are.

[Lord Stoneham of Droxford (LD)]

Given the reality of the global economy, surely the only effective way of protecting employees’ rights is through international agreements? To avoid international agreements is merely to undermine the sovereignty of this country.

[Lord Prior of Brampton]

My Lords, there are many other aspects apart from international agreements. When one looks at the performance of the UK economy, what absolutely stands out above all else is that in many industries our productivity levels are too low. Increasing productivity in this country, partly through better training and skills but also through more investment in the research base of this country, is the best way to increase our trade overseas.

Green Investment Bank

Lord Stoneham of Droxford Excerpts

Thursday 12th January 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, no business would say that it will be intact for ever. Interestingly, the Green Investment Bank manages an investment fund of £800 million. It is the biggest investment fund in the renewable sector in the UK. It has a whole series of investments in that fund, and of course some will be sold in future.

[Lord Stoneham of Droxford (LD)]

My Lords, the suggestion in the Sunday papers was that the integrity of the bank was under threat. It is not sufficient just to support the objectives of the bank; this is about its integrity. Can we have an assurance from the Government that they are seeking to protect that integrity as well as the objectives?

[Lord Prior of Brampton]

I can give an absolute assurance that, in assessing which company or organisation might acquire the Green Investment Bank, the integrity and commitment of that company to the green purposes of the bank is crucial.