Oral Answers to Questions

Andrew Griffiths Excerpts

Tuesday 30th January 2018 Commons Chamber

[James Cartlidge (South Suffolk) (Con)]

2. What steps he is taking to ensure that low-paid workers are remunerated appropriately.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)]

The national minimum wage and national living wage rates are recommended to the Government by the independent Low Pay Commission. To ensure that workers are paid fairly and that non-compliant employers are caught, the Government provide £25.3 million to Her Majesty’s Revenue and Customs for minimum wage enforcement —that is an increase from £13 million in 2015-16. Last year, HMRC secured arrears of wages for 98,000 workers, totalling £10.9 million.

[James Cartlidge]

I thank my hon. Friend for that answer and welcome him to his deserved new position. I very much welcome the national living wage as a way of boosting the wages of our lowest-paid workers. Does he share my surprise that there are those who criticise its generosity, given that the only international comparator is The Economist’s Big Mac index, under which we have the most generous minimum wage in Europe aside from that of its richest country, Luxembourg?

[Andrew Griffiths]

I completely agree with my hon. Friend on that. The next increase to the national living wage is to be a whopping 4.7%. The introduction of the national living wage was the biggest pay rise for low-paid workers in nearly 20 years. The latest increase will benefit more than 2 million people and is set to cover 3 million by 2020. The average earnings of a 25-plus, full-time worker have increased by £2,000 since 2016.

[Helen Jones (Warrington North) (Lab)]

When will the Government accept the need to actually prosecute more firms that fail to pay the national minimum wage? Only when people are prosecuted for breaking the law, rather than being issued with warning notices, are they going to take it seriously.

[Andrew Griffiths]

I gently point out to the hon. Lady that the Government take robust enforcement action against employers who do not pay their staff correctly. We have increased enforcement funding to £25.3 million this year. The total value of penalties has more than quadrupled since 2014-15, and in 2016-17 a record £3.9 million was recovered in penalties, with one penalty of more than £1 million being issued.

[Tom Pursglove (Corby) (Con)]

Along with the steps the Minister has outlined, does he agree that increasing the tax-free threshold and taking the lowest paid out of tax altogether has made an enormous difference to many workers in this country?

[Andrew Griffiths]

I absolutely agree with my hon. Friend: 4 million people have been taken out of paying tax as a result of decisions taken by this Government. The employment rate is 75.3%, which is the joint highest rate since comparable records began in 1971. We have record numbers of people in work, and unemployment is at its lowest for 40 years. This Government are on the side of the worker and the lowest paid.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Low pay stifles investment and holds back productivity. We in the Scottish National party believe that the economy is stronger when a real living wage is paid. The Minister’s own Department has rightly named and shamed 350 companies for failing to pay even the minimum wage. Does he therefore agree that the practice of companies paying no wages at all through unpaid work trials is morally repugnant? Will his Department support the ending of that shameful practice?

[Andrew Griffiths]

I should point out to the hon. Gentleman that more than 160,000 people in Scotland benefit directly from the national living wage. The Government are looking closely at employment practices. We engaged Matthew Taylor to look into employment practices and to come up with new ways to support people, particularly those in the gig economy. We very much value that work and will be coming forward with recommendations in the very near future.

[Laura Smith (Crewe and Nantwich) (Lab)]

3. If he will take steps to regulate executive pay.

[Stephanie Peacock (Barnsley East) (Lab)]

19. If he will take steps to regulate executive pay.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)]

The Government will legislate to require quoted companies to publish and explain the ratio of their chief executive officer’s pay to the average pay of their UK employees. Companies will also have to provide a better explanation of how share price increases affect the value of complex, long-term incentive plans.

[Laura Smith]

Does the Minister acknowledge that there is sufficient compelling evidence to conclude safely and beyond any reasonable doubt that collective bargaining significantly reduces income inequality?

[Andrew Griffiths]

The hon. Lady is absolutely right to raise the issue of collective bargaining and how that affects employee pay and the wider pay of executives. I should point out to her one interesting fact: the average FTSE 100 CEO’s pay leapt from £1 million to £4.3 million between 1998 and 2010, but CEOs’ pay fell by 17% in 2016. Interesting.

[Stephanie Peacock]

It would take the average person in Barnsley East more than 176 years to earn what the average FTSE CEO earns in 12 months. Does the Minister agree that that is a sign of grotesque inequality in the UK? What is he going to do about it?

[Andrew Griffiths]

What private companies pay their directors is ultimately a matter for their shareholders, but the new pay ratio disclosure requirements mean that we will give shareholders and other stakeholders important new information on how pay at the top of companies fits with wider workforce pay. Companies will be forced to explain and defend their pay ratios and account for changes to the ratio over time.

[Mr Philip Hollobone (Kettering) (Con)]

Does the Minister agree that Britain’s biggest broadcaster, the BBC, is setting an appalling example to the nation over executive pay in failing to ensure gender parity?

[Andrew Griffiths]

I assure my hon. Friend that we absolutely and completely agree with fair pay. It is unacceptable that women who are doing the same job as men receive less pay. That must change. The BBC must act.

[Jo Swinson (East Dunbartonshire) (LD)]

Hardworking people on ordinary incomes are understandably angry at the way executive pay has skyrocketed at a time when ordinary wages have remained flat. When can we expect to see these regulations that the Minister is talking about on publication of pay ratios, and can he confirm that this requirement will be in place for companies by June, as promised?

[Andrew Griffiths]

I have to point out to the hon. Lady that she may have her figures wrong. CEO pay has fallen, not risen. This Government are keen to ensure that there is more accountability and transparency in relation to the pay of top executives. We want to give the shareholders of companies greater power and ensure that there is greater accountability to shareholders and to the workforce.

[Laura Pidcock (North West Durham) (Lab)]

Since 2010, Carillion has paid out more than £500 million in dividends to shareholders while, over the same period, running up a pensions deficit of £587 million, a deficit that is now threatening the security of thousands of hardworking people. While those people suffer, former Carillion CEO Richard Howson was rewarded with a bonus package worth £1.5 million in 2016. Will the Government join me in condemning this scandal and work with the Labour party to end the failed model of outsourcing using shell companies and in condoning excessive pay, or will it be just business as usual?

[Andrew Griffiths]

Please allow me to assure the hon. Lady that any payments due to directors and executives of Carillion have been stopped; nobody is getting paid and nobody is getting executive bonuses. The moment that the insolvency happened, the Secretary of State wrote both to the Insolvency Service and the FRC to ensure that there was a thorough investigation of all payments to directors. If necessary, PricewaterhouseCoopers and the Insolvency Service have the power to claw back all of those payments. I can assure her that we will be learning the lessons from the Carillion insolvency and ensuring that we do all we can to support businesses going forward.

[Several hon. Members rose—]

[Chris Williamson (Derby North) (Lab)]

4. What discussions he has had with Cabinet colleagues on the work of the legal working group on seafarers and the national minimum wage.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)]

The Government believe that seafarers should be paid fairly for the work that they do. My Department and the Department for Transport worked with trade unions and employers to publish new guidance that explains the responsibilities of employers to pay the national minimum wage. We are crystal clear that if someone works in UK waters, they are entitled to at least the minimum wage and that all employers—no matter where they are from—must pay it.

[Chris Williamson]

I am pleased to hear that, but is the Minister aware that UK seafarers are being undercut by rates of pay as low as £1.75 an hour? That is happening even though the legal working group on seafarers and the national minimum wage, which includes his Department, agrees that legislative change is needed to provide more protection. Will the Minister give a commitment to work with the RMT and Nautilus to end this brazen exploitation, starting with the application and enforcement of the national minimum wage for seafarers working between UK ports and offshore installations?

[Andrew Griffiths]

I reassure the hon. Gentleman that the guidance is clear that the national minimum wage applies on foreign registered ships when they are in UK territory. The new guidance is the first of its kind on the application of the national minimum wage specifically to seafarers, which shows that this is a priority for the Government. UK national minimum wage law must naturally have a limit, but if a person is employed as a seafarer in British waters, they will be entitled to the national minimum wage.

[Ben Bradley (Mansfield) (Con)]

Q5. What discussions he has had with the Secretary of State for Education on encouraging small and medium-sized enterprises to take advantage of the apprenticeship levy.

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[Maggie Throup (Erewash) (Con)]

13. What steps he is taking to support growth in the small business sector.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)]

We are actively supporting small businesses by enhancing the business support helpline and funding growth hubs in every local enterprise partnership area in England. The new Small Business Commissioner will help with payment issues, and British Business Bank programmes support nearly £4 billion of finance to more than 60,000 small and medium-sized enterprises.

[Trudy Harrison]

I thank the Minister and welcome him to his new position. Sellafield in my Copeland constituency is one of Britain’s biggest single-site employers. It is about to award its multimillion PPP contract. What is he doing to promote the role of SMEs, rather than just large companies, when awarding those contracts?

[Andrew Griffiths]

I clarify to the House that PPP stands for “programme and project partners” and not, as many might have assumed, “public-private partnership”. The programme that my hon. Friend talks about will support Sellafield in decommissioning and contains provisions designed to support small businesses. In November 2015, the Cabinet Office agreed to a target of 31% of spend with SMEs for the Government’s Nuclear Decommissioning Authority. Moreover, as the Small Business Minister, I will look at what I can do to ensure that more is done to help small businesses to win Government contracts.

[Maggie Throup]

Will the Minister join me in commending the work of the Erewash Partnership, which helps entrepreneurs in my constituency to start up and grow their own small businesses? Will he consider what more Government can do to help such organisations expand their support services?

[Andrew Griffiths]

I am delighted to join my hon. Friend in applauding the work of the Erewash Partnership, which she will know was a previous winner of a national enterprise award—well done them. Through our industrial strategy, all businesses in every region will have access to a growth hub. We have announced a further £24 million of core funding over the next two years for growth hubs, including the D2N2, which I understand works with the Erewash Partnership. I am delighted to work with her to do what I can to support businesses in her constituency.

[Richard Burden (Birmingham, Northfield) (Lab)]

Stability among larger tier 1 suppliers is really important to SMEs in the automotive and aerospace supply chains. Given that, does the Minister agree that if the Melrose bid for GKN splits up and sells off that company, as is anticipated, that cannot be in the interests of either sector or SMEs in this country?

[Andrew Griffiths]

We are always sensitive and aware of the impacts on the supply chain. We need a strong supply chain, but I point the hon. Gentleman to the Secretary of State’s previous answer on that issue.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Support for the small business sector will be even more urgent given the findings of the UK Government’s leaked Brexit analysis, which shows that in all current scenarios, businesses across all sectors and all parts of the UK will be hammered with between 2% and 8% reductions in GDP growth. Will the Minister confirm what planning his Department has undertaken in the light of those figures? Is he declining to publish because it is too embarrassing?

[Andrew Griffiths]

The hon. Gentleman will know that that issue is the subject of an urgent question later on in the House. I would hate to spoil his fun, so I will leave it to others.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

9. What assessment he has made of the UK’s ability to meet its carbon reduction targets.

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[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)]

The taskforce established to tackle the impact of Carillion’s liquidation includes the Department for Work and Pensions, and my right hon. Friend the Business Secretary is in regular contact with my right hon. Friend the Pensions Secretary. Those already receiving their pensions will continue to receive payment at 100% of the usual rate. Anyone worried about their pension situation can contact the Pensions Advisory Service; its dedicated helpline has now responded to over 800 calls since Carillion’s insolvency.

[Paul Blomfield]

I thank the Minister for that answer, but I think it will be of very little comfort to many Carillion staff, past and present, when they hear that the deficit in their pension fund is approaching £1 billion. Public sector contracts have made some at the top of Carillion very rich indeed, so what action is the Minister taking to ensure that current and future pensioners do not lose out?

[Andrew Griffiths]

The hon. Gentleman will understand that issues in relation to pension schemes are a matter for the independent Pensions Regulator. However, the Pensions Regulator has been in contact with Carillion and the pension scheme trustees for a number of years about the funding of the pension scheme. I can absolutely assure the hon. Gentleman that the work of the taskforce is to look at what happened in relation to the Carillion insolvency, and to ensure that if lessons are to be learned, we will learn them.

[Rachel Maclean (Redditch) (Con)]

The global headquarters of GKN is in my Redditch constituency. It employs 200 people, and concerns have been raised about the pension scheme there as well. The Pensions Regulator is warning that in the event of a takeover, there may be something to look at. What lessons is the Minister learning from Carillion in this case, and what further action does he need to take?

[Andrew Griffiths]

The Secretary of State, I think, has already outlined the approach with which the Government are handling the takeover of GKN, but I can assure my hon. Friend that the implications of business actions, and particularly takeovers, in relation to pension schemes are a priority for the Government. We will continue to proceed with care and caution to protect the interests of all members of pension schemes.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

14. Whether he plans to review the rules governing the use of agency workers.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)]

The Government work to ensure that our labour markets work for everyone. That was why the Prime Minister asked Matthew Taylor to carry out an independent review on modern working practices. The Government are considering the issues that the review has raised, including rules governing the use of agency workers. The review is comprehensive and detailed, and we have been giving the report the careful consideration it deserves. We will respond shortly.

[Gareth Thomas]

Two thousand workers in BT call centres, some of whom handle 999 calls, are paid up to £500 less per month than permanent staff because BT uses the loophole known as the Swedish derogation under agency workers regulations. Taylor recommended its abolition; when will the Minister get on with it?

[Andrew Griffiths]

As I have outlined, the Matthew Taylor report does, in some depth, look at the Swedish issue. I am meeting Matthew Taylor this afternoon, and that issue will be one of those that we shall discuss. I can reassure the hon. Gentleman that in 2017, the employment agency standards inspectorate dealt with more than 800 complaints from agency workers. EAS investigations have protected an estimated 303,000 agency workers, and we will continue to defend their interests.

[John Cryer (Leyton and Wanstead) (Lab)]

How many of those complaints under the agency workers directive led to successful prosecutions?

[Andrew Griffiths]

I will write to the hon. Gentleman with the answer.

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

15. What recent steps he has taken to support the development of renewable energy sources.

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[Maria Caulfield (Lewes) (Con)]

T7. As banks are closing on our high streets, two of my towns, Newhaven and Polegate, are not having any banking facilities left. Will the Minister consider expanding the facilities that post offices offer? Postmasters such as the one in East Dean in my constituency are keen to do more, but Post Office Ltd refuses to allow them to do so.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)]

I take on board the very important question that my hon. Friend asks. The Government have invested over £2 billion to ensure that the Post Office is able to meet the needs of our constituents and the small businesses that rely on it. That means that 99% of UK personal bank accounts and 95% of small business accounts can be accessed to withdraw cash, and that customers can deposit cash over the counter or cheques in any one of the 11,600 post offices across the UK.

[Wera Hobhouse (Bath) (LD)]

T6. Investment in solar energy has fallen by 85% over the last year. Will the Minister explain why her Department believes that solar energy no longer requires public subsidy?

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[Mr Speaker]

I remind colleagues of the merits of the blue pencil. If you have a prepared question and it is a bit on the long side, just scratch a bit out—very useful, and the question never suffers.

[Andrew Griffiths]

I congratulate my hon. Friend on his tenacity in campaigning on behalf of his residents. Following his representations on the impact of the proposed redundancies, I am happy to confirm that there will be additional flexibility in how the rapid response service can be used. That means that, while there is no additional funding, all workers made redundant from Cleveland Potash will benefit from the same flexibilities for job-focused training as have been made available to ex-SSI and supply chain workers.

[Jim Shannon (Strangford) (DUP)]

T8. In the light of the possible barriers to resolving cross-border insolvencies in the UK post Brexit, what assessment has the Minister made of the need to reform the UK’s corporate insolvency framework to ensure that it is fit for purpose?

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[Andrew Griffiths]

The hon. Gentleman will find that the date set out in the Digital Economy Act 2017 was 2020, but I am sure he will join me in congratulating the Government on their success in ensuring that 95% of the country now has access to broadband.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Will the Minister support Transport for the North’s strategic transport plan, which calls for a 50% increase in regional infrastructure spending across the north of England?

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[Alex Chalk (Cheltenham) (Con)]

Does the Minister agree that competitive rates of interest should be offered to businesses and subcontractors that are affected by the LARC collapse, and that the 8.64% offered to LARC Construction in my constituency is simply too high?

[Andrew Griffiths]

I agree with my hon. Friend that access to competitive finance is essential, not just for businesses affected by LARC, but more widely, and particularly for small businesses. I am happy to meet him to discuss the issues if he would like me to.

[Mr Speaker]

It is a great pleasure to welcome back to the House the hon. Member for Redcar (Anna Turley). I know that the House will join me in doing so.

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[Michelle Donelan (Chippenham) (Con)]

A constituent of mine is a director of Tower Supplies, one of the leading small and medium-sized enterprises in the personal protective equipment sector, whose bid was recently rejected by Transport for London in the first round of the process with no explanation. The practice is for feedback to be given, but that does not always happen. Will the Minister work with the Ministry of Housing, Communities and Local Government and other Departments to ensure that the system does not hinder SME growth?

[Andrew Griffiths]

The Government are committed to ensuring that more small businesses are able to bid for such contracts. We want to support SMEs through the procurement process, and to ensure that they can be competitive and win such contracts. I shall be happy to meet my hon. Friend and representatives of the company that she mentioned in order to find a solution.

[Eleanor Smith (Wolverhampton South West) (Lab)]

When I met the Minister last week, I was told that the Carillion headquarters would continue to operate in the interim. What steps are the Government taking to safeguard jobs for the employees who work in my constituency?

[Andrew Griffiths]

I think that the hon. Lady and I spoke on the telephone on the day of the insolvency, and I think I have met her twice since then, along with other Wolverhampton colleagues, to ensure that she is kept fully updated. We are working closely with PricewaterhouseCoopers and the Insolvency Service in the best interests of not just the creditors but all those employed in the Carillion network. To date, things have been positive, but I will seek to update the hon. Lady further as more information becomes available.

[Gillian Keegan (Chichester) (Con)]

On a point of order, Mr Speaker.