Retained EU Law (Revocation and Reform) Bill

John Hayes Excerpts

Report stage
Wednesday 18th January 2023 Commons Chamber

[Ms Ghani]

Before I take any more interventions, I want to address the point made by my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) about the Henry VIII powers. That is a misrepresentation of what is happening. Each Department will review and then amend, assimilate or revoke EU law. Each Department’s Secretary of State will be responsible for the decisions they take. All the laws are on the dashboard, which will be updated once again, and we will be codifying the retained EU law. In the absence of the application of supremacy, restating a rule in primary legislation could lead to the same policy effect as the rule itself currently has. The Bill just sets out a process to allow each Department to take a decision. Why would we not want to review the EU law that is out there and assess what needs to be assimilated? If we can amend and update it, why would we not do that?

[Sir John Hayes (South Holland and The Deepings) (Con)]

Notwithstanding the charmingly innocent faith in lawyers of my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), the key thing about our decision to leave the European Union is that sovereignty lies in this place and with the people to whom we are accountable. The point about this measure is that it will allow exactly that sovereignty to be exacted in practice with regard to retained EU law.

[Ms Ghani]

Absolutely. When decisions are taken either to amend or to revoke, the usual channels will be followed in Parliament. Committees will be put in place and decisions will be reviewed the Leaders of both Houses. Decisions can be taken openly and transparently. We also have the dashboard, which will be updated and already has thousands of EU laws on it.

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[Justin Madders]

The hon. Member is right. I shall come back to that in a little while.

[Sir John Hayes (South Holland and The Deepings) (Con)]

In essence, when we took back control through the referendum decision in 2016, it was not to a particular party or even to a particular Government: it was to the British people and their sovereign Parliament. I find it inconceivable and rather disappointing that the hon. Gentleman does not have the confidence that this Parliament will do the right thing in a range of legislative areas.

[Justin Madders]

I am afraid the right hon. Gentleman does not understand what the Bill does. It hands the power to Ministers, not to Parliament—that is why we are so concerned about it. Taking back control was about this Parliament, not giving power to Ministers.

I turn back to the Bar Council’s clear warnings. It is not some sort of anarchist organisation, it is not part of an anti-growth coalition—it is the Bar Council, for goodness’ sake. Anyone who is concerned about parliamentary scrutiny and accountability and who wants to make this country work should listen carefully to what the Bar Council says and its warnings about why the Bill is inappropriate.

The sunset clause is interrelated with the question of Ministers’ powers and the ability of Parliament to effectively scrutinise changes. I do not want to be faced later this year with having to make a choice between a reduction in the number of days’ paid holiday that people are entitled to and their having no rights at all—and that is a choice that this Bill could force upon us, if we are pushed up to the precipice due to timescale.

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[Sir William Cash (Stone) (Con)]

Having endured the last 40 minutes, I am bound to say, as Chairman of the European Scrutiny Committee, that although I will be relatively brief there are important matters that need to be discussed. I will raise them and give the House the opportunity to reflect on what I have to say.

This Bill was passed by this House without amendment. There were no amendments on Second Reading or in the Public Bill Committee. I have been Chairman of the European Scrutiny Committee for many years, and I have been on this Committee since 1985. I draw the attention of the House to the European Scrutiny Committee report tagged to this debate, published on 21 July last year. As the Minister said, EU retained law was never intended to remain part of our domestic statute book. I am deeply grateful to the Government for today’s round robin letter to all Members and to my right hon. Friend the Member for North East Somerset (Mr Rees-Mogg) for his work on the genesis of this Bill.

We left the European Union with section 38 of the European Union (Withdrawal Agreement) Act 2020 guaranteeing UK sovereignty and democracy, and therefore UK democracy itself. It was the culmination of a process that began with my sovereignty amendment to the Single European Act in 1986, which, at that time, I was not even allowed to debate. In turn, that was followed by the Maastricht treaty and a whole series of treaties, enactments and debates on the Nice, Amsterdam and Lisbon treaties.

Incidentally, on the question of maternity pay—the only interesting thing mentioned by the hon. Member for Ellesmere Port and Neston (Justin Madders)—the UK actually has 52 weeks of maternity pay, while the EU has merely eight. On holiday pay, we have six weeks; the EU has four.

The views of the British people, as expressed ultimately in the 2016 referendum, repudiated the idea of our remaining in the EU by democratic vote, and the general election that endorsed that decision, under my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) as Prime Minister, gave the present Conservative Government a large majority. The democracy that we enjoy is based on our unique and universally envied constitutional arrangements, whereby laws are passed in this House by a simple majority of MPs representing individual constituencies, who derive their authority exclusively from those who voted them into the House of Commons.

[Sir John Hayes]

This is the essence of the misunder-standing of the hon. Member for Ellesmere Port and Neston. The relationship between the Executive and the legislature is such that the Government receive a mandate from the people, but Ministers are answerable to this House. I am amazed that the hon. Gentleman has not grasped that constitutional fundamental.

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The Bill is a bonfire of our rights and protections. The haste with which it is being brought through Parliament and the 2023 sunset clause put us in serious danger of things being accidentally revoked and our rights and protections being lost. The amendments proposed make a bad Bill better, and the Government would be wise to support them. If the Government press ahead with the Bill unamended, they will have to explain to the House when any rights and protections are lost after 31 December, and they cannot then say that they were not warned.

[Sir John Hayes]

The great constitutional theorist A.V. Dicey declared:

“The principle of parliamentary sovereignty means neither more nor less than this...that Parliament has the right to make or unmake any law whatever”.

When we joined the EU, despite the promise at the time of Europhilic politicians like Edward Heath that it was an economic community, what happened in practice was that this place paradoxically used the very sovereignty it had inherited from generations before to give up sovereignty and surrender parliamentary authority. The promise of Brexit was a repudiation of such international law making. I know that it discomforts the globalist liberal elite that that promise will and must be delivered, but that is how it is and how it will be. The people’s will must be seen and must be seen to be done, and that is precisely what this Bill is all about.

The journey since 2016 has not been easy. The doubters and deniers—the schemers and plotters—unable to let go of their Euro-federal fantasies, have conjured every trick imaginable to try to stymie Brexit. However, this Government are clear: we will deliver on the promise made in 2016 and restore parliamentary sovereignty to this country. In doing so, we will re-empower the people to whom we are answerable.

I will pick up a couple of points made by Opposition Members. I enjoyed the rhetoric of the SNP spokesman, the hon. Member for Stirling (Alyn Smith), which was as elegant as ever. I particularly enjoyed his criticism of hyperbole, which was immediately followed by a hyperbolic list of all of the things that are now at risk. Do any Opposition Members really believe that the Government or Government Members want less safety for our workers, dirtier rivers and less protection of the environment? If they do, they cannot have listened to what Members on the Tory Benches have advocated and fought for, in many cases, for years.

It is an absurdity that, six years on from the referendum, we remain shackled to thousands of articles of retained EU law. I accept that whether we keep, amend or discard those articles needs to be a thorough process, but there must be a single means of delivering that process, which is precisely what this Bill is. Some claim that this is a power grab, but this process—this business of secondary legislation; this use of statutory instruments —was how these regulations found form in the first place. It is a well-established practice that Governments through time have used to deal with such matters, and will again.

That detailed practice requires a Bill of the kind that has been drafted. Without such impetus, we risk wallowing in the malaise and self-doubt that can too often infect those tasked with grand undertakings. After six years, the British people deserve a deadline by which they can know for certain that Britons will live exclusively under British law, free from the interference of foreign powers. This Bill delivers the very certainty that those who criticised it have called for today. Such self-confidence is anathema to the hon. Members who still balk at the audacity of the 17 million Britons who believed in Britain enough to vote for Brexit.

To hon. Members who have signed amendment 36, I say that it is, by definition, an attempt to dilute, delay and obfuscate. Such efforts must be resisted. There are those who remain unreconciled to the decision of the British people to leave the EU, but any device to perpetuate our legislative connection to the EU is incompatible with our national interest and the common good. The unamended Bill facilitates the removal of our EU hangover through all the necessary, democratic mechanisms.

The Bill is a decisive and unequivocal declaration of self-confidence in self-governance. At last, we have a Government who display such self-confidence, free of the doubt and guilt that has infected politicians on both sides of the House for far too long. Edmund Burke said that what matters

“is not what a lawyer tells me I may do, but what humanity, reason and justice tell me I ought to do.”

What we ought to do now is deliver what the British people missioned us to do in 2016: to ensure that the laws and regulations that affect their lives are made in this House and that their Government are free to lead that process.

I enjoyed the speech of hon. Member for Ellesmere Port and Neston (Justin Madders), which was rather like a Russian novel—very long but with good bits—but he must know that there are any number of ways in which Ministers are accountable to the House. For example, they can be questioned orally and in writing, and they can be challenged through Opposition day debates, Standing Order No. 24 debates and urgent questions. Ministers should and will be held to account by both sides of the House in all kinds of formal and informal ways, but we could never hold to account those foreign powers that dictated our laws for far too long.

Now, we escape.

[Ian Blackford]

The right hon. Member for Haltemprice and Howden (Mr Davis) described the Bill as a pig in a poke. I think it is a pig in a poke that the Government have put lipstick on. We have heard about taking back control many times this afternoon, so I am at a loss to understand why Government Members would go through the Lobby in support of this Bill. In effect, a whole range of legislation will be wiped out, but they do not know what it is or what authority they are giving to the UK Government. They do not even know whether it will be 3,000, 4,000 or more pieces of legislation. It is extraordinary that a group of people who want to take back control are giving authority to the UK Government to do what they like without any scrutiny in this House—that is exactly the point of the Bill.

We have heard that we should not worry, because we will have statutory instruments and the ability to hold the Government to account, but the last time that the Government were defeated on a statutory instrument was in 1979—my goodness. Those who want to take back control talk about parliamentary sovereignty and the lack of democracy in the European Union, but all that they are doing is giving untrammelled powers to Ministers to do what they like. There is nothing that the Opposition or Government Back Benchers can do to effectively hold the Government to account. What an extraordinary set of circumstances.

SNP Members have always accepted that it is the right of others in other parts of the United Kingdom to determine their future. They want to leave the European Union, but we reject that—of course, we do not want to leave. As my hon. Friend the Member for Stirling (Alyn Smith) said, according to a recent opinion poll, 72% of the public of Scotland want to stay in the European Union. We have a tale of two different Parliaments moving in different directions. It is clear that Scotland is on a journey to independence and we will rejoin the European Union as a member, hopefully soon. To do that, however, we need to remain aligned with the European Union.

This is about democracy. We have referred to the Scotland Act 1998 on many occasions, as we did yesterday in the debate on section 35, and it is worth reflecting on the difference between what happened there and what is happening today. We have a Parliament in Edinburgh that we are proud of. There was a majority in that Parliament for legislation that was passed before Christmas, yet this Government in London can bring in legislation under the Scotland Act that strikes out an Act of the Scottish Parliament and there is nothing we can do about it. In this particular case, the legislation impinges on domestic legislation and devolved legislation in Scotland. The principle was established in the Scotland Act that in order to do that the principle of consent stood—the so-called Sewel convention. That means the devolved Government in Edinburgh, and in Cardiff and in Belfast, have to give consent for matters that affect domestic legislation. Yet we are told to go and stick it—the view of the Scottish Parliament and the Scottish Government that this is not in our interest and we do not consent to it.

We saw yesterday that a UK Government can strike down a Bill of a Scottish Parliament. Why does not the Scottish Parliament have the right to say to this Government that they are doing that without our consent? That demonstrates to the people of Scotland that devolution as it works at the moment means Westminster continues to call the shots. Westminster determines what happens in devolved legislation. It is a wake-up call to the people of Scotland in the debate we are having on independence that, if we want to secure the right to determine areas such as the economy, the environment and consumer protection, we cannot rely on the Westminster Government to protect our rights and we cannot stop a UK Government interfering in what are devolved matters. If we want to secure that protection, if we want to secure our rights, if we want to celebrate the joys we had of European membership from 1973 until now, we need to take the final steps.

Look at what has happened in this House this week: there has been the threat to the right to strike, the threat to democracy in Scotland yesterday, and the threat to the values and protections we have built over many years in the European Union. All are being swept away. This is a United Kingdom turning the clock back, moving backwards. We want to move forwards as a member of the European Union. That is why today we will push our amendments and reject this Bill.

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[Sir John Hayes]

The truth is that we would have the power to do exactly as the Minister said and to introduce improved regulation where necessary and in our national interest, but that power would rest here in this House and with our Government, who are accountable to this Parliament. That is the difference; it is as simple as that. To claim anything else is a thinly veiled deception.

[Ms Ghani]

My right hon. Friend hits the nail on the head. We are elected to govern. Of course, it will take some work, but the outcome is that we can take the decisions here. Whether we choose to take those decisions, are anxious about taking decisions, or do not even want to know what these EU laws are—that is just a very ignorant way to be—we need to be aware so that we can take those decisions.

My hon. Friend the Member for Waveney talked about 2023 being a cliff edge. That is the time by which we wish to sunset, but there is an extension to 2026 for the bits of EU law for which Departments need more time to consult. The process has already been around for 18 months, and it has been and will continue to be considered. Department officials will continue to work together on that.

My hon. Friend the Member for Great Grimsby spoke about her constituents’ concerns and anxieties about the Labour party doing everything it can to take us back into the EU. There has been a lot of fearmongering from the Labour party in the amendments that it has tabled, but in this instance, I would argue that maybe her constituents should be afraid, as I am told that the Labour leader has attempted to block Brexit at least 48 times.

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[Sir John Hayes]

Fear, doubt and guilt have bedevilled politicians and politics for too long in this country, but the British people are not so fearful of their freedoms, not so doubtful about their sovereignty, and not so nervous about the journey that we have now embarked on to a free future, where this country, through its elected Parliament, can make laws in the national interest for the common good. We have had a lot of fears expressed today. We have heard about bonfires and cliff edges, but the people know that they can trust in the people that they choose, from all parts of this House, to do the right thing by them. If we do not believe that, then what on earth are we doing here? It is absolutely right that we have fulfilled the promise from the 2016 election and taken back control. This Bill—I congratulate Ministers on bringing it before the House today—is the next step on our path to sovereignty, freedom and success.

Energy Security Strategy

John Hayes Excerpts

Tuesday 19th April 2022 Commons Chamber

[Sir John Hayes (South Holland and The Deepings) (Con)]

I refer hon. Members to my entry in the Register of Members’ Financial Interests. The commitment to solar is vital, but does the Secretary of State recognise that food security is as important as energy security? Every building, every warehouse and every commercial enterprise should be covered in solar before a single acre of valuable arable land is consumed by solar farms.

[Kwasi Kwarteng]

I would be very interested to hear my right hon. Friend’s views on solar. I think solar is crucial. I am delighted that we have so many former Energy Ministers in the Chamber today; my right hon. Friend was a very distinguished holder of the post, and I am very pleased to engage with him on this important subject.

Large Solar Farms

John Hayes Excerpts

Wednesday 9th March 2022 Westminster Hall

[Brendan Clarke-Smith]

I thank the hon. Member for her input. I agree that it is extremely important that we move on and invest in renewables, but having community input and ensuring that we choose the right sites, that people have been consulted properly and that the planning process works for everybody, is incredibly important. That is the key issue. Few people are against renewable energy, and solar farms in general are not the issue; it is very much a planning issue of getting things in the right place at the right time.

[Sir John Hayes (South Holland and The Deepings) (Con)]

There is another point, too. Recent events in particular have shown us that we need more security, including food security, but these solar farms are often sited on grade 1 or grade 2 agricultural land, which should be used for food production. Does my hon. Friend agree that the production of energy should be as close to its consumption as possible, to minimise transmission and distribution costs? Until we have solar on every large building, there should be none in fields at all.

[Brendan Clarke-Smith]

I thank my right hon. Friend for his comments. The threat to agricultural land is the crux of the problem, certainly in my own constituency, as I will describe a little later. With the situation in Ukraine at the moment, we have to look to our wheat supplies, and we want to source more of our food locally, because that contributes to reaching net zero, which is important too. Getting that balance right and making sure that we do not throw the baby out with bath water, so to speak, as we move forward is key. Of course, solar needs to be used in a mix with many other energy sources, so that we have a secure supply of energy, bring less of it from abroad and generate more of our own. I very much agree with my right hon. Friend.

The planning practice guidance provides more detail on renewable and low-carbon energy. It notes that

“large-scale solar farms can have a negative impact on the rural environment, particularly in undulating landscapes. However, the visual impact of a well-planned and well-screened solar farm can be properly addressed within the landscape if planned sensitively.”

That is key. The guidance also states that solar farms should be focused on

“previously developed and non-agricultural land…that it is not of high environmental value”,

as my right hon. Friend just mentioned.

The Planning Act 2008 introduced a new consent process for nationally significant infrastructure projects in order to speed up the approval process, especially for large-scale developments. A development consent order removes the need to obtain several of the consents that would have otherwise been required, including planning permission, compulsory purchase order and the like, with the idea of speeding up the process that we had before. Applications for DCOs are decided in accordance with national policy statements. In the absence of one, the Secretary of State has the power to make a decision. Although the current NPS argues for more renewable energy, it does not explicitly mention solar energy. However, a revised version is currently being considered, and an inquiry has been undertaken by the Business, Energy and Industrial Strategy Committee. The revised draft suggests guiding development away from the “best and most fertile” agricultural land and, where possible, utilising developed brownfield sites, contaminated land, industrial land or agricultural land that is preferably classification 3b, 4 or 5 rather than 1 or 2. Of course, we want to extend that to the underground cabling and access routes that will also be required with such developments. As Bassetlaw has been badly hit by flooding in the past, my constituents would add to the revised draft a requirement to make any development safe without increasing flood risks elsewhere.

Solar installations greater than 5 MW can also bid for competitive Government funding through contracts for difference, and installations up to that level can receive payments from energy companies for the electricity that they export to the grid through the Government-backed smart export guarantee. The energy White Paper refers to solar and wind, including unsubsidised rooftop solar, as part of a low-cost approach to energy generation. It also mentions green skills boot camps, including for solar.

Although many people agree that we need to further increase the supply of green energy, significant concerns have been raised by constituents in Bassetlaw about proposals put forward by West Burton Solar Project Ltd and developed by Island Green Power. They have submitted plans to build a 600-acre solar farm and energy storage infrastructure, which will be one of the largest single solar farm sites in the UK. Many believe that it is disproportionate and not appropriate. The site abuts two special conservation villages, Clayworth and Gringley on the Hill, and many people would emphasise the local landscape, which is rich in wildlife such as badgers, brown hare, deer and a vast array of farm birds, which has been enjoyed for generations. There are also related plans to develop several sites across the border in Lincolnshire, which I am sure we will hear about later.

Many people find it very strange that although they are unable to have solar panels on their roofs because they live in conservation areas, they now face the prospect of a large solar farm effectively connecting both villages. The installation would be visually intrusive for miles around, and any screening would therefore provide very little improvement. I have raised some concerns about the loss of countryside, the environmental impact and the flood risk, and there is also the issue of the water management system in Clayworth, which is a concern for us.

In contrast to similar projects that Members have raised, greenfield developments are supposed to be targeted at poor-quality farmland. From the feedback we have received, it is vital that we retain our countryside for the benefit of those who live there and that we make sure it continues to work for us.

[Sir John Hayes]

I am sorry to intervene on my hon. Friend again—I know that time is pressing. None the less, he may know that the Secretary of State for Levelling Up, Housing and Communities—and more or less everything else—has made it absolutely clear that beauty should be at the heart of the planning process. Indeed, the planning process was altered by his predecessor and has been confirmed by him to do just that. No solar park of the kind my hon. Friend is describing or industrial wind turbine placed in the middle of the countryside could pass any test of beauty, except the most perverse and corrupted one.

[Brendan Clarke-Smith]

I thank my right hon. Friend again. That is certainly an issue in our green and pleasant land. That is why I find it encouraging that there has been a move to utilising brownfield sites, not just for energy, but for housing and so on, making sure we make full use of brownfield sites before we look at our green fields and develop for the sake of developing.

Feedback from the consultants for Island Green Power claims that the soil quality is grade 3b, which would open it up to the process we have described. There are several questions about that given the high-yield crops that are grown there, including potatoes, which only grow in higher quality soils. We have already mentioned food security and energy. There is a lot of scepticism about the soil quality analysis, which is arguable, and I understand that Bassetlaw District Council is carrying out its own analysis. We need to grow more of our own food locally, not only to cut carbon emissions, but to mitigate wider problems such as the soaring price of wheat resulting from the situation in Ukraine, which is a particular concern at the moment.

I thank my constituents, including the “No Solar Desert” campaign group, who have worked hard to bring the issue to public attention and to engage thoughtfully. I had the pleasure of attending their coffee morning last week. Many are watching the debate today. It is worth emphasising some arguments made about the plans, and why local people believe the proposed site is not suitable.

The site does not meet many of Island Green Power’s selection criteria. It is not low-grade agricultural land or a brownfield site. It is near protected areas, such as the Idle Valley nature reserve. It is not flat or south-facing, and it is not near a viable grid connection, which creates another issue. Questions therefore remain about the efficiency of solar panels on this site, with some estimating it could be a low as 27%. I want to use this opportunity to throw in a reference from “Robin Hood: Prince of Thieves”—I do so regularly, as a Nottinghamshire MP:

“Is there no sun in this cursed country?”

There is, but in many cases there is not enough of it— we could all do with a little sunshine now—and perhaps this site is not the best place to utilise the sunshine most effectively.

Island Green Power is a UK-based developer that specialises in large-scale developments. It has developed projects in Australia, Ireland and so on. It has signed an options agreement with the Henry Smith Charity to explore the potential of the 600-acre site between Clayworth and Gringley—a huge development. I thank Island Green Power for its engagement with me on the issue, which I look forward to continuing. The Henry Smith Charity, which owns the site and other land in the area, along with several properties, has an option agreement with Island Green Power. It is a charitable trust—one of the biggest grant givers in the country—with assets of around £1 billion, and this is one of its investments. The charity is governed by a board of trustees appointed by the Archbishop of Canterbury. I know that many have a desire to protect the British countryside. I encourage them to engage with me and my constituents on this issue, which has not happened so far.

We must not reach a situation where we have a wild-west style gold rush, with developers looking to increase the value of their land and their financial gains—

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[Sir John Hayes (South Holland and The Deepings) (Con)]

I am grateful for your indulgence, Sir Charles, and I will speak briefly as a former energy Minister. Before I do so, I draw the attention of the House to my entry in the Register of Members’ Interests.

The point that my hon. Friend the Member for Tiverton and Honiton (Neil Parish) made at the end of his speech is the first salient point that I want to amplify, and that is that of course there is an argument for renewables. It is not an a priori argument, by the way; it has to be legitimised by renewables’ efficiency, their ability to supply productive energy, and by the goods and virtues they displace. Every kind of energy production needs to be measured against those kind of criteria, as does every specific proposal.

There is a case for renewables in an energy mix—an energy mix that allows us to deal with our environmental footprint, as it is known in the modern idiom; that can guarantee steady supply; and that provides the flexibility necessary to ensure that we can deal with the peaks and troughs of demand. But renewables should be measured by their cost effectiveness, too. The point made by the hon. Member for North Antrim (Ian Paisley) about the cost-effectiveness of solar was one that I identified when I was energy Minister, before my right hon. Friend the Member for West Suffolk (Matt Hancock) did the job.

It is critical that energy supply be placed as close as possible to areas of demand. It is absolutely right that we should populate industrial, commercial and domestic buildings with solar panels long before we consider putting them in fields, which are remote from demand and entail all the transmission costs I mentioned.

My second point is about food security, which I mentioned at the outset of the debate and has been raised several times since. It is vital that we protect grade 1 and 2 agricultural land, such as the land in Lincolnshire that is now being suggested for these very large-scale solar parks. They are not being suggested for some rocky outcrop; it is proposed that they be placed on the very land that can grow the food to guarantee the food security that so many in this House have called for. The Minister needs to make it absolutely clear, again, that the Government will not tolerate that, as we move into a future in which we protect our economy to the greatest degree possible, in terms of both food supply and energy provision—as I have always wanted us to do. We are moving happily into the post-liberal age for which I have clamoured so long.

I have also clamoured for the protection of our green and pleasant land—indeed, for our green and pleasant land to become a new Jerusalem, one might say. A Conservative Government should understand the aesthetic argument associated with solar farms—and wind turbines, too, by the way. It is critical that we preserve the character of settlements, and that we believe in the sense of place that helps to deliver our sense of worth and identity. Again, a truly Conservative Government—and I know that the Minister is truly Conservative, so I have high expectations of him—would do just that.

In summary, it is right that we consider renewables as part of the energy mix, but not on any terms or at any cost. I congratulate my hon. Friend the Member for Bassetlaw (Brendan Clarke-Smith) on being such an outstanding servant of the people of his constituency; I am proud to have contributed to a debate sponsored by him. I look forward to the Minister’s response with eager —one might say gleeful—anticipation.

[Sir Charles Walker (in the Chair)]

Last but not at all least, Greg Smith.

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[Dr Whitehead]

The hon. Member is quite right. Any form of renewable power—indeed, any form of power—ought to be based on extensive community consultation and the community being on board with the idea of that particular power source coming to their area. Hon. Members have raised a number of issues about agricultural land and its quality, the visual aspects of particular solar farms, and various other things, which need to be discussed in great detail at the local level by communities faced with these proposals.

Solar farms, and particularly the West Burton solar farm, which was the subject of the concerns raised by the hon. Member for Bassetlaw, actually have quite a good grid connection. That solar farm would potentially be based around the West Burton A power station, which as I am sure the hon. Member will be aware is going offline in 2022, as is the Cottam power station just down the road. However, if we had had a discussion when someone decided to build the West Burton A power station and the Cottam power station in the middle of the countryside—which is where they are—a number of years ago, we probably would have had exactly this sort of debate in the Chamber.

That underlines the fact that, although we are transferring what we do as far as power stations and power are concerned, the issue remains just the same: where we put those power stations and renewables into operation, not whether we put them into operation. It is imperative that we have this amount of renewable energy across our country for the future. Be it offshore wind or onshore wind, city-based solar or field-based solar—all of those have to be considered as imperative for delivering our renewable power supplies. Solar happens to be the cheapest power available, and it is one of the quickest to introduce if we are thinking about a dash for renewables in the future.

[Sir John Hayes]

The hon. Gentleman and I have been debating these issues for longer than either of us care to remember. I am sure he will acknowledge that against that backdrop—the objective he set out—it is important to measure the environmental cost of renewables. The manufacture, siting and anchoring, for example, of wind turbines bring an environmental payback period. The same applies to solar. We need to test these things on a specific basis against the very criteria he set out.

[Dr Whitehead]

The right hon. Member is absolutely right that we need to test these things and take the environmental benefits as a whole, but these tests have pretty much been carried out, and there is an overwhelming environmental benefit to solar, which is a cheap and reliable power source. By the way, the batteries associated with it that make it more reliable do not need to be sited in the same place as solar farms, so things can be designed in such a way that the environmental disbenefits are not all concentrated in one place.

National Security and Investment Bill

John Hayes Excerpts

2nd reading & 2nd reading: House of Commons
Tuesday 17th November 2020 Commons Chamber

[Greg Clark]

I would say to my hon. Friend that the Bill’s focus on national security is absolutely right. We should have a beady eye on national security, with substantial powers, as my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said, to enforce that. I think the Bill has it right in its focus on national security.

The Committee that examines the Bill will need to consider in detail some of the provisions of the Bill as it is presented on Second Reading. It is essential to provide investors and UK firms with a sense of predictability and confidence, but that can be undermined if the law has administrative consequences that are unintended and not provided for. For example, there are strong reasons to think that there may be a deluge of notifications, as the hon. Member for Dundee East said, when the new unit in the Department is set up, and it must be geared up to handle that right from the outset.

The prospect of five years’ imprisonment for directors and fines of 5% of turnover, as my right hon. Friend the Secretary of State commends, for failure to notify under a mandatory regime within sectors defined as broadly as communications and transport is, in my view, likely to lead to many small transactions being notified under the voluntary regime for peace of mind regarding those very strong sanctions against an inadvertent breach. It is an enormous challenge for the Department to set up a new unit, especially since the current regime—or the previous one, since the powers are live—has dealt with a very small number of transactions each year.

As Secretary of State, I reduced the turnover threshold for review from £70 million to £1 million only two years ago. This Bill contains no de minimis threshold, and I will be interested to see during the passage of the Bill evidence of why a zero de minimis threshold is necessary, especially when the definition of technology assets extends to “ideas, information or techniques”, which is very broad. This could result in a very large number of very small transactions being notified defensively.

Even if businesses are confident that they will not be covered by the mandatory notification requirement, the advantages of voluntary notification and clearance, with its exemption from the five-year look-back, may prove to be very attractive and very important in baking in the approval of a transaction against reversal more than five years in the future. It is clearly the ambition of the right hon. Member for Doncaster North to add further public interest tests. As we approach the general election, it may well be attractive, as a defence against the action of future Governments, for companies to notify even when they do not have to. It is very important that the Department is geared up for that.

Much of the Science and Technology Committee’s work in recent months has been concerned with the nation’s response to the coronavirus. If we can learn one lesson from that—for example, from problems with the test and trace system—it is that, to have public confidence, we need to properly anticipate demand and to set up to meet it from the outset. If that demand is not supplied, public confidence, which is crucial for investment, will be undermined.

[Sir John Hayes (South Holland and The Deepings) (Con)]

Does not the coronavirus provide us with another lesson, which is that Government historically have not been terribly good at assessing risk and modelling the response to it? I say that as a former Minister, like my right hon. Friend. I was always surprised, in all the Departments I served in, at how little time is spent on modelling outcomes of the kind we are now enduring.

[Greg Clark]

My right hon. Friend is right. To look ahead, we need to develop the capabilities to do that, and for a unit in the Department that previously did not have that responsibility—it was with the CMA, advised by others—that is a steep learning curve.

The foundational feature of the UK’s commercial reputation in the world is a place where people and businesses all around the world can be confident in investing. That derives in no small part from a public policy regime that is rational, stable and rigorously and efficiently administered. We should continue to aspire to take a global position of leadership in this area, so I welcome the focus of the Bill and its ambition to bring our arrangements up to date. I look forward to helping ensure that we can be proud of the Bill and see it as a contribution to our continued reputation for having the highest standards of corporate government and investment security in the world.

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[Sir John Hayes (South Holland and The Deepings) (Con)]

This Bill is welcome, necessary, important and, it has to be said, overdue. In making a few remarks about it, I draw the Minister’s attention to the fact that the Chairman of the ISC, the right hon. Member for New Forest East (Dr Lewis), is not able to be with us and sends his apology. I will make a number of points from the Committee on his behalf and that of other Committee members.

The first is that this Bill is stimulated, at least in part, by the ISC report from 2013. That report, “Foreign involvement in the Critical National Infrastructure”, made the case that new legislation was required. The hon. Member for Dundee East (Stewart Hosie) has already made that point emphatically, but the Minister does need to explain what might have happened differently had this legislation been in place seven years earlier, because some of these powers are clearly retrospective but they do not stretch back into the mists of time.

The Bill is important, not least because the Government have acknowledged that the UK faces continued and broad-ranging hostile activity from foreign intelligence agencies, hostile state actors and others. Novel means of undermining UK national security include investments that can be structured to obscure the real actors behind them. This is not a straightforward matter of takeovers that are directly linked to defence or critical national infrastructure; it is subtler than that, as the Bill acknowledges and as the Government have said. I want to dig a little further into that during my extensive, but not tediously so, contribution.

The Bill’s importance is also reflected in the dynamism of the threat that we face, which is metamorphosing, as I implied a moment ago. Those who seek to undermine our national security are becoming increasingly clever at doing so and the Bill will need to exercise all the flexibility that its provisions permit. But it may be that, as well as that, we need to return to these matters time and again. In a recent debate, I emphasised that traditionally legislation coming before this House pertaining to security has been spasmodic—it has been periodic. Legislation has stood the test of time but, as the increasing dynamism of the threats we face obliges Government to think again about means of countering them, it may be that we see more legislation than we have hitherto in this area. I happily give way to my hon. Friend, a fellow member of the ISC

[Bob Stewart (Beckenham) (Con)]

I thank my very good friend for giving way. It seems to me that, if we define national security closely, we will not keep up with the speed at which it changes. So I am against the idea of having a definition of what national security is. Does my right hon. Friend agree?

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[Sir John Hayes]

I do, but the challenge in a democratic polity is ensuring sufficient accountability while maintaining that degree of flexibility. It is all much easier in less democratic countries—I use that term as gingerly and modestly as I can—which are not obliged to legitimise or justify what their Governments do. We are—rightly—so the Government are properly scrutinised and held to account. It is right, as my hon. Friend says, that we maintain enough flexibility to respond to the dynamism that I described. But of course, we need mechanisms in place to ensure that that flexibility does not allow the Government too much scope. That is why—this point was made by my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) and I emphasise it on behalf of the ISC—Committees in this place missioned to do just that need to play an important role. I know that the Government recognise that, and that my right hon. Friend the Member for Wokingham (John Redwood) recognises it.

[John Redwood]

Indeed. This issue—where does security end—is very difficult. If we look at the great wars of the last century, which we do not want to repeat, food supply was absolutely critical and was a great strategic vulnerability of our country.

[Sir John Hayes]

That is true. Vulnerability, of course, is also dynamic. That is why I emphasised, in intervening on my right hon. Friend the Member for Tunbridge Wells (Greg Clark), that the Government need to get better at assessing risk and modelling the response to it. This is what the Bill begins to do. It has been a long time in the making, but I emphasise that it is welcome because it begins to look at appropriate mechanisms for doing that. So it is certainly necessary.

[Mr Kevan Jones]

Does the right hon. Gentleman agree that security and intelligence need to be at the heart of the Bill and that they should drive how we take decisions? That is why being located in BEIS might be a mistake.

[Sir John Hayes]

The right hon. Gentleman made that point in his contribution earlier and it seems to me to be a profound one. In establishing the new processes and the new governance associated with this legislation, it is vital that the interaction with the intelligence services, and all the skills available to the Government to assess risk, is built in to their considerations but also to the process. I am not absolutely convinced that the Bill does that. It may be that there is sufficient flexibility, to take up a point raised in an earlier intervention, to allow the Government to do so, but I hope the Minister, when he sums up the debate, will provide reassurance that the connection between intelligence and risk assessment is as sure as it needs to be. I am grateful to the right hon. Member for North Durham (Mr Jones) for making that point.

[Greg Clark]

When the decision maker is a Minister in the Government, they benefit from the advice of the security services, including the National Security Adviser. That was certainly my experience as Secretary of State. All these decisions draw extensively on the advice of the national security apparatus. I do not think—my hon. Friend the Minister will clarify it when he winds up—there is any intended change to that.

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[Sir John Hayes]

Yes, the Minister needs to explain how the Government’s arrangements for the new investment security remit interface and interact with the national security structures that already exist, such as the investment security group. There needs to be clarity about the process, as I described it a few moments ago.

[Stewart Hosie]

Of course, it is not just about the formal structures, because of the fast-changing nature of the threat and the way in which technology emerges and develops. Perhaps we should have an annual debate in here, where we can think out loud about emerging technologies that may become a threat and, on the other side, those technologies that have become so redundant they are no longer a threat, to avoid them being pre-emptively given to the Government and clogging up the system.

[Sir John Hayes]

That is an excellent suggestion from another member of the Intelligence and Security Committee. My goodness, we are here in force and working as a team, as you can see, Madam Deputy Speaker. It is important that the House considers these matters, as well as the Committees I mentioned which have a particular responsibility for dealing with these things and holding the Government to account.

The point was made earlier that the national interest and national security are not identical. But they are coincidental—they do overlap—as there is a point at which national resilience, or its absence, compromises national security. The Government acknowledge that in the scope of the Bill. They talk about critical national infrastructure, as well as technology sectors of various kinds. By the way, I first looked at this issue, Madam Deputy Speaker—this is not a widely known fact, but I am happy to share it in the privacy of this intimate gathering—as a Cabinet Office Minister, with the former Member for West Dorset, Sir Oliver Letwin. We looked particularly at the threats posed to core infrastructure, such as the energy sector. By the way, that threat is posed not only by hostile state actors, but other players who might choose to disrupt core activities, with extraordinarily damaging consequences for our citizens. The Government do look at those things, but historically I do not think they have done so systematically enough. I know my right hon. Friend the Member for Tunbridge Wells, who has a distinguished record in this area, will have had similar experiences to me when we, in turn, looked at energy as part of our ministerial responsibilities.

China has been mentioned. I do not want to speak about it at great length, but clearly the ISC is currently looking at China and will be considering these very subjects in relation to that inquiry. That will come as no surprise to the House or the Minister.

I said this Bill was necessary, but necessity requires a degree of precision and I have some specific questions that I hope the Minister will deal with, either in summing up or by writing to the ISC if he does not have time to address them today. In looking at a specific case, will the investment security unit be able to consider the cumulative effect of a particular business transaction? In other words, will it take into account whether past acquisitions in that sector, when combined with the case currently under consideration, will result in a cumulative threat to national security? Moreover, will the unit consider acquisitions that might result in an indirect threat, for example, through supply chains or managed service providers? This may well involve very small businesses; sometimes a single expert or a small group of experts will play a vital role, as component parts, in either a technology or an industry that is vital to our national security.

[Bob Seely]

My right hon. Friend is making an excellent point in an excellent speech. He is highlighting the need to understand national security not only as individual events and individual companies, big or small, but as a series of cumulative processes. Those gradual processes, over time, are as important to understand.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Just before the right hon. Gentleman replies, let me give a gentle reminder that we have a lot of speakers still to go and I know the Minister wants to give a full reply at the end.

[Sir John Hayes]

I am terribly grateful, Madam Deputy Speaker. I do not know whether it was the persuasiveness of the case I was making or its imperfection that has encouraged 1,001 people to intervene on me. Perhaps it was the latter, but I will give way no more and move to the concluding part of my oration.

There are questions to be asked about the proposals before us. I touch on one more before I reach my exciting summary. The Bill provides for the Government to apply to use closed material proceedings. My hon. Friend the Member for Isle of Wight (Bob Seely) and the right hon. Member for North Durham made the point about connections to other expertise, both within Government and beyond it, so how will that be impacted, given the closed material proceedings? How will closed hearings be managed effectively? I think the House will want to know the answer to that.

I said that the Bill is welcome, and it is certainly is, because it provides the means by which, for the first time, Government will consider matters of profound concern very much in line with the recommendations of the 2013 report. That report identified:

“The difficulty of balancing economic competitiveness and national security”

and suggested that it had reached a “stalemate”. With this Bill, we have moved on from that stalemate. Given the scrutiny the Bill will enjoy, in the spirit that this kind of legislation normally does, as the whole House will want to get this right, and given the Government’s willingness to listen and to take on board some of the points that have been made today and that will be made in further scrutiny, I have every confidence that we may end up with a very good piece of legislation that is fit for purpose. Edmund Burke said:

“Early and provident fear is the mother of safety.”

Sometimes it is important to be a little fearful in order to be provoked to take necessary action. In taking that action, the Minister will know that the Government have no greater responsibility than to secure the safety of the country they serve and its people.

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[Stephen Kinnock (Aberavon) (Lab)]

It is such a pleasure to follow the hon. Member for Beckenham (Bob Stewart), and I genuinely hope that your naughty finger will not be pointing towards me at any point in my remarks, Madam Deputy Speaker.

We on the Opposition Benches will not oppose the Bill, because it is a step in the right direction. It is good to see the Government finally recognising the need to put national security at the heart of how we deal with foreign investment. However, the Bill fails to address the broader issue of how takeovers and acquisitions should be regulated to promote our broader national and economic interests and, indeed, the interests of British workers and their families across the length and breadth of our country. In that sense, it draws a false distinction between national security and economic security, because it is absolutely clear that the two are intrinsically linked.

In order to properly reflect on the effectiveness of this legislation, we therefore need to go back to first principles and ask ourselves this single basic question: what is the economy actually for? It is only by reaching consensus on that fundamental point that we shall be in a position to assess the extent to which the Bill will make a positive contribution to the lives and livelihoods of our constituents.

The British economy is unbalanced, it is unstable and it is therefore profoundly lacking in resilience. It is too reliant on the financial services sector at the expense of manufacturing—our manufacturing sector has collapsed since the 1970s from 30% of GDP then to just 9% now. It is too London-centric, thus failing to harness the talents of so many people from other areas of our country; it is too inward-looking, with persistent trade deficits; it is too unequal, pushing the proceeds of growth to the wealthiest 1%, and it is too short-sighted, constantly aiming for the fast buck rather than long-term, sustainable prosperity driven by patient capital.

Every piece of legislation that is brought forward by the Department for Business, Energy and Industrial Strategy should be relentlessly focused on fixing those faulty foundations of our economy—those fundamental weaknesses—and every step that the Business Secretary takes should be a step towards an active industrial strategy that is designed to drive a modern manufacturing renaissance. He should be focused on home-grown industry, home-grown investment and home-grown technology. Those critical steps will help to build that sense of purpose and resilience into the UK economy that we are so desperately missing.

The culture of the UK’s corporations is also in urgent need of change. The prevailing business strategies are driven by short-termism, with the delivery of fast buck profits to shareholders taking precedence over all other considerations. Addressing that will require a new deal between shareholders, companies and their workforces, and between the public and private sectors. Far too many of the corporations listed in the FTSE 500 are characterised by a transactional, rootless form of ownership, which militates against the investment in R&D, innovation, skills development, new technology, plant and machinery that is desperately needed if we are to put our economy on to a more balanced and sustainable footing.

The Government’s laissez-faire approach makes a major contribution to this short-termist culture, because it opens the door to acquisitions by foreign companies, resulting in the UK’s having by far the highest number of successful hostile takeover bids of any advanced economy in the world. Time after time since 2010 we have seen our strategic national assets being flogged off to the highest bidder. Let us just look at the case of Arm, a jewel in the crown of the British tech industry, which is in the process of being sold to Nvidia, or Cadbury’s, an iconic British brand, sold to Kraft without any proper consideration of what that would mean for the long-term sustainability of the business.

Moreover, our sovereign capability is profoundly undermined by the fact that much of our critical infrastructure is not in our own hands. In fact, 57 of our critical national infrastructure supply chains depend on China, from our energy suppliers to our airports, our pharmaceuticals and our personal protective equipment. The repercussions of that overexposure have been felt during the pandemic. Our lack of capacity to produce PPE has cost the UK taxpayer an eye-watering amount of money; a breaking story today shows that a Spanish businessman has pocketed £21 million of British taxpayers’ money simply for acting as a broker between the Government and overseas suppliers—a potent symbol of systemic failure.

Let me be clear that many of these so-called private takeovers and infrastructure investments are carried out by companies and investment vehicles that are a front for authoritarian state actors who have wider political and national security agendas and whose values are at odds with our commitment to democracy, liberty and the rule of law.

The crucial point here is that our values should not be for sale.

The most obvious and pressing case, of course, is the Chinese Government, who are relentlessly expanding their influence economically, politically and militarily. We need only recall the case of Imagination Technologies, which was recently the target of a hostile takeover attempt by an investment vehicle with direct links to the Chinese state. Of course, there are also substantial Chinese stakes in Hinkley Point and other sizeable chunks of our critical national infrastructure.

Successive Conservative Governments since 2010 have been naive and complacent in their approach to China, exemplified by David Cameron and George Osborne’s disastrous “golden era” strategy. It is time for this Government, this House and, indeed, the entire country to wake up to the reality of these matters and to come to the realisation that, while we must always seek constructive engagement with China, we must take a clear-sighted, hard-headed approach to defending our national interest and our sovereign capability.

I also take this opportunity to raise another more specific way in which the Government’s lethargic tendencies have proved costly to British business and weakened the economy as a result. The Government have been naive about the deliberate attempts to weaken UK businesses through market distortion by the undermining of competition laws. The most obvious example of that is the deliberate over-production of steel way beyond global demand and the subsequent illegal dumping of that steel on European markets.

The result of those illegal uncompetitive practices combined with Conservative inertia has been the weakening of UK steel companies and the opportunity for foreign investors, many of whom come from countries that are the origin of the dumping in the first place, to buy up our strategically and nationally important asset. Some 80% of China’s steel industry is state owned, and the key point is that the illegal dumping of products from those state-owned industries into European markets is an example of the practices that are undermining the international rules-based order.

That in turn has a damaging and direct impact on our industrial base and on our communities and their families—the workforces that are directly impacted. It is a perfect example of how the global is truly local. We need a level playing field, and this legislation should be about—this is everything that the BEIS Department should be about—developing that level playing field so that our workforce is not competing with one hand tied behind its back against a system that is rigged against it from the word go.

This Bill is a big missed opportunity to strengthen the UK’s wider industrial strategy and for the Government to show that they are committed to building an economy of purpose and resilience. Moreover, it fails to reflect the impact of coronavirus on UK businesses and the increased vulnerability in the face of vulture capitalists and state-backed actors that are waiting to pounce. This legislation only really seeks to protect the UK’s national security and appears to do little to support the UK’s wider national interest, such as the need to protect jobs and support communities in this time of national emergency.

Focusing on the all-too-narrow scope of the Bill, I also have genuine concerns about the process for arriving at a decision on whether to block a takeover. Currently, the plan is that the process sits firmly within BEIS. That is an issue, first, because such a decision would have huge cross-departmental impact, so it would surely be better to create a multi-agency taskforce to rule on key decisions. Such a taskforce would include the Treasury, the Home Office, the Foreign, Commonwealth and Development Office, the intelligence and security services, and the Ministry of Defence. It could follow a similar model to the Committee on Foreign Investment in the United States. All the signs were that BEIS was a cheerleader for the Huawei deal, when it was clearly against our national interest to go ahead with that deal. That does not augur well for its ability to police the effective implementation of the Bill.

Secondly, handing all the decision-making power to the Business Secretary could lead to problems further down the line, should a future incumbent—I am in no way implying that such a fate would befall the current Business Secretary—be influenced by political or commercial interests in this country or overseas.

[Sir John Hayes]

I had not intended to intervene again in the debate, except that I want to emphasise, and perhaps amplify, the point that the hon. Gentleman has just made. The legislation brings us into line with other Five Eyes players—the intelligence community with which we work directly—but he is right to say that the mechanisms that they use are different, in some cases, from the ones employed in the Bill in exactly the way he describes. Will the Minister look at those mechanisms and see what more we can learn from them as the Bill is improved during its passage through the House?

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

As my right hon. Friend the Member for Doncaster North (Edward Miliband) set out very well in opening the debate, we support the Bill. Inward investment is crucial for businesses across the UK and our economy, but it is also crucial that the UK has the powers in place to scrutinise and intervene in business transactions that could have implications for our national security.

In fact, we would have welcomed this Bill a long time ago. It is clear that the Government have failed to keep pace with other countries, including the United States, France and Germany, that have already taken steps to update the legislation in line with evolving security threats. From serious questions about Huawei’s dominant role in the UK’s 5G network, as raised many times by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), to the takeover of Imagination Technologies by Canyon Bridge, it is inarguable that the Government have been slow off the mark on foreign acquisitions and the possible implications for national security.

Right hon. and hon. Members from all sides agreed on that, including, I think, the Chairs of the Business, Energy and Industrial Strategy Committee, the Science and Technology Committee and the Foreign Affairs Committee, and all five—I think it was five—members of the Intelligence and Security Committee who spoke. I thank colleagues from across the House for their contributions and apologise in advance if I cannot do justice to all of them.

This has been an excellent debate, one that I think showed the House at its best; we heard informed and considered speeches and, where there was disagreement, it was reasoned and open. There is strong agreement across the House that new legislation is necessary to combat changing security threats and to balance those considerations against the ambition to ensure that the UK remains an attractive country in which to invest.

Companies in fast-developing fields, from quantum computing to telecommunications to artificial intelligence to cryptography, are no longer just companies; they are strategic assets that are fundamental to our nation’s security. Until now, Ministers have failed to modernise the takeover regime to keep up with this changing landscape, the pace of technological development and what that means for security. Instead, they have continued to operate within a legal framework that, as we have heard, was created almost two decades ago, before Facebook or Twitter were even invented. My hon. Friend the Member for Warrington North (Charlotte Nichols) explained the impact of that uncertainty on the nuclear industry and investment in her constituency.

That is why we strongly welcome the Bill now and agree that it is necessary. It is essential that we get the specific provisions of the Bill right, in order not to deter foreign direct investment while also balancing the need to protect our national security. First, there is the definition of national security, which was raised by many, particularly the hon. Member for Isle of Wight (Bob Seely). The right hon. Member for South Holland and The Depths (Sir John Hayes)—[Interruption.] The Deepings, sorry.

[Sir John Hayes]

As deep as you want!

[Chi Onwurah]

The right hon. Gentleman is always very deep in his responses. He suggested it was deliberately left undefined in the Bill. The sectors that will be subject to mandatory notification are also not defined in the Bill and, we are told, will be set out in secondary legislation. I thank the hon. Member for Bolton North East (Mark Logan) for his provisional mnemonic and wish him well in updating it.

Definitions, and the lack of them, are important because the proposed powers are not limited by size of turnover or share of supply threshold. They could apply to almost every business transaction within the sectors, and the definition of national security therefore must be set out to help provide clarity for businesses and investors, but it is unclear—perhaps the Minister could provide some of that clarity—whether the takeover of the UK artificial intelligence company DeepMind by Google would have been called in on national security grounds under the scope of this Bill.

In Committee, Labour will seek further details on how the retrospective powers to render acquisitions void would be applied and whether an assessment has been made of the economic and legal consequences for businesses and their employees of acquisitions being rendered void after the fact. The hon. Member for Dundee East (Stewart Hosie) highlighted the Government’s capacity, or lack of it, to process the sheer volume of estimated notifications that the Bill will provoke. We need also to look at how businesses, small businesses in particular, will be supported to cope with the new regulations, which may prove difficult to navigate. We will ask also whether an assessment has been made by Government of the impact the changes could have on investment in small businesses—a chilling effect—including university start-ups, particularly those in the 17 key sectors, which was a point made by the hon. Member for The Wrekin (Mark Pritchard).

Labour will also seek assurances about transparency and oversight and how the powers are applied—a worry of the hon. Member for Beckenham (Bob Stewart)—including calling on the Government to explore giving the Intelligence and Security Committee a role in scrutinising the use of powers under this legislation. My right hon. Friend the Member for North Durham (Mr Jones) was right to emphasise the importance of the involvement of and access for the intelligence services.

We hope to work with the Government to ensure that we establish a robust, transparent and fair regime that protects national security, while allowing the UK to continue to enjoy the opportunities that overseas investment affords businesses across our country and economy, but the Bill is also a missed opportunity. It is a missed opportunity to demonstrate what the Government mean by “industrial strategy” and to show that it is more than a slogan. It is a missed opportunity to help UK businesses in key sectors to flourish and grow here in the UK, sustaining and creating jobs—a point on which my hon. Friend the Member for Aberavon (Stephen Kinnock) was particularly eloquent.

Time and again, we see vibrant, growing UK companies sadly lost overseas. While we recognise that foreign acquisition can breathe new life into a company, supporting jobs and growth in the UK, far too often we see UK companies pawned off or stripped for parts. Far too often we see UK companies bought out and wound down to eliminate the competition, with the consequent loss of high-skilled jobs. Nowhere is that more evident than in the technology sector, which must be a key part of any 21st century industrial strategy.

We have lost far too many businesses to Silicon Valley, weakening our technological sovereignty. The takeover of leading UK technological company Arm by the US company Nvidia was announced recently, and while Ministers claim to have scrutinised the deal, they have not been forthcoming with the details. When Arm was previously taken over by SoftBank, legal assurances were extracted about the future of the company’s Cambridge headquarters and the UK workforce. Have Ministers extracted the same legal assurances at this time? Will the Minister come clean today?

The Business Secretary said himself that the UK should be open for business but not for exploitation. However, key companies have been cherry picked by companies in San Jose, with the UK consequently losing out. It is therefore not clear that the current takeover regime is fit for purpose.

The weaknesses in the current regime are about not just national security but industrial strategy. Under the current regime, the Secretary of State has the power to intervene in qualifying businesses on four public interest grounds: media plurality, national security, stability of the UK finance system, and the capability to combat and mitigate the effect on public health emergencies.

[Sir John Hayes]

The coincidence, as I described it, between national interests and national security is profound and is proven. When a company is taken over and technology transfer takes place, it is possible for a nation that is hostile to our interests to gain a sufficient understanding to develop systems that endanger this country, including, in some cases, weapons systems.

[Chi Onwurah]

The right hon. Member is talking to a chartered engineer who strongly believes that our capability in engineering and the kind of key technologies of which he talks is a basis for our national security, and that national security, without some degree of important technological sovereignty, is difficult to wholly achieve. I look forward to debating that in Committee.

It is worth pointing out that the Government’s powers have been used only sporadically in previous interventions, and they are seemingly not underpinned by any real strategy. The hon. Member for East Worthing and Shoreham (Tim Loughton) made a similar point.

Many Conservative Members are vehemently opposed to extending the remit of the Bill to cover industrial strategy, including, but not limited to, the hon. Members for Totnes (Anthony Mangnall), for North West Norfolk (James Wild), for Cities of London and Westminster (Nickie Aiken), for North East Bedfordshire (Richard Fuller), for Wantage (David Johnston), for Rother Valley (Alexander Stafford), for Newcastle-under-Lyme (Aaron Bell) and for South Dorset (Richard Drax). Labour believes, however, that the Government should be able to intervene in the takeover of a critical business on industrial strategy grounds. That power should be paired with defined criteria and transaction thresholds to give businesses and foreign investors clarity and confidence, and to truly make it clear that we are open for business and not exploitation—to coin a phrase.

Why did the Government not bring forward legislation to ensure that technology firms remain in the UK and to end the current ad hoc approach to industrial strategy being pursued by Ministers? That has seen binding commitments often negotiated at the last minute, companies lost, and no clarity as to the rhyme or reason why the Government choose to intervene or not. I urge the Secretary of State and the Minister to continue to approach the Bill in the spirit of collaboration, to address the undefined areas and issues that we have raised, and to shed some light on their long-term industrial strategy, including their plans to keep high-growth technological companies flourishing in the UK.

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

It is a pleasure, as ever, to follow the hon. Member for Newcastle upon Tyne Central (Chi Onwurah). I thank all hon. Members who have spoken in this important debate. We have had upwards of 25 speeches, all of which were thoughtfully delivered. I also thank the shadow Secretary of State, the right hon. Member for Doncaster North (Edward Miliband), for his constructive approach to this important piece of legislation. I will aim to respond to as many points made by hon. Members as possible, but I will, of course, write in response to individual questions as well.

I begin by responding to the points of the right hon. Member for Doncaster North and the hon. Member for Newcastle upon Tyne Central, who both raised the grounds for intervention when it comes to the legislation. The legal texts in the Bill are explicit in their reference to national security rather than public interest or wider economic considerations. The hon. Member for Newcastle upon Tyne Central mentioned the particular deal with DeepMind and Google. If it is deemed that the asset is so important to national security—it does not matter who the acquirer is—the Bill would allow us to intervene and block that acquisition.

I have to be clear to the House today that any action the Secretary of State takes under the proposed regime would be to protect national security and not for wider economic or industrial reasons. I am sure that the right hon. Member for Doncaster North will look forward to the industrial strategy refresh that the Secretary of State is committed to publishing in the first quarter of 2021.

To address the point made by my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), we already have a proportionate public interest power on the statute book, and most recently we have legislated to allow intervention for mitigating the effects of public health emergencies. The right hon. Member for Doncaster North and the hon. Member for Newcastle upon Tyne Central also asked about the engagement with Government. The investment security unit will ensure that clear guidance is available to support all businesses engaging with investment screening from the outset. We have made it clear to the investment community that we are committed to effective engagement with businesses on the regime itself, and to ensuring that they are able to access a dedicated, simple online portal to notify us of any potential transaction. Of course, we note the importance of a full Government approach to investment screening. While the unit will be based in BEIS—this point was made by the right hon. Member for North Durham (Mr Jones) when he talked about the ISC—it will work closely with the security agencies and other Departments with real sector expertise. The chief executive of Make UK, Stephen Phipson has recognised this point, saying: “Technology development moves at fast pace and this Bill will modernise the UK’s approach in a proportionate way, given the Government’s commitment to a quick and streamlined process of evaluation.”

More widely, I am happy to meet any hon. and right hon. Member who has today expressed an interest in the workings of the investment security unit. The right hon. Member for Doncaster North also raised the role of the Intelligence and Security Committee, as many other colleagues have done today, and we will of course work constructively with its members and, indeed, with other Committees across the House. I wish the Chair of the Committee, the right hon. Member for New Forest East (Dr Lewis), well, and I would like to thank the other members of the Committee who spoke today. The contributions from the hon. Member for Dundee East (Stewart Hosie), the right hon. Member for North Durham, my hon. Friend the Member for The Wrekin (Mark Pritchard), my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) and my hon. Friend the Member for Beckenham (Bob Stewart) were typically excellent and well-informed.

The right hon. Member for Doncaster, North, along with the hon. Member for Bristol North West (Darren Jones), also raised the issue of the five-year period for retrospection. We have come to that view because six months would simply be too short, and we have looked at what other countries have done. It would be relatively easy for hostile parties to keep a trigger event quiet for six months and time us out, but that will be substantially more difficult in a five-year period.

[Sir John Hayes]

I am extremely are grateful to the Minister for his comments about the members of the ISC who have contributed to the debate. Given the range of questions posed to him by ISC members, will he commit to write to the Committee formally to pick up those points, so that the Committee has a clear set of answers to the series of questions posed? It would not be fair to expect him to deal with all of them now.

[Nadhim Zahawi]

I can certainly give my right hon. Friend that commitment; I will do that.

My right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), my hon. Friend the Member for Isle of Wight (Bob Seely) and the hon. Member for Oxford West and Abingdon (Layla Moran), who is not in her place, probed on the definition of national security. A number of hon. Members have argued that the definition of national security is too narrow. I would gently point out that the Bill does not seek to define it at all, as some other Members have quite rightly argued, including, very wisely, my hon. Friend the Member for Beckenham. I think that is a real strength of the Bill, not a weakness. It means that the Government have the flexibility to act as risks change over time. The statement of policy that was published last week refers to espionage, disruption and destruction and inappropriate leverage. Those are examples of national security, not the exhaustive content of it. We need to maintain a degree of flexibility in our approach, as my hon. Friends the Members for Wantage (David Johnston) and for Beckenham recognised. I appreciate that these are quite important powers, and of course they are fully justiciable under the Bill. Hon. Members can feel secure knowing that their use, including the application of national security, can be fully tested in closed courts if necessary.

The Chair of the Science and Technology Committee, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), and my hon. Friend the Member for The Wrekin expressed concerns that these reforms will somehow threaten investment in small tech firms. I again remind the House that we estimate that the vast majority of transactions across the economy will not be affected by this legislation, and we do not expect to take action in relation to most of the small number that are notifiable. We will make any interactions with the Government simpler, quicker and slicker by providing clearance to most transactions within 30 days, and often quicker. Notifiable investments will be submitted through a new digital portal. At the spring Budget, the Government committed to increase public spending on R&D to £22 billion, which I think is music to the ears of many innovators in our country.

My right hon. Friend the Member for Tunbridge Wells and my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) made the important point that the Bill does not set out a minimum size of business affected by the regime. As the Secretary of State set out, the threats we face today do not correlate to the size of the parties concerned, as they perhaps once did. This is unfortunately the world we live in. I am glad that we live in a country in which small and medium-sized businesses thrive so mightily and are often at the vanguard of cutting-edge technologies, but it is only right that the Government have flexible powers to intervene when the acquisition of such businesses may pose a risk to our national security.

My hon. Friend the Member for Isle of Wight, the hon. Member for Bristol North West (Darren Jones) and the right hon. Member for North Durham (Mr Jones) raised the issue of supply chains. The covid pandemic has demonstrated the importance of resilience in supply chains to ensure the continued flow of essential items to keep global trade moving. We have focused on ensuring supply chains for goods such as PPE. When we entered the pandemic, only 1% was manufactured in the UK; it is now about 70%. That is why we are looking at what other steps we can take to ensure that we have diverse supply chains in place. We will consider all our global supply chains to avoid shortages in the event of future crises.

My hon. Friend the Member for Tonbridge and Malling, my right hon. Friend the Member for South Holland and The Deepings and the hon. Member for Dundee East also probed the assessment process. We will make any interaction with the Government much simpler, quicker and slicker, and I am very happy to share how we are doing that.

The Chair of the BEIS Committee, the hon. Member for Bristol North West, probed our approach to sectors. It is important for the regime to reflect technological change and keep up with the investment landscape. We welcome views from across the business community on our sector consultation, and officials from across Government are already engaging with the sectors’ experts to ensure that those definitions are tight.

In the time that I have left, I want to tackle the issue of human rights. My hon. Friends the Members for Isle of Wight and for Totnes (Anthony Mangnall), and the hon. Member for Oxford West and Abingdon raised the issue of human rights, particularly in relation to Xinjiang and the Uyghur people. We take our responsibility incredibly seriously and are concerned about gross violations of human rights being perpetrated against the Uyghur Muslims and other minorities in Xinjiang. We have played a leading international role in holding China to account on these abuses and we will continue to do so through the UN and other opportunities that we have. In respect of the risk of UK business complicity in human rights violations, including forced labour, we have urged all UK businesses to conduct due diligence on their supply chains and are taking steps to strengthen supply chain transparency.

In conclusion, we have had an excellent debate today and I again thank right hon. and hon. Members for their contributions. I look forward to further probing the Bill and getting it right together in Committee.

Question put and agreed to.

Bill accordingly read a Second time.

National Security and Investment Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the National Security and Investment Bill:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 15 December 2020.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and up to and including Third Reading

(4) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No.83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(David Duguid.)

Question agreed to.

National Security and Investment Bill (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act arising from the National Security and Investment Bill, it is expedient to authorise:

(1) the payment of sums out of money provided by Parliament of any expenditure incurred under or by virtue of the Act by the Secretary of State, and

(2) the payment of sums into the Consolidated Fund.—(David Duguid.)

Question agreed to.

Budget Resolutions

John Hayes Excerpts

Thursday 12th March 2020 Commons Chamber

[John McDonnell]

To give the Government their due, the Chancellor did announce a £150 million contribution to the IMF, so there is an element of financial involvement and engagement. However, it requires the co-ordination of policy to ensure that those resources are directed effectively and successfully to tackle the very issue that my right hon. Friend raised. I hope that will be a model for the future when other global issues have to be confronted. As in the past—and this has happened under various Governments and political leaders—the UK should now be playing a critical role in mobilising the international bodies we have, in particular the UN, to agree a global response to deal not just with the current wave of this pandemic, but with the possibility of subsequent waves.

[Sir John Hayes (South Holland and The Deepings) (Con)]

The right hon. Gentleman is right about the need for collaboration, and he is also right about needing alacrity and the response to a dynamic set of circumstances requiring leadership. Can the Commonwealth play an active role here? He talked about an international body, and it is of course a body in which we play a pivotal part, and that would very much be in tune with what he has proposed.

[John McDonnell]

I fully concur with the right hon. Gentleman. The various international vehicles that we could mobilise are available to us, and we just need to do it now. It needs to be done at a senior level, in a way that sends out a message of determination across the globe to people and families, but also to the markets. We need to ensure that this medical crisis does not create the long-term recession that some are predicting as a result of its global implications. I will now move on from the coronavirus.

In addition to the coronavirus, we face other emergencies, and we must not lose sight of the two other crises that we face. One is the crisis in our public services—it is a social emergency—with the levels of poverty and inequality in our society. The other is of course the existential threat of climate change. I have to say that yesterday’s Budget failed to address the social emergency. We have discussed it on the Floor of this House before, but this social emergency sees 4.5 million of our children living in poverty, with 70% of those children living in households where an adult is in work. We have—I do not know how else to describe it—a crisis of in-work poverty that perhaps we have not seen for generations in this country.

I have to say that there was nothing in the Budget to relieve the hardships inflicted on our community by universal credit, the bedroom tax and, especially for disabled people, the brutality of the work capability assessments undertaken against them. In fact, the Government’s own table accompanying the Budget shows that the bottom 10% fare the worst as a result of tax decisions made in this Budget and the last spending round, which cannot be right. It cannot be right. It states that the bulk of the benefits are flowing to higher paid households. Yesterday some people were saying that this could have been a Labour Budget, but whoever said that was not looking hard enough at who wins and who loses in it. I believe that not one family will be lifted out of in-work poverty because of yesterday’s announcements. Yesterday we again heard the Government’s aspiration to get the national living wage to two thirds of median earnings, but that is not a real living wage; it is an aspiration for four or five years’ time. Some may also have seen the small print, which says, “if economic conditions allow”.

Worryingly, there is nothing of any substance in the Budget to tackle the long-term crises in our public services. Let us take the justice system, for example. In prisons there has been

“a sharp rise in deaths, violence, self-harm”

and suicides, which can all be

“linked to cuts”.

That is not my statement; it comes from the Institute for Government. The House of Commons Justice Committee has pointed to a £1.2 billion gap in justice funding, so the small sums in this Budget, such as £175 million for prison maintenance, just will not cut it. Not one prison officer will be safer on the landings because of this Budget, yet in some of our prisons, those people put their lives at risk on a daily basis.

On domestic violence, according to Women’s Aid, 10 domestic abuse victims are turned away from women’s refuges every day because of a lack of space. This Budget needed to commit £173 million to ensure that no survivor is turned away. It has not done that, and without that funding, the measures in the Domestic Abuse Bill simply cannot be delivered. Not one women’s refuge can feel assured that it will get the funding it needs from this Budget.

The National Education Union said that class sizes are rising, subjects are being dropped, and inadequate pay is making the education staffing crisis worse, but there will be few teachers from whom the pressure will be lifted as a result of this Budget.

On housing, the sums earmarked for rough sleeping are totally inadequate, and we know that at least £1 billion is needed to reverse cuts in homelessness services. Yesterday, the Chancellor said that he would end homelessness, but we heard that from the Prime Minister who, when he was Mayor of London, said that rough sleeping would be ended in London by the 2012 Olympics. Rough sleeping doubled during the Prime Minister’s second term as Mayor.

It goes on: not one library will be reopened as a result of yesterday’s Budget. Not one youth centre will reopen; not one Sure Start centre.

--- Later in debate ---

[Sir John Hayes (South Holland and The Deepings) (Con)]

Budgets must take account of immediate circumstances, but they must also address the pattern of trends that shape our economy and fashion our society. Given what we know now, few will argue with the Chancellor’s bold action, in an attempt to stabilise an economy rocked with the uncertainty of the coronavirus. His comprehensive, generous and tailored stimulus, totalling £30 billion, will strengthen the safety net that our welfare system needs and bolster our precious health service. Businesses, too, will receive the support they need to get through these difficult times. The instability and uncertainty that fear spawns is bound to create an economic shock, and it is right that the Chancellor has responded to it.

The Chancellor’s commitment to support workers, including the self-employed and those on zero-hours contracts, is welcome and virtuous, and I want to say a bit more about that later. The creation of a hardship fund, coupled with his pledge to refund statutory sick pay for small firms, will enable ordinary businesses to prevail and flourish in the face of this uncertainty. This pragmatic, sensible and ambitious Budget should embolden us, confident that, as he said, he will take whatever steps necessary to guarantee our national interest and the common good.

This is a time, by nature, for leadership and unity, for let there be no doubt that there will be foreign powers who can—and, because they can, will—leverage instability caused by the virus to their own advantage. As the President of the United States has made clear, it is pivotal to examine further the behaviour of the Chinese state—whom the western economies are not only affected by but, to some degree, dependent upon—regarding their transparency throughout this crisis. The Chancellor is right: this Budget provides security and lays the foundations for prosperity in the future.

While it is laudable to be responsive, beyond the immediate circumstances we face, we must address some of the suffocating facts in our society. There is too much societal emphasis in our time on the immediate and the trivial—at worst, the facile and the brutal. In happy contrast, it is good to see a Budget that is holistic, measured, serious and sustainable. First and foremost, it is strategic. One of the problems in democratic polities is that Governments are, by the nature of the five-year terms they serve, often tempted to do things that deliver a short-term payback and thereby neglect those things that are strategic and infrastructural. That cannot be said of this Government and this Budget—rather, the opposite. The Government have taken a long-term strategic view, and that is certainly to be welcomed.

The investment in road and rail is, of course, welcome. It builds on the road investment strategy, which I was happy to launch when I was Minister for Transport. It is vital because the connectivity of our country is the lifeblood of local economies as the way that people get to work and the way they move goods are critical.

It is also important to note that the Chancellor is investing in skills, as the hon. Member for Stretford and Urmston (Kate Green) said, although there are question marks about intermediate level skills. I would simply amplify the remarks she made. There are also issues about the effect of the apprenticeship levy and its unintended consequences. However, the investment in skills, through the extra support for further education, will allow us to build a workforce fit for the future.

A lot is said about capital, but too little is said about human capital. Unless we invest in the human infrastructure necessary to deliver those ambitious plans, they will not work. We need people to engineer, to design, to project manage and to deliver those big infrastructure projects, and further education and skills lie at the heart of all that.

Research and development funding is also welcome. However, I have three words of warning about research and investment for the Financial Secretary, which I know he will address with his usual diligence when he sums up. The first is that risky development is all very well, but what we actually want is bold investment that is mindful of risk. Secondly, we need to avoid the bureaucracy that is often associated with Government funding. Finally, that kind of investment also has to be long term, because the sort of projects that innovate require people to commit to them—and, by the way, to be attracted to the relevant science and innovation—over an extended period. So, long-term funding, funding that is tailored and measured, and funding that is not bound up with bureaucracy all become critical.

Furthermore, we have to address the issue of job insecurity and the character of the employment we are creating. It is really important to grasp that societal solidarity is framed by people having a sense of self-worth that comes from having a sense of purpose. It is not enough just to have jobs; we have to have jobs that are meaningful. We have to believe again in the nobility of labour. We have to understand that people’s wellbeing is in part fuelled by their sense that they are making a difference over the long term by employing their skills in a virtuous purpose. That may sound rather like an emulation of the sentiments of William Morris, but I make no apologies for emulating that great man because I have reservations about the gig economy and some of the job insecurity to which it has given rise.

Finally, let me say a word about globalisation. A few years ago, it was heralded as a great virtue, but now the support we have given for small business could and can be the beginning of a reappraisal of what really matters in the economy. I believe it is the particular and the local—shorter supply chains and facing up to the downsides of globalisation—that lies at the heart of protecting the national interest and delivering the common good. That is precisely what this Budget begins and what the Government should do.

Draft Higher Education (Monetary Penalties and Refusal to Renew an Access and Participation Plan) (England) Regulations 2019

John Hayes Excerpts

Wednesday 8th May 2019 General Committees

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

I beg to move,

That the Committee has considered the draft Higher Education (Monetary Penalties and Refusal to Renew an Access and Participation Plan) (England) Regulations 2019.

It is a pleasure to serve under your chairmanship, Mr Hosie. I welcome the opportunity to debate the draft regulations. Last week, during our debate on the higher education registration fees regulations, I mentioned that we had come a long way since the passage of the Higher Education and Research Act 2017. It is good to see one of the architects of that Act, my predecessor as the Minister, my hon. Friend the Member for Orpington, as a member of the Committee. In the time since HERA gained Royal Assent, the Office for Students has taken shape as the new HE regulator.

Since the formation of the Office for Students, it has registered more than 350 education providers—352 at 26 April, to be precise—to exacting standards. It has also ensured that all registered providers with fee caps at the higher level have comprehensive access and participation plans to improve access and support for students from disadvantaged backgrounds and under-represented groups. All students should have equal opportunities to complete their courses, get a good degree grade and go on to a graduate-level job or postgraduate study. The OfS helps with that.

The OfS includes academic freedom as a core principle of governance for registered providers, and it works in partnership with the Department for Education on the best way to enhance and improve the information given to students about the quality and standard of teaching to justifiably expect. HERA gives the Office for Students the power to create a new single register of higher education providers to be maintained by the OfS. The register is the route for providers to charge fees that attract student loans, to become eligible for grant funding, to offer degrees or, indeed, to call themselves a university.

In return for those considerable benefits, providers must comply with registration conditions relating to, for example, their financial sustainability, quality of provision and student protection. Additional conditions—for example, on access and participation for students from disadvantaged backgrounds—also have to be met by providers on the OfS register.

HERA also gives the OfS the power to apply specific conditions to a particular provider if there is cause for regulatory concern. Those are not specified in the Act, but they can include such measures as imposing improvement plans on providers in certain circumstances, which might involve the imposition of student number controls on an institution or particular course to protect the interests of students.

In the event of any of those measures failing to stop a provider falling short of its registration conditions, to protect the interests of students and the taxpayer, HERA specifically gives the OfS power to suspend a provider and to restrict its activity, or to remove it from the register with a loss of access to any of the benefits of being in the regulated system, such as student support. Section 15 of HERA also gives the OfS the power to impose monetary penalties on providers that fail to comply with their ongoing conditions of registration. Regulations are required to make provision for the amount of the penalty that can be imposed, and may set out the matters to which the OfS must or must not have regard when exercising the power to impose a monetary penalty. These are the regulations that we are debating today.

During the passage of the Act, Members in all parts of the House debated long and hard about the future of higher education. Indeed, HERA was the most amended piece of legislation in this Parliament’s history. Irrespective of the different views of how we finance or regulate higher education, there will always be an imperative to ensure that students get a high-quality experience and positive outcomes from the time and effort that they put into their education.

Adherence to registration conditions is a vital component of our reforms to the regulatory landscape. It is critical to safeguard the interests of students and the quality and reputation of our higher education sector. The power of the OfS to impose this monetary penalty on providers is an important tool that it has at its disposal to enforce registration conditions and encourage compliance. Failure to put the draft regulations in place will mean that the OfS will not have that essential regulatory tool at its disposal at the very point at which it most needs it.

Monetary penalties provide an effective incentive to comply with regulation and act as an enforcement tool. However, they must also be proportionate and fair. There was no statutory obligation to consult on the draft regulations, but during the passage of HERA through Parliament, a commitment was made to consult on the matters that the OfS must have regard to when imposing a monetary penalty. The Department conducted its consultation between December 2017 and March 2018. To reassure the Committee, as these are new regulatory powers, we also took the opportunity to seek views on the maximum monetary penalty. Through that extensive consultation, we have established the fair and balanced approach set out in the regulations.

The consultation process identified some concerns that monetary penalties could take away provider income that might otherwise be used for the benefit of students. The majority of respondents did not support the Department’s initial proposal for the maximum penalty as it was initially set out, but respondents were broadly supportive of the proposed factors, especially the factor relating to impact on students. We have listened. In response, the Government adopted the lower of their options for a maximum penalty amount—2% of qualifying income rather than 5%.

We remain of the view that monetary penalties need to be set at a level that ensures visible and meaningful consequences for providers in breach of ongoing registration conditions without being unduly punitive. The legal restraints that the draft regulations place on the OfS, including the mandatory factors to which it must have regard when setting the penalty, are designed to ensure that it is required to—but can do no more than—take appropriate, reasonable and proportionate action. In doing that, the draft regulations ensure that the interests of students—both those at the provider in question and students more generally—are taken into account.

Let me turn to the other element of the draft regulations, which permit the Office for Students to refuse to renew an access and participation plan. Ensuring that students from disadvantaged backgrounds and underrepresented groups can access and successfully participate in higher education is a priority for this Government. We have asked the OfS to secure greater and faster progress in this area. Access and participation plans are key to secure greater progress. The plans are not just about access to higher education but, importantly, are about support, so that students can successfully participate in their courses, helping to tackle drop-out rates, attain qualifications and progress from higher education.

[Sir John Hayes (South Holland and The Deepings) (Con)]

This instrument speaks of disadvantage and under-representation. Among the challenges faced are those confronted by disabled students and people with disabilities who are seeking to become students. On the Minister’s last point, on continuing support for those students, what results did the consultation provide? What further work might we do to ensure that people with disabilities can play their part and have their place in the sun?

[Chris Skidmore]

A total 54 organisations representing higher education organisations responded to the consultation. On the specifics relating to disabled students, I will be happy to write to my right hon. Friend with a range of views from those organisations during the consultation.

When it comes to support for disabled students, having been a secretary of the all-party parliamentary group for disability, I am keen to ensure that, as a Government and a higher education provider system, we do more to support disabled students. I have a roundtable organised for the Thomas Pocklington Trust on 17 May in Birmingham to talk to visually impaired students. I am keen to ensure that their needs are looked at. We are keen to ensure the disabled student allowance, which we raised for post-graduate study from £10,500 to £20,000 this year. A recent report demonstrated that just over 60% of disabled students found that the increase in support through DSA had allowed them to take up their course. Around 50% of those students felt that they may have dropped out if they had not had financial support.

It is not just about the money but about accommodation, and looking at what we can do—me as a Minister and the OfS—to reflect that in access and participation plans. If my right hon. Friend wishes, I can send him a copy of the Secretary of State’s guidance letter to the OfS, which was published in February or the beginning of March. As Universities Minister, I specifically ensured that the needs of disabled students were, for the first time, mentioned in the Secretary of State’s guidance letter. I will write to my right hon. Friend on the consultation and I am happy to send him that guidance letter, and I reassure him of my commitment to disabled students, to ensure that we do all we can so that more disabled students feel that they have the opportunity to succeed and have access to higher education.

[Sir John Hayes]

I have rarely received such a comprehensive and persuasive response to an intervention. I reassure the Committee that the Minister did not know I was going to make it, which makes it even more impressive.

[Chris Skidmore]

I am humbled by my right hon. Friend’s intervention. I am sorry to detain the Committee by giving a rather lengthy answer, but I thought it was important to do so. Ultimately, the draft regulations and the access and participation plans are about support, so that students can successfully participate in courses, and helping to tackle drop-out rates. Any provider that wants to charge up to the maximum permitted tuition fees to its students must be legally required by HERA to agree a plan with the OfS and then stick to it.

The OfS recently published guidance on the access and participation plans, which can be reviewed annually. There will therefore be an opportunity to update the plans with respect to new groups of students on which we may wish to focus in the future. I am fully aware that under-represented groups of students often present themselves, and we need to ensure that we have the flexibility in the system of access and participation plans to update them going forwards.

If we want to achieve real progress, it is vital that the OfS has strong powers where there are concerns that a provider has breached an access and participation plan—having failed, for example, to deliver on specific commitments laid out in it—or has exceeded the specified limits for course fees. In those circumstances, the OfS could, among other things, refuse to renew a provider’s next access and participation plan for a specified period.

Such refusals are a powerful tool. Without an agreed access and participation plan, a provider cannot charge higher-level fees. That would have a significant financial implication for many providers. More importantly, it would encourage them to stick to the letter of their plans, and ensure that they implement them effectively for the benefit of all students. Given the potential impact of refusing to renew a plan, the regulations ensure that providers can ask for any such decisions made by the OfS to be considered by an independent reviewer. That should give providers additional reassurance about the fairness and transparency of the process.

The regulations ensure that the OfS is consistent in the use of its powers. As such, it will have to take into account broadly the same factors before it decides to refuse to renew a plan as it would if it wanted to impose a monetary penalty—again, going back to the point about transparency in the process, and giving providers the opportunity to engage in dialogue with the OfS before we reach an end point at which action may need to be taken. Importantly, refusing to renew a plan is not the only tool available to the OfS if it is concerned about a provider’s performance on access and participation. Also available to the OfS are the sanctions and interventions that I have discussed, including monetary penalties, suspension of registration and deregistration, to address underperformance and encourage progress.

It is planned that the regulations, if passed today, will come into force on 1 August 2019, when the new Office for Students regulatory framework successfully becomes fully operational. That will permit the OfS from 1 August 2019 to start imposing penalties where it appears to the OfS that there has been a breach of a registration condition. The OfS will publish detailed guidance on its monetary penalties policy and processes before that date. The Government firmly believe that the higher education regulatory system must effectively protect the interests of students in the short, medium and long term—especially the most disadvantaged. The regulations support that.

HERA established the Office for Students, and it is already operational. The regulations enable the use of an important tool that will give the OfS the opportunity to carry out its core task of the effective stewardship of the higher education landscape, so that all providers deliver positive outcomes in the students’ interests. I therefore hope that the Committee agrees that the regulations are ultimately of benefit to students and the sector alike.

[Gordon Marsden (Blackpool South) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Hosie, and to discuss and debate the regulations. The Minister and I may have some sense of déjà vu because we were in this exact room at the exact same time last week. However, this is a case of sliding doors, for those Members who have seen the movie, because the outcome will be different today—we will not oppose the regulations. Having said that, these are important regulations that deserve to be probed properly. I will therefore ask the Minister a number of questions pertaining both to what he has said and to the content and implications of the regulations.

Talking of déjà vu, it is a great pleasure to see—I will not call him my old opponent—my old sparring partner from the Bill, the hon. Member for Orpington, on the Committee. I hope he does not have too many senses of déjà vu, because I will be returning to one or two of the arguments we talked through on that Bill.

The Minister has laid out in considerable technical detail how this process has come about. That is welcome, as is the fact that the Government have listened to some of the elements relating to the operation of the penalty clauses.

On the subject of participation, I absolutely agree with the Minister. Indeed, I will praise my friend, as I can call him in a non-parliamentary position, the right hon. Member for South Holland and The Deepings. It is extremely important that the letter of the regulations embodies the spirit in which access and participation need to go forward, to which I will make a couple of references.

For the moment, I would just ask the Minister two or three questions on the text of the draft regulations. He referred to monetary penalties, a matter to which the OfS has regard. I refer to regulation 4, which mentions having regard to

“any financial or other gain made by the provider”

or “loss avoided”.

It is true that paragraph (g) refers to the impact this is likely to have on students on higher education courses, and on students in general. However, this matter goes beyond the implications for students of a particular refusal or monetary penalty. In my view, which I will come to in relation to another part of the proposals, the measure needs to involve as closely as possible both students and staff at the institutions concerned.

There is a grave danger, as we discussed previously with the Bill, that we talk about the actors as though they are simply the university bodies and the Government or the Government’s new organisations, in this case the OfS. That is not the case. The measures also intimately affect the people who work day to day for those higher education providers and the people who study with them. I am interested to hear the Minister’s comments on that area.

Regulation 5 talks about

“the impact that a decision under section 21(2) of the Act is likely to have on—(i) students or prospective students on higher education courses at the provider”.

It would again be interesting to hear the Minister’s explanation as to how that might be addressed in practice and what discussions there might be between the OfS and the Department on how that matter would be taken forward. The Minister will understand that one of the things I am probing here is what precisely the future relationship between the OfS and the Department will be.

We debated that issue long and hard during the passage of the Bill. Now we have an opportunity, with these statutory instruments, to see how the measures will work in practice. The Minister will be aware, as was the previous Minister, the hon. Member for Orpington, of our concerns that the OfS should not simply be a micromanager implementing minute Government decisions. In cases such as this there is an important argument for discussion.

Those are the main points I would like to raise on the regulations. The only other point I would make relates to the explanatory note that says:

“A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sectors is foreseen.”

I am not sure that I agree with that conclusion. We all hope, of course, that the regulations will be largely honoured in the observance rather than the breach. If a significant provider were to get into trouble and were to be subject to these penalties, I fear it would have a significant impact on the private, voluntary or public sectors.

I am not saying that there absolutely should have been a full impact assessment at this stage, but it seems a slightly cavalier way of looking at it. Perhaps the Minister would give some indication of whether, for instance, this might come as part of the OfS’s annual report to Parliament, maybe a year or so after these regulations have gone through. As I say, I hope we do not have such incidents, but if we do, I hope some account will be taken of their impact in the way I have described.

Those are the specifics of these regulations. On the broader implications, the Minister has talked about consultation, and it is true that there were considerable concerns across the university sector about the size and relevance of any potential fines. I think it is still the case that the sector, whether individual organisations or Universities UK itself, harbours, with good reason, some concerns about how the specifics of these sanctions might be taken forward. I want to probe the Minister about two or three of those.

In particular, UUK has talked about the way in which the OfS will judge higher education institutions that are judged to be of higher risk and that will need additional requirements for access and participation. In a note to me, UUK has said:

“While we agree that the approach by the OfS to access and participation would, theoretically, reduce burden for providers with a low risk of a future breach, it is currently difficult to understand levels of burden in practice without more detail on the risk assessment methodology. UUK would welcome more detailed clarity in the area of risk classification and associated timeframes.”

It may well be that such details exist at some level in the bowels of the Department and that it has not been felt appropriate or necessary to burden the Committee with them today. However, it would be helpful if the Minister were able to indicate whether such issues have been taken forward.

On the positive side, Universities UK and the Opposition welcome the fact that these plans now focus strongly on access and participation, and we support many of the OfS’s wider measures to make progress in this area. We particularly welcome the ability of the OfS, and its new director Chris Millward, to look at the performance of institutions on access and participation over a long period of time—three to four years. However, that has to be balanced by the ability of the OfS to act sharply, and of the Government to support it in that process, if institutions appear to be in a rocky position.

UUK also says that it would welcome

“access to more contextual data to inform universities' access activity”

and

“a suitable basket of indicators of disadvantage”.

Here, again, I wish to pick up on a point made by the right hon. Member for South Holland and The Deepings. He made a specific and important point about disabled students that could be made about other areas, such as potential students from a black and minority ethnic background, service veterans or care leavers. This has not been discussed in detail today, but there are worrying signs that, in some areas, the Government are not necessarily following through on some of the promises they have made to care leavers. I therefore ask the Minister for an assurance that the Department will convey to the OfS the importance of looking at people who come from a care-leaver background; I hope that the OfS would do so anyway.

The issues about access and participation cannot be understood unless there is clarity and assurance about the minimum entry requirement. This obviously depends on what happens with the Augar review. However, there are concerns that a minimum entry requirement based on prior attainment would disproportionately affect young people from the most disadvantaged areas and under-represented groups.

In particular, it would severely disadvantage adult learners wanting to return to higher education because, by definition, in many cases they would not have those formal prior attainments—certainly not in the form that is required. I press the Minister on that issue. The master of Birkbeck College, David Latchman, and various other people have made those points, too. We want to ensure that these groups are not caught out by the unintended consequences for access and participation that might come from this legislation.

[Sir John Hayes]

I do not intend to delay the Committee unduly, Mr Hosie—not that you would allow me to. On that point, the key is the structure and nature of courses. Birkbeck’s success—the hon. Member for Blackpool South knows that I know that place well—is borne from the fact that people study in the evenings, in modular fashion and part time. All those things allow all kinds of learners who would not otherwise engage to do so. It is high time that we revisited the structure and character of how people learn to allow them to engage.

[Gordon Marsden]

I thank the right hon. Gentleman for his observations, with which I absolutely agree. I also agree with the revisiting to which he refers. I have had conversations—I am sure the Minister has had similar conversations—with the Office for Students about the issues around adult students and how we deal with them in the context of standardised access and participation measures. I am not saying that the Government are not considering those things, but it would be useful as we move along to have a bit more detail.

There are a couple of other points in that particular area on which it would also be good to have clarity. For example, it would be useful to have clarity on what might happen regarding fines for providers, as detailed in the regulations, that are subsidiaries of larger organisations, some of which will be based overseas. I do not propose to reopen the debate I had with the hon. Member for Orpington about our concerns on how those processes with new providers might work, but it will be a fact—it is not necessarily damnosa hereditas—that a number of these new providers will be subsidiaries of overseas organisations. It would therefore be helpful if the Minister clarified how they will be dealt with and how the opportunities for evading such fines or instructions might be avoided.

We are talking today about a situation where we have come to the eleventh hour and various pressures have been put on by the OfS and the Department, and the institutions concerned have not budged. It is important that the Department and the OfS, in particular, keep a very close eye on how new providers, particularly those without much of a track record, go forward. That relates to the issue we most want to avoid. It is one of the reasons why we were concerned, and remain concerned, about the proviso that new providers can assume all the advantages of university status, including access to public funding, from day one.

I want to conclude by returning to a couple of points that we raised in the Bill Committee in September 2016. Those points related to how decisions would be made in the OfS. On that occasion, the hon. Member for Orpington and I had a detailed set of exchanges. We would have liked the issues to be resolved in legislation. They were not, but we had a number of assurances from him. However, with all due respect to him, I want to make the points again to the current Minister, because he is responsible for taking such things through.

One of the things we were most concerned about—something that was certainly given in evidence to the Committee by Professor Les Ebdon, the previous director for fair access and participation—was where the ultimate responsibility for decisions lies. That is not stated in the Bill. I said in the Public Bill Committee that

“the ability of the director for fair access and participation to negotiate with institutions...would be seriously compromised if the director did not have the ultimate authority to approve or refuse access and participation plans.”––[Official Report, Higher Education and Research Public Bill Committee, 8 September 2016; c. 132.]

We also pointed out that the way in which the director had operated under the previous structures had led to some useful improved targets at various institutions and an increased level of predicted spend.

I will not return to the debates about whether the Higher Education Funding Council for England did better than the OfS—they are different bodies designed to do different things—but how the functions will be carried out remains an issue. It is crucial that the director for fair access and participation has the independence to challenge higher education institutions robustly, particularly in such areas, so I would welcome any further thoughts or clarifications that the Minister can offer.

Draft Designs and International Trade Marks (Amendment etc.) (EU Exit) Regulations 2019

John Hayes Excerpts

Tuesday 5th March 2019 General Committees

[The Minister for Universities, Science, Research and Innovation (Chris Skidmore)]

I beg to move,

That the Committee has considered the draft Designs and International Trade Marks (Amendment etc.) (EU Exit) Regulations 2019.

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

The framework for protecting intellectual property is a vital part of our industrial strategy. The UK’s strong IP system drives creativity and showcases UK innovation. Leaving the European Union will not change that. We will continue to deliver quality rights-granting services, lead the world in IP enforcement and engage in international IP discussions.

This draft statutory instrument uses powers provided by the European Union (Withdrawal) Act 2018 to ensure that protection continues in the UK for registered and unregistered Community designs, and international trademarks and designs in the event of no deal. It also addresses other deficiencies in UK law that would arise on exit.

Under the EU designs regulation, the shape and appearance of a product can be protected under a registered Community design granted by the EU Intellectual Property Office. That system runs in parallel to our domestic system, so protection in the UK can currently be obtained by registration under either or both of the EU and UK systems.

Shape and appearance can also be protected under the unregistered Community design. That right is established automatically when a design is first shown to the public, and it is particularly valued by design-intensive sectors such as the fashion industry. As with registered design, the UK provides a parallel domestic system. However, the scope of UK unregistered design is different from that of the EU equivalent because protection is afforded only to three-dimensional designs.

In addition to the rights granted by the EU Intellectual Property Office, businesses can obtain EU-wide registered design and trademark protection through an international system administered by the World Intellectual Property Organisation. That system enables business to protect designs and trademarks in multiple territories via a single application, filed in one language. Both the EU and the UK are contracting parties to that system. As with registered EU trademarks and designs, international EU rights are protected through EU regulations, meaning that a failure to act will result in the protections afforded to those rights being lost.

The draft regulations in Committee provide replacement rights for those who own registered EU designs on exit day in the form of a “re-registered” UK design. For those holding unregistered Community design, we will preserve UK protection through the “continuing unregistered” design. The new UK rights will be fully independent of the corresponding EU right. However, they will retain the effective date of the EU design and, in the case of a re-registered design, any other relevant dates filed as part of the original EU application.

The scope of protection for EU unregistered designs is broader than that provided by existing UK unregistered design, so we are introducing a new type of UK right called supplementary unregistered design. By doing so, we will ensure that the full range of design protection provided in the UK before exit day will remain available after we leave the EU. That new right will function alongside existing UK unregistered design.

To ensure continued protection in the UK for international designs that are protected through EU designations under the Hague agreement, we will create comparable re-registered UK designs just as we are doing with registered Community designs. For international trademarks designating the EU, we will create a comparable UK trademark, using an approach similar to that set out in the EU trademarks exit SI, recently approved by both Houses; the Committee in this place was attended by several members of this Committee today.

As with re-registered designs and comparable trademarks created from registered EU rights, the new UK designs and trademarks will be fully independent of the corresponding international rights, but they will inherit their effective dates and be treated as if applied for and registered under UK law.

For those with registered Community design and international EU design and trademark applications that are pending on exit day, we will allow corresponding UK applications filed after exit day to claim the EU right’s earlier filing and priority date. To do so, an application must be submitted to the UK Intellectual Property Office within nine months of exit day.

The draft regulations also set out provisions to accommodate other particulars of EU and international design and trademark protection, including deferment of design publication and the use of subsequent designations to create multiple EU protections under a single international registration. The new UK rights can be challenged, assigned, licensed and renewed, so the instrument also sets out how such procedures will be accommodated. The IPO provided an outline of the changes through technical notices published last year, and it will provide full business guidance once the instrument has been made.

[Sir John Hayes (South Holland and The Deepings) (Con)]

On pending applications, people have proceeded using the existing system and will reapply to the new system. Can the Minister assure us that there will be no delay there? If people have had an application in for some time, that could affect their business. Can the Minister send out a clear signal from the Government that those people will not be adversely affected?

[Chris Skidmore]

I can absolutely give that assurance. I have full confidence in the IPO, in both London and Newport. I have visited the office to see its ongoing work in ensuring that the registration process is clear and consistent. When it comes to registered Community designs, it is important that the information is there—with many other issues, there is a lack of data—and that there is a simple transfer across. I am confident that that will minimise the impact on businesses; in fact, it will give them greater flexibility by providing that nine-month window for registration in the new UK-wide system.

Draft Package Travel And Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018

John Hayes Excerpts

Tuesday 4th December 2018 General Committees

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

I beg to move,

That the Committee has considered the draft Package Travel and Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018.

It is a pleasure to serve under your chairmanship, Mr Hosie. The draft regulations, which were laid before the House on 29 October, will be made under the powers conferred by the European Union (Withdrawal) Act 2018. They form part of the wider programme of work to adjust our legislative framework in readiness for leaving the European Union.

If a withdrawal agreement is reached between the UK and the EU, the implementation date of this draft statutory instrument could be changed by any Bill that the Government introduce to implement the withdrawal agreement in UK law. However, it is sensible to prepare for all scenarios, and that is what we are doing by bringing this instrument before the Committee today.

The Package Travel and Linked Travel Arrangements Regulations 2018 came into force in the UK on 1 July this year. They implemented the European Union’s 2015 package travel directive, and expanded the definition of “package” to ensure that it encompasses modern methods of purchasing package holidays, online in particular. They also created the new concept of linked travel arrangements, which are looser combinations of travel services, and introduced limited protection for consumers who purchase them.

The 2018 regulations require the provision of information to travellers, so that they have clear information about their package holiday or linked travel arrangements and their statutory rights. They also require that organisers put in place adequate insolvency protection to cover the refund of payments made by passengers and, if necessary, their repatriation.

If approved, the draft instrument will make amendments to deal with deficiencies that arise from a possible UK withdrawal from the EU on a no-deal basis. The 2018 regulations implemented the mutual recognition requirement of the EU directive. That requires member states to recognise the insolvency protection put in place by traders under the law of the member state in which they are established. In consequence, the 2018 regulations exempt traders established in other member states from having to comply with UK insolvency protection rules. Upon EU exit, the UK will become a third country, and so will no longer benefit from the mutual recognition provisions of the directive. In consequence, member states will no longer recognise the UK’s insolvency protection under the 2018 regulations.

The draft instrument will remove the exemption that allows European economic area traders to sell in the UK as long as they meet the insolvency protection of the member state in which they are established. If they sell or offer for sale package holidays or linked travel arrangements in the UK, they will be required to comply with UK insolvency protection rules on the same basis as UK traders—and, indeed, traders established anywhere else in the world. That change is necessary, first, to ensure that UK travellers are fully protected by the 2018 regulations if they purchase a package from EU traders that choose to trade within the UK market; and, secondly, to ensure fairness for UK-based traders. EU-based competitors should not have the advantage of an exemption that is no longer reciprocal.

The 2018 regulations also required member states to establish central contact points, the main purpose of which is to facilitate information sharing between member states in relation to insolvency protection. The Civil Aviation Authority is the lead central contact point in the UK. Should the UK leave the EU without a deal, the role of the central contact point would become redundant. The draft instrument will revoke the function of the central contact point to reflect that. It does not affect the Civil Aviation Authority’s other enforcement functions in relation to the 2018 regulations.

The draft instrument will also change the obligations on UK retailers that sell packages put together by a non-UK organiser. Regulation 27 of the 2018 regulations requires UK-established traders selling a package put together by an organiser outside the European economic area to be responsible for the performance of the package. They must meet the insolvency protection obligations of the 2018 regulations, unless they can provide evidence that the organiser complies with those requirements. The draft instrument changes regulation 27, so that this responsibility is placed on UK-established retailers when selling a package put together by any organiser established outside the UK, including organisers established in the EEA. This change is important to ensure that UK travellers purchasing packages combined by EEA established organisers can continue to be confident that they would be protected by adequate insolvency cover in the event of the organiser’s insolvency.

[Sir John Hayes (South Holland and The Deepings) (Con)]

The Minister may be familiar with the role that I played when I was Transport Minister in doing exactly the sort of work and supporting the kinds of businesses that she is talking about. As she will know from the explanatory notes, one of the principal objectives will be to get those kinds of businesses, voluntary bodies and charities, to understand the changes. She is a competent and extremely diligent Minister, so I know that she will want to find means by which the Government can support that growing understanding. Will she agree to make provisions to get the word out among those kinds of businesses about what the changes mean?

[Kelly Tolhurst]

I thank my right hon. Friend for that point. If the draft statutory instrument is agreed to, and we move into a no-deal situation in which this piece of legislation is required, the Government are committed, as we have always made clear, to ensuring that consumers’ rights are protected. We are and will continue working with the industry, and with consumer representative bodies, to make sure that consumers are aware of what they need to be looking at, and that businesses operating in this area make sure that people are fully aware of the consequences of the draft instrument.

Finally, the draft instrument makes other technical changes to deal with references to EU legislation, for instance replacing references to EU directives with references to the relevant saved domestic legislation. Importantly, the instrument does not otherwise change the 2018 regulations, so that after EU exit, travellers will continue to benefit from all the protections in those regulations. Officials from the Department have undertaken the appropriate assessment of the impacts of the draft instrument. That has shown that there is likely to be a small impact on business in cases where UK businesses have to provide the relevant insolvency insurance.

The draft instrument is a sensible and necessary use of the powers of the European Union (Withdrawal) Act 2018 that will ensure that our consumer law continues to function effectively on exit day. I commend the regulations to the Committee.

--- Later in debate ---

[Chi Onwurah]

Our commitments are to comprehensive investment in our public services and our infrastructure, and to strengthening consumer rights and protections. I will not go through every line of funding in our first Budget as a Labour Government, because I am not in a position to do that. However, I am in a position to say categorically that we would not have indulged in the failed economic policy of austerity, which has cut our public services while also giving us the lowest economic growth within the Organisation for Economic Co-operation and Development, and the second lowest within the European Union. If that is successful economic investment, then I think the right hon. Gentleman has a lot to learn about a successful economic policy.

[Sir John Hayes]

Might I be helpful? I realise that I cannot match the assertiveness of my right hon. Friend the Member for East Devon, but this seems to be less about trading standards than about the way in which people book holidays. When I looked at these matters as a Minister, as I mentioned earlier, it became clear that the regime that has prevailed for some time was based on the fact that most people booked their holiday through a supplier, as a package. Increasingly, people construct their holiday by a variety of means, including through the internet. There is a reasonable point to be made about this being a dynamic sector that requires a moving regulatory environment.

When I challenged the Minister on this, she very helpfully committed—I thought she would—to providing information to all those bodies associated with that highly dynamic part of the market, as the explanatory note implied that we should. I am not putting words into the mouth of the hon. Member for Newcastle upon Tyne Central, but a more telling critique would be about that, rather than taking this more conventional approach around trading standards.

[Chi Onwurah]

I hesitate to disagree with the right hon. Gentleman, who is so well informed in many areas, but as I said in my opening remarks, while it is absolutely true that consumer behaviour has changed in terms of how holidays are booked, that does not mean that the need for protection and for trading standards has reduced. For example, if we look at how crime has moved from the high street to the virtual high street, then some might argue that there was a greater need for trading standards and for protection of consumers. While I take the point that any consumer protection regime needs to reflect consumer behaviours, I do not think that that in any way reduces the need for trading standards bodies to have the proper resources.

[Sir John Hayes]

rose—

[The Chair]

Order. Before the hon. Gentleman makes another intervention, the statutory instrument is very narrow; it is about package travel and linked travel arrangements, not about trading standards. If you stuck to the statutory instrument, I would be very grateful indeed.

[Sir John Hayes]

I am always guided by your wisdom, Mr Hosie. The point is that this is a complex area. The hon. Member for Newcastle upon Tyne Central is right that trading standards matter, but that is not all that matters. The Minister has made it clear that she is determined to make sure that information is provided to the businesses, voluntary organisations and charities that are likely to be affected, in exactly the way that I requested.

[Chi Onwurah]

Thank you for your advice, Mr Hosie. Let me reflect the right hon. Gentleman’s point and ask the Minister specifically what assurance she will make to resource British trading standards adequately to reflect additional workload. Assurances are very well, but it takes resource and funding to make them into reality. What resources will she put behind the information and communication campaign that she has apparently committed to in this debate?

Bombardier

John Hayes Excerpts

Thursday 22nd November 2018 Commons Chamber

[Mr Speaker]

No, no, it is always a pleasure to listen to the Minister’s mellifluous tones, which are equalled only by those of the right hon. Member for South Holland and The Deepings (Mr Hayes).

[Mr John Hayes (South Holland and The Deepings) (Con)]

Political theorists and practitioners from Benjamin Disraeli to Ernie Bevin understood the relationship between the national interest and the common good, but the Government’s procurement policy, and particularly the policies of their agencies, frequently subsumes both those noble things in all kinds of extraneous qualifications, usually under the title “state aid”. The excellent Minister has said that he will work with Bombardier, and the Government in their industrial strategy have committed £4 billion to the aerospace sector. Will the Minister ensure—perhaps he can tell the House now that he will do so—that the procurement policy of the Government and all their agencies will be amended, reformed and in tune with that support and investment?

[Richard Harrington]

As ever, my right hon. Friend is right and as erudite as he always is in explaining the significance of the Government’s procurement role. That is also true for many other sectors in which I am involved, including construction. I think my right hon. Friend was asking me whether state aid policies will change in relation to the procurement of Government contracts and so on. I cannot answer that question, because we will have to see what happens in future, but I can say that my Department is regularly in touch with other Departments that are responsible for procurement, to push continually the advantages of Bombardier and many other companies in the supply chain, in all the areas that we deal with.