Draft Construction Contracts (England) Exclusion Order 2022

Bill Esterson Excerpts

Wednesday 29th June 2022 General Committees

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure, as always, to have you in the Chair, Mr Gray. I am grateful to the Minister for his in-depth explanation of the order, but I will perhaps tease out further one or two of the points that he made.

The Minister quite rightly made the point that the construction Act was designed to address, among other things, the very real concerns about poor payment practices, particularly through construction industry supply chains. It addressed the way in which pay when paid was used to undermine the interests of smaller firms and self-employed contractors. It explained the rationale, and the fact is that this has been used previously.

What the Minister has said, however, raises a number of questions, some of which were raised in the House of Lords. The Lords Minister’s answers raised additional questions, which the Minister has not quite addressed this morning. First, he mentioned that the tier 1 provider would often be part of the special purpose vehicle. Could he clarify how often that is likely to be the case? In circumstances where it will not be the case, what protections would there be through the supply chain? I can perhaps pre-empt his answer, because he did say that whoever the contractor is would be aware of the terms and the dispute resolution mechanism.

Cash flow was also raised in the House of Lords. Given what has been said by the Minister, the explanatory memorandum and in the House of Lords, I believe I am right in saying that payment is due to the tier 1 contractor when services are delivered. That gives rise to a question about the timeframes. If payment is made after one month, that should not adversely affect the cash flow and ability of the tier 1 contractor to pay SMEs, self-employed contractors and the workforce more widely. However, what are the implications if payment is made after six months or longer? I take the Minister’s point about the SPV, but what protection is there for those contractors who are not part of it? That seems to be the key challenge to tease out, to make sure they do not end up with cash-flow problems.

We are all acutely aware of what can go wrong in the construction industry. In recent years, Carillion left £2 billion unpaid to its supply chain. I am not suggesting for one minute that this is another potential Carillion—it is on a very different scale and, as the Minister has set out, it is a regulated situation—but ultimately this comes down to cash flow. I am concerned about what happens if tier 1 contractors are not in a position to ensure their cash flow because of the way in which contracts are let and agreed, in spite of their awareness of the terms up front. We need to do everything we can to avoid problems through the supply chain for SMEs, self-employed contractors and the workforce. That is the key point.

On a related point, I want to tease out whether the concerns I have raised are the same as those raised in the consultation responses. I gently say to the Minister that it would be helpful if we could see the consultation responses before we debate statutory instruments, so that we can scrutinise the concerns that were raised with Ministers directly. It was helpful of him to draw our attention to what some of those concerns might be, but could he confirm whether I am correct in assuming that the people consulted raised the same concerns as me, or did they raise other concerns?

That covers the main points. In essence, I would like to hear from the Minister whether pay when delivered is in danger of getting close to pay when paid, and how that will be avoided and policed. Ultimately, if there is a situation where cash flow is problematic, how does he envisage ensuring that that does not create problems through the supply chain for SMEs, self-employed contractors and the workforce?

[Lee Rowley]

Many thanks to the hon. Member for Sefton Central for his constructive questions and comments. I will try to take them in turn, although I will take the third one first. I was not in the specific consultation meetings, but as I understand it consultation was undertaken over a number of months. I mentioned in my speech some of the things that the hon. Gentleman has pointed out. I will cover those in a moment, including the need to ensure that the model and the cash flows work and that ultimately those companies further down the supply chain can still get the money they need for the services that they pay for.

The consultation covered a significant number of operators in both the water industry and the construction industry, ranging from Balfour Beatty to Build UK, the Civil Engineering Contractors Association, Costain, Deloitte and EY. There were roundtables with water companies covering Yorkshire Water, South West Water, Welsh Water and United Utilities. My previous comments were a fair reflection of the aggregate opinion, which is that they are content to progress and recognise that this has the potential to be an important new tool. They want to make sure that the contracts are organised in a way that minimises issues, but also recognise that there is risk and that that has to be priced in through the commercial transactions undertaken either when people or organisations join the SPV or contract into it.

[Bill Esterson]

The Minister mentioned the consultees and named some fairly large businesses. Were SMEs and those further down the supply chain part of the consultation? What were their responses?

[Lee Rowley]

A number of industry bodies were consulted, including Build UK and the Construction Leadership Council, which try to take a holistic look at the views of the industry as a whole. In my other role, as construction Minister, I work with them very closely and know that they try to ensure that they prioritise the views of all across the industry, not simply those who may speak with a louder voice, for whatever reason.

Let me turn to the other two points, which are important and I am happy to address them. We hope that the special purpose vehicle will be a tool that can be used to bring forward significant infrastructure improvements in the future, but the ultimate decision about how it would be set up in the one, two, three or n number of cases where this happens will be down to the organisations that want to go into those SPVs. The hon. Gentleman asked how likely the first-tier contractor is to be part of the SPV or its entity, but I cannot give him a number, a percentage or an expectation, because ultimately that will be down to the market to determine. However, experts and officials have indicated that, given historical precedent and what companies that play in this space are likely to do, they would expect those companies building this infrastructure, such as pipes or sewage improvements, to take an early interest in the discussions and the transactions. It is not unusual for such companies to be in similar financial structures early on in the SPV process, but that will ultimately be down to them.

That leads on to the second question, which is how do we make sure that there is not a problem of payment further down the supply chain. There are two broad answers to that. First, for those who are not first-tier suppliers, the same requirements apply around payment as they do today. The contracting that would be undertaken for tier 2 suppliers would be undertaken on the basis of the construction Act, and that Act and the scheme of construction contracts contain clear clauses about payment upon delivery, not payment when other organisations or entities choose. That is not changing.

What is changing is, in effect, the box before that. The SPV and the first-tier operator will need, either through being a group of one or through the SPV contracting to a tier 1 operator, to price in risk appropriately and organise themselves appropriately. They will also need agreement with their funders to ensure that they have cash available at the point at which they will need the working capital to pay tier 2 suppliers or whoever they are contracting, to ensure that the output is delivered.

That is fully transparent at this stage, and that is exactly what the DPC is designed to do—to allow private companies to go out and seek investment to cover the build element, including tier 2 suppliers, and then recognise that they will start to get a revenue stream at the point when the infrastructure is delivered. That is entirely the point of it. The revenue coming from the water companies will not start until delivery. That means that if this works, and we have confidence that it will, the risk to the public purse is minimised because companies pay on results, not on proposal, and because a set of companies and individual actors will be entering into a contract to ensure that they price the risk of delivery appropriately and deliver it to get a long-term revenue source from the Government. I hope that those answers resolve the points raised by the hon. Gentleman. I am grateful for his contribution.

To conclude, I reiterate that the creation of any exclusion under the construction Act is the exception.

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[Bill Esterson]

The Minister has said that there has not yet been an example of this disapplication, so we are not in a position to judge it. There are, however, two earlier examples of where the construction Act has been disapplied. Are those examples relevant or are they different and, therefore, not relevant?

[Lee Rowley]

The reason the Act was disapplied in 1998 and 2011 was, in effect, the private finance initiative. PFI has a different structure whereby the Government are still involved in contracting out the cost. The order, however, relates to the arrangement between two private parties—the water companies and first-tier building contractors—though admittedly for a piece of infrastructure that will be important to the citizenry of the United Kingdom. It will, however, be a different prospectus. I do not, therefore, think that we can draw conclusions from the previous disapplications. That is why we want to tread carefully, and why Ofwat is keen that we have some early pathfinders, so that we can learn and understand that the proposal works.

Oral Answers to Questions

Bill Esterson Excerpts

Tuesday 29th March 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister, Bill Esterson.

[Bill Esterson (Sefton Central) (Lab)]

The spring statement did not

“address the complex challenges facing the manufacturing sector”.

It just is not

“tenable for thousands of businesses”

and it is

“kicking the can down the road”.

Those are the words of three businesses that are asking for help. So how about this: first, cancel the 10% increase in national insurance payroll tax; secondly, cut energy bills by up to £600 per household; and, thirdly, set up a £600 million energy-intensive industries contingency fund? Our plan is following the evidence from the business community of what is needed. Why will this Government not help businesses that are crying out for support?

[Lee Rowley]

The hon. Gentleman highlights the importance of manufacturing, which we have already talked about in these questions. This Government are a champion of manufacturing—[Interruption.] I am so glad that all Opposition Members agree with me. If they really do, they would recognise that ensuring a strong manufacturing base is incredibly important. The Labour party can provide no lessons, on the basis that it decimated manufacturing before 2010.

Support for New Adoptive Parents

Bill Esterson Excerpts

Monday 21st March 2022 Westminster Hall

[Bill Esterson (Sefton Central) (Lab)]

I am delighted to be here and hon. Members will realise why shortly. I congratulate the hon. Member for Colchester on his speech, his presentation and the case he made. I hope we hear a similar speech from the Minister in a moment or two, and that the Minister accepts everything his hon. Friend said; I did not find anything that I disagreed with. I also agreed with the hon. Member for Scunthorpe (Holly Mumby-Croft).

As always, my hon. Friend the Member for York Central (Rachael Maskell) made an impassioned case in support of adoption. She knows, even if others do not, why the issue means so much to me. I say to the hon. Member for Colchester that it is not just the Conservatives who think that we should support our self-employed people; that is what the Labour party thinks, too. I speak from personal experience, because I was self-employed and started and grew small businesses for many years.

[Ms Nusrat Ghani (in the Chair)]

Order. Mr Esterson, I do not wish to stop your flow, but I think you are getting the constituency name wrong, as Mr Colburn represents Carshalton and Wallington.

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[Bill Esterson]

I apologise to the hon. Member for Carshalton and Wallington (Elliot Colburn) and to the constituents of Carshalton and Wallington for moving them to Essex—that will get me into a whole heap of trouble. I will get into trouble at home for that as well. Not only was I self-employed, but I adopted two children with my wife in 2007, while we were growing our businesses, so I completely understand why the issue is so crucial for so many people and my personal experience means I support the case. My children were from Essex and were born in Southend, so I will now be in deep trouble for having slighted them.

We found it incredibly difficult to build relationships with our children when we adopted them, which is a common experience. The challenges of children who have been neglected and faced trauma, including the trauma of having been removed from their birth parents, have been described. That trauma can be there in the youngest of children, not just among older children who have conscious memories.

As well as giving a chance for parents and children to bond, those of us who have done it appreciate, sometimes much later on, that there is a huge need for us as adoptive parents to learn from experience, preferably with support, about what is required in looking after children with significant additional needs. Sometimes those needs come out much later, when children are older. The very least we can do is ensure we reflect the response to the needs of parents who give birth to their own children and the arrangements for adoptive leave for people who are employed. There seems to be an oversight and an inconsistency, which I hope the Minister will address.

We have heard about the situation where a self-employed birth parent has the right to paid adoption leave, which was introduced by a Labour Government nearly 20 years ago. The rationale was that it gave time to adjust to the new relationship and reduced the number of disrupted placements. As we heard from a number of hon. Members, sadly more than 80,000 children are in care, a number which is at a record high. Anything that we can do to get permanence for those children must be to their benefit and to the benefit of society as a whole.

We heard about the figures from Home for Good and the Federation of Small Businesses. The FSB estimates that £5 million a year would fund self-employed adoption leave, while Home for Good estimates a figure of £34,000 a year for each child in care. It does not need very many more children to be in a position where self-employed prospective adopters can adopt them to make a financial saving for the Exchequer. The numbers work.

It is absolutely clear that this is the right thing to do for children. As the hon. Member for Carshalton and Wallington correctly said, the support should be available to self-employed people as well. I got his constituency wrong because I was thinking about the Children’s Minister, who has spoken previously on the issue.

I hope that we will make some progress and that we get a good response from the Minister. Ultimately, providing such support is right for adopters, entrepreneurs and the Exchequer; above all, it is right because it will provide a better chance for children and families. Sadly, self-employed people were excluded far too often during covid. Far too many of them are excluded from the opportunity to make a difference to children’s lives through adoption. Come on, Minister—let us include the self-employed and change lives for the better.

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[Lee Rowley]

I am grateful to the hon. Gentleman for his characteristically incisive intervention. My answer is that we continue to look at all the different elements of how we can structure support for new parents, whether birth parents or adoptive parents—not that that should matter in any way, shape or form—and to work through the most appropriate interventions possible. There will be opportunities later in this Parliament to look at this issue again. I am keen for people to continue to highlight their challenges and personal situations.

I hope I have articulated in my contribution so far the challenge of working through the intentions of every single element of different policies brought in for very good reasons at different times, but the fundamental point is that this particular benefit, which this petition seeks to extend, was ultimately brought forward for a different purpose from what is being talked about here. That does not take away from any of the important points being made by colleagues and the petitioners at large.

I would like to draw to a close, if I may—

[Bill Esterson]

Before the Minister does, will he give way?

[Lee Rowley]

I would be delighted.

[Bill Esterson]

The Minister has made the point, which I accept, about how, for health reasons, benefits for parental leave and maternity benefits were decided on for employment and self-employment. The principle seems to have been established for adoptive parents in employment, too. What I have not followed from his argument—I waited until the end to ask, to see whether he fleshed it out—is the rationale for saying that the principle has not also been established for adoptive parents in self-employment.

[Lee Rowley]

The principle is that while we recognise that the world of work changes—the hon. Member for York Central highlighted the moving parts around the Taylor review and other things around how work is changing—there is a difference between employed work and self-employed work. The cohort of self-employed, who we want to support, grow and help, is very diverse, and there are groups within it who have additional flexibilities as a result of self-employment. Some have the ability to work around their personal lives in terms of their work issues and the rest of it, and we accept that there is a group that does not. It is a question of recognising that the cohort is very diverse.

One reason for the recommendation and advice to local authorities about being able to give consideration to support for specific circumstances is to acknowledge the diversity within that cohort and to try to ensure support where people need it. However, it is also a recognition that this diverse cohort has different groups and different people with different needs.

In terms of the overall position, I recognise that there are strong feelings here and that there are significant views on this issue, both in the Chamber and in the Public Gallery.

Shale Gas Production

Bill Esterson Excerpts

Tuesday 15th March 2022 Commons Chamber

[Greg Hands]

I think I am meeting my hon. Friend’s APPG either this week or next, and I am looking forward to that. He makes some strong points. Net zero is not part of the problem; it is part of the solution when it comes to both the transition and energy security. He talks about not repeating the mistakes of the past and he mentions nuclear. I will put on record that I am glad to see the conversion of the Labour party from saying it was anti-nuclear in its 1997 manifesto to now backing the Government’s nuclear programme. I welcome that conversion.

[Bill Esterson (Sefton Central) (Lab)]

My constituents in Formby have experienced test drilling, and they have very real safety concerns. I can assure the Minister that there is widespread community opposition to fracking in my constituency. Will he give my constituents certainty that fracking is ruled out? I will tell him how he can do it—by ending the moratorium on onshore wind and giving full-throated support to tidal energy, both of which are realistic options in the Liverpool city region.

[Greg Hands]

We have just announced a dedicated pot for tidal energy in the CfD round. In terms of providing certainty, may I suggest to the hon. Gentleman that he goes back to the 2019 Conservative party manifesto? The policy is unchanged from that. As a friendly, cross-party suggestion, if he wants to give his constituents some assurance, he could perhaps reprint that manifesto in full and distribute it to all his constituents, saying that there the policy is unchanged.

Professional Qualifications Bill [Lords]

Bill Esterson Excerpts

Report stage
Monday 14th March 2022 Commons Chamber

[Mr Deputy Speaker (Mr Nigel Evans)]

Does the shadow Minister want to come in straightaway or shall I go to somebody else?

[Bill Esterson (Sefton Central) (Lab)]

Go to somebody else.

[Mr Deputy Speaker]

I call Ben Lake.

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[Owen Thompson]

My right hon. Friend makes an excellent point, and I absolutely agree. Of all the things to pick an argument over, why create this situation over something on which we broadly agree and are actually on the same page? It is not too late. My right hon. Friend is not pressing his amendment to a vote, but the Government could still accept new clause 5 so that we could fix this situation and deal with it. I sincerely hope that the Minister will prove my concerns wrong.

[Bill Esterson]

I will speak to new clauses 3 and 4 tabled in my name, then briefly come back to the Government amendment and to amendment 3. During the progress of this Bill through the Lords, it became clear that it had been thrown together in a completely unsatisfactory way. The Financial Times described the way in which the Government introduced it as a

“chaotic handling of a post-Brexit regime for recognising the qualifications of foreign professionals”.

Remarkably, the Government admitted introducing the Bill to Parliament without knowing which professions were in scope. We argued in the Lords that we had to know who and what was in the scope of the Bill. It stands to reason that the relevant regulators and professions need to be aware of these changes. Having initially listed 160 professions and 50 regulators that would be affected by the legislation, the Government twice published a revised list, ultimately increasing the numbers to 205 professions and 80 regulators. Due to do the increased number of regulators in scope, the Government also had to publish an updated impact assessment, with the total cost to regulators increasing by almost £2 million. That is hardly the way to inspire confidence that the legislation will help businesses or skilled workers.

The Government were criticised from all sides in the Lords, including by those on their own Benches. Baroness Noakes said that the legislation had

“all the hallmarks of being a Bill conceived and executed by officials with little or no ministerial policy direction or oversight…we learn that the Bill was drafted with a far-from-perfect understanding of the territory that it purports to cover. This is no way to legislate.”—[Official Report, House of Lords, 22 June 2021; Vol. 813, c. 149.]

How can regulators and regulated professionals know where they stand when the Ministers responsible for the Bill do not even know themselves? When I raised this in Committee, the Minister responded that he had

“reservations about enshrining a list in the Bill.”

This was because of concerns about not knowing which professions were ultimately covered. He went on to say that the Government had committed to

“maintaining a list of regulated professions and regulators to which they consider the Bill applies, and to keep that list readily accessible and in the public domain.”––[Official Report, Professional Qualifications Public Bill Committee, 18 January 2022; c. 30.]

It is of course encouraging that the Minister has made such a commitment to maintaining a list. I am not asking Ministers to place a list of regulators on the face of the Bill, but for the certainty that regulators and professionals need to be able to operate with confidence, it is important that they now know whether they are within the scope or not, and that means maintaining the list that Ministers have agreed to keep in the public domain. Web pages can be deleted, links can be lost, and without an amendment requiring the maintenance of a list, there will be no legal duty on Ministers to do so. Indeed, if they decided on the day following the granting of Royal Assent to this Bill that they no longer wanted to publish the list on the gov.uk website, they could remove it. This amendment, which I will not be pressing to a vote, is a reminder that the Secretary of State and the Minister need to maintain the list in the public domain, as promised, for the benefit of the professions and professionals who need certainty. This should not be a controversial point, and I hope the Minister will confirm that that is indeed what will happen.

Turning to new clause 4, the Bill provides a framework to allow mutual recognition of professional qualifications between regulators and professional bodies in the UK and the equivalent organisations overseas. The provisions in clauses 3 and 4 will allow for the implementation of regulator-to-regulator mutual recognition agreements and of the recognition arrangements in new international trade agreements. As the Law Society tells us, the Bill will enable the mutual recognition agreement provisions in the UK-EU trade and co-operation agreement to be implemented. However, the Law Society also says that the provisions for mutual recognition agreements in the TCA are largely based on the EU-Canada comprehensive economic and trade agreement—CETA—but that in fact no mutual recognition agreements have been signed between the EU and Canada using the provisions in CETA in the three years since CETA came into force. The failure to use the provisions on which the Government are relying raises the concern that the provisions are not sufficient. To remind ourselves, this legislation, if applied effectively, might well help to address shortages in a multitude of professions, including the chronic shortage of nurses and vets.

In Committee, I asked the Minister how his Department would put in place the additional support, co-ordination and guidance needed to make the most of the provisions in the trade and co-operation agreement, especially if they are to form the benchmark for future free trade agreements. There is real concern that the model on which the provisions in the legislation are based will not deliver results. That is why I tabled new clause 4, which would oblige the Secretary of State to provide guidance to regulators on how to make the most of the provisions in the TCA.

The Minister has written to me since the Committee stage to say that BEIS has engaged with 20 regulators of professional bodies. It will be important to see that such engagement leads to the delivery of mutual recognition agreements using the template on which the Government are relying. The Minister referred in Committee to a limited pilot recognition arrangement programme. I would be grateful if he could explain how effective that pilot has been so far, and how he foresees its leading to the successful implementation of new regulations.

I shall turn now to what the Minister said about new clause 1. In Committee we tabled two amendments to address the concerns raised by the devolved Administrations. We asked for consistency from the Government in the way they approach this Bill. The consistency we asked for in one of the amendments involved a similar amendment to that included in the United Kingdom Internal Market Act 2020. I see from new clause 1, having read it a number of times, that it is consistent with what is in the internal market Act and I thank the Minister for listening to the concerns that we raised, even though the Government voted against our amendments in Committee.

The Minister has addressed the concerns about those matters on which the devolved Administrations can make recommendations. That is an improvement on the more “flexible” approach to consultation that he talked about in Committee. That informal approach would have left no formal consultation mechanism. We have heard reservations expressed by a number of hon. Members on that, and I trust that the Government will still seek consent, in the spirit of new clause 1, when applying the regulations that are relevant to the devolved Administrations.

Briefly, I can tell the hon. Member for Richmond Park (Sarah Olney) that we will be supporting amendment 3. Representation of the devolved Administrations on the board is an important principle, and something that we return to again and again in legislation. We believe that, in the interests of the devolution settlement, that is entirely appropriate.

[Paul Scully]

I thank the hon. Members who have taken part in this important debate. I will whip through each amendment in turn, starting with new clause 2.

I thank the hon. Member for North East Fife (Wendy Chamberlain) for tabling new clause 2, and I wish her well as she recovers from covid. I thank the hon. Member for Richmond Park (Sarah Olney) for speaking to the amendment. I remind the House that clause 16 sets out the definition of an appropriate national authority for the purposes of the Bill. It also sets out the concurrent powers for making regulations in areas of devolved competence.

These powers could be used by the Secretary of State or the Lord Chancellor if, for example, a profession falls within devolved competence but is regulated at UK level. I understand the strength of feeling about the concurrent powers in the Bill, but I have been clear that any regulation made by the UK Government that falls within devolved legislative competence will be limited in scope and will always be made in consultation with appropriate Ministers from the devolved Administrations. The Government listened carefully to the concerns raised in both Houses, undertook extensive engagement with the devolved Administrations and negotiated in good faith in relation to those concerns. I am grateful for the devolved Administrations’ constructive and well-spirited engagement.

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[Bill Esterson]

The Bill is much improved following its passage through the Lords and the scrutiny carried out in this House, not least by the addition of new clause 1, which was tabled by the Secretary of State on Report and addressed at least some of the concerns expressed about the devolution settlement.

It is vital that there is a robust regime so that our professionals can operate effectively here and overseas and we can to address shortages in many of the occupations covered by the legislation, including those of nurses and vets, as we have discussed many times throughout the Bill’s passage. I plead with the Government to give the guidance to the regulators, the professional bodies and the professionals, so that the system that the Bill sets up is effective in creating mutual recognition agreements that will make a difference to the professions, with the resultant impact on the economy. The legislation will affect 205 professions and 80 regulators. It is vital that there is certainty as to who is included and that the list of who is covered is up to date, to the benefit of professionals and the economy.

I associate myself with the Minister’s remarks about the role of all those involved in getting the Bill through both Houses. My thanks go to the Clerks and my office for their help in the construction and tabling of amendments and support in respect of my speaking notes. With that, I thank all who have taken part in our debates.

Oral Answers to Questions

Bill Esterson Excerpts

Tuesday 22nd February 2022 Commons Chamber

[Lee Rowley]

I pay huge tribute to my hon. Friend for all the work he has done on Britishvolt, as a passionate advocate for his constituency. This will bring new skills, jobs and opportunities to Blyth Valley, and I congratulate him on it.

[Bill Esterson (Sefton Central) (Lab)]

Yesterday, the Prime Minister said that he wanted British workers to be more like German workers. Let us be more like Germany: it has increased the number of manufacturing jobs by 1 million since 2010, whereas this Government have presided over a fall of 93,000 jobs. The difference is that this Conservative Government do not have a plan, whereas in Germany there is a plan for manufacturing. The Labour party has a plan in our country, too, so if Ministers really want to support manufacturing, why do they not use Labour’s plan to make, buy and sell more in Britain?

[Lee Rowley]

I am not sure that Members on these Benches will take any lessons from a Labour party that decimated manufacturing between 1997 and 2010. Before the pandemic in 2019, we had seen an increase in employment in manufacturing, and the expansive and multiple investments in manufacturing announced in just the past few months—at Nissan, Stellantis and Britishvolt—demonstrate this Government’s commitment to manufacturing for the long term.

Topical Questions

Professional Qualifications Bill [ Lords ] (First sitting)

Bill Esterson Excerpts

Committee stage
Tuesday 18th January 2022 Public Bill Committees

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

It is a pleasure to serve under your chairmanship, Mr Pritchard. The Bill will replace the interim system for the recognition of professional qualifications that was put in place when the UK left the EU. That interim system can give preferential treatment to professionals within the European economic area and with Swiss qualifications. It has not been reciprocated by the EU, and will be superseded by our recent trade agreement with the EEA and European Free Trade Association states. It must therefore be revoked.

Clause 1 sets out the substance of a new recognition approach. It means that regulations can be made that require regulators to consider applications from individuals with professional qualifications and experience gained around the world. Regulators will determine whether an individual with overseas qualifications or experience has substantially the same knowledge and skills to substantially the same standard as demonstrated by the relevant UK qualification or experience. Equally, other relevant regulatory criteria must also be met—for example, regarding language proficiency or criminal record checks. The regulations would not alter the standards required to practise professions in the UK. No regulator would be pressured into accepting qualifications that did not reach UK standards. My officials have worked with all regulators affected by the Bill, and I am happy to report that the regulators support clause 1.

Where clause 1 is not exercised, regulators will be free to continue recognising qualifications from overseas in line with their existing powers and any reciprocal agreements in place. As a result of the condition in clause 2, there are only certain conditions under which a Secretary of State, the Lord Chancellor or a devolved Administration would be able to make regulations under clause 1. Action can be taken only where there is a clear public interest to do so—in this case, unmet demand for services. I hope that my explanation has provided further clarity on why the Government believe that that approach is necessary and proportionate. I assure the Committee that the regulators support the clause.

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to see you in the Chair, Mr Pritchard. Having a skilled workforce is essential for the economic success of our country, and the Bill will promote mutual recognition of professional qualifications, which will in turn increase the opportunities for many professionals from abroad to work here in Britain. We also need our high-class professional services professionals to have the opportunity to work abroad. The Bill matters both in addressing access here and in creating a potential for mutual recognition agreements for professionals to work abroad.

Whether it is for the billions that qualified professionals contribute to our economy—such as the £60 billion of gross added value that legal services are worth and the £5 billion in the export of legal services—or the societal contribution that nurses, doctors, veterinarians and others make to the fabric of our country, it matters greatly that we get the legislation right. Although the Bill has faced much scrutiny from colleagues in the Lords, there are areas where it could be amended to ensure that we in this House, as well as our colleagues in the devolved Administrations and the regulated professions, deliver the certainty that the Bill should provide to millions of professional workers.

We therefore encourage the Government to properly consult with the relevant regulators and professional bodies before making regulations, so that they can avoid the same shambolic approach that the Government took, for example, in the establishment of the Trade Remedies Authority, where the Secretary of State had to step in at the eleventh hour last year to prevent the disastrous removal of vital protections for our steel industry. Similarly, we encourage the Government to properly consult with the devolved Administrations, and provide appropriate reassurances to them that they will be appropriately consulted when regulations affect them, and that the Bill will not strip more powers from them when it comes into force. The relevance of the Trade Remedies Authority is that the Government opposed our amendment in Committee to then Trade Bill to include, among others, the devolved Administrations. Our amendments to today’s Bill would reassure the devolved Administrations that this legislation will not be another attempt by Westminster to seize responsibilities that were previously devolved.

We have also tabled new clauses to strengthen certain aspects of the Bill. Having qualified professionals here in the UK contributing to our economy and social fabric is vital. It is therefore galling to see yet more shortages of skills across the country—shortages that, we hear today, are in the tens of thousands for nurses and carers. We know about the shortage of vets. All of those are covered by the Bill, as are driving instructors, who of course link to lorry drivers, where we have a significant and sustained set of problems. That is why we seek an obligation for the Government to provide a report to the House about what they are doing to tackle the skills shortages facing the country. We also seek additional certainty for workers who already have their professional qualifications recognised in the UK.

Finally, we seek certainty that a number of regulators and regulated professionals are covered by the Bill. When the Bill was in the Lords, it was clear how little effort and thought went into it from Ministers. It was truly shambolic. In fact, it was so shambolic that the Government’s own Minister, Lord Grimstone, said that the deep errors had made him feel “uncomfortable” and that he had listened to the criticism

“with a certain lack of enjoyment.”—[Official Report, House of Lords, 22 June 2021; Vol. 813, c. 160.]

Conservative peer Baroness Noakes said that

“it has all the hallmarks of being a Bill conceived and executed by officials with little or no ministerial policy direction or oversight.”—[Official Report, House of Lords, 22 June 2021; Vol. 813, c. 149.]

I hope that today’s Minister is giving a little more political direction and oversight than his colleagues have previously. How does he feel about the Bill? Is he, as his colleagues were, uncomfortable with it? Is he certain that the wrinkles have been ironed out?

This is an important piece of legislation, which will affect people’s lives and livelihoods, and every effort must be made to deliver the system that those in scope need. Lord Grimstone had the decency to accept the shortcomings of the Bill and of the Government, and in collaboration with Labour made the necessary amendments to put the Bill into better shape. I hope that today’s Minister will address the remaining concerns with us as we debate the amendments before us.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Power conferred by section 1 exercisable only if necessary to meet demand

[Bill Esterson]

I beg to move amendment 2, in clause 2, page 3, line 2, at end insert—

“(2A) In determining whether the condition in subsection (2) is met, the appropriate national authority must have regard to the availability of professional services in the regulated profession by reference to such factors as appear to the authority to be relevant including, but not limited to—

(a) the extent of delays in accessing professional services,

(b) the level of charges for services,

(c) available workforce data, skills needs or workforce modelling forecasts,

(d) vacancy levels or recruitment difficulties,

(e) whether the profession is on the occupation shortage list, and

(f) the views of the relevant regulator and of professional representative bodies.”

This amendment requires additional information to be taken into account by the appropriate national authority when deciding what regulations are to be made in accordance with the powers conferred under clause 1.

The reluctance to consult on matters of great importance to people’s lives and livelihoods is a flaw and a hallmark of how the Government operate. The Bill does not provide any obligation to consult the relevant regulators and other professional representative bodies when determining to make recommendations that will no doubt affect them and their members. How can that be right?

The second report of the Lords Delegated Powers and Regulatory Reform Committee stated clearly that it was

“surprised and disappointed that neither the Memorandum nor the Explanatory Notes…explain why Ministers will have no duty to consult before making regulations.”

The Minister should explain why not. As Conservative Baroness Noakes said to other peers, that

“goes to the heart of this Bill. BEIS did not consult on this Bill or any policy proposals. All it did was issue a rather strange call for evidence, some of the replies to which were really rather thin, and it then worked out its own policy and put out a statement of policy at the same time that it published the Bill.”—[Official Report, House of Lords, 22 June 2021; Vol. 813, c. 167.]

Failure to consult the relevant experts will only lead to mistakes and time wasted in trying to rectify those mistakes.

Furthermore, while the Bill was in the Lords, the Minister in that place said:

“I fully agree that it is important for the relevant national authority to engage with a range of stakeholders before making regulations. Because of the complexity of these matters, it would be the height of foolishness not to do that.”—[Official Report, House of Lords, 9 June 2021; Vol. 812, c. 1500.]

Does the Minister agree with his colleague that it would be “the height of foolishness” not to consult with the appropriate stakeholders? If he does, does he accept the need for the amendment?

[Paul Scully]

I thank the hon. Member for his amendment, which would alter the unmet demand condition in subsection (2). The amendment would require the appropriate national authority to consider a specific set of factors to determine whether that unmet demand condition had been met.

I agree that the appropriate national authority should be transparent when determining whether the unmet demand condition is satisfied. I also recognise that considering a combination of the factors set out by the hon. Member in the amendment would make a sensible determination of unmet demand. That is why the Government committed to publish specific guidance to support appropriate national authorities in their determination of unmet demand. Factors in the amendment would of course be part of that guidance anyway.

The other place agreed that that was appropriate, because setting matters out in guidance, rather than on the face of the Bill, will give the appropriate national authority the freedom to tailor its unmet demand assessment to the needs and circumstances of each profession. I expect that appropriate national authorities will be clear in showing how they have reached their determination. Their approach must withstand scrutiny.

For example, a devolved Administration is best placed to determine the factors relevant to assess whether there is unmet demand for a profession in an area of devolved legislative competence. It is important that they are able to decide how best to make such determinations, and are not forced to work through a list of prescribed factors in the Bill. I therefore hope that the Committee will agree that setting the factors out in guidance is more appropriate.

The amendment also refers to the gathering of views of interested parties. I agree that that is clearly of the utmost importance. Therefore, clause 15 sets out a duty to consult with regulators when appropriate national authorities are using the powers under clause 1. That will provide an opportunity for regulators to express their view on unmet demand and on the content of any resultant negotiations. Given that the Bill already legislates for that, I do not see the need to repeat such an obligation in clause 2.

The proposed amendment also extends the consultation to give regard to the views of professional bodies. I am sure that appropriate national authorities, as a matter of good practice, will look to liaise with such bodies where appropriate. I hope the Committee is reassured that measures are in place to guide the application of the clause and provide transparency of how decisions will be made, as the hon. Member rightly suggests is required, as well as appropriate engagement with key parties. There is no need, therefore, to set that out further in the Bill. As such, I ask the hon. Member to withdraw the amendment.

[Bill Esterson]

I am grateful for the Minister’s response. I come back to the point that the Lords Delegated Powers and Regulatory Reform Committee made—that this part of the Bill does not contain the duty to consult. I take his point about it being later in the Bill, but the point is, if the Government are happy to put it in later on, why is it missing here? We have not really had an answer, so we will test the will of the Committee.

Question put, That the amendment be made.

--- Later in debate ---

[The Chair]

With this it will be convenient to discuss new clause 1.

[Bill Esterson]

Encouraged by the closeness of the vote, we will have another go with new clause 1. The amendment provides additional reassurances to the devolved Administrations that the Bill does not affect the establishment or operation of common framework agreements, which are devolved matters. This amendment would—[Interruption.] Sorry, I am speaking to the wrong provisions. I am amazed that nobody noticed. [Laughter.]

[The Chair]

Oh, I assure you that I did.

[Bill Esterson]

Given your vast experience, Mr Pritchard, and given my experience of debating with you over a number of years, I know that you were about to intervene to stop me. We will speak to new clause 1, but we will not test the will of the Committee on the matter; we will come back to it on amendment 3.

The new clause would place an obligation on the Secretary of State to provide guidance to regulators concerning mutual recognition under the EU-UK trade and co-operation agreement. The Bill provides a framework to allow mutual recognition of professional qualifications between regulators and professional bodies in the UK and the equivalent organisations overseas. The provisions in clauses 3 and 4 will allow for the implementation of regulator-to-regulator mutual recognition agreements, and of the recognition arrangements in new international trade agreements.

Importantly, the Law Society advises that the Bill will enable the mutual recognition agreement provisions in the EU-UK trade and co-operation agreement to be implemented, but it raises concerns about the arrangements. The Law Society says that the provisions for mutual recognition agreements in the TCA are largely based on the EU-Canada comprehensive economic and trade agreement. No mutual recognition agreements have been signed between the EU and Canada in the three years since CETA came into force. The concern is that the lack of mutual recognition agreements using similar provisions may indicate that the arrangements in the TCA are not sufficient for setting up such new agreements as are needed to encourage professionals to make up the shortages of nurses, vets or other professionals.

The Law Society and the Labour party want assurances that additional support, co-ordination and guidance will be available if needed by regulators and professional bodies on how to make the most of the provisions in the trade and co-operation agreement, not least in case they are to form the benchmark for future free trade agreements. More than assurances, the new clause would oblige the Secretary of State to provide guidance to regulators on how to make the most of the provisions in the trade and co-operation agreement.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I will not detain the Committee for long, but I will speak briefly in support of the new clause in my name and that of my hon. Friend the Member for Sefton Central, who made some excellent comments.

I declare a slight interest as having a professional qualification myself—that of a chartered engineer. That qualification is not part of the list of qualifications that will be subject to the legislation, but professional qualifications are an important part of many sectors, such as engineering, in our economy and our public realm. They are a significant factor in the protection of service users. Think of the many professions that have such an impact on service users, from the legal profession to chartered engineering, medical professions and nursing. It is important that those professions are well regulated, and the Bill is important to all our constituents. Newcastle, for example, has many professionals who benefit from the recognition of their qualifications.

We want the UK to be the best place in the world to live and work. That means being able to attract those with professional qualifications. We must recognise the importance of the autonomy of the regulators, provided for by Labour amendments during the passage of the Bill, and the importance of appropriate guidance, for which the new clause seeks to provide, for professional qualification regulators, particularly when it comes to the impact of trade deals. Many of us in this House—I bow to my hon. Friend the Member for Sefton Central with his extensive experience, however—might find the intricacies of the many trade agreements somewhat difficult to master, so it is critical that the regulators of professional qualifications have the support and guidance that the new clause seeks.

I note, for example, that in the EU-UK trade agreement we have not achieved any reciprocity of professional qualification recognition, so we are in a worse position than we were before leaving the European Union. For many with professional qualifications in this country—lawyers, engineers—being able to work abroad is an important part of their training. I myself worked in France, the US and Nigeria for some time, bringing skills back to this country. Not having reciprocal agreements in many areas leaves us worse off with regard to, say, the European Union, where there is a system of automatic recognition of professional qualifications for seven sector professionals—nurses, midwives, doctors, dentists, pharmacists, architects and vets—and a general system that enables workers to have their professional qualifications recognised.

Given the challenges of negotiating a mutual recognition agreement, surely the Minister understands that many of the professional qualification regulators could benefit from the advice and guidance of his Department and, more broadly, of the Government, with all their experience. Therefore, in providing for an obligation on the Secretary of State to provide guidance to regulators concerning mutual recognition—specifically under the European Union-UK trade and co-operation agreement—and in supporting regulators, the new clause would protect all our constituents by ensuring the quality and professionalism of the services that they very much enjoy now and hope to continue to do so.

--- Later in debate ---

[Bill Esterson]

I am grateful to the Minister for describing the dedicated support team that the Department has set up. Will he give us some examples of the advice it has been able to give already? How many inquiries has it had from regulators or professional bodies?

[Paul Scully]

I will happily write to the hon. Gentleman with that detail. I have not been directly involved in that advice. None the less, we are here to talk about the amendment. The debate for today is whether we put that experience and advice on the face the Bill or have the existing structure, whereby that team is already offering that advice, is available and is stepping up with its experience to do so. That team regularly engages with regulators of professional bodies. It has published technical guidance on gov.uk. It is obviously going to be hard to quantify how many people have read and used that information, but information on how to seek recognition arrangements inside and outside the TCA is there.

The Department has also provided limited, targeted financial support to regulators seeking to agree recognition arrangements for a pilot recognition arrangements grant programme. I hope the hon. Member is therefore assured that the Government share the priority highlighted by his amendment and have already instituted support for regulated and professional bodies to make the most of the provisions in the TCA.

Clause 4 is part of our support for regulators as they pursue recognition agreements, ensuring that all regulators can take full advantage of international opportunities and enter recognition agreements at their discretion. Some regulators believe that they can already do so with their overseas counterparts and seize those opportunities. For example, the Financial Reporting Council has entered into a memorandum of understanding with the Irish Auditing and Accounting Supervisory Authority. If they can already enter recognition agreements, no further action is needed, but many regulators are currently considering recognition arrangements for the first time, and not all regulators have clear powers to enter them. Clause 4 can help. The Government are committed to supporting regulator recognition to fit legal agreements with the EU and beyond, and have taken action with that aim.

[Bill Esterson]

I am grateful to the Minister for his answers, which I will come back to. I commend my hon. Friend the Member for Newcastle upon Tyne Central for what she said about the importance of different professions, including her own, as part of the UK’s economic success, exporting around the world, gaining experience and returning it to this country. It is clearly in all our interests that we have good trade in services and facilitate that by supporting our professional services to trade internationally. She gave some excellent examples from across the professions of exactly why that matters and why it is a concern that we are relying on a clause that has not seen after three years any mutual recognition agreements signed up to in the corresponding EU-Canada agreement. That is the reason for the amendment and why we are raising this concern.

I am given a degree of assurance by the Minister that the dedicated support team is in place. I just gently say to him that, as the Minister, he really should have anticipated my question and probably pre-empted it by giving us some examples. I hope he is not going to blame his officials, because he should have asked for that information before, so that he could give us examples of the team in operation and told us how many inquiries there had been.

[Chi Onwurah]

I thank my hon. Friend for giving way and for his kind comments earlier. Is he concerned, as I am, that the Minister considers the lack of any negotiated reciprocal agreement under the Canada deal as some sign of success, and that that is why he is so complacent when it comes to providing proactive advice to our professional regulatory authorities for the EU trade deal?

[Bill Esterson]

A large degree of complacency and a lack of preparation characterise the whole way that the legislation has been brought forward, as Lord Grimstone and a number of Conservative peers acknowledged in the Lords. I think my hon. Friend is certainly on to something. The key thing is how we can ensure that mutual recognition agreements can be entered into by professional bodies and regulators in this country in a timely fashion that supports the kind of activity that she mentioned and maximises the benefit to our professional services that want to work abroad, as well as to employers who need access to staff in this country.

I will take the Minister at his word that a dedicated support team is up and running. In that spirit, we will not press the amendment to a vote.

[The Chair]

I remind the Committee that, as I set out in the preamble, the Question that is about to be put relates to clause 4, not to new clause 1. The debate on both has just taken place, but the decision on new clause 1, on which the shadow Minister has indicated his thinking, will come later.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

Revocation of general EU system of recognition of overseas qualifications

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Paul Scully]

Clause 8 is about increasing transparency by requiring regulators of professions in all parts of the UK to publish information on entry and practise requirements. Our evidence gathering found that the complex regulatory landscape is sometimes difficult for professionals to navigate, including in relation to transparency of information regarding entry into professions and application fees, so the clause requires regulators to make available the information about what qualifications or experience are needed, application processes, registration processes, how to continue to practise, ongoing training units and fees.

Question put and agreed to.

Clause 8 accordingly ordered to stand part of the Bill.

Clause 9

Duty of regulator to provide information to regulator in another part of UK

[Bill Esterson]

I beg to move amendment 3, in clause 9, page 8, line 12, at end insert—

“(6) Nothing in this section affects the establishment or operation of a common framework agreement relating to professional qualifications.

(7) A “common framework agreement” is any agreement between a Minister of the Crown and one or more devolved authorities as to how devolved or transferred matters previously governed by EU law are to be regulated.”

This amendment provides additional reassurances to devolved administrations that the Act does not affect the establishment or operation of common framework agreements which are devolved matters.

The amendment provides additional reassurances to devolved Administrations that the Bill will not affect the establishment or operation of common framework agreements, which are devolved matters—that is to say any agreement between a Minister and a devolved authority as to how devolved matters previously governed by EU law are to be regulated—relating to professional qualifications. It is important that when divesting powers to a devolved authority, we allow those powers to remain and do not seek to revoke them on a whim, buried in a Bill such as the one we are debating.

The position of the Labour Government in Wales is that assurances by Ministers in Westminster that they will not use powers granted to them without consultation with devolved Administrations is not good enough. If Ministers say they will do something, they should be prepared to put their commitments on the face of the Bill. Indeed, as the Welsh Government say, although the UK Government have stated that they do not intend to use the concurrent powers in the areas of devolved competence without the agreement of the relevant DAs, the provisions in the Bill do not reflect that, and the Secretary of State and Lord Chancellor would be able to exercise these powers in devolved areas without requiring any consent from Welsh Ministers. As representatives of the devolved Administrations are telling the Government, matters that were previously the preserve of the devolved Administrations, such as common framework agreements, should remain so.

[Paul Scully]

I thank the hon. Member for the amendment, which seeks to ensure that clause 9 does not affect the establishment or operation of a common framework. A framework for the regulation of professional qualifications is under development between the UK Government, the Scottish Government, the Welsh Senedd and the Northern Ireland Executive, to ensure a common approach on powers that have returned following our exit from the European Union and that intersect with devolved legislative competences. Those discussions are well advanced, and they are a testament to the collaborative and collegiate working between Administrations.

Although the amendment relates specifically to clause 9, let me reassure the Committee that we are committed to ensuring that the provisions in the Bill work alongside the common framework programme, and we will consider this as we develop the framework further. However, the common framework is a separate entity. The Bill does not constrain it in any way, and a reference to that effect on the face of the Bill is entirely unnecessary. I hope that reassures the hon. Member and that he will withdraw his amendment.

[Bill Esterson]

Well, that is not the view of the Welsh Government. [Interruption.] We could go into the support that the Welsh Government have given the UK Government recently on tests, but you might tell me to move on rather quickly, Mr Pritchard.

The point that the Welsh Government are making is that it is very important that confidence is retained and that there is no indication of the UK Government going into areas of devolved competence without agreement. The Bill is going through Parliament now. There is no indication of a final date on the wider negotiations and discussions that the Minister referred to. It would therefore be prudent to ensure that in areas such as the common framework, which the Government have committed to, they intend to follow such an approach. If so, they should have no concerns about the provision being in the Bill. On that basis, I would like to press the amendment to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Paul Scully]

The clause details the extent and limits of the powers to make regulation provided to appropriate national authorities in the Bill. It is a framework Bill. The clauses are essential to ensure that the Bill works in practice and can carry out its intended functions. It details new powers that can be used to make supplementary, incidental or saving provisions. It also sets out where the Bill does not allow powers to make regulations to modify legislation. That ensures that the use of the Bill stays within its remit.

Question put and agreed to.

Clause 13 accordingly ordered to stand part of the Bill.

Clause 14

Protection of regulator autonomy

[Bill Esterson]

I beg to move amendment 4, in clause 14, page 11, line 13, at end insert—

“(6) Subsections (7) to (9) apply where the Secretary of State makes regulations as the appropriate national authority under this Act which extend to the whole of England and Wales, Scotland and Northern Ireland.

(7) Before making such regulations, the Secretary of State must—

(a) consult such persons as the Secretary of State considers appropriate, and

(b) following that consultation, seek the consent of the Scottish Ministers, the Welsh Ministers and a Northern Ireland department.

(8) If consent to regulations is not given by a relevant authority set out in subsection (7)(b) within the period of one month beginning with the day on which consent is sought from that authority, the Secretary of State may make the regulations without that consent.

(9) If regulations are made in reliance on subsection (8), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the relevant authority.”

This amendment obliges the Secretary of State to consult the devolved administrations where regulations affect a regulator that covers the whole of the United Kingdom.

The amendment obliges the Secretary of State to consult the devolved Administrations where regulations affect a regulator that covers the whole of the United Kingdom, and we will be pushing it to a vote. The amendment is important because there are some regulators that operate on a devolved basis—the Law Society, for example, because of the different legal systems across the nations of the United Kingdom. Another example is the Institute of Chartered Accountants in England and Wales, which is separate from the Institute of Chartered Accountants of Scotland. Those are two regulators covering different areas of the country.

In those cases the relevant devolved Administration must be consulted before regulations that affect that nation are made. There are also regulators that govern the whole of the United Kingdom, such as the Civil Aviation Authority or the Royal College of Veterinary Surgeons. Just as the Government should consult the devolved Administrations when making regulations that affect the individual nation, so too should they consult the devolved Administrations when a regulation is made that affects the whole of the United Kingdom.

The amendment does not give the devolved Administrations the power to overrule the Secretary of State. Withholding consent does not mean new regulations will not be introduced. Instead, it allows those devolved Administrations to make their representations, and it gives them a statutory right to argue their case to the Secretary of State and try to change his or her mind. If the Secretary of State still believes their course of action is the correct one, despite representations from the appropriate devolved Administration, in their authority as Secretary of State they will, of course, still be empowered to make regulations.

The amendment adopts the formula that was adopted in the United Kingdom Internal Market Act 2020, so we are asking for the Government to follow their own lead.

[Stephen Flynn (Aberdeen South) (SNP)]

I perhaps do not share the hon. Member’s view that the UK Government should have the ability to override the devolved Administrations in respect of the concerns they have. He has mentioned that the content of the amendment is based on the United Kingdom Internal Market Act 2020. Will he be cognisant of the fact that the devolved Administrations were against the 2020 Act? Does the amendment go far enough?

--- Later in debate ---

[Bill Esterson]

The hon. Member is right, of course. We may not agree entirely, but we are trying to hold the Minister and the Government to consistency with their own measures through our amendment. That is the spirit in which it is intended, with the one-month period in the amendment in which consultation should take place. It is an attempt to improve on a wholly inadequate and unacceptable situation, putting in some degree of consultation. I accept the difference of opinion between us on the ideal, but that is what we are trying to do with the amendment. His colleagues could have tabled an amendment to go further, but they have not done so in this case. Our amendment is what we can vote on.

It might seem odd for the Government to be inconsistent—now I come to think of it, perhaps it is not odd at all—and, in a rational world, we might expect them to take the same approach that they obligated just over a year ago, applying that consistently across post-Brexit legislation. That seems like a good idea to me. I wonder what the Minister thinks.

[Paul Scully]

I thank the hon. Member for the amendment, which seeks to require the Government to consult with appropriate persons and to seek the consent of the devolved Administrations when making regulations that extend to the whole of the UK, even when legislating in a reserved area. As the Government have set out repeatedly, it is absolutely not the Government’s intention to make regulations in relation to matters on which the devolved Governments could legislate without seeking their view.

Lord Grimstone has put that assurance on the record many times in the other place, including in correspondence with ministerial counterparts in the devolved nations. We are therefore not convinced that the amendment is preferable to the Government’s own, more flexible proposals, which Ministers of all four nations are now discussing.

Working with the devolved Administrations is the way to make the Bill operate best for all our UK nations. That is why I and Lord Grimstone wrote to our ministerial counterparts in the devolved Administration ahead of Second Reading, offering to put a duty to consult with devolved Administrations in the Bill. Thus far, Ministers in the devolved Administrations have rejected our offer, but our discussions are ongoing.

I hope that we will be able to reach an outcome that maintains the policy integrity of the Bill while giving all four nations of the UK the assurances that they need about the operation of the powers.

[Bill Esterson]

I wonder whether the Minister will clear something up for me. If he gets an indication from the devolved Administrations, is it his intention to come back on Report with a Government amendment to put that duty to consult into the Bill?

[Paul Scully]

That is exactly why we continue to discuss ahead of further stages of the Bill. As I say, we offered an amendment to provide for the duty to consult and to publish the outcome of the consultation. That was rejected by the Scottish and Welsh Governments. A rationale for the inclusion of the current powers and the reasons why a consent mechanism would not be possible on the face of this Bill were shared with the Welsh Government on 22 September. However, we will continue to work with the Welsh and Scottish Governments and the Northern Ireland Executive on that basis, to try to do everything we can to secure an agreement.

--- Later in debate ---

[Paul Scully]

I think we have made it clear with the devolved Administrations that we want to get as many agreements as we can, but we need to press on with this legislation. However, that is not the same as closing down the conversation. It is important that we do everything we can to work with them.

This amendment has some similarities to the Government’s own position, in that it advocates consultation. However, as with some of the other proposals that we have discussed, the amendment is somewhat less flexible and therefore less satisfactory than the Government’s own approach.

For example, the amendment is limited to regulations that extend across all four nations. What if the Lord Chancellor wished to make regulations under the Bill, or the regulations extended to only two or three nations of the UK? The amendment would oblige the Government to seek the consent of the devolved Administrations even when legislating in the reserved area that I have talked about.

Hon. Members will be aware that the Bill now includes a duty to consult regulators, which extends to regulators in the devolved nations. In addition to the consultation that we would normally undertake with devolved Administrations, wherever appropriate we will engage directly with those closest to the issues before making regulations.

I will continue to engage, as I have said, with my counterparts in the devolved Administrations to persuade them of the merits of the Government’s approach. I do not believe that the amendment is preferable to the Government’s approach, so I ask the hon. Member to withdraw it.

[Bill Esterson]

We have had an interesting series of exchanges. The hon. Member for Aberdeen South made the point well that we see this approach in Bill after Bill; indeed, we see it in clause after clause in Bill after Bill. We have already seen it in more than one clause today.

We have hit the nail on the head with the amendment, because we are calling for consistency. In the absence of a formally agreed commitment to wider consultation, if it was good enough 13 months ago to provide for a one-month period of consultation, with the Secretary of State having the final say after listening to representations or if representations were not forthcoming, why is it not good enough today? On that basis, I will press the amendment to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Paul Scully]

Clause 20 sets out procedural detail for the commencement of the provisions of the Bill. It stipulates the timings at which, and conditions under which, the various sections and sub-sections will come into force.

Question put and agreed to.

Clause 20 accordingly ordered to stand part of the Bill.

Clause 21

Short title

Amendment proposed: 1, in clause 21, page 15, line 11, leave out subsection (2)—(Paul Scully.)

This amendment removes the privilege amendment inserted by the Lords.

[Bill Esterson]

This poses the question of why the Government are proposing this amendment. Perhaps the Minister will explain why they are removing the provision which says that nothing in the Act will impose any charges on the public or on public funds. Does he expect that the Act will, indeed, incur costs to the public purse, perhaps to the regulators or those professionals working in the regulated sector? Will he provide assurances around what costs they now expect?

[Paul Scully]

The House of Lords maintains the approach that when a Bill is introduced in the Lords, it does not involve taxation or public spending, deal with non-domestic rates or council tax, or otherwise infringe financial privileges. The House of Lords does that via the privilege amendment. There is no equivalent for Bills that start in the Commons. We believe that it is appropriate—this is a technical move—to remove that privilege.

Amendment 1 agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

--- Later in debate ---

[Paul Scully]

Clause 21 gives the short title of the Bill for references to it in future papers or bodies of work. The short title is the Professional Qualifications Act 2021.

Question put and agreed to.

Clause 21, as amended, accordingly ordered to stand part of the Bill.

New Clause 2

Skills shortages reporting

“In relation to any regulated profession falling under the provisions of this Act, the Secretary of State must lay before Parliament an annual report detailing any workforce shortages, including what measures are being taken to resolve the shortages.”—(Bill Esterson.)

This new clause obliges the Secretary of State to produce an annual report setting out which sectors are facing skills shortages and what measures are being taken to resolve the shortages.

Brought up, and read the First time.

[Bill Esterson]

We have serious shortages of skilled workers, so the new clause obliges the Secretary of State to produce an annual report setting out which sectors are facing skills shortages and what measures are being taken to resolve those shortages.

As the Royal College of Nursing notes, we went into this pandemic with 50,000 nursing vacancies in the UK, and we are likely to have lost far more nurses throughout. The British Medical Association has estimated a shortage of around 49,000 doctors and doctors in training across primary and secondary care. The Royal College of Veterinary Surgeons has identified a shortfall of nearly 1,000 vets. Meanwhile, professional services firms in the UK have warned of a growing shortage of white-collar workers as companies fight for top talent amid a global economic recovery from the coronavirus crisis.

There are shortages across the economy. HGV drivers have been given an enormous amount of attention because of their impact on supply chains—including, at times, with fuel suppliers, but more commonly with food. We have all noticed that our favourite food has sometimes not been available on supermarket shelves. I talked to the manager of a store in my constituency on Friday. He said that that is week to week, and it is down to shortages, including of drivers.

The role of driving examiners is covered in this Bill; there is an interdependency between what is in the Bill and what is not. It is essential that the Bill gets that right so that our country has the skills it needs, today and in the future. By requiring the Secretary of State to produce an annual report setting out the areas in which we face skills shortages, we will be able to see some of the more obvious shortages in advance, giving the Government some chance of mitigating the problems before they become a crisis.

[Paul Scully]

I thank the hon. Member for his new clause, which introduces a reporting requirement to set out the professions facing workforce shortages and the measures that are being taken to resolve those shortages. I would like to make it clear from the outset—much as Lord Grimstone, my colleague in the other place, has done—that the Bill is not solely about addressing UK workforce shortages, but about ensuing that professional qualification recognition works for the UK.

Clause 1 allows appropriate national authorities to act where there is unmet demand, ensuring that regulations have the processes in place to assess overseas professionals who might help to alleviate that. That is not a replacement for the Government’s skills strategy. In this instance, the Bill is one part of a means to meet unmet demand or shortages. The Bill does not undercut, nor will it replace, the work that the Government are undertaking to support home-grown skills.

The Government already publish information on workforce shortages. For example, the shortage occupation list is a publicly available document comprising professions and occupations that experts at the Migration Advisory Committee deem to be in shortage. Given that workforce shortages are already documented in such a way, with expert input, and with the next shortage occupation list review taking place this year, there is no need for the Secretary of State to also publish a report on professions in shortage.

I turn to the request to report on the measures that are being taken to address workforce shortages. The Government have set out an ambitious reform programme in the “Skills for jobs” White Paper, focusing on giving people the skills that they need in a way that suits them. For example, the lifetime skills guarantee is already being delivered through a wide range of activities, from short, flexible, employer-led bootcamps to the skills accelerator, and by enabling providers to have more control over budgets and funding levels. As Members can see, the Government are already undertaking a great deal of work on both identifying workforce and skills shortages and developing approaches to tackling them. A requirement in the Bill for the Secretary of State to publish a report on workforce shortages would be unnecessary, and it would result in the duplication of work that was being undertaken elsewhere in the Government. I therefore ask that the amendment be withdrawn.

[Bill Esterson]

The Minister referred to skills development. When I meet businesses around the country, as he does, that is often the first item on the agenda. There is great concern about the shortage of technical skills, some of which are covered by the Bill and some not. Parity of esteem within that wider skills agenda is at the heart of what businesses are calling for. Any measure that can be taken to improve understanding, address shortages and find a long-term approach to developing skills—by training people in this country in technical and vocational areas, and by valuing technical learning and the development of skills as much as we do academia—is key.

Where we have shortages, it makes sense to have a systematic approach to addressing them. I read out the figures earlier for what things were like before the pandemic. They have become worse as a result of the pandemic, and they have been exacerbated by the gaping holes that the Government have left in the trade and co-operation agreement with the EU. The Government have belatedly acknowledged some of that, including by adding care workers to the shortage occupation list, which I asked about in a written question a few months ago. There is clear recognition of the need to address these skills shortages. The amendment would put in place a system for the professions covered by the Bill to put that the Government in the strongest possible place to identify and address the shortages. It seems to me that that would be a valuable tool, rather than the Government’s more fragmented approach—the Minister explained it very well—which is one reason why we have shortages. We will press the amendment to a vote.

Question put, That the clause be read a Second time.

--- Later in debate ---

Brought up, and read the First time.

[Bill Esterson]

I beg to move, That the clause be read a Second time.

For workers whose professional qualifications are already recognised in the United Kingdom, this new clause provides additional certainty that the legislation will not affect them negatively. There is a clear need to give those whose qualifications are already recognised here that certainty and confidence. In many cases, those professionals already live in our communities and have decided to call the UK their home. They are people on whom we all so often rely, particularly in our vital public services.

The explanatory notes to the Bill state that

“nothing in the Bill prevents, qualifies or otherwise impacts the ability of those with existing recognised qualifications from continuing their areas of practice in the UK”.

If it is in the explanatory notes, why is it not in the Bill? That is a fundamental gap in the Government’s approach, because without this simple amendment, how can the Minister provide the reassurance that these workers, their employers, their families and their communities so desperately need? Enshrining the Government’s own promise from their explanatory notes in the Bill would achieve what those people, and those who rely on them, are looking for.

[Paul Scully]

I thank the hon. Gentleman for the amendment. It has been previously considered in the House of Lords, both in Committee and on Report; we turn to it once again. I can confirm that professionals who have already had their qualifications recognised in the UK will be able to continue to rely on those recognition decisions. The revocation of the EU-derived system for recognising qualifications will not impact on the ability of professionals with existing recognition decisions to continue practising in the UK. Nothing in the Bill, nor the regulations anticipated under it, will interfere with or reverse such decisions. Professionals with recognition decisions will need to meet any ongoing practice requirements, but that is for the relevant regulator to determine, so the Bill does not make commitments in those areas.

Regulations commenced in clause 5 will include saving and transitional periods, to ensure that professionals’ existing recognition decisions continue to be valid, and applications made before revocation comes into effect through the commencement regulations will continue to be assessed under the relevant EU-derived recognition laws. It is possible to make similar provisions in regulations under clause 6, so we believe that this matter is best dealt with through the saving provisions in the secondary legislation. That is consistent with the approach that the UK Government and devolved Administrations took when amending EU legislation on recognition of professional qualifications in order to prepare for leaving the EU in the first place. As I have assured the Committee, the Bill also respects the protections in place for existing recognition decisions that are born from the UK’s international agreements. I therefore ask that the amendment be withdrawn.

[Bill Esterson]

There was an interesting admission from the Minister that he thought that secondary legislation could achieve what we are aiming for with the amendment. My concern is that a significant part of our professional workforce have a recognition of their qualifications in the UK. Hearing his words, I doubt that they would feel particularly confident or certain of their future, because although he may have no intention to use the lack of confirmation in the Bill, one of his successors may take a rather different view. That is why professional workers and their employers want confidence. We all know the importance of confidence and certainty for our economy, let alone for the individuals who are subject to the amendment and on whom everybody relies, which is why we will press the amendment to a vote.

Question put, That the clause be read a Second time.

--- Later in debate ---

Brought up, and read the First time.

[Bill Esterson]

I beg to move, That the clause be read a Second Time.

This new clause requires the Secretary of State to publish and maintain an up-to-date list of regulators on the Government’s website. The Financial Times reported the way in which the Government introduced this Bill as the

“chaotic handling of a post-Brexit regime for recognising the qualifications of foreign professionals”.

Remarkably, the Government admitted introducing the Bill to Parliament without knowing which professions were in scope of the legislation. Labour argued in the Lords that we had to know who and what was in the scope of the Bill. It stands to reason that the relevant regulators and professions need to be aware of these changes. Having initially listed 160 professions and 50 regulators affected by the legislation, the Government twice published a revised list, ultimately increasing the numbers to 205 professions and 80 regulators.

[Chi Onwurah]

As I said earlier, I am a chartered engineer with the Institution of Engineering and Technology. In order to find out whether my profession was affected by the Bill, I had to write to the Institution of Engineering and Technology. Does my hon. Friend think that is acceptable? Does it not make sense that professionals, wherever they are in the world at the time, should be able to easily find out whether their body is affected by this legislation?

[Bill Esterson]

I am grateful to my hon. Friend, who has explained very neatly with that example why the new clause is important. Due to the increased number of regulators in scope of the legislation, the Government also had to publish an updated impact assessment, with the total cost to regulators increasing by nearly £2 million. That is hardly the way to inspire confidence that the legislation will help businesses or skilled workers.

The Government were criticised from all sides in the Lords, including by those on their own Back Benches. Baroness Noakes said that

“it has all the hallmarks of being a Bill conceived and executed by officials with little or no ministerial policy direction or oversight...we learn that the Bill was drafted with a far-from-perfect understanding of the territory that it purports to cover. This is no way to legislate.”—[Official Report, House of Lords, 22 June 2021; Vol. 813, c. 149.]

My Labour colleague Baroness Hayter said of the list:

“I understand that it has taken BEIS a little time to get it right. I think we have had two updates of the list, with some regulators added and some gone. I see that the pig farmers have gone from the latest list and the aircraft engineers have also disappeared, as have analytical chemists. However, we have in their place chicken farmers, schoolteachers and waste managers—so it seems that the Government can turn flying pigs into chickens.”—[Official Report, House of Lords, 9 November 2021; Vol. 815, c. 1696.]

I thought that was a good line then, and I still think it is a good line today—and so do the Government!

How can regulators and regulated professionals know whether they have equivalence when the Ministers who are responsible for the Bill do not even know themselves? At Committee stage in the Lords, my Labour colleagues Baroness Hayter and Baroness Blake tabled amendments to encourage Ministers to remove any suggestion of doubt as to which professions were covered by the Bill by placing a list of such professions and their regulators in the Bill and giving Ministers the authority to amend that list as necessary. The Opposition realise that Ministers have subsequently published a full list on the gov.uk website. However, there is no duty on the Minister to regularly maintain and update that site. The new clause places an obligation on the Secretary of State and his Department to maintain the website and, as necessary, update it, giving professions and professionals the certainty they need.

[Paul Scully]

As I rise for the final time, I thank you for your chairmanship, Mr Pritchard. I thank the hon. Member for the new clause. The Government recognise the need for clarity on who meets the definitions in the Bill. It is for that reason that officials carried out a comprehensive exercise last year across Government, as well as with the devolved Administrations and with the regulators, to determine who the Bill applies to. That extensive engagement culminated in the list of regulators and professions affected by the Bill being published on gov.uk on 14 October 2021—officials are now maintaining that list. We spent a lot of time over that period saying that we were going to publish the list. We have had a series of webinars to which all regulators were invited, and we continue discussions.

The amendment seeks to commit the Government to maintain and publish a list of regulators. Although I understand the desire for transparency, I have reservations about enshrining a list in the Bill. A list of regulators alone does not provide clarity on which regulated professions are affected by the Bill. It might be that organisations that meet the definition of regulator for one or more regulated professions also have responsibilities and functions for professions that do not meet the definition. Listing the regulators would leave it open to interpretation whether it is all or just some of those professions that are affected. If it was some, it would be unclear which were affected.

For example, the Institute of Chartered Accountants in England and Wales regulates statutory audits and is a profession to which the Bill applies. It also regulates chartered accountants, a profession to which the Bill does not apply. The proposed amendment would not provide clarity in regard to which of the professions is a regulated profession in the Bill. As a result, publishing the list of regulators in such a way risks confusion. That is why the Government have committed instead to maintaining a list of regulated professions and regulators to which they consider the Bill applies, and to keep that list readily accessible and in the public domain. I hope hon. Members are assured that the Government are already delivering that action. It is on the record that the list of regulators and regulated professions will be maintained, so there is no need to further state it in the Bill. I hope the new clause can be withdrawn.

Finally, as well as thanking you, Mr Pritchard, I thank the officials, the Clerks, the Doorkeepers and the Whips, and indeed Opposition Members for the way that they have engaged in the process.

[Bill Esterson]

I am grateful to the Minister; I shall accept his assurances. And I thank you, Mr Pritchard. It is a shame that we will not get to see the other Chair in action; we have denied Ms Bardell her moment in the Chair.

I thank the officials, the Doorkeepers, and the Government Members who sat there quietly and dutifully maintaining their Trappist vows—with the exception of the hon. Member for Calder Valley, who had to be woken up earlier in the proceedings. I thank the Minister and Opposition Members for attending. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Question proposed, That the Chair do report the Bill, as amended, to the House.

[The Chair]

The final Question I must put is that I do report the Bill, as amended, to the House. I thank all colleagues for turning up so early in the morning. I thank our extraordinary Clerks, Hansard, the Doorkeepers, and our hidden broadcasting team who make it all work for us and the public, who I am sure are tuning in to this rather than to GB News.

Question put and agreed to.

Bill, as amended, accordingly to be reported.

Oral Answers to Questions

Bill Esterson Excerpts

Tuesday 11th January 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Bill Esterson (Sefton Central) (Lab)]

Buying British is a great way for the Government to boost productivity, so why are they buying so many covid tests from China? Many of those tests have only temporary approval from the Medicines and Healthcare products Regulatory Agency and are now banned in the United States. In contrast, the MHRA is delaying approval for British test manufacturers, who have approval and can sell around the world but not here. Surely the Secretary of State is not going to tell us that the MHRA has a different set of standards from those in all other countries. When will he get behind British manufacturers who want to play their part in fixing the shortage of covid tests?

[Kwasi Kwarteng]

The hon. Gentleman will know that the UK has led the world in life sciences manufacturing. I am delighted that the Under-Secretary of State, my hon. Friend the Member for Mid Norfolk (George Freeman), has taken up the role of life sciences Minister. He has engaged with our manufacturing base, and people look to the UK as an outstanding example of a world-leading life sciences manufacturing nation.

Draft Small Business, Enterprise and Employment Act 2015 and Pubs Code Etc. (Amendment) Regulations 2021

Bill Esterson Excerpts

Tuesday 11th January 2022 General Committees

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to have you in the Chair, Mr Gray.

I am grateful for the Minister’s comprehensive explanation of the proposed amendments, and his analysis of some of the concerns. The Pubs Code was needed in the first place because of the lack of balance, and I agree with the Minister about how the industry should operate. I served on the Bill Committee and I know that there was a strong consensus on the creation of the Pubs Code. I am not going to stray from the topic of the instrument, but I remember very well the reasons why the behaviour of some of the pub-owning companies led to the need for a much more fair and balanced arrangement that gave pub tenants the opportunity to run their businesses under fair terms with pub-owning companies. The hon. Member for West Worcestershire referred to bad practice and I am afraid that there were many such examples prior to the creation of the Pubs Code.

The amendments under paragraph 5 of schedule 2 relate to the ability of the tenant to understand or analyse the cost of the market-rent-only option. That has been a cause of significant concern since the initiation of the Pubs Code. The Opposition support the move to give tenants the figures related to the MRO option. The other changes outlined by the Minister will also improve the current arrangements.

I noticed that most of the respondents to the Government’s consultation appeared to be—it was difficult to be absolutely sure—either pub-owning companies themselves or organisations that probably would be sympathetic to them. Some of those responses I therefore take with a slight pinch of salt. That brings me on to parallel rent assessment, which was referred to in the Government’s response to the consultation on amending the Pubs Code, but I do not believe the Minister referred to it today. Tenant representatives have said that having a parallel rent assessment would allow pub tenants, or their advisers, to make a judgment on the comparative costs and benefits of remaining a tied or a market-rent-only operation.

Paragraph 7 of the Government response to the consultation states the “consultation document”—I assume that means the original consultation document sent out to consultees—

“noted that such information could serve to confuse a person unfamiliar with the Code or running a tied pub”.

To me, that suggests that the Government already had a strong preference for not introducing parallel rent assessments. If we were in a court of law we might describe that as leading the witness, your honour. That concerns me. The consultation response says that the majority agreed with the assessment in paragraph 7, but, as I said, given that the majority of consultees appear to have been favourable to the pub-owning companies, that is hardly a big surprise. Perhaps the Minister can explain what is meant by

“confuse a person unfamiliar with the Code or running a tied pub”.

To put that in context, anyone who is investing in a business—precisely what a pub tenant is doing—would carry out their due diligence. They would therefore want as much information as possible when making the judgment between being a tied tenant or free of tie, or notional free of tie in terms of the market rent option. I hope that the Minister can provide an explanation. It makes sense for anyone going into business or already in business to be as informed as possible when deciding which business model would best support their investment and business future. The advantage of a parallel rent assessment is that it acts as a check to ensure that the Pubs Code meets its principle of ensuring that individual tied tenants are not worse off than they would be if free of tie. Is there a lack of information that prevents tenants or their advisers from making the necessary judgment and acting accordingly? That is my key question to the Minister.

We need to support our pubs. The pandemic has been brutally hard on pubs and pub tenants who were already struggling before it. They need as much support as possible. The local pub is a key part of our high streets and our communities, and our future prosperity, because it drives so much else in communities and brings business to fellow local businesses. Pubs are often the source of very good local activity.

The Opposition want good businesses to grow, not least our pubs. I hope that the Government will seriously consider our proposed reforms to business rates, which is a source of real concern to pubs.

[The Chair]

In context of this SI.

[Bill Esterson]

Indeed. The regulations we are considering this morning offer such support. I hope that the Minister will take note of my comments and offer some good answers particularly about parallel rent assessments and how they sit with the ability of pub tenants to make the decisions crucial to their future success.

--- Later in debate ---

[Paul Scully]

I will not tempt you to intervene.

I agree with the hon. Member for Sefton Central about the importance of pubs to our communities and the social value they offer, so it is really important that we get the balance right. I think the code was drafted in such a way that we can balance the rights and protections of tied tenants against the property rights of pub owners to ensure that they can operate the tied pub estate and secure rents on their investment while keeping the pubs in full flow for and on behalf of the community.

On parallel rent assessment, we share the aim to achieve informed decision making. I take the hon. Gentleman’s point about who actually responded to the consultation but stakeholders reinforced their concerns about additional complexity for tenants and the possible increased cost associated with providing a parallel rent assessment. Stakeholders provided valuable insight into the recruitment processes, the additional support provided particularly for tenants new to running a tied pub and the use of break clauses during the early stages of the tied agreement to enable the parties to end the commercial contract. We are working with the PCA on its tied tenants’ survey to find out more about tenants’ understanding of the terms. As the hon. Gentleman said, it is not only about people accessing the proper process in the first place, but their Pubs Code rights and what informed their decision to enter into a tied tenancy agreement in the first place.

[Bill Esterson]

My question about parallel rent assessments was trying to tease out how a tenant can make such a judgment call and what is the best way forward financially. What is the Minister’s answer to the question that many tenants pose about how they can make that judgment call without being given a parallel rent assessment, so that they can then compare between the tied and non-tied option?

[Paul Scully]

Doubts were expressed about the parallel rent assessment by tenant representatives as well, but I take the point that we must understand exactly what type of information prospective tenants need to enter into that relationship. That is why we will work with the PCA on its tenants’ survey to get to grips with that and achieve that understanding before we go further.

We believe that the amendments to the Pubs Code are proportionate in terms of improving the practical operation of the code. I appreciate the Opposition’s support for our pubs and achieving the right balance for all parties, notwithstanding the hon. Gentleman’s wish to go further on parallel rent assessments. We believe that the proposed changes improve things for tenants without placing undue constraints on pub-owning businesses, particularly at such a difficult time for the tied pubs and the hospitality sector. I am pleased to commend the measure to the Committee.

Question put and agreed to.

Professional Qualifications Bill [Lords]

Bill Esterson Excerpts

2nd reading
Wednesday 15th December 2021 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

Having the skilled workforce that our employers need is essential for the economic success of our country. The shortages of lorry drivers, carers, nurses, doctors and vets, and the shortages in hospitality and in farming, are well documented. Some are covered by this legislation, which, as the Secretary of State said, replaces EU law and allows the recognition of qualifications in other countries, so that workers can come here and fill the gaps in our economy. The requirements for our future economic success include the need for mutual recognition of qualifications to the benefit of our domestic businesses, public and voluntary sectors. Our success as we recover from covid will depend on the boosting of our prospects for trade internationally, for instance through the ability of UK professionals to apply their expertise abroad.

Regulators must remain independent, and it would undermine them and the high British standards they uphold were the Government to force them to accept professional qualifications awarded overseas which were of a lower standard. I shall return to that point, and explain how the Bill has been amended in the House of Lords.

The public will expect high standards of health, public safety and consumer protection to be maintained. We need to address shortages of key skilled staff, but the overseas qualifications that have been recognised in the UK by professional bodies need to have been accredited by the regulators themselves on the basis that they meet or exceed our standards, and not because the regulators are pressured into lowering standards by the Government as a consequence of poorly conceived international agreements. The Conservative peer Lord Bourne said that these were far from unreasonable fears, and I therefore hope that this issue will be explicitly addressed. The Government have made promises that standards will be maintained, and those promises need to be kept.

Most of the changes for which the Bill provides are designed to be implemented through secondary legislation. The use of statutory instruments has become the Government’s favourite method of legislating, and it is essential that all changes made through secondary legislation can be scrutinised in full.

Attracting talent to the UK is essential for public services and the wider economy, but we are currently facing a skills shortage. The recognition of overseas qualifications is not a silver bullet to end that shortage; nor is it a long-term answer. A neglect of skills by this Government has seen further education funding halved and 200,000 apprenticeships lost since 2016. The Government must invest in skills at home and must do so in a strategic way, with a long term view. Indeed, a national and ambitious strategy would be very welcome, and is surely a part of any serious levelling-up agenda—if the said agenda is to become more than a slogan.

The shortage of intermediate and advanced-level technical skills has been highlighted for many years by business, trade unions and the Labour party. The need for overseas skilled workers, at least in the short to medium term, is one result, and when there are regulatory difficulties in recruiting from overseas, the scale of the problem becomes apparent. The most recent NHS figures reveal that there are about 39,000 vacancies for registered nurses in England. The president of the British Veterinary Association, James Russell, has said that between 400 and 500 vets working part time will be needed to fill in additional export health certificates for meat and fish products—from sausages to salmon—shipped to Northern Ireland alone, with many more needed owing to other increases in demand. The occupations of nurses and vets are among the 205 covered in the Bill.

Labour would seek regulatory equivalence for financial services and mutual recognition of professional qualifications, because we absolutely recognise the importance of looking after our world-class financial and professional service businesses. Our ability to trade internationally, not least to maximise our trade in services, is essential to our long-term economic prospects, to the creation of good jobs at home and to the prosperity of people and communities across the UK.

The initial version of the Bill did not stand up to scrutiny. The Financial Times reported the way in which the Government introduced it as a

“chaotic handling of a post-Brexit regime for recognising the qualifications of foreign professionals”,

in contrast to the Government’s claim that it would help to make Britain

“the best place in the world to work”.

I want Britain to be the best place in the world to work. I want us to buy more, make more and sell more in Britain, but serious concerns have been raised about the Government’s mismanagement of such an important piece of legislation. One concern was that the Bill as originally presented was not going to give British employers what they needed to ensure that our economy and our people could thrive.

Remarkably, the Government admitted introducing the Bill to Parliament without knowing which professions were in scope of the legislation. Labour argued in the Lords that we had to know who and what was in the scope of the Bill. It stands to reason that the relevant regulators and professions need to be aware of these changes. That was why we tabled amendments in the Lords to ensure that this information was made public. But the disarray continued. Having initially listed 160 professions and 50 regulators affected by the legislation, the Government twice published a revised list, ultimately increasing the numbers to 205 professions and 80 regulators. Due to the increased number of regulators in scope of the legislation, the Government also had to publish an updated impact assessment, with the total cost to regulators increasing by nearly £2 million. That is hardly the way to inspire confidence that the legislation will help businesses or skilled workers.

The Government were criticised from all sides in the Lords, including by those on their own Back Benches. Conservative peer Baroness Noakes said that

“it has all the hallmarks of being a Bill conceived and executed by officials with little or no ministerial policy direction or oversight…we learn that the Bill was drafted with a far-from-perfect understanding of the territory that it purports to cover. This is no way to legislate.”—[Official Report, House of Lords, 22 June 2021; Vol. 813, c. 149.]

My Labour colleague Baroness Hayter said of the list:

“I understand that it has taken BEIS a little time to get it right. I think we have had two updates of the list, with some regulators added and some gone. I see that the pig farmers have gone from the latest list and the aircraft engineers have also disappeared, as have analytical chemists. However, we have in their place chicken farmers, schoolteachers and waste managers—so it seems that the Government can turn flying pigs into chickens.”—[Official Report, House of Lords, 9 November 2021; Vol. 815, c. 1696.]

Given the shambolic way in which the Bill was introduced, it would have come as no surprise if someone had accused Ministers of making a right pig’s ear of the legislation. It is little wonder, then, that with wonderful understatement the Government spokesman, Lord Grimstone said—[Interruption.] The Secretary of State might want to hear this from his own Minister in the Lords. Lord Grimstone said that the errors and various revisions had made him feel “uncomfortable”, and that he had listened to the criticism with “a certain lack of enjoyment.” To the credit of Lord Grimstone, he had the grace to confess his embarrassment at the mistakes made by the Government.

I return to the matter of regulatory autonomy. Consistent arguments were made by peers that this legislation must not undermine the autonomy and independence of regulators. Independence is essential to protect domestic standards and consumers. Labour’s amendment in the Lords sought to guarantee regulator autonomy, and our amendment was supported by the Conservatives Lord Lansley and Baroness Noakes, and indeed across the parties. As a result, the Government amended the Bill to provide statutory protection for regulator autonomy. I was hoping that that was where the Secretary of State was going to go in his response to my hon. Friend the Member for Wirral West (Margaret Greenwood), but he did not go quite that far.

We are told by the Government that their changes to the Bill should protect domestic standards across 205 regulated professions and ensure that regulators are not obliged to reduce standards due to provisions included by the Government in free trade agreements. The change made to the Bill was welcomed by regulators and stakeholders. The Bill has been improved, thanks in large part to my Labour colleagues in the Lords. However, there remain outstanding concerns, including about how the Government will consult and seek the consent of devolved Administrations. We believe that the Bill should be amended to ensure that the devolved Administrations have a proper voice when the powers in it are used. We will press these points in Committee, as we did in the Lords.

We as a country have serious shortages of skilled workers. Some, such as those related to heavy goods vehicle drivers, are well documented, but there are many others. To give just one other example, the most recent NHS figures reveal that there are about 39,000 vacancies for registered nurses in England, with many unfilled posts. The number of nurses from the European economic area joining the Nursing and Midwifery Council register has fallen by more than 90%, from 9,389 in the year to 31 March 2016 to just 810 in the year to 31 March 2021. Thousands of nursing shifts each week cannot be filled because of staff shortages, according to hospital safe staffing reports. That is unacceptable.

Of course, this is an area that requires attention from other Departments if it is to be addressed, but given the severity of the situation and the fact that the shortages were often predictable and predicted, it is essential that the Bill gets it right and ensures that our country has the skills it needs today and in the future. The Government’s approach to the Bill so far does not inspire confidence that it will play its part in addressing the shortage of nurses or, indeed, care staff, many grades of whom are also covered by the Bill.

The Bill provides a framework to allow mutual recognition of professional qualifications between regulators and professional bodies in the UK and the equivalent organisations overseas. The provisions in clauses 3 and 4 will allow for the implementation of regulator-to-regulator mutual recognition agreements and of the recognition arrangements in new international trade agreements. Importantly, the Law Society advises that the Bill will enable the mutual recognition agreement provisions in the UK-EU trade and co-operation agreement to be implemented, but it raises concerns about the arrangements. It says that the provisions for mutual recognition agreements in the TCA are largely based on the EU-Canada comprehensive economic and trade agreement, but no mutual recognition agreements have been signed between the EU and Canada in the three years since CETA came into force.

The concern that the Law Society raises is that the fact that no mutual recognition agreements have been signed using similar provisions may mean that the arrangements in the TCA are not sufficient for setting up such new agreements as are needed to encourage professionals to make up the shortages of nurses or vets, or those in 203 other professions. The Law Society therefore wants assurances from the Government—we will pursue the same point in Committee—that additional support, co-ordination and guidance will be available, if needed, on how to make the most of the provisions in the trade and co-operation agreement, not least in case they are to form the benchmark for future free trade agreements. I trust that the Minister, in winding up the debate, will address the very real concern about how to ensure that mutual recognition agreements are put in place in a timely fashion.

As it was the Law Society that carried out the analysis about the need for additional attention to be paid to how mutual recognition agreements will be negotiated, let us remember that legal services in the UK contribute £4.29 billion to our international trade each year. We are a global legal centre, and solicitors in England and Wales are respected the world over. The Minister with responsibility for professional services—the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for North East Derbyshire (Lee Rowley)—is not here, but perhaps his colleague who is responding to the debate can tell us, on his behalf, what assurances the Government can offer the Law Society, which wants legal qualifications to be recognised abroad and needs mutual recognition agreements to be secured but fears that, without additional Government impetus, none will be.

There is much still to do with this Bill. Lord Grimstone had the decency to accept its shortcomings and some of the changes needed, with Labour’s help, on regulator autonomy, but there is more to do in Committee and on Report in this House. On consultation with the devolved Administrations, we need the Government to come back to us. On the maintenance of high standards of health, public safety and consumer protection, on keeping promises that regulators will not be pressured by the Government into lowering standards, and on scrutiny of changes made through secondary legislation, we need assurances. On being able to attract professionals and fill the holes in our labour market, the Government need to do much better now, while putting in place a plan to address skills shortages in the long term.

The Labour party will address the concerns of employers, to support our economy, professional workers in this country and those who wish to work abroad. This is in our national interest. I hope that the Government will engage with us in that spirit and address the concerns raised in the Lords, by the professional organisations that need this legislation to be effective and by the devolved Administrations. I also hope that Ministers will address the shortcomings that we have identified in a way that delivers a system of mutual recognition of professional qualifications that is fit for purpose.