Oral Answers to Questions

Catherine West Excerpts

Tuesday 6th July 2021 Commons Chamber

[Mr Speaker]

I call Richard Holden—not here. This is not very good. I call Bob Seely—not here. This is the worst school register anybody could have.

[Catherine West (Hornsey and Wood Green) (Lab)]

What steps the Government are taking to achieve the net zero emissions target.

[Steve Brine (Winchester) (Con)]

What steps his Department is taking to achieve net zero emissions by 2050.

[The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)]

I will pass on your displeasure, Mr Speaker. I had some very interesting answers to share with my hon. Friends, so I am as disappointed as you. Our 10-point plan lays the foundation for the transition to net zero, with key commitments and action including in offshore wind, zero-emission vehicles and building our green economy. Ahead of COP26, we will also publish a comprehensive net zero strategy. It will set out the Government’s vision for transitioning to a net zero economy, making the most of new growth and employment opportunities across the UK.

[Catherine West]

May I press the Minister on the Aquind scheme, in which I believe she may have an interest that she needs to declare? It was raised by my hon. Friend the Member for Southampton, Test (Dr Whitehead). How many green jobs will be provided by the proposed scheme and what national security assessment has been carried out, given that the project is sponsored by an oligarch who has donated £1 million to the Conservative party?

[Anne-Marie Trevelyan]

I am unable to answer any of the hon. Lady’s questions, because I have recused myself from all matters to do with the Aquind interconnector, because Northumberland Conservatives received some funds from one of the owners of the company.

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[Anne-Marie Trevelyan]

We continue to invest in new nuclear, as I set out earlier, and we are working to grow our renewable energies at an extraordinary pace. We are world leading, with our offshore wind capacity already at 29% of the total, and we will continue to grow that from 10 GW to 40 GW by 2030.

[Catherine West (Hornsey and Wood Green) (Lab)]

On a point of order, Mr Speaker.

[Mr Speaker]

Is the point of order relevant to these questions?

[Catherine West]

It is. In Question 31, I asked about green jobs and a scheme called Aquind, sponsored by Mr Temerko, who is a funder of the Tory party to the tune of £1 million. The Minister for Business, Energy and Clean Growth quite rightly recused herself from answering the question because she has an interest, but can anyone else on the Front Bench answer my question about green jobs? Has a national security assessment been done of the Aquind project for an interconnector between France and the UK and its data implications?

[Paul Scully]

Further to that point of order, Mr Speaker. My right hon. Friend the Minister for Business, Energy and Clean Growth was right to recuse herself from the decision to ensure probity. We will find an answer for the hon. Member for Hornsey and Wood Green (Catherine West) from the Secretary of State.

Oral Answers to Questions

Catherine West Excerpts

Tuesday 21st July 2020 Commons Chamber

[Nadhim Zahawi]

I take issue with “warm words and no action” as £8.5 billion has been put to work to protect jobs and to protect the sector. It is great to see that, this week, Airbus has shown confidence in the UK with confirmation that the wings for its latest aircraft, the A321XLR, will be built in the UK at Broughton. That demonstrates our engagement not just with Airbus, but with Bombardier and with other major players in the market and, of course, the supply chain as well. We continue to put the support in place and to look at further support as we progress through the economic recovery.

[Catherine West (Hornsey and Wood Green) (Lab)]

What support his Department is providing to (a) the beauty sector and (b) other sectors that remain fully or partially locked down as a result of social distancing measures.

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

Further to the Prime Minister’s announcement on 17 July, I am delighted that all close contact services will be able to resume from 1 August. We have taken a phased, cautious approach to reopening our economy, guided by the scientific and medical advice.

[Catherine West]

The close contact sector of the theatre is the one that I want to ask about, Minister. What action can the Government take to support local theatres such as Jacksons Lane, Upstairs at the Gatehouse and the Park Theatre? My constituents work in those theatres and, sadly, redundancy notices are going out. What can be done to save these jobs and protect another highly skilled sector?

[Paul Scully]

I totally understand, as Minister for London, that many theatres in the middle of London also require that support, but for provincial theatres around the country, we really do need to make sure that we can attract audiences back. That is why we are looking forward to working with theatre groups to have pilots for events so that when they are able to open, people can come safely and enjoy the performances that they have to offer.

National Minimum Wage Naming Scheme

Catherine West Excerpts

Tuesday 4th June 2019 Commons Chamber

[Kelly Tolhurst]

The hon. Lady raises prosecutions as the only way of action or enforcement, but that is not true. I have said that since 1999 over £118 million has been paid back—to over 200,000 workers in 2019, so in just one year. It is true that there have been only 14 prosecutions. However, organisations are required to pay back the arrears, and pay a penalty, wherever a breach is found. I would like to highlight the fact that the Government have recently been consulting on salary sacrifice schemes. There have been examples in the media of workers being found to have a detriment through salary sacrifice schemes. This has been a key area in employers being caught under the national minimum wage legislation.

[Catherine West (Hornsey and Wood Green) (Lab)]

What assessment has the Minister made of the pay discrepancy among cleaners in Whitehall? The Department for International Development pays the London living wage but the Ministry of Justice, which should be seeking justice, pays the national minimum wage. What does she intend to do about it?

[Kelly Tolhurst]

I thank the hon. Lady for raising that point about the differences between Departments. I do not personally have the details of that and I have not looked into it, but I will happily do so, and I am more than happy to write to her with a fuller answer.

Climate Action and Extinction Rebellion

Catherine West Excerpts

Tuesday 23rd April 2019 Commons Chamber

[Claire Perry]

I am happy to tell the hon. Gentleman that the Each Home Counts review that we did, whose recommendations we have accepted, and where we have a trust mark for the work he mentions, should stop this problem happening in the future. Too much shoddy work has been done. Reparations have been made. Essentially, people have to have confidence that the work they are having done to their homes is of a high standard and is effective.

[Catherine West (Hornsey and Wood Green) (Lab)]

Tragically, Ella Kissi-Debrah lost her life to asthma, and the courts are currently looking at whether the authorities had any responsibility in that tragic death. I believe there is a crisis in children’s respiratory health. There is a meeting tonight with the title “Pollution Has No Borders”. One thing the Government could do would be to take away the cuts to local councils, which were looking at having more clean buses. Just increasing the number of bus journeys rather than car journeys would help not only lots of people on low incomes but the planet. Please could that be one thing that the Minister takes away from these questions and pledges to look into? Will she give that money back to councils so that action can be taken on our terribly polluted air?

[Claire Perry]

The hon. Lady is right to point out that one problem we do not talk about enough is that CO₂ pollution is often associated with particulate pollution, and one of the co-benefits of cutting emissions is that we get cleaner air. However, I gently say that she is wrong to focus on a reduction in budgets for zero-carbon transport. My recollection—I will check this and write to her—is that those budgets have gone up, and I myself have seen some of the hydrogen and hybrid buses that are running. Of course, the challenge is also to get more cars off the roads, because they obviously have a far greater level of pollutant per mile travelled, and to ensure that children, particularly in the most deprived areas, have clean air to breathe.

Solar Industry

Catherine West Excerpts

Tuesday 5th March 2019 Westminster Hall

[Antoinette Sandbach]

There are huge changes coming forward in battery technology. Of course, battery technology will be the key not only to solar energy, but to small-scale wind projects, particularly in relation to how we harness and store such power. There are a number of new and exciting technologies in renewable power. As someone who is keen to see as much of our power as possible coming from renewable sources, I know that the Government are committed to looking at how we can encourage those kinds of projects to go forward, and in the battery sector there is the Government’s Faraday battery challenge.

Given the prospects outlined by SolarPower Europe’s global market outlook, it is clear that the sector needs some positive news, and I hope that the Minister can deliver that today. However, businesses need reassurance more than anything. The Government have been consulting on the replacement to the feed-in tariff regime: the smart export guarantee. The consultation on that measure closed just over four hours ago. However, the export tariff, which is a key part of the FIT, ends on 31 March, which leaves just 18 days to resolve the questions surrounding a replacement before we risk falling into the void that will be created between the old policy closing and the new one beginning.

I welcomed the Minister’s reassurance last November that

“solar power should not be provided to the grid for free”.—[Official Report, 20 November 2018; Vol. 649, c. 701.]

However, there is a risk that that is exactly what will happen if there is a gap between the two schemes, so I would like her to give some reassurance that the replacement scheme will be fully operational in time. This should be a baseline to build upon, not a standard to live up to. What the sector really needs is a minimum floor price.

[Catherine West (Hornsey and Wood Green) (Lab)]

I thank the hon. Lady for her excellent speech. Does she agree that some schools and voluntary sector organisations are really getting involved in this kind of green initiative, and that small businesses in particular could be affected adversely if the scheme should fail and the recommendations are not taken up fully by the Government?

[Antoinette Sandbach]

The Minister will have heard the hon. Lady’s comments, and I hope that she takes account of them, because a minimum floor price would put the sector on the same footing as the offshore wind industry, which benefits from the certainty that contracts for difference provide, and fossil fuel investors, who benefit from the capacity market.

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[The Minister for Energy and Clean Growth (Claire Perry)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I know that you take a strong interest in these matters on behalf of your constituents in Kettering. I warmly congratulate my hon. Friend the Member for Eddisbury (Antoinette Sandbach) on securing the debate and putting forward, as always, an excellent, well-informed set of points, which have been responded to and added to by the knowledgeable group we have here today.

I will not do the usual context setting, which is that we are doing well on the whole agenda. Renewable energy is now up to more than 32%, and emissions continue to fall rapidly. In fact, the last time our CO₂ emissions were this low was in 1888, when Queen Victoria was on the throne. That is absolutely worth celebrating.

[Catherine West]

Will the Minister give way?

[Claire Perry]

I want to respond to the points made by my hon. Friend the Member for Eddisbury, but of course I will accept the intervention.

[Catherine West]

I thank the Minister for being so generous with her time. Will she also congratulate the Greater London Authority and the Mayor of London on the London community energy fund, which helps to promote this sort of initiative?

[Claire Perry]

I will touch on that good point about community. Many good schemes operate across various local authorities.

The feed-in tariff scheme has been an effective part of our great decarbonisation journey. Since 2010, the scheme has supported more than 830,000 installations, 99% of which are solar and are currently generating about 3% of total electricity consumption. Also, a few things have changed since that time, as the hon. Member for Hornsey and Wood Green (Catherine West) will know. We have seen a dramatic fall in the cost of solar installation—up to 80% in some cases—which is to be welcomed, as it makes that more accessible to many people. We have also seen a dramatic fall in the cost of other renewable energies.

I like the phrase the hon. Member for Warwick and Leamington (Matt Western) used: the democratisation of energy. We are all participating, and one of the great benefits is that the hugely important technology that is offshore wind now costs the same, effectively, as building a new gas-fired power plant. That is a benefit to us all and to all our bills.

The feed-in tariff scheme has cost us almost £6 billion to date, and over its lifetime it will continue to cost us all about £30 billion, on many of our bills. It was absolutely right, therefore, that the decision was taken—before my time—to close the scheme. As we move to a lower-cost solar environment, and to a world in which we are rapidly seeing price parity between renewables and non-renewables technology, it is important to think about the impact on bills.

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[Catherine West]

rose—

[Claire Perry]

I will come to the hon. Lady’s point in a second.

I talked about jobs and the opportunity for skilled workers to pursue careers in this sector. Not only is there ongoing growth in solar, but so many other opportunities are emerging: electric vehicles, charging infrastructure, smart appliances and battery technology are all working to decarbonise our buildings and our transport systems. The opportunity for green-collar jobs is enormous; we already have almost 400,000 people in the UK working directly in the low-carbon economy or in its supply chain, making it a bigger sector than aerospace. Those jobs exist in the here and now.

[Catherine West]

rose—

[Claire Perry]

I am going to take an intervention from the hon. Member for Ceredigion (Ben Lake), who has not spoken yet.

[Claire Perry]

Indeed I do, and I am proud to have secured one of the largest increases in innovation research and development spending in the clean energy space. Of course, the ECO scheme, which we have recently pivoted to focus on fuel poverty in its entirety, includes an increase in the amount spent on innovation.

[Catherine West]

Will the Minister reassure us that when her officers are looking at the responses to the consultation, they will take into account the fact that for small schemes, such as the one that is putting solar panels on schools in my constituency, the overheads tend to be greater?

[Claire Perry]

That is a valuable point, and the hon. Lady is right to make it.

The consultation is closing in a few hours’ time. I know that it has been welcomed, including by the industry, which sees it as a bridge to a renewable, subsidy-free future. The comments that have been made today will be valuable in ensuring the details of the scheme are acceptable.

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[Claire Perry]

Sadly, in all honesty, probably not. We have been clearly signalling the closing of the FIT scheme for several years now, and the response from the industry has been, “We understand that. We understand that some schemes may be on hold, but we welcome the smart export guarantee, because our main ask was to ensure that the energy that was being generated had some value.”

My hon. Friend the Member for Eddisbury asked me another question about an issue that I was not fully aware of—namely, the concerns about testing the smart metering equipment technical specification 2 programme to ensure it interacts effectively with solar generation. I have instructed my officials to ensure that that testing is actioned, because that is an important point.

[Catherine West]

Will the Minister give a brief account of what is happening with Government buildings? They are clearly low-hanging fruit, as it were; there should be more and more solar installations on Government buildings.

[Claire Perry]

I am sure that the hon. Lady will have read the clean growth strategy from cover to cover, and will have seen in there that we have set out ambitious targets for the central Government estate and the wider estate. As we have so many former representatives of local authorities here, I encourage all Members to look at the Salix scheme, which allows local authorities to green up their own activities and rely on an interest-free revolving loan. It has been a great success story, and one that we must do a lot more on.

I will mention another issue—briefly, as I only have two minutes. A question was asked about encouraging housing associations and others to be involved, and I have been encouraging housing associations and local authorities to think about issuing green financial instruments. There is a huge appetite for green bonds, either individually or collectively, and using that funding for some of the excellent energy efficiency work that is available.

Nissan in Sunderland

Catherine West Excerpts

Monday 4th February 2019 Commons Chamber

[Greg Clark]

I hope that when the hon. Lady has been having her discussions with those employers, she has listened to what they have said. The SMMT, for example, has been very clear that in order to avoid the consequences that she talks about, it is necessary to accept the deal that has been agreed. The SMMT said that it is “a positive step” that should be backed. The chief executive of Siemens in the UK has also commended the deal. So if she wants to avoid the disruption that I agree would be caused, she needs to listen to the other part of what people say to her and follow their advice in that respect too.

[Catherine West (Hornsey and Wood Green) (Lab)]

Given the uncertainty that the announcement by Nissan has caused, the job losses announced at Jaguar Land Rover, the worries expressed by Honda, and the Hitachi decision when the Prime Minister of Japan had barely taken off following his visit to our Prime Minister, what worries does the Secretary of State think have arisen in his Department? Does he agree with his junior Minister, the hon. Member for Watford (Richard Harrington), that we are going from

“a crisis into a catastrophe”?

[Greg Clark]

I visit Japan a lot and speak both to the leaders in the Government and the leaders of important investors there. They regard Britain as a place with which they have enjoyed good relationships and in which they have invested with prosperity. They admire the ingenuity of our scientists and our engineers. They are keen to work even more closely together in future. But is true to say that they look at the uncertainty around Brexit and think that after two and a half years it is time that it is resolved and comes to a conclusion. When they say that, we should listen to them and act on their advice.

Draft Companies (Miscellaneous Reporting) Regulations 2018

Catherine West Excerpts

Wednesday 4th July 2018 General Committees

[Andrew Griffiths]

I thank my hon. Friend and constituency neighbour for raising that point. The John Lewis Partnership is an exemplar of the way businesses should deliver corporate governance. It has a well-earned reputation for doing the right thing. Although it would be wrong of us to be prescriptive about pay ratios, sunlight is the best antiseptic, and this kind of transparency will change behaviour.

[Catherine West (Hornsey and Wood Green) (Lab)]

There is good practice in certain local authorities where chief executives are paid only 10 times what, say, a cleaner is paid. A chief executive’s role is complex, but pay should not be excessive, so I would say that 10 times is about right. What does the Minister think of that?

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[Andrew Griffiths]

I am not sure whether it is the heat, but there is certainly a lot of excitement in the Committee Room. Perhaps I can calm things down a little bit, first of all by agreeing with the hon. Member for Feltham and Heston. She is absolutely right: pay restraint and doing the right thing in relation to employees is an important element of good corporate governance, but making sure that women take their rightful place in the boardroom in senior positions is hugely important. I am delighted to see the recent figures from the Hampton-Alexander review, which show that only 10 of the country’s biggest companies now have male-only boards. I think that is 10 too many and have written to each one of those businesses to ask why they cannot find, among the millions of fantastic women in the workplace today, just one woman good enough to take up a position on their board. It is unacceptable. The hon. Lady is absolutely right.

There were concerns about boardrooms being remote, unrepresentative and disconnected from employees and the experiences of ordinary people. There was also heightened interest in the standards of corporate governance in large private companies in the wake of the failure of BHS and some other large private companies. There is growing awareness that large private companies can have an economic importance similar to that of listed companies. Their size means that their conduct and governance can have an equally significant impact on the interests of employees, suppliers, customers, pensioners and others.

[Catherine West]

Will the Minister update the Committee on whether employees will be sitting on company boards?

[Andrew Griffiths]

I will be delighted to come to that point, but I hope the hon. Lady will bear with me a moment.

The Government’s response, announced in August last year, set out nine key reform measures. There was a combination of new statutory reporting requirements and changes to the UK corporate governance code, which is the responsibility of the Financial Reporting Council, and industry-led measures. The regulations we are debating today will implement the four new company reporting elements of the reform package.

First, large companies will be required to explain in their annual reports how their directors have complied with the requirements of section 172 of the Companies Act 2006, including the need to have regard to employee interests and fostering business relationships with suppliers, customers and others. Investors and the public are increasingly interested in how companies take account of stakeholder views and interests, because they are important to a company’s long-term, sustainable success. The information will make it easier for shareholders to hold companies to account and encourage directors to think more carefully about how they take account of such matters.

Secondly, very large companies will need to make a statement about their corporate governance arrangements, including whether they follow a corporate governance code and if so, how. That requirement will encourage directors to consider the robustness of their existing arrangements and the ways in which they are communicated. Extra transparency will also strengthen public confidence in the way large private companies are run.

Thirdly, quoted companies with more than 250 UK employees will be required to publish pay ratios comparing the CEO’s remuneration to median employee pay and employee pay at the 25th and 75th quartiles. The ratios will need to be accompanied by an explanation, including the reasons for an increase or decrease in the ratio from year to year and whether the median pay ratio is consistent with the pay, reward and progression policies for UK employees as a whole. The hon. Member for Feltham and Heston asked which employees are taken into account. We think it would be difficult for companies to include those who are employed through agencies, as they are not directly responsible for paying those employees, so they would not be included within that pay ratio. The information will give shareholders new information to help them assess whether pay at the top is justified and consistent with pay and incentive arrangements in the rest of the workforce.

Finally, quoted companies will be required to illustrate more clearly for shareholders the impact of future share price growth of 50% on the value of share-based incentive plans. That will give shareholders a better understanding of how significant share price growth over a performance period will increase executive pay. It will also encourage remuneration committees to consider, if appropriate, whether any discretion should be exercised to avoid mechanistic pay outcomes.

None of those reporting requirements will apply to small businesses. As the Minister responsible for small business, I am keen to ensure that regulation does not become over-burdensome. The measures are aimed at quoted, large and very large companies. The total costs for business arising from the new reporting requirements are expected to be £16.7 million in year one and £9.8 million annually thereafter.

The reporting obligations complement and in some cases reinforce other elements of the corporate governance reform package. They should not be seen in isolation. For example, the new regulation 14, requiring large private companies to make a statement about their corporate governance arrangements, is linked to work being undertaken by James Wates to develop corporate governance principles suitable for use by large private companies. Those principles are being consulted on with a view to finalising them by the end of the year, but we expect that many companies will use them as an appropriate framework when making a disclosure about their corporate governance arrangements under the new reporting regime.

Importantly, the Financial Reporting Council has a new UK corporate governance code. The new requirements on companies to state how they have had regard to the employee and other wider stakeholder interests set out in section 172 of the Companies Act will help to underpin revisions to the code. Those revisions include a new code principle establishing the importance of boardroom engagement with stakeholders and a new provision requiring boards, on a comply-or-explain basis, to establish at least one of three robust methods of gathering the views of the workforce: having a director appointed from the workforce, having a formal workforce advisory panel, or having a designated non-executive director. The FRC has been consulting on those changes and expects to publish the final, revised code on the 16th of this month.

In addition, the Investment Association, at the Government’s request, has launched a public register—a world first in transparency—of companies encountering significant shareholder dissent of more than 20% to executive pay packages and other resolutions. That shines a stronger light on companies that are not listening to their shareholders, and in particular on companies that face significant opposition in successive years.

[Catherine West]

Will the Minister give way?

[Chris Stephens (Glasgow South West) (SNP)]

Will the Minister give way?

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[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Sharma, and to debate this important set of regulations. There is much in them to welcome. It has taken us two years to get to this point from the Green Paper but we must celebrate success when it is on us, and we do—with some questions, as the Minister would expect, I am sure.

The Government propose a series of changes, yet questions have not been addressed in the regulations, so I would be interested in the Minister’s response. For example, does he foresee the Government proposing corporate governance commitments on companies’ attitudes and policies on their carbon footprint, reducing waste or using recyclable packaging? Will commitments be proposed to support suppliers through the supply chain in areas such as access to apprenticeship programmes or prompt payment? What requirements should be in place as a result of Government contracting?

I mentioned prompt payment, and the Carillion fiasco reminds us that treatment of suppliers is not always as we would want: 30,000 suppliers are owed £2 billion, which they are highly unlikely ever to see. Will the Minister give his thoughts on where we will go from here and on when the Government might make proposals not just for companies to consult, discuss and publish how they have done in their annual report, but for practical action to ensure that such things do not happen in supply chains?

My hon. Friend the Member for Hornsey and Wood Green mentioned seats on boards for workers. That has been discussed by the Government, as has the question of seats for suppliers and other stakeholders. What plans are there for such changes to boards? The former Prime Minister, David Cameron, proposed a 20:1 ratio—slightly different from the 75:1 figure for the John Lewis Partnership. What is the Government’s thinking? A number of figures have been mentioned but the Minister has not given one.

[Catherine West]

While my hon. Friend is pursuing this line of questioning, perhaps an assessment could be made of the construction industry, where Persimmon, Berkeley and other large companies have paid themselves massive bonuses yet created few affordable homes for people to live in.

[Bill Esterson]

My hon. Friend is quite right to raise that point, given that we are talking about private sector companies. Perhaps it is time for the Government to consider wider corporate governance issues in the private sector. The directors to whom she referred have benefited from public money and success for such companies has come through the Government’s Help to Buy scheme, where unfortunately, despite the Government’s intention, money has gone to the directors rather than helping people who desperately need somewhere to live. Last year, Labour’s manifesto had commitments on the 20:1 ratio for the public sector and companies involved with public contracts. Might the Government be in a position to do something similar?

I agree that improving relationships and consulting stakeholders is important. Doing so with employees is also important, so I will return to employees. Consulting, discussing and publishing the results of those discussions is one thing, and action is quite another. I am interested in the Minister’s thoughts on what can be done with the findings of such consultations. If consultations are just a talking shop and the results have to be published, what is the point? What is a company’s motivation other than to look good in reports?

Members of the Committee will have had the TUC’s briefing. It has raised a number of concerns. It said—the Minister touched on this in his opening remarks—that the whole workforce need to be engaged, and that these regulations should be about engaging with workers as a whole and not just with employees. I remind the Committee that the TUC estimates that 740,000 people in the UK today are working through an employment agency, 450,000 earn most of their income through personal service companies and 500,000 people are in bogus self-employment. Significant numbers of people are in indirect employment and their indirect employment is often with the companies covered by the regulations.

I hear what the Minister has to say about the difficulty of having direct control, but is there not a danger that some employers will take the opportunity to act less than scrupulously and use indirect employment as a way to avoid their responsibility under the regulations? Sadly, we have seen too much of that kind of behaviour in our economy and the mistreatment of people in precarious situations is a growing and dangerous part of how our economy functions. Not only is it bad for working people, but it creates an unfair competitive advantage and undercuts those employers who want to do the right thing—those businesses that want to act in a responsible way. I urge the Minister to take that point on board, in the spirit of its being good for workers and good for businesses.

The TUC also raised the point about the size of businesses covered by these regulations. For listed companies the regulations use the established definition of a large company, which in this case is one with more than 250 employees, but, for reasons that the Minister might want to explain, for private companies the figure is 2,000. The TUC has drawn to our attention the fact that the gender pay gap reporting requirements use the same lower figure for public and private. I stand ready to be corrected by the Minister, but that is my understanding from the information coming from the TUC. Why is there a difference between the reporting requirements for gender pay and for pay ratios, if that is indeed the case? If it is not, and they are both 2,000 for private companies, I would still want to know why there is a difference between private and public.

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[Bill Esterson]

Yes, of course—I do not think there is any doubt about that—but this is about the private sector. I quoted the figure in our manifesto for the public sector. Perhaps the hon. Gentleman is advocating that the Conservative party should make similar proposals of its own for the public sector? I welcome his conversion to the cause and support for Labour’s manifesto from last year in the spirit in which his intervention was no doubt intended.

The other point I want to raise with the Minister concerns the FRC’s responsibilities and enforcement. Perhaps he could start by describing how enforcement has happened with the gender pay gap regulations and what examples have been received, in what I think is just over a year since those regulations came into force, of the need for the FRC to intervene and whether they have found companies that are not compliant. He quoted the policy of “comply or explain”; perhaps he can say whether he has considered what happens if the answer is always to explain and if we do not have compliance. I would be interested in his thoughts on the level of enforcement that has already gone on with the gender pay gap, and on how enforcement will happen for these regulations.

A lack of enforcement of the prompt payment code was one reason so many ended up in such a precarious financial position as suppliers of Carillion. The Minister and I have debated before the difficulties of enforcing the prompt payment code. This debate is an opportunity to remind him that good enforcement is essential for the regulations to have any meaning, and to encourage him in that regard. Perhaps the Minister could tell us how he envisages that and also give examples of how the FRC will be able to deliver that enforcement.

[Catherine West]

The shadow Minister makes some excellent points. Does he agree that the failure of Carillion and larger firms to pay small suppliers on time is not the only trouble caused? When those firms go bust many apprentices lose their jobs and roles; they are cast away. There should be some penalty for companies when the bosses walk away and the poor apprentices are left with no future.

[Bill Esterson]

My hon. Friend is absolutely right. When a company goes bust not a lot can be done to support apprentices. That is a problem with legislation, in that suppliers are unsecured creditors. It is very unlikely that the 30,000 Carillion suppliers will get a penny of the £2 billion owed to them. Money will go first to secured and preferential creditors.

In the case of Carillion, directors appear to be able to retain considerable bonuses and other payments received as a result of running Government contracts in a very unsatisfactory way for a number of years. They do not seem to be the ones who suffer when things go wrong. That is a question we can explore today and take further on another occasion. I am interested to hear from the Minister how the regulations will be enforced and how they will lead to better corporate governance for the good of all stakeholders: the business, the wider workforce—as the TUC rightly says—and shareholders.

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[Andrew Griffiths]

I thank all hon. Members for a debate that has challenged the nature of the proposals and raised some important questions, which I will address as quickly as I can.

The hon. Member for Hornsey and Wood Green raised the issue of employees on boards. These regulations, plus the new provisions of the corporate governance code, significantly strengthen the employee voice in the company boardroom while driving up accountability. For the first time, all large companies will have to report each year on how they have regard to their employees’ interests and the impacts of that. Strengthening the employee voice at board level will happen at different levels. Given the huge variety of companies in the UK and the different ways that groups operate and are structured, one method would not suit, but as I laid out earlier, the range of options to ensure that the employee voice is heard in the boardroom is adequately addressed in the regulations.

To reiterate the point about employees and not the wider workforce being covered, the regulations are being made under the Companies Act 2006, and we are using the definition of an employee in that Act, which is someone employed under a contract of service by the company. It is not for the regulations to redefine what is meant by an employee. We did not consult on that matter, which is part of a much bigger employment rights question. For instance, a person employed by a company under a zero-hours contract would be regarded as an employee for the purpose of gathering that information.

[Catherine West]

To clarify, what other protection will there be for non-employees, such as other agency workers?

[Andrew Griffiths]

The hon. Lady will know that, as part of our enforcement, we have doubled the amount we are putting into protecting those on the lowest pay. We are increasing resources in the Employment Agency Standards Inspectorate to protect agency workers. Through our work in relation to the Matthew Taylor review, we are specifically looking at what we can do to strengthen the protections for agency workers and give them more rights and more clarity in relation to who employs them and the pay that they should receive. It is part of a wider corporate governance package and a wider set of protections for workers such as those employed by the Employment Agency.

Nuclear Power

Catherine West Excerpts

Monday 4th June 2018 Commons Chamber

[Greg Clark]

My right hon. Friend is ingenious in his scrutiny of the timetable. If we start the negotiations on the regime while a member of the EU, it seems to me that we would not want to delay their completion until the date of Brexit.

[Catherine West (Hornsey and Wood Green) (Lab)]

What reassurances can the Minister give on genuine consultation with local communities over the long-term considerations of nuclear waste?

[Greg Clark]

The hon. Lady raises a very important point. The treatment and storage of nuclear waste is part of the consultation at the moment. Part of the safety assessment for all new and current nuclear plants is to make sure that the waste is stored and eventually disposed of safely, and part of any contract needs to provide for the money to address that.

Corporate Governance and Insolvency

Catherine West Excerpts

Tuesday 20th March 2018 Commons Chamber

[Andrew Griffiths]

I agree with my hon. Friend. This is why we are specifically consulting, in this document, about what more we can do to protect small businesses. In lots of these failures, we have seen clever directors with clever advisers, clever lawyers and clever tax accountants putting in place a regime that allows them to walk away scot-free while hard-working businessmen and women in our constituencies pay the price. This consultation looks at how we can put an end to that and be on the side of the small guy, not the big guy.

[Catherine West (Hornsey and Wood Green) (Lab)]

In the consultation, will the Minister consider extending the 30-day limit for late payments to other non-governmental contracts, to create a new way of doing business? Also, what will he do to protect apprentices who are often caught in the subcontracting chain and who lose their apprenticeships with SMEs, which are the lifeblood of our economy?

[Andrew Griffiths]

The hon. Lady asks two important questions. The Government have a role to play in this as a customer. We give billions of pounds of contracts and we have the power in our own hands to demand that the supply chain is treated properly. I can assure her that, in the very near future, we will be coming forward with a clearer set of principles and tools to ensure that the supply chain is treated properly and paid fairly, using the 30-day terms. That is what we expect of our suppliers. I agree with her point about apprentices. Unfortunately, we have to accept that there will always be businesses that go bust. That is one of the realities—[Interruption.] That is the way in which the business environment works. We are putting the employees at the heart of this consultation and at the heart of the decisions we make.

Hospitality Sector: Tipping

Catherine West Excerpts

Wednesday 7th March 2018 Westminster Hall

[Catherine West (Hornsey and Wood Green) (Lab)]

It is an honour to serve under your chairmanship, Sir Roger, and to follow my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders). I thank my hon. Friend the Member for Bristol North West (Darren Jones) for introducing the debate.

This issue first came to my attention when I attained my seat in the House in 2015. I was shocked to dine at one of the restaurants here and to find, when asking the staff whether they would receive my tip, that because I was paying that tip on a card, it would go straight to management. Following a write-up of that in the Evening Standard, there has been an improvement in practice. However, I understand from an update that I received from a waiter in the Palace that tips are now evenly distributed, but not until two months after the meal. Despite promises and commitments made by the House, some improvement seems to be required. I wonder whether the debate could be shared more widely than just in Westminster Hall.

Partly as a result of that furore, the then Business Secretary, who is now Secretary of State for Housing, Communities and Local Government, eventually set up a review of the issue. I was disappointed to read that we still await a proper Government response, despite the Minister then responsible replying to a parliamentary question in December 2017 that they would get around to it at some time. Is that not the case with just about everything we deal with, unless it starts with B, ends with T and has an X in the middle? We do not seem to get responses on much, which is a problem for people in the workplace who are desperate for fairness and to see a change in the situation.

The national minimum wage is now £7.71 an hour, but a cleaner in a local authority, for example, might get the London living wage of £10.20 an hour. That is a big difference. A lot of staff who wait on tables are really getting the rough end of the stick. We know from The Observer that, in one week, a restaurant called Las Iguanas took £34,000 from its servers across all its branches from a sales charge on servers. If that represents a typical week, over a year that would amount to £1.8 million. That was from a 3% sales charge, or 5.5% in London, which no longer exists at Las Iguanas. That shows that things can be changed and improved. It is often through these debates and coverage in newspapers and so on that we can advise the consumer on best practice. However, I understand that the 3% charge still applies at Turtle Bay, while a 2.3% charge still applies, as far as we know, at Gaucho.

There is a lot more to be done. I look forward to an energetic response from the Minister. I ask him please not to tell us that he is going to postpone the response to that review because we are too busy speaking about B, X and T. Could we please have a speedy response to the review, with energy injected into it? We look forward to his response.

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for Bristol North West (Darren Jones) on securing the debate.

The hon. Gentleman clearly highlighted a lack of basic protection in the workplace for those in the hospitality sector. Certainly, the only individuals providing that basic protection are in the trade union movement or organisations such as Better Than Zero, which operates in Scotland and is organised by the Scottish Trades Union Congress youth committee. It stands up against harassment in the workplace—there have been many complaints about workplace harassment in the hospitality sector—unpaid work trials and last-minute shift changes, and it exposes poor employment practices. Tipping practices in the hospitality sector are among those poor practices.

However, I have a wider concern: national minimum wage compliance, and those in the hospitality sector who try to use tips towards paying the national minimum wage rather than, as should be the case, tips being received over and above the national minimum wage. But what chance do workers have when the latest available figures show that 25% of the posts in the national minimum wage compliance unit are lying vacant? There are 399 members of staff in the unit and 83 vacancies, so although according to the National Audit Office 208,000 workers are being underpaid—not paid the statutory minimum wage—25% of the posts in the compliance unit lie vacant.

[Catherine West]

Has the hon. Gentleman made an estimate of the amount of taxation that is missing as a result of the failure to check on who is being paid the adequate amount and therefore the amount that is missing from the Exchequer?

[Chris Stephens]

I have not, but it seems to me that if 208,000 workers are not being paid the national minimum wage and 56,000 workers are in accruals, who have been owed the national minimum wage, and if we compare those figures with the 4,504 full-time equivalents chasing Department for Work and Pensions social security fraud, we see that more resources should be put into ensuring that the national minimum wage is complied with. I think that the Minister is anxious to intervene.

--- Later in debate ---

[Laura Pidcock]

That is absolutely right. My hon. Friend gives a terrible but, I am sure, quite common example of what is happening in the hospitality sector. I implore everyone in that sector—and in all sectors, of course—to join a trade union, because only through a trade union can they have greater workplace rights. Also, consumers will become more aware and ask questions about what is happening to the tips when they are in an establishment.

What happened at Aqua Italia has been very well set out. Most striking was the case of the woman who had to go to a cashpoint at the end of her shift. How draconian is that? What century are we in when somebody has to pay just to be at work? Of course, the mantra of this Government is that for people to get themselves out of poverty, they must be in work. That is clearly a story to the contrary.

It is astonishing that this practice is legal, and it is more commonplace than people imagine. Although it remains within the law to treat people in such an extraordinarily exploitative way, it certainly cannot be said to be moral. The problem in the hospitality sector was and is the chronic lack of regulation, which has meant that exploitation—especially of young people, who perhaps are unaware of their rights and of the benefits of being in a trade union—has been allowed to flourish. That shows that we cannot rely simply on self-regulation in that sector.

Trade unions have taken a special interest in the sharp practices used in the hospitality sector since at least 2008. In May 2015, after it emerged that restaurants such as Pizza Express, Bill’s and Strada were taking tips and service charge payments intended for staff, Unite the union launched a summer campaign against these practices. For example, Pizza Express claimed an 8% so-called “admin fee” from any tips paid on a card. That is a huge problem, which has been repeated. There was public outcry as the endemic nature of the problem was displayed and publicised via social media. The huge public reaction forced the Government to act. They launched this call for evidence into tipping practices, followed by this consultation. However, as has been repeated consistently: nearly two years on from the consultation, what action has been taken?

In June, Unite campaigners handed a 6,500-signature petition to the Business Secretary, urging him to release the Government report into tips, but it still has not been published. The petition called on the Business Secretary to give staff 100% of their tips with complete control over how they are shared, to ban the bogus tronc schemes and make the code of best practice mandatory. For every single day that goes by, more abuses come to light. The so-called “pay to work” schemes are part of this broader set of practices, which cynically exploit restaurant workers and customers, who are none the wiser.

[Catherine West]

Whereas previously a waiting job was done for a few months or in the summer while someone was a student, these days, with the flat economy we are seeing, people are working in the waiting sector for several years as a full-time role. Does my hon. Friend agree that we now have to get to grips with the situation, get some energy into this and really address the poor practices?

[Laura Pidcock]

My hon. Friend is absolutely right. For many people this is not a stop-gap, but a career—they will work for many years in a restaurant, bar or pub.

Workers are charged fees, denied service charge payments, robbed of customers’ tips and denied tips by these bogus tronc schemes. A properly run tronc scheme— a pooling system, used by employers to distribute non-cash tips for employees—should be genuinely independent, free from employer interference and involve staff, but many are not. Too many say that they get absolutely no say in how the non-cash tips and service charges are shared out, or who gets a share. We have to remind ourselves all the time that it is not the business of the employer to say what happens to those tips. Those tips are hard-earned by the service of that member of staff.

Unite has also uncovered something very important. A number of these bogus tronc schemes, organised through troncmaster consultants—quite a dramatic name—have been used by companies to minimise the basic income of workers in order to avoid liabilities on national insurance and pensions. One case of this was an advert for a sous chef with a salary of £28,000. Once taken on, the employee found out that their contract stated a salary of £16,000, with the remaining £12,000 being paid from service charges. If anybody thinks that these practices are tailing off, I should say that two weeks ago we heard about the scandal at TGI Fridays, the American chain, following the proposal to redistribute card tips from waiters to kitchen staff, in lieu of an increase in wages.

Bogus tronc schemes are among a handful of ways in which tips are taken from the pockets of waiting staff and redistributed upwards and outwards into the pockets of companies, both big and small. Trade unions are rightly pointing out that these schemes verge on remuneration avoidance, illicitly reducing companies’ tax liabilities, and therefore should be subject to an investigation by HMRC.

Until staff are given 100% ownership rights over their hard-earned tips, with complete control over how they are shared out, bad employers will continue to take the tips of staff—that has been proved conclusively throughout our history—and young people will continue to live with that insecurity of low pay and not have the regularity of their tips. As the unions have been urging the Government for a decade now, it is time that the Government showed some leadership and dealt with these appalling, exploitative practices that exploit both the customer and the employee. Let us be honest: tips are often a lifeline for staff, but they often become a subsidy for low pay. People are dependent on these tips to live, not just for luxuries.

I am becoming somewhat tired of the Government’s inaction, already mentioned by hon. Members, in response to the low-pay economy. We do not need another review, consultation or any further consideration, but we do need a legislative imperative on employers to stop this theft from their staff. Actually, a whole new suite of workers’ rights is needed, placing collective bargaining, as has rightly been said, at the heart and centre of that agenda. The Taylor review and the Government response to it did not go far enough at all. In fact, the Government’s response to some of these complex issues in the modern labour market was extremely weak. I look forward to the Minister announcing that he will indeed take decisive action on this issue.