Oral Answers to Questions
Gareth Thomas Excerpts(5 days, 16 hours ago)
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Jade Botterill (Ossett and Denby Dale) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
We have begun a series of roadshows, which bring overseas buyers to the UK to meet small businesses here in, for example, clean energy, advanced manufacturing, life sciences, technology, and digital, creative, financial and professional services. In addition, we are offering new online support to help small and medium-sized enterprises win new export orders to EU markets.
Kirsteen Sullivan
I know from a recent business roundtable I hosted in my constituency of Bathgate and Linlithgow, and from many meetings with industry, that a common barrier to small business exports is supply chain instability. In the past few years, we have seen massive instability, including from the impact of the pandemic and now from the announcement of tariffs. Disrupted demand forecasting, increased costs of raw materials and uncertainty are damaging fledgling businesses in growing their exports. What specific measures is the Department implementing to help small businesses navigate these challenges, and to ensure they can maintain reliable supply chains as we enter another turbulent time for international trade?
Gareth Thomas
I thank my hon. Friend for that question, and I commend her for the business roundtable that she hosted. She is absolutely right, and we recognise that supply chain instability is a critical issue for businesses. We are therefore working hard to minimise the uncertainty that businesses face, both in exporting and in purchasing from key markets. Whether through the economic deal with the US that we are seeking to negotiate, the reset of our relationship with the EU, or new opportunities with India and the Indo-Pacific, we are keen to take down barriers to business. I have to say that the evidence continues to demonstrate that free and fair trade drives down prices, offers better choices for consumers and, crucially, leads to more stable supply chains.
Jade Botterill
I recently visited Phoenox Textiles in Denby Dale, a family-run business that proudly continues our community’s heritage in the sector. It raised the concern that, while it operates a “zero to landfill” operation, low-quality, unsustainable imports from Chinese sellers such as Temu undercut its business and the local growth that it sustains. How are the Government addressing this concern, and what are they doing to support British businesses?
Gareth Thomas
First, I commend the work of Phoenox Textiles and my hon. Friend for championing its concerns. Because of the concern she has articulated, which we have heard from across the retail sector—I have certainly heard it from members of the Retail Sector Council—my right hon. Friend the Secretary of State recently met the Trade Remedies Authority to agree urgent steps to prevent the dumping of cheap goods in the UK. There will be increased support for businesses to report unfair practices, and my right hon. Friend the Chancellor is also reviewing the customs treatment of low-value imports.
Nick Timothy (West Suffolk) (Con)
Last year our trade deficit was £32 billion and, apart from during the pandemic, we have run a deficit every year since 1998. Does the Minister agree that the trade deficit brings severe economic consequences, and is it Government policy to reduce it over the course of this Parliament?
Gareth Thomas
The hon. Gentleman is right to highlight the fact that we need to increase exports to all sorts of markets. It is one of the reasons why we are taking urgent steps to agree a new deal with the US, why we are seeking to reset our relationship with the EU, and why we are keen to open up new opportunities through a free trade agreement with India, and new opportunities in the Indo-Pacific. When he served in a senior role under a previous Prime Minister, his party took decisions to cut support for exporters. We are looking at what we can do to help exporters move forward.
Saqib Bhatti (Meriden and Solihull East) (Con)
The Minister will know that Meriden and Solihull East is proud to be the home of Jaguar Land Rover. JLR, the supply chain and the small businesses in it are crucial, not just for the constituency, but in exporting. I have written to the Secretary of State asking for a meeting, and I am very willing to work with the Government on this. I recently visited Washington and spoke to Congress people about the damage that tariffs can do. What is the Minister doing to help not just JLR, but those small businesses, and how we can work together?
Gareth Thomas
I know my right hon. Friend the Secretary of State is urgently seeking to arrange the meeting with the hon. Member to discuss this issue, because we recognise that this is a key concern of the automotive sector. As I have said, we are seeking to negotiate an economic deal with the US, but we are also looking to work with the automotive industry to increase exports of cars and other things that they produce across all sorts of new markets. One of the roadshows we are organising for small businesses is about that.
Dame Harriett Baldwin (West Worcestershire) (Con)
The Government are far from supporting small businesses to export. Businesses of every size, up and down the country, are failing at a rate not seen since the 2008 financial crash, when Labour was last in power. Confidence is slumping, family businesses are closing, millionaires are fleeing the country—and that is before tariffs hit. What representations is the Minister making to the Chancellor about reversing some of the measures that hit business in her Hallowe’en Budget?
Gareth Thomas
I had thought that one of the first contributions from the Opposition Front Benchers today would be to celebrate the £1 billion investment by IKEA in the UK. It is opening its flagship store on Oxford Street today, and committing to a range of investments in other towns and cities across the UK. When the hon. Lady was on the Treasury Committee, I do not know whether she looked at the cuts the previous Government made to help for small businesses in getting their goods into new markets. We are taking active steps to increase the opportunities for small businesses in overseas markets.
Ellie Chowns (North Herefordshire) (Green)
Charlie Dewhirst (Bridlington and The Wolds) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
Hospitality businesses are vital to our communities and to economic growth in the UK, which is why we plan to introduce permanently lower tax rates for retail, hospitality and leisure properties with rateable values of less than £500,000. In addition, we recently held our first licensing taskforce meeting, which aims to reduce red tape for the sector. Next Thursday, on VE Day, pubs and bars across the country will be able to stay open until late to enable everyone to celebrate all those who served during the second world war.
Gregory Stafford
Pubs and the hospitality industry are by their very nature seasonal businesses and rely heavily on flexible working patterns. I saw this at first hand when being served by many younger staff on my recent pub tour of the constituency. Why is the Minister, through the powers in the Employment Rights Bill, seeking to end the flexible contracts that benefit these young people, which will end up causing pubs to have to close?
Gareth Thomas
I gently remind the hon. Gentleman of the dismal record of the Conservatives when it came to support for the hospitality sector; 10,000 pubs closed between 2010 and 2024. The Employment Rights Bill will not have the effect that he describes. The Bill will help to put money into people’s pockets, which is exactly what we need to do to help the hospitality industry going forward.
Charlie Dewhirst
In my constituency, 115 pubs and five breweries contribute £40 million to the local economy and support 1,500 jobs. As highlighted by the British Beer and Pub Association, the sector faces a disproportionate business rates burden, with pubs paying a higher share relative to their turnover, so will the Government commit to increasing the upper threshold of small business rate relief in order that these iconic British institutions continue to thrive?
Gareth Thomas
I certainly take the hon. Member’s broader point about the significance of business rates to the hospitality sector, particularly pubs. I have heard strong representations from the industry about the need for business rates reform. The hon. Member will be delighted that this Government have instigated significant business rates reform, which previous Governments over the last 14 years did not do, including a permanently lower rate for retail, hospitality and leisure.
Chris Kane (Stirling and Strathallan) (Lab)
Residents in Buchlyvie in my constituency are losing their only pub, which is being turned into holiday lets. This comes despite the objections of local residents and Stirling council’s planning panel refusing the change-of-use application. The Scottish Government’s planning reporter has stepped in and made what many local people think is a short-sighted decision. Does the Minister agree that local village pubs, like libraries and community centres, are vital to local wellbeing and cohesion and that we should do all we can to help them thrive as key parts of our local economies and social infrastructure?
Gareth Thomas
I completely agree with my hon. Friend about the significance of pubs across the UK, particularly in rural communities such as those he represents. It is one reason why we are in the final throes of agreeing extra funding for the great organisation Pub is the Hub, which supports pubs in rural areas to adapt to changing needs and enables them to continue to be the vital social hubs that they are in communities. I hope that the Scottish Government will have heard my hon. Friend’s comments and will recognise the need to follow the UK Government’s line and instigate significant business rates reform. Certainly, they need to look at provision on business rates relief, which is not as generous in Scotland, thanks to their decisions, as here in the UK, thanks to the generosity of our Chancellor.
Andrew Griffith (Arundel and South Downs) (Con)
In a grave and exceptionally rare step, five major business groups, including the Confederation of British Industry, Make UK, the Institute of Directors, and the Federation of Small Businesses, have all written to condemn the Employment Rights Bill, and their views are shared by UKHospitality and many others. They say that the Bill will damage growth and employment. I know that, and the Minister knows that. This Bill will hurt business. Every business tells me this, and they are telling him exactly the same. Does the Secretary of State think that is why so many of his Ministers are unable to name a single business that supports the Bill and his Government’s jobs tax?
Gareth Thomas
I wondered whether the shadow Secretary of State might finally use this set of questions to take the opportunity to apologise for helping to write the Liz Truss Budget, which drove interest rates up fourteen times and did more damage to business than any other single measure in recent times. We had to take difficult decisions to sort out the fiscal inheritance we got, and we recognised that to tackle the cost of living crisis that the Conservatives bequeathed us, we needed to ensure that there is more money in people’s pockets. The Employment Rights Bill will help to do just that.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
James Wild (North West Norfolk) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
We are reforming business rates, rolling out banking hubs, stamping out late payments, empowering communities to bring vacant properties on the high street back into use and beginning to tackle the antisocial behaviour and crime that has bedevilled the high street over the last decade. Last month, we also announced a licensing taskforce that will recommend ways to improve our licensing regime to foster vibrant hospitality, the night-time economy and cultural industries on the high street.
James Wild
A British Retail Consortium survey this week of major retailers employing half a million people found that 70% say that the £5 billion a year Employment Rights Bill will have a negative impact on their business and half said that it would lead to job cuts. How does the Minister expect our high streets to cope with that extra cost, coming on top of higher business rates and higher national insurance? When will the Government actually listen to businesses and to the people creating jobs in this country?
Gareth Thomas
The Conservative party has a rather dismal record on support to workers. I gently say to the hon. Gentleman that most businesses that do the right thing by their employees support the Employment Rights Bill. One reason the Bill is so important is that it will help put more money into people’s pockets, and that will have a knock-on benefit for high street businesses.
Alison Bennett (Mid Sussex) (LD)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
Rural areas offer significant potential for growth and are central to our economy, so we are working closely with other Government Departments, including the Department for Environment, Food and Rural Affairs, to improve the quality of life for people living and working in rural areas. Later this year, we will launch the business growth service, which, in partnership with the growth hub network in England, will make it easier for businesses, including those in rural areas, to get the information and support that they need to thrive.
Alison Bennett
I thank the Minister for his answer. I am encouraged that his Department is working with other Departments.
There are brilliant vineyards in Mid Sussex, such as Bolney wine estate, which produce high-quality English wine. They form a vital part of the rural economy and they also entice domestic and international tourism. With the end of the wine duty easement on 1 February causing significant concerns across the sector, what steps is the Minister taking to ensure that the English wine industry is not damaged by that and instead can continue to grow and go from strength to strength?
Gareth Thomas
We recognise that the English wine industry, which has gone from strength to strength in recent years, is a crucial part of the rural economy and of the food and drink offer that the UK can rightly be proud of. It is one reason that we are seeking to increase exports of food and drink, including helping English vineyards to export English wine to a range of markets overseas, and we will certainly continue to do that.
Blake Stephenson (Mid Bedfordshire) (Con)
Paul Davies (Colne Valley) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
The hon. Member for Farnham and Bordon (Gregory Stafford) might not invite Ministers to his constituency, but I am grateful for my hon. Friend’s invitation—diary permitting, I would be delighted to come along. Last year, my right hon. Friend the Secretary of State announced our plans for a business growth service, which should make it easier for UK businesses to get Government advice and support in order to grow. I hope that will make a real difference. In addition, we are considering what else we can do to unlock better access to finance for small businesses such as those in my hon. Friend’s constituency.
Tony Vaughan (Folkestone and Hythe) (Lab)
Gareth Thomas
I know from personal experience that there are some great hospitality and tourism businesses in Kent, and we want to see them do even better in the coming months and years. That is why we are seeking to support the sector through initiatives such as business rates reform and the licensing taskforce, which has just started work. It is also why the Government will launch a national visitor economy strategy this autumn, as we seek to welcome 50 million international visitors annually by 2030—and many of them, I suspect, will visit Kent.
Sir Jeremy Hunt (Godalming and Ash) (Con)
If the Secretary of State is not going to visit Farnham, can I tempt him to visit Fountain Beauty Therapy in Hurtmore, a much-loved business in my constituency? The owner, Clare Porter, talks about the extreme pressure caused by the Employment Rights Bill, the hike in employers’ national insurance and the withdrawal of business rates relief, leading to a crisis in the hair and beauty sector. What measures is the Secretary of State planning to alleviate pressure on this very important sector?
Peter Swallow (Bracknell) (Lab)
Gareth Thomas
I commend my hon. Friend for meeting with Berkshire Growth Hub. Growth hubs play a crucial role in local economies. We want to supplement their work with our business growth service, which is set to launch later this year, and we are working with Skills England to identify the skills shortages in particular areas. I am happy to ensure that Skills England talks to Berkshire Growth Hub through my hon. Friend, so that the particular skills challenges in Berkshire are understood by Skills England.
Sir Desmond Swayne (New Forest West) (Con)
Arrangements at the border are disadvantaging companies on both sides of the channel, so there are mutual advantages to be had in negotiations without feeling the need to make any major concessions, aren’t there?
Hair and Beauty Sector: Government Policy
Gareth Thomas Excerpts(1 week, 6 days ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
In the usual way, let me begin by congratulating the hon. Member for Hornchurch and Upminster (Julia Lopez) on securing this debate. Let me say at the outset that, as in all the debates that I am privileged to participate in, her and in the main Chamber, there are points in this debate for many other Government Departments as well as my own to consider. I am happy to make sure that those Departments have heard the different insights—let me put it in those diplomatic terms—offered by Members in this debate.
As well as hearing from the hon. Member for Hornchurch and Upminster, we heard from the right hon. Member for New Forest East (Sir Julian Lewis), my hon. Friends the Members for Ribble Valley (Maya Ellis) and for Stourbridge (Cat Eccles), the hon. Members for Bromsgrove (Bradley Thomas), for Gosport (Dame Caroline Dinenage), for Strangford (Jim Shannon), for South Northamptonshire (Sarah Bool) and for Solihull East (Saqib Bhatti), and the hon. Member for Chippenham (Sarah Gibson)—the spokesperson for the Liberal Democrats—and the hon. Member for West Worcestershire (Dame Harriett Baldwin).
Let me begin by responding to a couple of the points that came out in the speech by the hon. Member for Hornchurch and Upminster. I also take this opportunity to commend her and other hon. Members for the support they have shown for hair and beauty businesses across the UK, including in their constituencies.
While I was researching in preparation for this debate, I noticed that the hon. Lady ran a campaign to highlight the very best salons in her area so that they could be nominated for the British Hairdressing Awards. I do not know whether Wyndham Hair was one of those that she nominated, but I certainly wish it well in the coming months.
It is very important that we continue to champion this sector as individual constituency MPs, because of the significance that hair and beauty businesses have to our economy, our high streets and all our daily lives. Many Members have asked about the extent to which the Government engage with the hair and beauty sector, and I can confirm that I regularly meet the sector to understand its views and concerns. The very first business that I visited on my appointment was the excellent Pall Mall Barbers, founded by the remarkable Richard Marshall; he could not read or write when he started in the industry, and he now runs some eight stores in central London and New York.
As well as visits, those conversations with the sector include holding roundtables with key representatives of the industry, the next of which is due next month. I think those are important because the hair and beauty sector is one of the industries that I would gently suggest has been neglected for too long over the last decade. Economically, the industry contributes some £25 billion to the UK economy and employs over 550,000 people. Hair and beauty businesses, as Members have rightly set out, are found on every high street and in every town and village in the UK. They are essential for pulling people to the high street and help to generate the footfall that keeps other local businesses there.
However, it is true that the contribution of the industry is far more than an economic one, and the hon. Member for Hornchurch and Upminster also rightly drew that out in her contribution. It is an industry that should be championed for its female entrepreneurship, for the opportunity it brings to people from all backgrounds, and for its role, on occasion, in combating mental health challenges. For example, over 80% of hair and beauty workers are women, and almost of 90% of businesses in the sector are owned by women. Almost half of all jobs in the sector are in areas with traditionally high levels of unemployment, which I think underlines the contribution that the sector makes in getting people into work and into an exciting and creative career path.
Whether it is getting a fresh haircut, a massage or even just chatting to their beauty therapist, many people relish the conversations that their local salons offer. I am not sure there is much that a beauty therapist in Harrow West could do for me, but I certainly value the conversations and skill of the barbers at Paul’s in north Harrow in my constituency.
In short, hair and beauty businesses are a vital pillar of our high streets and communities. I recognise that it has been an exceptionally challenging decade for high street businesses, and that includes the hair and beauty sector. The pandemic, followed by the cost of living crisis and rising interest rates, forced many hair and beauty businesses into high levels of debt, depleted cash reserves and reduced profit margins.
Opposition Members may not like to hear this, but the Government inherited a very challenging fiscal position, so we had to make some very difficult decisions on tax, spending and welfare at the autumn Budget. Some of the measures in the Budget have concerned the industry, but I believe that those decisions are important for delivering long-term stability and, in time, and even more significantly, economic growth. Many hair and beauty businesses will benefit from some of the other measures that the Chancellor announced.
Dame Caroline Dinenage
It is entirely predictable that the Minister is trying to push the blame on to the previous Government for some of his Government’s decisions. Does he not agree that actually this is such a retrograde step? As a number of Members have tried to explain, what he is seeing from these small businesses is a decrease in the tax take and a decrease in employment opportunities. At a time when his Government have bet the house on growth, all he is seeing is a decline in growth. Surely that is a decision, not a position that he has been forced into, and it is a retrograde step.
Gareth Thomas
I would have thought that the hon. Lady would welcome the measures we took in the Budget to protect the smallest businesses. We increased the employment allowance so that almost 1 million employers pay no national insurance contributions at all. More than half of employers will see no change or gain from that package, and that includes many hair and beauty businesses, as the vast majority of them are micro-sized.
Sarah Gibson
Does the Minister not agree that, at the same time, he reduced the threshold at which that measure steps in, such that any allowances mean that it is counterproductive to most small businesses? There is an increase in NICs once they pay it, and the fact that they pay it on a £5,000 rather than £10,000 employment means that lots of part-time workers are suddenly liable for employment contributions when they were not before.
Gareth Thomas
I will go back to the point I made earlier. We inherited a very difficult fiscal position, which, to be fair to them, the Liberal Democrats do accept. Unfortunately, the Liberal Democrats never like taking difficult decisions in my experience, although they are happy to support the benefits of those difficult decisions.
We sought to protect small businesses as much as we could in the Budget, in order to repair the finances of the country going forward. We are also creating a fairer business rates system that protects the high street, supports investment and is fit for the 21st century. We have committed to reforming business rates from 2026-27 with a permanently lower multiplier for retail, leisure and hospitality businesses, which will include hair and beauty salons.
I also understand that the sector is competing against unfair and illegitimate businesses, as many hon. Members drew attention to. His Majesty’s Revenue and Customs recognises that tax can be very complex, and we are working with the sector to help businesses to remain within the rules. However, there are those who are engaged in criminal activity, and we take that very seriously. As has been well chronicled across various media outlets, the National Crime Agency has been co-ordinating Operation Machinize, during which 265 premises were visited and officers secured freezing orders over bank accounts totalling more than £1 million. Other work in that space is ongoing. We will continue to support law enforcement partners to tackle high street crime more generally. Improved funding to help those partners go after gangs was also announced in the Budget.
Later this year, we will be publishing our small business strategy, which will set out the Government’s vision for small businesses. It will focus on boosting a range of support to businesses to create thriving high streets, make it easier to access finance, open up overseas and domestic markets, build business capabilities, and provide a strong business environment. All those are vital to the growth and resilience of the hair and beauty industry, and I will certainly continue to work with the sector as the strategy develops.
My hon. Friend the Member for Ribble Valley specifically asked me about the consultation run by the previous Government, and whether the Government are going to respond to it. We are due to respond as soon as possible. The Department of Health is leading on that issue, so I hope she will continue to watch this area and campaign on it going forward.
In conclusion, I know that the hair and beauty industry is incredibly important to every high street and every community in the UK, and I will continue to champion it in the House and across Government.
Horizon: Redress
Gareth Thomas Excerpts(4 weeks ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
I will deliver the planned statement orally today, as Minister for services, small business and exports.
[HCWS585]
Horizon Redress and Post Office Update
Gareth Thomas Excerpts(4 weeks ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
With your permission, Madam Deputy Speaker, I wish to make a statement on the Post Office, Horizon redress and Post Office finances. We inherited a Post Office in crisis. It had a grim past, a poor commercial track record, unstable leadership and its record on compensation was widely perceived as legalistic, slow and adversarial. Since this Government came into office, the total amount of redress paid to victims of the Horizon scandal has increased by more than three and a half times. Between July last year and 31 March this year, more than 3,300 victims have received compensation for the first time. Approximately £892 million has now been paid to more than 6,200 claimants. We have also established a new compensation scheme, so that those postmasters who finally had their convictions overturned by Parliament last year get redress. We are working on our approach to redress for postmasters who fell victim to the flaws in the Capture system.
Unlike the previous Government, we set out a clear forecast for compensation within the autumn Budget of £1.8 billion from 2024-25. As the House will know, the Government previously committed to provide the majority of group litigation order claimants with substantial redress by the end of March. I can confirm that, as promised, 76% of those who submitted claims for compensation have received substantial redress. All those who submitted a claim before Christmas have received an offer or, in one case, a substantial interim payment instead. We will also take further steps to increase the pace at which claimants’ challenges can be resolved fairly. Facilitated discussions will be reintroduced to the GLO scheme for this purpose.
Most recently, we announced that from 3 June my Department will take over responsibility for the overturned convictions scheme from the Post Office. We have also welcomed Fujitsu’s commitment to contribute to the Government’s compensation for the victims of the scandal. During a meeting between the Secretary of State and Fujitsu’s chief executive officer in March, an agreement was reached on beginning talks ahead of the conclusion of Sir Wyn Williams’ inquiry.
The House will be aware that the Secretary of State announced the Government’s intention to establish an appeals mechanism for claimants who were unhappy with offers that they had received under the Post Office’s Horizon shortfall scheme. Today we are publishing the guidance and principles for the HSS appeals, and by the end of this month we will begin to accept applications from eligible postmasters who are currently involved in the Post Office’s dispute resolution process. The document sets out the underlying rules that will govern the assessment of appeals, and also provides information on, for instance, the eligibility criteria to help postmasters and their legal representatives make their claims. We developed this in consultation with the Horizon compensation advisory board, claimants’ lawyers, and representatives of postmasters’ organisations.
Later this month we will begin writing to the legal representatives of potentially eligible postmasters who are currently involved in the dispute resolution process, inviting them to transfer their claims to the new HSS appeals scheme. If postmasters do not have legal representatives, we will write to them directly. Shortly after that, we will open the scheme to all other eligible postmasters. As with the GLO scheme, my Department will aim to respond within 40 working days of the submission of a substantially complete appeal in at least 90% of cases. We will encourage postmasters entering the process to engage legal advisers, and we will meet their reasonable legal costs through a tariff that we have agreed with claimants’ lawyers. Postmasters will not have to pay a penny of income tax, capital gains tax, national insurance contributions, corporation tax or inheritance tax on any compensation that they receive through the new process.
As we look to the future, we will also continue to address any concerns about the Post Office’s past behaviour. I am therefore pleased to be able to provide an update on the Government-funded Post Office process review scheme, which will provide redress for postmasters who lost out financially owing to issues connected with Post Office products, policies or processes. Those issues are unrelated to Horizon but are part of the company’s efforts to rebuild trust with its postmasters and ensure that past failings are fully addressed. The scheme is due to be launched in the next month, and the Post Office will write to all of those potentially affected with further details, including information on how postmasters can apply.
We will consider carefully the conditions and recommendations of Sir Wyn Williams’ inquiry when it is published. While tackling the awful legacy of the Horizon scandal, the Government are also determined to make the Post Office more sustainable for the future, and we remain committed to publishing a Green Paper to consider its long-term future. In particular, I look forward to hearing the visions and ideas of stakeholders, including key trade unions, sub-postmasters and others.
It has been apparent for some time that the Post Office is heavily reliant on Government funding. Its chair’s transformation plan was announced in November, with the aim of putting the company on a path towards financial stability and delivering a “new deal for postmasters”. The plan requires the company to make difficult decisions about, for example, the need to look seriously at efficiencies in its headquarters and the branch network to ensure that it is fit for purpose.
Today the Post Office has announced that it would be moving to a fully franchised network as part of those plans. That will realise significant savings, potentially amounting to £100 million over the duration of the current Parliament. Before this announcement, many Members wrote to me expressing concerns about their local directly managed branches, and we have heard those concerns. The Post Office will therefore ensure that each directly managed branch will be franchised, either on site or in a location nearby, so that service provision will remain in place in communities. Making those changes will ensure that the company is more sustainable.
To support Post Office provision in every community across the UK, the Government plan to provide up to £83 million of subsidy next year. That is up from the £50 million provided under the last Government, and is in addition to the uplift that we provided in the last financial year. The Post Office needs to transform the outdated technology on which it depends, and we therefore plan to provide up to £136 million of funding for its new future technology portfolio in the 2025-26 financial year. Over the next five years this work will address technology needs across the business, which will include replacing Horizon, reducing central costs and ensuring that postmasters have the tools they need to serve their customers. To enable the Post Office to continue to administer redress payments to postmasters and respond to the Post Office Horizon IT inquiry, the Government will provide up to £57.9 million of funding. These funding streams are subject to the Subsidy Control Act 2022 and referral to the Competition and Markets Authority.
An announcement on banking framework 4 has not yet been made, but I am hopeful that there will be a positive announcement soon, as post offices continue to provide vital banking services in every community up and down the country. Together, these steps will help to pave the way towards a more sustainable future for the Post Office.
During my engagement with the National Federation of SubPostmasters, concerns have been raised that the Post Office may have acted improperly in the course of the network transformation programme during the 2010s. There are claims that the Post Office and its representatives put undue pressure on postmasters, and may have given unregulated financial advice to encourage them to move on to contracts that were ultimately not in their best interests. Those allegations must be taken seriously. I am therefore commissioning an independent review of the conduct of the programme to establish whether there was any improper or coercive behaviour, and I will update the House on the scope and timing of the review in due course.
It remains our priority to speed up the delivery of fair compensation to all the victims of the Horizon scandal, and to secure and strengthen the Post Office for the future. There is more to do, but I commend this statement to the House.
Kevin Hollinrake (Thirsk and Malton) (Con)
I thank the Minister for his statement, and for advance sight of it. I also thank the campaigners on this issue, with whom I worked for more than five years—both as a Back Bencher and as a Front Bencher—and, indeed, I thank Lord Beamish and Lord Arbuthnot for their work on the Horizon compensation advisory board, which we established on a cross-party basis during our tenure.
I agree with the Minister that, although good progress has been made, there is much more to do. It is good that £892 million has been paid to 6,200 sub-postmasters, a tenfold increase on what we saw only a couple of years ago. It is clear that most of that has gone out of the door because of what this Parliament did last June, when it overturned the convictions by statute, and because of the introduction of fixed-sum awards, which have revolutionised the ability to pay compensation quickly.
I am proud to say that we did all that in the House on a cross-party basis, and it was the right thing to do. I worked with the then shadow Secretary of State for Business and Trade and with this Minister and others in their former roles, and our work was strongly supported by the then Prime Minister, my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), the then Business Secretary, who is now Leader of the Opposition, and the then Chancellor and his Ministers. I am therefore a little disappointed that the Minister has sought to suggest that he took over a crisis.
We have made much progress on this matter on a cross-party basis, and my remarks today will continue to be made on that basis, but for all the progress the Minister talked about in his statement, I did not hear about a single aspect of the Horizon programme that was not already in train under the last Government, in conjunction with the then Opposition. The Minister mentioned a three and a half-fold increase in July, which I welcome, but as he will no doubt concede, it happened as a result of the overturning of the convictions by Parliament and the introduction of the compensation schemes. The redress scheme, for example, was set in train by the last Government with the co-operation of the then Opposition, as was the investigation of Capture.
The Minister says that the compensation was not budgeted for, but that is not right. Last year’s Budget simply said that the money had been reallocated from departmental expenditure to annual managed expenditure. He implies that the money was not there to pay out to postmasters, when the work had been done on a cross-party basis. It is absolutely wrong to give that impression to people out there who are still waiting for redress. The HSS appeals system was something that we advocated for and put in place, as were the fixed-sum awards for overturned convictions and the Horizon shortfall scheme.
The Minister talks about the unstable leadership of the Post Office. We thought it was right to put a new chair in place, and we have every confidence that Nigel Railton, whom we put in place, will do a fantastic job. We support his transformation plan and the move to a fully franchised network, which we think is the right thing to do.
I will ask the Minister some questions, if I may. It is not clear what he will do about victims of the Capture programme, even though it has been acknowledged that the Post Office was at fault in some of those cases. Will he bring forward legislation to overturn their convictions by statute? I know the advisory board believes that that is the right way forward.
On compensation, when I was in the Minister’s role, I said that a named individual should oversee the compensation schemes, and the Business and Trade Committee has advocated for that. There should be one individual to oversee all the schemes, who will put their reputation on the line for delivering compensation. Although the fixed-sum awards are working, the full assessment route still has problems. Something that the Minister did not mention in his statement, but which we looked at, was a pilot of a more tariff-based scheme, whereby people who have suffered from mental health difficulties could be paid more rapidly, rather than going down a full assessment route.
The Minister mentions the timescales. Currently, there is a time parameter of 40 days for a response from the Department to a new claim, but the clock is reset when the claimant says that the claim is at the wrong level. Will he look at that?
What progress has the Minister made on an interim payment from Fujitsu? What progress has been made on establishing what Ernst and Young should have done in 2011-12, when it was aware of the huge liabilities that the Post Office had on its books due to this particular problem? Will he be ambitious on the banking framework to make sure that postmasters get a good deal, and what progress has the chair made on his commitment to reduce the highest-paid roles in the Post Office’s central management tier to make sure that more of the revenue that flows into the Post Office flows out to postmasters?
Gareth Thomas
I thank the hon. Gentleman for his comments, and I join him in commending the work of all those who have campaigned, and who continue to campaign, for the victims of this horrendous scandal. I pay tribute to the noble Lords Arbuthnot and Beamish. In a spirit of cross-partisanship, I pay tribute to the hon. Gentleman for his work in the past. I know that he worked extremely hard to try to move things forward, and I very much respect the job that he did.
Let me attempt to do justice to the detailed questions that the hon. Gentleman asked. On Capture, we are actively working on a redress scheme. We have had a series of meetings with some of the sub-postmasters who were affected by the problems in the Capture software and their legal representatives. He will be aware that a number of cases with the Criminal Cases Review Commission relate to Capture, and we think it is appropriate that the CCRC is allowed to continue to review those cases.
As I outlined in my opening remarks, the Secretary of State recently met the global chief executive of Fujitsu during his visit to Japan. I have met the chief executive of Fujitsu in the UK, and I said to him that an interim payment would be a significant step in the right direction.
The hon. Gentleman asked me about the Post Office’s accountants. He may be aware that the Financial Reporting Council is looking at this issue and has been talking to the Horizon compensation advisory board. It is an independent body, and I am sure that he and the House will recognise that it is right that we respect the right of that independent body to do its work.
The hon. Gentleman said, quite rightly, that the full assessment of claims occasionally has problems. That is one of the reasons why I referred to the fact that we are bringing back facilitated discussions, particularly on the GLO scheme. Although there has been significant progress in settling two thirds of the GLO claims that have been put in, we think that those facilitated discussions will help to make it easier for fair compensation to be allocated in a timely way to those victims of the scandal.
Where a case for interim payments is made to us, we always encourage our team to make such payments in order to try to ease the financial pressures, and therefore the trauma, that victims still experience. The hon. Gentleman will know that there were concerns in the past about the letters requesting further information. I have seen some previous examples of those requests, and I can well understand the frustration of sub-postmasters, their lawyers and campaigners. When we request further information, it is to make sure that we can offer an increased payment to sub-postmasters going forward. However, I recognise that there will be some scepticism because of the history around requests for information.
We will continue to do everything we can to get payments out to people as quickly as possible, and we have taken further steps to work with the Post Office to identify victims who had not previously come forward. Some 6,000 new claimants have now come forward, and we are trying to process their cases as quickly as we can.
Clive Efford (Eltham and Chislehurst) (Lab)
I welcome my hon. Friend’s statement, particularly the reference to the discussions with Fujitsu. The Horizon software is still being used by the post office network, and I understand that the contract with Fujitsu is worth about £2.4 billion over its lifetime. We should not lose sight of the fact that Fujitsu was heavily involved in supporting the Post Office’s prosecution of innocent sub-postmasters. Can my hon. Friend say exactly how he will ensure that Fujitsu pays the appropriate amount of money to compensate for its role in this affair?
Gareth Thomas
I recognise the concern across the House. My hon. Friend has followed this issue for a long time, and I recognise his continuing interest. He will forgive me if I do not give a running commentary to the House on the negotiations that we will have with Fujitsu. We are obviously waiting for the conclusions of Sir Wyn Williams’ inquiry and his judgment about the level of responsibility that Fujitsu must accept. As I alluded to in my answer to the Opposition spokesman, an interim payment by Fujitsu would be a significant step forward.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Daisy Cooper (St Albans) (LD)
We Liberal Democrats welcome the progress that the Government have made, but the redress payment processes are still too slow. First, victims claiming under the Horizon shortfall scheme continue to face significant up-front complexity without legal advice. I welcome the Minister’s announcement that the Government will be writing to that group, but could he please outline a time by which they will receive those letters?
Secondly, the Minister announced that any compensation will not be subject to a penny of income tax, capital gains tax, inheritance tax or other taxes. Could he confirm whether that will require primary legislation? If so, will it be limited to this scandal or apply to other scandals as well? I am thinking in particular of the cross-party campaign on Philomena’s law because some victims of that scandal are struggling to access their compensation.
Thirdly, this scandal has involved many individuals working at the Post Office, Fujitsu and others. The Government have committed to bringing forward a statutory duty of candour; they initially said they would do so by 15 April, which is the 36th anniversary of the Hillsborough disaster. At business questions last week, the Leader of the House cast doubt on whether that deadline would be met, because the Government say they will take whatever time is necessary to get the issue right. We Liberal Democrats want the drafting to be done correctly, but is there any update on when we can expect the statutory duty to be brought forward?
Fourthly, the evidence of whistleblowers at Fujitsu was crucial in exposing the lies about Horizon. We Liberal Democrats have repeatedly called for an office of the whistleblower, and we have put down amendments to the Employment Rights Bill to strengthen protections for whistleblowers. Would the Government work with us on that issue?
Finally, I was surprised to see the announcement about directly managed post offices. The Minister will be aware that a cross-party group of Members has been infuriated by the poor communication from Post Office bosses on this process. I recognise that today’s announcement states that the Post Office will move to a fully franchised network, but that still provides no guarantee about the range or quality of services that will be available, no guarantee on the definition of “nearby”, no guarantee that there will not be a break in service and no guarantee that those post offices will not eventually be closed if the franchises do not work. Will the Minister please set out the next stages? Those will affect my constituents in St Albans and many constituents represented by Members here.
Gareth Thomas
I am grateful to the hon. Lady. She is absolutely right to reflect the view of the whole House that there is still much more to do on compensation. We as the Government are very clear about that ourselves, and we are working at pace to try to step up even further the rate at which compensation payments are made. We think that, in just the first nine months of this Government, we have made significant progress, increasing by three and a half times the amount of compensation that has been paid out. But I completely accept that there is more to do.
We think that the launch of the Horizon shortfall scheme appeals process will help to address a number of cases in the HSS where sub-postmasters are concerned about the offers they have had. The hon. Lady asked me when letters would be going out. I set out the broad timescale in my statement, and I simply say to her again—shortly. We want to get this up and running as quickly as we can.
The hon. Lady asked me whether new legislation would be required to implement the commitments on tax that I set out. No, it will not be required. On the issue of the duty of candour, I do not have anything to add to what my right hon. Friend the Leader of the House said. However, the hon. Lady’s question is an opportunity to underline that we expect a number of significant issues to arise from Sir Wyn Williams’s inquiry, and we as the Government—and, I am sure, the whole House—will want to reflect on the conclusions and recommendations that he comes up with.
The hon. Lady mentioned the issues about the decision to franchise the remaining directly managed branches. As I set out in my statement, I have heard the concerns from across the House—they were particularly significant on the Labour Benches, but I recognise those from the Opposition side as well—about the impact of losing post office services in the communities where those directly managed parties are. That is why we have made it clear to the Post Office that franchised post office services have to remain in those communities.
We expect the Post Office to work from the starting point of those services being what is called a mains franchise—a franchise that, as well as providing the more traditional post office services such as stamps and parcels, will also provide Government services such as passports and driving licences: the equivalent of what is available in those branches at the moment. I expect that, in the first instance, those franchised services will continue to operate in exactly the same place where they do at the moment, before decisions are taken about where they should be located in the slightly longer term.
The hon. Lady asked me what guarantee there is that services will continue to be provided in that space. She will know that access criteria have already been published that commit the Government to provide 11,500 post offices. The decision on directly managed branches does not change those criteria, and the Post Office is committed to continuing to provide a service in those communities. I would also expect the Post Office to talk to local stakeholders, including Members of this House, about the continued operation of post office services in their communities.
Rebecca Long Bailey (Salford) (Lab)
Salford precinct’s busy Crown post office is a vital lifeline for residents and businesses alike, especially for those who collect their pensions and benefits in person. Put simply, closing it in favour of a franchise would cause local economic and social devastation, especially if services are reduced and staff are let go. It would also put that service at the whim of the franchisee, which, as we know from the recent case of WH Smith, causes great uncertainty and insecurity. What is the Minister doing to guarantee that Salford retains all its existing post office services and staff in this geographical location, and what alternatives has he considered or will he consider in favour of shelving franchising?
Gareth Thomas
I know that my hon. Friend has always been a great champion of Salford. Like other Members, she has made it very clear to me how significant the post office is in her community. The vast majority of post office branches across the country are already franchised. Both main and local franchises are often open longer than directly managed branches.
My hon. Friend asked what guarantees there are. As I have set out, we have made it clear to the Post Office that we want every directly managed branch to ensure that there is a main franchised operation in those communities. I recognise that there will be concern while that change takes place, but if she or any other Members have concerns about aspects of that transition as it moves forward in their constituencies, I will obviously be very happy to meet them to discuss those.
John Cooper (Dumfries and Galloway) (Con)
As a member of the Business and Trade Committee, I should remind the House that in March we recommended that the Government should listen harder to our recommendations. I am glad that that seems to have been taken on board, but I am slightly concerned that a lot of back patting seems to be going on, particularly about Fujitsu. Does the Minister not agree with me that he should be telling Fujitsu what to do, not asking it? This Government seem overly deferential to lawyers. He is in charge of this. Can he not get the pace moving, because lawyers are getting their money—their fees—but postmasters are not getting their money at the rate they should?
Gareth Thomas
The hon. Gentleman is absolutely right to want progress on Fujitsu, which is one of the reasons why I have made it clear to Fujitsu that an interim payment would be a very welcome and significant step forward. We have said that we think it is important that we hear the view of Sir Wyn Williams, who has been looking in detail at the responsibility of both Fujitsu and senior leaders in the Post Office during this scandal. We need to recognise that there is a process, but we are absolutely clear about our responsibility to move the negotiations forward.
Dawn Butler (Brent East) (Lab)
I thank the Minister for his statement and for all the work he is doing to redress the injustice of the Horizon scandal. Can he confirm that the Communication Workers Union, as well as the National Federation of SubPostmasters, has been involved in decision making? I have lobbied him very hard about my post office in Cricklewood, so he will know that we want to and must maintain those services going forward. I think a lot of the problems stem from the separation of the Royal Mail and the Post Office following privatisation, so would he consider discussing the possibility of a joint venture again?
Gareth Thomas
I know from the conversations I have had with my hon. Friend just how much she and her constituents value the post office in Cricklewood. As I have set out, our starting point is that a mains franchise offering the same services as currently enjoyed by the residents of Cricklewood will be provided. I hope her constituents will not see any significant disruption going forward, but I am very happy to have a conversation with her about that.
I have had many conversations since coming into this role with the leadership of the Communication Workers Union, who have been very direct in their views about directly managed branches. On the question of their having a view and a say in the future of the Post Office, as I have made clear we are determined to publish a Green Paper, which will allow all those who are interested, including the CWU, to give us their vision of the future of the Post Office and view about the various questions about its future.
Tim Farron (Westmorland and Lonsdale) (LD)
Does the Minister acknowledge that among the horrific impacts of the Horizon scandal is the massive brand damage to Post Office Ltd and its management among not only the sub-postmasters who are currently employed, but the potential workforce of the future?
Our communities in the lakes in Hawkshead, Staveley and Grasmere are currently without an operating post office and have lost those services. Will the Minister give attention to and push Post Office Ltd to provide a package that not just encourages people to remain within the Post Office, but attracts new people, acknowledging that it will take more effort than normal to attract people into the sector? On the issue of franchise services, our post office in Kendal shares space with the Royal Mail, and any change of site for our post office could threaten both. Is he cognisant of that, and will he do something about it?
Gareth Thomas
The hon. Gentleman rightly underlines the significance of the Post Office, in particular in rural communities, and the challenge on occasion of finding sub-postmasters to run franchise post offices in those areas. I hope the uplift in postmaster remuneration that came just before Christmas will help to address that particular challenge.
We have made clear to the Post Office leadership that a fundamental change in its culture is needed to place sub-postmasters at the heart of the operation going forward, which they accept. They have therefore set up a consultative council to ensure that sub-postmasters have direct input into the future direction of the Post Office. They are also doing more, through a postmaster panel, to bring in postmasters to understand the different processes used and to rebuild confidence in how Post Office management handles some of the bigger challenges that the company faces.
I will happily consider any request or point of concern that the hon. Gentleman raises about Kendal. If he is not satisfied with progress in addressing those points, he is very welcome to get in contact with me further down the line.
Luke Akehurst (North Durham) (Lab)
I am very proud of the local campaign I have been involved in alongside councillors and residents to save Chester-le-Street post office. Although it is disappointing that we are losing the post office in its current form, I am relieved that the services have been saved. I recognise that the market for traditional post office services has been in decline for some years. Does the Minister share my disappointment that Post Office management did not have the commercial imagination to find new business streams utilising their brand and network of prominent high street locations?
Gareth Thomas
I commend my hon. Friend for his campaign. I recognise just how much the Chester-le-Street post office is valued by his constituents, as he has made clear to me a number of times in his representations.
On the commercial future of the Post Office, it is absolutely true that postal services in this country—as indeed in a number of other countries—are facing significant pressures, and it is therefore imperative that Post Office management here in the UK look at what they can do to capitalise on new opportunities, particularly in terms of banking. The Post Office chairman and chief executive, Nigel Railton and Neil Brocklehurst, completely get this point, and we are actively talking to them about what more we can do. I very much hope we will hear positive news on banking framework 4, which I hope will be a significant step forward in this regard. However, there is more that can be done in this space.
Sir Julian Smith (Skipton and Ripon) (Con)
Third-party litigation funding played a key and controversial role at the start of this crisis. Following recent Supreme Court judgments, that access to justice that postmasters had at the start is under threat. What discussions is the Minister having with his colleagues about how third-party litigation funding worked in this situation and what needs to improve as it moves forward?
Gareth Thomas
The right hon. Gentleman will have to forgive me; I have been very focused on the efforts to increase compensation for the victims of the Horizon scandal, which has been the immediate challenge facing the Government in this policy area. It was something we heard loud and clear in opposition and we wanted to see progress on it. As I alluded to earlier, I suspect that the recommendations in Sir Wyn Williams’ inquiry will range quite widely, and if it touches on the particular issue that the right hon. Gentleman has raised, we will look at that extremely carefully. More generally, I suspect that my right hon. Friend the Secretary of State for Justice will be interested in his question.
Alex McIntyre (Gloucester) (Lab)
I thank the Minister for his statement and for the update on the redress scheme for victims of the Horizon scandal. I also thank him for listening to my campaign to save the Kings Square post office in Gloucester and for maintaining so many vital services for Gloucester residents with today’s announcement that they will be franchised and continued. Will he meet me to discuss the merits of the new franchise staying in its current location? Kings Square has a fantastic future, with the opening of the university’s new City campus later this year and the Forum, a new office, hotel and leisure facility, which will be fantastic. It would be great for the new franchise to be an important part of that future.
Gareth Thomas
I am grateful to my hon. Friend for his continued representation of his constituents’ interests. He has made a number of very clear representations to me on the importance of the Gloucester post office, and I would be very happy to meet him to discuss its future as it transitions to a franchise-run operation. I should make it clear that the Post Office very much wants these franchises to be in key locations that are important for our communities, because that is obviously where the commercial income will come from, so it will be keen to meet with stakeholders such as Members of this House and other local stakeholders. If my hon. Friend would like to meet me to discuss this issue further, I would be very happy to do so.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Where a post office branch that is currently directly managed is not staying in its current premises, will there be a proper formal scheme of community engagement to give the community some control over ensuring that what is provided in its place will be at least as good? Communities simply do not trust the Post Office at the moment to make that judgment for itself.
Gareth Thomas
The right hon. Gentleman makes a completely fair point that the Post Office suffers from a significant lack of trust, for all the reasons we know. I completely understand why he would want to press the particular point that his community should be involved in discussions about their post office services going forward. As I alluded to earlier, I would expect the Post Office to engage with local stakeholders, including the right hon. Gentleman as the local Member of Parliament. If at any point he is concerned about those discussions, he is very welcome to get in contact with me, and I will happily meet him.
Helen Hayes (Dulwich and West Norwood) (Lab)
My constituents are served by Crown post offices in Brixton and East Dulwich, both just outside my constituency boundary and both in areas that have seen the near complete withdrawal of high street bank branches, leaving residents and businesses dependent on the post offices for banking services, as well as for the wide range of other services that they provide. The Minister knows that the big difference between Crown and franchised post offices is that no one in the public sector has any say in the public interest over whether a franchised post office remains open, or indeed whether a franchisee can be secured. What assurance can my hon. Friend give that post office franchises opened in place of Crown post offices will remain open for the long term?
Gareth Thomas
I recognise the significance that the two post offices have to my hon. Friend’s constituents, and I recognise, too, that there will be concern in her constituency about the long-term future of those post offices. Although she is not the constituency Member of Parliament for the area, I will ensure that she is consulted about the future of those post offices. I recognise that, particularly in urban areas such as the ones that she and I represent, people outside the immediate constituency are reliant on those post offices. As I have said, a post office will want to ensure that, in the long term, it is located at the heart of the commercial activity in a community, because its future income depends on that. However, given what has been said about the lack of trust in the Post Office, it is important that there are conversations with local stakeholders, including Members of this House. Moreover, given the points that she has made, I will make sure she is included in conversations about those two particular post offices.
Dr Kieran Mullan (Bexhill and Battle) (Con)
More than 4,000 residents have signed my cross-party petition opposing the closure of the Bexhill Crown branch. It is fair to say that this whole situation has been made worse, because the Minister has allowed the Post Office to put the cart before the horse, with the decision taken on closures ahead of a clear guarantee on what will come next for all of our constituents. I notice that in his answers, the Minister has talked about “should”, “expectations” and “starting points”, but those are not cast-iron guarantees. Can he give a cast-iron guarantee that he will veto any replacement of the Crown service in Bexhill if it does not provide exactly the same services as the current branch is providing?
Gareth Thomas
I recognise from the meetings that I had with the hon. Member and also with a Bexhill Labour councillor how strong the feeling is about the threat to the post office in Bexhill. I have made it clear that the Post Office should replace the directly managed branch with a mains franchise. That is what I expect it to do. I also expect there to be a consultation with local stakeholders in Bexhill, including with him as the Member of Parliament. If he has concerns about that process, he is welcome to get in contact with me.
Joe Powell (Kensington and Bayswater) (Lab)
I thank the Minister for meeting me to discuss the directly managed branch on Kensington high street in my constituency of Kensington and Bayswater. More than 1,000 residents joined my campaign to save the services at the branch. Today’s news is welcome for them, but can the Minister give us some reassurance on when the transition will take place from the current system to a franchise model, and what guarantees he has on continuing service levels?
Gareth Thomas
I welcome my hon. Friend’s question. I recognise that he has campaigned and made representations to me on this issue, as he has set out. As I have said to other Members today, he and other local stakeholders should expect to be involved in discussions about the future of post office services in Kensington and the transition to a franchise. We have the expectation—the Post Office has accepted this expectation—that it will be a mains service, as opposed to a local franchise, which provides Government services such as passports, driving licences and so on. I cannot give him an exact timeframe for when those discussions will begin, but the Post Office has already begun to have conversations with staff and potential franchisees. I would expect them to start getting in contact with Members of Parliament over the next few months.
Richard Foord (Honiton and Sidmouth) (LD)
Tony Hibberd, a former sub-postmaster from Colyton in east Devon, is 84 years old. Four years since he submitted his claim, and 14 years after his wrongful dismissal, there has still been no meaningful progress towards a fair and final settlement that reflects the loss to Tony’s reputation. Following the statement from the Dispatch Box on 18 December, I wrote to the Minister about Tony’s case and the reply that I received referred to an offer made to Tony in December, but no such offer had been received. The Minister refers to a new Horizon shortfall appeal scheme with a turnaround time of two months; but again, I say that Tony is 84 years old. Will the Minister urgently review Tony’s case to ensure that he finally receives the compensation that he deserves?
Gareth Thomas
The hon. Member will understand that I do not have the details about Tony’s case to hand, but he has asked me to review the way that the case has been handled. I am happy to do that. I am keen that complex cases are resolved fairly and as quickly as possible. I recognise that many sub-postmasters have been waiting a long time for compensation. We have made progress, but I recognise that there is more to do. I will happily look at Tony’s case after this and write to the hon. Member.
Amanda Hack (North West Leicestershire) (Lab)
I thank the Minister for his update on the progress to redress the victims of the Horizon scandal as well as the commitment to invest in new technology. In light of the sudden closure of a post office in Coalville in my constituency, what reassurance can the Minister give to current and prospective new postmasters that the Horizon system, which is still being used in post offices, is now fit for purpose?
Gareth Thomas
We are clear that we need to replace the Horizon system. As the whole House would expect, the Post Office is not taking any criminal action when there are shortfalls. There are processes for resolving issues around shortfalls in the Horizon system. Indeed, I referenced the postmaster panel and the way in which the Post Office management is working with sub-postmasters to help them to understand how shortfalls in the system are being dealt with going forward, so I hope that, slowly, we are taking the first steps to rebuild that trust.
Vikki Slade (Mid Dorset and North Poole) (LD)
I am sure the Minister remembers that, on 18 December, I raised the case of Donna from Mid Dorset and North Poole, who was bankrupted for a quarter of a million pounds due to the Horizon scandal. The bankruptcy was cancelled, but not before most of the interim settlement was deducted by the Post Office receiver. I was therefore shocked to receive a reply from the Minister in which he confirmed that the GLO approach is to deduct interim payments regardless “of what the claimant did with the money”. Apparently, the only option is for legal representatives to undergo a protracted appeal, incurring more costs and delays, ensuring that the lawyers get their pay day before the postmasters. Will the Minister reflect on this policy, which is punishing victims again and again, so that Donna gets the redress that she deserves?
Gareth Thomas
I ask the hon. Lady to forgive me for not having the details of that particular case in front of me. As she has asked me to look again at that case, I will happily do so and write back to her.
Mark Sewards (Leeds South West and Morley) (Lab)
I thank the Minister for his statement, and for giving me his time over these past few months to discuss the Morley directly managed branch with him. Over 3,300 people signed my petition to keep Morley post office open, so it is definitely welcome that the post office will be retained. That is caveated by the fact that it will be a franchise, and there are questions about its location. I was also delighted to help secure a banking hub for our community, but the services provided by a banking hub do not overlap with those provided by a post office. What guarantees can the Minister give my constituents that the new Morley post office will offer all the services that they enjoy from the current one?
Gareth Thomas
I recognise that my hon. Friend has been campaigning hard to save Morley post office; he has certainly made clear representations to me about it. The starting point for discussions about the future of postal services, in Morley as elsewhere, is that post offices will be replaced by a main post office offering Government services as well as traditional post office services. If he has particular concerns about the way the transition is happening, he is welcome to get back in contact with me.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his answers and commitment to addressing these issues. The Post Office Horizon scheme was deeply flawed from the outset, and we cannot trust Horizon to provide evidence for postmasters or postmistresses when the entire scandal is based on Horizon’s unreliability. Does the Minister not agree that we have no option other than to trust the people, not the computer, and that we must do the right thing by the people who have been vilified?
Gareth Thomas
I absolutely pay tribute to the journalists and campaigners who exposed the Post Office scandal, and who continue to campaign for those who have not yet received redress. I had the privilege of meeting a number of sub-postmasters who were very badly affected by the scandal, and those conversations will stay with me for a very long time, and I suspect that the same is true for other Members who have had similar conversations. They are powerful, motivating conversations that will help this to get sorted out.
Chris Murray (Edinburgh East and Musselburgh) (Lab)
I put on record my complete sympathy and solidarity with the victims of the Horizon scandal, which is one of the biggest injustices in modern British history. I was extremely concerned in November to hear that Edinburgh City Crown post office, based in the Waverley station complex—the centre of Scotland’s capital—was to close. I have been campaigning hard to ensure that residents, commuters and businesses see no diminution in services, and for fair treatment for post office staff. Can the Minister confirm that, thanks to this Government, a franchise post office will be established in the area, meaning continuation of service for local residents? When does he expect that transition to take place, and will he ensure that both MPs and Members of the Scottish Parliament are consulted on where the post office will be?
Gareth Thomas
I recognise the point that my hon. Friend makes about Edinburgh. He will remember conversations we have had about the future of the post office, in which he made very clear to me the significance of a continued post office service for that community. As I say, we will make sure that conversations take place between local stakeholders, including him as the constituency representative in this House and his Scottish Parliament colleagues representing his community. Colleagues in Wales such as my hon. Friend the Member for Merthyr Tydfil and Aberdare (Gerald Jones) have made similar representations to me, and are also very concerned to make sure that they have conversations about the location of their post offices.
Amanda Martin (Portsmouth North) (Lab)
For some, the post office is a lifeline. I understand the changing role of the post office in this difficult and changing market, but given the closure of several banks on the high street of Cosham in my constituency, the recently proposed closure of the post office has caused huge concern. First, I thank the Minister for constantly meeting me and listening to me. I also thank my constituents who shared and signed the petition, and who got in touch about the need to save our post office, for showing its value. I am pleased to see that the Government and the Post Office have been listening to them. Today’s announcement of a franchise model will allow Cosham post office to remain open. What will the Minister and the Post Office do to ensure that local voices continue to be heard in the franchising process? Can they ensure that Cosham post office retains all existing services and stays on the high street? Will he also continue to meet me to discuss this issue?
Gareth Thomas
My hon. Friend makes a very good point about the number of bank branch closures. Over 9,500 bank branches closed under the Conservatives, who did next to nothing to ensure that they were replaced by any sort of alternative service. The post office is often the last opportunity for people to access banking services on many high streets. That is one of the reasons why we remain committed to having 11,500 post offices, and to the access criteria, which will help ensure that every community in the UK, including the people served by the Cosham post office, has access to post office services. I will of course continue to meet my hon. Friend, if that is what she requires.
Alex Mayer (Dunstable and Leighton Buzzard) (Lab)
I thank the Minister for his positive engagement on this; I have discussed with him on a number of occasions the situation at Leighton Buzzard post office. Can he confirm that a Leighton Buzzard post office will remain in the high street area, and what can he tell residents about the opening hours that the branch will have?
Gareth Thomas
My hon. Friend has pushed me repeatedly on the future of the Leighton Buzzard post office. We are very clear that we want post offices to be located on or very close to high streets, so that they can best serve local people. I can give the commitment that my hon. Friend will be consulted by the Post Office and other stakeholders in the Leighton Buzzard community about how it will operate going forward.
Ben Coleman (Chelsea and Fulham) (Lab)
It is just Ben Coleman, Madam Deputy Speaker, but thank you for the honorific. I am very grateful to the Minister for his statement, and for the further measures he is taking to support the shamefully treated victims of the Horizon scandal. I also thank him for saving our beloved post office on the King’s Road in Chelsea, after meeting me to discuss it. The news will be warmly welcomed by residents in Chelsea, 1,000 of whom signed the petition to save that post office. Can I ask him to ensure that the King’s Road branch, when it is franchised, provides no less a service than it does now? Ideally, it would provide an even fuller service, if possible. That is what happened to the franchise branch on the North End Road in Fulham, which I campaigned with residents to save, and which is now open seven days a week, from 7 in the morning till 9 in the evening.
Gareth Thomas
My hon. Friend made clear to me the significance of the King’s Road post office to his constituents, and I am pleased that there will continue to be a post office service there. I have experience of a directly managed post office closing and a franchise opening up—in this case, in a WHSmith—and afterwards the service was open for longer. I hope his constituents enjoy the same experience. If he has particular concerns about the way services are to be delivered, I will happily meet him again.
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank the Minister for his statement. I know that none of these issues are of his making, so I am grateful to him. Edinburgh South West and Edinburgh South share 18 victims of the Horizon scandal, and I am sure that they very much welcome what the Minister has said. I want to talk about the directly managed branch in my constituency, in Wester Hailes. That is one of the most deprived parts of Scotland, so any loss in service there will be acutely felt. I know from campaign work I have done, along with Councillor Stephen Jenkinson, that the post office is used by people well beyond Wester Hailes, so it is important that we take any threat to it really seriously. The situation is made all the worse by the fact that the Bank of Scotland branch right across from it is closing next month. I am slightly concerned that what is described as a “new deal” for the Post Office might be a bad deal for Wester Hailes. For it to be a good deal, the consultation has to be right. It has to be meaningful and tailored to the people of Wester Hailes. Can the Minister reassure us that this will be a meaningful consultation that will reach into Wester Hailes and understand the needs of the community?
Gareth Thomas
I know from conversations I have had with my hon. Friend the significance of the post office to his community. I very much hope that his experience, the experience of his community, and that of local stakeholders such as the councillor he has been working with, will be positive when the Post Office sits down with him and talks through the transition. If he has concerns about how those conversations are going, I remain happy to meet him to discuss them.
UK Trade Envoy to Brazil: Lord Evans of Sealand
Gareth Thomas Excerpts(1 month, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
The Secretary of State has today appointed Lord Evans of Sealand to the United Kingdom’s trade envoy programme as the UK trade envoy to Brazil.
The United Kingdom’s trade envoys will play an integral role in the Government’s growth mission and delivering our plan for change by helping to create opportunities for UK business to compete abroad, break into new markets and attract greater inward investment from their markets.
Lord Evans of Sealand will play a crucial role in supporting my Department’s growth priorities, in particular through helping deliver the industrial and trade strategies and attracting foreign direct investment to every region in the UK.
The role as a United Kingdom trade envoy is unpaid and voluntary with cross-party membership from both Houses.
[HCWS523]
Oral Answers to Questions
Gareth Thomas Excerpts(1 month, 3 weeks ago)
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Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
Businesses in rural areas offer significant potential for growth and are central to our economy. We are working across Government to unlock the full potential of rural businesses as part of the Government’s growth mission. We are committed to launching a business growth service inspired by the US Small Business Administration, which will operate in partnership with devolved Governments and the growth hub network in England to make it easier to access support from Government for all businesses.
Jamie Stone
In conversation this morning with Trudy Morris, the CEO of the Caithness chamber of commerce, she outlined the sheer importance of tourism businesses to the local economy and the farmers in Scotland. The concern expressed to me is on the rate of VAT on tourism and similar businesses, and although we do not know whether the Highland council will impose a tourism levy, that could be a double whammy. I do not expect for one instant hon. Members on the Front Bench to say, “Jamie, you can have a cut in the rate of VAT”—well, I dream sometimes—but I would be grateful for a meeting to discuss the nature of the problem and how we could possibly tackle it.
Gareth Thomas
I apologise to the hon. Gentleman, as I cannot fulfil his dreams right now. However, I am happy to meet him to talk about that issue. I recognise that there is considerable interest in that question from the hospitality industry, so I am happy to meet to hear, in a bit more detail, the particular concerns expressed to him.
Dame Harriett Baldwin (West Worcestershire) (Con)
The Business Secretary, the Minister and the Chancellor have all said that they want growth, including in rural areas. I have searched high and low for business growth statistics since the Budget of broken promises, and I find that, in the last quarter, there has been a growth of 50% in the number of businesses that are in critical financial distress. Why does the Minister think that is?
Gareth Thomas
I say gently to the hon. Lady that the difficult decisions that my right hon. Friend the Chancellor had to take in the Budget were, interestingly, particularly well explained by her former colleague Kwasi Kwarteng, who made it clear that he thought they had to be taken because of the mistakes that he and the Conservative party had made when they were in government.
Shaun Davies (Telford) (Lab)
Bradley Thomas (Bromsgrove) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
Working across Government, we are determined to revitalise our high streets and support the businesses on them. We are working with industry to create a fairer business rates system that protects the high street and supports investment. We have introduced the Crime and Policing Bill, which will give better protection for businesses and retail workers against assault and theft. Our forthcoming small business strategy will set out our plan for further support for small businesses on the high street and beyond.
Dr Huq
From 5 am to 10 pm daily, the Patels’ newsagent, off licence and post office was an Acton staple—until Horizon slapped it with a £123,000 demand, and Mrs Patel had a series of mini-strokes. Will Ministers look into the fact that their compensation was rejected because Mr Patel was the postmaster, and show their love for high-street heroes everywhere by attending a tea organised by the all-party parliamentary group for ethnic minority business owners on 3 April? You are welcome too, Mr Speaker.
Gareth Thomas
I am grateful for my hon. Friend for raising the case of the Patels. I am keen that any sub-postmaster who was a victim of the Horizon scandal gets access to the compensation they rightly deserve as quickly as possible. She will understand that I cannot comment on individual cases, but if she wants to write to me about the specific case, I would be happy to look into it further and to discuss it with her.
Bradley Thomas
There are over 70 pubs across Bromsgrove and the villages. One of them—the Queens Head—faces a staggering £42,000 annual increase in the cost of business rates and national insurance contributions as a result of choices made by this Government. That is on top of increasing concerns around a banter ban. Will the Minister confirm that nobody will be ejected from a pub or hospitality venue for sharing a joke, and will he outline what steps he is taking to support pubs, rather than putting them out of business?
Gareth Thomas
I note in passing that 10,000 pubs closed their doors under the Conservative Government, so I do not think the pub industry is looking to the hon. Gentleman’s party for guidance going forward. On the specifics he asked about, he will be aware of our plan for business rates reform, which will help and make a significant difference to many pubs. On the so-called “banter ban”, I gently suggest that he should not believe everything that he reads in the newspapers.
Sally Jameson (Doncaster Central) (Lab/Co-op)
Pubs and restaurants are part of a thriving high street in Doncaster that is known for its iconic nightlife. Will the Minister set out what action the Department is taking to support hospitality and ensure that high streets continue to thrive, and may I invite him to Doncaster to see how nightlife is done properly?
Gareth Thomas
I will give careful consideration to my hon. Friend’s very generous offer. In answer to the hon. Member for Bromsgrove (Bradley Thomas) I mentioned business rates reform, which could make a significant difference for many businesses in the night-time economy. Another crucial issue that we want to tackle is the rising crime and antisocial behaviour on our high streets. As she will know, the Crime and Policing Bill, which is beginning its journey through Parliament, will make a significant difference in that regard.
Sir Roger Gale (Herne Bay and Sandwich) (Con)
The high street trader John Lewis Partnership is announcing its annual results today. It is a highly successful business but this year it will not be paying a dividend to its partners, the workforce, because it has to absorb national insurance costs. Does the Minister understand the real impact that NI contributions are having on what his party likes to describe as “ordinary working people”?
Gareth Thomas
I say gently to the right hon. Gentleman and his Conservative colleagues that we had to take the difficult decisions in the Budget to increase employer national insurance contributions because of the mess that their party left the country in. The shadow Secretary of State for Business and Trade, the hon. Member for Arundel and South Downs (Andrew Griffith), helped to write the Liz Truss Budget that did so much damage to our country—we are trying to sort out the mess. The shadow Secretary of State still has not apologised for his part in that fiasco. He should take the opportunity to do so during these questions.
Greg Smith (Mid Buckinghamshire) (Con)
Yesterday, the owner of the hugely popular Rumsey’s, which is celebrating 21 years on Wendover high street in my constituency, emailed me to say:
“We estimate the changes coming in April will add 15% to our staff costs that we simply don’t have. Therefore we have had to sadly make redundancies, put in a recruitment freeze and implement staff hour cuts to offset this.”
With real-world testimony like that replicated up and down the country, will the Minister finally acknowledge that an urgent change of course is needed to support high streets, scrap the employer NI rise, save jobs and protect communities?
Gareth Thomas
I gently say to the hon. Gentleman that it would be interesting to know whether he now regrets the enthusiastic support he gave the Liz Truss Budget, which did so much damage to our country’s public finances. Our Budget in October last year started the process of sorting out those situations. I looked with interest at his website recently, which has a “My plan” section. It is completely blank. Although that is probably better given that he so strongly supported the Liz Truss Budget—there is at least a bit of progress.
Greg Smith
Well, that was no answer to my question whatsoever. It is almost as if Labour Members have not realised that they are in charge and that it is their decisions that are having this impact. Let me tell the Minister something else that Rumsey’s reported to me:
“The reduction in business rate relief will leave me no choice but to raise prices simply to break even, further limiting growth and accessibility for customers.”
I just do not know how much more the Minister needs to hear to understand the scale of the problem on our high streets. He talks of business rates reform, but the only business rate change we have seen is the devastating cut to business rates relief, which is hurting high streets now. Will he reverse it?
Gareth Thomas
Had the hon. Gentleman’s party been elected, retail, hospitality and leisure relief would have come to an end. We have extended retail, hospitality and leisure relief. We have set out in the Budget our plans to permanently lower tax rates for retail, hospitality and leisure properties on the high street from 2026-27. We are taking measures to tackle crime and antisocial behaviour on the high street, which his party could have done more to tackle but chose not to. We are bringing in new legislation to end the immunity for crime on the high street where shoplifters steal goods worth £200 or less, and we are creating a specific offence of violence against retail workers to try to make it easier for businesses operating on the high street.
Kenneth Stevenson (Airdrie and Shotts) (Lab)
David Reed (Exmouth and Exeter East) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
We are creating a fairer business rates system, reducing alcohol duty on qualifying draught products, and our forthcoming small business strategy will set out our plan to further support small businesses on the high street and beyond. In addition, through the Hospitality Sector Council, we are addressing, with business, strategic issues related to high street regeneration, skills, sustainability and productivity, and we have recently saved the pint.
Sir Edward Leigh
Obviously the Minister is working very hard, but he looks a bit tired, so may I offer him some Lincolnshire hospitality? Will he come and stay for a glorious weekend in one of our farm cottages, to enjoy our great skies and bracing air, and help our distressed farmers? Frankly, they need the income. The problem is that the Government have abolished the furnished holiday letting scheme, which was a tremendous encouragement for the countryside. I do not expect an answer now, but will he consider approaching his right hon. Friend the Chancellor to see if we can reinstate that in the Budget, to help our farmers and the countryside?
Gareth Thomas
Unusually for the Conservative party, the right hon. Gentleman has made an extremely generous offer. I am almost as tempted by that as by the offer from my hon. Friend the Member for Doncaster Central (Sally Jameson) to visit Doncaster. I am happy to look at the issue he raises and I will write to him with more details.
David Reed
The Crusty Cob bakery has been a constant in east Devon for the past 55 years, but last week the family-run business closed the doors on all nine of its shops, making over 100 local people redundant. The owners stated a panoply of issues, from manufacturing costs to reduced high street footfall and energy prices, but the kicker is the decision that this Business Secretary’s party has made to slam companies with increases to the national living wage and employer national insurance contributions. The effects of this Labour Government’s decisions are setting in and literally destroying working family businesses. Will the Business Secretary and the Minister please give a message to the Crusty Cob team who have just lost their jobs?
Gareth Thomas
I understand that this will be an extremely worrying time for employees of the Crusty Cob and their families. I gently say to the hon. Gentleman that we are offering a 40% discount to retail, hospitality and leisure properties as part of our business rates package. We are going to reform business rates more substantially, with a permanently lower multiplier in 2026 that, while it clearly will not help the Crusty Cob and its employees, will help other businesses on the high street.
I am slightly surprised that the hon. Gentleman should be so opposed to an increase in the living wage—I do not know whether that is his party’s policy. I also gently remind him of the data from the Office for National Statistics, which my right hon. Friend the Secretary of State pointed out, showing more people in jobs this year compared with last year.
David Davis (Goole and Pocklington) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
In the past eight months we have trebled the total amount of compensation paid and ensured that more than 2,300 victims who had as yet received nothing have now had some financial redress. We are making up-front, fixed-sum offers and interim payments where possible to speed up the delivery of redress. There is still a lot more to do, though, and we remain committed to ensuring swift and fair redress for every postmaster affected by the Horizon scandal.
David Davis
I thank the Minister for that answer. He and I will agree that the Post Office Horizon scandal is one of the greatest miscarriages of justice in modern times, but the problems with the Post Office and its injustice extend far beyond that. Some 21 cases relating to the precursor system, Capture, which bear the same hallmarks as those in the Horizon scandal, have been referred to the Criminal Cases Review Commission. I am afraid that the CCRC is famous for taking years to come to obvious decisions, so can the Minister tell me that it will deal with this in months? If not, will his Department intervene directly?
Gareth Thomas
The right hon. Gentleman is absolutely right to raise the issue of Capture. As he will know, we have published our response to the independent Kroll report on the Capture software issue and the way in which the Post Office responded to the data that came out of it. We have been meeting sub-postmasters who used the Capture system and who were the victims in that regard to talk through a redress scheme with them. We are also working closely with the Criminal Cases Review Commission and have made it clear to the Post Office that it must co-operate with requests from the CCRC so that we can speed up its deliberations on the 21 cases.
Harpreet Uppal (Huddersfield) (Lab)
I recently met a constituent who is a former postmaster affected by the Horizon scandal. He has applied for compensation but feels that the process is taking too long, with unreasonable asks. Given the legal ruling that postmasters should be afforded the benefit of the doubt, what steps is the Department taking to ensure that compensation claims are processed fairly and without delays that could further affect the victims?
Gareth Thomas
As my hon. Friend will know, we inherited a compensation process that was perceived by many sub-postmasters as being slow, legalistic and adversarial, so we have already taken a series of steps to try to speed things up, particularly in trying to get out more fixed-sum payments—for example, we are moving in more staff to support work on the compensation process. If she would like me to look in more detail at her constituency case, I am very happy to do so.
Dame Harriett Baldwin (West Worcestershire) (Con)
The Business Secretary met recently in Japan with Fujitsu, which developed the Horizon system and has offered to contribute to the compensation for victims. Can the Minister tell the House how much the Secretary of State has asked it to contribute, so that taxpayers are not on the hook for £1 billion?
Gareth Thomas
The hon. Lady is right to reference the discussions that my right hon. Friend had with the chief executive officer of Fujitsu. That company has agreed to begin talks about its contribution to the costs of compensation. She will understand that we also need to wait for Sir Wyn Williams’ inquiry to conclude, and for his recommendations regarding compensation from Fujitsu to be heard and understood. I am sure she will also understand that I am not going to give a running commentary on the discussions with Fujitsu, but I welcome the fact that it has agreed to begin talks.
Alex Baker (Aldershot) (Lab)
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
The Treasury published a tax information and impact note in November 2024, alongside the introduction of the Bill containing the employer national insurance contribution changes. It sets out the impact of the policy on the Exchequer and the impacts on business, and that approach is consistent with previous tax changes.
Mr Carmichael
The impact I hear from SMEs in my constituency, predominantly in the visitor economy, is that they are anticipating cutting the hours of part-time staff or laying them off and reducing the number of seasonal employees that they will take on. Will the Minister take those concerns seriously and work with Ministers in the Scottish Government to ensure that the legitimate concerns of SMEs in my constituency do not blossom into a full blown crisis of confidence?
Gareth Thomas
I am always happy to work with the Scottish Government and other devolved Governments on how we can improve the business environment. I am sure the right hon. Member will join me in encouraging the Government in Scotland to mirror the changes we have made to business rates relief. Given the sizeable increase in the Scottish budget, it is somewhat surprising that the SNP has not been willing to support the retail sector through an extension of retail hospitality relief.
Frank McNally (Coatbridge and Bellshill) (Lab)
Jo Platt (Leigh and Atherton) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
My hon. Friend is a great champion of the social enterprise sector. She will know that we are committed to doubling the size of the co-op and mutuals sector. We recently met the recently launched mutuals and co-op business council to begin working with businesses on our plans to expand the co-op and mutuals sector. She may also be aware that our social enterprise boost fund is currently spending some £4 million on helping to support social enterprises that are already up and running.
Mike Wood (Kingswinford and South Staffordshire) (Con)
Gareth Thomas
We have had one or two questions on this topic, and the hon. Member will therefore not be surprised by my answer. I gently point out that the difficult decisions we took on employer’s national insurance contributions in the Budget were a direct result of the mess the Conservative party, which he supported so enthusiastically, left for this Government.
Amanda Hack (North West Leicestershire) (Lab)
Gareth Thomas
We know that rural businesses want to see more investment in bus services and better transport infrastructure. My hon. Friend will appreciate that the Chancellor announced in the Budget some £650 million-plus in funding for local transport, which is designed to support everyday journeys and improve transport connections. I am sure, too, that she will welcome the better buses Bill, which is coming in to give local authorities—
Gareth Thomas
One of the big issues that small businesses wanting to scale up face is access to finance. We are actively working across Government on what else we can do to support businesses to get access to the finance they need, including through the British Business Bank.
Ellie Chowns (North Herefordshire) (Green)
In my constituency, a planning moratorium has been in place for more than five years due to water pollution, with an estimated effect on the local construction industry of half a billion pounds, despite the fact that new house building is a minute proportion of the problem. Will the Secretary of State meet me and representatives of the Herefordshire construction industry to try to find a solution to this devastating problem?
Horizon Redress
Gareth Thomas Excerpts(1 month, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
This Government are fully committed to providing full and fair redress to victims of the Horizon scandal and making sure all of those responsible face justice and contribute to redress.
The latest redress figures published by my Department on Friday show that £768 million has now been paid to over 5,100 claimants across all redress schemes, representing a more than tripling of the total amount of redress paid to victims by Government since the end of June 2024.
I am pleased to inform the House that on Friday, the Secretary of State for Business and Trade, my right hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), held a positive and constructive meeting with Takahito Tokita (CEO, Fujitsu Ltd) and Paul Patterson (Director, Fujitsu Services Ltd).
The Secretary of State welcomed Fujitsu’s agreement to begin talks on Fujitsu’s contribution to compensation costs, ahead of the conclusion of Sir Wyn Williams’s Horizon IT inquiry—a joint statement was issued after the meeting and published on gov.uk and Fujitsu’s website. Fujitsu has previously stated its moral obligation to contribute to compensation for the victims of the Post Office scandal, which we have welcomed.
Officials from the Department for Business and Trade will continue to engage with Fujitsu representatives in full. We will not provide a running commentary on these discussions, but will keep both Houses informed at key points.
The Secretary of State commented after Friday’s meeting that we must never forget the lives ruined by the Horizon scandal and no amount of redress can take away that pain. But, as I am sure Members of this House agree, justice can and must be done. This Government are determined to hold those responsible to account, and will continue to make rapid progress on compensation and redress.
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Post Office Horizon: Redress
Gareth Thomas Excerpts(2 months ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
The delivery of redress for victims of the Post Office Horizon IT scandal is a key manifesto commitment for this Government. As part of our commitment, I have been actively considering whether the Department for Business and Trade should take on responsibility for the redress schemes currently managed by the Post Office. This is something that postmasters, campaigners and parliamentarians, including the Business and Trade Select Committee, have called for.
I am today announcing that the Department’s Horizon convictions redress scheme (HCRS) will broaden its scope and take on responsibility for redress for postmasters who have had their convictions overturned by the courts.
There will be a three-month transition period to allow for the smooth transfer of active claims from one scheme to the other. At the end of May 2025, claims for redress under the Post Office’s overturned convictions scheme will be transferred into the HCRS and the Post Office will cease to be involved in the administration of redress for overturned convictions. From Tuesday 3 June, all existing and new overturned convictions claims will be processed by the Department for Business and Trade.
There will be no gap in service for postmasters who have claims in the system. During the transition period, the Post Office will continue to actively progress claims towards settlement. The Department is already working with the Post Office to ensure that the transfer process is as smooth as possible for individuals and will work with them and their legal representatives throughout the process. Our intention is for a seamless transition for existing claims.
The assessment framework for HCRS was deliberately aligned with the principles for decision in the overturned convictions scheme to ensure fairness of outcome across the two schemes. All postmasters can therefore expect consistency of treatment between the HCRS and overturned convictions schemes.
In advance of 3 June, I encourage all those eligible to apply for redress under the overturned convictions scheme to continue to engage with the Post Office, which is committed to continuing to process existing claims swiftly until the transfer date.
As I have previously indicated, I am considering whether responsibility for delivering the Horizon shortfall scheme should also be transferred to the Department. I will make a separate statement about that in due course. We have already committed to running the Horizon shortfall scheme appeals process within the Department, rather than allowing it to be run by the Post Office.
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Growth Guarantee Scheme
Gareth Thomas Excerpts(2 months, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
I wish to make Members aware of the details of a proposed variant of the existing growth guarantee scheme that is designed to increase uptake by businesses of green assets that facilitate the transition to a low-carbon economy.
The GGS was launched on 1 July 2024 and is facilitated by the Government-owned British Business Bank and delivered through its delivery partners. Under the scheme, lenders offer facilities of up to £2 million to support businesses that would otherwise be unable to access the finance they need, or would only be able to do so on worse terms.
Green GGS uses the infrastructure of the existing GGS programme to help increase the supply of affordable finance for businesses investing in green technologies. Lenders face uncertainty over the future value of these green assets in the instance of borrower default, due to the pace of technological advances and a lack of observable track record or data in the relevant second-hand markets. As a result, lenders raise the up-front cost of financing green assets to mitigate this uncertainty, or simply choose not to finance the green asset. This in turn dampens business demand for green investment.
The BBB’s GGS variant is designed to address this uncertainty by setting a floor on losses that a lender would take if a borrower defaulted on the loan. This would give lenders the confidence to support finance for green assets or lower the up-front cost of that finance, increasing the supply of finance available to small and medium-sized enterprises to invest in green assets. The terms of the programme ensure that the benefit of the guarantee is passed to the business.
Initially, the British Business Bank will reallocate funding from the existing GGS to pilot this scheme with a single lender, facilitating an initial portfolio of £30 million of investment in green assets. There will be no change to the maximum lending facilitated across both GGS variants, which will remain at £2.2 billion, as notified to Parliament by means of a written ministerial statement made on 24 May 2024. Any future proposed increase in the capacity of green GGS will be notified as applicable.
I will be laying a departmental minute today containing a description of the liability undertaken.
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Closure of High Street Services: Rural Areas
Gareth Thomas Excerpts(3 months ago)
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The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
It is a pleasure to serve under your chairmanship, Ms Furniss. In the usual way, let me, too, congratulate the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) on securing this important debate.
We have heard a series of powerful speeches from Members from Northern Ireland and from the Liberal Democrat Benches, and some particularly strong speeches from my hon. Friends the Members for Na h-Eileanan an Iar (Torcuil Crichton), for Rushcliffe (James Naish), for South West Norfolk (Terry Jermy), for Bury St Edmunds and Stowmarket (Peter Prinsley), for Monmouthshire (Catherine Fookes) and for Scarborough and Whitby (Alison Hume). I note in passing that not one Conservative Back-Bench MP or Reform MP is present to champion rural areas. I gently say to the shadow Minister that if the previous Government had done a slightly better job, this debate would perhaps not be necessary.
I will address as many of the points that have been raised as I can, but let me first say this. It goes without saying that our high streets play a vital role in providing a place for communities to come together, work, socialise, shop and access essential services. I very much share the passion of Members across the Chamber for ensuring that all communities in rural areas have access to those services, wherever they are in the UK. Rural areas offer significant potential for economic growth. More than half a million businesses are registered in rural areas, and the rural economy contributes more than £315 billion a year in England alone. The Government are committed to improving the quality of life for people living and working in rural areas, in part so that we can realise the full potential of rural businesses.
If a high street or town centre is to flourish, residents, businesses and councils must work together to develop their own unique offer for the high street that resonates with the local community. That is why this Government are focused on our five-point plan to breathe life back into Britain’s high streets: addressing antisocial behaviour and retail crime, reforming the business rates system, rolling out banking hubs, stamping out late payments, and empowering communities to make the most of the vacant properties with which rural communities, and indeed urban ones, are all too familiar. We have already made progress on that plan.
My Department is working with others across Government to ensure that we do all we can to create thriving high streets now and long into the future. Our small business strategy, which we will publish later this year, will set out further plans to support small businesses on the high street and beyond. We want to support efforts to ensure that all our high streets are places for our businesses, local people and visitors, creating jobs and economic growth wherever they are in the UK. When thinking about solutions to the future of the high street in rural areas and more generally, we need to recognise that no two high streets are the same, and that the way we live and work is evolving quickly.
A series of hon. Members raised the issue of high street banks and branch closures. The UK branch network is now below 5,000—half what it was in 2015—and although the banks point to the increasing use of digital channels for day-to-day banking, access to cash and in-person banking services are still essential for many, not least the elderly and the vulnerable, who often need face-to-face engagement to get their banking sorted.
Jim Shannon
I commend the Minister for his response. My constituency has lost the most banks—I think we have lost 12 over the years. It is obscene and immoral that the banks are making exorbitant profits, in the hundreds of millions, at the same time as they close branches and deny pensioners and vulnerable people the right to bank access. Has the Minister spoken to the banks about their immorality in relation to their profits, and their dedication and responsibility to vulnerable people?
Gareth Thomas
We certainly want the banking industry to do more to work with us as a Government to ensure that there is much better access to financial services, in particular for small businesses. Too often, one of the big pressures facing small businesses is accessing the finance they need to expand and thrive. We know that good access to finance for small businesses is not universal; that is a challenge not only in rural areas, but more generally. We will continue to press the financial services industry generally, and banks specifically, in that space.
The Government have said that accessing physical banking services is important, which is why we are working closely with banks to roll out 350 banking hubs to provide people with critical cash and banking services on their doorstep. The hubs offer basic counter services, provided by post office staff, that allow people and businesses to withdraw and deposit cash, deposit cheques, pay bills and make balance inquiries. Many hubs also have dedicated rooms where customers can see community bankers from their own banks to discuss things such as staying safe from fraud, adding a lasting power of attorney, making payments or registering for online banking.
David Chadwick
Ystradgynlais is the biggest town in my constituency, and it has a catchment area of 24,000 people. People there tell me that they experience long waits when they go to use the post office, and that post office staff have lost cheques and made other errors that have created problems for local businesses. Does the Minister agree that a post office is no substitute for a functioning bank branch run by trained staff?
Gareth Thomas
Having some Welsh blood, I am instinctively sympathetic to the hon. Gentleman’s constituents. I would not put it in quite the way that he did, but if he and his constituents have concerns about the service that the post office provides in his constituency, I am happy to take those up. Perhaps outwith this debate, he might drop me a line or have a word; I am certainly willing to press the post office. I will come back to the question of post office banking services.
Just before Christmas, the Chancellor opened the 100th banking hub in Darwen in Lancashire. Out of the 100-plus that have now opened, 12 are located in Scotland, seven in Wales and five in Northern Ireland. This is just the start. I am pleased that Cash Access UK and LINK have announced that over 200 banking hub locations have been recommended, including a further four in Wales, one in Northern Ireland and 17 in Scotland. Among those will be a new banking hub in Wick, as the hon. Member for Caithness, Sutherland and Easter Ross mentioned. I acknowledge his work and campaigning for the banking hub in Wick, which I hope goes some way to addressing the concerns in his constituency that he mentioned.
On the question of banking hubs, I should say that where they are located is determined independently by LINK, the operator of the largest ATM network in the UK. An access to cash review can be requested via its website, which also sets out the criteria it uses for considering locations for banking hubs. These include population size, whether other banks remain nearby, the number of small and medium-sized enterprises on the high street and public transport links, as well as the level of vulnerability in the community.
When it comes to big high street banks pressing ahead with closures, we expect all banking firms to follow closely the Financial Conduct Authority’s branch closure guidance in supporting their customers.
Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)
Will the Minister allow me to intervene?
Gareth Thomas
I apologise to the hon. Gentleman, but he has only just rocked up to the debate, so if he will forgive me, on this occasion I will not give way. If there is a specific issue about which he wants to write to me, I would be happy to look at it.
Hon. Members will know that the FCA engages with banks and building societies to ensure that the impacts of branch closures on customers are properly considered. Where firms fall short, the FCA can and will ask for a closure to be paused or for other options to be put in place. Some banks also provide pop-up services, with a community banker visiting a library or a community centre to offer support where other options are not available. I understand that that has been the case in the constituency of the hon. Member for Caithness, Sutherland and Easter Ross following the announcement of the closure of the Bank of Scotland branch in Golspie, and that Lloyds Banking Group will be providing a pop-up community banking service on a regular basis to support local people with banking services.
For a number of reasons, we are beginning to look at what else the Post Office can do to improve its banking offer, and I hope to say a little more about that in a moment. When the local high street bank closes, the alternative option for accessing everyday banking services in person is the post office. As our economy has modernised and evolved, so too have our local post offices. Today, they are much more than just a place to send letters and parcels. They increasingly act as basic high street banks, but also as access points for some Government services and, in many places, as community hubs for an array of different activities, generating tremendous social capital in our communities. So it is right that the Government hold the Post Office to account to ensure there is enough provision across the country. We protect the post office network by setting minimum access criteria. At all times, we want 99% of the UK population to live within three miles of a post office and 90% to live within one mile.
Edward Morello
The Minister seems to be outlining very succinctly the failure of the banks to provide a service and the importance of post offices in providing services. I am struggling to understand why the Government are punishing the Post Office with national insurance contribution rises while maintaining the Tory tax cuts for the banks, so will the Minister explain why we are rewarding the people who are failing us and punishing those who will now provide this service to us?
Gareth Thomas
The hon. Gentleman will know that the Government had a very difficult fiscal inheritance and had to make some very tough choices in the Budget back in October.
We continue to provide a subsidy to the Post Office of some £50 million to ensure that the loss-making parts of the network can be maintained. Indeed, just before Christmas we provided a further £37.5 million to support the Post Office network this year. We are working with the senior leadership team at the Post Office on future opportunities, beginning with banking, so that the company can increase its product offers and commercial revenue while reducing its costs, as well as improving the service to all our constituents.
I heard the specific concerns raised by my hon. Friend the Member for Na h-Eileanan an Iar, whose constituency includes Stornoway, about the future of the directly managed post office in his constituency. No decisions have been made on the future of all the directly managed branches, but I know he will continue to campaign on the issue.
We want our post offices to form part of healthy, bustling high streets. Like the post office itself, our high streets have had to adapt quickly to the post-covid economy. High streets have faced more than their fair share of challenges in recent years, in terms of vacancies opening up—an issue that my hon. Friend the Member for Bury St Edmunds and Stowmarket referred to. That is why in December we brought forward new powers for councils, which can now force landlords to rent out unsightly, vacant, boarded-up properties via high street rental auctions. The new regulations will make town centre tenancies more accessible and affordable, giving local businesses and community groups a right to rent valuable space on their local high street. I welcome the fact that Bassetlaw, Darlington and Mansfield are already working with us as early adopters to help to learn how the new power can be used to make a difference.
We have also announced our intention to introduce a new community right to buy, empowering residents to address decline and protect valuable spaces such as pubs, theatres and cinemas, and thereby keeping those assets in the hands of the local community. We are investing in further initiatives to boost town and city centres, including by maintaining the high street accelerators that bring together the local community, businesses and property owners to work in partnership with their council to regenerate and revive local high streets.
My hon. Friend the Member for Rushcliffe referred to our work to improve and reform the business rates system. That was a key manifesto pledge that we are beginning to deliver on, with permanently lower tax rates for retail, hospitality and leisure properties, including those on the high street, from 2026-27. We have published a discussion paper to explore what else we can do in this space.
My hon. Friend the Member for South West Norfolk referred to issues to do with digital connectivity. He will be pleased that we are committing over £500 million next year to deliver Project Gigabit and the shared rural network to roll out broadband and 4G connectivity, which will support growth in rural areas and beyond.
Digital connectivity is one consideration for rural communities but, as hon. Members have rightly pointed out, physical connectivity is another. For people in far-flung communities, especially those without a car or family living nearby, getting to the high street can be extremely difficult. We recognise that challenge and are responding in turn with more than £650 million for local transport outside city regions in 2025-26. The Department for Transport will say more about how that funding will be used shortly.
We are also providing more than £1 billion of funding to support and improve local bus services and keep fares affordable wherever we can. In December we introduced the Bus Services (No. 2) Bill that will put control over local bus services back in the hands of local leaders right across England. It is intended to ensure that bus services reflect the needs of the communities that rely on them.
I thank the hon. Member for Caithness, Sutherland and Easter Ross and all Members who participated in this debate for their contributions. High streets are the beating heart of all our communities. The services they provide are essential for the people and businesses they serve. As a Minister with a key interest in this area, I look forward to continuing to work with hon. Members to help to improve local high street services in their communities.