Employment Rights Bill

Jerome Mayhew Excerpts

Report stage
Wednesday 12th March 2025 Commons Chamber

[Several hon. Members rose—]

[Jerome Mayhew (Broadland and Fakenham) (Con)]

On a point of order, Madam Deputy Speaker.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Is it pertinent to the actual debate?

[Jerome Mayhew]

Yes, Madam Deputy Speaker. As we all know, Members are required to draw attention to any potential conflicts of interest prior to speaking, in order to avoid any impression of, among other things, paid advocacy. Given that clause 52 will lead directly to increased payment of money from unions to Labour Members of Parliament, I ask for guidance on the proper declaration of interests. Most Labour Members due to speak this afternoon have received thousands of pounds from the unions—totted up, I make it £283,974.86. In addition to a general reference to their entry in the Register of Members’ Financial Interests, in this instance, where there is a direct link, should they not also set out the actual amount of money they have received?

[Madam Deputy Speaker]

Obviously, further clarity on this issue is required, as it was raised earlier. It is the responsibility of individual Members to ensure that they declare their interests properly. The procedure for raising a complaint of this sort is by writing to the Parliamentary Commissioner for Standards. The guide to the rules sets out the rules relating to the declaration of interests in debates. This is not otherwise a matter for the Chair. I hope that brings some further clarity to the issue.

I call the Chair of the Business and Trade Committee.

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[Charlie Dewhirst]

I think the best solution would be proper privatisation of our railways, including nationalised services like Northern, which is constantly on strike. I would use Hull Trains, which serves a lot of constituents in my area and is very rarely, if at all, on strike, as an example of an excellent, private open-access firm. Rail franchises that have been nationalised have a far greater problem with strike action than those that have not.

I wish to go back briefly to the ’70s—the height of the trade union movement. The number of trade union members peaked in 1979, at around 14 million. Since then, the number has declined considerably to around 6 million, the majority of whom are in the public sector. It is often for good reason that people in the public sector are members of a union, but it means that the landscape has changed. We have moved away from being a society and an economy of heavy industry and large manufacturing, and of towns that may have been built on one or two industries, or one or two factories, where everybody in that area was largely employed, either directly or indirectly, in those places. That was where the trade union movement was required, where it was strong and where it was needed.

The modern workplace is very different. We are now largely a services-based economy, and the relationship between employer and employee is much more modern and much more flexible. We have heard about the need for the traditional trade union movement, and about a return to secondary action, flying pickets and so forth. Clearly, there is no place at all for that in the UK now.

[Jerome Mayhew]

The hon. Member for Blyth and Ashington (Ian Lavery) suggested that we should have a return to secondary action. What is my hon. Friend’s view?

[Charlie Dewhirst]

I do not want to speak on behalf of the hon. Member for Blyth and Ashington (Ian Lavery), but he made his views very clear. I am sure that we will hear more in that tone as we go through the afternoon.

It is really important that the Bill does not take us back to a place where growth is stifled. The Government talk about the importance of growth but, taken together, this Bill and the Budget will cause us a very severe problem, because there is very little point in having extra trade union representation if unemployment is going through the roof. Those who are unemployed will not be represented.

My big fear is that, overall, this Bill is an act of economic sabotage. It protects the dinosaurs from extinction, it damages the UK economy and it ensures only that trade union donations continue to flow into the Labour party.

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[Madam Deputy Speaker (Ms Nusrat Ghani)]

Miss Murray, you used the term “you”. If it makes it easier, you can speak focused on the Chair, and that way you will not make such a mistake. Saying “thank you” means thanking me, and it gets very complicated for Hansard, so it is best not to do that. Just focus on the Chair, and that will help.

I need to make a correction. I should draw Members’ attention to a printing error in Government new clause 52 as it appears in the printed version of today’s amendment paper. The closing words at the end of subsection (1) should read:

“the Secretary of State may withdraw it by giving a notice of withdrawal to the person.”

A corrected version of the amendment paper is available online.

[Jerome Mayhew]

This is a chaotic mess of a Bill, cobbled together in 100 days to satisfy a press release. We have the unedifying spectacle of an amendment paper that is 274 pages long, as the Government try to correct their many mistakes.

The main thing that I want to address in my short speech is the idea that Labour is beholden to the unions. That is often suggested, but let us just look at the facts, because we need to put this to bed. Between 2019 and 2024, Labour received only £31,314,589 from the unions, and in this Parliament more than 200 Labour MPs have been paid directly by the unions. The Ministers in the Department for Business and Trade have collectively received about £120,000 from unions. What are the unions paying for? Whatever it is, they have been handsomely repaid in the drafting of this Bill. To make it easier for Labour Members, who were all here to hear my point of order, perhaps they could put their hands up if they have not received any cash from the unions—oh dear, oh dear!

Clause 52 suggests that there should be a requirement to contribute to political funds when people join a union. It changes the rules on how union members should donate and how they should contribute political funds to the Labour party. Clause 52(2) changes subscriptions from an opt-in to an opt-out. That raises the question: why do we need this clause? What is the problem that the Labour party is trying to fix? Is £31 million just not enough? This clause encourages unions, when signing up members, to take advantage of their distraction, because members will not be focused on that and they will fall into what is in effect a subscription trap.

In other circumstances, the Labour party does not think that subscription traps are a very good idea. In fact, the Government sent out a press release on 18 November 2024 entitled, “New measures unveiled to crack down on subscription traps”. That sounds good so far. It says:

“Consultation launched on measures to crack down on ‘subscription traps’ and better protect shoppers…Unwanted subscriptions cost families £14 per month per subscription and £1.6 billion a year in total”.

It goes on:

“New proposals to crack down on subscription traps have been unveiled today…‘Subscription traps’ are instances where consumers are frequently misled into signing up for a subscription…It comes as new figures reveal consumers are spending billions of pounds each year on unwanted subscriptions due to unclear terms and conditions and complicated cancellation routes.”

The Business Secretary says:

“Our mission is to put more money back into people’s pockets and improve living standards across this country, tackling subscription traps that rip people’s earnings away is an important part of that.”

Clause 52 flies in the face of that press release.

[Mrs Russell]

Does the hon. Gentleman agree that there is a massive difference between major corporations wanting to take money out of people’s bank accounts every month and trade unions wanting to represent people as effectively as possible in the workplace?

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[Jerome Mayhew]

I do not accept that difference. Taking advantage of people’s inattention, as this clause expressly sets out to do, is taking advantage of people for financial gain. The difference is that the people who gain in this instance are Labour Members. That begs the question: why have they drafted this clause and why, shamingly, will they vote for it later?

[Becky Gittins (Clwyd East) (Lab)]

Will the hon. Gentleman give way?

[Jerome Mayhew]

I will in a moment.

Here we have it: a clause of direct financial interest to Labour Members. We have so far had two speakers who have both received very significant sums from the unions, to which they did not directly refer. The first was the hon. Member for Blyth and Ashington (Ian Lavery), who has received £20,000 from the unions, according to his entry in the Register of Members’ Financial Interests. The second is the hon. Member for Cumbernauld and Kirkintilloch (Katrina Murray), who has received £14,000 directly from the unions. This is germane to this debate.

[Laurence Turner (Birmingham Northfield) (Lab)]

As has been said already in this debate, trade union donations have been declared, but donations from employers who have a direct private interest in particular sectors that we have debated in this place have not been declared. If any of the hon. Member’s colleagues have not drawn attention to such an interest, will he encourage them to do so? Does he agree with us on the Labour Benches that they were wrong not to make such a declaration?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. There were two points of order on declarations earlier, and I think I made the situation quite clear. I just wish to let Mr Mayhew know that, if he is referring to Members directly with any form of criticism, he is meant to give them prior warning, so he should be mindful of that for what comes next in his speech.

[Jerome Mayhew]

The intervention from the hon. Member for Birmingham Northfield (Laurence Turner) is a classic distraction technique. This Bill addresses the unions and union membership, and clause 52 moves money from unsuspecting union joiners directly to the Labour party. There is no other explanation for the clause.

[Becky Gittins]

Will the hon. Gentleman give way?

[Gareth Snell]

Will the hon. Gentleman give way?

[Jerome Mayhew]

I will give way to the hon. Lady, and then I will make some progress.

[Becky Gittins]

The hon. Member is working incredibly hard to try to make a case for vested interests in relation to this Bill. Those vested interests are in the working people of this country. Nevertheless, I appreciate his efforts, and he certainly has earned his afternoon snack today. This precedes my time in this Chamber, and my hon. Friends may be able to help me, but was he as vociferous during the pandemic—a time of national crisis—when close relationships with senior Government figures secured contracts that produced no personal protective equipment when the country was in such desperate need?

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[Jerome Mayhew]

I did not follow that, so I will just have to move on.

[Mr Louie French (Old Bexley and Sidcup) (Con)]

The hon. Member for Clwyd East (Becky Gittins) has just made a point suggesting that working people are not impacted by the behaviours of trade unions, but does my hon. Friend agree that it is the working people of this country who are hammered the most when Labour Members’ paymasters, the trade unions, go on strike?

[Jerome Mayhew]

I completely agree with my hon. Friend. I cannot add any more to that. He has hit the nail on the head.

I support amendment 291, in the name of the Opposition, which would remove clause 52. At the moment, this is a circular Bill of self-interest: Labour Members get money from the unions, the Bill increases union powers and that clause increases the amount of money from the unions. The clause is brazen and shaming, and it should be removed.

[Johanna Baxter (Paisley and Renfrewshire South) (Lab)]

I draw Members’ attention to my entry in the Register of Members’ Financial Interests, and to my proud trade union membership—I am a member of the Communication Workers Union and the GMB. For too long, working families in Paisley and Renfrewshire South have been let down by outdated employment laws unfit for a modern economy, leaving too many workers trapped in insecure, low-paid jobs. When the Conservatives crashed the economy, who bore the brunt? Not them. People in insecure, low-paid roles were left to bear the brunt of their economic incompetence.

“Chapter 4A

Jerome Mayhew Excerpts

Tuesday 11th March 2025 Commons Chamber

Every part of Government will need to contribute towards our ambition.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

When my hon. Friend the Member for Bognor Regis and Littlehampton (Alison Griffiths) asked a moment ago which businesses support the Bill, the Minister mentioned the British Chambers of Commerce. I have just visited its website, which states:

“The British Chambers of Commerce has used an evidence session on the Employment Rights Bill to highlight businesses’ serious concerns about the legislation and the speed and detail of consultation.”

Will the Minister withdraw his comment?

[Justin Madders]

I am glad that the hon. Member has access to the internet. I direct him to the Department’s webpage, where he will see that Jane Gratton, deputy director of public policy at the British Chambers of Commerce, said:

“There is much here to welcome as sensible moves that will help ensure that employment works for both the business and the individual”.

That was in response to the amendments, so it is a much more up-to-date comment than the one the hon. Member mentioned.

Returning to the important issue of violence against women and girls, it is incumbent on every part of Government to work together to tackle violence against women and girls. That is not a task for a single Department or Minister. The Government are steadfastly committed to delivering our manifesto commitment to halving violence against women and girls, and we will publish a cross-Government strategy shortly. I intend to work with colleagues to ensure that our Department does its bit in that respect.

I also take this opportunity to note the amendments tabled by my right hon. Friend the Member for Sheffield Heeley (Louise Haigh) and the hon. Member for Oxford West and Abingdon (Layla Moran) on non-disclosure agreements. I have met advocates on that issue and I understand the significant problems that they have highlighted in relation to the misuse of non-disclosure agreements in some circumstances. That important issue warrants further consideration. The Government are pressing ahead with plans to implement the provisions relevant to NDAs in the Victims and Prisoners Act 2024 and the Higher Education (Freedom of Speech) Act 2023. We take NDA misuse seriously and will continue to look into it to see what we can do.

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[Alison Griffiths]

The hon. Member knows that I will always support fair process, but the point I was making is that this clause will make it more difficult for employers to take on prison leavers, care leavers, candidates with a non-traditional CV, career changers, and young people who are just looking for that first rung on the jobs ladder. Those people will not be given a fair chance, as employers will see them as too risky, and I hope she will see the risks inherent in the clause.

[Jerome Mayhew]

My hon. Friend is making a powerful point. I used to be an employer. I was an entrepreneur for about 15 years, and we employed more than 1,000 people. Does she agree that exactly those people who are a bit of a risk because they have something not quite right on their CV and are a high-risk hire, are the people who will not get jobs as a result of the Bill?

[Alison Griffiths]

I thank my hon. Friend for making that powerful point. Anyone who has ever looked for a job—Members in the Chamber will probably count themselves as being among the better qualified of the population looking for work—will know that most employers, of any kind, do not want to take a risk. If we make it even harder for them to employ people who are a risk at base point, it will not serve their purposes.

The Government’s own impact assessments suggest that the direct effects of the Bill will cost UK businesses an additional £5 billion annually. That estimate most likely understates the true cost, as it accounts only for administrative burdens while ignoring the broader impact on hiring, business costs and strike action. Key factors such as reduced hiring due to zero-hours contract limits, increased strike activity, and greater liability from employment tribunal claims, as outlined in the Bill, are dismissed as “too hard to calculate”, making those assessments highly questionable.

That is why I support new clause 86, which would require an impact assessment to be carried out for the measures in clause 21. We tabled new clause 83 and amendment 283 to ensure that the Bill’s provisions on zero-hours workers would not come into force until a comprehensive review of the Bill’s impact on employment tribunals had been assessed and approved by Parliament. Clause 18 places a new duty on employers to prevent third-party harassment. Protecting employees is unquestionably important, and no one should doubt the sincerity of Conservative Members about that.

Oral Answers to Questions

Jerome Mayhew Excerpts

Thursday 30th January 2025 Commons Chamber

[Gareth Thomas]

The hon. Gentleman has always been a great champion of small businesses in his constituency and in Northern Ireland more generally. We want the business growth service to complement the support that the Northern Ireland Executive and the Welsh and Scottish Governments already give their businesses, to improve the quality of advice and support available to all businesses in all parts of the UK.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

2. What steps he plans to take to help reduce employment costs.

[The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)]

The Government are pursuing the reforms needed to deliver sustained long-term growth. Developed and delivered in partnership with business, we have taken significant steps, including launching a consultation on the modern industrial strategy, establishing the national wealth fund, transforming our planning rules, committing to a 10-year infrastructure strategy and introducing the Employment Rights Bill to boost productivity. We have also added extra protections for small businesses by increasing the employment allowance and freezing the small business rate multiplier.

[Jerome Mayhew]

I think the Minister may have misunderstood my question; I asked how he would reduce employment costs. The president of the Confederation of British Industry recently said that, because of things like the Employment Rights Bill, employers will be laying people off and will be less likely to employ, and that is before the national insurance tax on employment imposed by this Government. Does the Minister accept responsibility for the increase in unemployment that we are already seeing?

[Justin Madders]

I think it is something of a stretch to say that a Bill that is not even law yet, most of the provisions of which will not come into force until next year, is driving unemployment already. I quote back to him what the head of the CBI said yesterday about our growth plan. He said:

“This positive leadership and a…vision to kickstart the economy and boost productivity is welcome.”

Stellantis Luton

Jerome Mayhew Excerpts

Wednesday 27th November 2024 Commons Chamber

[Jonathan Reynolds]

I believe my hon. Friend’s analysis is absolutely right, and he and I were in the Chamber on several occasions when that case was made to the previous Government. The intervention from the former Prime Minister was not based on any kind of business or economic logic, but was an attempt to create some sort of wedge issue before the election. Frankly, that did them absolutely no good, because people saw straight through it. I say again that to change the deadline, but keep the existing thresholds in place up until 2030 was the worst of all worlds—it really did have a negative impact on consumer confidence—and we will never repeat those mistakes.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

The Secretary of State said in his statement that, at the time of the election, Stellantis was minded to close the plant. However, since the election we have had the Budget, which has imposed £25 billion of increased taxes on business, and the Employment Rights Bill, which will also increase costs on business enormously. Both have led directly to a collapse in business confidence. Does the Secretary of State think that those decisions helped Stellantis to stay or go?

[Jonathan Reynolds]

I can tell the hon. Member categorically that those decisions had no impact whatsoever. This is the crucial point. I hear Conservative Members say this, but do they have any idea about employment conditions in the automotive sector? Those conditions are well above the floor that the Employment Rights Bill will raise them to in the United Kingdom. They should get out and talk to industry and have such conversations—please.

To be clear, on the wider point the hon. Member makes about business confidence, I recognise that the outrageous inheritance this Government walked in on, with Conservative Ministers not even planning to say how they would pay for the promises they had made, created speculation about where the revenue would come from. I regret the fact that we had to make difficult decisions. Ideally, we would not have wanted to make those decisions, but we are the people fixing the foundations and clearing up the mess the Conservative party left behind. There can be no long-term prosperity unless we have a serious Government willing to do that.

Oral Answers to Questions

Jerome Mayhew Excerpts

Thursday 31st October 2024 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

After receiving millions from the trade union paymasters for its election, Labour is rewarding them with a package of 1970s, French-style workplace regulations, which will increase the cost of doing business in the UK to the tune of £5 billion a year, disproportionately falling on SMEs. That is before the £25 billion body blow to business delivered by the Chancellor yesterday in her anti-business Budget of broken promises. Does the Minister agree with the Office for Budget Responsibility that this Government’s decisions will make workers poorer, not richer, as increased employment taxes are passed on in lower wages, and that business investment will fall, not rise, as a direct result of this Government?

[Justin Madders]

I find it incredible that the Opposition quote French-style labour laws, because when they introduced the minimum services legislation, they always held up France as the example of where that works already. I wish they would make their minds up. The implication behind the question about trade union funding says rather more about their attitude to how legislation is made in this country than ours. We do things because we believe in them. If he looks carefully at what the OBR is saying, £1,400 into people’s pockets as a result of the national living wage increase is a fantastic achievement that we should all be proud of.

Business Confidence

Jerome Mayhew Excerpts

Tuesday 15th October 2024 Westminster Hall

[Jerome Mayhew (Broadland and Fakenham) (Con)]

Thank you, Mrs Harris, for chairing the debate, and well done to my hon. Friend the Member for East Grinstead and Uckfield (Mims Davies) for securing it. What a good debate it has been. It has been a debate of two halves. From this half of the room—the Opposition half—we have heard lots of interventions and lots of thoughts about business confidence, while the other half of the Chamber was entirely empty for the majority of the debate.

There have been some very interesting contributions. My hon. Friend the Member for East Grinstead and Uckfield rightly thanked businesses in all of our constituencies. She focused in particular on the role of family businesses as the thriving local hubs of our communities, as well on as the economic growth that they provide. She correctly identified the importance of animal spirits, which are vital for growing an economy. In the first half of this year, confidence was growing in our business community, but what a disastrous change we have had, with business confidence now falling as a result of tax fears.

[David Pinto-Duschinsky]

Will the hon. Member give way?

[Jerome Mayhew]

No, I am not going to take an intervention. I feel quite strongly that if an hon. Gentleman cannot make it to the start of a debate, wanders in halfway through and then seeks to make an intervention to ask a question—

[Carolyn Harris (in the Chair)]

Order. Can we keep it to the debate, please?

[Jerome Mayhew]

I will, but I would just like to refute this. Perhaps if the hon. Gentleman takes out Hansard, he will find the answer to his question in the first half of the debate.

My hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti) is right that business is in an uncertain holding pattern and that SMEs are the lifeblood of our community. The hon. Member for South Basildon and East Thurrock (James McMurdock) is quite right to say that his community is rich with potential. He expressed concerns, however, over the delay of the decision on the lower Thames crossing, and said that he thought the Government should have taken a more professional approach towards DP World. I agree with him. Finally, my hon. Friend the Member for Bromsgrove (Bradley Thomas) rightly pointed out that between 2010 and 2024, growth was higher in the UK economy than in all the main EU economies, and that there is opportunity if we focus on entrepreneurship and on rural businesses.

Throughout this debate we have highlighted the slump in confidence since Labour came to power—and not just in business confidence, but in consumer confidence. Why is that? Well, do not take my word for it. The ex-chief economist of the Bank of England, Andy Haldane, said that the Government’s approach has generated

“fear and foreboding and uncertainty among consumers, among businesses, among investors”.

Labour’s plan appears to have been, “We’ll come into power, we’ll say it’s all terrible and so much worse than we thought it was, we’ll say that there’s this black hole”—a black hole, by the way, that Treasury officials were unable to find when the Financial Times asked to see the data behind it—“and this will give us political cover for long-planned tax increases.”

The problem is that political games in this case have been paid for in lost jobs and futures. After nearly four months of inaction, this inept political vacuum has been filled by speculation, rumour, kite flying and denial. The “So what?” is that Government incompetence has cost jobs. The CBI has just said that it is clear that firms are holding back from employment because of Budget fears. The consultancy AJ Bell has said that directors of listed companies have doubled sales of shares since the general election—that is businesses voting with their feet. Evelyn Partners has said that a third of private business owners with turnovers in excess of £5 million have accelerated their exit strategies. Why? Because of fears about capital gains tax and inheritance tax relief. This is our entrepreneurial future being destroyed by the inaction of the Government.

It does not matter whether the rumours are true or false; the fact that they are rumours is having devastating impacts in its own right. Now the direction is clear, and it appears that the Government will increase employer national insurance contributions. As Paul Johnson of the Institute for Fiscal Studies said, that is a clear breach of the manifesto promise. When considering the issue previously, the Chancellor of the Exchequer said that an increase was an anti-business measure—I agree. The Office for Budget Responsibility has told us that an increase in employer national insurance contributions will lower wages.

Labour is pulling off the triple: misleading the public, harming business and lowering wages—all with the same policy. The more business sees of this Government, the less it likes them. When will this party of opposition that finds itself in government get a grip?

Oral Answers to Questions

Jerome Mayhew Excerpts

Thursday 5th September 2024 Commons Chamber

[Jerome Mayhew (Broadland and Fakenham) (Con)]

When dealing with the Post Office Horizon scandal, does the Secretary of State understand that by sitting on the letters informing Horizon victims that their convictions have been quashed, the Department is exacerbating the trauma of this terrible injustice? After two months in office, I understand that fewer than one in six letters have been sent. When does he plan to get a grip on the situation?

[Jonathan Reynolds]

I welcome the hon. Gentleman to his place. We have been in office for two months, and we have already set up the Horizon convictions redress scheme. Indeed, I was pleased to work with the former Minister, the hon. Member for Thirsk and Malton (Kevin Hollinrake), on creating the legal environment necessary to do that. The letters are an issue for the Ministry of Justice and its database. We have not sat on anything, and we have moved at pace to give people the compensation they deserve. We will continue to do that, and to work with those on the Opposition Front Bench to deliver what we all want to see.

Future of Horseracing

Jerome Mayhew Excerpts

Wednesday 25th October 2023 Westminster Hall

[Jerome Mayhew (Broadland) (Con)]

Thank you, Mr Hosie, for chairing this debate, which has been fascinating. I have learned a huge amount about British racing. I declare an interest: I do not represent Newmarket or Cheltenham, but Fakenham—a fantastically formed, albeit small, national hunt course—is in my constituency. The topography is such that one can see the entire race from the stands. It is a really lovely place, and it employs 132 people on race days, all from Fakenham and the surrounding area. It is not just about the direct employment; the beneficial impact of having a course like Fakenham in my constituency is more widely felt like that in the town—

[Peter Aldous (Waveney) (Con)]

I have a confession to make: Fakenham was the first racecourse I ever went to. When I went, it had a chase course that went out beyond the point. Would my hon. Friend agree that the supply chain for British racing extends out of training centres and the courses we know about, into the countryside and studs? Its tentacles go right through towns in this country into those licenced betting offices that are features of all our towns. There are people employed in that wider industry on high streets everywhere around this country.

[Jerome Mayhew]

I am grateful to my hon. Friend. He is quite right. It is not just about the betting offices in towns, but the restaurants and hotels that are supported by Fakenham race days. I declare an interest: I have enjoyed a day’s racing at Fakenham courtesy of the racecourse’s trustees. I think they threw in a sandwich as well. That should be included on the record. It was delicious. I hope to go again later this year—[Laughter]—depending on the outcome of this debate.

Many Members have spoken about the benefits to the national economy of racing. I will not repeat them; they have been well rehearsed. I want to focus on the local benefits of racing to rural communities like mine. The Gambling Act review is causing Fakenham huge concern. The proposed enhanced checks for problem gamblers will be incredibly important for two communities: problem gamblers—they must be assisted, not hurt, by this decision—and the racing industry. It is a truism that, like any important decision, it should be based on best evidence, not ideology.

Judging by this debate, which I have listened to, there appears to be a massive conflict of evidence. It depends on who one listens to. According to the racing industry, the existing checks to reduce problem gamblers have not had a minimal impact and have not been taken in the industry’s stride. In fact, they have cost it about £1 billion. It is argued that as a result of this withdrawal of cash from the industry, about 1,000 racehorses have been taken out of training, bringing the number in training comfortably below 15,000 for the first time in a long time. That is a very heavy impact on the industry.

Perhaps it is worth it. Perhaps the benefits of the current checks on problem gamblers are so positive that it is worth imposing a cost of £1 billion on the racing industry. But they have been in place for two years now. What does the evidence show us? There were nine characteristics of harm from gambling that were associated with the assessment of the efficacy of these new rules. Have they changed? I am sorry to say that despite costing the industry £1 billion, of those nine measures of gambling-related harm, not a single one has improved during that period.

At the very least, this should cause the Government to pause for consideration, rather than doubling down on yet more of the same seemingly failed approach. Losing £1 billion for no measurable impact on the nine metrics that the Gambling Commission considered were the right ones to measure is not a result that would lead one to think, “Oh yes, we need to go further in the same direction.” The Gambling Commission tells us that the current proposals will also have very little, or minimal, impact on the industry. As one of the other contributors has mentioned, it says that about 3% of the accounts will be affected. But the evidence from the industry is that this is already incorrect. Somebody only has to read the front page of the Racing Post, of which I hope many Members here are subscribers, to see the multiple accounts of people changing their betting habits even before the new restrictions come in.

Just this month, there was a survey in which 15,000 racing gamblers took part—so a very substantial survey. More than 50% said they would stop betting or significantly reduce their betting because of these personally intrusive checks, which include one’s job title and postcode, while 40% of them said that they would consider moving towards black market betting, which 10% have already done. What outcome are the Government seeking to achieve for those with problems in gambling? Is it to drive and increase the size and scope of the black market industry, where there is no regulation at all, and where problem gambling is actively encouraged because it maximises profitability? If that is what they want to do, just the threat of this consultation review is already causing that to happen.

[Danny Kruger (Devizes) (Con)]

My hon. Friend is making a very good speech and I agree with everything that he is saying. Does he also recognise the danger of driving people towards international gambling organisations online, which, although perfectly legal, have none of the checks that we would have, and where, as he is describing about the black market, they have all the incentives in the system to drive people into addiction?

[Jerome Mayhew]

I very much welcome my hon. Friend’s contribution. Of course, he is absolutely right. There are many seemingly unintended consequences of the current proposals. I have yet to see any worked examples backed by genuine evidence, as opposed to the expressions of hope from the Gambling Commission, that support an alternative interpretation.

If we are worried about unintended consequences, I encourage the Minister during this welcome consultation to follow the evidence and not ideology; to support rural employers like Fakenham; to support the fantastic day out that racing provides to 5 million people a year and the pleasure that it gives them; to support the economies that rely on racing in places like Fakenham and around the country; to support fun betting, which in itself provides revenue to help the 0.3% of the gambling public that has a serious problem; and to support the long-term future of this fantastic racing industry in our country.

Digital Markets, Competition and Consumers Bill (Third sitting)

Jerome Mayhew Excerpts

Committee stage
Thursday 15th June 2023 Public Bill Committees

[The Chair]

Mr Ross, we will now have a quickfire round, because we have you for only another five minutes and there are three Members seeking to ask questions. It will be one question each and one answer each.

[Jerome Mayhew (Broadland) (Con)]

Q I want to pick up on what you said about your concerns about the JR approach to appeals and whether it should be full merits. Then you said, “Well, we could do full merits, but within a six-month period.” How could you possibly do that?

Neil Ross: We put out a position paper ahead of the Bill being published and we did not argue in favour of full merits; we argued in favour of what is often referred to as a judicial review-plus system, which is a blended system that gives a bit more flexibility for the CAT to decide what factors to take into account.

[Jerome Mayhew]

Q Okay, but the bit that I am really interested in is how you could contain an appeals process within six months if you were going to look, even in any element, at the merits.

Neil Ross: I am not 100% sure of exactly how it would work in practice. We are just reporting back that what our members are really keen to see happen is that they move forward at speed. There is a lot of debate about exactly how you speed up that process, and we are pretty open to what solutions might be brought forward.

[Jerome Mayhew]

Q But you do recognise that speed is of the essence in a fast-moving market.

Neil Ross: Yes, absolutely.

[Jerome Mayhew]

Q So if you could not limit it to six months, that would be self-defeating in its own right in many cases.

Neil Ross: I think there is a balance to be struck depending on what the case is and what is being discussed. Ultimately, the aim would be speed and flexibility. There are going to be trade-offs between the two, depending on what is happening. We want to give the CAT as much discretion as it needs to make that judgment, depending on what is being put before it. Because this regime has enormously flexible and very invasive powers at the upper end, we do not know exactly what kind of cases are likely to be brought forward or discussed. That is why we will want that focus on flexibility as well as speed.

[Andy Carter (Warrington South) (Con)]

Q This follows on from that question. Do you think the Bill is designed with sufficient flexibility for the CMA and the digital markets unit to respond to the changing nature of the sector? Five years ago some of the things we have today just did not exist. What is your view on that?

Neil Ross: Yes. Sorry to repeat points I have made before. I think it depends on exactly how the DMU exercises the power. They have to look ahead five years when making an SMS designation, which puts a lot of pressure on the digital markets unit to make an assessment about how a market is going to be used.

--- Later in debate ---

[Vicky Ford]

Q How quickly have we gone from zero to 30%?

Gene Burrus: In 2008, it was zero, and the 30% probably came in about 2012. Once the markets settled down and it was clear that there were two phone platforms to be had, that is when Apple began to try to extract that.

Tom Smith: We focus on the app store stuff, but there is potential at other SMS firms. There are a lot of allegations about Amazon’s fees going up over time for small sellers, for example, and them being pushed into buying Amazon’s logistics operations, which are said to be expensive. The DMU can go and investigate whether they are expensive and whether they should be freed up to competition more. The CMA published a very good market study report on Google’s advertising businesses. It was 2,000 pages long and detailed the excessive profits made. Google charges 30% to 40% more than Bing to reach the exact same eyeballs. Those prices are going up.

[Jerome Mayhew]

Q You are buying a service to reach the same number of eyeballs. The process does not have greater reach. You said that, to achieve the same outcome as a facilitating business, they charge 30% to 40% more. Why doesn’t everyone use Bing?

Tom Smith: You may have seen yesterday that the European Commission is threatening to break up Google in the ad-tech business. The European Commission is formally alleging that Google is abusing its dominant position in ad tech. That is on the display side of the business. On the search side, Google has a 90%-plus market share in this country. It is a must-have product, and people are buying that product. There are lots of allegations about why it should be able to sustain such prices, but I do not want to make an unfounded allegation.

[Kevin Hollinrake]

Q We have put subscription traps in the Bill. I will ask the same question I asked Mr Burrus earlier: do you see anything in the legislation that would make it difficult for companies that currently operate on a subscription basis to comply with what we have set out?

Tom Smith: No, I do not think so. In fact, one of the problems with subscriptions that are operated through mobile devices is that Apple inserts itself and Google inserts itself in between the developer and the customer. If you are a British person who subscribes to an app and then something goes wrong or you want to cancel your subscription, quite naturally you might want to contact the developer, such as Tinder or whatever other developer—you are talking to Mr Buse later. At that point the developer has to say, “I’m terribly sorry; you might think you are dealing with us, but you have a contract with Apple,” and that is a major source of complaints. It is pretty confusing for consumers.

Digital Markets, Competition and Consumers Bill (First sitting)

Jerome Mayhew Excerpts

Committee stage
Tuesday 13th June 2023 Public Bill Committees

[Vicky Ford]

Q Really quickly—will you be watching our market compared with what is happening in other markets?

Sarah Cardell: As one of our factors, absolutely.

[Jerome Mayhew (Broadland) (Con)]

Q You say that open, competitive markets are good for growth. I totally agree, but we are one market among a global series of markets. Building on what Vicky Ford just said, where do you see this regulatory innovation sitting? You have referenced the EU and what it is doing, and there are other things going on in the US. Will this draw investment into the UK in this sector, or will it make people say, “Hmm, I’m not sure”?

Sarah Cardell: I firmly believe it will draw investment in. Will, do you have a couple of examples of people you have spoken to?

Will Hayter: You have app developers who are wanting to provide a service through these mobile ecosystems that have pent-up business—I think you are talking to one of them later—waiting to be invested in and to grow. There is also a UK-based search engine looking for opportunities to expand. Those are exactly the kind of businesses that are trying to grow and want this kind of regulatory infrastructure to create the conditions to do that.

--- Later in debate ---

[Neil Coyle]

That is disappointing.

Matthew Upton: I have nothing to add.

[Jerome Mayhew]

Q Mr Upton, I want to come back to you about subscription traps. You are saying that the requirement in the Bill that subscription cancellation should be a timely process is not sufficiently detailed. I declare an interest: in a former life, I used to help write European regulations. Is it not an absolutely basic tenet of writing regulations that you design outcomes— you do not list processes unless you absolutely have to, because things change? Given that point, are the Government, or the drafters of this Bill, not correct to focus on the outcome required and leave the process alone?

Matthew Upton: In a sense, I disagree with you because I agree with your point about it being outcomes-focused. In a sense, you are right; it leaves it fairly open, which gives some space for people to interpret, but I think what will end up happening is that firms will get around those provisions in various ways. They will tweak the subscriptions to find other ways to find people to step in. We will have a game of whack-a-mole, where we chase around trying to clamp down, a little bit like we had in the utility-switching space of four or five years ago. Ultimately, whether people agree or not, that led to much heavier intervention in the market.

Just taking one step to move towards opt-out—in a sense, you are right; it is a process step—is incredibly simple in terms of aligning the incentives. I think that would mean you would have to do less of the tweaking, constant interventions and prodding of firms. It just sets up the incentives in a much more simple way.

[Jerome Mayhew]

Q Is the intervention not actually the exact opposite of what you are suggesting, in that, if you have a stricter requirement within the regulations, people find ways to get round that strict interpretation, but if you have an outcomes-focused statement as is currently in the Bill, the onus is on the companies to demonstrate compliance, and the CMA, with the fining power of 10% of global turnover, has the stick with which to enforce it?

Matthew Upton: I disagree, because I think the simplicity of simply saying, “You opt out at the end of a period” gives clarity. I think it is easier for firms to interpret. In reality, under the current set-up, I do not think you will see a lot of firms thinking in a positive way about how to interpret it. I think they will think about how they can push as far as possible.

Customer journey design is so complex—this is the challenge of emerging digital markets. It is not a case of being able to say, “You have two click-through screens versus three,” so that constitutes easy or hard. There are incredibly subtle ways to make it difficult. I think a lot of firms would continue to put their efforts into thinking about how they can stay as close as possible to the law to avoid CMA sanctions, while effectively still making it psychologically and in reality difficult for consumers. An opt-out would just simplify it, and would take that thought process off the table for firms.

[Alex Davies-Jones]

Q You mentioned schedule 18 already and some of the missed opportunities that you see there. Some things that have been highlighted are drip pricing and misleading green advertising. Can I push you a bit further on the missed opportunities in schedule 18?

Rocio Concha: In what respect? On why we want them there?