Businesses: Late Payments

Debate between Andrew Griffiths and Kelly Tolhurst

Wednesday 19th June 2019 Commons Chamber

[Kelly Tolhurst]

I stand here today and make announcements, but we also need to recognise that this is about culture. We want to use all the tools in the box to legislate and take action where possible, but we also want to work with the industry and businesses to change the culture. It is not right that large firms take advantage of smaller businesses through late payments, so today we bring forward our response to the call for evidence, to stem the scourge of late payments.

The hon. Gentleman mentions project bank accounts. As I briefly outlined in my response to the previous question, project bank accounts and the use of retention is obviously a concern for many people. It is part of the whole late payment arena. That is why, as I have said, we have worked with the industry and heard the views of both sides. A consensus has yet to be found in the industry. The challenge that we have set is that the industry must come to a way forward or we will take action.

To answer the hon. Gentleman’s question, I have indeed looked at some of the work that has gone on in Scotland and at what has happened in Northern Ireland. I highlight what the Federation of Small Businesses said today:

“Small businesses will be delighted with today’s announcement. FSB has worked very hard with government to create a whole-board approach to late payment within the UK’s large companies, and empower Audit Committees to look after the supply chain. Together with measures to strengthen the Small Business Commissioner’s powers and reform the Prompt Payment Code, the measures today could finally see an end to poor payment practice.”

[Andrew Griffiths (Burton) (Con)]

The words that my hon. Friend just spoke were those of my constituent, Mr Mike Cherry. There can be no greater praise than that from such an advocate for small business. The FSB supports these measures, so I commend her on them.

Does my hon. Friend agree that one of the main challenges is not late but prompt payment? Far too many big businesses continue to extend payment terms—150 days, 180 days or even more. That is simply not acceptable and is unfeasible for many small businesses. Will my hon. Friend add that to her to-do list and really make a difference for small businesses?

[Kelly Tolhurst]

I thank my hon. Friend for his question and recognise his particular interest as my predecessor in this post. He is absolutely correct: prompt payment is a particular concern for small businesses, and some large companies alter their payment terms. We are seeking views on giving the small business commissioner more powers because he acts for small businesses that have struggled with getting prompt payment. Currently, his powers are not binding; we feel that if his powers were binding, that could be part of his suit of armour in tackling late and non-payments.

Recall of Tumble Dryers

Debate between Andrew Griffiths and Kelly Tolhurst

Monday 17th June 2019 Commons Chamber

[Kelly Tolhurst]

I must start by outlining that the protection of consumers, the safety of consumers and the safety of products placed on the market are of utmost importance to me and this Government. I did indeed update the House last week in response to a question about the action that we have taken in regards to Whirlpool; it is part of a legal process, as I have already outlined. All complaints about modified or unmodified tumble dryers that have been duly registered were included in the review. The review was significant: it looked at many areas, took all the data into account, and carried out the assessments, as the hon. Lady has outlined, and I am absolutely satisfied that the review undertaken by OPSS was appropriate and robust.

I have not taken a different decision from OPSS. We were very clear. OPSS wrote to Whirlpool after the review outlining areas where it wanted a guarantee of further work. Whirlpool had 28 days in which to respond. It responded, and the OPSS reviewed that information and was not satisfied, finding that the commitment was inadequate. We therefore decided to issue a notice—an intention to recall. As I have outlined today, we will be reviewing what has been submitted by Whirlpool. There is no intention to put, as has been suggested, big business over the needs and safety of consumers, and we will not do that. Fundamentally, the safety of people in their homes is of utmost importance to me and the Government and I will do everything in my power to make sure that large companies and manufacturers absolutely comply with their legal obligation to place only products that are safe on the market. If they fail to do so, this Government will take appropriate action to hold them to account.

[Andrew Griffiths (Burton) (Con)]

I congratulate both the OPSS and the Minister on having the cojones to hold Whirlpool to account, because there is no doubt that Whirlpool has been shifty on this and the Minister has called it out, so I say well done. Does she agree that it sends a clear message to business that either they put their house in order and ensure that their products are safe or the Government will act and have a product recall?

[Kelly Tolhurst]

I thank my hon. Friend for his comments and acknowledge his role in instigating the review of Whirlpool’s modification programme last May. Let me reiterate that the law is clear: manufacturers have a responsibility to ensure that only safe products are placed on the market, and appropriate action must be taken when a safety issue is identified. We will make sure that any organisations placing unsafe products on the market are forced to comply with the law, and we will continue to hold them to account.

Oral Answers to Questions

Debate between Andrew Griffiths and Kelly Tolhurst

Tuesday 11th June 2019 Commons Chamber

[Andrew Griffiths (Burton) (Con)]

T2. The Office for Product Safety and Standards undertook a thorough review of the modification of Whirlpool tumble dryers. However, there still remain great concerns about not only the straightness of Whirlpool, but whether people have unsafe products in their homes. Can the Minister update us on what is happening in relation to Whirlpool?

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

I recognise the key role that my hon. Friend played in instigating the review when he was in post. Consumer safety is a Government priority and I assure him that we have kept Whirlpool’s action under review. I can tell the House that we have informed Whirlpool of our intention to serve a recall notice as the next step of the regulatory process. This is unprecedented action.

Oral Answers to Questions

Debate between Andrew Griffiths and Kelly Tolhurst

Tuesday 30th April 2019 Commons Chamber

[Kelly Tolhurst]

The hon. Gentleman makes an important point with regard to traditional retail and online sales. I have spoken with the likes of Amazon and eBay, and one thing I have been extremely surprised at is that they have worked with small businesses that have started online but then invested in bricks-and-mortar retail outlets. We need to work to make sure we have a mixed economy, and I have outlined the work we are doing with the Retail Sector Council, particularly looking at business rates and other issues.

[Andrew Griffiths (Burton) (Con)]

I congratulate the Minister on the work she does for small businesses. She will know that one of the major challenges small businesses face is not just with late payments but with getting prompt payments and reasonable terms from bigger businesses. Will she ensure that the Government do all they can to end the scourge of late payment? Will she also ensure that the prompt payment code has some teeth so that it actually does the job it is supposed to?

[Kelly Tolhurst]

I thank my hon. Friend for highlighting prompt payment. It is a particular focus within the Department to tackle late payments, which can be very damaging to small businesses. This week, the Chartered Institute of Credit Management has announced that there are 17 businesses that I have removed or suspended from the prompt payment code to make sure that we highlight where bad practice is occurring. We want to bring business with us. We do know that late payments can have a major impact on small businesses, and I therefore stand committed to ensuring that we do all we can as a Government to end this poor practice.

Draft State Aid (EU Exit) Regulations 2019

Debate between Andrew Griffiths and Kelly Tolhurst

Wednesday 10th April 2019 General Committees

[Kelly Tolhurst]

I point out to the hon. Gentleman that the devolved Administrations are highly aligned with the policy position on setting a UK-wide state aid regime. Our conversations with the devolved Administrations are ongoing and will continue as they are. The Secretary of State has made it very clear that he is committed to meeting the devolved Administrations to discuss these matters and many others in relation to how we exit the EU. In fact, the Prime Minister has made it clear that, were we to enter into an agreement with the European Union and therefore not be in a no-deal situation, we would extend the opportunities for devolved Administrations to feed in.

[Andrew Griffiths]

Does my hon. Friend agree that just because we do not like the answer to a question, it does not mean the answer is incorrect? Is not what we are doing here just transposing the current EU regime into UK law, with the CMA replicating the role that the Commission currently undertakes?

[Kelly Tolhurst]

I thank my hon. Friend for that contribution. That is absolutely what we are doing here today. We have before us a no-deal SI, so in the event of no deal we will be replicating the EU laws in the domestic setting. The SI is extremely important for fairness and competition in the UK, so there really should be no resistance from the Committee to what is in it, because it is a fundamental of how we already work, and in a no-deal situation it would be important were we to enter into any future trade deals with the European Union.

I will continue with my opening remarks. Maintaining a level playing field across the whole UK means that the richer parts of the UK will not be able unfairly to distract investment away from less prosperous parts of the country. The existing principles and practices of the regulation of state aid will remain substantively unchanged in the domestic regime, in accordance with the aims and powers under the withdrawal Act. These regulations will therefore have minimal impact on public authorities that grant state aid or entities that receive it.

Instead, the regulations correct deficiencies in the retained EU law relating to state aid. That includes correcting references to EU concepts, such as the internal market and the functions of the Commission, which will ensure that the law remains operable in a domestic setting while minimising the impact on stakeholders. An alternative test of trade within the United Kingdom, however, would inadvertently change the scope of the rules by catching local measures that are currently not caught.

The main practical change under the new regime is that rules will be regulated and enforced by the CMA in place of the European Commission. The CMA is well placed to take over the European Commission’s role of approving, investigating and monitoring state aid across the whole UK. It has extensive experience and understanding of markets as the UK’s competition regulator, and is independent of the Government in its decision making. To prepare for its new role, the CMA has received £20 million from the Treasury contingency fund to prepare for EU exit in 2019-20, in addition to the £23.6 million it received for the year 2018-19, which specifically included £3.3 million for its state aid function.

The Government are working to ensure that the CMA will be ready to take on the new role and have every confidence in its ability to do so. The CMA is on track to recruit all the staff needed to start working on state aid by exit date, if necessary. The CMA will adopt the Commission’s existing state aid guidelines, which provide clear parameters for how and when aid should be approved. The CMA will also receive investigatory and enforcement powers broadly equivalent to those of the European Commission, although I should explain one point of divergence from the EU regime.

Under the EU rules, the European Council has the power in exceptional circumstances to intervene and approve aid before the European Commission has reached a decision. That power does not easily translate into the UK context and we do not consider it appropriate to use the regulations to vest the Government with similar powers. The regulations will still allow the Government to act swiftly if necessary, much as they have been able to do under the existing regime. Ultimately, the Government could bring forward legislation to amend the state aid rules if they deemed that to be absolutely necessary—an option that is not available to the European Council in the EU context.

I mentioned earlier that state aid rules help to ensure fair and open competition throughout the UK. Over the past year the Government have engaged extensively with each of the devolved Administrations and shared drafts of the regulations. As agreed, each devolved Administration will be responsible for managing the communication between their respective aid givers and the CMA. The Government have offered to sign a supporting memorandum of understanding with the devolved Administrations about the operation of the state aid regime, which we still hope to agree. Those discussions have indicated broad agreement on the substance of the Government’s policy to establish a UK-wide state aid regime that mirrors the EU’s. We will of course continue to work closely with the devolved Administrations on the development of state aid policy in the longer term.

As we leave the EU, the draft regulations will give certainty to public authorities and recipients of state aid, and help to maintain confidence for businesses across the UK. Commitments on state aid support free trade, as is recognised in the political declaration. The CMA has the expertise, operational independence and resources to enforce a UK state aid regime.

--- Later in debate ---

[Kelly Tolhurst]

Thank you, Mr Hanson. I think the hon. Gentleman’s point of order highlights that he was not questioning my integrity, so I thank him for pointing that out.

[Andrew Griffiths]

We have heard Opposition Members speak at such length and with such passion that one might have thought that, if they were so bothered and exercised about the subject, half of their members of the Committee would have turned up to take part.

[Kelly Tolhurst]

My hon. Friend makes a fair point.

In many of our debates on no-deal regulation, the fact that we are where we are regarding the powers in the withdrawal Act and bringing in retained European law through secondary legislation has been a bone of contention for the hon. Member for Sefton Central. I understand that he wants further scrutiny, but I assure him that the reason we are here today, dealing with a no-deal SI, is that we are retaining EU law and bringing it over so that in the event that there is no deal on exit day, we have a functioning domestic regime. The regulations have been laid and there have been opportunities to read and examine them. I do not believe that the Government in this case are shirking their responsibilities or not giving Parliament the opportunity to scrutinise. We have been debating for an hour in this Committee. The withdrawal Act does not allow us to make big policy changes; we can make the changes required. We are debating a no-deal SI, which will come into effect if we leave the European Union with no deal. If we can reach agreement on a deal, the regulations will not be relevant.

Terms and Conditions of Employment

Debate between Andrew Griffiths and Kelly Tolhurst

Tuesday 19th February 2019 Commons Chamber

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

I beg to move,

That the draft National Minimum Wage (Amendment) Regulations 2019, which were laid before this House on 28 January, be approved.

The Government want fair employment for all. Through our industrial strategy, we committed to boosting productivity and increasing earning power across the country. The way in which people work is changing, thanks to new technology and new employment models. We need to ensure that the labour market continues to work for everyone.

In December, we published the “Good Work Plan”, which sets out the biggest package of workplace reforms in over 20 years. This includes our vision for the future of the labour market and our ambitious plan for implementing the Taylor review recommendations. The important package will ensure that workers have access to the rights and protections that they deserve. It will also create a level playing field for employers, ensuring that responsible employers are not undercut by a small minority who seek to circumvent the law.

The national minimum wage and the national living wage are crucial to those commitments. They help to protect the lowest paid in our society. We can be proud of our labour market. Our employment rate of 75.8% is the highest since comparable records began in 1971. Unemployment is down to 4%. Since 2010, the national minimum wage has increased faster than average wages and inflation, meaning more money for the lowest-paid workers while employment continues to increase. This success means that we can continue to increase the rates above inflation. We will continue to work towards our target of the national living wage reaching 60% of median earnings by 2020, subject to sustained economic growth.

[Andrew Griffiths (Burton) (Con)]

The Minister is doing a brilliant job as the Minister responsible not only for small business but for the labour market. I was lucky enough to be the Minister when we brought forward the biggest increase in the national minimum wage for 10 years. Does she agree that the greatest beneficiaries of that are women in the workplace who tend to be the lowest earners, and that our actions in increasing the minimum wage on the scale that we have has gone a long way towards helping to reduce the gender pay gap?

[Kelly Tolhurst]

I thank my hon. Friend, my predecessor, for making those comments on what the Government have undertaken over recent years to increase wages for the lowest-paid workers. I agree with him that what we have done to increase the rate of pay for the lowest-paid workers has supported women in the workplace and has been able to help to reduce the gender pay gap. We also have other programmes coming forward, including our consultation on mandatory ethnicity pay reporting, which we will say more about soon.

The regulations will increase the rates of the national minimum wage and national living wage from 1 April. We estimate that this will lead to a pay rise for more than 2.1 million workers. I would like to place on the record my gratitude for the work of the independent Low Pay Commission, which recommends the rates, bringing together the views of businesses and workers, using research and analysis to inform its work and reaching a consensus on what the rates should be. I am delighted to say we have accepted all its recommendations for the increases to the rates from 1 April.

The regulations will increase the national living wage for those aged 25 by 38p to £8.21. This is an above-inflation increase of 4.9% and means a pay rise for a full-time worker of more than £690 a year.

[Andrew Griffiths]

May I too commend the work of Bryan Sanderson from the Low Pay Commission and his team? Given that he manages to bring together unions, labour market experts and businesses and get them to agree, does the Minister think we should get him involved in our European Brexit negotiations?

[Kelly Tolhurst]

I thank my hon. Friend for pointing out the good work of the Low Pay Commission and how it brings people together to come up with balanced proposals, such as those before us today, which the Government have accepted.

The regulations mean that a full-time worker will be more than £2,750 better off next year compared with the year the national living wage was introduced. The regulations also increase the rates for younger workers and apprentices. Those aged between 21 and 24 will be entitled to a minimum hourly rate of £7.70, which is a 32p increase; workers aged between 18 and 20 will receive an extra 25p an hour, taking their rate to £6.15; 16 to 17-year-olds will earn at least £4.35 an hour—a 15p increase; and apprentices aged under 19 and those in the first year of their apprenticeship will receive the largest percentage increase of 5.4%, meaning an hourly rate of £3.19.

--- Later in debate ---

[Kelly Tolhurst]

I thank all Members who contributed to the debate. I was pleased to hear that the Opposition will not oppose this statutory instrument, although I was disappointed by some of the comments about the Government’s commitment to workers and, in particular, to young people—it seems to be a recurring theme, because some of these criticisms were levelled against me in a debate last week. This Government and the Prime Minister have been clear about our commitment, so I will take no lectures from the Opposition on supporting low-paid workers, and no suggestion that Government Members do not understand the real world. As I have said numerous times, I am proud to be a member of a Conservative Government who are committed to the biggest reformation of rights in the workplace in 20 years. I am proud to be a Minister who is part of that.

[Andrew Griffiths]

I thank the Minister for what she has said so far. We hear a lot about workers’ rights being eroded by us leaving the European Union, but are we not demonstrating, through the Taylor report, that we are actually going further and faster than Europe in guaranteeing new rights to the lowest paid and to vulnerable workers?

[Kelly Tolhurst]

I thank my hon. Friend for that point. He is indeed correct, because we have been clear that we will not be rolling back workers’ rights when we leave the European Union. That has been further guaranteed by the introduction of the “Good Work Plan”—I will say more about that later—and we have already laid three SIs dealing with workers’ rights. We are going further on workers’ rights and increasing the wages for the lowest paid. We are sticking to our commitment. I am proud to be part of a Government who have put workers’ rights and the lowest paid in our society at the top of our agenda, so I will take no lectures from the Opposition in that regard.

We will increase the personal allowance of the lowest-paid workers to £12,500 in April. That will take 1.7 million people out of tax. Since 2015, the national minimum wage has risen faster than average wages and inflation. For the lowest paid, there has been 8% growth, above inflation, between April 2015 and April 2018. I will therefore not listen to accusations that we have not continued to work towards our commitment to reach 60% of median pay by 2020.