Points of Order

Chi Onwurah Excerpts

Wednesday 18th November 2020 Commons Chamber

[Madam Deputy Speaker]

I thank the hon. Gentleman for raising a point of order. As I have just said in reply to the previous point of order, what is said by hon. Members and the veracity of it or otherwise is not a matter for the Chair. What is said in election literature by candidates who do not subsequently become Members of Parliament is definitely not a matter for the Chair, which is a matter of some relief for any occupant of the Chair. The hon. Gentleman asks me how he can draw his point to a wider audience. I think he has just done so.

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

rose—

[Madam Deputy Speaker]

Does the hon. Lady wish to raise a point of order?

[Chi Onwurah]

indicated dissent.

[Madam Deputy Speaker]

No, the hon. Lady just wants to leave the Chamber. In order to facilitate the exit of the hon. Lady and all other Members and the safe entrance of those who wish to participate in the next item of business, I will suspend the House for three minutes.

Draft Competition (Amendment etc.) (EU Exit) Regulations 2020

Chi Onwurah Excerpts

Wednesday 4th November 2020 General Committees

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

It is a great pleasure to serve under your chairmanship, Mr Gray.

I thank the Minister for his opening remarks and emphasise that the Opposition believe that open and competitive markets promote consumer welfare, that healthy competition is a fundamental part of a prosperous economy, and that effective competition law is an absolute prerequisite of achieving that. Well-balanced legislation in this area can bring down prices, encourage product innovation and lead to better quality service delivery.

As a member of the European Union, the UK has benefited from harmonised competition standards across the single market for decades.  Those rules have protected UK businesses and consumers from the negative effects of so-called abusive practices from large corporations based elsewhere.  They have been developed at EU level by UK representatives in our own national interest. I am sure that the Minister agrees that European competition law was primarily instigated and driven by UK competitive ideas, practices and regulators. To a certain extent, we have left the EU with our competition law framework. Unfortunately, we are not so clear how the sovereign competition framework that the Minister mentioned will look and where it is going. Perhaps he can provide greater clarity on that.

It is certain that the weight of 600 million consumers that the European Union brings to the table has given it great clout on the international stage. The EU’s robust competition framework has been used to take on tech giants, curb unhealthy market dominance and push for consumers to be able to migrate their personal data from platform to platform. So even though the UK has technically left the European Union, in reality we continue to benefit from EU rules now. 

Today’s instrument is being laid partly to amend legislation to reflect the fact that the UK will be covered by EU protections right up until the end of the transition period, as the Minister said.  It formalises the European Commission’s ability to carry out its agreed functions under Title X of part three of the withdrawal agreement in the UK during the transition.  As the Minister set out, that includes the European Commission continuing to have the jurisdiction it needs to make final decisions on merger referrals made to it before the end of the transition period.  Of course, the retention of those rules during the transition period makes absolute sense. It limits disruption at an already difficult time and keeps our markets functioning harmoniously with our nearest neighbours. 

We will not oppose the instrument, although we have some concerns. The transition period comes to an end at the end of this year, in less than two months. Businesses with a base in the UK will continue to be subject to European Union frameworks insofar as any of their actions affect competition within the European Union, even after the transition period ends, but the UK will no longer be able to have a say in drawing up the rules. We will effectively be a rule taker rather than a rule maker. In fact, the UK courts will no longer have the facility to refer questions of interpretation of European Union law to the European Court of Justice after Brexit, which could see damaging divergences between UK and European Union competition rules that may leave businesses confused and over-burdened.

Business leaders continue to warn that we could see more red tape, not less, after the transition period because, as I have suggested, businesses operating in both the UK and the European Union—this applies to many businesses operating across Europe—will be required to deal with both the CMA and the European Union competition authorities simultaneously on mergers and competition investigations. Will the Minister confirm that that will be the case and that they will have to have regard to those authorities’ regulations? Can he offer any assurances that UK businesses will not be burdened with red tape, and will he outline how the CMA will keep that in mind?

Finally, I hope the Minister will use this opportunity to lay out how he and his Government will make sure that businesses and the public will continue to be safeguarded against unscrupulous competition practices in future. As I have suggested, the European Union has used its competition powers, and looks to do so even more in the future to address the lack of competition in data, digital and platform markets. Although we see the European Union making progress in that area, we have had no indication from the competition Minister as to whether the UK will also address the unhealthy lack of competition in platform, data and digital markets.

[Paul Scully]

I thank the hon. Member for her considered comments and for agreeing that these regulations are the way forward. As I have said, they are needed to give effect to the provisions that we have already agreed in the withdrawal agreement, so they very much relate to a specific set of cases. I will try to cover the areas that the hon. Lady talked about. We have the Penrose review into the competition regime in the UK. As soon as that comes back, we will consider it and come up with the changes and improvements that we need. We both agree that healthy markets need to function well together to ensure a fair deal for other competitors, and consumers as well. It is really important that consumers are at the heart of what we do.

[Chi Onwurah]

Will the Minister indicate when the Penrose review will be completed?

[Paul Scully]

The review is working at pace. I cannot give a timescale at the moment, but as soon as the review comes back we will consider it quickly, because we want to make sure that we have the best competition regime. As the hon. Lady stated at the beginning of her speech, UK competition specialists were at the heart of the EU regime. We are leaving the regime, but we are leaving with our competition experts, so they will be at the heart of what we do. We have made it clear in our published proposal for the comprehensive free trade agreement with the EU that we intend to maintain international co-operation on competition enforcement. The EU has expressed a desire to maintain UK-EU co-operation on competition law matters in its own proposals as well. We want to make sure that the CMA continues to participate in multilateral networks such as the international competition network and the OECD.

Without the regulations the UK would fail to implement its obligations in competition law under the withdrawal agreement. Inconsistencies between the withdrawal agreement and competition law would cause significant uncertainty for UK businesses, the CMA and UK courts. The changes that I have described today are required to complete the process of preparing the UK statute book for the transition. I hope the Committee approves the regulations.

Question put and agreed to.

DRAFT STATE AID (REVOCATIONS AND AMENDMENTS) (EU EXIT) REGULATIONS 2020

Chi Onwurah Excerpts

Tuesday 3rd November 2020 General Committees

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

It is a great pleasure to serve under your chairship, Mr Davies. I am glad to be on the Committee considering the regulations.

I am particularly pleased that a Conservative Government recognise the role that state aid can play in the development of key sectors in a nation’s economy. If deployed as part of a robust industrial strategy, it can help to create decent jobs, kick-start businesses and rebalance regional inequalities. State aid, public ownership and workers’ rights are important building blocks of our nation’s economic model, and getting them right will be crucial to our future prosperity and the nature of any post-Brexit settlement. EU state aid rules on innovation clusters, broadband, culture and heritage, as well as on small and medium-sized enterprises, general economic interest and local infrastructure projects, have allowed member states lots of room to invest in and pursue their domestic priorities.

I should declare an interest here. When I worked for Ofcom I worked on state aid rules with particular regard to investment in broadband—for many years and in quite a lot of detail, although I shall not indulge myself by going into that during this debate, Members will be glad to know. However, I can say that state aid rules allow for support for industries of general economic interest. It is true that they prohibit heavy-handed state aid when it distorts competition, but there have always been ways to strengthen and support industries without falling foul of EU guidance.

State aid rules are a critical concern in providing the right level of financial and other support, but even within the EU different countries have interpreted state aid rules in different ways. Other countries within the European Union have always, shall we say, been far more innovative, creative and supportive with their strategic industrial capacity than the UK, despite the same state aid rules environment. The UK did not keep up with strategic investments. For example, the Government provided just 0.38% of GDP in state aid in 2018, compared with France’s 0.79%, Germany’s 1.45% and Denmark’s 1.55%.

I give those figures to emphasise to the Minister that the Government cannot continue to hide behind the false excuse that it was the EU regime that was the reason for the lack of strategic investment. Further, it is strange that the state aid regulations should cause such an impasse in the negotiations, given the lack of support from the Conservative Government over many years for strategic investment and subsidy. While the Minister says that state aid is an EU concept, it is certainly recognised in the WTO subsidy regimes, which are essentially the same thing. When I asked the Secretary of State for International Trade in the House on 14 September, at column 35, what the difference was between the European Union state aid rules, which had been rejected, and the Japan trade deal state aid rules, which were being accepted, I did not get an answer. I hope that the Minister will perhaps give us some clarity on that.

[Kevin Hollinrake]

Is not the difference the fact that we would be able to make our own rules unilaterally; but if we remained part of the jurisdiction of EU state aid we would have to go to the European Court of Justice, potentially, or to the European Commission, to determine what support we might offer to business? Does the hon. Lady propose that should still be the case once we have left the European Union?

[Chi Onwurah]

I am afraid that the hon. Gentleman has entirely misunderstood me. We are leaving the European Union, as I said. In fact, we have left the European Union and the transition period is coming to an end. My question, like my question to the International Trade Secretary, was very specific. It was about the difference between state aid rules. In the case of what was agreed with Japan it is not something unilateral. In the Japanese trade deal state aid rules were agreed—as they are in all trade deals; it is difficult to agree them unilaterally with another country. My question was about the difference between those rules and those that were rejected as part of the European Union trade negotiations.

[Kevin Hollinrake]

The European Union position in the negotiations is that it wants us to be accountable to the European Union. That is exactly what it is saying, and that is what is different. Whereas in the Japan deal that was not the case, with the EU it is. There would be a requirement for us to agree our measures with the European Union. Is that what the hon. Lady wants? That is what the EU wants. That is its position.

[Chi Onwurah]

What I wanted to understand was the difference—comparing the rules agreed with Japan and the existing rules within the European Union state aid agreement. The way in which they are managed in the future is obviously part of the negotiations, but I wanted to understand the difference. I still do not understand what the difference is, and am not sure whether it has been set out clearly anyway; but I am sure the Minister will explain it to me.

As has been said, we have left the European Union, and the end of the transition period is fast approaching, so we call on the Government to protect British jobs and support regional communities that have been held back after 10 years of austerity. State aid can and should play an important role in that. Labour does not want a return to top-down subsidies and command-and-control intervention in the economy. Instead, we want to build an economy where public bodies work with the private sector to promote innovation and drive economic growth. The Government have had over four years to put together a replacement state aid regime. We were promised a framework way back in March 2020 and we are still waiting to see it. We agree with the need for this statutory instrument and will not be opposing it, but we believe it important for businesses and, indeed, for all of us, to have greater clarity.

With less than two months to go, there is regrettably no time left to carry out a meaningful consultation on a new, ambitious plan for state aid before the end of the transition period. Businesses that I am talking to are understandably frustrated. As we have discussed, negotiations with the European Union broke down earlier this month and Lord Frost confirmed that the UK would be operating under WTO rules from January 2021. While this gives a modicum of clarity to stakeholders—which is to be welcomed—we know that WTO rules are suboptimal, lacking in important detail on state aid. They also do not include provisions on services, which is a critical part of the UK economy.

On 11 March, the Chancellor of the Duchy of Lancaster told the Committee on the Future Relationship with the European Union that Great Britain-based businesses trading with Northern Ireland would categorically not be subject to European Union state aid rules come January 2021. Many experts say that WTO do not operate effectively as a subsidy control regime, and that a reliance on WTO rules should only be a stopgap. Does the Minister agree? Will he give an indication of what a future state aid regime built on the proposed WTO framework would look like?

We hope the Government will improve on the WTO baseline quickly and get this implemented, not only because that would that give further clarity to UK businesses, but because it would improve free trade negotiations with the EU and other countries.

Businesses have raised concerns that under the Government’s current proposals, subsidies made outside of Northern Ireland might still be regarded to have a potential effect on trade between the European Union and Northern Ireland. The Minister talked about the impact of these rules on Northern Ireland, but these outside subsidies could necessitate a European Union state aid assessment. What is the Minister’s view and can he allay those concerns by confirming that the Government will prevent EU state aid rules from reaching back into the UK for trade between Great Britain and Northern Ireland, which is covered by the Northern Ireland protocol?

Before I conclude, I wish to say that we have long been concerned about how the Government’s flagship shared prosperity fund might interact with a UK state aid regime. The Government have promised that details regarding would come with a comprehensive spending review, but the CSR has been curtailed to just one year and the consultation has not even started yet. Can the Minister assure us that we will have some details of the framework before the end of the transition period? Will that framework ensure that regional leaders and devolved Administrations are consulted and included in decision making?

We should remember that the structural funds received from the European Union were always allocated based on where they were most needed according to relative deprivation. Will a future state aid regime reflect that? Given the controversy around allocations from the towns fund, how can the Government assure us that the appropriate safeguards will be in place to prevent cronyism arising from Ministers’ own “qualitative analysis”? Finally, I would like to hear from the Minister the ways in which the Government intend to allocate state aid funding other than via the shared prosperity fund.

[Paul Scully]

I am grateful to the Committee for its consideration of the regulations and the valuable contribution of the hon. Member for Newcastle upon Tyne Central to this important debate.

I have talked about the fact that the EU state aid rules were created to meet the needs of the EU, but, with us leaving the EU and the single market, as we have heard from my hon. Friend the Member for Thirsk and Malton, whether for the Japan deal or for our future deals, we want to have a system, controls and regulations that fit the UK economy and our objectives, which can be enforced and administered by the UK as an independent sovereign nation.

The hon. Member for Newcastle upon Tyne Central talked about certainty for businesses and I totally agree with her. This is a specific, technical statutory instrument that does not look at our future subsidy control regime beyond the WTO. Clearly, we will want to build on that and work out where we need to go with businesses. It is important that we involve businesses to develop any future additions, should we choose to build on the WTO. In terms of the certainty that businesses require now, we will publish guidance as soon as possible on the international commitments that will apply in the UK on 1 January 2021. That will cover WTO rules and subsidies and any commitments that we have made in the free trade agreement to date.

Our approach will have implications for businesses and all public authorities that grant subsidies with taxpayers’ money, including the devolved Administrations. It will take time to listen closely to those voices and design a system beyond 1 January that promotes a competitive and dynamic economy throughout the whole UK.

[Chi Onwurah]

Can the Minister give more clarity about the timescale he envisages to develop the state aid regime, given that we will have left the European Union and the existing state aid regime will no longer be applicable?

[Paul Scully]

Clearly the timescale will involve two things: our negotiations with the EU and other countries in terms of free trade agreements, and our discussions with businesses and government at every level, including the devolved Administrations, to ensure that we get it absolutely right.

We can be sure that on 1 January 2021 we will be leaving with the subsidy control, as outlined by the WTO. The guidance for businesses at that point will be there for them to see. We need to ensure that with anything to do with the transition—whether it is changes to company administration, organisation supply chains or subsidy control of state aid—it is important that businesses look at gov.uk/transition website. Whether we have a deal with the EU or not, companies will have changes to make. It is important that they are on top of that, especially small businesses that do not necessarily have available the big resources to work on those matters at such extraordinary times, as they work on a day-to-day basis.

The objective today is to revoke the retained EU state aid law, rather than looking forward beyond that—that is appropriate and necessary—and to ensure that consequential amendments to other retained EU law and UK domestic legislation that refers to state aid rules continue to operate appropriately for businesses and Government after the end of the transition period.

In conclusion, I confirm that we are revoking the retained rules that have been preserved through the withdrawal Act. The regulations will provide the legal certainty for businesses and aid-granting authorities. I therefore hope that the Committee will approve the regulations.

Question put and agreed to.

CCRC Decision on 44 Post Office Prosecutions

Chi Onwurah Excerpts

Monday 5th October 2020 Commons Chamber

[Paul Scully]

My hon. Friend is absolutely right that we need to get to the bottom of who knew what and when. That is why I am determined that, under Sir Wyn Williams’ chairmanship, we can seek evidence to complement what is already available from Mr Justice Fraser’s findings by speaking to the Post Office and Fujitsu, who have agreed to comply fully with this inquiry. I also hope that sub-postmasters will, through conversation with Sir Wyn Williams, agree to get involved so that they can share their evidence and stories and so that we can get to the bottom of this, exactly as my hon. Friend says.

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

The Post Office Horizon scandal may well be the largest miscarriage of justice in our history, with 900 prosecutions, innocent people bankrupted and imprisoned, careers ruined, families destroyed, reputations smashed and lives lost. I pay tribute to the Justice For Subpostmasters Alliance and all who campaigned with them, including Members on all sides of the House, and particularly my right hon. Friend the Member for North Durham (Mr Jones), who secured this urgent question.

For decades, the Post Office denied all wrongdoing, imposing huge stress and legal fees on the victims and spending tens of millions of pounds in the process. Friday’s announcement is a welcome relief for so many, but can the Minister tell us why, as its only shareholder, the Government allowed the Post Office to continue to oppose the appeals for so long? Far from it being merely an operational matter, as the Minister has said, will he admit that this represents a gross failure of oversight, and will he tell us how much this has cost the Post Office and, ultimately, the taxpayer? What is the estimated cost of the compensation that will now need to be paid to those prosecuted, and what of those who were pursued, harassed and bankrupted, but not ultimately prosecuted? It is right that the Government have finally announced a judge-led inquiry into this scandal, which Labour called for months ago, but despite this House having expressed its concerns forcefully, the terms of reference deliberately exclude compensation. Will the Minister amend the terms of reference to include compensation and deliver true justice for the victims?

A miscarriage of justice on this scale undermines confidence in the justice system. Is it right that the Post Office has the power of independent prosecution, and is the Minister reviewing it? The victims need justice, not more unanswered questions. The taxpayer needs to know just how much this failure of oversight has, and will, cost. Finally, the Government need to take responsibility for this debacle and ensure nothing like it can ever happen again.

[Paul Scully]

I thank the hon. Lady for her question—there were a number of questions in that. In terms of the Government’s involvement, as I say, the Post Office’s decisions are operational decisions for it and its board. What happened when—whether there was any Government involvement in terms of the Government shareholder, the board’s appointee, as well as the Post Office—will come up in the independent inquiry, and it is right that they are questioned so that we find out what happened and when.

On the issue of compensation, if the sub-postmasters get involved in this inquiry and share their evidence, they will be able to share their stories and the losses that they have made, both directly and indirectly. However, an inquiry cannot direct compensation; ultimately, that has to be done through the courts.

End of Eviction Moratorium

Chi Onwurah Excerpts

Wednesday 23rd September 2020 Commons Chamber

[Christopher Pincher]

I understand from my discussions with the National Residential Landlords Association that about 89% of tenants are paying their full rent; about 4% of tenants have agreed either rent holidays or rent reductions with their landlords; and about 7% are in arrears. My hon. Friend is right to point out that smaller landlords rely on their rents, which is why we have made it plain, through our introduction of the SI on 29 August, that where there are egregious rents, landlords should be able to move quickly to repossess their properties and rent them out again. If they do not, the likelihood is that the number of properties available to rent will fall away as landlords leave the sector. As I said, 21% of homes are in the private rented sector; it is an important part of our economy and we will support it.

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

Newcastle citizens advice bureau reports a massive jump in housing queries, and no wonder—for most people, after their family’s health and wellbeing, their home is what is most important to them, and the two are often related because, as we know, covid-19 feeds off bad housing, overcrowding and the respiratory conditions associated with that. The Minister is giving a lot of general reassurances, but can he say to me specifically that no one in Newcastle will face eviction, court action or bailiff action as a consequence of arrears due to covid-19?

Draft Alternative Dispute Resolution for Consumer Disputes (Extension of Time Limits for Legal Proceedings) (Amendment etc.) (EU Exit) Regulations 2020

Chi Onwurah Excerpts

Monday 20th July 2020 General Committees

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

I start by offering my unequivocal support to the Minister in welcoming the opportunity to serve under your chairship, Dr Huq; it is a real pleasure. [Hon. Members: “Hear, hear.”] I hope the debate will be conducted with the same level of mutual support, although I am not sure about that.

Over 40 years of membership of the European Union, the UK has shared responsibility to protect the UK’s consumer rights with EU member states. An extensive body of law has grown up, with more than 90 European directives applying across the single market. The reciprocal rights enshrined in those directives enable UK consumers to seek redress for any poor service they receive anywhere in the EU. Indeed, the UK played a central role in negotiating many of those directives alongside the European Commission, including the alternative dispute resolution directive to which today’s regulations refer.

The ADR directive has made a valuable contribution to consumer confidence across the EU single market by reducing impediments to, and improving cross- border engagement with ADR organisations. The directive has helped UK consumers to avoid some of the more challenging issues about jurisdiction and applicable laws related to ADR that often arose before the directive came into play. That has saved UK citizens and businesses many hours of complex and costly court proceedings. In particular, the time extension provisions—the subject of today’s statutory instrument—have ensured that UK and EU consumers can enter into ADR processes in good faith, without fear of strict time limits to bring a case to court elapsing in the meantime.

We can therefore see that much of the EU’s consumer protection laws and UK national laws are interwoven in a complex and interconnected way. That harmonisation between our domestic and European law has provided us with the comprehensive protection UK consumers need to purchase goods and services with confidence, which has in turn bolstered trade across the single market, including here in the UK. While the Government’s withdrawal Act attempts to mirror in UK law the individual consumer rights that operate within the EU, it cannot guarantee the protection of UK consumers’ rights when they visit the EU27 after the transition period, nor can the UK Government assure UK consumers of continued access to the shared network of agencies, mechanisms and infrastructure that polices, secures, develops and underpins consumer confidence across the EU single market.

In short, the harmonised reciprocity of consumer protections we have enjoyed as members of the EU will come to an abrupt end once we leave the transition period, yet the Government are not clear about what comes next. We know that talks with the EU have been stalling, and as we move closer to the end of the transition period, it looks increasingly unlikely that the Government will be able to negotiate a post-Brexit relationship that continues to protect consumers’ rights for UK residents in the same way. That added uncertainty comes on top of the business interruption and drop in consumer confidence that we have seen as a result of covid-19.

Labour is concerned that without reciprocal obligations to investigate breaches of consumer law and progress with necessary enforcement actions between the UK and the EU, the Government will leave UK consumers unable to seek redress from EU-based traders in UK courts when things go wrong. There is every chance that divergence between UK and EU consumer law will become even more pronounced over time without proper oversight from the Government, which would have a significant impact on consumers and businesses and burden cross-border transactions and recourse processes with unnecessary red tape.

With the possibility of a no-deal Brexit and an economy hit by covid-19, Labour calls on the Government to take a more proactive approach to protecting UK consumers by agreeing mutual recognition rules, underpinned by a standard equivalence principle, as a matter of urgency. The Government may say that they want high regulatory standards and robust domestic market surveillance after the transition period, but they have slashed funding to frontline trading standards services by more than 50% in just over seven years. That has led to potentially dangerous counterfeit cigarettes and unsafe toys and electrical products entering our homes. The UK’s largest market surveillance authority and regulatory service, the Chartered Trading Standards Institute, recently said:

“Much has been made of maintaining the UK’s post-Brexit standards of regulation, but rules without resources for application, advice and enforcement are rendered ineffective and detrimental to the UK economy.”

The regulations remove all reference to the ADR directive from four pieces of EU-derived legislation. Of course, Labour accepts that it is a broadly technical instrument designed to ensure that EU law does not apply after the transition period has come to an end, but it excludes two key groups of people from the ADR-related time-limited extension: first, EU-based consumers buying goods and services in the UK and, secondly, UK-based consumers buying goods and services in the EU. It will ultimately mean that UK consumers are protected by the time-limited extensions only when working through ADR organisations. Will the Government seek to address that and ensure that all consumers are protected in the UK?

The Government estimate that the changes will affect about 131 ADR cases per year that are five years old or older, but it is not clear how those figures have been arrived at or what the total value of those cases might be. Can the Minister take this opportunity to show how the figures have been calculated? Can he outline clearly the Government’s plans to protect UK consumers when making purchases of goods and services in the EU, and vice versa, if the statutory instrument comes into force?

Labour has noted, and is grateful for, the European Statutory Instruments Committee’s intervention on the grounds that the diminution of rights to the time limit that the Government are proposing is significant, alongside the fact that the legislation being amended is mostly primary legislation. That Committee deemed it appropriate to upgrade the instrument to an affirmative resolution, and a debate will take place in Parliament after the recess.

Labour has always strongly supported giving consumers and businesses every opportunity they need to reach mutually beneficial dispute settlements. Mediation and conciliatory processes supported by third-party ADR organisations are informal, flexible, low-cost and user-friendly compared with court proceedings. The Government must make sure that UK consumers and businesses have an equally straightforward route to ADR and that any such access comes with similar provisions to ensure that parties are not caught out by time limits when entering into them in good faith.

Corporate Insolvency and Governance Bill

Chi Onwurah Excerpts

Consideration of Lords amendments & Ping Pong & Ping Pong: House of Commons
Thursday 25th June 2020 Commons Chamber

[Paul Scully]

I agree with the hon. Gentleman that it is so important that we work with all parts of the nation and all the devolved Administrations, which we do regularly. My colleague my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) has regular conversations from our Department, and other Departments liaise closely with the devolved Administrations to ensure that local economies are protected, as well as looking at the overall national picture.

The measures that the Bill introduces will give our businesses the vital support they need to keep afloat, preserving jobs, maintaining productive capacity and enabling the foundations to be laid for the country’s economic recovery. Saving lives and livelihoods is at the heart of what we are seeking to achieve. Measures such as the new moratorium and restructuring plan, together with a prohibition on contractual termination clauses, will help more businesses in future to survive rather than become insolvent. Many of the permanent measures have been improved through scrutiny in the other place, and I will set out some details of the amendments that the Government have brought forward to ensure that the measures work as intended.

I turn first to the financial services super priority amendments.  The Government want to prevent firms gaming the system through a moratorium. Our amendments seek to disincentivise financial services creditors from seeking to accelerate their pre-moratorium debt solely to benefit from super priority should the company fail, or to obtain protection from compromise if a restructuring proposal was put to them. The amendments exclude pre-moratorium financial services debts from having super priority status in a subsequent administration or liquidation where the financial services debt has been accelerated for payment during the moratorium. That ensures that the correct incentives are in place for the moratorium to work effectively and not be brought to an end prematurely.

On amendments relating to pensions, the aim of the measures in the Bill is to rescue a company, which is ultimately the best outcome for its pension scheme. Nevertheless, the Government have been alive to the concern that the new procedures could result in a pension scheme being disadvantaged as an unsecured creditor of the company. As a result, we agreed that there is a need to build in specific protections. Amendments made in the other place ensure that the pensions regulator and the Pension Protection Fund get appropriate information in the case of both a moratorium and a restructuring plan and that the PPF can challenge through the courts, the directors and the monitor of a company in a moratorium. There is also a regulation-making power, which will allow the PPF to be given creditor rights in both procedures in certain circumstances. I hope that hon. and right hon. Members will agree that these are important and fair amendments to the Bill.

We have also made amendments to the temporary measures in the Bill. These temporary measures allow businesses to focus on what is important for their survival through this extraordinary period, rather than having to respond to aggressive creditor actions, or struggle with statutory filing or meeting requirements during the disruption. The amendments to the temporary insolvency provisions in the Bill extend the life of those provisions beyond what was proposed when the Bill first came to the House. They will now expire, as I have said, on 30 September.

It is already clear that businesses will need these measures in place for longer than we first anticipated, and we brought forward amendments in the other place to take account of that. The provisions retain the capacity to be extended further through a regulation-making power should it be required, and the affirmative procedure will apply to such regulations.

Amendments have been made in the Bill in relation to pre-pack sales in administrations. Pre-packs are a valuable tool for saving businesses and jobs. However, concerns have been raised about the lack of scrutiny of them. The amendments reinstate a power that had elapsed earlier this year for the Government to regulate pre-pack sales in administrations to connected parties. The Government will look carefully at pre-packs and I can inform the House that a commitment was made by my ministerial colleague, Lord Callanan, to review current practices in the summer before making any decision on regulatory changes.

Finally, a number of technical amendments have been made to the Bill where it was judged necessary. These include changes that will restrict the period for which certain powers have been given in the Bill that will be available to Ministers, changes to clarify the intended effect of the legislation, and changes which place a condition on the use of some powers. We have ensured that there is appropriate parliamentary scrutiny of any regulation made under the Bill, as well as appropriate safeguards on these powers. Where they relate to powers for a Scottish or Welsh Minister or a Northern Ireland Department, the corresponding change has been made to ensure equal scrutiny for all the Parliaments of the UK.

This Bill has been improved by the scrutiny of the House of Lords Delegated Powers and Regulatory Reform Committee, as well as by the incredible work of the Government’s own parliamentary counsel and their legal advisers. I hope that the House will agree that making good, accurate, appropriately balanced and clear legislation is very much in the interests of all, not least of businesses that rely on this legal clarity. I am confident that we have now achieved that in this package, which we have, nevertheless, brought forward as quickly as possible to respond to the covid emergency. Taken together, these amendments improve this important and much-needed Bill. The debates and discussions in this House, as well as in the other place, have shown quite what this Parliament can achieve, even if socially distanced, when we share that common aim to save and support businesses in this emergency context. I therefore call on Members to support all the Lords amendments.

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

I want to start by echoing the constructive tone of the Minister and thanking everyone, both in this place and the other place, who has been involved in the scrutiny of the Bill. I also want to thank the Minister specifically for how he and his colleagues have engaged with us on this Bill and listened to the concerns we have had as it has progressed. We on the Labour Benches welcome the amendments that the Government have brought forward, which improve and strengthen the Bill in some important regards. As we have said previously, this is just one of the measures that we hope will safeguard businesses and livelihoods through this crisis. Our objective as the Opposition is to be constructive and to ensure that businesses get the support they need now and in the longer term, and that the number of insolvencies over coming weeks and months is as few as possible. We back this Bill, but we are clear that it is a last resort for many businesses and that there is much, much more for the Government to do now—now—to support businesses, safeguard our economy and protect jobs and livelihoods, so that the measures passed today only have to be used in a limited number of companies.

--- Later in debate ---

[Stephen Doughty]

I entirely endorse the point my hon. Friend is making, particularly with regard to pension schemes, because we have seen the tragedy of where this has gone wrong, such as the Allied Steel and Wire pensions scandal in my constituency, which is still affecting people today, years afterwards. Does she agree that we need to take some of the lessons from this process into protections for pension schemes and pensioners, who are expecting, having paid in, that they will get out in due course?

[Chi Onwurah]

I thank my hon. Friend for that extremely constructive and to-the-point intervention. We absolutely need to learn from this process, and we also need to ensure that not only the mistakes but the injustices of the past are not repeated, particularly now, when the economy and so many workers and pensioners are so vulnerable.

First, I hope that Ministers will learn from the experience of passing this legislation in such a hurried manner, with a mixture of permanent and temporary measures. While we understand the need for speed with this Bill, it is clear that there have been problems in combining temporary changes with permanent reforms that have been a long time coming and the lack of time for proper scrutiny. That point has been strongly voiced in the other place, and we hope that Ministers will bear this in mind when introducing complex permanent changes along with temporary measures.

Secondly, the ranking of priority debts in insolvency cases has not been changed in a number of years and concerns have been raised that this is out of date. There is no mention of FinTech or some of the new complex ways in which firms finance themselves. If further insolvency changes are planned by Ministers, they must be relevant to where the world is now.

Thirdly, the interaction between pension funds and insolvencies is very complicated, particularly around defined pension schemes. That needs to be looked at afresh. Fourthly, the lack of mention of employees in the whole Bill is a complete oversight, which is why we argued for greater recognition of, and voice for, employees during the passage of the Bill. Any further changes to insolvency and corporate governance legislation must consider how workers can be better included. Finally, there are clearly issues, as the Minister has raised, around pre-pack. They will need to be resolved.

We are pleased that we have been able to work so constructively with the Government to pass this important legislation to support business through this crisis. We are grateful for the listening ear of Ministers. We hope that this legislation will save businesses threatened with becoming insolvent through this crisis. We will keep a close eye on how the measures are implemented, and we hope Ministers will do the same.

[Richard Fuller (North East Bedfordshire) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests and in particular to my roles as a director of companies.

Like the Opposition, I welcome the changes that the Government are accepting in the Bill today. I have listened to a couple of interventions from the Opposition Benches, with their strong support for Government measures to support the economy, and that is emblematic of how successful they have been. However, I would just gently warn my hon. Friend the Minister that we have made great progress so far, but there are issues, as we emerge, about how those programmes are helping certain people, while other people are not receiving that support. We need to get the economy going back to normal business principles as quickly as possible, not seek to extend Government intervention unnecessarily or for too long.

This Bill is a very timely Bill and it is a good Bill. As the shadow Minister said, there is a mixture of short and long-term issues here, but getting this on the books is really rather important for the market. May I ask the Minister, building on some other comments about the changes in the role of the Pensions Regulator and the PPF, whether he sees this as part of a longer-term view of the Government about the role of pensions regulators in insolvency, and whether this is an indication of something that may outlast and be outwith any short-term changes? I would be interested in his perspectives on that.

I am not sure if the Bill continues to relate to the primacy of HMRC as a creditor in insolvencies, but I would be interested if the Minister has any observations on that. I know that, for many businesses when they are trying to seek resolution in insolvency, HMRC can prove to be one of the most difficult creditors to deal with—and that is putting it perhaps a little lightly. So do the Government have the intention of providing, or does the Treasury have any intention of providing, any guidance on how HMRC may be treating its obligations during this particular period? For many companies, that would be a welcome piece of information as they go through what may otherwise be very difficult periods.

May I ask the Minister about the extension to 30 September? That seems to be a very sensible change, but may I ask him about what happens in the event that there is a repeat lockdown that is a national lockdown? He has talked a bit about an affirmative decision here. That, it seems to me, is perhaps a bit more focused than that. Perhaps more tellingly, what happens in the instance where there is a localised lockdown in a particular county or a particular region that affects businesses there and they go insolvent? What happens to those particular businesses? I would be interested to see if the Minister has some thoughts on that.

My final observation, Mr Deputy Speaker—and you, with your great experience, may know this too—is that frequently measures that come into this House that are seen as short-term measures have a habit of sticking around on the statute book. So could I have, on the sunny-side view of the recovery of the economy, an absolute assurance from the Government that it is their intention, as these things sit, as the economy recovers, that they will implement the sunset clause, and they will come forward so that we can enable businesses to go back to the longer-term framework, some of which is in this Bill, for managing corporate insolvency?

Horizon: Sub-Postmaster Convictions

Chi Onwurah Excerpts

Wednesday 10th June 2020 Commons Chamber

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

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy what steps the Government are taking to support sub-postmasters wrongly convicted in the Post Office Horizon scandal.

I wish you a very happy birthday, Mr Speaker, and many happy returns.

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

Happy Birthday, Mr Speaker. I have listened to a number of postmasters’ stories personally, and I saw the recent “Panorama” programme. It is impossible to ignore the negative impact that the Horizon dispute and court case have had on affected postmasters’ lives, livelihoods, financial situations, reputations and, for some, as we know, their physical and mental health.

Convicted claimants’ seeking to overturn their convictions are going through a further process with the Criminal Cases Review Commission, which has the power to refer cases to the Court of Appeal to consider whether any of the convictions are unsafe. As the hon. Lady will appreciate, it is important that the Government do not seek to influence this process or comment on any individual cases. I can confirm, though, that the Post Office is co-operating with the CCRC to the fullest extent and the Government are monitoring this. Forty-seven of the 61 CCRC cases have now been referred to the Court of Appeal, and it is for the courts to decide whether the convictions are unsafe.

Let me acknowledge the strength of feeling on this matter on both sides of the House, which was evident in the debates I participated in earlier this year and in the correspondence I have had from many Members. That is why the Government are committed to establishing an independent review to consider whether the Post Office has learned the necessary lessons from the Horizon dispute and court case, and to provide an independent and external assessment of its work to rebuild its relationship with its postmasters. Full details of the terms of reference for that independent review are set out in a written ministerial statement that I laid in the House this morning. We are keen to see that review launched as soon as possible, and we are in the process of identifying a chair to lead the work of the review.

[Chi Onwurah]

The Post Office Horizon scandal may well be the largest miscarriage of justice in our history. Nine hundred prosecutions, each one its own story of dreams crushed, careers ruined, families destroyed, reputations smashed and lives lost—innocent people bankrupted and imprisoned. Does the Minister agree that Monday’s “Panorama” adds to the sense of a cover-up on a grand scale in the Post Office, a trusted national institution? And all because of the failings in the Post Office Horizon system.

For over a decade, the Justice for Subpostmasters Alliance campaigned to get at the truth, but the Post Office denied all wrongdoing, imposing huge lawyers’ fees on the claimants. Mr Justice Fraser’s High Court ruling in December paved the way finally for justice for some, but the mediated settlement means the truth remains hidden. Does the Minister agree that there can be no justice without truth?

So many questions remain unanswered. When did the Post Office know that the Horizon system could cause money to disappear, and what responsibility did the developer, Fujitsu, have? What did Ministers, to whom the Post Office is accountable, do, and what did they know? Who was responsible for innocent people going to jail? Have they been held accountable? Will all the victims be properly compensated?

Three months ago, the Prime Minister committed to a public inquiry, but we now hear that that is to consider whether the Post Office has learned the necessary lessons. We need an inquiry not simply to learn lessons but to get to the truth. Only a judge-led inquiry can do that, with the Post Office compelled to co-operate. Will the Minister now agree to the judge-led inquiry we need? It is the very least the victims deserve.

We need answers, not more delay. We will not rest until we get that and justice for all those wronged in this scandal.

[Paul Scully]

I welcome the hon. Lady to her place, and I appreciate her comments. A public inquiry, according to Jason Beer QC, one of the leading experts on this, talks about what happened, why it happened and who is to blame, and what can be done to prevent it from happening again. This independent review, chaired by someone independent of both the Government and the Post Office, will indeed look to do that—to understand and acknowledge what went wrong in relation to the Horizon system by drawing on the evidence of those people who, as we have discussed, have been wronged in this situation, using both Mr Justice Fraser’s judgment and words and his own evidence that he will call upon.

The Government want to be fully assured—I want to be fully assured—that the right lessons are learned for the future and concrete changes have taken place at Post Office Ltd to ensure that this is not repeated. We want to be sure that, through this review, there is a public summary of the failings that occurred at Post Office Ltd, drawing on the judgments and, as I say, listening to those who have been most affected. That is the purpose of the independent review we are in the process of setting up.

Draft Weights and Measures Act 1985 (Definitions of @0082Metre@0083 and @0082Kilogram@0083) (Amendment) Order 2020

Chi Onwurah Excerpts

Tuesday 2nd June 2020 General Committees

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

It is a great pleasure to serve under your chairmanship, Mr Hollobone, and to take part in this debate. Our country has a proud scientific tradition, from Isaac Newton to Stephen Hawking, and from Ada Lovelace to Rosalind Franklin. Today we have Lesley Yellowlees, Jocelyn Bell Burnell and Newcastle-born Peter Higgs, who discovered the Higgs boson. Britain’s scientific giants have bestrode the world, and our science sector continues to lead the world, powering our economy in the process. Isaac Newton famously discovered gravity and, with Cavendish, identified the gravitational constant. He was one of the first fellows of the Royal Society and, like the Royal Society, I welcome these measures to redefine important constants —I say redefine, but in reality it is clarifying the definition in scientific terms.

Social distancing measures—and, at this very moment, parliamentary voting procedures—have ensured that the entire country is now expert in measuring 2-metre distances. I am pleased to note that this amendment will not send millions of us back out with our rulers to recalculate what we were once certain of. In fact, the amendment embeds scientific certainty and is a welcome example of following the science.

As shadow Science Minister, I am pleased to welcome this. Many may ask why or how these measurements are changing. The Minister said something on the subject. In the past, measurements were determined by physical standards, for example a foot or a finger’s width—body parts were a common method of measurements. As physical science developed, so did our measurements system.

As the Minister said, the latest definition of a kilogram goes by a piece of metal stored in a Parisian vault, Le Grand K. The problem is that if Le Grand K remains the fixed definition of a kilogram, damage to the cylinder in Paris would have knock-on effects on the value of a kilogram across the world. I do not want to be the one explaining that to wholesalers in my constituency when our markets are just re-opening.

Economics had the gold standard, and weights and measures had a physical standard. The new definition is based on a set of seven defining constants drawn from the fundamental constants of physics and other constants of nature. The kilogram is the last remaining measurement based on a physical standard. As the Minister outlined, scientific experts have spent decades researching and testing measurements. That research eventually led to the International Bureau of Weights and Measures adopting seven new base measurements in 2018. The new measurements were approved to come into effect a year ago. In the EU withdrawal agreement, the UK signed up to following EU member states in adopting the measures in 10 days’ time.

The statutory instrument is important because it will update the Weights and Measures Act 1985 with the new definitions for metre and kilogram, as approved by the IBWM, which consists of 102 countries. A kilogram will now be defined based on the most precise measurement ever, the Planck constant, which scientists have spent decades measuring to 10 parts per billion. The Planck constant can be expressed in terms of the SI units kilogram, metre and second.

Since metre and second are already defined by constants of nature, the value of a kilogram can be obtained without relying on comparisons with a metal block. A metre is defined by taking the fixed numerical value of the speed of light in a vacuum, c, to be 299,792,458 when expressed in the unit metres per second. It is very technical but accurate and rooted in scientific certainty.

The UK’s National Physical Laboratory, a world-leading metrology institute, played a key part in the redefinition of the kilogram. The changes ensure that units of measurement definitions are scientifically robust and globally accessible. I have spoken with the Royal Society, which in 2011 held an international meeting calling for change to the definition of the kilogram. It welcomes the news and applauds the contribution made by UK science.

If anyone is worried about what this draft order means for their lives, it is important to note that, as the Minister said, it will have no direct impact on businesses or consumers. The changes ensure uniformity across the world. Despite the changes, a kilogram will still have the same mass and a metre will still be the same length, so socially distanced outdoor exercise regimes can continue as successfully as they have been.

This is a useful technical instrument, but I have a couple of questions. The order’s explanatory memorandum states:

“It partly implements Commission Directive 2019/1258”.

If that is the case, what parts of the Commission directive are not being implemented, and why? Can the Minister reassure us that the UK will continue to reflect the European Union’s metrological definitions after the transition period? That is an important point for our scientists.

As the Minister outlined, part of the redefinition took place in the Weights and Measures Act 1985 (Amendment) and Units of Measurement Regulations 1986 (Amendment) Regulations 2019. Having looked at those regulations, I am not clear why we are doing it in two separate instruments, or whether there will be any issues in their interaction in practice.

Overall, the measure is a positive move that I and the stakeholders in the scientific community I have spoken to welcome. I hope that it reflects the Government’s commitment to embracing internationally recognised standards and aligning with our European neighbours, rather than moving away from them. Scientific evidence and certainty are key to the UK overcoming coronavirus and building a post-Brexit future, but so is collaboration.

I am glad that we are committed to abiding by European Union regulations as set out in the withdrawal agreement, as will be the case on 13 June when we adopt the new definitions of metre and kilogram, as that will necessarily support ongoing collaboration. It is a shame that this could not have been done a few weeks earlier, on World Metrology Day, but I will not hold the Minister responsible for that.

The draft order will make UK legislation consistent and up to date, reflecting the new scientific definitions that underpin the legal and scientific metrology framework around the world, and Opposition Members are happy to support it.

Draft Weights and Measures Act 1985 (Definitions of 'Metre' and 'Kilogram') (Amendment) Order 2020

Chi Onwurah Excerpts

Tuesday 2nd June 2020 General Committees

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

It is a great pleasure to serve under your chairmanship, Mr Hollobone, and to take part in this debate. Our country has a proud scientific tradition, from Isaac Newton to Stephen Hawking, and from Ada Lovelace to Rosalind Franklin. Today we have Lesley Yellowlees, Jocelyn Bell Burnell and Newcastle-born Peter Higgs, who discovered the Higgs boson. Britain’s scientific giants have bestrode the world, and our science sector continues to lead the world, powering our economy in the process. Isaac Newton famously discovered gravity and, with Cavendish, identified the gravitational constant. He was one of the first fellows of the Royal Society and, like the Royal Society, I welcome these measures to redefine important constants —I say redefine, but in reality it is clarifying the definition in scientific terms.

Social distancing measures—and, at this very moment, parliamentary voting procedures—have ensured that the entire country is now expert in measuring 2-metre distances. I am pleased to note that this amendment will not send millions of us back out with our rulers to recalculate what we were once certain of. In fact, the amendment embeds scientific certainty and is a welcome example of following the science.

As shadow Science Minister, I am pleased to welcome this. Many may ask why or how these measurements are changing. The Minister said something on the subject. In the past, measurements were determined by physical standards, for example a foot or a finger’s width—body parts were a common method of measurements. As physical science developed, so did our measurements system.

As the Minister said, the latest definition of a kilogram goes by a piece of metal stored in a Parisian vault, Le Grand K. The problem is that if Le Grand K remains the fixed definition of a kilogram, damage to the cylinder in Paris would have knock-on effects on the value of a kilogram across the world. I do not want to be the one explaining that to wholesalers in my constituency when our markets are just re-opening.

Economics had the gold standard, and weights and measures had a physical standard. The new definition is based on a set of seven defining constants drawn from the fundamental constants of physics and other constants of nature. The kilogram is the last remaining measurement based on a physical standard. As the Minister outlined, scientific experts have spent decades researching and testing measurements. That research eventually led to the International Bureau of Weights and Measures adopting seven new base measurements in 2018. The new measurements were approved to come into effect a year ago. In the EU withdrawal agreement, the UK signed up to following EU member states in adopting the measures in 10 days’ time.

The statutory instrument is important because it will update the Weights and Measures Act 1985 with the new definitions for metre and kilogram, as approved by the IBWM, which consists of 102 countries. A kilogram will now be defined based on the most precise measurement ever, the Planck constant, which scientists have spent decades measuring to 10 parts per billion. The Planck constant can be expressed in terms of the SI units kilogram, metre and second.

Since metre and second are already defined by constants of nature, the value of a kilogram can be obtained without relying on comparisons with a metal block. A metre is defined by taking the fixed numerical value of the speed of light in a vacuum, c, to be 299,792,458 when expressed in the unit metres per second. It is very technical but accurate and rooted in scientific certainty.

The UK’s National Physical Laboratory, a world-leading metrology institute, played a key part in the redefinition of the kilogram. The changes ensure that units of measurement definitions are scientifically robust and globally accessible. I have spoken with the Royal Society, which in 2011 held an international meeting calling for change to the definition of the kilogram. It welcomes the news and applauds the contribution made by UK science.

If anyone is worried about what this draft order means for their lives, it is important to note that, as the Minister said, it will have no direct impact on businesses or consumers. The changes ensure uniformity across the world. Despite the changes, a kilogram will still have the same mass and a metre will still be the same length, so socially distanced outdoor exercise regimes can continue as successfully as they have been.

This is a useful technical instrument, but I have a couple of questions. The order’s explanatory memorandum states:

“It partly implements Commission Directive 2019/1258”.

If that is the case, what parts of the Commission directive are not being implemented, and why? Can the Minister reassure us that the UK will continue to reflect the European Union’s metrological definitions after the transition period? That is an important point for our scientists.

As the Minister outlined, part of the redefinition took place in the Weights and Measures Act 1985 (Amendment) and Units of Measurement Regulations 1986 (Amendment) Regulations 2019. Having looked at those regulations, I am not clear why we are doing it in two separate instruments, or whether there will be any issues in their interaction in practice.

Overall, the measure is a positive move that I and the stakeholders in the scientific community I have spoken to welcome. I hope that it reflects the Government’s commitment to embracing internationally recognised standards and aligning with our European neighbours, rather than moving away from them. Scientific evidence and certainty are key to the UK overcoming coronavirus and building a post-Brexit future, but so is collaboration.

I am glad that we are committed to abiding by European Union regulations as set out in the withdrawal agreement, as will be the case on 13 June when we adopt the new definitions of metre and kilogram, as that will necessarily support ongoing collaboration. It is a shame that this could not have been done a few weeks earlier, on World Metrology Day, but I will not hold the Minister responsible for that.

The draft order will make UK legislation consistent and up to date, reflecting the new scientific definitions that underpin the legal and scientific metrology framework around the world, and Opposition Members are happy to support it.