BHS

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Monday 6th June 2016 Lords Chamber

[Baroness Neville-Rolfe]

I am grateful for the noble Baroness’s thoughtful comments. I, too, used to be a pensions trustee and my experience was that you lived in constant fright of doing the wrong thing and that you really did try very hard to be on top of management and to make sure your responsibilities were fulfilled—otherwise the riot act was, rightly, read to you by pension schemes’ legal advisers. You also tried to look ahead, and any suggestion of M&A was always a good opportunity to try to make sure that the pension fund always got topped up. I know that the Pensions Regulator has spent a lot of time trying to train the remaining defined benefit pension schemes to do things well.

We need to see the results of the insolvency and the Pensions Regulator investigation to see where we get to. Obviously, these kinds of arrangements are kept under review. I take the point, also made by the noble Lord, Lord Mendelsohn, that circumstances are a bit different now. Trustees have strong powers, and if you were to look at the whole situation, you would need to look at that as well. These defined benefit schemes are of course, in a way, a good thing, because the employer provides pensions for the workers so that they do not have to have state pensions. These schemes, which have now largely disappeared, can be extremely favourable for those who have them, giving them security, making them loyal to the employer and so on. It is a difficult area and I am in danger of straying into the territory of the Pensions Minister.

[Lord Stoneham of Droxford (LD)]

My Lords, I agree very much with the noble Lords, Lord Lawson and Lord Myners, when they say that the smell of this case is not good. We do not have the full facts yet, but the smell is very bad indeed. The Statement talks about seeking redress from the employer, but this presumably is a dead end, because the current employer is insolvent, and it is the group that originally owned BHS which should be vulnerable. Can the Minister assure us that the powers exist to seek redress in that direction?

The second point is about the regulator. What in the world enabled the regulator to allow these pensions liabilities to be transferred in this way, on the basis of the facts that we have seen? Who will be responsible for holding it to account and for finding out whether the legislation and the regulator’s powers are adequate to stop this sort of thing happening again?

Trade Union Bill

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Tuesday 3rd May 2016 Lords Chamber

[Lord Stoneham of Droxford (LD)]

My Lords, I, too, must apologise for being a little late. I was brought up on the good trade union tradition that an agreement on procedure is an agreement, although clearly it was not this afternoon.

I want to add a couple of comments to the important speeches that we have already heard—particularly those from the Cross Benches—and to what the noble Lord, Lord King, said. We are seeking three things. The first is that the unions should be consulted as part of this review. Secondly, we would like to see some form of pilot as part of the review, bearing in mind that the Electoral Reform Services has conducted in the past year 2,000 polls and covered 1 million votes. There is a lot of experience out there, so this review does not actually need a lot of time. Therefore, our third requirement is that there should be some form of deadline. We are concerned that this will be heading for the long grass otherwise. The whole concept of electronic balloting is very important to the future of trade union democracy, not only for ballots for industrial action, but ballots for union leadership. Postal ballots were seen 20 or 30 years ago as essential reform, but now that turnouts in postal ballots are disappointingly low, we have to look at alternative methods of making such ballots more representative. Electronic balloting, as we have discussed in this Chamber, is now the next important reform. I hope the Government will exercise this review quickly and expediently and get a positive response.

[Baroness Neville-Rolfe]

My Lords, I believe that we have made significant progress today, despite the confusion over the timing of the Statement. The review will help to assess the rigour of the latest technology and address concerns about security, confidentiality and intimidation. It will allow us to consider again the case for e-balloting and ensure that we are making the right decision about whether to allow this method for conducting trade union ballots. I note what the noble Lord, Lord Collins, said about the value of increasing participation through e-balloting and the points made by the noble Lords, Lord Kerslake and Lord Pannick, about its value.

Let me first address the point raised by the noble Lord, Lord Stoneham, about pilot schemes. Pilots are always a good thing, and it is a pity they are not deployed more generally in public policy. How and when you use them in this area is not something that can be decided today. However, we have specifically mentioned them in the Bill and I appreciate from exchanges that we have had, including with the noble Lord, Lord Mendelsohn, that they are important.

I note the point made by the noble Lord, Lord Collins, about involving interested parties in the review, and in particular trade unions and the Trades Union Congress. This will of course be an independent review, and it will be for the chair to determine how best to conduct it. However, to my mind, it would make sense to involve trade unions, and indeed other relevant experts, and I am sure that he or she will come to the same view. Union input is very important, and in deciding how to set up the review we obviously need to avoid conflicts of interest.

My noble friend Lord King rightly quoted my honourable friend Nick Boles, who has done so much to progress this legislation, and the Government’s intentions, as set out recently. I cannot really add to that, but a number of noble Lords have asked about timing. I am pleased to provide reassurance that the review will be acted upon in due course and without delay.

Update on the UK Steel Industry

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Monday 11th April 2016 Lords Chamber

[Lord Stoneham of Droxford (LD)]

My Lords, six months ago—I was slightly surprised that it was six months ago—these Benches advocated the Government setting up a Minister-led steering group to look at the whole range of problems of steel and develop a strategy to save what we could of this great industry. All the impression of the past few weeks is that the Government have been running around like a rabbit in the headlights, with the local MP knowing that Tata was going to make a key decision on Port Talbot but the Minister responsible not knowing so. Have the Government used the past six months to develop a strategy for steel and, if not, why not? What is the Government’s industrial strategy towards steel?

[Baroness Neville-Rolfe]

My Lords, I welcome the comments made by the party opposite, particularly in relation to the role of the unions, the staff and the First Minister of Wales.

To answer the point made by the noble Lord, Lord Stoneham, we have been doing a great deal. Some of the things that have been said today are a travesty of the truth. The Secretary of State and the Business Minister have been working day and night on the steel issue for many months. Without our intervention, we believe that Tata would have moved to shut Port Talbot. Now it is up for sale on a basis that gives us the prospect of success.

On the attitude of Tata, we have been in discussion with it over many months and it has made it clear that it will be a responsible seller. We are working with it to find a sustainable solution.

The pension arrangements are extremely important and we have made it clear that they are part of the discussions we are having. Both the UK and the Welsh Governments—because they are working together in relation to Port Talbot—stand ready to engage with commercial investors to help provide a package of support on commercial terms to help ensure the long-term future of our steel industry. We will consider support in the area of pensions but also of plant and power supply, and any other areas for which potential buyers believe the Governments can provide support. We need a solution on pensions not only to help any buyer but to help the steel workers.

The noble Lord, Lord Stevenson, asked about intellectual property. Certainly, since that is an area for which I have ministerial responsibility, I will think further about that. Procurement is one of a number of areas where this Government have tried to change the situation fundamentally. We have moved to change the future procurement rules so that it will be much easier to buy British. We have a splendid supply chain of possible steel projects: not only HS2 but we are now finishing the Elizabeth line; there is the Intercity Express Hitachi factory in Newton Aycliffe; and 98% of the steel used by Network Rail is from the UK. Then, obviously, there is defence and aircraft carriers. The noble Lord rightly drew attention to the success of our industries, which brings me on to the question of industrial strategy.

The key point about industrial strategy is to promote growth and innovation and to get the country back on its feet. The Government have done that. Car production has flourished, up 60% since 2010; manufacturing is up 18.7%; and we are now working well with the supply chain. We have a Steel Council, which is bringing together all the different stakeholders involved and keeping in contact with customers. As the noble Lord said, we need to give the supply base confidence for the future, as I know from being in business.

Trade Union Bill

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Thursday 25th February 2016 Lords Chamber

[Lord Stoneham of Droxford]

I am very reluctant to test the Minister’s voice, as I understand it is wavering a little, but she is proposing to increase the regulator’s costs by four times, and yet we are only going to see a modest increase in complaints. Is that a good use of money?

[Baroness Neville-Rolfe]

I think so. It is important that we have an up-to-date regulator. The £2 million that I mentioned is the upper end of the range in the impact assessment. Obviously, we do not know the figure for certain, and as we have said, we are going to continue to consult the Certification Office. Under a later amendment, we will come on to discuss the levy that will meet the cost.

Amendment 117A seeks to establish a separate independent adjudication panel whose decision will be required before the Certification Officer is able to exercise his powers under Clauses 15, 16 and 17 of this Bill. As I have already explained, it is common for regulators to make proactive investigations or to have the power to initiate investigations and then decide to take enforcement action where a breach of rules or statutory requirements is found—the point that was made about judge and jury. There are various regulatory models in the UK: many regulators—for example, the Information Commissioner, the Charities Commission and the Groceries Code Adjudicator—have internal processes for ensuring fair decision-making. They do not, however, have their decisions made by an entirely separate body that oversees their work.

In view of the Certification Officer’s independence—I emphasise to the noble Baroness, Lady Donaghy, that this will be an independent regulator, not a political appointment—it is only right and proper that procedures for investigations and decisions will be up to the Certification Officer. The Certification Officer has in fact recently referred to his early thinking on how best to manage his functions in the light of the requirements in the Bill. A range of different models is used by regulators, and we will have further discussions about the implementation processes with his office. The union will also of course have the opportunity to make representations to the Certification Officer before any decision is made. There will continue to be a right of appeal to the Employment Appeal Tribunal.

The noble Lords, Lord Mendelsohn and Lord Ouseley, asked whether the reforms were in breach of international obligations under the ECHR or ILO. It is important to be clear what the powers will be. The Certification Officer will be able to investigate and to determine whether there has been a breach, and then take enforcement. The decisions are then appealable, as I have said, to an independent tribunal. This is standard for regulators, and it has been established that this framework is compatible with Article 6 of the ECHR.

I am very grateful for the work of the noble Baroness, Lady O’Neill, on human rights, both in this House and more generally in the country. She asked whether Article 11, the freedom of association provision, might be breached. The Government do not think that effective and proportionate regulation infringes Article 11 rights, and our reforms do not interfere with the right to join trade unions. Having said that, I have listened carefully to the points about the oversight of the Certification Officer’s decisions, and I would like to reflect on them in the light of discussion.

The noble Lord, Lord Mendelsohn, asked about access to sensitive data. He was concerned that the Certification Officer would have quite a bit of sensitive data—a concern close to my heart. As I have said, the CO is independent from Ministers; the Government will not be able to see any sensitive data that he or she may hold. When handling data, the CO and his or her inspectors will need to comply with the provisions of the Data Protection Act. Any inspector whom the Certification Officer appoints will have a duty of confidentiality. The CO is also under a statutory duty to act consistently with rights conferred by the ECHR, as I have already said. Those are important provisions.

I come finally to the question that a number of noble Lords, including the noble Lord, Lord Oates, have raised about the risk of vexatious complaints using the new power. We are extending the potential to make complaints for members only to third parties. Concerns have also been raised that the Certification Officer might feel duty bound to examine all complaints, which could be very costly. I do not see it like that. Let me first reassure noble Lords that the obligations on concerns from third parties are different from those relating to union members. So while currently the Certification Officer must make inquiries following a complaint from a trade union member, he or she will be under no such obligation with concerns from third parties. He or she will be able to exercise judgment based on the evidence presented as to whether there are sufficient grounds for further investigation. The Certification Officer will remain independent, with responsibility for delivering against the statutory objectives. As I said, his or her enforcement decisions will remain subject to appeal.

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[Baroness Neville-Rolfe]

I start by responding to the noble Lord’s questions. On cost, I thought that that aspect of the impact assessment was quite helpful and clear, but I will look through it myself in the light of the questions that the noble Lord has asked and drop him a line. I will copy it to others who are interested, in all the nooks and crannies of this House, which I think is what we agreed on our previous day in Committee.

I also think that I went into some detail on the last amendment about how I saw judicial review and how the Certification Officer would need to act when looking at external, third-party complaints. But again, I will look at what I said, see if there is anything useful that I can add and cover that in the same letter.

The amendments seek to retain the current position by preventing the Certification Officer from making inquiries or taking enforcement action unless a complaint is received from a member in relation to two specific obligations—the duty to secure positions not held by certain offenders and a failure to comply with political ballot rules. As I have explained, the current system is reliant purely on complaints from union members. This relies on union members being aware of all the obligations on their union and of any failures to comply with them. Enabling the Certification Officer to consider potential failures without having to wait for a complaint from a member will enable him or her to take action should information on serious matters come to light, regardless of the source. That is consistent with our reform towards a more responsive and diligent regulator.

The noble Lord, Lord Stoneham, asked what the Certification Officer had said about these reforms. The Certification Officer set out how he might deal with the reforms and how they could be implemented when speaking to the committee.

[Lord Stoneham of Droxford]

Did he say that they were needed? That is the key issue that we need to know.

[Baroness Neville-Rolfe]

I am not clear whether there is yet a Hansard record of what he said.

[Lord Stoneham of Droxford]

I thought that the Minister said that, although the Government did not initially consult the Certification Officer, they had now done so. He has, it is perfectly true, appeared before the Select Committee and made certain views known, but I would have thought that it would be helpful for the Government to ask him his views, why he thinks reform is necessary and what powers he wants.

[Baroness Neville-Rolfe]

As far as I know, he has not given a view on that either in the committee or elsewhere. We consulted him on the implementation of proposals which obviously the Government have set out and believe to be necessary.

Like other noble Lords, I hope that the powers we are discussing under this amendment rarely need to be used because that would indicate compliance, which must be the goal of any good regulatory system. However, in the circumstances of failure coming to light, the Government strongly believe that the Certification Officer should be able to respond. It is important that we have a consistent and credible approach for all the reasons that we discussed earlier. I hope that these comments have been helpful and that the noble Lord will feel able to withdraw his amendment.

[Lord Stoneham of Droxford]

I thank the Minister for her reply. We have had a long debate on various aspects of the role of the Certification Officer. I shall withdraw the amendment, but I am sure that we will return to this on Report.

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[Lord Dykes (Non-Afl)]

I rise to intervene briefly, having listened carefully all afternoon to our exchanges. I thank the noble Lord, Lord Stoneham, for his remarks, and I fully support both this and the previous set of amendments. The more one thinks about this obnoxious, sad little Bill—well, it is a fairly big Bill, I suppose—the more one has deep misgivings about it.

I do not mean to embarrass the Minister, but I genuinely thank her for being a listening Minister on this occasion, and for listening very carefully. It is obvious that the Bill has been contrived, through the interstices of the central office apparatus of the party in power, to produce something that does not reflect the reality of modern trade union/employer relations. I cannot think of any examples, in respect of our exchanges on Clause 16 onwards, where employers have asked for anything in this field. That is fairly telling. Normally, Governments respond to legitimate lobbies, but that has not happened on this occasion.

I look back—it is a long way—to when I first entered the House of Commons in 1970 and the nightmare of the Heath Government, the National Industrial Relations Court, the Official Solicitor being called on to adjudicate, the dockers on strike, and all the rest of it. That all arose from anti-trade union legislation built on principles of prejudice, dislike and antagonism, rather than genuine constructive industrial relations—the kind of thing we see routinely in Germany and other civilised European countries where there is a much more balanced picture.

Given that the Minister has been a patient listener, and given that an expectation is building up that we will return on Report, which, if my memory serves me right, will be on 14 March, to lots of these fundamental points, I ask her, at this late stage in the Committee—we only have a short time to go before we conclude this four-day Committee stage—to indicate that she will come back with modern modifications to reduce the onerous and extreme extra bureaucracy being placed on the Certification Officer’s activities. They are not necessary and have not been requested by anybody, least of all the professionals in that department. I ask that she listen to these correct objections.

I am glad that the Liberal Democrats have been involved in objecting, and not just the Labour party, which is the main expert on industrial relations. It shows the authority of the genuine overall opposition—including on these Benches—to these really undesirable measures in a Bill that is widely unpopular among the people observing it. It is a pity that many are not bothering to observe it; they should be, because it is one of the worst examples of the Government’s illegitimate use of a so-called mandate based on 24% of the electorate. It is nowhere near a genuine majority of people in this country. People want proper, modern, civilised industrial relations that do not oppress trade union members.

I thank the Minister for her patience. She has the chance to indicate, either in her reply today or on another occasion, that, when the time comes, the Government will respond and make sure there is a definite change in the text of these clauses.

[Baroness Neville-Rolfe]

I thank Lord Mendelsohn for the amendment. This short debate has raised an important question about the proportionality of penalties for breaches in this area, and I want to emphasise the seriousness with which we should all view the requirements and obligations on unions. The impact assessment helps us to have a useful discussion in this House. It reflects conventions—I do not always agree with the conventions, as I am sure noble Lords opposite will remember, but penalty estimates are one bit of good practice that is rightly included when these assessments are prepared. I emphasise that it is not a target. It is about encouraging good compliance, including as a deterrent, and creating and maintaining public confidence by removing those unfit for union office and ensuring accurate trade union registers. Union leadership elections or political fund rules and ballots should all be carried out according to due process. Any irregularities, quite rightly, would raise concerns and damage confidence among not only union members but employers and the wider public.

We intend that the maximum penalty would vary according to the seriousness of the breach. This is a normal approach among regulators. Within this maximum, the Certification Officer may also set a lower penalty, depending on the circumstances of the case. In a number of areas that the Certification Officer regulates, he is currently limited to being able to make an order requiring the union to correct a breach. There is nothing to sanction a union that has failed to comply with a requirement, no matter how significant the failure. The additional option of a financial penalty being applied will ensure that appropriate sanctions are available as a remedy and a deterrent, as I have said.

[Lord Stoneham of Droxford]

Is the Minister going to give an example of where due process has not been followed which justifies extending enforcement powers?

[Baroness Neville-Rolfe]

The honest answer is: not this evening. Obviously, we are making the regulator more responsive. We are making some changes, and one of the things you look at when you review regulators is what the appropriate penalty regime is, and that is what I am proposing.

[Lord Stoneham of Droxford]

But normally when you reform a process, it is because something is not being enforced properly. I ask again: is there an example of where due process has not been followed?

Trade Union Bill

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Wednesday 10th February 2016 Lords Chamber

[Baroness Neville-Rolfe]

I thank my noble friend. That is certainly something we can look at.

I was asked for an example. In a trade dispute about pay, it would be reasonable to expect the union to state which year’s pay offer is in dispute, and which employees are covered by the offer. This may be done in some cases but in others it may not. I am concerned about a trade union simply stating the trade dispute, as proposed in Amendments 23 and 24. This would not ensure that the voting paper was sufficiently clear. Members need to know exactly what they are voting for—if there is a strike they lose money.

[Lord Stoneham of Droxford (LD)]

Is it not a reality that any ballot paper would have accompanying documents setting out the case for the vote. Surely that is where the detail should be, not on the ballot paper.

[Baroness Neville-Rolfe]

We do need clarity. I have listened to what has been said in relation to the reasonably detailed indication. We have heard from the noble Lords, Lord Collins, Lord Oates and Lord Pannick, about what that might mean in practice. I would like to reflect on whether we have got that right. Probably what everybody wants is a balance, so that there is sufficient detail and members can make an informed decision without unnecessary burdens being put on unions by asking them to include a long and detailed account of the trade dispute.

I turn to Amendment 25. Terms such as “action short of a strike” are too wide. The type of industrial action proposed will depend on the circumstances of each dispute and the industry concerned. It is important that members know which type they are voting on because of the different impacts on people’s lives. I reassure noble Lords that we have considered that there might be a degree of uncertainty when a union is drawing up its plans about what action it might subsequently take. But it must surely have in mind a plan for such action. All we are asking is that that plan is made available to members.

I am concerned that Amendment 26 would mean that there was no requirement to provide any information on the voting paper about the timing of industrial action, which is a key point. We want to avoid the situation where a member might have made a different decision had he or she realised when the strike would take place. For example, Unite conducted a ballot where British Airways staff voted to strike, but it is not clear that they would have supported the strike action had they known they would have been called out for 12 days over Christmas. We want to avoid that sort of thing.

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[Baroness Neville-Rolfe]

My Lords, I thank the noble Baroness, Lady Donaghy, for her amendments and for the contribution she made to industrial relations as chair of ACAS. I always listen very carefully to what she says because she knows so much about this important area. We also recognise the important part that negotiations play in reaching a resolution in disputes between unions and employers. One wants to avoid these where one can. I am grateful to the noble Lord, Lord Collins, for reminding me of the good partnership we had between unions and management when I was at Tesco.

Serving notice of an intention to take industrial action is the last stage in the process before a union may actually take such action. This is when continuing dialogue between the parties becomes even more important. This is why we are moving from seven to 14 days, thereby providing a longer period during which trade union and employer can discuss and strive to reach agreement on how best to resolve the dispute without recourse to industrial action. There is, of course, nothing to prevent a union and an employer continuing to negotiate after the notice has been served. Indeed, this happens already. Having a longer statutory notice period should not affect this.

We fully appreciate that a negotiated settlement is best for all concerned. It is better for the employer, the union and its members and—crucially—for the public. Those whose lives can be so affected should be confident that the law provides every opportunity to avoid such disruption.

The noble Lord, Lord Stoneham, asked about ballot paper dates. My understanding is that we will not require unions, when balloting, to provide a specific date. It is an indication of the time period; it does not have to be a specific date.

[Lord Stoneham of Droxford]

I thank the Minister for giving way. The point I was making was that, if unions put the date on the ballot paper, will that provide a defence that they have given notice?

[Baroness Neville-Rolfe]

We will come back to that. In the mean time, I will deal with a different point. I have a serious concern about removing the notice and instead relying on the indicated period from the voting paper, as suggested in Amendment 34. An indication is a much vaguer concept. People must have notice of the days when industrial action will take place, or they cannot make the contingency plans that we have been discussing. These can, of course, help to reduce costs on both sides.

The noble Lord, Lord Callanan, most eloquently made the point that strikes can have a wider effect and cause a huge amount of disruption—not only for businesses but for the public. The public need an appropriate amount of time to make contingency arrangements. My concern is that the noble Baroness’s amendment does not address this. Nevertheless, the noble Baroness has made some good and interesting points, on which I would like to reflect.

Finally, to return to the question asked by the noble Lord, Lord Stoneham, on whether a specific date on the voting paper would constitute notice, our answer is no.

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[Baroness Neville-Rolfe]

I am grateful to the noble Lord, Lord Stoneham, for his amendment and for bringing up his experience as a manager involved in a dispute.

The Government recognise that peaceful picketing is legitimate and lawful. We are not changing that. Equally, we believe that people have the right to go into work or about their daily lives without fear or risk of being intimidated. This is what we committed to in our manifesto. Picketing in Britain is governed by a framework of civil and criminal law, and is further guided by the provisions, as some have said, set out in the code of practice on picketing. I am pleased to say that most picketing is peaceful and, as the noble Lord, Lord Dykes, reminded the Committee, I said at Second Reading that most unions observe the provisions set out in the code. I say “most” as, regrettably, this is not so in every case.

A number of noble Lords have mentioned the Carr review, including my noble friend Lord De Mauley, and have gone through some of the submissions that were made to that review, which I will not repeat. The review was set up because of the intimidating tactics at Grangemouth, which I think shocked us all in 2013.

Furthermore, in response to a government consultation on this issue in July, nearly half of the 177 respondents stated that they had observed intimidating behaviour, either during picketing or more generally as a result of strike action. This included following staff from the picketing line, strikers bringing dogs to a picket line outside a school and alcohol being consumed on the picket line, leading to heightened incidences of intimidation. One union stated that more than half of its members had experienced intimidation of its non-striking union members.

Even more concerning was the increasing prevalence of intimidation online. Cameras are being used to take images of people crossing picket lines that are then posted online to name and shame them. These photographs are often accompanied by derogatory comments, images and innuendo. Another union, which similarly consulted its members, concluded that the current legal protections are not effective, particularly where low-level intimidation was involved. The CBI has also stated that its members have witnessed trade union activity that falls foul of current guidelines.

The Government are clear that this type of behaviour must be tackled, but it must be done in an effective and proportionate way. Therefore, while our recent consultation also sought views on other proposals, including a new criminal offence of unlawful picketing, we listened. The Government will not be taking these forward. Instead, we have committed to the fair and proportionate provisions of Clause 9. We will also update the code of practice, making clear what is expected in relation to social media, which on occasion has been subject to misunderstanding.

The provisions of Clause 9 are not new and unions will be familiar with them. They reflect the key aspects of the code on picketing, which has been around since 1992. Where they have been followed by most unions, these provisions have not raised concerns or prevented unions picketing. They are targeted at the activities of the minority of unions that do not follow the code. The CBI is equally of the view that while the code has encouraged positive behaviour, its current voluntary status does not ensure that all trade union members follow its guidelines. As we have heard, it has said that it would like to go further and that we should transpose the entire code into a statute. However, we are being proportionate and enacting only the relevant parts that will tackle the intimidation of non-striking workers. There has been a lot of interest in this area and I hope the Committee will bear with me as I go through the amendments briefly.

As the noble Lord, Lord Stoneham, said, we have discussed on many occasions whether we should have “may” or “must”. Neither of us has been entirely consistent. These reforms are preventive measures that should stop unacceptable and intimidating behaviour. They are directed at those unions that currently do not observe the guidance set out in the code. Making compliance with these requirements voluntary would completely undermine their effectiveness. It would also result in confusion with the guidance of the code of practice on picketing that should complement Clause 9.

The noble Lord, Lord Stoneham, asked me three questions, which I will seek to answer. He asked whether I accepted that the co-operation of unions is critical for peaceful picketing. I agree that it is. However, we want to ensure that it is easy for all those attending a picket line to identify who the responsible union official is and that is why we are asking for a picket supervisor to be clearly identifiable.

[Lord Stoneham of Droxford]

They already are, so why does that need to be statutory?

[Baroness Neville-Rolfe]

It is in the code, of course, but it is not in the legislation and it is not legally enforceable in the same way. As I have sought to explain, we have put the key provisions in the Bill so that they are observed. These are provisions that the vast majority of unions, as we have heard this evening, feel are entirely reasonable.

The second question related to concern that further legal action would mean that unions would distance themselves from picketing—I think I understood that correctly. The provisions in Clause 9 are perfectly reasonable and proportionate. The appointment of the picket organiser is already in the code and is well known to unions. I see no reason why unions should not comply with those provisions.

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[Baroness Neville-Rolfe]

That is a good question, but my understanding is that provisions relating to familiarity are not new. They have been in the code of practice on picketing since 1992. Familiarity with the code is not an onerous requirement; it is a necessity for the person who is going about their business.

I turn to interaction with the police. It is important that the police know who the picket supervisor is, how to contact him or her and where the picket is taking place. The supervisor does not have to be on the picket line all the time, provided they can return at short notice. It provides an extra safeguard where the police will be able to contact the supervisor should an issue arise on the picket line that does not require police intervention but would benefit from the picket supervisor’s advice.

The advance notice of such details, in particular the location of the picketing, should help the police to plan their resources in the event that something happens on the picket line which requires their attention. The provision to inform the police reflects the language of the code, which has not given cause for concern. The police are, of course, bound by the Data Protection Act and any complaints about the mishandling of personal data can be brought before the independent Police Complaints Commissioner and/or the Information Commissioner. I am not aware of any complaints of this nature related to picketing.

I move on to Amendments 48 and 49 and the letter of approval. As the noble Lord, Lord Collins, said, this has been the cause of significant misunderstanding and concern. We have listened and made amendments. There is now no requirement for any of the picket supervisor’s personal details to be in the letter. Following consultation, the Government tabled an amendment so that the letter seeks only to approve the picketing activity. We further fine-tuned Clause 9 to clarify that only the employer to which the trade dispute relates and at whose workplace picketing occurs will be entitled to see this letter.

I fear that removing this requirement for a letter would result in confusion on the picket line about whether the union has endorsed the picketing and appointed a picket supervisor. I am not sure whether that was the intention, but the substituted wording in Amendment 49 removes the words,

“as soon as reasonably practicable”,

and would make the provision to see the letter more onerous.

On Amendments 51 and 52, the appointed picket supervisor will be the main point of contact during picketing and will act as a source of knowledge so that picketing remains peaceful. That is in everyone’s interest.

Finally, I come to the matter brought forward in the other place by the honourable member for Haltemprice and Howden. The media portrayal of this issue of armbands has been frankly mischievous. The key part is that the picket supervisor must be identifiable. The reference to an armband already sits in the code and is, of course, an indicative example. There are other ways of being identifiable, for example, wearing a badge or having blue hair. However, it is clear that there are concerns. I will therefore reflect further on this matter before Report.

Clause 9 seeks to tackle the intimidation of non-striking workers in a fair and proportionate way. It will result in picketing that is peaceful and consistent in the way it is conducted. I therefore ask the noble Lord to withdraw the amendment.

[Lord Stoneham of Droxford]

I thank the Minister for her reply to these amendments. I welcome the support my amendments had from the noble Lords, Lord Monks and Lord Collins, and the noble Baroness, Lady Donaghy. I shall pick up one point the Minister made. She said that by making the code statutory we are going to get consistency of approach to picketing because there will be a statutory obligation. Frankly, if she believes that, I will believe anything because you do not get enforcement or consistency just by making something statutory.

I shall pick up one point made by the noble Lords, Lord De Mauley and Lord Callanan, in relation to the Carr report. I read the Carr report, and I was amazed that there were not more instances of bad behaviour because this is a very difficult area to control and discipline. Unions play a very important part in exerting discipline and control in these situations. I shall take up one example because a lot of the examples they gave were examples of criminal behaviour that could have been prosecuted. Let us take the example of a person who is under the influence of alcohol on a picket line. Do we want the police to go in and pull that guy out, in quite an inflamed situation? I am sure they would not do that as their first option. They would want a responsible union representative who is the supervisor of the picket line—which is provided for in the code—to go in and deal with that person and quietly persuade him to leave the picket line. If he is unable to do that and the person does not leave, there is a difficulty either way.

The problem will be if that individual, having tried to do that, is then prosecuted because he has not fulfilled the statutory duty that is now laid down for picketing. Who in the union movement is going to take on the job of picket line supervisor when they could risk being taken through the courts? I have seen it happen to an individual from the shop floor. It destroys their life because they are not used to it, and it is irresponsible. Anybody who has seen that will know that nobody in their right mind in the union movement would easily take on that responsibility. The point that we are trying to make is that the code, by being voluntary, encourages people like that to help enforce consistency and order in the picket line, and if you make it statutory you will complicate the situation and deter that sort of behaviour. That is the problem. However, I withdraw my amendment.

Trade Union Bill

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Wednesday 10th February 2016 Lords Chamber

[Lord Stoneham of Droxford]

I suspect that one reason the noble Lord, Lord King, did the deal with the TUC was that he knew that every 10 years there was going to be a ballot on the political funds in the unions, of which there have been three or four. So every 10 years all trade union members are reminded that they contribute to the political fund, and they have the option of voting it down if they wish to do so. Surely that is pretty transparent.

[Baroness Neville-Rolfe]

I thank the noble Lord for mentioning that because I am going to talk about the 10 years in a minute.

Clause 10 seeks to address the previous point by adopting a transparent opt-in process for union subscriptions. Additionally—in response to the point made by the noble Lord, Lord Stoneham—the only time a union member is informed of their choice to contribute is at the time of a political fund ballot, which happens only once every 10 years. Ten years is a long period of time to update members with the information they need about political fund contributions and activities. Clause 10 provides that members should decide whether to contribute every five years. This will ensure that members make their choice based on more current and transparent information of spending on political activities.

Moreover, the move to an opt-in approach for union members to contribute to political funds is in line with current best practice more broadly; that is an important point. I shall give two examples. In consumer law, reforms have reinforced transparency for consumers when they are charged for goods and services. The consumer rights directive was implemented in the UK in 2014. This reform reinforced the concept of express consent. Traders need the active consent of the consumer for all payments. Pre-ticked boxes are not permitted. Moreover, the Information Commissioner’s Office provides guidance on best practice in relation to direct-marketing communications. This recommends that best practice is to provide an unticked opt-in box and invite the person to confirm their agreement by ticking.

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[Baroness Neville-Rolfe]

I agree with my noble friend. These are important decisions, and there are differences between us on the various Benches. But the Bill will make the default position for a member to exercise a positive and up-to-date choice in line with what I see as best practice.

[Lord Stoneham of Droxford]

I hope that the Minister is going to come to this point. Given that she is one of the pioneers of the digital world, surely she must accept that that is also something that the Government must consider—otherwise people will say that they are trying to deter people.

[Baroness Neville-Rolfe]

As is so often the case, the noble Lord makes a good point. Perhaps he will give me a minute. I wanted to say that we will not be discussing Clause 11 until another day, but it provides for the transparency of expenditure and information that members need to make a sound decision. I am clear that these changes are proportionate and for the benefit of individual members. They are not aimed at what unions decide to spend their money on but provide a transparent choice for individual members.

I now turn, for the benefit of the noble Lord, Lord Stoneham, to Amendments 57 and 64 on giving notice via electronic means. I recognise the arguments that have been made in favour of electronic means of communication and have acknowledged in the Bill’s impact assessment that there are extra costs for unions in communicating with their members. I can see that moving to an electronic means of communication would help reduce the burden of postage costs for both unions and members, but particularly for unions at a time when they are going to have to contact members to make an active opt-in to the political fund.

Trade Union Bill

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Monday 8th February 2016 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, the simple point is that we need to be assured that the electronic ballot will give us a safe and secure outcome. I have heard from many noble Lords, including my noble friend Lord King, whose conclusion I agree with, that the fullest turnout is the best safeguard against a wrong result. Frankly, that has been the spirit of several comments this evening. I want to ensure that we take fully into account noble Lords’ detailed knowledge of these matters and experience of how we can get round the difficulties on electronic balloting. I want to reflect further on the very excellent arguments we heard today. I ask noble Lords not to press their amendments.

[Lord Stoneham of Droxford]

Before the noble Baroness sits down, I am sorry, but I asked three questions, none of which has been answered. I will not go into all three, but first, have the Government talked about the CAC’s experience of dealing with workplace ballots? Secondly, will she tell us whether the Conservative Party regards the ballot it recently had for its mayoral candidate as safe and secure?

[Baroness Neville-Rolfe]

My Lords, I did try to answer in passing the noble Lord’s questions. I think that I answered all three of them. We are satisfied that the arrangements used in London were appropriate for the purpose, but as I have sought to explain, this is a little different. We need to reflect further on the best way to conduct electronic balloting, which we have agreed to in principle.

Business: Advice Services

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Tuesday 8th December 2015 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, the Manufacturing Advisory Service is, indeed, part of the Business Growth Service. As I have explained, we are doing things differently. In future, businesses will be able to get their support from local growth hubs. We have a strong menu of support through the British Business Bank, start-up loans and in other ways, but the main way to secure success for small businesses is to have the right framework to progress profitable activities. Of course, that means growth, a lesser burden of red tape and of rates and so on.

[Lord Stoneham of Droxford (LD)]

My Lords, three years ago the noble Lord, Lord Heseltine, in his report No Stone Unturned in Pursuit of Growth, remarked on the inconsistency of support for small businesses through government policy. With this change, are the Government still on the side of inconsistency, and will they act on his other recommendation to strengthen, through extra resources, local chambers of commerce and LEPs to provide greater support and consistency to allow small businesses to grow?

[Baroness Neville-Rolfe]

I am delighted that the noble Lord mentioned LEPs because, of course, LEPs bring together chambers of commerce, business interests and local authorities. The growth hubs that I mentioned are indeed part of that LEP network, which already has 31 hubs and will have 39 by next April.

Enterprise Bill [HL]

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Monday 30th November 2015 Lords Chamber

[Lord Stoneham of Droxford]

My Lords, I think we established in Committee that the current, ongoing consultation has departed from the objective of the enterprise Bill we were looking at in January, which was to introduce the PRA, the parallel rent assessment. The Minister told us in Committee that there were two reasons for this change. One was the cost to the sector of £600,000, and the second was about trying to do away with complexity. However, there was also the slight suggestion, as the discussion developed, that there had been some oversight here, and I would just like it clarified that this was intentional and that the Government have gone back on the previous legislation.

My former colleague, the noble Baroness, Lady Wheatcroft, said that we should continue the consultation now it has started, but the consultation started on a basis which the legislation did not provide for. The intention of the legislation we looked at in January was to have a parallel rent assessment, which was part of the further protection for tenants in this whole process. I would like some confirmation on that, but we remain sympathetic to this amendment because it basically restores what we agreed in January.

[Baroness Neville-Rolfe]

My Lords, I thank the noble Lord, Lord Mendelsohn, for his amendments, and the noble Lord, Lord Snape, for bringing his knowledge of the industry to our debates yet again. I also thank my noble friend Lord Hodgson for his contribution. As always, his knowledge of the pub industry is helpful to our consideration, and I am grateful for his considered analysis of the amendments. My noble friend Lady Wheatcroft was right to say that consultations are ongoing—lively ones, I understand—and that we should allow them to continue, although I will discuss that in a bit more detail.

I used to contemplate the subject of pubs with great enthusiasm, reflecting a very positive consumer experience over many years—with four sons and a husband who likes a pint—but I understand the feeling on the House on this issue, so I will try to explain where I think matters stand and then address in turn the amendments on market rent only, on parallel rent assessment and on gaming the system by company avoidance. Pubs were never part of the Bill, and I, at any rate, was taken aback by the turn of events ahead of our debate in Committee. I have attempted to do what I can to engage with noble Lords about their concerns and get us back on track, and I am very grateful to the noble Lord, Lord Mendelsohn, for his courteous words.

My first point is that we will shortly be issuing a second consultation, which will complement and clarify the one issued on 29 October, which had such a poor reception from the Committee. The Government have listened to concerns about the timing of the consultation. We cannot withdraw Part 1 and reissue the consultation as one document without delaying the whole package beyond the May deadline, which many stakeholders want to meet. Therefore, to meet the concerns expressed, we instead intend to extend the deadline for responses to the first consultation well into the new year. This will give stakeholders more time to look at our proposals in the round and respond to them as a whole. The Government have asked open questions in the consultation document, will ask more in the second consultation document and will carefully consider the material received from all respondents. The results will inform the content of the regulations, which of course will have to be debated in both Houses of Parliament, as we agreed earlier, on the affirmative resolution procedure.

Amendment 70ZC relates to MRO conditions and triggers. I listened carefully in Committee to the noble Lord, Lord Whitty, who I think cannot be here today, and the noble Lords, Lord Snape, Lord Berkeley and Lord Mendelsohn, and have of course heard what has been said today. The Government have heard the strength of feeling from noble Lords and stakeholders in response to our proposal in paragraph 8.12 of the first consultation and draft Regulation 15(b) that the tenant will have access to the MRO option only if the rent review proposal shows an increase in the rent that they are currently paying under the tenancy agreement. This proposal was based on an assumption that the amount payable would be expected to rise at each rent review and so MRO could be triggered in most cases. The Government intended this to be a proportionate intervention—there has never been any expectation on the Government’s part that it could or should defeat the statutory duty to introduce the right to MRO at rent assessment.

Since the publication of the first part of the consultation, we have been told that the effect of existing rent indexing arrangements and current trends in rent settlement figures would be to limit significantly the number of times tenants would, on the basis proposed, be able to exercise the MRO option at the time of their rent assessment. This was never the Government’s intention. We would be greatly concerned if it were to be the practical effect of our draft regulations. The Government believe that it is important to ensure maximum clarity on this issue and to obtain evidence of any and all unintended consequences. We will therefore take the opportunity of the second consultation to ask for consultees’ views on what would be the effect of removing from the draft Pubs Code the condition that there must be a proposal for an increase in the rent at rent assessment before a tenant may exercise the MRO option.

We also note the concerns regarding other MRO option triggers, the concerns of the noble Lord, Lord Mendelsohn, about the definition of price lists and other points. Again, there will be questions in the second part of the consultation that seek stakeholders’ views and allow those issues to be properly considered. It may be worth reflecting on the fact that allowing the current consultation to proceed alongside the first one, rather than passing the amendment today, would avoid the situation where the Pubs Code rests on two separate pieces of primary legislation, one of which would not become law until after the Pubs Code is intended to be in place—which could of course create legal uncertainties. I would also say that, protest apart, Amendment 70ZC is unnecessary, as existing powers in the SBEE Act 2015 permit the change in wording, should that be the outcome of the consultation.

I turn to the second amendment in this group and the issue of the relationship between the parallel rent assessment and the market rent only option. The noble Lord, Lord Mendelsohn, was kind enough to suggest that he thought that we had made progress in that area, and I hope that we can find a way through. The first part of our consultation on the draft Pubs Code set out that we would not be providing for a separate PRA process within the code. It may be helpful for me to explain the Government’s logic.

Before the market rent only option was put in the legislation last November, the PRA was the Government’s key remedy for delivering the principle that tied tenants should be no worse off than free-of-tie tenants. At this time, the supporters of the MRO option, the Fair Deal for Your Local campaign and its constituent groups, were opposed to this approach—understandably, given that they supported MRO as the key remedy for unfairness. They and stakeholders from all sides have also provided detailed comments on the operation of MRO that the Government have taken on board in drafting the regulations setting out the MRO option.

For example, the Save the Pub group wrote to the Government last year, and I think it would be helpful to read a brief excerpt. It said:

“A parallel rent assessment has been proposed which I believe all parties to this dispute have agreed, for different reasons, is unworkable. The tenant organisations have highlighted that, whilst a useful informative tool in the right hands, the method is time consuming and complex and should only be used in conjunction with the MRO option as a mechanism to calculate which agreement (tied or free of tie) would deliver the most likely sustainable/profitable future for the tenant”.

I could not have put it better. Similar feedback on the potential complexity of PRA was received from pub companies and their representatives.

So when the Government made a commitment, on Report in the Lords on 9 March, to include PRA in the Pubs Code, we went on to say:

“I am always keen to minimise bureaucracy, and as I said earlier it is our intention to streamline and integrate the two processes as far as possible, but we need to do the detailed work and process mapping to understand where and how the processes dovetail. This will benefit from further formal consultation, which will inform how we set this out in secondary legislation”.—[Official Report, 9/3/15; col. 464.]

It is this streamlining and integration that the Government have undertaken to inform their draft proposals in the consultation so that, as was suggested to us at the time, the PRA can be used in conjunction with the MRO option.

We therefore propose that the MRO process should allow the tied tenant to use the MRO offer to make an informed choice between two options—a tied rent figure and a parallel free-of-tie figure. These would both be subject to independent third-party scrutiny and based on evidence prescribed in the Pubs Code. I understand that at least some tenant representatives see no need for a parallel rent assessment as a separate remedy for the no-worse-off principle, as this amendment could require. I can also say today that engagement will continue throughout the consultation period with all sides of the debate. Indeed, Small Business Minister Anna Soubry will continue discussions tomorrow in round-table meetings with tenant groups and pub companies.

The hope is that, under our consultation proposals, the Pubs Code regulations can deliver PRA as part of the MRO process. Our intention is—and we are consulting on this—that the regulations will ensure tenants are provided with a detailed comparison of a tied rent in parallel to a free-of-tie rent, which will deliver the no-worse-off principle. If there are concerns that, in incorporating the key elements of PRA in the MRO procedure, the Government have made the process too “time consuming and complex”, the Government need to hear this through the consultation. If there are views that there is not enough information being required of pub-owning businesses and that PRA needs to be implemented in another way, the Government wish to hear that, too, again through the consultation. To give all sides time to study the proposals, the Government have decided to extend the consultation deadline to after the busy Christmas period.

--- Later in debate ---

[Lord Stoneham of Droxford]

My Lords, I said in Committee that there are a number of aspects the Government should be looking at. One was that they should retain some flexibility for dealing with special cases, particularly where value for money was involved. Given all the reforms in the public sector that will be required in the next few years, to miss out on the opportunity to compensate people who will be involved in those, and hit them with caps when they are seeking to co-operate, is not progress in any respect. We pointed out in Committee, as the noble Baroness, Lady Donaghy, did this evening, that these measures are not just aimed at people in the public sector on high pay. They are aimed at quite low earners who, because of long service, could reach the proposed cap. That is unfair. We have also heard that pension arrangements struck only quite recently are being further undermined by imposing this inflexible cap. For these reasons, we hope the Government will show some flexibility on these amendments, to give them the capacity to respond to the injustice they are creating through a commitment they made at the general election without really realising the unintended consequences.

[Baroness Neville-Rolfe]

My Lords, I am grateful to the noble Baronesses, Lady Hayter and Lady Donaghy, for their amendments and their comments. I will begin by setting out why it is important to cap the highest exit payments in the public sector. The Government have taken a range of difficult decisions on public sector pay. Measures to restrain pay growth in the public sector have not been easy or popular, but they have worked. The OBR estimates that the resulting savings will protect the equivalent of 200,000 public sector jobs in this Parliament. The cap is a smaller measure, but it is being taken in the same spirit and for the same reasons. It will not have any impact on the large majority of public sector workers. It is focused on the highest payouts and will affect only the top 5% in value of all exit payments made in the public sector. In those limited cases where the cap will bite on middle-earners with long service, I hope to show why this measure is a fair and proportionate course of action. It will still allow such public sector workers to receive payments of up to £95,000 and retire with guaranteed and index-linked defined benefit pensions, which are likely to be far more generous than those received by counterparts in similar roles in the private sector.

Amendment 70ZG is concerned with appropriateness and value for money, but it is not necessary or desirable. There is already a fundamental duty on the public sector to ensure that exit payments are value for money and that they are made in the most appropriate manner. This is a principle that will run through my comments.

Furthermore, along with fairness and proportionality, appropriateness and value for money will be the starting points for the guidance that this clause and the draft regulations mandate. The guidance, which will be binding, will set out when a decision-maker should exercise the power to relax the restrictions imposed by the cap and in what circumstances. The guidance will do more than simply restate two well-established principles; it will set out how the principles should be applied in practice. This will ensure that proper scrutiny is given to exit payments and that employers act with discipline and proportionality. The draft guidance will be consulted on and will be published alongside the regulations when they are considered by this House. Accordingly, the Government agree with the spirit of the amendment but believe that this clause goes further. It allows for clear and detailed guidance on the policy and will set out how the underlying principles should be applied.

Turning to Amendment 73A, the potential inappropriate use of settlement agreements and exit payments more widely is precisely why our clause requires approval by a Minister of the Crown, rather than the employer, when relaxing the cap. Ministerial or full council approval means that the power will be exercised objectively and only in exceptional circumstances, set down in guidance, to prevent circumvention and misuse. The power will be discretionary to allow for unique and novel situations. Regulations, as opposed to guidance, stipulating what such situations would be would limit flexibility. The multifaceted consideration that would be needed would not lend itself to the structure and prescriptive nature of regulations.

Amendment 70B, on pensions, was discussed both at Second Reading and in some detail in Committee. I appreciate that any discussion of pensions raises concerns and that good pensions are an important part of public sector remuneration. However, the proposal should be put in context. The Government are a strong supporter of public sector pensions. As has been said, strong new defined benefit pension schemes for public sector workers, protected by a 25-year guarantee, were introduced in the last Parliament—and this at a time when most private sector employers have said that defined benefit schemes are unaffordable and are moving away from them.

The noble Baroness, Lady Hayter, asked about the 25-year guarantee. This measure addresses exit payments, not entitlements to pay or pensions. The cap has no impact on an individual’s accrued pension and does not change the protected elements of the 25-year guarantee. A small minority of public sector workers to whom the cap applies will still be eligible for substantial taxpayer-funded increases in their pension entitlement.

There are fundamental reasons why an exclusion of employer-funded pension top-ups would not be desirable, and I should start by being clear that the issue we are debating concerns not retirement but redundancy. Any earned pension that has been accrued is untouched. The pension lump sum that is often paid as part of a public sector pension is outside the cap and does not count towards it. Instead, the pension costs that we are discussing are additional top-ups funded by employers when individuals depart early. The top-up payments, which provide an income stream from the day you leave, can greatly increase the value of pension payments above the level that has been earned through years of service.

In Committee, the noble Baroness gave several examples of public servants who might be caught by the cap. We have looked at these examples using assumptions, including of likely earnings. Of course, I accept that in the world of pensions different assumptions can always be made but, using our assumptions, we have found the following.

In the example of a librarian on £25,000 with 34 years’ service, we have found that an additional £95,000 pension top-up from the employer would in fact be enough to allow that person to retire on an unreduced pension at the age of 52. The same is true of the noble Baroness’s examples of a prison warder, whom we have assumed earns £28,000, retiring at 52 with 25 years’ service, and a school inspector, whom we have assumed earns £70,000, leaving at 56 with 16 years’ experience. In those cases, only if an additional redundancy lump sum were received on top of the pension strain payment could the cap be breached at all. In the cases of the prison warder and the school inspector, the additional cash redundancy payment would have to be more than £37,000 and £50,000 respectively before the cap could be breached.

Enterprise Bill [HL]

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Wednesday 4th November 2015 Grand Committee

[Baroness Neville-Rolfe]

My Lords, I am in some difficulty because we are still designing the sale process. I know that the noble Lord has been in meetings where we have tried to explain the situation, and he has asked lots of questions. We have to try, with the House’s help, to find a way through. I have tried to explain some of our expectations and what we are trying to achieve, which I do not think is a million miles away from what others here want to achieve.

The noble Lord, Lord Teverson, rightly asked a question about the Royal Mail and whether the controls over it helped us in terms of a precedent. Actually, his comments show how valuable it is that we have introduced this amendment in Committee rather than leaving it until Report because he has asked some very good questions, and the Bill will of course go on to the other place. The simple answer on the Royal Mail is that it is regulated because it is designated as a universal service provided by Ofcom; it is not itself controlled by legislation. The same is true for other utilities, such as water companies, that choose to operate in a specific sector.

I understand that noble Lords will want to reflect on our discussion. The Government too will of course reflect on the discussions raised and on the amendments proposed. I note that noble Lords wish to debate this on the Floor of the House.

I said that I would respond on the question asked by the noble Lord, Lord Mendelsohn, about public interest in the GIB. The public interest lies in the GIB having a strong and secure future in the private sector as a green institution, and securing the best value for money for UK taxpayers.

I agree with my noble friend Lord Cope of Berkeley that it was right to raise this in Committee. In view of today’s discussion and the points made by noble Lords, I will withdraw my amendment for now and the Government will retable it on Report.

[Lord Stoneham of Droxford]

Can I just clarify one thing? I accept that the Minister says that she will withdraw her amendment. She said that she agreed with most of the points in my amendment, and that Parliament will be properly consulted. Given the uncertainty, what is the problem with putting some procedural amendment—I took my drafting from the Postal Services Act—in the Bill? Why cannot something like this be considered? I ask her, with due respect, please to consider coming back with a fuller amendment rather than something that gives the Government a complete blank cheque, which will not be acceptable in this House or the other.

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[Lord Stoneham of Droxford]

My Lords, as housing associations have been designated as part of the public sector, I ought to declare my interest as the chairman of Housing and Care 21. I will refer to the housing sector in the course of my remarks on these amendments. Personally, I have deep concerns about this. We know that it was a manifesto commitment of the governing party. It was a good selling point for them because it was populist, but I fear and know that it will result in poor legislation and will have unintended consequences.

I am one of those who is immensely worried about management capability in the public sector with all the demands to reform, change and improve it. But here we are, again putting public sector staff at a disadvantage as against the private sector at a time when, frankly, that sector remains rampant in terms of its conditions, benefits and even its pay-offs, certainly for high-level staff. We will find as a result of this change that we have further difficulties getting the managers that we want for these very difficult jobs, where we are trying to get change and reform. It is not easy and the very best people are needed. I have said this before but 100 good managers are worth £1 billion in public spending. This puts them at a disadvantage.

The noble Baroness, Lady Donaghy, said that this does not affect just the high paid. It also affects some of the lowest paid in the public sector, for all the reasons she set out. This is not simply a populist measure because it deals with the high paid; it affects others. Pensions are the main problem here. There are generous aspects of public sector schemes but we have recently been through a renegotiation on a lot of these and we are now going to break them once again. What is the Government’s word going to be worth in these situations where contractual obligations are being overruled by legislation?

I will give one example from the housing sector. The most difficult job in my career is making changes where people have to be made redundant. I always find it painful, but I have always ensured one thing—you have to show other employees that when you make changes you look after the people who are vulnerable in that situation. Whether we like it or not, we are going to face those situations in the next five years. We have never before seen the reform and change that is going to come in the public sector on the scale that is coming. We will know more when we see the public spending commitments but it is huge. At this precise moment we are undermining morale and will increase resistance to change.

In every housing association I have chaired we have had to make changes and we have sometimes had to make payouts in excess of £100,000. However, I have never regretted doing so because we have saved millions in return. If we give up these opportunities for change by putting in inflexibilities which make change more difficult, it will hold up reform and improvements that need to be made.

It is absolutely essential that there is some flexibility here. Normally, there would be a ministerial guideline that all payments above a certain level should be approved. That should be a normal management guideline instruction, and if this was not part of a populist general election commitment, it is what would happen. It would be the best thing for the public sector. It would provide restraint and a guideline on what is appropriate. Above all, it would provide flexibility for those who deserve payment and need to be protected. That is what should happen, so anything we can do in this legislation to provide a loophole and some flexibility must be welcomed. Ministers will regret not doing it in a year or two when they are finding it difficult to get change in the public sector or when they are trying to get people to believe agreements they want to make. People will say, “Well, you made an agreement a year ago and you broke it. It was on pensions, something that is pretty important, and you just it let it go, so why should we trust you now when you are trying to make even bigger changes?”.

Equity, sensitivity and trying to get change are important issues and are going to be very important in the next five years. Any Government that go into these changes wearing these handcuffs will find it very difficult to get change and improvements, nor will they deserve to do so. At the end of the day, change is painful and difficult for the employees in the sector where it is being done. They need to be able to say that the people who are being sacrificed for change are being well protected and that their agreements are being honoured. That will actually help achieve change quicker. I hope the Minister will assure us that on Report they will look at giving themselves some flexibility. That will be welcomed.

[Baroness Neville-Rolfe]

I am grateful to noble Lords for their comments. At the outset, I shall address the point that the noble Baroness, Lady Hayter, made about whether the cap had been extended deliberately. First, £95,000 is a large exit payment, whatever the level of an individual’s former salary. The Government do not believe that the taxpayer should continue to fund exit payments larger than that. The clause allows for the cap to be relaxed, including to take account of exceptional individual circumstances. The large majority of workers are not affected by these arrangements; for example, less than 2% of recent exits in local government would have exceeded the cap. But where generous early retirement provisions are offered that include immediate payment of unreduced pensions, some lower-paid staff with very long service can currently be eligible for exit packages above the level of the cap.

The Government recognise the importance of exit payments in providing workers with support as they get back into employment or enter retirement. However, the fundamental point is that the Government do not believe that it is fair for taxpayers to continue funding the small minority of exit packages that cost over £95,000. The Government made a clear commitment in their manifesto—the source of the figure—to end six-figure exit payouts for public workers.

The noble Baroness, Lady Donaghy, asked about consultation; she said that it had been inadequate. The measure has been public for a long time. We announced the intention to legislate in May, I think, in the Queen’s Speech. We received over 4,000 responses, and do not believe that that suggests that there has been insufficient time to comment. Obviously, the measure will go through full parliamentary scrutiny during the passage of this Bill; we discussed it at Second Reading, are discussing it today, and I am sure that it will be discussed again. I express my thanks to the noble Baroness for her positive comments about some of the exclusions, which she has rightly highlighted. She also asked about the impact assessment. It is not a private sector impact, so it does not go through the RPC. There was an impact assessment as part of the consultation, which followed the usual criteria set out in government guidance. I do not know whether she has seen that; if not, obviously I will send it to her. I understand that the public had an opportunity to comment on it.

It is currently possible for employers to use taxpayers’ money to fund excessive exit payment, as a substitute for good management practice. I remember the noble Lord, Lord Stoneham, saying at Second Reading how important management was. I think he said that 100 good managers were worth a billion pounds. The availability of very large payments can lead to issues of poor performance. The possibility of redeployment is not always given adequate consideration, which we would all like to see. The cap and the additional scrutiny it brings to payments will encourage employers to act with discipline and proportionality in considering public sector exits, and will help to ensure that good management practices are embedded in decision-making.

Amendment 53A seeks to increase the value of the cap to £145,000, a much higher figure. It would require taxpayers to continue to fund six-figure exit payments for public sector workers. Statutory redundancy pay is of course capped at £14,250. Exit payments of £145,000 would of course represent payouts of 10 times that amount. A cap even at the level proposed by the Government will not affect the large majority of public sector workers, as I have said. For the few who receive such payments, the cap does not reduce their compensation to an unreasonable amount and still compares favourably to the private sector. In addition, as I have said, the clause applies for a waiver power to allow the cap to be relaxed in exceptional circumstances.

Enterprise Bill [HL]

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Monday 2nd November 2015 Grand Committee

[Lord Stoneham of Droxford (LD)]

The noble Lord, Lord Stevenson, has masterfully summarised the amendments. I put my name to Amendments 52F and 52P in the interests of trying to improve the processes. In the interest of brevity and trying to improve the timescale, I am happy to give my support formally.

[Baroness Neville-Rolfe]

I thank my noble friends for proposing these amendments with such swiftness and efficiency, and I shall try to do them justice. The noble Lord, Lord Stevenson, has done fantastic work today in covering so many areas that are usually addressed by others on the Front Bench. As always, I thank the noble Lord, Lord Stoneham, for his involvement.

I appreciate that there are concerns, which I share, that an effective business rates system should be based on businesses having a good understanding of their tax bill, underpinned by shared and transparent information. The amendments are about sharing information with the payer. Business rates are determined by taking account of a comparison with other properties. However, it follows from this that the Valuation Office Agency collects and holds commercially sensitive data. For example, it may hold information on the precise terms of rental agreements reached for a group of properties. The VOA has a legitimate duty to protect that information and the interests of the ratepayers who have provided it. That is in everybody’s interests, so we make no apology for having a rigorous system for handling and protecting sensitive information, an important general principle in life.

Enterprise Bill [HL]

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Monday 26th October 2015 Grand Committee

[Lord Stoneham of Droxford (LD)]

I support what the speakers so far have said, particularly the noble Lord, Lord O’Neill. This is an issue of confidence. Either the Government have confidence in this appointment and are prepared to give it powers and independence or we must ask whether it is really worth having it.

We will be raising this later, but if the powers of intervention are to be limited simply to other businesses rather than to look also at the role of public authorities, it is understandable why the Government are trying to circumscribe the position. Under other amendments, we will look at whether the commissioner should have a wider role. Nobody will say that other public authorities are not just as bad at times in dealing with their suppliers as some parts of the private sector. We must ask why they should not be included. If that is the case, the position clearly needs greater independence, rather than being responsible simply to the Secretary of State. For all those reasons, I very much support the amendments.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, I thank the noble Lord, Lord Mendelsohn, for opening the debate with his amendments. He is always a great charmer, but the power of argument matters too. I particularly thank him for his kind words to my officials—it is a bit like being photographed alongside the Minister in the media: they have to buy a round of cakes for the office—but I thank him in any event because, as he said, they are giving us a lot of support right across the board.

I thank the noble Lord, Lord Stoneham, with whom I spent hours on the small business Bill looking at some of the issues that I think we will probably visit over our next four sittings. I will come back to the public sector on later amendments, in the interests of time.

The Small Business Commissioner will be a valuable source of advice, information and support for small business, and, if I may say so, I think that we are all agreed that it is vital to find a person of talent and good judgment to carry out this very important role. We are very serious about tackling late payment, as noble Lords know. We are doing that not only in the provisions of the Bill but with a number of other provisions which we ran through on Second Reading.

As I said then, my view is that the commissioner does not need to be able to address any and every problem in order to be effective. Indeed, I believe that focus is an important ingredient in success. A commissioner who has a focused remit and great personal authority and credibility will have a significant impact on culture and practice—as we have seen in Australia, where the Small Business Commissioner’s role has been focused on priority issues in the Australian circumstances. This first group of amendments addresses the independence of the commissioner from the Government. Obviously, I understand noble Lords’ concern that the commissioner should be able to act independently. That is our intention, just as it is important that the commissioner must act independently of business.

Under the Bill as drafted, the commissioner will be required to act impartially in deciding complaints and when providing general advice and information, and the very fact of being set up by Parliament lends the office permanence and authority. Amendments 1 and 3 seek to remove the power of the Secretary of State to appoint and dismiss the commissioner and to give this power instead to Her Majesty. The fact that the Secretary of State will appoint the commissioner will not compromise the independence of the office. This will be a public appointment subject to all the usual public appointment rules and procedures.

As noble Lords will be aware, a great many appointments in public life are made in this way. The Commissioner for Public Appointments is the guardian of the process and ensures that the best people get appointed to public bodies free of personal and political patronage. The OCPA code of practice requires those making public appointments to comply with three principles: merit, fairness and openness. It is designed to provide Ministers with a choice of high-quality candidates, drawn from a strong and diverse field.

It is normal practice for public appointments to be capable of termination by the Secretary of State if he is satisfied that the person is unable, unwilling or unfit to perform his or her functions. The wording is carefully chosen and he or she cannot dismiss the commissioner at will. These grounds for dismissal reflect the approach that Parliament has been content to approve for the Groceries Code Adjudicator and the Pubs Code Adjudicator.

I agree with the noble Lord, Lord O’Neill, that we need to find someone excellent for the job but the power in Clause 11 for the Secretary of State to abolish the office of Small Business Commissioner is not one that could be used as lightly as the noble Lord suggests. The Secretary of State could abolish the commissioner only following a review, and only if he is satisfied that either there is no longer a need for a commissioner or that the commissioner’s role has not been fully effective. Any regulations to abolish the office of commissioner would be subject to affirmative resolution.

If the role of commissioner is no longer required—either because sufficient improvements have been made in the issues the office is being set up to address or because it has proven ineffective in tackling them—it is right that there should be a clear and efficient process in place to abolish it, as my noble friend Lord Eccles said at Second Reading. To respond to the noble Lord’s challenge, I think it is a very attractive public job, which, if circumstances were very different, I might even be thinking about myself.

I am aware that the Delegated Powers and Regulatory Reform Committee has published recommendations in relation to this clause, and I confirm that we are considering those recommendations closely and will bring forward amendments where necessary.

Amendments 4 and 5 would remove the ability of the Secretary of State to provide staff to the commissioner and would enable the commissioner to recruit his or her own staff.

--- Later in debate ---

[Lord Stoneham of Droxford]

I thank everybody who participated in the debate. It was very interesting and I am very grateful for the support that I seem to be getting from the noble Lords, Lord Hodgson and Lord Cope—I accept only in part—the noble Baroness, Lady Byford, and the noble Lord, Lord Mendelsohn.

The points made by the noble Lord, Lord Hodgson, were very apposite. I agree entirely with his three stages of commissioning, operations and payment. I accept that that is widening things considerably. I could welcome that but I also have some sympathy for the Minister, who is trying to get some focus. I am prepared to accept what the noble Lord, Lord Cope, is saying—that the main area is payment—but inevitably, as whoever is dealing with this is trying to focus on these issues, that person will be drawn into issues of commissioning and operations as well as payment. If there was an argument saying, “We want focus”, I could accept that the first stage would be to look at payment and then, if we are not resolving things as we like, we can look at commissioning, the monitoring process in the public sector and so on, if those are the subsidiary issues. So I can accept the argument for focus.

The noble Lord, Lord Mendelsohn, was saying how important it is that the whole culture here is all-embracing. This is why I find the Minister’s response quite disappointing. On the one hand she is saying, “We’re making a lot of improvements, the Government are committed to this. We’re having mystery shoppers, and that’s improving things”. If that is the case, what are we frightened of? If we are saying that the Government are making improvements, why do we not monitor it? Why do we not allow the Small Business Commissioner to say, “It’s amazing—I had a number of complaints in the private sector but because of all the work the Government are doing, I have to say that I am mightily impressed by the progress there, and as a result we have very few cases”. Therefore, if the work that is being done is successful, there will be less of a burden on the Small Business Commissioner, which will be welcomed.

The Minister made a very telling point. She was saying that obviously, if we are legislating on the private sector, the public sector will have to behave as well. Anybody in the private sector looking at this will say, “You’re putting all the burden on us and you’re not prepared to have the guts, the courage and the confidence to say, ‘We’ll allow the public sector to be measured as well’”. Call it clearly. If we have the confidence and are determined, we should include that.

[Baroness Neville-Rolfe]

I was trying to make the point, with rather a long list of what we tried to do in the public sector to put our house in order—alongside the noble Lord, Lord Stoneham, for a number of years—that we brought in the Public Contracts Regulations 2015 and a number of changes, and we are trying to measure and look at that. It seemed that what we are doing there and how we are monitoring is relevant to the issue of what the priority should be for the Small Business Commissioner that we are setting up. We believe that the prime focus of the commissioner should be on late payment, particularly when there is an imbalance of power between big business and small business, which has been a recurring issue that noble Lords on both sides of this House have been worrying about.

--- Later in debate ---

[Baroness Neville-Rolfe]

My Lords, small businesses caught by this Bill are those with fewer than 50 employees —so 49 or fewer. To further refine that, we can add extra provisions by regulation, provided those are in accordance with EU law. I do not think we have tried to lay down what constitutes a big supplier but I will certainly look again and come back to the noble Lord if I have anything to add. I do not have anything further on that.

[Lord Stoneham of Droxford]

I am grateful for those various interventions. There were so many, I am not sure I can respond to them all but I will try.

First, I intended that this general reference to public authorities would include local authorities, for the very precise reason given—that it is more likely that it will be a small business which deals with a local authority. I intended that and if I have not got it right I hope that as we go forward we can look at that further. I am grateful to the noble Lord, Lord Hodgson, for developing his argument with me. I will return to and look at this further because I think it is right.

However, the critical issue here is the words “imbalance of power”. The imbalance of power argument seems to refer as much to the big businesses in the private sector as to a small business dealing either with a local authority or the public sector. Although I accept that the Government are doing a lot here, they should have the confidence to look at this as a way of doing more to show that, just as they make requirements of the public sector, they ensure that their own house is in order and, indeed, setting an example. Together, that would be a much more forceful way forward in what we are trying to do here, which is to deal with the whole issue of late payment.

I see—I am not sure the Government do—the Small Business Commissioner as a one-stop shop. If we start saying to local businesses, “Well, you cannot take issues you have with local authorities to the Small Business Commissioner”, then, although the Small Business Commissioner will be told that he can instruct them to go somewhere else for advice, local businesses will just get frustrated. They will want resolution of their issues. If they are referred around the houses, it will just disillusion them and undermine confidence in the system that we are trying to set up.

I accept the arguments that have been made in the debate. I welcome the support that the amendment has generally received—it was much wider than I expected. Obviously, although I am happy to withdraw the amendment now, I will come back to this matter at a later stage.

Steel Industry

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Tuesday 20th October 2015 Lords Chamber

[Lord Stoneham of Droxford]

My Lords, Tata’s statement today says that China’s imports of plate steel into the EU have increased by a factor of four over the last two years. Is the Prime Minister raising evidence of dumping with President Xi during his visit today, and, given that the Government’s Statement says that no Government can act alone in this matter, what precise action are the Government seeking from the EU to use the strength of its marketplace to put pressure on the Chinese?

[Baroness Neville-Rolfe]

The Prime Minister is talking to the Chinese about this issue; obviously I am not able to share the detail with noble Lords today. However, I will add that we have been active at the European Union level, as I explained last week in answer to an earlier Statement. The Secretary of State will go to Brussels next week to talk to the relevant Commissioners in the various areas, and obviously the issue of Chinese imports, anti-dumping and the marketplace that I have described will be at the absolute top of the agenda.

Redcar Steel

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Thursday 15th October 2015 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, the Government and the receiver did take time. They used the notice of intention to appoint an administrator. Talks had been going on before. As I said, it was not possible to come up with a viable case for continued use of these coke ovens and the blast furnace on a basis that would be competitive in the world. We all regret that. My heart goes out to the thousands of people who have lost their jobs. We now have to look forward, help them and find new opportunities.

[Lord Stoneham of Droxford (LD)]

My Lords, the tragedy of Redcar is that it was overdependent on one sector. When that sector has problems, which it does because of world capacity, that community is very vulnerable. The hope is that this area should be helped with diversification. Will the Minister explain something? In Portsmouth two years ago, a ministerial task force was set up in a far less tragic situation than Redcar yet I am not sure from what she is saying that the task force has direct government representation on it locally. I respect her view that local views should prevail, but should the Government not be directly involved in this task force in order to make sure that all government departments are properly co-ordinated in the rescue of this area?

[Baroness Neville-Rolfe]

My Lords, I agree that there is a problem where you are very dependent on one industry. The noble Lord made a very powerful point. The local task force will get support from government officials. It is looking widely at options. On the task force will be Paul Booth, the head of the LEP, which has a large amount of funding from the growth fund and other interests will come in as necessary. We believe that that is the right way forward. Obviously, we stand ready to look at broader issues in the way that the noble Lord described, but this seems the right way forward. We do not see a case for doing quite what we did in Portsmouth. A great deal is going on. The steel summit is taking place tomorrow. The focus on the lessons and the future is strong.

Redcar Steelworks

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Tuesday 13th October 2015 Lords Chamber

[Baroness Neville-Rolfe]

I thank the noble Lord for his comments and for his experience. I certainly agree that we should seek to preserve what is good. There are opportunities in the steel industry: there is HS2, if that happens; there is specialist steel; and we have a sector-led strategy on metals. We need to look forward in those areas and to small business creation in Teesside and in other ex-steel communities.

[Lord Stoneham of Droxford (LD)]

My Lords, can the Minister confirm that £20 million of the £80 million that she says the Government are investing in Teesside is money that would be paid in any event in the form of statutory redundancy in a liquidation situation? Will she further say whether the Government, in the situation that they face in Redcar, would be prepared to consider a government-backed task force, as they did five years ago, to look at the diversification of the economy and would be prepared to consider additional funds to help that community if viable projects subsequently emerged?

[Baroness Neville-Rolfe]

My Lords, on the up to £80 million that is made available, how much goes on redundancy will depend on uptake, but we are clear that it will provide a lot of funds for training and reinvestment in skills—the sort of things that are needed and that are in the hands of the local task force that we have set up and did great work in 2010. The Prime Minister has said that, if necessary, we will look at this again, but we think that the £80 million will make a huge difference to the more than 2,000 unfortunate people who, if one takes all of them together, will lose their jobs—it is very disappointing. On a future task force, we are focusing this week on the summit and on the local task force.

Zero-hours Contracts

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Thursday 11th June 2015 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, as I have already said, the relevant authorities are looking at this to ensure that we have a high-quality service and that the terms are fair. I should make it clear that time spent travelling directly between assignments or on standby at work during quiet periods generally counts as time worked for national minimum wage purposes. This often works better than we think, but it is of course an important area to look at.

[Lord Stoneham of Droxford (LD)]

I declare my interest as chair of Housing & Care 21. Surely any Government seeking to improve the efficiency and quality of public services should be monitoring the impact and growth of zero-hours contracts. Will the Minister tell us whether the Government have an estimate of the number of zero-hours contracts paid for out of public funds?

[Baroness Neville-Rolfe]

My Lords, this is an issue I would need to look into. We have 697,000 people on a zero-hours contract as their main job, but I do not have a breakdown between the public and private sectors.

Small Business, Enterprise and Employment Bill

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Monday 9th March 2015 Lords Chamber

[Lord Mendelsohn]

My Lords, I rise briefly in support of the amendments tabled by the noble Lord, Lord Stoneham, who has been an assiduous follower of the Bill. These are important tidying-up amendments that help correct and clarify some key measures in the Bill. In particular, Amendment 33AR is an essential requirement to make sure that there is consistency in the Bill. I hope that either the amendment will be accepted or the Government will agree to bring it back at Third Reading.

[Baroness Neville-Rolfe]

My Lords, I am afraid that I cannot agree to this amendment. I explained why we could agree to “must” elsewhere in the Bill but we are unable to agree to this amendment for reasons that I have also explained.

[Lord Stoneham of Droxford]

In that case, is my noble friend going to talk about Amendment 33AR? I will probably have to accept what she says about the other amendments, but I should like a definitive response on Amendment 33AR.

[Baroness Neville-Rolfe]

My Lords, I apologise for the confusion. There are a lot of different amendments here and perhaps I may have noble Lords’ patience. Perhaps the noble Lord could clarify to which amendments in which groups he seeks a response, because there are two or three different ones that relate to “must” and “may”. I explained where I was happy to accept “must”. If he is asking me to accept it in other places, there are reasons that I can go through.

My apologies to the House; we have moved on more rapidly than I could possibly have believed. I thank the noble Lord, Lord Stoneham, for his amendments. Amendments 33H and 33K would change two references to “may” in Clause 42. This would turn the powers in the Pubs Code to require pub companies to provide parallel rent assessments and give the adjudicator functions in relation to PRAs into duties. We have made a commitment to this House to introduce PRA. This commitment, together with the duty on the Secretary of State to produce the Pubs Code in Clause 42(1), means that the Government must deliver on these provisions in the secondary legislation one year after these provisions come into force, as I explained a minute ago. There can be no doubt that we will introduce these provisions.

We had similar debates on a number of topics in Committee. As I set out then, it is standard legislative drafting to refer to provisions that “may” be set out in secondary legislation to preserve some flexibility. If we were to change these “mays” into “musts”, we would need to be aware of the possibility of overly restricting and restraining the use of these powers. For example, we have said that the adjudicator “may”, in the interests of fairness and administrative effectiveness, choose not to charge fees to smaller pub companies that have bought only one pub formerly owned by a pub company. These amendments would remove such flexibility and I hope my noble friend will recognise the undesirability of that. I can assure him that the Government will include all the provisions set out in the Bill in the statutory code, which will be made by secondary legislation and subject to parliamentary scrutiny by the affirmative procedure.

With noble Lords’ permission, I shall comment on Amendments 33AJ, 33AL and 33AP. Where the Bill provides that the Secretary of State “may” by regulations give the adjudicator functions in relation to dispute resolution and determining rent for market rent only, it is clear that the Government must set out these functions for the adjudicator in secondary legislation. Clause 42(1) sets out a clear duty on the Government to introduce the statutory code within 12 months of the Bill coming into force—14 months from Royal Assent, as I have said—and to establish an adjudicator to enforce the code. The code must include the market rent only option and the adjudicator must therefore be able to enforce the market rent only option.

I turn now to Amendment 33AR. The definition of a tied pub set out in Clause 68 determines the scope of the regime and deliberately focuses on the alcohol tie, rather than other product and service ties. This is because it is in the abuse of the combination of the alcohol tie and property rent that we have evidence of problems in the relationship between tenants and pub-owning companies. This has been documented in the evidence we received to the Government’s consultation, in the continued correspondence the department receives from tied tenants, and in the multiple reports into the sector carried out by the BIS Select Committee. These reports and the evidence we have received point to problems with the alcohol tie.

The requirements for a market rent only-compliant agreement set out in the Bill specify that an agreement made once the tenant has opted for MRO must not include any alcohol, product or service ties. This is to ensure, when a tenant opts for MRO, that he or she is offered a genuinely free-of-tie agreement. However, it does not follow that all pubs with any kind of tie should be brought into the scope of the code at the outset. Amending the definition of a tied pub in the way proposed is a different prospect, as this changes the scope and application of the measures as a whole. For example, this would mean that a pub with no alcohol tie but with a service tie of some description would be covered by the legislation. This would bring into scope a pub that is contracted to a pub-owning company for something like cleaning services, but is in all other respects free of tie and able to purchase beer and other products from any source. This is not the sort of pub where we have evidence of a problem, and I believe we must avoid inadvertently capturing free-of-tie pubs and creating greater uncertainty in the regime. Focusing these measures on those pubs that are tied for their beer and alcohol will ensure that we target that part of the market where we have evidence of a problem.

I hope that my noble friend Lord Stoneham has found my explanation reassuring. I know it is all very complex, but on the basis of my full explanation, which I think has explained why the Bill says “may” and “must” on different occasions, I hope that he will feel reassured and able to withdraw his amendment.

--- Later in debate ---

[Baroness Neville-Rolfe]

I am sorry; I think he is a friend on this occasion. The noble Lord, Lord Berkeley—I will have to go back to Lords school shortly. As I explained in my long reply, it is standard legislative drafting to refer to provisions that “may” be set out in secondary legislation. In practice, we will do all the things that I have described. Therefore, I feel that these “musts” are not needed.

[Lord Stoneham of Droxford]

I thank my noble friend for the reassurance that we will do these things. On my last amendment, Amendment 33AR, which I will be happy not to move, all I ask, in the final phases of looking through, is that the clauses I mentioned, Clause 68(5) and Clause 43(4)(a)(ii), coincide with each other.

Small Business, Enterprise and Employment Bill

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Tuesday 3rd March 2015 Lords Chamber

[Lord Stoneham of Droxford (LD)]

My Lords, I am pleased to follow the noble Lord, Lord Young. In my heart, I am with him 100%. The opportunity to encourage through public procurement the expansion of apprenticeships and training and development is certainly worth while. The trouble is that these clauses are very much concerned with trying to enable small businesses to have a greater chance for public procurement contracts. Obviously, if we over-complicate the procedure, that is a problem. However, I just wanted to register my hope that the Government are continuing to look at this. It is something that they can encourage in the public sector and, indeed, they are already doing so. We need to do much more and there is a lot of very good casework and examples of where this is being done successfully at all levels of industry. I hope that the Government will continue to give this particular priority.

In addition, the linkages to the work of the LEPs are very important. We also have in schools a big obligation to promote technical apprenticeships and encourage more young people to take part. I am dubious as to whether the Government will be able to accept something at this stage in this Bill but it is something that should be a continuing priority.

[Baroness Neville-Rolfe]

My Lords, I thank the noble Lord, Lord Young, for his amendments and for allowing us to debate the important subject of apprenticeships, albeit rather late in the evening. I am also grateful to my noble friend Lord Stoneham for adding his wisdom to the debate, expressing concern about the particular provisions we are looking at but making absolutely the right point about the need to move the apprenticeship agenda forward and do ever more.

Starting with Amendment 29, I should, perhaps, remind the House that there is some outstanding work currently under way in this area. The noble Lord mentioned Crossrail as a trailblazer. It is an amazing project in all respects and has recently hired its 400th apprentice. Obviously, there is a huge opportunity to train apprentices on big construction procurement projects of that kind.

The Government have agreed to support apprenticeships growth in the provisions brought forward by city deal partners, linked to their growth sectors in the local economies. For example, 1,500 new high-value manufacturing apprenticeships have been created in the West Midlands and 420 apprenticeships have been created in Greater Cambridge in different priority sectors, from professional and scientific, through to advanced engineering. We are also encouraging employers to take on apprentices by creating the apprenticeship grant for employers and relaxing national insurance contributions for employers who take on apprentices. However, not every procurement is appropriate for delivering apprenticeships. I think the noble Lord acknowledged that. Trying to deliver a policy where it does not properly fit creates bureaucracy. We do not want a situation where suppliers are forced to meet a requirement to create new apprenticeship opportunities every time a new contract is awarded. This would change the very nature of apprenticeships, meaning that they were not linked to the company’s needs. Young people could be let go before their apprenticeship ended, a concern that I have heard from the Local Government Association. Even more important, it could be damaging to the individual apprentice.

We also have to follow legal requirements. For above-EU threshold contracts, a contracting authority must always be able to show that the requirement to provide an apprenticeship is sufficiently linked to the subject matter of the contract. Some contracts will have no links with apprenticeships, so forcing apprenticeships into all of them could even breach these EU rules.

The noble Lord might say that the amendment refers to requiring an “appropriate number” of apprenticeships so this does not apply to every procurement. But how would a contracting authority or Government know what an appropriate number was? A blanket requirement about apprenticeships as proposed in the amendment would not work. However, the Government support the appropriate inclusion of training and apprenticeship criteria in procurement and we believe that such requirements are most likely to be relevant on major construction and infrastructure projects. We need to adopt a thoughtful and considered approach, working with industry. I assure noble Lords that we are actively working to achieve this.

I turn to Amendment 30. I should like to reassure the noble Lord that we support schools and local enterprise partnerships working together with SMEs to deliver more training and apprenticeship opportunities. There are some highly successful examples of this work taking place. Indeed, following a debate we had on an Oral Question that the noble Lord asked, I shared some of those good examples with him. I will not delay the House by repeating those this evening.

I understand that the noble Lord’s intention is to place general duties on local enterprise partnerships and educational institutions such as schools to encourage, develop and promote these apprenticeships. However, I do not believe that moving away from good practice in this area to regulation is the right way ahead. Local enterprise partnerships are flourishing because we are addressing exactly the barriers identified by employers, getting them involved directly, simplifying the system and giving them a free hand so that they can do the right thing. The Government are working with a number of such partnerships as part of the city and local growth deals to drive up business demand for apprenticeships in their localities. This allows local enterprise partnerships to choose the most effective way to promote apprenticeship development.

I share the noble Lord’s concern about the way apprenticeships declined in the first part of the 2000s. As he knows, we are getting back on track and doing many of the right things. My noble friend Lord Stoneham is right to urge us to do more and to make it a priority—which I can confirm that it is. However, I do not believe that legislation of the kind proposed in the amendments is right or sensible. While the noble Lord, Lord Young, knows I share his wish to increase apprenticeships, it is wrong to introduce new bureaucratic regulatory burdens in a small business Bill. I fear that these amendments could be perverse in their effects and I hope that on reflection he will feel able not to press them.

Small Business, Enterprise and Employment Bill

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Wednesday 28th January 2015 Grand Committee

[Baroness Neville-Rolfe]

My Lords, that is the proposal set out in the Government’s amendments.

[Lord Stoneham of Droxford]

Will the Minister confirm whether she is looking at any protection for people who, when a company is sold or goes into administration, move from a company that is covered by the threshold to one that is not?

Companies Act 2006: Nominee Operators

Debate between Lord Stoneham of Droxford and Baroness Neville-Rolfe

Tuesday 13th January 2015 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, I was very pleased to see the extension of ISAs to AIM. I am delighted that these questions have been asked today so that we are debating the issue. I am sure that noble Lords will be pleased to hear that we are looking into exactly what is needed with a view to taking action.

[Lord Stoneham of Droxford (LD)]

Could the Minister tell the House what progress the Government have made on implementing the recommendations of the Kay report to encourage long-term share ownership and commitment, rather than simply trading in the stock market?

[Baroness Neville-Rolfe]

My noble friend raises a very important issue. The Government have made a sustained commitment to reform, working with companies and investors. We published a comprehensive progress report on that in October. Professor Kay also recommended that we look at the most cost-effective way for investors to hold shares electronically as individuals. That is one of the reasons why it is so important to explore that option.