UK Internal Market

John Hayes Excerpts

Tuesday 22nd July 2025 Westminster Hall

[Sammy Wilson (East Antrim) (DUP)]

I beg to move,

That this House has considered barriers to trade in the UK internal market.

I am pleased to have been granted this debate. I do not have much luck securing debates in Westminster Hall, but I thought that perhaps nobody else would apply for a debate at the end of the last day before recess. I think I guessed right, so we have a debate on this very important issue.

This debate is about the disruption to the UK internal market. My remarks are not based on the political stance that my party has taken against the Brexit arrangements agreed by the last Government and continued by the present Government; they are based on a report by the Federation of Small Businesses, an independent body interested only in the concerns of its members, that does not look exclusively at Northern Ireland. Indeed, the report is based mostly on responses from businesses in England, Scotland and Wales—only 14% of responses came from businesses in Northern Ireland. The impact on the internal market is a UK-wide concern.

The report found that the Windsor framework is not protecting the market. There are considerable barriers, whether customs paperwork, European Union rules and laws applying in Northern Ireland, physical checks, delays in the delivery of goods, the labelling of goods not for EU use, or business-to-business parcels now being subject to customs procedures. As a result, many businesses have abandoned Northern Ireland. Indeed, the report highlights that 34% of small businesses that previously traded with Northern Ireland have now stopped, saying that the regulation has made it far too expensive to trade with Northern Ireland.

Some of the regulations are ludicrous. One business wrote that some of the requirements are little short of farcical. They have to state that their goods have not been imported from Iraq, even though they were made in Great Britain. Others have been told to fill in forms to make it clear that canes imported for use in road construction are not being used to torture anybody. Businesses find themselves facing that kind of nonsense, and as a result they are abandoning Northern Ireland.

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

I congratulate the right hon. Gentleman on securing this debate. Is not the real problem, as identified by the FSB and articulated by the right hon. Gentleman, that there is an unholy alliance of Eurocrats and bureaucrats, of separatists and globalist corporates, who are acting in a way that is injurious to the interests of small and medium-sized businesses that trade across our United Kingdom?

[Sammy Wilson]

The right hon. Member is absolutely correct. I will talk about some of that bureaucracy later in my speech.

Fifty-eight per cent of businesses have faced significant or moderate difficulties, including rising transport costs, significant disruption to supplies, stock shortfalls, shortages, loss of sales and increased bureaucracy and costs, as well as the drain on their finances because of the payment of taxes and duties that take a long time to be repaid.

Of the companies surveyed, 61% said that they had experienced negative consequences as a result of the Windsor framework. Significantly, despite what the Secretary of State for Northern Ireland would try to tell the House, only 2% said there were any positive benefits. More worryingly, 56% either said that they are “not confident” or only “slightly confident” about what will happen with their trading relations with Northern Ireland, and 29% said that they are likely to have to stop supplying to Northern Ireland in the future. That is on top of those companies that have already stopped.

In fact, one company said that it was now more difficult to trade with Northern Ireland—that is, bring goods from GB into Northern Ireland—than it is to trade with Australia and the USA, which is why it would stop trading with Northern Ireland.

What has been the Government’s response to all this, as it is well known? I am pleased that the FSB has now independently verified what we have all known anecdotally, as constituency representatives. I suspect that the Minister will say, “Oh, but we are doing our best. We have put in support mechanisms. We have the trader support service, we have HMRC guidance.” I hate to tell the Minister that the survey shows that 78% of businesses say the support is either “poor” or “very poor”—in other words, useless. The report says,

“a similarly high proportion found access to the support difficult. Businesses frequently cited confusing or inconsistent guidance. As one NI manufacturer put it, navigating new customs paperwork via the Trader Support Service often feels like a ‘guessing game’.”

It is a joke of a system. The defence is, “We have put in support mechanisms.” Well, they are not working.

The second argument—and we have heard the Secretary of State make it repeatedly—is, “Oh, but you have other benefits. You have access to the dual market. You have the benefits of being able to sell into the EU, which companies in GB cannot do as freely, and to sell into the GB market.” We know now that the GB market is not accessible, and that supplies are not coming through.

As far as the dual market system is concerned, when businesses were surveyed, 88% said that the opportunities were not explained—they did not know what the opportunities were—and 64% said that they did not even understand what the opportunities were. They said that it seemed like the Government were making no effort to promote the great benefit that was meant to be the result of the Windsor framework. I suspect that the reason why the benefit has not been promoted is because, as many of the companies said, it is more in theory than in reality. There is no real benefit.

Of course, the latest argument is, “Well, the new sanitary and phytosanitary agreement with the EU will smooth it all out.” Every time I hear that argument, if I am at home, I look down into Larne harbour from my study window and see that, despite the promises that the SPS agreement will do away with a lot of these checks, there is a border post being built—I can see it clearly from my study window. £140 million is being spent on it, and only last night, the local council was asked to sign a memorandum of association to ensure that it supplies staff for that border post until March 2029.

Even if the SPS agreement were to do that, it covers only a very small part of the trade. All of the customs requirements, duty payments, checks, delays and parcel post will still be affected. EU regulations, affecting many businesses because the EU has different standards, will still apply.

The one thing I hope I do not get from the Minister today is the same complacency, disdain and “I couldn’t care less” attitude that Northern Ireland experiences from our Secretary of State, whose attitude has been little short of disgraceful. Pontius Pilate-like, he has washed his hands of it all. If anything, he acts more like an EU emissary to Northern Ireland than a Secretary of State for Northern Ireland. I can see that you are getting a bit uneasy, Dr Huq, but I notified the Secretary of State that I am angry at the way in which he has treated Northern Ireland, and he knew I was going to make these remarks this afternoon. In fact, I think I spelled them out to him.

Let us look at some of the Secretary of State’s comments. When my hon. Friend the Member for Upper Bann (Carla Lockhart) recently raised a statistic from the FSB survey in the House, his attitude was, “Well, if some of the businesses can trade with Northern Ireland, why can’t the rest of them? It is up to them to decide where they want to trade and where they don’t.” When someone who is meant to be standing up and fighting for Northern Ireland takes that kind of attitude, I despair about whether this issue is being taken seriously.

In a recent letter to me, the Secretary of State indicated that, as far as he is concerned, the main thing is to ensure that we “faithfully” pursue the Windsor framework because the EU is getting angry that some of the regulations may not be fully implemented. Here we have damaging regulations for Northern Ireland, and the Secretary of State’s response is, “Well, I have to stand up for the EU. Northern Ireland businesses? Let them paddle their own canoe.”

I know that others wish to speak, and I am pleased that so many have stayed on the last day. I do not want them to miss out, so this is the last thing. What do we need? I could go through many of the options that we have proposed and that the Government have dismissed, but I ask the Minister for one simple thing. All the paperwork, all the regulations, all the delays and all the checks are founded on one thing: that goods entering Northern Ireland from GB are regarded as at risk of going into the Irish Republic, contaminating its economy in some way and breaking EU rules.

Custard, the stuff we heat and pour over apple tarts or put into trifles, was deemed to be a dairy product, but it was not required to be labelled until phase 3 of the labelling requirements. However, the EU decided that perhaps custard should have been regarded as a product at risk, so it changed the labelling requirements. One of the big supermarkets had custard in its supply chain, and the EU bureaucrats decided that this custard must be hunted down—“We cannot have it coming into Northern Ireland and finding its way into the Irish Republic.” Lorries with mixed loads were stopped and searched. The offending custard was hunted down, discovered and exposed. That delayed the lorries, which did not reach the depot in time, so their goods could not be broken down and distributed to the various shops. It affected the supply chain and the supply of shops in Northern Ireland.

Here is the irony: the supermarket did not have any shops in the Irish Republic. The offending custard was okay one day, but not the next, because it did not have a label that it did not require the previous day. There was no evidence that anybody was dying from eating this custard in Northern Ireland or anywhere else, but the supply chains for a major supermarket in Northern Ireland were disrupted.

I am sure many Members could tell story after story about how the regulations are having an effect. What is it all down to? It is down to goods presenting a “risk”. What risk? We do not know. A simple change could be made so that goods are deemed at risk only once they leave Northern Ireland and go into the Irish Republic or elsewhere. The Road Haulage Association and Federation of Small Businesses have asked for that. It is not beyond the wit of man to ensure that happens. After all, all the companies that are selling these goods have VAT returns. HMRC trusts those companies at the end of the year to declare how much VAT they owe. If the goods have gone out of Northern Ireland, they do not have to pay VAT. Why can that VAT return not be used to follow the goods to where they eventually go? There is much disruption to trade, though not to all of it.

I am sure Members will talk about the inequity and constitutional implications of EU law applying to Northern Ireland, but one simple change can be made. Rather than kowtow to the EU, or be afraid that the reset with the EU might be disturbed if we ask for something simple, I ask the Minister to consider that one simple change, which many businesses have said would restore their ability to trade freely within our own market, selling goods that are not at risk. It would be of immense help to the small businesses that are the backbone of our economy.

--- Later in debate ---

[Andrew Griffith (Arundel and South Downs) (Con)]

Thank you, Dr Huq. It is a pleasure to speak under your chairmanship. I congratulate the right hon. Member for East Antrim (Sammy Wilson) on securing this last debate before the summer recess on this important topic. The UK’s internal market, forged over centuries through the Acts of Union, is the bedrock of economic prosperity. We are indeed stronger together, and the United Kingdom Internal Market Act 2020 has provided what should be a robust foundation for economic cohesion and non-discrimination.

I accept that challenges remain, and we have heard about them today. I thought the example—the illustration —of custard, visual metaphor though that was, was important. I regret the imperfections of the Windsor framework, and this Government with their reset have the potential to use their equities to significantly improve some of those arrangements in the UK internal market, should they so wish. The right hon. Member for East Antrim drew attention to the work done by the excellent Federation of Small Businesses, highlighting the very real problems and concerns.

[Sir John Hayes]

My hon. Friend, with typical generosity, says that we are all trying to get this right. I established that that is largely true, with the possible exception of the EU itself. There are those in the European Union, stung by the wise decision of the British people to leave that awful body, who have never really accepted that decision and have made life as difficult as possible—both for this country and for the businesses described by right hon. and hon. Members in this debate.

[Andrew Griffith]

As ever, drawing on his extensive experience in this place, my right hon. Friend makes exactly the right point. We do not have time to revisit all the imperfections of the Brexit deal imposed upon us by a recalcitrant European Union, which turned out to be a very false friend.

We should hear from the Minister, and I want to afford him as much time as possible. But my party will of course support anything that removes frictions and reunites the territorial integrity of the whole United Kingdom. We want every small business to benefit from that frictionless relationship with the rest of the United Kingdom. Our Union depends on that single indivisible approach and the sort of practical solutions that we heard about, such as trusted trader schemes and utilising HMRC’s already extensive data collection and reporting framework to improve the operation of our internal market. That should be something that every Member of this House seeks to do. The Government have given up things like British fishing for 12 years; I hope that we continue to see in return some real progress on this issue.

I thank all hon. Members, and congratulate the right hon. Member for East Antrim on highlighting the issue. With your permission, Dr Huq, I will give the rest of the available time to the Minister.

Corporate Businesses and Franchisees: Regulatory Environment

John Hayes Excerpts

Wednesday 2nd July 2025 Commons Chamber

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

Speaking long before I was born, G. K. Chesterton said that

“big business…is now organized like an army. It is, as some would say…militarism…without the military virtues.”

Heaven knows what he would say if he was alive now, as global corporations have such influence on all our lives.

Yet it is the small and medium-sized businesses in my Lincolnshire constituency and in constituencies across this country that are the backbone of our economy. They also provide the particularities—the colour and shape —of the places that each of us calls home. Those small and medium-sized businesses reinvest in the communities of which they are a part and provide opportunities for local people. We all know them from our daily experience as customers, but we also know them from the representations they make to us as Members of Parliament. Today, I speak in the interests of those small businesses, those entrepreneurs, those people who devote so much of their time, skill and energy for the common good—for the national interest and the common good drive all that I do in this place.

Small and medium-sized businesses employing up to 250 people make up about 99% of businesses, but just think of the influence and effect of the other 1%. When SMEs are accused of wrongdoing or even of breaking the law, they often have little in the way of resources to defend themselves, so they are at the mercy of powerful regulators and the caprice of giant competitors. In contrast, the big multinational companies, which have come to dominate too much of our economy, have armies of compliance officers, lawyers and spin doctors to bat away legitimate concerns.

The fear that many of us in this Chamber have about two-tier justice runs parallel to our certainty that there is a two-tier economy. Faceless, heartless multinational firms often have little in the way of roots here, and many tech firms use such rootlessness to justify decisions to pay little, if any, tax. Corporate behemoths have grown ever larger, ever more dominant in their sectors, ever more detached from their customers, and ever more determined to bend rules and evade justice. In recent years, we have seen profiteering by, for example, the major supermarkets, which very often give their suppliers—primary producers such as the farmers and growers in my constituency—a raw deal. We have seen them distort the food chain, yet take advantage of the disruption brought by the pandemic and the war in Ukraine.

Indeed, the pandemic exacerbated the power of greedy globalists. Following research on 17,000 big firms, the trade union Unite has highlighted that average profit margins have soared by 30% compared with the pre-pandemic period. In 2022, the profits of the 350 largest companies in Britain increased by about 89% compared with pre-pandemic levels. Contrast that if you will, Madam Deputy Speaker, with the plight of smaller businesses, which face ever greater costs and ever more unfair competition from their giant competitors.

What of the claims of the enthusiastic globalists that the world would be a better place as a result of their activities? Do you remember the globalists—those people who were addicted to modernity and change? Who has really benefited? In an economy in which standards of living are falling, productivity has stalled and the state grows ever bigger in the face of rising worklessness, it seems to me that the only beneficiaries of globalisation are a few people at the top of those corporate businesses. We need not monopolies, but a multiplicity of businesses, such as start-up firms, local firms, and firms that innovate and engage in new activities in the economy, rather than cement existing practices. Let us give those businesses what they need, which is greater freedom, while the big corporate monoliths need to be regulated so that they do not exploit the marketplace they dominate.

Think for a moment of the banks. I have a vision of banking—I hope you might too, Madam Deputy Speaker—rooted in a sort of “Dad’s Army” approach: a Captain Mainwaring figure committed to his community, in close touch with his customers and caring about the businesses they run. That was not just a fiction in my younger years. I well remember going to a bank as a young man and asking if I could borrow £500 to buy an old car—I was a student at the time. The manager, a bit like Captain Mainwaring in character, invited me in, gave me a glass of sherry, interrogated me for half an hour and eventually said, “Yes, I think we can probably lend you the £500.” Imagine that scene now. At best, you would have an online connection with someone remotely situated—

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

You wouldn’t get a car for 500 quid though, John!

[Sir John Hayes]

I think my right hon. Friend is referring to the £500 he still owes me from the days when I used to work for him.

The point is that nowadays the connection between customers and suppliers has become at best detached and at worst remote. As I say, now you would have a conversation with some remotely situated person who knows nothing about you or your circumstances, and probably cares less.

[Sir Iain Duncan Smith]

Will my right hon. Friend give way?

[Sir John Hayes]

I will happily give way. Is it about the £500?

[Sir Iain Duncan Smith]

Yes—without interest. I agree with my right hon. Friend. I also agree about something else, which is that people do not realise that the really big global multinationals, for example Amazon, do not really make their profits on what they sell. They hold your data and that is what they really sell, subsequently. That is where they make their money and their profit. You derive no income from that data, but they make a lot of money off the back of it. To try to break that process down and make things more local, we have to start with what we have all been complicit in, which is the idea of getting something for nothing. It is not for nothing—there is a cost.

--- Later in debate ---

[Sir John Hayes]

My right hon. Friend, as ever, makes an apposite comment. The trading of data by big businesses has become a business in itself, in the way that he sets out. By contrast, we need firms to practise responsibility, not parrot slogans and virtue signal. They concentrate power and wealth with little regard to the community in which they sit, or even the country in which they are situated.

[Jim Shannon (Strangford) (DUP)]

I commend the right hon. Gentleman. He is a friend to us all in this Chamber and we all love him because of the wisdom he brings to it. He is also a good friend to Northern Ireland. I say that because he will be very pleased when he hears about what we are doing in Northern Ireland. The Northern Ireland better regulation strategy requires Departments to undertake and publish a regulatory impact assessment when considering new policy proposals or amendments to existing policy that may impact on businesses and to carry out a microbusiness test to assess the impact on businesses of fewer than five employees. Does he not agree, understanding what we are doing in Northern Ireland, that with increased regulation must come increased co-operation to secure better business, which benefits us all—the very thing he is trying to achieve?

[Sir John Hayes]

As ever, the hon. Gentleman makes an apposite and worthy contribution to our considerations. I simply say this to the Minister. The Government have a lot of power in all kinds of ways. They certainly have the power to regulate the kinds of unfair practices I have begun to set out, but they also have power as a customer. Government procurement has never, under successive Governments, been used as well as it might be to support British businesses, and in particular British small businesses. My challenge to the Minister is to look at that again. Let us look at how the Government, as a huge customer of all kinds of businesses, can support small and medium-sized firms.

Decades of non-intervention, driven by the mistaken belief in the triumph of liberal economics, have resulted in extraordinary numbers of foreign takeovers of British firms. It is also a matter of who owns these corporate giants and overseas companies that own our critical national infrastructure. The Government recently approved the Vodafone-Three merger, and the latter company is owned by a Hong Kong-based conglomerate. I wonder how closely the Competition and Markets Authority looked into the owners and leadership of Three’s parent company, the CK group, and I wonder whether that group has ties with the Chinese state—perhaps the Minister can inform us tonight. This merger must not become yet another corporate bonanza for shareholders at the expense of our national interest and the common good.

I sought this debate in particular following a meeting with a constituent who was previously a Vodafone franchisee, along with others from across the country. I am mindful, Madam Deputy Speaker, of a legal case involving those Vodafone franchisees; I have taken advice from the Table Office and amended my speech heavily as a result. However, I do think it is important to set out some of the context, in the broad terms that I have described, which relates to the behaviour of large companies that adopt the franchise model.

[Navendu Mishra (Stockport) (Lab)]

I congratulate the right hon. Gentleman on securing this debate. I refer to my entry in the Register of Members’ Financial Interests, in particular my trade union membership. I wonder whether he shares my view that the merger between Vodafone and Three will have real consequences for both pricing for customers and job losses in Britain.

[Sir John Hayes]

That is certainly the risk. I think mergers more generally need to be looked at closely. It is why we have the Competition and Markets Authority, and why these things are indeed considered in the terms I have described.

More recently, of course, as my right hon. Friend the Member for New Forest East (Sir Julian Lewis) will know—as a former member of the Intelligence and Security Committee, of which I remain a member—the Government introduced other legislation in respect of security, large businesses, mergers and all kinds of similar and related matters. It is important to gauge the national interest in all kinds of ways when one considers business activity.

[Richard Tice (Boston and Skegness) (Reform)]

rose—

[Sir John Hayes]

However, I will say no more about that, as it would be digressing from my main theme, and I can see an eagerness to intervene—I give way to my neighbour.

[Richard Tice]

I am most grateful to the right hon. Gentleman for giving way. He makes a powerful case about the differences between small businesses, entrepreneurs, franchisees and the big corporates. Does he share my concern that franchisees suffer the risk of what is essentially corporate bullying from the mega-companies—the likes, potentially, of Vodafone—and that they do not have any form of umbrella regulatory comfort? Entities such as the British Franchise Association may sound effective, but they are actually toothless in the face of such corporate bullying.

[Sir John Hayes]

I have worked closely with the hon. Gentleman—as ever, he and I are on the same page here. He is absolutely right that franchising can be used as a method to exaggerate the power of the business at the heart of the franchise and to weaken the position of franchisees. My assertion is that that is common and is particular in the case of Vodafone.

[Several hon. Members rose—]

[Sir John Hayes]

I will give way to the hon. Member for North Durham (Luke Akehurst) and then to my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith).

[Luke Akehurst (North Durham) (Lab)]

I congratulate the right hon. Gentleman on securing this important Adjournment debate. Like him, I have met Vodafone franchisees in my constituency, particularly the Chester-Le-Street former franchise holder, whom I met again today. I am grateful to the right hon. Gentleman for setting out the legal advice he has received on the ongoing case, and I will therefore be careful about what I say. I think there are major corporates that treat their franchisees very badly; they sign them up on one set of terms—one rate card—and then change the goalposts, and then, when people dissent and complain about that, they find their franchises withdrawn and lose their investment, after they have put a great deal into that corporate giant. I think this is a matter that will in the near future require ministerial attention. I thank the right hon. Gentleman very much for bringing this to the House’s attention.

[Sir John Hayes]

I give way to my right hon. Friend the Member for Chingford and Woodford Green.

[Sir Iain Duncan Smith]

I need not detain my right hon. Friend for long, but I very much supported the unions’ position on this, as I thought this was wrong at the time. Without straying into the issues of the bids, we should consider organisations such as CK from China. It now has links with and control over UK Power Networks, Northumbrian Water, Wales and West Utilities, and Eversholt Rail. The network it has now is intriguing, which is hugely around the power and communications networks. All of those are now falling into the hands of conglomerates that have nothing to do with the UK, but that are linked to Governments of a different country. This is the big problem we face: it is not that we do not like big businesses; it is just that so often now they operate from outside our legal empowerment.

[Sir John Hayes]

I am grateful to my right hon. Friend, who takes a great interest in these matters, and that is precisely why I posed the earlier question to the Minister about how closely he and others had looked at that merger. I will say no more about it than that, but it does seem to me to be a legitimate question to ask: were those things considered in this particular case, and how are they generally considered? If my right hon. Friend is right that there are threats that result from this, under existing legislation and regulation it is perfectly possible for the Government to become involved in these kinds of commercial affairs.

[Navendu Mishra]

Will the right hon. Gentleman give way?

[Sir John Hayes]

I will give way once more and then will make a little more progress.

[Navendu Mishra]

May I put on record that I did not use the term “right hon.” in my earlier intervention on the right hon. Gentleman and wish to correct that? Also, the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) made a very important point about bigger businesses that operate outside the UK perhaps in some cases abusing their position. On a lighter note, may I encourage him to join a trade union? I would be happy to supply him with a membership form.

[Sir John Hayes]

I am again grateful to the hon. Gentleman. It seems to me that there is a mood across the House tonight that more must be done. This Minister, as an experienced Member of the House, will have gathered that that mood could easily, from this small beginning, become a crescendo that might endanger the very safety of his office and the Government as a whole, so let us hope that this is the beginning of a journey, for both the Government and the Minister, towards a regime that counters the very things that have been described by Members across the House.

[Matt Rodda (Reading Central) (Lab)]

Will the right hon. Gentleman give way?

[Sir John Hayes]

Because I am a long-standing friend of the hon. Gentleman, I will certainly give way to him, but then I must make progress.

[Matt Rodda]

I am very grateful to the right hon. Gentleman, who does the House a favour in his work tonight. I should first declare an interest, as I have a close relative who works for the Competition and Markets Authority. I do not wish to comment on competition and mergers, though I would like to ask the right hon. Gentleman to join me in supporting the Government’s work. I believe that Ministers are shortly to do some further work to offer greater support to small businesses in terms of opening up Government procurement and in other matters. Like the right hon. Gentleman, in my own constituency I am a keen supporter of small business, and my own small business competition has provided a great deal of recognition for businesses, whether local florists, those repairing small musical instruments, people providing other services, and indeed many other forms of small business. So I do want to commend the broad thrust of the right hon. Gentleman’s work tonight, although I do not want to comment on the CMA.

[Sir John Hayes]

I am most grateful for the hon. Gentleman’s support.

During the pandemic, the UK Government introduced the business rates relief package, which allowed businesses with commercial leases to claim relief on their business rates. That was designed to help firms with physical stores compensate for lost footfall during the lockdowns, and it was an essential lifeline to those smaller businesses. This automatically applied to businesses through local councils. From 11 March 2020 to June 2021 the relief was 100% with no cash cap, and ratepayers with more than one property were entitled to relief for each eligible property.

Franchisees were eligible to receive this relief, and it would have been automatically applied to stores operated by companies such as Vodafone and not through the franchise programme. It is worth noting that some corporations that benefited from that scheme, such as Tesco—although I hold no candle for Tesco generally—have since returned the money to the Government. The question is how Vodafone used that money: did it achieve its original purpose—I would be interested to hear the Minister’s answer to that question—or was it redirected in some way that was out of tune with the Government’s intention and the proper purpose? It is worth noting that that was available not only to Vodafone, but to all those organisations that had franchises. I wonder how other organisations handled the matter and how that compares with the circumstances surrounding Vodafone.

The important thing to consider as we debate these matters is that the franchisees are small business owners with families—this was important to them. Business rates relief was of huge significance and made a meaningful difference to people, as intended by the Chancellor at the time, my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak). The Government’s stated purpose for covid-19 business relief was to assist small businesses to carry on trading at a financially difficult time when profits in bricks and mortar shops were much reduced. The question is, was that the reality? The fact that the Government later introduced caps on the relief indicates that it was intended to help small businesses—those to whom £100,000 makes a great difference—not to subsidise large globalist corporations with hundreds of stores and access to other types of relief.

What is the Minister’s assessment of how that kind of funding was used during the covid pandemic? Too often, franchisees’ payments from those who franchise them are cut drastically and with little or no explanation. Contracts are often terminated with just a few days’ notice and stores repossessed with little notice, often without valid reasons for doing so, leaving debts and loans to be repaid with no income. Franchisees claim that they faced fines and clawbacks that were grossly disproportionate to the errors in question. In some cases, the errors that led to fines were the results of failures in major corporation systems, yet the financial burden was often unfairly placed on franchisees. Communications raising serious concerns, though made, were often unanswered and pressing issues were ignored for long periods of time, leaving franchisees without support or resolution to their problems.

Moreover, it has emerged that whistleblowers had warned a series of senior Vodafone executives that scores of its franchise store owners face financial ruin. What steps are the Government taking to regulate corporate businesses’ relationship with their franchisees? As I say, we are not speaking of powerful businesses with deep legal departments and balance sheets to absorb losses but ordinary people—mothers, fathers, sons and daughters—who saw an opportunity when they became a franchisee to build a meaningful business of their own under the banner of a global household name and to make a difference to their family, their community and the towns in which they are situated. People put their savings, their homes and their reputations on the line because they believe that a franchise agreement with a company such as Vodafone—there are others too—would be safe and secure.

Last month, the Competition and Markets Authority confirmed the merger of Vodafone and Three. Will the Minister confirm that the matter of the problems with franchisees were discussed ahead of that merger being approved? Indeed, more broadly, can such a merger really be said to benefit the British public, given that it is forecast to cost 1,600 UK jobs and that evidence from overseas shows that countries with fewer mobile phone operators tend to charge higher prices to consumers? Will the Minister confirm what steps the Government are taking to investigate allegations of inappropriate use of Government relief during the covid pandemic, specifically in relation to businesses with franchisees? Will the Minister confirm that all allegations of misappropriation of Government relief schemes intended for franchisees should be investigated as part of the inquiry into covid by the covid commissioner? Will the Minister urge banks to show leniency and support to those franchisees facing financial distress, and will he commit to looking afresh at the lack of enforceable regulations governing franchiser conduct?

A key lesson from the Post Office scandal is that we must not allow the sophisticated power of a corporate body, or the impression created by an impressive balance sheet, to persuade us to ignore the voices of less powerful individuals who speak out. Many franchisees have given up stable jobs. Some have taken out personal loans, and some have remortgaged their home. They train staff, open stores, serve customers, and are told by the big business that they are partners; but when the going gets rough, when the commission cuts come with little warning, when franchisees’ performance plummets due to decisions beyond their control, and when stores are repossessed with inadequate notice, they are left out on their own, high and dry. No lifeline, no dialogue—just silence from the corporations that they once trusted. I cannot believe that this Minister does not feel as I do about corporate malpractice—about greedy, soulless, heartless firms that act irresponsibly and hide behind the high wall of their substance.

Governments have a duty not only to promote entrepreneurship and business, but to protect entrepreneurs and ensure that businesses do not take unfair advantage of their staff. We must call time on the era of corporate giants using legal structures not as a framework for partnership, but as a shield for avoidance—for avoiding responsibility and decency.

Brands that trade on their reputation and public trust must be held accountable for the actions that they take that cause real harm. We must move away from a globalist, faceless corporate model that has enriched a few, and towards a different kind of economic order, in which we shorten supply lines, encourage small and medium-sized businesses, and understand that economics must serve a civil purpose. I call that fraternal economics —an economics in which community and economic activity are bound together in a common cause. We can build that kind of economic future, but it requires Government to know when to step forward to support business, and when to step back and not suffocate entrepreneurship. That future is within our grasp, but it will require this Government—perhaps any Government —to think afresh about the power balance between large, faceless businesses, and smaller entrepreneurs. They are ordinary people, like most of us, I guess, who simply want to get on and do the best for their family and their community. I know which side I am on. I am on the side of those people, because I know that they make so much difference in my constituency, and across the whole of our kingdom.

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

In the usual way, I thank the right hon. Member for South Holland and The Deepings (Sir John Hayes) for securing this debate. Having crossed swords with him when our positions were reversed, I approached this debate with particular wariness, not least because he has assembled a very distinguished cross-party group of Members to participate in this debate.

We heard from not only the right hon. Gentleman, but the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), my hon. Friends the Members for Stockport (Navendu Mishra), for North Durham (Luke Akehurst) and for Reading Central (Matt Rodda), and the hon. Member for Boston and Skegness (Richard Tice). Each of them made important points. I very much agreed with the opening remarks of the right hon. Member for South Holland and The Deepings about small and medium-sized businesses being the backbone of our communities. They are important; they are fundamental to the strength of each of our constituencies. The Government are determined to do much more to support our SMEs going forward. That is why, on the point made by my hon. Friend the Member for Reading Central, we will publish a strategy for supporting SMEs.

The right hon. Member for South Holland and The Deepings was right that we as a country should do more to celebrate our entrepreneurs and to champion their interests. They are brave; they are risk takers; they create wealth; and they make all our communities better and richer. We are determined to encourage more people to come forward as entrepreneurs, to take risks and succeed, and to grow businesses. We have already taken a number of measures to support SMEs. The Secretary of State for Business and Trade has already committed to establishing a business growth service inspired by the US Small Business Administration. That is why one of the outcomes of the spending review was a two-thirds increase in the capacity of the British Business Bank. The vast majority of that funding will go to help tackle the considerable challenges that SMEs face in accessing the right forms of financial support.

The right hon. Gentleman rightly raised the issue of access to public procurement for British SMEs. I am sympathetic about the need to open up public procurement to SMEs. Again, we will have more to say on that in the small business strategy, when it is published shortly. Cabinet Office colleagues are very much working in this space, too.

The right hon. Gentleman also rightly raised the matter of the difficulties that small and medium-sized businesses face when legal issues arise. Again, we will have more to say on that in the small business strategy shortly. Towards the end of his remarks, he made a powerful link to an appalling miscarriage of justice: the scandal of how the Post Office treated its sub-postmasters. There are many lessons to learn from that. I hope that he will take confidence from the Government’s determination to do that when he sees the Green Paper on the future of the Post Office, which we are seeking to bring forward. I am sure that the whole House appreciates the work that Sir Wyn Williams is doing to draw conclusions about what went wrong in the scandal, and about what more we need to do to learn the lessons and ensure that nothing like that ever happens again.

[Sir John Hayes]

I thank the hon. Gentleman for the way in which he is responding. There is a close parallel between the way the Post Office is constructed—its business arrangement, and the connection between independent post offices and the centre—and the matters that I described. Will he ensure that his small business strategy includes something on franchising? That is a really important part of getting right our approach to regulation on the relationship between smaller businesses and corporate giants.

[Gareth Thomas]

I have already given a flavour of what might be in the small business strategy. I will leave the right hon. Gentleman to wait a little longer, if I may—he will have to forgive me—before he sees the strategy in full.

Let me come to the substance of the right hon. Gentleman’s concern. He rightly and understandably mentioned the experiences of a number of franchise operators who allege mistreatment and being badly let down by Vodafone during covid. No one in the Chamber will have failed to have been moved by those stories. I have read a number of them in correspondence from colleagues on both sides of the House.

There are, without question, serious allegations being levelled at Vodafone. As the right hon. Gentleman said, and as I am sure he will understand, I am unable to comment on ongoing legal disputes, but I will respond on behalf of the Government as best I can, given the ongoing nature of the case. Until now, there has not been sustained concern about the quality or effectiveness of the self-regulation of franchises in general. However, I recognise that this case has raised concerns across the House, and I will track very carefully what happens in this case, the final outcome, and the conclusion of any court case.

As hon. Members will no doubt be aware, franchising is growing in the UK, and it makes a big contribution to our economy, at just over £19 billion annually, according to the latest British Franchise Association survey. The franchising industry is covered by the same general protections in law as other businesses, and I will come on to some of those in a moment. In addition, the franchising industry also effectively self-regulates through the British Franchise Association, which has a code of ethics, and the Quality Franchise Association, which provides a code of conduct. On the whole, as the House will recognise, there are significant advantages to self-regulation: greater flexibility and responsiveness, and lower costs.

--- Later in debate ---

[Gareth Thomas]

As I said, I recognise that this case has raised concerns across the House about the quality and effectiveness of the legislation that governs franchisees and, indeed, other businesses, and about the arrangements around franchisees, and their relationships. As I say, up to now, we have not had significant representations that the quality of regulation of franchises is not adequate. However, I recognise the concerns across the House that this case has brought up, and as a result, I will track very carefully how the court case unfolds.

I was noting the advantages that, on occasion, self-regulation brings. They include freedom when it comes to contracting. Individuals and businesses have the right to enter into agreements and set their own terms, free from unnecessary Government interference. That freedom allows franchise agreements to be tailored to individual needs. People can set up shop more easily on the high street or elsewhere with the power of a big brand behind them. On the whole, self-regulation also allows the franchise industry to set standards and guidelines based on deep, industry-specific expertise. It allows the industry to adapt more quickly to market changes, too.

It is my understanding that the franchise agreements are the main instruments governing the relationship between franchisors and franchisees. Those agreements normally cover key issues such as fees, territory rights, contract duration and dispute resolution mechanisms. The Government of course encourage anyone entering a business contract such as a franchise to seek independent legal advice before agreeing to the terms and conditions laid out in those agreements.

I have talked a little bit about self-regulation and its benefits, and I alluded earlier to the fact that there are existing protections in law that cover all businesses, including franchises. For example, under the Misrepresentation Act 1967, anyone who has entered into a contract as a result of misrepresentation may be able to rescind the contract and claim damages. Misrepresentation is a false statement by one party to another that induces that person to enter the contract. Ultimately, it would be for the courts to decide whether a misrepresentation had occurred and what the remedy would be. There are other forms of legislation, too, including the Unfair Contract Terms Act 1977, which may apply to business-to-business contracts. That references the application of a reasonableness test, but that again is a matter for dedicated legal advice.

[Sir John Hayes]

The Minister is absolutely right, of course. Contract law is well established and business contracts are enforceable in the way that he sets out, but the problem with franchising is that it is a hierarchical relationship that creates a kind of dependency. The franchisee is dependent on the larger business, so there is an in-built advantage if that larger business is inclined to be permissive in the way that it applies the terms of the contract, or even varies its terms. The parallel I drew in my speech was with supermarkets and primary producers. The supermarkets have so much power that the primary producer is implicitly weakened in that commercial relationship.

[Gareth Thomas]

The right hon. Gentleman made a very interesting speech with a series of interesting analogies, and I have noted those and the points that he made. As I have said, I will track this particular court case and its conclusions. I always try to make myself available when hon. and right hon. Members want to discuss particular issues that are pertinent to my brief, and as things unfold, I make that offer to the right hon. Gentleman too.

I should stress again that only the courts can really decide on the application of contractual terms. It is absolutely right that affected businesses seek independent legal advice on the particular circumstances of their situation. As the right hon. Gentleman will be fully aware, legislation cannot prevent wrongdoing. It can deter and it can punish, but only after the event. It is important for companies, obviously, to conduct business fairly. We already have rules that encourage this, whether in relation to criminal offences of fraud, audit requirements or prompt payment reporting, which my Department has begun to strengthen and on which we will publish further proposals shortly.

I am sure the right hon. Gentleman will agree that investors and the public expect and deserve access to truthful reporting from our most important businesses on their finances and related issues. This is critical for trust, and ultimately it is critical for economic growth. That is why, through the audit and corporate governance reform Bill, we are developing legislation to uphold standards and the independent scrutiny of companies’ accounts while ensuring real accountability for company directors.

Section 172 of the Companies Act 2006 already requires company directors to frame regard in their decision making to a wide range of stakeholder interests. That includes the impact of the company’s operations on the wider community. It also requires directors to have regard to the desirability of the company maintaining a reputation for high standards of business conduct. This requirement applies to a company’s business transactions, including the treatment of franchisees. Large companies must report annually on how their directors have complied with these requirements. Taken together, the section 172 duty helps to provide assurance that companies are run responsibly and that directors are mindful of the impact of their decision making beyond the company and its shareholders.

The right hon. Gentleman touched on the additional regulation of franchises and the wider franchise model. As he will know, this Government are dedicated to implementing an ambitious regulatory reform agenda. In March, we published our action plan for regulation, outlining changes to streamline rules and regulations to support growth. While that plan includes a clear commitment to cut regulatory administrative costs for business by 25%, it also includes a commitment to strengthening accountability for regulators. That includes simplifying their duties to ensure that the regulatory environment focuses on growth, investment and, crucially, transparency.

Our modern industrial strategy also includes an ambitious package of regulatory reforms that will support our growth-driving sectors and the wider economy, but as we stated at its launch, that is not the end of the journey; it is just the beginning. Where there are changes that we can make to increase the UK’s economic resilience and channel support to the most productive parts of our economy, we want to continue to work with Members across this House to implement them.

In conclusion, let me thank the right hon. Gentleman and other hon. Members who have participated in the debate. Franchise regulation is a complex and difficult issue and, as I have said, this particular case has raised concerns across the House. As I promised, I will continue to look closely at how the case develops and ultimately what conclusions are reached. I am happy to continue conversations about this case and its implications outside the Chamber.

Question put and agreed to.

Groceries Code Adjudicator

John Hayes Excerpts

Tuesday 3rd June 2025 Westminster Hall

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

I beg to move,

That this House has considered the powers of the Groceries Code Adjudicator.

It is a delight to be here and to speak on this subject, which is of great importance to my constituents, both consumers and producers. A free economy works best when those who buy and those who sell can do so in a multiplicity of places. Nowhere is that more important than in the field of food, for food is the most basic of all commodities; we all, after all, need to eat. That variety prevailed for most of time. Indeed, if one thinks of the earliest civilisations, the way we mark them is by their trading capacity, such as those in the Levant who traded food produced there in markets between 7,000 and 10,000 years ago.

Yet in my lifetime—in all our lifetimes—the provision of food in this country has changed. It was Napoleon who described Britain as a “nation of shopkeepers”. If only that were still true. In my boyhood, my mother could shop at a variety of places to obtain the food products and other household items that she needed. What has happened during my lifetime is that a monopoly supply, or near-monopoly supply, of food provision has emerged, in the form of the great behemoths, the huge supermarkets, the corporate interests that now dominate the provision of food.

That has broken the food chain. Let us be in no doubt about where we are as a nation in respect of the provision and consumption of foodstuffs. The food chain is broken, and Governments of all colours have been reluctant to face that reality. Indeed, there has been a defence of the fact that most people now are obliged—I emphasise that: obliged—to buy their food from a handful of places, with little or no choice as to whether they do so, because, as I said, everyone has to buy and consume food. The defence offered is that it has driven prices down; but I will contest, in this short debate, that that is not really so.

Bulk buying of food, which is now the norm—most people buy their food on a weekly basis; they fill their trolley with any number of goods—does three things. First, it disguises the relationship between cost and value. In the days when people bought as they needed, they had a pretty good idea of what things cost and whether they were providing value for money. When people fill a basket, those details are lost in bulk purchase. That allows supermarkets to produce what they call loss leaders, which are cheaper products that draw people in.

[Rachel Gilmour (Tiverton and Minehead) (LD)]

The Groceries Code Adjudicator is of course vital, but my party and I believe that its remit is too narrow. Does my right hon. Friend agree with me that it is time for a new groceries code regulatory authority, with powers to introduce price floors and ceilings, ensuring fair prices for suppliers and consumers?

[Sir John Hayes]

I am delighted to accept the hon. Lady’s advice on that. She is not, in parliamentary technical terms, my hon. Friend, but she is a friend none the less, and she is right in her assertion, which I shall move to after I entertain the House a little further with my preparation for making exactly that argument. The essence of my call today is that this Government need to take action to deal with the near-monopolistic supply of foodstuffs that our constituents are obliged—I use the word again—to endure. The best way of doing that is through a more regulated market, and she is right to say so; but let me set the scene a little more before I come to the point at which I will call for exactly what she has suggested.

As well as the loss leaders that I mentioned, which have the seductive effect on consumers of encouraging them to buy many other things, secondly, that kind of provision of food has led to a great deal of waste. From studies that have been done, we know that these days much of what people buy—as much as 20%, or perhaps a little more—is never consumed. That would have been unthinkable a couple of generations ago. People would not have believed it was possible to stock the pantry or fridge with all kinds of things that ended up on the scrapheap.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

rose—

[Sir John Hayes]

I give way to the Select Committee Chairman, to whom I pay tribute on this subject for bravely making the case that I will make today, with less expertise than his.

[Mr Carmichael]

The right hon. Gentleman flatters to deceive, I fear. He is right about the way grocery supermarkets go about their business, but much of the problem is the way they choose to go about it. I recently heard from a livestock farmer who bought in potatoes to feed stock. He expected to find them green, bruised or damaged, but when they arrived they were perfect; they just were not conformed to the particular specification that the supermarket demanded. That demand does not come from consumers, but directly from supermarkets. If he looks around Europe and elsewhere, the right hon. Gentleman will find that supermarkets there behave very differently.

[Sir John Hayes]

The right hon. Gentleman is right. That is why, when he and I were in Government together, we introduced the Groceries Code Adjudicator. He will remember that I worked closely with his colleague Vince Cable, then Secretary of State, and was involved in that decision. He is also right to focus on the producers. I have spoken so far about consumers, but I want to go on to talk, thirdly, about the distortion in respect of producers.

I began my speech by speaking about how both producers and consumers need a multiplicity of places to buy and sell. In the model that I set out, the one that prevailed for aeons, people who made and grew food, primary and secondary producers, were able to sell to a variety of places. In our lifetimes—I might be overestimating the age of some hon. Members present, but certainly in many of our lifetimes—markets existed where farmers would take their produce to auction. Indeed, there was a livestock market in Spalding in the streets until the 1930s and a covered market until the 1990s, where livestock was brought to be traded and auctioned very openly.

Producers have also been affected by this distortion. As the food chain breaks, it is not only consumers who struggle, able to go to only one or two places to get not just what they want, but what they need, because, as I said, foodstuffs are fundamental.

[Jim Shannon (Strangford) (DUP)]

I thank the right hon. Gentleman for bringing forward this debate on an incredibly important topic. Those of us here will express that shortly. Does he welcome, as we all should, the commitment shown by these examples? Tesco, Asda and Lidl in my constituency have an arrangement on Fridays and Saturdays to give those goods that are coming to the end of their shelf life but are still consumable to local community groups, which in turn filter them out to those who need help, the families below the poverty level. We are sometimes hard on the superstores for what they do, but we should recognise that there are occasions when they play their part.

[Sir John Hayes]

The hon. Gentleman is right. His endless good will, known in this House for some time, encourages him to emphasise that supermarkets do deal with their waste products, but inevitably, as well as the waste products that over-consumption produces, supermarkets throw away many of the things on their shelves because of sell-by dates. It is hard to get a handle on, because quite a lot of it is disguised, but supermarkets themselves are actually contributing immense amounts of food waste.

It is true that some communities have found settlements for that, in the way that the hon. Gentleman described. Some supermarkets have at least paid lip service—I say at least, because it is occasionally more than that—to redistributing some of the waste food from their shelves into communities, but we should not be gulled by that. Burke said that tyrants seldom need a pretext; this is a kind of economic tyranny. To have a circumstance in which a near cartel of supermarkets can determine the price of products and then foist them on to a consumer base that has little other option is, in commercial terms, about as tyrannical as can be imagined.

You can tell from all that, Dr Allin-Khan, that I am not a great admirer of the large retailers, and not just for the reasons I have given. I doubt, for example, that supermarkets are particularly careful—by that, I mean they are careless—about the circumstances of their customers and employees. I am not confident that a supermarket chain has quite the sensitivity to a locality, to a community or to a group of people who become their customers and employees that a small family business has. Happily, I still have some of those small family businesses selling food in my constituency, and thank goodness for that, but their number has shrunk. The nation of shopkeepers is now a nation of very large shops, and those are corporate entities rather than the kind of shops that I imagine Napoleon had in mind. This huge problem has affected our high streets, where supermarkets have become more ubiquitous and the only grocers one can spot is a Tesco or a Sainsbury’s—or perhaps an Aldi or a Lidl—rather than the variety once seen up and down our constituencies.

It has also affected producers, as I will come on to in the second part of my speech, because my constituency is disproportionately responsible for the production of UK food. Lincolnshire grows 30% of the UK’s vegetables, 20% of the sugar beet, 18% of the poultry, 20% of the potatoes, and it processes 70% of the kingdom’s fish. In total, my county produces 12% of all the food that fills the shops and shelves, pantries and fridges of our country. Given that, one can understand the particular concerns that farmers and growers in my constituency have about the way those big retailers treat them.

The picture I painted, of an open economy where people can sell in a variety of places, has long gone. Most of my primary producers have very few options, and therefore often have a gun put to their head by their customers, the supermarkets. That might affect their terms of trade and the prices they are offered, which is why the relationship between farm-gate prices and retail prices is, again, distorted in this broken food chain. It often involves sharper practice still, where supermarkets cancel orders quickly; even when a farmer is tooled up ready to provide goods, they will find that in the next season they no longer have a contract to do so.

In the past, supermarkets have lumped all kinds of other costs on to the supplier, such as marketing and transport costs. That is unacceptable, and it is ultimately unsustainable, as those businesses make too little profit to reinvest and therefore become less competitive. We might say, “Well, surely the supermarkets need to obtain their goods to sell them,” but we know where they then go; they import goods from countries that produce those goods at standards we cannot imagine in this country, thereby putting even more pressure on domestic producers. Do we really want that, or do we want a country that cares about food security and becomes more economically resilient because more of what we consume is made here?

A Labour Prime Minister once spoke of British jobs for British workers. He was right. We indeed want British jobs for British workers and we want British goods for British consumers, too. We need to recognise that the provision of food as locally as possible provides economic security, cements and secures communities, and shortens supply lines and therefore, apart from anything else, has immense environmental benefits by cutting food miles. That is the kind of economy that we can have, because there is nothing inevitable or pre-ordained about fewer and fewer food suppliers dominating the food chain.

I have spoken about the impact on consumers of reduced choice and the impact on producers of not being able to trade their goods fairly and freely. Now, I shall talk about the changes we could make. In addition to the decline in income that all types of farm have suffered in the last several years—figures from the Department for Environment, Food and Rural Affairs suggest a sharp decline between 2023 and 2024—there is an issue with the GCA itself.

I am proud to have played a part in setting up the Groceries Code Adjudicator in 2013, but since then the GCA has conducted only two major investigations—into Tesco in 2015 and the Co-op in 2018. The GCA’s power to fine retailers came into force in 2015 and applies only to breaches that occurred after that date, so it did not apply to the first of those investigations. Then, in 2018, the adjudicator said that it did not consider

“the nature and seriousness of the breaches by Co-op to merit a financial penalty.”

So although the GCA has had the power to investigate and punish retailers who breach the groceries code, for that is what the GCA oversees, it has not done so. Why is that? Where is this reluctance rooted? What has been the reason for it?

The reason is partly that those detrimentally affected by the broken food chain are reluctant to report their problems to the adjudicator. They fear they will be identified and later punished—after all, these economic tyrants have little mercy. Those affected can go nowhere else to sell their produce, so what would they do then? They literally have nowhere to go. It is also partly that the adjudicator’s powers are insufficient, and that is the reason for and purpose of this debate.

I am pleased by the reports that the adjudicator is now taking a look at Amazon. As a matter of record, I have never bought anything on Amazon and never will; let me establish that before we go any further. I like to buy my goods in small shops, face to face, and meet real people. I do not want to live in the virtual world—why would we? I want to live in the real world. That investigation is good news, but I fear that, rather like the two previous investigations, it may come to nothing, merely raising false hopes of action that will not in the end be taken.

By the way, I hold in high regard the Chairman of the Select Committee, the right hon. Member for Orkney and Shetland (Mr Carmichael), with whom I worked in government. Not all Liberals are as bad as they are painted—at least, not as bad as they are painted by me, that is for sure. I know, too, that the Under-Secretary of State for Business and Trade, the hon. Member for Ellesmere Port and Bromborough (Justin Madders), is a good and responsible Minister, who will be listening to this debate with care. I implore him and the shadow Minister, my hon. Friend the Member for Keighley and Ilkley (Robbie Moore)—because the previous Government’s record on this is not great either—to step up to the mark, because the present position is unsustainable and cannot continue, for we cannot perpetuate a situation where a handful of corporate giants wield disproportionate power over the provision of food, and by so doing, dictate the food security of this country. If they continue to import food at the rate they are without care, how can we be food secure?

Let me deal with the particular measures we would like to see. We need to extend the role of the adjudicator to include more retailers and food service providers, including food manufacturing businesses, because at the moment the scope is narrow. We need to find a better way of guaranteeing the anonymity of those who bring their complaints to the adjudicator. Efforts have been made in that respect, and even at the time we set up the system we were mindful of that issue and tried to create some degree of protection for people going to the adjudicator with complaints, but I am not sure that has bedded in as well as it might have done. I know from speaking to farmers and growers in my constituency, whom I meet weekly, that that remains a fear. That is a barrier to the effective application of the adjudicator’s powers.

We also need to expand the adjudicator’s remit to include the ornamental sector, which is important in my constituency. Lincolnshire, particularly South Holland and The Deepings, has a thriving ornamental sector, employing a large number of people in many smaller, often family-run, businesses. They are currently outside the adjudicator’s scope and should be included.

We need the adjudicator to have a role in initiating inquiries and studies, rather than simply waiting for complaints. It would be perfectly reasonable for the adjudicator, on the basis of his or her expertise to initiate inquiries into particular aspects of food provision and retailer behaviour. We want a more proactive role. When the role of Groceries Code Adjudicator was established, it was dubbed the “food ombudsman”. That was never the official title, but perhaps it ought to be. Rather than simply having a narrow remit to enforce the groceries supply code of practice, perhaps the adjudicator could have a slightly broader remit to look at the whole issue of the provision of food and its relationship with food security.

When people such as the right hon. Member for Orkney and Shetland and I began speaking about food security donkey’s years ago, it was regarded as a rather arcane subject and we were seen as mildly eccentric for worrying about such things. Now, food security is a salient issue and at the top of many nations’ political agenda. More than that, it has become critical to national wellbeing. What a good time this is to think more laterally about the role of the food ombudsman and how it might reinforce the Government’s commitment to food security. It would be a way of delivering the objectives that the Government have set out. They said that they are keen to reinforce food security, so why not use the GCA as the means of doing so?

Doing that would allow the adjudicator to develop a strategy and to roll out a set of co-ordinated actions against unfair practices. I would include prices in that because, while all of the techniques I have briefly outlined are used to distort the relationship between buyers and sellers, prices are an issue. How can we ensure that farm-gate and retail prices are brought into closer union?

Just before Christmas last year, we had the obscene spectacle of one or two retailers bagging a series of vegetables in a plastic bag and saying, “These can be bought for 12p.” I had farmers and growers in my constituency telling me, “We have toiled hard to produce high-quality produce, only to see it being sold at a price far below the cost of production. Is it any wonder that the consumer does not appreciate the hard work that goes into making food and the quality of food grown in this country?” There has to be some means of reuniting value and cost by looking closely at the price farmers are paid and the price consumers subsequently pay. That is not to encourage food inflation, but simply to ensure that everyone gets a fair share of a bigger cake, rather than see their share be eaten up in the profits of these corporate behemoths.

By and large, I favour a capitalist economy, although I am not an unbridled admirer of capitalism. How could I be? I am a Conservative, after all. But on balance, I think it is perhaps the best of a series of faulty options. As I said at the outset, capitalism works when people can buy and sell in a multiplicity of places—circumstances that do not prevail in the UK food sector. By empowering the Groceries Code Adjudicator, which henceforth will be known as the food ombudsman, I think, we may be able to rebalance the provision of food and join again the food chain, which is so badly broken.

[Dr Rosena Allin-Khan (in the Chair)]

I remind Members that they should bob if they wish to be called in the debate.

--- Later in debate ---

[Robbie Moore (Keighley and Ilkley) (Con)]

It is a pleasure to serve under your chairmanship, Dr Allin-Khan. I congratulate my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) on securing this important debate. Who better to open this debate than a Lincolnshire representative from a county that I know very well and which produces 30% of our vegetables, 20% of our sugar beet and, collectively, 12% of all of the food that we find on our shelves?

We have heard contributions from Members from all four nations of the United Kingdom—Northern Ireland, Scotland, Wales and England. I represent the constituency of Keighley and Ilkley in God’s own county of Yorkshire, and we also have many producers and growers who have a relationship with supermarkets, and have been expressing their concern to me in advance of this debate.

The Groceries Code Adjudicator is hugely important in addressing some of the systematic issues within our food supply chain that have been referenced in the debate. It was set up under the coalition Government, which my right hon. Friend the Member for South Holland and The Deepings noted. It manages only 14 retailers, which cover a vast swathe of the food market, but that does not go far enough. Competition puts huge pressures on our suppliers and growers further down the chain, which is why it is vital that the Groceries Code Adjudicator addresses unfair practices. The questions that have been raised in this debate are those of power, funding and resource.

In 2024, a survey run by the GCA reported a reduction in the number of groceries code issues and an increase in supplier satisfaction with retailers, where issues were raised. I question that report. All Members speaking in this debate have picked up on the fear among growers and producers of being blacklisted if concerns are raised, and a reluctance to even report, because of the huge pressure that can be put on them by the retailers.

The 14 retailers included in the scope of the GCA and the code of practice cover a significant proportion of the UK market. However, it misses a number of smaller but significant retailers. That is the point I want to build on, as mentioned by other Members today. Has the Minister considered reducing the £1 billion turnover threshold that marks the point where businesses must be compliant? If that threshold were removed, many more retailers would be brought into the fold of the GCA. Members have advocated for that in today’s debate.

The work of the GCA is important in maintaining the health of our supply chains. An unfair contract between a retailer and a producer or grower can be devastating. We have heard the points made in the debate—the challenges are huge. That can result in growers and producers being locked into unfair contracts. Orders can be cancelled unnecessarily. The Chair of the EFRA Committee, the right hon. Member for Orkney and Shetland (Mr Carmichael), made a point early on in the debate about potatoes—they were of sufficient quality for any consumer to eat, and yet, because they did not meet the exact specification from the retailer, the order was not taken.

[Sir John Hayes]

I forgot to say what a pleasure it is to see you in the Chair, Dr Allin-Khan. My hon. Friend identifies a fundamental issue. In commercial transactions, there is always risk, and that risk needs to be balanced. At the moment, all the risk is taken by the farmer or grower and none of the risk is absorbed by the retailer. We need to adjust that balance to ensure fairness, in the way that has been articulated by so many Members across the Chamber.

[Robbie Moore]

My right hon. Friend makes a valid point. At the moment, the risk is all sitting on the shoulders of the growers and producers. That is unfair, because there is a certain expectation of the food they are preparing, whether in quantity or quality, but some of the risk factors are completely out of their control, as the hon. Member for Lichfield (Dave Robertson) noted. Those factors include weather conditions, which impact many of our farmers and growers. The lack of flexibility in the contracts is another.

That is why the GCA must have the teeth that many have talked about in this debate, because these issues go beyond the impacts of the unfair contract. At a time when pressures on our agricultural sector are mounting, additional budgetary pressures were announced by the Government in last year’s Budget. The hike in employer’s national insurance, the family farm tax, which has created a huge amount of uncertainty, the cuts to the sustainable farming incentives, and the drastic reduction in the delinked payments to a cap of £7,200 are all additional cash-flow pressures, exposing our farmers and growers to long-term uncertainty, beyond the challenges associated with the contracts they are entering into with retailers.

While the GCA has made hugely important steps, many producers and growers are still unaware of its role and powers. There is absolutely more work to be done within the industry to build awareness and trust of the GCA and its powers, and that is exactly what the nub of this debate is about. We know that pressures are mounting on the agricultural supply chains that run right the way through the system, from farm to fork. One of the shortcomings of the GCA in its current set-up is that it only handles the relationship between the retailer, the supplier and some farmers and growers, missing out many farmers, growers and other intermediaries in the supply chain. That has to be addressed, as has been referenced by many Members in their contributions.

That has to be addressed if we want to restore a level of trust in the system, and work to do so has been started. The Fair Dealing Obligations (Milk) Regulations 2024 were introduced recently, which have a specific focus on milk, and regulations for other products are on their way. But I ask the Minister: what are we doing to address this disjointed approach? It seems that multiple regulators are managing different elements of the supply chain, which is creating more friction and uncertainty for businesses.

The experience of the last decade shows the growing case for better lines of communication between the GCA, DEFRA and the Agricultural Supply Chain Adjudicator. What conversations has the Minister, in his role representing the Department, had with DEFRA and the GCA? That was a point made by the Chair of the EFRA Committee, the right hon. Member for Orkney and Shetland; I congratulate him on the work he did in introducing his ten-minute rule Bill, which had the support of the Opposition.

Going forward, I hope that the Government will be able to pick up where the last Government left off and not only expand on the fair dealing regulations, but tie in the GCA and its operation to the Agricultural Supply Chain Adjudicator, providing a joined-up approach to the full supply chain. Although I welcome the increasing scope of regulatory framework on the agricultural supply chain, does the Minister plan to include other products, such as ornamentals, as part of an expanded GCA remit? Ornamentals, like food, are perishable and suffer with the same challenges that many Members have outlined in this debate.

What are the Government’s intentions when it comes to increasing the GCA’s powers, funding, resource and people power, so that it has the ability to enact the requests of both sides of this House? I reiterate that trust absolutely needs to be restored into the system, which can only be done by re-establishing better supply chain relationships throughout the system. That relies on giving the GCA more power, more finance and better lines of communication with DEFRA and the Agricultural Supply Chain Adjudicator.

--- Later in debate ---

[Justin Madders]

I thank the right hon. Member for his question. Of course, the review is dictated by the legislation that his party was, in government, involved in introducing, so part of the problem is where we are with the statutory framework, but I do take his wider point that clearly there are a number of different developments in how we deal with the overall agricultural food supply market; the GCA is just one part of it. The other developments, which Members have talked about, particularly in terms of ASCA, probably need to be looked at more holistically than is the case at the moment.

[Sir John Hayes]

I am grateful to the Minister for that remark, but the right hon. Member for Orkney and Shetland (Mr Carmichael) is right: the important thing is co-ordination. The previous Government did a good job in establishing the basis for the “fair dealing” obligations, but it is really important that the work being done—outside the Minister’s Department in some cases—is co-ordinated, and the Groceries Code Adjudicator, in exactly the way that the right hon. Member for Orkney and Shetland suggested, has a purview that extends across the whole process. I hope the Minister will give a commitment to that now.

[Justin Madders]

I acknowledge the wider points that have been made. Members have raised today a number of issues that are beyond the scope of the Groceries Code Adjudicator and clearly are within the bailiwick of the Department for Environment, Food and Rural Affairs, which clearly I need to work with on developing a more holistic approach. That is one of the challenges we face, because the code regulates only designated retailers’ dealings with their direct suppliers and currently applies to the 14 largest grocery retailers in the UK, each with an annual turnover of £1 billion or more.

A number of Members referred to the threshold and questioned whether that is currently appropriate. It is worth pointing out that, according to the marketing data company Kantar, the 10 largest retailers covered by the groceries code amount to 97% of the grocery retail market, although the adjudicator has said that he is happy to hear views on whether the threshold should change and about suppliers’ experiences of dealing with retailers not currently covered by the code. The adjudicator has also said that he will pass on any relevant information to the CMA to inform future decisions on retailer designations under the code. There is therefore an opportunity for Members to feed in if they feel there are particular retailers under the current threshold that should be included.

A number of Members talked about the issue of price. The code does not regulate the prices agreed between retailers and suppliers. It does, however, require these negotiations to be conducted fairly and transparently, and the GCA is keen to ensure that negotiations around cost price pressures do not lead to non-compliance with the code. In 2022, the GCA published the seven golden rules to remind retailers of best practice when agreeing to prices.

--- Later in debate ---

[Sir John Hayes]

With that pledge that I can continue to communicate with the Minister, I am delighted to thank all colleagues who contributed to this debate. It is perfectly possible to feed the nation at a fair price without fuelling the excessive profits of greedy plutocrats. To do that, we need to extend the power of the adjudicator in the way that has been set out by a considerable number of Members from across the House. It is vitally important the food chain is relinked, to make sure that all those involved in the production, distribution and sale of food can act in a way that is commercially viable but fair. It is not fair now.

Motion lapsed (Standing Order No. 10(6)).

Automotive Manufacturing: Employment

John Hayes Excerpts

Wednesday 7th May 2025 Westminster Hall

[Antonia Bance (Tipton and Wednesbury) (Lab)]

Thank you for indulging me, Sir John, and for letting me speak after I walked in so late. I also thank the hon. Member for Reigate (Rebecca Paul) and congratulate her on securing this important debate.

We have heard today how strategically important the automotive industry is for our country and about the £93 billion turnover across the industry and its supply chain. I would also like to flag how important the industry is to many of our regional economies. In my constituency, which covers Tipton, Wednesbury and Coseley—the home of the industrial revolution—we have 21,000 manufacturing jobs across 1,000 firms, many of them in the supply chain for the automotive industry.

I recently visited J.H. Lavender & Co., which makes cast aluminium casings for JLR’s new electric Land Rover. It was incredible to see the process go from the silver liquid all the way through to the finished casing. Those world-class products are made in a family firm in the heart of my constituency. Truflo makes industrial air-cooling fans that go in industrial vehicles—the construction and heavy goods vehicles we are all so familiar with—and exports across the world, including to China and the US. As my hon. Friend the Member for Wolverhampton North East (Mrs Brackenridge) so eloquently outlined, the west midlands is also the home of Jaguar Land Rover, with its 34,000 jobs—many of those people live in my constituency—and 200,000 jobs in the supply chain.

The automotive industry faces two key challenges: transition and tariffs. On the transition piece, automotive is critical if we are to reach net zero. I do not believe that this country will give up its cars—I certainly do not want to give up mine—so it matters that we move towards net zero in a way that is sustainable and that supports the freedom that owning a car brings. We can see that the investment towards that net zero future has already begun, whether it be JLR’s investment of £18 billion over the coming five years or the investment elsewhere in the industry. I was so glad the Prime Minister went to JLR in April to announce the flexibilities that have been needed for so long in the ZEV mandate to smooth the requirements, cut the fines and ensure that there is a continued role for hybrids.

We know there is more to do to increase the uptake of electric vehicles, whether that be on consumer demand or the charging infrastructure we need. More broadly, I hope that the industrial strategy, when we see it, takes action on the issues that have held back advanced manufacturing: skills, access to finance—particularly in the supply chain and for smaller manufacturers—and energy costs. I was absolutely appalled to hear Nissan tell the Business and Trade Committee two weeks ago that its plant in Sunderland is its most expensive in the world, because of the energy costs. It will be great to hear the Industry Minister’s thoughts ahead of the industrial strategy, although I know she will have more to say in the coming months.

Let me turn now to tariffs. This morning, I talked to Richard Parker, our Mayor of the West Midlands, and his team. They have produced research by Steve Rigby, which my hon. Friend the Member for Wolverhampton North East touched on, showing a £6.2 billion hit to the west midlands economy from the US automotive tariffs if nothing changes—the biggest regional hit in the country. Some 52% of firms in our local manufacturing base are warning about profits because of the tariffs.

JLR alone accounts for 4% of UK goods exports. We need a deal, and soon. I thank the Prime Minister, the Chancellor, the Business Secretary and the Industry Minister for their calm approach to the negotiations. That is right, but we must get a deal; otherwise, that impact will be coming down the road in my constituency and in all our constituencies in terms of jobs and the critical research and development that will help us navigate the transition that we need to electric cars and net zero. When it comes to a deal, fast is better than perfect: that is the message from the west midlands automotive industry to my colleagues in the Government.

I would like to hear from Ministers what options they intend to explore to help the industry, and especially the employment base in the automotive industry supply chain in my constituency, if—God forbid—we get no deal. The Chair of the Business and Trade Committee set out a number of options in a letter to Ministers earlier this week. It would be good to hear what consideration is being given to things such as a reduction in employer costs, help with energy costs, domestic sales subsidies for EVs, an increase in research and development tax credits, and help with cash flow, particularly for the smaller companies in the supply chain, which tell me time and again that they need that.

Then, of course, there is the £2 billion that was allocated in the Budget to the automotive industry’s transition, which we will hear more about in the industrial strategy. It would be good to know whether that can be used to help in the event that there is no deal and there is a prolonged period of tariffs. But that money is necessary for the transition—for research and development, and for moving our workforces to the new industry’s new production techniques and requirements—so it will have to be replaced in time.

My colleagues in Government know how urgent this issue is and have been working at pace to get the deal that our automotive sector needs. They have the support of all of us in this House, and I urge them to continue that work for this vital sector of the UK economy, of which we are so proud.

[Sir John Hayes (in the Chair)]

We will move to the winding-up speeches now but, given how much time we have left, I emphasise that Front Benchers should not fall into the Gladstone trap of becoming intoxicated by the exuberance of their own verbosity.

--- Later in debate ---

[Clive Jones]

I certainly agree with what my hon. Friend says about energy prices, and I will talk about that a bit later.

When I visited BMW’s plant, I met hard-working staff, who are the most at risk if the Government continue to get this wrong. Whether plants are being closed or investment scaled down, people lose their livelihoods and a rich history of manufacturing at the heart of Britain is lost, possibly forever.

This sector is at a crossroads: with the right support, it can lead the way in innovation, climate action and economic resilience, but without swift and strategic action, we risk losing a competitive advantage built up over generations. That is why more must be done to end the uncertainties that the car industry faces, and that starts by building consumer confidence in electric vehicles. The previous Conservative Government failed to support a thriving electric vehicle market in the UK, implementing chaotic U-turns that badly hurt the industry, and they continually failed to deliver the charging infrastructure needed to boost demand, create jobs and cut emissions. The Government must right that wrong by cutting VAT on public charging by 5%, by investing urgently in schemes to speed up the installation of rapid charging points throughout the country and by making it as affordable as possible to own an EV by reducing electricity prices that are passed on to the consumer.

One of the clearest calls from the sector is on energy costs. UK automotive businesses face electricity prices that are, on average, twice as high as those in the EU; gas costs are nearly 60% higher. That is an unsustainable burden. If we are serious about reshoring manufacturing and making the UK a global hub for ZEVs, we must address that urgently.

Ensuring that we have a strong trading relationship with our economic allies is vital for supporting UK automotive employment. The EU remains our largest trading partner for vehicles, and electric vehicles are now the biggest share of UK automotive exports by value. With the next EU-UK summit on the horizon, the time to act is now. We must give investors and manufacturers certainty and protect the employment and regional growth that depend on it.

What contingency planning is in place to protect UK manufacturers and exporters if President Trump’s damaging tariffs remain in place? What action is being taken to reduce the UK’s industrial energy costs to ensure a level playing field with our global competitors? What is the status of the £200 million that was announced in the autumn Budget for charging infrastructure but is in limbo? What is the status of the rapid charging fund, which has delivered ultra-rapid en-route hubs across the country? Will the UK formally seek to accede to the Pan-Euro-Mediterranean convention to provide manufacturers with a more flexible and reliable origin framework?

[Sir John Hayes (in the Chair)]

I remind the remaining Back Benchers that interventions should be pertinent and pithy.

Product Regulation and Metrology Bill [Lords]

John Hayes Excerpts

2nd reading
Tuesday 1st April 2025 Commons Chamber

[Jonathan Reynolds]

I am extremely grateful to the right hon. Gentleman for that intervention; he always brings wisdom to these debates. I can absolutely give him the assurance that the Bill makes no decision as to how we should use these powers. The reason we are bringing it forward today is the same reason the previous Conservative Government first proposed a Bill of this kind: having left the European Union, we need the powers to properly regulate these products in this way; without this legislation, we would not necessarily have the ability to do that.

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

On that specific point, further to the remarks of my right hon. Friend the Member for New Forest East (Sir Julian Lewis), that presumably means that the Government will press for recognition of UK standards where they prevail and where we think we are doing the job better. There will absolutely be occasions where we can learn from others, and other occasions where they can learn from us. Is that the Government’s intention? Will the Secretary of State make that clear now?

[Jonathan Reynolds]

I am more than happy to make that clear. We see that in a number of areas—it is the case across the whole field of regulation. Let us look at AI, which is topical right now: we have chosen a different regulatory path in the UK from the European Union, which is to our economic advantage. I am very confident in the approach that we are taking. I am sure that when I get to the provisions of the Bill, and in particular when it comes to weights and measures, the whole House will be united in being able to say that we believe that traditional British standards are particularly important to us.

I say again, however, that having the power to set standards in itself makes no decision as to how these powers are used. We can all clearly recognise the need to repatriate these powers to our own statute book.

--- Later in debate ---

[Graham Stringer (Blackley and Middleton South) (Lab)]

I would like to make two points. First, this House can do what it wants. It does not need this Bill to regulate anything. To say that is does simply is not true. Secondly, on the question of whether the Bill will lead to dynamic realignment with the EU, can the Secretary of State explain what clause 2(7)(a) is for? It seems to me that it could be used to dynamically realign with EU regulations.

[Sir John Hayes]

rose—

[Jonathan Reynolds]

I will give way to the right hon. Member.

[Sir John Hayes]

I wish to give the Secretary of State time to read the clause. He owes me now, Madam Deputy Speaker.

The key thing is that we must not use EU standards as the default. The hon. Member for Blackley and Middleton South (Graham Stringer) is right that we have the authority to make our own standards, and we often do so very well. But the risk is that where we have not yet done that, the EU standard will become the default position. The Minister can make it crystal clear to us today that that is not the case.

[Jonathan Reynolds]

As ever, I am particularly grateful to the right hon. Member for his courtesy. To my hon. Friend the Member for Blackley and Middleton South (Graham Stringer), I say that clause 2(7) says:

“Product regulations may provide that a product requirement is to be treated as met if—”.

It clearly says “may” and “if”. Again, I say that there will be times when it is in our economic interest to have a close relationship with the product standards in, for instance, the European Union or another jurisdiction. There will also be times when it is not. That will be our choice. I think we would all recognise the absence of powers without this Bill.

--- Later in debate ---

[Andrew Griffith]

On behalf of my right hon. Friend the Member for South West Wiltshire (Dr Murrison), I thank the Secretary of State for intervening. It is important that we legislate with full understanding of what the law says, but the point still stands on the overweighting of references to EU standards versus comparable standards from the United States and Commonwealth friends of this great nation.

[Sir John Hayes]

On that note, the point is the one I made to the Secretary of State: where, as the impact assessment suggests, regulations are moving at pace—the Secretary of State repeated that—we will default to a European set of standards. That is the problem, and that is certainly implied in the Bill’s impact assessment. I sought the Secretary of State’s assurance that that will not happen. If it does not happen, will there be no rules or regulations? How will that work in practice?

[Andrew Griffith]

We are having the proper debate through these interventions that perhaps we should have had when the Secretary of State was introducing the Bill. That illustrates the point about putting a vast amount of ambiguity—even if it is well intentioned—into the law and how things will operate, and for a reason of which we know not. If there are instances of, for example, e-scooters catching fire in people’s halls, this House has the ability to legislate, and legislate fast where necessary, against those particular harms at that particular moment in time. My right hon. Friend, with his many years of experience in this House, understands that point, and I think that was what he was saying.

--- Later in debate ---

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

There are three fundamental points to be made about the Bill, and I will make them more briefly than the previous speaker, the hon. Member for Walthamstow (Ms Creasy), although I am delighted to follow her. First, there is a constitutional issue at the heart of the legislation about the power of this House and this Parliament, and the power of the Executive.

The Bill creates a permissive power for the Executive to introduce by regulation, through statutory instrument, all kinds of measures. Those who have been in the House for a long time, and perhaps those of us who have been in the House for a rather shorter time, will know what that means in practice: a brief debate in a room upstairs that will take a few minutes or perhaps a little longer. It will be thinly populated and the measure will be given scant scrutiny. The Executive should be held to account on the Floor of the House or by a Committee designed for the purpose.

That brings me to my second point about the Bill. We once had a European Scrutiny Committee whose task was to look closely at all kinds of things that emanated from the European Union. The hon. Lady who spoke immediately before me described those of us in the House who are sceptical about the European Union as not being rational; she said these were irrational fears about the European Union. Were that to be true, she would probably have a point, but actually our fears are entirely rational. We know what emanated from the European Union during our membership, and it was endless bureaucracy. I acknowledge that it was often gold-plated here, but none the less it was every kind of rule and regulation, some of which were entirely superfluous to our needs because they were introduced on a pan-European basis. I learned long ago that power is best exercised when it is exercised closest to its effect. When decisions are made, they need to be sensitive to the difference they make to those affected by them. One of the reasons I was a passionate supporter of Brexit is that I want power to return to the place where it has its effect. I fear, therefore, entirely rationally, that if the default position as a result of the Bill is that we end up with European regulation, it will not be sensitive to its effect but instead will be decided upon far from where the businesses that it affects are located.

So, given the second issue is about how the measure is scrutinised, I invite the Government to reinvent some kind of European Scrutiny Committee or similar. Perhaps we can call it a regulatory scrutiny Committee; perhaps it may be a body that allows the full consideration of each of the measures that the Government introduce under this umbrella Bill to ensure the House was happy with them and felt they were appropriate and had been tailored in the right way. That might be an amendment that the Government will accept, given that the Secretary of State said he was open-minded about improving the legislation during its passage.

The third problem that this Bill has at its heart is the assumption about harmonisation. That term is often used and one should always be terribly fearful when it is, because it’s usually not about creating harmony but about accepting control from elsewhere. I worry that that process will snuff out some of the measures that might more usefully be adopted by Government and impose on businesses and others blunt measures that are insensitive to the particularities that prevail in our country. I do not say that is with intent, as it seems to me that the Secretary of State made clear it was not his intention, but I just fear that it will.

The regulatory impact assessment and the explanatory notes that we already had seem to imply that. They say, and the Secretary of State repeated this in his opening remarks, that there are all kinds of changes—new rules, new regulations and new restrictions—happening at a pace that require the attention of Government, and that pace is so great that it is hard for the Government to keep up. My fear is, therefore, that they will adopt very broad measures rather than ones that are sufficiently tailored and sufficiently refined to meet domestic needs.

With that constitutional problem of the balance between the Executive and Parliament; with that lack of scrutiny and oversight that comes from not having a body that can look at these things on a one-by-one basis; and with that tendency to produce broad-brush measures emanating from the European Union, as implied both in the Bill and in supporting documents, I have grave doubts about this legislation.

It is true that we should regulate where necessary, of course; it is right in the public interest that we do so. However, we must always do so with care, because when that regulation becomes burdensome, when it frustrates innovation and when it tempers the ability to produce goods that meet popular demand, rather than becoming helpful to either customers or those that supply them, it inhibits the very things that support those businesses and aid those customers. I simply invite the Minister when he sums up to re-emphasise that the Government believe, as I do, in light-touch regulation and in regulation that only applies when there has been appropriate discussion with those affected by it, that there will be a proper dialogue between business and business representatives before new measures are introduced, and that all that is introduced will have the character that I have set out: tailored, specific and in the British interest.

Our role in this place is to defend the national interest. I know that a kind of heady internationalism permeates particular parts of this Chamber—I look to my left towards the Liberal Democrats—but I have always thought that it was more important to stand up for the British people, to represent my constituents to the best of my ability and to be, as I described earlier, sensitive to the particularities of the locale that I represent and the country that I love. Is that too much to ask of Members of this House?

So, I do not regard my fears about this Bill as irrational, contrary to the hon. Member for Walthamstow’s assertion; they are deeply rooted in a rational fear of the worst this Bill could bring.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Good regulation is basically the immune system of our nation, and it is often unseen. When regulation is working well and having the desired effect, we rarely see it happening because it is keeping us safe and protecting us from those harms that we outsource to the Government to keep watch over for us. It is taking the necessary steps and measures to make sure that we are safe, the things we buy are safe, the interactions we have in our communities are safe and our children are safe. That regulation is a protection, essentially, and this Bill gives the scope and the agility for the Government—any Government—to respond quickly and in a timely manner to new and emerging potential threats that regulation is required to protect us from.

I worry when Governments of any colour—including, unfortunately, that of my own party of late—seek to suggest that regulation is inherently a bad thing, an inhibitor of growth or the heavy hand of the state stopping the illustrious bounds of enterprise, because it often is not. Often it is about a level playing field. It is about creating the circumstances where competitors in Stoke-on-Trent have as much opportunity to compete with their competitors around the country or around the world in a way that we understand to be fair, balanced and proportionate. To me, this Bill sets us on a course where we are able to do that.

There are some areas where product regulation and the safety that comes with it are lacking. If the House will indulge me, I would like once again to talk about ceramics and the ceramic industry because I believe that the product regulatory framework and the existing protections for ceramics—in terms of the quality of goods that are purchased and also the protection of the level playing field—could benefit hugely from actions that the Government could take through the powers in the Bill.

We have discussed online drop-shipping platforms many times in this House. These are websites that bulk buy things and sell them into the UK, often at a fraction of the price that people could buy them for in this country, and often faking and forging the identities and brands of British companies, without any consideration for what people are actually buying. I was shown a great example by a company in Staffordshire, Dunoon ceramics, which makes a very particular style of ceramic mug. The mugs cost about £28 to make and they retail at about £35, sometimes up to £50.

An online drop-shipping website was selling a fake version—with the same artwork and the same “Made in the United Kingdom” sticker and backstamp on the base—into the UK for about £10. We have no idea whether that product was meeting the Materials and Articles in Contact with Food (England) Regulations 2012 that it is required in this country to meet in order to be considered safe. We had no idea of the levels of lead or cadmium in the paint, no idea what the glaze was made of, no idea where the clay had come from and no idea of the conditions under which it was made, but it was sold into the UK thousands at a time, undercutting the British company. For clarity, I have no idea whether the product was defective, but it could have been, thereby putting people at risk.

[Sir John Hayes]

The hon. Gentleman may not know this, but I collect ceramics, by the way, so I am extremely interested in them. He is right that we should support and, indeed, revere the British ceramic industry, but many laws already prevent the kind of counterfeiting he describes and other laws prevent illegal substances from being used and sold in the manufacture of goods. There is a lot of existing statute that protects consumers from the kind of practices he describes.

[Gareth Snell]

The right hon. Gentleman is correct that there are existing protections for some of the things I have mentioned that, if enforced properly, could take those products off the market, but the enforcement of many of our regulatory frameworks in this country is quite weak. Funding for most enforcement agencies across this country was—not to make a party political point—reduced under the last Government. I hope this Government will reconsider that because a regulation is only ever as good as the enforcement regime sat behind it.

--- Later in debate ---

[Gareth Snell]

I do not think anybody would disagree with the right hon. Gentleman’s assessment that if there is no enforcement of regulation, there is no benefit, but we are not saying in the Bill that there should be less enforcement. The Bill produces a framework in which the Government can take action to respond to create the good regulation necessary. I will freely admit that what has to come with that are the enforcement arrangements to ensure those new regulations are enforced properly, penalties to deter people seeking to circumvent the regulations, and the proper resourcing of enforcement agencies so they are equipped to take action against those people and companies seeking to circumvent the laws. Without that, I fully accept that regulation for the sake of regulation is no good any more than regulation being cut or diverged for the sake of divergence and reduction is any good. It comes down to enforcement.

To go back to the comments of the right hon. Member for South Holland and The Deepings (Sir John Hayes), there is one area in this Bill where Government action could bring in a new product protection regulation that would have a huge impact on the ceramic industry. That is around the backstamp on the bottom of a piece of ceramic or pottery. As an avid collector, he will be aware of the importance of those backstamps. In this country, if we turn over any plate, cup or anything made from good-quality British ceramics, we will normally find the words “Made in England” and the pottery name underneath it. Consumers then know they are buying a premium piece of British-manufactured ceramics that has been made to a suitable product standard that we accept in Stoke-on-Trent is one of the best in the world. It is perfectly plausible, as has been done with some of the fakery, to replicate that phrase when it is not true.

The other challenge we have is companies that import things into the United Kingdom augmenting the wording of that particular backstamp to suggest it has been made in the UK when it has not. It may have been bisque-fired overseas, imported and then decorated and glazed in the UK, but it will normally have a company name, the word “England” and the date upon which that historic brand was established. It gives consumers the idea that they are buying a piece of British-made ceramics that would therefore be protected by the normal product regulations when in fact it is not.

There is the potential for the Minister to use the new powers in the Bill to produce new regulation that says anything produced in the UK that is considered to be ceramic has to have a proper mark on the base that demonstrates where it was made and where it has come from and to demonstrate that it was made in the UK. If a company is not making it in the UK, they become prohibited from putting the words “England” or “Made in the UK” on it.

[Sir John Hayes]

I am extremely grateful to the hon. Gentleman for giving way a second time—it is very generous of him. I think that we should jointly sponsor a Bill, Madam Deputy Speaker—the hon. Gentleman and I, not you and I, although we would love for you to be involved. He and I could jointly sponsor a “Made in Britain” Bill that would do exactly what he describes. I am not sure that this piece of legislation is necessary to do that, for we have that power in this House as it stands. Let us get little crowns printed on eggs again, let us have “Made in Britain” printed on everything, and let us go back to “Foreign made”, which was formerly widely used. I would love to see “Foreign made” stamped on imported goods—then people would not buy them!

[Gareth Snell]

I am very sorry to disappoint the right hon. Gentleman, but I and a number of my colleagues have already presented the Ceramics (Country of Origin Marking) Bill. He is more than welcome to support it should it ever be given its Second Reading. However, because of the nature of this place and the way private Members’ Bills work, I am realistic about the fact that if we are to see that regulatory protection for British ceramics, it will have to come through a different mechanism. The mechanism in this Bill, which allows the Government to make those protective arrangements through secondary legislation, could increase the protection of British ceramics.

My final point is about a level playing field for exports. I take the point that the right hon. Member for East Antrim (Sammy Wilson) made, after I had intervened on the hon. Member for Beaconsfield (Joy Morrissey), about our regulatory regime and where we want to export. The bulk of the ceramics made in my constituency are exported to the EU. We could diverge from the EU food contact materials regulations and have a secondary system in this country, but all that would do is create a separate set of regulatory regimes for small companies with small margins, requiring them to make products twice. We simply could not stand that burden. Before I get attacked for being one of those horrible remainers, I urge Members to check my voting record during the 2017 to 2019 Parliament. There are times when sticking with what we know—the European regulations—absolutely makes sense. We should control that, but it makes sense to align ourselves where we should.

I support the Bill. I hope that the Minister will, as one of his first actions with his new powers, consider my points about ceramics. If he does not, perhaps he would like to support my Ceramics (Country of Origin Marking) Bill.

--- Later in debate ---

[Sammy Wilson (East Antrim) (DUP)]

Anyone listening to the debate would think that it is all about saving children from choking on toys, buildings not burning down because of defective batteries in bicycles, saving lives, safe products, and even the internal market and safeguarding the Northern Ireland economy, but it is not about any of that. It is nice to dress it up like that, and I suppose using that kind of language is helpful to make the Bill relevant to constituents, but the Bill is nothing to do with that.

Time and again Members have spoken about those kinds of issues—batteries catching fire, defective toys and so on—but they can and have been dealt with already in law. Indeed, we have even heard Members talking about illegal products being sold, so we do not need some Minister to change the law; we need someone to ensure that the laws in place are enforced. We already have a mechanism to make things illegal, so if there are gaps in the law, we can just use that mechanism.

Let us not obscure what the debate is all about. It is not about gaps and the need to safeguard people. It is all about the Bill’s agenda, which is to give Ministers additional powers. The public see a Government with a majority of over 200 who have been able to drive through legislation that has frustrated and angered them, whether it is taking money off pensioners for winter fuel or the legislation that was driven through last week to meet the net zero agenda, which failed to prevent us from buying solar products from China that are made by slave labour. I could go through all the other things that have made people angry, but a Government with a majority of over 200 now want to take on additional powers to allow a Minister to avoid having to come to this House to ensure product safety.

I have no doubt that the real reason Ministers wish to retain that power is that the Government have already set their mind on resetting our relations with Europe. They know it is unpopular with many of their supporters. They do not want to have constant scrutiny in this House on a weekly or monthly basis of new regulations that align us with Europe, so it is far better to give Ministers the power to do that quietly, without consultation or a vote in this House. As a number of Members have said, the Bill gives Ministers the power to do that.

Indeed, some of the Government’s own supporters in the House of Lords made the point that the Bill contains the potential for dynamic alignment. The Government have been ambiguous about whether the powers will be used to do that, but I am fairly sure that is the main reason. There is little enough opportunity for this House to look at and challenge legislation, but I believe it is wrong for a Bill to allow Ministers, under the cover of darkness, to take us back into arrangements that we have escaped from.

Members have mentioned Northern Ireland. We know the impact of the EU general product safety regulations already, because they apply in Northern Ireland. Businesses in the rest of the United Kingdom that want to sell their products in Northern Ireland will have to have agents in Northern Ireland. The EU makes these laws to try to tie other countries and companies to its regulations. I suspect the excuse the Government will use for pursuing dynamic alignment will be, “We’re doing it for the good of businesses in GB as well as Northern Ireland, because if we’re aligned to EU rules, we escape some of the restrictions on trade that the EU has imposed.” But why did we leave the EU in the first place, and why did many businesses support leaving the EU? First, the EU introduced costly regulations that did not even need to apply to many businesses because they never traded with the EU, but they still had to adjust their products to meet the regulations, which incurred costs.

[Sir John Hayes]

I am listening with intent to the right hon. Gentleman’s contribution. It may be that the Government are more innocent than he suggests and that there is not this hidden agenda he is describing, but in the words of a Northern Irishman, C. S. Lewis,

“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive.”

Even if there is not a hidden agenda, in the end, in the name of the victims—the customers—this will end up being regulatory, bureaucratic and costly.

--- Later in debate ---

[Adam Thompson]

Certainly. It is not a new word as far as I am concerned; I believe it was brought into common parlance in the Victorian era.

I will move on to some more examples. There is the James Webb space telescope—something more modern than the pyramids. It takes images of our universe more than 13 billion light years away that are deeper, more brilliant and more beautiful than anything we have ever seen. Behind that, there is the construction of a 6.5-metre mirror, flat to within just a few tenths of billionths of a metre from its highest top to its smallest valley. If we were to expand the size of the 6.5-metre mirror to the size of the Earth, the distance from the highest mountain to the deepest valley would be of the order of the height of my hip.

Behind the discovery of gravitational waves, there is a series of interferometers, kilometres in size, which can detect signals from noise at levels considered unachievable throughout human history until the past 20 years or so and which are capable of listening to the collision of black holes across spacetime.

[Sir John Hayes]

I hesitate to interrupt the hon. Gentleman, because he is making a wonderful contribution to our affairs, which is indicative of the beauty of science, about which we hear too little. Before he rushes—hurtles, one might say—into the future, can he say a word about the peculiarly British measurements that informed my childhood? I mean things such as pecks, perches, rods and bushels, for each of those was rooted in the way that he described.

[Adam Thompson]

I am grateful to the right hon. Gentleman for his intervention, and I am happy to explain. Those particular forms of measurement are not in common use any more, but of course many right hon. and hon. Members of this House will have grown up with them. Broadly, the ones that are still in use are defined in the modern parlance, but it is important to remember that the modern metric system accounts for all of those heritage measurements. The common inch, for example, is formally defined as 25.4 mm, and while I apologise to Members across the House, it is important for me to let them know that the pint is formally defined as 568 ml. Those heritage measurements and, indeed, the entire imperial system are now referenced on to the metric system; defined very simply, the imperial system is the metric system. There is no reason why we should not use those historical measurements—where they are useful, they are perfectly valid—but they are formally defined with reference to the modern metric system. I will talk more about this shortly.

Metrology lies at the heart of everything we know, from telescopes to speed cameras and from knee replacements to jet engines. Every single thing made by human hand was designed first, constructed second and then checked by a metrologist to ensure it met its specifications—if we cannot know it, we cannot improve it. However, ensuring that parts meet their specifications is not simple, as each measurement, dimensional or otherwise, has an associated measurement uncertainty. That is a non-negative parameter characterising the dispersion of the quantity values being attributed to the thing being measured, based on the information used. Estimation of measurement uncertainty is a complex procedure—one that formed much of my career prior to coming to this place—and is usually performed in line with the “Guide to the expression of uncertainty in measurement”.

Uncertainty estimation is generally performed by making measurements that are traceable to the definition of the SI metre—when we are concerned with the metre. Again, the “Vocabulaire international de métrologie” defines traceability as a property of a measurement result whereby the result can be related to a reference through a documented, unbroken chain of calibrations, each contributing to the overall measurement uncertainty. Traceable measurements allow for the successful estimation of uncertainty and are generally a base requirement for the verification of manufactured goods. Traceability is considered by the international community to be the only means by which evidence can be provided towards a given product fulfilling the requirements set out by its designer.

To provide an example, let us consider a length measurement made between two faces of a manufactured part, such as a Rubik’s cube. Imagine that I am holding a Rubik’s cube—I could not possibly have brought a prop, Madam Deputy Speaker. The length between two faces could be measured by a calliper. That calliper would be calibrated using a measurement artifact, most commonly a metal cuboid called a gauge block. That gauge block would in turn be calibrated by a more accurate instrument, which itself is calibrated using a more accurate gauge block. That more accurate gauge block would then be calibrated with reference to an optical interferometer using a laser source. That laser source is finally calibrated against the iodine-stabilised laser that is used to realise the definition of the metre, so traceability is established from the shop floor measurement all the way up to the definition of the metre by an unbroken chain of calibrations.

--- Later in debate ---

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

I do not think I can; I thought that was an absolutely brilliant speech. I feel like a party-pooper, because I am going to drag the debate back to the Product Regulation and Metrology Bill, and I can only apologise. I was going to assert boldly that I was the only Member of this House who had sat on a standards committee and drafted European regulations, but I stand corrected. There are now two of us.

At first glance, the Bill looks tiny. There are just four clauses on product regulations and four substantive clauses on metrology. There is a reason why it is so tiny: it does not actually say anything. There is no description of the changes anticipated by this legislation. There are no examples of what needs to be addressed. There is no indication of the direction behind any future decisions—nothing. Members, particularly those on the Government Benches, have referred to e-bikes and e-scooters, electrical safety, defective toys and lithium-ion batteries, to name just a few, but not a single one of those things is in the Bill. They could be. This could be a regulation Bill trying to fix the problems that have been identified, but none of that is there.

Worse than that, there is no explanation for the silence. The Bill simply makes a request of this House—of us, as parliamentarians—by saying, “Please give me, the Minister, the power to change primary legislation through regulations, including the power to create new and novel criminal offences.” This is the very definition of a skeleton Bill, where almost all the substance is left to regulations. That is contrary to an established convention in this House and the other place that the principal aspects of policy should be in a Bill, and only its detailed implementation left to delegated legislation. That is an established principle of our legislature. If we wish to depart from that, there needs to be a very good reason.

In exceptional circumstances, there are good reasons, but are there exceptional circumstances here? The issue was picked up immediately in what proved to be a hostile reception in the other place on Second Reading on 8 October last year. That was followed by a review on 15 October by the Delegated Powers and Regulatory Reform Committee, which is not some right-wing conspiracy theory group. This is not “Brexit or die”; it is chaired by Labour. It is chaired by Baroness Ramsey, and it is a cross-party Committee. By the way, in another role, she is the senior adviser to the Labour party on standards and ethics, yet her report has been entirely ignored by this Government, because it was damning in its conclusions. It said that Government guidance was that skeleton legislation should be used only in the most exceptional circumstances, but that test was “failed” by this draft legislation. As a result, that cross-party Committee, chaired by Labour, made the recommendation that clauses 1, 2, 3, 5, 6 and 9 all be removed. Those are the substantive clauses right through the Bill, on both sides. That is a stinging indictment of this category of draft legislation.

However, the Committee members were so concerned that they did not leave it at that. The following day, they took the exceptional step of summoning the Minister and his officials to give oral evidence. That is very rare, and it was the first time for three years that it had happened. The Committee members were clearly unimpressed by the answers—the attempted explanations —that they were given, because in a subsequent report, on 28 October, they reported that the Minister and his officials had

“failed to provide a convincing justification”.

As a result of that second damning indictment of the Government’s approach, there was some movement: the removal of some Henry VIII powers, and the addition of a duty to consult, at least in the first instance. However, other Henry VIII powers remain, and the duty to consult refers only to the first instance, not to any secondary attempts.

The Committee then produced a third report, on the Bill in its current form. It said that

“the delegation to Ministers of law-making powers in this Bill involves legislative power shifting to an unacceptable extent from the democratically appointed legislature to the Executive”,

and also that

“the Government have failed to provide a convincing justification for the inclusion of skeleton clauses in the Bill”.

Actually, I think the Government did understand what they were doing, because the Bill gives Ministers the power to make politically contentious decisions about the degree to which domestic law on product regulation and, indeed, on metrology should be aligned with EU laws. That is the real reason behind the Bill: the fear of EU alignment by the back door.

[Sir John Hayes]

My experience in this place—I am mindful of what my hon. Friend has said already—is that there are two types of Bill to beware of. The first is the Bill whose provisions are so permissive, so broad, lacking the tailored approach that I described earlier, as to allow law to be applied in a way that is not expected by those who debate it as it passes through the House. The second is the Bill that makes specific provision for delegated legislation—for subsequent action by the Government. Those two types of legislation are legislation to beware of, and I say that to Members on both sides of the House, having seen Governments of all kinds introduce such Bills which became, in the end, bad laws.

[Jerome Mayhew]

Of course I agree with my right hon. Friend, and that comes to the nub of what I want to say. Yes, inevitably we are party politicians. We have the official Opposition, we have the Government, and we have those who sit on the left-hand side of the official Opposition. Above that, however, we are parliamentarians, and some of us are quite new. I may look old, and indeed I am, but I was first elected in 2019, and an awful lot of Members in the Chamber who may be voting tonight are even less experienced than me. It takes a while to begin to understand the difference between the role of the legislature and the role of the Executive, and my profound concern is that we are at risk of handing very significant powers from ourselves, the legislature, to the Executive.

--- Later in debate ---

[Jim Allister]

Absolutely. If the Government are not—as many of us suspect—following a deliberate approach of circumventing debate in this House on key realignment issues, and is seeking rather to channel it through statutory instruments, then call our bluff, change this Bill in that regard. But this idea of skeleton legislation, which sets up the powers that have been taken from Parliament and given to the Executive, is something which, historically, this party of Government have railed against.

Indeed, within a week of Second Reading in the other place, the Attorney General gave the Bingham lecture. He said:

“excessive reliance on delegated powers, Henry VIII clauses, or skeleton legislation, upsets the proper balance between Parliament and the executive. This not only strikes at the rule of law values…but also at the cardinal principles of accessibility and legal certainty. In my view, the new Government offers an opportunity for a reset in the way that Government thinks about these issues. This means, in particular, a much sharper focus on whether taking delegated powers is justified in a given case, and more careful consideration of appropriate safeguards.”

That was the Attorney General. Where did that go to?

[Sir John Hayes]

I am interested in the Attorney General’s view, and we should take it seriously. Does the hon. and learned Gentleman recognise that primary legislation in this place metamorphosises in its passage through scrutiny? I have been involved in many Bills, as shadow Minister, Minister and Back Bencher, and that is precisely what happens. Ministers listen to argument, and as Bills return to the House, they reflect that argument both from here and in the Lords. Secondary legislation does not go through that process. That is why it is so important that the Bills we pass here do not contain the kind of permissive powers that facilitate so much secondary legislation.

[Jim Allister]

The right hon. Member is absolutely right. If one wanted to realign the United Kingdom with the EU, the easiest passage would be by statutory instruments. That is why that is the chosen mechanism here.

I have one final point. This Parliament traditionally and properly makes the law on criminal offences. We set the tariffs. Sometimes we say what the minimum penalty for a criminal offence is, but we always say what the maximum penalty is. We say what the content is of the criminal offence—what are the actus reus and the mens rea. But amazingly under clauses 3(9) and 3(11) and clauses 6(9) and 6(11) of the Bill we are going to make criminal offences by statutory instrument. Surely we have lost the run of ourselves if we think it is appropriate to make criminal offences in that essentially uncontrolled manner. It deprives this House, and therefore those we represent, of the very careful scrutiny that should always go into making something a crime. That is but another of the fundamental flaws of this undeserving Bill.

Employment Rights Bill

John Hayes Excerpts

Report stage
Wednesday 12th March 2025 Commons Chamber

[Steve Yemm]

I absolutely agree; my hon. Friend has spelled out why enforcement is so important.

I would happily speak further in support of so many of the amendments that have been tabled, but I am acutely aware that we are at the end of the debate.

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

The hon. Gentleman is coming to his exciting peroration, so I just wanted to say that he is absolutely right about the feckless behaviour of corporate businesses that disregard the interests of their workers, and I share his view of trade unions. However, does he recognise that there is a world of difference between the burdens we place on those organisations that can happily deal with them and the effects that some parts of the Bill will have—perhaps unintentionally—on very small businesses? I imagine that the businesses he started were such business, at least at the beginning. This Bill has caused fear among small businesses and microbusinesses. There is a real distinction between those heartless corporates and the hard-working SMEs in the hon. Gentleman’s constituency and mine, is there not?

[Steve Yemm]

As a small business founder and someone who has grown a business, I recognise the need for balance. I am grateful to the right hon. Member for raising that point. In my concluding remarks, I put on the record how proud I am of my unions, the GMB and Unite, for the work that they have done with this Government to help deliver this groundbreaking legislation. I will therefore be voting with pride to support the Bill in the Lobby later today.

“Chapter 4A

John Hayes Excerpts

Tuesday 11th March 2025 Commons Chamber

[Greg Smith]

If the hon. Lady will allow me to continue, it will become clear why we take such a position; I will give some concrete examples in a few moments of where the law of unintended consequences will kick in on this provision.

A 2022 study by the Higher Education Policy Institute found that quiet no-platforming, where students decide not to invite otherwise suitable speakers to an event because of their views, was more common than reported cases of no-platforming. Speakers quietly no-platformed include Alex Salmond, Liam Neeson, Harry Enfield, Tony Blair—one that those on the Labour Benches might blink at—and Peter Hitchens. Although this clause is well meaning, it is likely to make matters worse. As James Murray, the legal director of Doyle Clayton, has pointed out, this clause could well cause difficulties for universities in offering a platform to discuss issues on which those listening may have differing views.

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

My hon. Friend is absolutely right to draw attention to the problem in universities. It has particularly found form in no-platforming speakers deemed to be unacceptable or to make people feel uncomfortable because of their views on transsexuals, for example. Kathleen Stock, a distinguished academic and a feminist, was no-platformed in exactly that way because of her view that sex is a biological fact. This clause needs to be examined in that context. I welcome much about this Bill—particularly on trade unions and zero-hours contracts, as it happens—but I feel that this one area needs to be looked at again by the Government, for the very reasons that my hon. Friend made clear.

[Greg Smith]

I totally agree with my right hon. Friend that this area needs to be looked at again to ensure that those unintended consequences that challenge freedom of speech in this country are not allowed to come through. I double-underline that we have no truck with harassment: we absolutely believe that it should be stamped out, using criminal law where necessary, to ensure that perpetrators are brought to justice. This Bill opens the door to unintended consequences.

Terms and Conditions of Employment

John Hayes Excerpts

Tuesday 14th May 2024 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

Let me begin by referring to my entries in the Register of Members’ Financial Interests.

I am grateful to the Minister for introducing the debate, and for making the necessary amendments to primary legislation so soon after the code of practice was approved. It has taken us more than two years, but today we see the first actual legislative change to tackle the blight of dismissal and re-engagement—or fire and rehire, as it is more commonly known. We will not oppose today’s motion, but we are clear that the order does not go anywhere near far enough towards ending this cruel practice, or meet the promises made by the Government.

During the two years since we witnessed those disgraceful scenes at P&O, it has continued to benefit from taxpayers’ cash through Government contracts, and fire and rehire hasusb continued to toxify our industrial relations landscape. While the P&O Ferries case itself did not entirely constitute fire and rehire, it bore many of the hallmarks of the practice and exposed the gaping holes in our law—holes that continue to be exploited; in the wake of the pandemic, there has been a jump in the number of instances of employers choosing to fire and rehire workers.

According to research conducted by the Chartered Institute of Personnel and Development, between August 2021 and 2023, the proportion of firms that conducted fire and rehire almost doubled. What was once a seldom-used device has become a mainstream practice, and part of the wider pattern of growing insecurity at work. In short, it has become a first choice, rather than a last resort. A TUC investigation found that about 38,000 employers were still using fire and rehire as a tactic. However, when we were finally given the code that we were promised would tackle this Dickensian practice, we found instead a vague, weak and disappointing document that would not actually prevent another case as egregious as P&O. On that basis alone, the Government have failed to keep the promise that they made more than two years ago.

The element that many people found most offensive about the P&O case, which today’s motion seeks to address, is the fact that the P&O management were able to look at the sanctions for which they were potentially liable and then decide whether or not they wanted to abide by the law. In effect, the cost of breaking the law was considered to be just another business overhead to be factored into decision making, and, as we saw, the management decided that those sanctions were not a strong enough deterrent to prevent rule-breaking. In its response to the consultation, ACAS said that a 25% penalty

“may not always present a significant deterrent when calculated against the financial costs and risks of an alternative approach.”

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

I raised exactly those concerns at the time in relation to P&O. The hon. Gentleman is making a powerful argument—and, incidentally, I congratulate the Minister on the motion—but the critical factor is the size of the business involved. A very large business can absorb all kinds of costs that a small local firm cannot. That has been the change, and the regulations that we put in place need to reflect that change, because otherwise those large businesses will behave with impunity.

[Justin Madders]

I will refer to other comments made by ACAS in response to the consultation, which I think will pick up some of the right hon. Gentleman’s observations.

We now have a clear indication that unscrupulous employers cannot get away scot-free with breaking the law, but there are concerns that a 25% uplift will not be enough to deter bad employers who are determined to do what they feel is necessary. Once P&O had calculated the maximum penalty that it could face in compensation for each employee, it priced that into its decision. In effect, it was able to treat the law on consultation—a law that is there to protect workers’ jobs and their dignity—as optional. Today’s motion means that breaking the law will remain an option; it just might be a slightly more expensive one now.

Laws are only as strong as their enforcement. We believe that sanctions should reflect the egregiousness of the transgression. If an employer decides to break the law, the sanction should not be capped, but instead should be decided on the basis of the facts. That would mean that any employers who were tempted to brazenly flout their legal obligations, having calculated the cost of breaking the law, would no longer be able to do so, because the cost of the sanction could, in the most serious cases, be much higher than the cost of complying with the law. Smaller transgressions would be treated accordingly by a tribunal. As things stand, the most egregious abuses have a cost ceiling, so those with ill intent can still price in the cost of acting unlawfully.

In its response to the consultation, ACAS said that there were

“grounds for considering whether additional or alternative financial disincentives might help…the government’s policy objectives”,

including

“greater uplifts of awards where this is just and equitable”

or

“where there are especially egregious breaches of the Code.”

It also suggested—this is relevant to the intervention from the right hon. Member for South Holland and The Deepings (Sir John Hayes)—that when deciding appropriate awards, courts and tribunals might be required to consider, for example, whether the employer ought to have known better than to breach the code, the degree of legal advice readily available to it, and its financial resources. We agree with those suggestions. The arrogant, uncaring and deliberate trampling of workers’ rights requires a stronger message from this place that those actions will no longer be tolerated. Bad employers should not be able to buy their way out of doing the right thing, but instead we see the status quo preserved.

Thankfully, many good employers understand the importance of working collaboratively with unions. We commend those employers, and we know that they already go above and beyond the legal requirements, but there is no evidence that the 25% uplift is likely to prove a deterrent to those who do not. The Government do not know how often the compensatory uplift is used in other areas of employment law where there is a similar penalty for transgressing a code of practice, which prompts us to ask on what basis it has been decided that this measure will be effective in preventing employers from failing to follow the code of practice.

We welcome the fact that the order extends the scope of compensation to any situation in which a protective award under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 is applicable. I understand that to mean that more traditional redundancy situations will be covered, but there are limitations. There must be 20 or more employees at the same establishment for the obligations to be activated, which means that many smaller employers—and, probably more pertinently, many more employers whose workforce may be spread across many different settings, retail being an obvious example—can still be excluded. The measure also only protects “employees”, which means that some of the most insecure workers in the labour market will not benefit one jot; and, of course, the Government intend to reintroduce employment tribunal fees, which, as we know from experience, inhibit people from enforcing their rights.

The regulations also provide for a 25% reduction in compensation when an employee unreasonably fails to comply with the code of practice. During last month’s debate on the code, I asked the Minister what elements of the P&O case, or indeed any recent mass redundancy exercise, had led him to believe that such provisions were necessary. I am afraid that I did not receive a satisfactory response then, so I will ask the question again. Is it not the case that nothing in recent high-profile examples of fire and rehire redundancy has made it necessary to give tribunals the power to take away compensation from employees?

We will not oppose the motion, because it is a step, albeit a small one, in the right direction, but let me make it absolutely clear that what is before us will not prevent another case as egregious as that of P&O. It has taken us two years to reach this point—two years in which we have seen growing insecurity at work, and have come no closer to providing the protections that workers in this country deserve. When the Government committed themselves to responding to the outrage of P&O, there was a moment of consensus across the business world, across the political spectrum and indeed across the whole country that this disgraceful practice should be consigned to the history books. Epitomising that consensus, the then Business Secretary, the right hon. Member for Welwyn Hatfield (Grant Shapps), said:

“we will not allow this to happen again…where new laws are needed, we will create them…where legal loopholes are cynically exploited, we will close them, and...where employment rights are too weak, we will strengthen them.”—[Official Report, 30 March 2022; Vol. 711, c. 840.]

Those legal loopholes remain as open as they did two years ago, and there is nothing, absolutely nothing, to prevent the outrage of P&O happening again. That is yet another example of the long list of wrongs that will need a Labour Government to put them right. It is time to end the race to the bottom. It is time to end fire and rehire.

Conversion Practices

John Hayes Excerpts

Wednesday 6th December 2023 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Ms Fovargue. Men and women are peculiar. All of us are characterised by as many particularities, preferences and preoccupations as can possibly be imagined. When we look from a distance, the beach looks uniform; when we get closer, every pebble is different, and so are we. Yet there is a constant in all our lives, and that constant is change, with all its joys and sorrows.

Change is at its most profound when we are growing, maturing and developing, as the hon. and learned Member for Edinburgh South West (Joanna Cherry) said. Some changes are permanent and some are ephemeral, but coping with both means learning from others—often others who know much more. Sometimes we need to ask; sometimes we need to question. If, in the secret garden of love, which is adorned with flowers of all kinds, some blooms are perpetual and some fade, and if we are told that what we choose is no longer permitted and that we need to be forced to grow a different flower altogether, can that be right? Can that be squared with the eclecticism, the strangeness and the particularity of life? For me, it cannot.

Exploring desire is a journey that we all travel. Being guided, counselled and advised sometimes helps us to navigate our way on that difficult journey. Prohibiting guidance, in my judgment, is a short step from a ban on friendship—friendship, which may make burdens lighter and suffocate the fire of fear. Could we, in conscience, really want to make consensual, quiet conversations illegal? No one in this Chamber and no one who contributes to this debate wants cruel, inhumane and spiteful interventions in people’s particular and very different lives. Surely, we cannot ban the freedom to speak, to put our case, and to converse.

I glory in our differences in all its richness, and I congratulate in particular the hon. Member for Kirkcaldy and Cowdenbeath (Neale Hanvey) on what I thought was an outstanding speech. Life is complicated, and in the mists of its confusion is the torch of free speech and free thought, which burns brightly.

[Florence Eshalomi]

On the right hon. Gentleman’s point about life being complicated, it is complicated for a number of people, including the many black and minority ethnic people who still, to this day, have not had the courage to come out because of the stigma and fear. Does he not appreciate that those practices make it even harder for those people to speak out and be their true selves?

[Sir John Hayes]

If the hon. Lady is speaking of what I described as cruel and spiteful interventions in quiet, or sometimes less quiet, lives, then yes, of course. However, if she is referring to the kind of conversations that I described, which help people to navigate their way through life, would she really want those prohibited and made unlawful? I cannot think she would.

When we consider cancellations, bans and prohibitions —on whatever grounds, but particularly on the grounds of activists who legitimise them on the basis that they are progressive and that anyone who opposes them is a heretic—I say that if to be part of a crusade against puritanical militant transsexuals is heretical, then sign me up. If it is heresy to say that sex is a biological fact, then count me in. On that basis, I am proud to be a heretic.

--- Later in debate ---

[Stuart Andrew]

My hon. Friend raises an important point. There are elements that could bring about prosecutions, but we are aware that more work needs to be done on providing the guidance that the police, the CPS and so on need. There have been accusations that nothing has been happening in the past couple of months, but that is part of the work that we have been looking at. What could we do to provide encouragement and confidence to those who are implementing the protections of the law and give them the guidance that they will need? I hope that we will be able to provide more of an update on that in the time to come.

[Sir John Hayes]

The Minister will be aware that many young people go through gender dysphoria and there is some evidence that that has increased over time. Growing up is a confusing time, as I said in my speech. Although I entirely agree with him about prohibiting cruel and spiteful practice, on the business of seeking counsel during that confusion from family or friends, or perhaps from an organisation or a church, we surely would not want to ban that.

[Stuart Andrew]

My right hon. Friend raises a point that I am about to address.

[Sir John Hayes]

Can he hurry up?

[Stuart Andrew]

Absolutely. I think we can agree that we must take particular care in this area when we consider legislative action. Any legislation targeting harmful practices must not affect the wider ability of parents, teachers, councillors, religious leaders or healthcare practitioners to have open, exploratory and sometimes even challenging conversations with young people who are expressing or exploring their identity. The hon. Member for Vauxhall (Florence Eshalomi) put it very well when she talked about her church and many people seeking support from that church. Protecting legitimate talking therapies is essential, especially for young people. We must not inadvertently criminalise or have a chilling effect on legitimate interventions and conversations.

I know from personal experience that it was conversations with my mum that helped me get through my period of coming out and realising what my sexuality was. I would not want my mum to feel that she could not have that honest conversation. Despite the fact that I am a big supporter of the conversion practices Bill, I have, as I have got into the detail, recognised that there are complexities that need to be addressed to ensure that those honest conversations can be had.

UK Concussion Guidelines for Grassroots Sport

John Hayes Excerpts

Tuesday 2nd May 2023 Commons Chamber

[Stuart Andrew]

I thank the hon. Gentleman for welcoming the guidance. Prevention is important. It is up to each of the national governing bodies to draw up plans, and in every meeting I have with those bodies I will keep asking what they are doing in that area. We will ensure that we monitor the success of the guidance. Just last week, we were talking about how we will measure success and ensure the messaging is delivered effectively.

If research suggests that we need to amend the guidance, then we will amend it. We will keep up with the latest available medical research and take evidence from all over the world. Indeed, medical experts from around the world helped us to develop the guidance.

On the provision of health services, I know that my right hon. and hon. Friends at the Department of Health and Social Care are taking the issue seriously, as part of a wider brain injury strategy, and I am sure they will make announcements in due course.

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

Brain injury blights thousands of lives each year. The Minister is to be congratulated, as are his immediate predecessors, for taking the issue more seriously than it has been taken by Government for decades. Nevertheless, more needs to be done both on preventative measures of the kind that have been raised already and on aftercare. When concussion occurs, what happens 24 or 48 hours later, or later still, matters too. In developing the next stage of the strategy, will the Minister recognise that this is a matter of what happens before, during and after such an event?

[Stuart Andrew]

I know that my right hon. Friend is vice chair of the all-party parliamentary group on acquired brain injury and takes a keen interest in this area. I hope that the publication of the guidelines shows how seriously we are taking the issue. We want to ensure that the best possible information is available, and we will liaise constantly with the research groups that have been established, so that the guidelines will be updated if needs be.