Enterprise Bill [Lords]

Jonathan Djanogly Excerpts

Tuesday 2nd February 2016 Commons Chamber

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I declare my interests as stated in the Register of Members’ Financial Interest.

I am always happy to welcome Conservative-proposed legislation that is aimed at assisting the conduct of business, particularly small business, not least because I represent a constituency with one of the largest proportions of small business ownership in the country.

I want to address the role of the small business commissioner proposed by part 1 of the Bill. I am not concerned about the concept of the new role per se—I thoroughly welcome it—but I want to explore its scope and interaction with existing schemes.

On capacity, the new £1.1 million SBC website should handle 390,000 disputes from 70,000 businesses, yet the SBC will deal with only 500 complaints a year. That gives rise to the question of what will happen with the rest of the disputes and what the real impact of the proposal will be. Could the site cope with the workload of significant numbers qualifying for assistance? That remains unclear.

I am also concerned that the background papers are light in identifying what is currently being done to give advice and information to small firms. In other words, is this going to be a consolidation of various existing advice givers, or will it be something new, delivered in a new way?

The law already forces large companies to report payment practices on a six-monthly basis. Likewise, the prompt payment code has been strengthened to start a 60-day maximum payment period. Importantly, the Government have been leading the way by imposing strict payment terms on themselves. All of that is very good, but it would be helpful to further assess whether those issues are working and where the remaining gaps are. I am surprised that the remit of the SBC covers only large private organisations, not public sector ones. I am not sure why that is.

There is also a regime for statutory interest on late payments where there is no contractual provision. Should we not be asking why that has not worked? Can we assume that to be the case, given this proposed legislation? If so, should we not be getting rid of the old fixed interest legislation? Indeed, where it applies, is it simply being ignored by large firms that might be threatening small firms that try to enforce it?

It is impressive that we have a Small Business Minister—the role in itself is a statement of this Conservative Government’s support for small business—and she is doing an excellent job. However, it would be interesting to hear a little more about how the Minister and the commissioner will interact and divide their jobs.

That leads us on to examining what the SBC will actually do. The SBC will take a non-legislative approach and will not give legal advice. There are no proposals to change court rules, and nor do we propose to go down the statutory route for enforced interest or penalties. That is my position, but it would be helpful to hear further justification for discounting the alternatives.

What has been proposed is more mediation and general advice, the complaints procedure and a statutory means for the SBC to make recommendations to the Secretary of State about the publication or provision of advice and information to small businesses. The question is whether the SBC should offer mediation, and the Government are saying no. My concern is that both parties need to agree to mediation, so if the late payer sees that mediation will remain as the low-cost option after a debt summons has been issued against it, why would it bother settling early, especially if one has to pay for mediation recommended by the SBC? I think the position might need to be reviewed. If the position is maintained, it might be smarter to have some kind of penalty or cost implication if one party has refused to attempt mediation before court.

I am also slightly unsure how the SBC will be encouraged to engage in signposting help at an early stage. We will need to tread carefully so as not to allow signposting to become legal advice. On the other hand, the SBC will be able to consider complaints by small companies at an early stage, and that could provide room for conflict. When it comes to providing advice, will that be generic or relevant to the sector in which a company operates, where, for instance, invoice payment times may vary significantly?

The notes focus on late payment advice, but that is only one aspect on which small businesses need help. For instance, a small business may well not have the resources or manpower to check the environmental or child labour practices of a large foreign supplier. Will the SBC help on such an issue? A lot of such signposting activity is currently carried out by business organisations, such as the Federation of Small Businesses and chambers of commerce. Will the SBC be expected to work closely with such organisations?

On the complaints side, the SBC can demand and order little. For example, the commissioner will not be able to order the production of documents from a company that has been complained about. Given the lack of hard powers for the SBC, the question is how effective they will be. I think that a big part of the answer will be the SBC’s ability to name and shame. Will the Minister explain how that will be carried out and publicised? The other key issue will be to have a charismatic leader, who will not be overwhelmed by the number of businesses involved or the lack of powers that go with the job.

That leads to the broader question of what the SBC should be about. In the other place, there was a description of the broader powers of the Australian SBC, and the Minister, Baroness Neville-Rolfe, responded that despite the success of the position in Australia, the Government had deliberately decided not to give our SBC as wide a remit. However, she did not really explain why that was the case, and an explanation would be helpful. Are there, or will there be, provisions in the Bill that will allow the role to be adapted, as is likely to be required? I know that the FSB wants there to be an advisory panel for ongoing consultation. Will that be provided?

Of course, it is not only Australia that has a champion for small businesses. The United States has had a Small Business Administration since 1953, and I once had the pleasure of visiting it in Washington DC. With more than 3,000 staff and a series of forthright commissioners who happily make a huge fuss about proposed Government regulations on business, it is pretty formidable. It has many other roles. Importantly, it leads on efforts to deliver 23% of prime federal contracts to small businesses, and it provides loan guarantees of up to 90% to small businesses. Although I am not saying that we should necessarily copy those foreign small business commissioners, will the legislation enable an ongoing review of what is required for the SBC to ease the way through the difficulties and regulation that we know hinder all small business?

[Several hon. Members rose—]

Trade Union Bill (Programme) (No. 2)

Jonathan Djanogly Excerpts

Tuesday 10th November 2015 Commons Chamber

[Mr Jonathan Djanogly (Huntingdon) (Con)]

The Opposition are protesting somewhat too much. When I looked at the amendments tabled for today, I was absolutely amazed by the lack of amendments on very important parts of the Bill, which may have been discussed in Committee—[Interruption.] Opposition Members say they did not have the time; they had the time to table amendments but did not do so, and today we will not debate very significant parts of the Bill that I think should be debated.

Question put and agreed to.

Trade Union Bill

Jonathan Djanogly Excerpts

Tuesday 10th November 2015 Commons Chamber

[Chris Stephens]

The hon. Gentleman is right. I found it curious that when I googled my name I got a link to his website and it was the exchange that we had in Committee. In fairness, the same thing happens with the hon. Members for Brent Central (Dawn Butler) and for Cardiff Central (Jo Stevens). The Open Rights Group is saying that trade union ballots do not apply in these cases, because there is the additional safety of a scrutineer and so on.

We are told that trade union ballots should be subject to tighter regulation than elections for officeholders in private businesses or non-governmental organisations. If the Government were genuinely concerned about levels of electronically based elections in the private sector, they would legislate for all bodies to be required to use postal-only ballots. They should also rerun the election for the Mayor of London using a postal-only ballot.

Labour’s amendments on balloting are in a similar vein. They can be broadly supported, as their intentions mirror that of our amendment. We are asking Members to vote for our catch-all amendments to make this draconian, Dickensian Bill a little bit better.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I rise to speak to new clauses 5, 6, 7 and 9. In overall terms and despite the heat coming out of the Bill, I think we can all agree that we have moved a very long way in industrial relations and strike laws towards consensus and away from the polarisation we saw in the early 1980s.

The Trade Union Act 1984 requirement for compulsory industrial action ballots to be put in place for there to be statutory immunity was a very significant step, although it did cement the rather odd situation whereby there is, technically, no right to strike. Rather, we give unions in certain circumstances statutory immunity for the tort—civil wrong—of inducing a breach of the employment contract. That being as it may, I think we can all agree that voting before a strike is vital, and that the vote itself should be carried out in a free and fair manner that reduces, so far as possible, any chance of coercion, threat or intimidation to the voter. It is certainly the case that the Bill addresses ballots insofar as voter turnout requirements and how the questions are put, but it does not address the question of how the ballot itself is physically conducted. This is now being put to the test by the Opposition in their amendments. New clause 7 argues for secure workplace ballots and new clause 5 suggests implementing electronic voting in ballots for strike action.

My first observation is that those two concepts do not necessarily sit very well together. Namely, if the Opposition believe that e-voting is the future and the way to go, why are they proposing returning votes to the place of work? The problem is actually more profound, of course. The security of a postal vote sent to a person’s home does remove a large area of risk in terms of intimidation that could attach to returning votes to the workplace. The benefits of the 1984 ballots and the use of post were hard won. They have been of great benefit to working people; not perhaps to the union organiser or the militant activist, but to the everyday working man and woman who has benefited from being able to reflect calmly on the merits of a strike ballot in the safety of their own home.

[Jo Stevens]

The hon. Gentleman refers to intimidation when people cast their ballot. Does he have any real examples of intimidation in ballots?

[Mr Djanogly]

I am not here to accuse anyone. If the hon. Lady thinks that the 1984 legislation was introduced because there were no instances of intimidation at that time, we need to go back to the history books. I do not intend to do that today. I am not saying that postal ballots will always be free from intimidation, particularly if several members of the same family work in the same place. I appreciate that new clause 7 requires that votes at the workplace are private and free from unfairness, but the question is how far does that go? Does it cover only the voting room or the factory premises? What about beyond the factory gates and the pickets? I am concerned that this could be a retrograde step.

[Andy McDonald]

The hon. Gentleman talks about intimidation in the workplace. He is a lawyer. Let us have some evidence to back that up, rather than just putting it out there and casting aspersions. Get on and give us some evidence.

[Mr Djanogly]

As I said before, we are looking at the optimum way of voting. The Opposition’s new clause 9 provides for the possibility of a combination of voting methods to be used, but I note that the combination is to be selected by the union. Unless I have read it wrong —someone might want to put me right—this could imply that workplace-only ballots could, in effect, be reintroduced via the back door. Again, I would see that as a step backwards that should not be supported.

On electronic voting, it could be said that this is where society is heading, a point made very strongly by the hon. Member for Glasgow South West (Chris Stephens), and that union law should take the lead on something that will be generally adopted. I have not seen the most recent opinions of the Electoral Commission on e-voting, but I recall that it had serious concerns about its security a few years ago. Will the Minister please advise the House to what extent he has discussed this with the Electoral Commission, and whether he has reviewed the role of the certification officer with that of the Electoral Commission in the conduct of ballots? In that regard, if in the future we wished to move towards electronic voting generally, could this be effective for unions under existing legislation, such as the provisions in section 54 of the Employment Relations Act 2004? In other words, are the e-voting amendments required at all?

If only because of the technological changes, this has been a useful debate. However, I am not yet convinced, in terms of security, that the proposals are the correct way to go at the current time.

[Kevin Brennan (Cardiff West) (Lab)]

I declare an interest as a member of the Musicians Union and Unite, and I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

This group contains our new clauses 5 to 9 and amendments 7 to 9. It is good to return to the Bill after a jam-packed Committee stage, as it is clear from reading the proceedings that the Government did not provide sufficient time. The Minister said earlier that the proceedings finished early, but neglected to tell the House that they had run late the night before because the Government were afraid there was not enough time to conclude proceedings. He missed that bit out.

--- Later in debate ---

[Kevin Brennan]

My hon. Friend is right. This is just what Tory Governments do, regardless of the evidence. They have not presented any evidence. I have read through the Committee proceedings and looked at the evidence given, but there is no evidence to support the changes in the Bill. It is a knee-jerk instinct, and that is greatly to be regretted.

We tabled many amendments in Committee, but, rather surprisingly, the Government did not accept any of them, despite the cogency of my hon. Friends’ arguments and their excellent drafting. We have therefore had to submit further new clauses. In answer to the hon. Member for Huntingdon (Mr Djanogly), I have to say he has been in the House a long time and is very experienced. He knows that Report is not a repeat of Committee and that, given the extremely truncated time limit, it is necessary to focus on a small number of items. That makes no difference to the fact that in Committee we made clear our fundamental disagreement with the Bill in almost every respect.

[Mr Djanogly]

The hon. Gentleman says he does not have enough time, but how could he come to this place today having not tabled amendments on, for instance, trade union funding or the vote percentages? Everyone, including all the union members who have written to Members, has been talking about these things, yet there is not a single amendment dealing with any of them.

[Kevin Brennan]

There were many amendments in Committee, but I think the hon. Gentleman will find there is not enough time to discuss those amendments that have been tabled, let alone additional items. However, if he wants to lobby his Ministers and Whips for more time so that we can put down more amendments, I would welcome that.

New clauses 5 would permit electronic voting in trade union ballots for industrial action, and new clause 6 would permit trade unions to use electronic voting in all other statutory elections and ballots, including elections of general secretaries and political fund ballots. Throughout the Committee stage, the Government sought to dress up the Bill as some kind of modernisation, but their continued refusal to introduce e-balloting alongside secure workplace balloting clearly demonstrated they were not serious about modernisation. Online balloting can be as safe and secure as any other form of balloting, and is already used for a variety of purposes in the public and private sectors, including at J. P. Morgan Asset Management, Lloyd’s of London, Chevron and, of course, the Conservative party itself, which recently selected its London mayoral candidate by e-balloting.

If Ministers’ reason for resisting e-balloting in the Bill seriously was fraud and concern about what the Speaker’s commission said about voting in parliamentary elections, why would they employ the very same method in their own party elections? We all know that the real fraud is the fraudulent argument of Ministers. In reality, they want to discourage turnout and make the thresholds harder to reach. That is rule 1 from the Tory party political playbook: disfranchise those who might disagree with it.

--- Later in debate ---

[Kevin Brennan]

Before I give way to hon. Friends, I shall give way to the hon. Member for Huntingdon because he is usually paid by the word.

[Mr Djanogly]

I can tell the hon. Gentleman that I have now looked at amendment 5, and in support of my hon. Friend the Member for Peterborough (Mr Jackson), who made the point that an individual may want to contract with his employer, I point out that the measure talks about the trade union contracting on behalf of employers, which is a rather different point.

[Kevin Brennan]

The hon. Gentleman does not understand that trade unions are democratic organisations. They do things on behalf of their members because they are elected and chosen to do so as democratic, voluntary organisations. There is no attack on the individual, and unusually for him his intervention is specious.

--- Later in debate ---

[Stephen Kinnock]

I agree entirely with my hon. Friend. We hear a lot from Conservative Members about smart government and deploying resources according to priorities. Does any hon. Member honestly believe that using police resources on this matter would be a good use of already stretched resources? I think not.

The digital age has brought a revolution in the world of work. That has thrown up several questions, but also offers employers, trade unions and Government alike a once in a generation opportunity to work in partnership—a chance to shape a framework that provides the blend of flexibility and security that this new reality requires. If all parties were to seize that opportunity, we could potentially see the green shoots of a 21st century industrial relations culture that would, in turn, enable the development of a labour market that is fit for purpose and resilient in this new age. Let us not waste that opportunity with an adversarial and counterproductive Bill such as this.

[Mr Djanogly]

rose—

[Mr Speaker]

Order. Before I call the hon. Gentleman, I would say to him that I wish to call the Minister at, or close, to 5.50 pm, so he has three or, at most, four minutes.

--- Later in debate ---

[Mr Djanogly]

Thank you for squeezing me in, Mr Speaker.

Given the Opposition’s comments at various stages of the Bill, I am surprised that only the SNP—in new clause 4—has suggested amendment of the role of certification officer. As a shadow BIS Minister some years ago, I visited the certification officer, and everything I saw there shouted that it was a weak, toothless regulator crying out for reform. I wholly support the Government’s attempts to do so.

As for new clause 4, I do not support the idea that the certification officer should have to have expertise in trade union law, although obviously some members of his staff will need to be experts, as much as others will need general legal or accounting skills. It is also somewhat ironic to hear that specific legal qualifications should be required when we know that the last Labour Government specifically excluded unions from regulation under the Legal Services Act 2007. The requirement in new clause 4 for a certification officer for Scotland may fulfil the SNP’s political mandate, but it would be unhelpful for Scottish and other British businesses which want to see a single regulator dealing with unions equally.

Given the wide political and practical debates involved in the unions’ political funds, it is surprising that it has been left to the hon. Member for Clacton (Mr Carswell) to initiate a debate on this important issue through amendment 1. To set up a political fund, trade unions must first ballot their members to adopt political objects as a union objective. Trade unions can then support political objects only with money from their political funds. The funds may also be spent on union objectives that are not political. The amendment is unnecessary because the Bill includes an opt-in provision.

On a connected issue, will the Minister confirm that I am right in thinking that failing to opt into the levy will not necessarily mean that a union member’s overall contribution will be reduced by the amount of the political contribution? If so, should we not consider doing that? Furthermore, given that statute dictates that companies require an annual vote on political donations, why should not the political levy be voted on annually by trade union members? Perhaps that could be addressed as the Bill makes progress.

[Mr Speaker]

To wind up the debate I call the Minister, Mr Nicholas Edward Coleridge Boles.

Apprenticeships

Jonathan Djanogly Excerpts

Wednesday 4th February 2015 Commons Chamber

[Mr Chuka Umunna (Streatham) (Lab)]

I beg to move,

That this House believes that more high-quality apprenticeships are essential to the future prospects of young people and future success of the economy; notes with concern that the number of 19 to 24-year-olds starting an apprenticeship has fallen by 6,270 in the last year, that 24 per cent of these apprentices are receiving no formal training, and around one in five are not receiving the appropriate minimum wage; calls on the Government to institute a ten-year national goal to grow the number of apprenticeships for young people and boost the standing and value of technical and vocational education so that the same number of young people that go to university undertake a high-quality apprenticeship; and further calls on the Government to use the money it already spends on procurement to require suppliers for large Government contracts to offer new apprenticeship opportunities, safeguard apprenticeship quality with new standards so that all apprenticeships are at at least level three and last a minimum of two years, ensure Government plays its part by creating thousands more apprenticeships in the civil service, give city and country regions a role by devolving money for adult skills and give a central role to business through sector bodies to drive up standards and increase apprenticeship places.

I note what you have said about time, Madam Deputy Speaker. I shall try not to drone on for too long.

I want to put this debate in context. It is not simply a debate on apprenticeships. The issue of apprenticeships is central to a wider debate about our economy and whether it is fit for purpose. The changing nature of the world is full of opportunity for Britain. Technology is transforming the way we live. New emerging economies with ballooning middle classes are providing a mass of opportunity for our businesses, but these forces of change are also bringing challenges: how do we deliver the goods for our people when the uncertainty which follows from all this creates insecurity for many?

As I have said before, the answer is to shape these forces of change and do all we can to ensure that everyone can access the opportunities available—in short, to ensure that everyone is connected to the new global economy and has a stake in the future. That requires an economy producing good, decent jobs that are fulfilling, afford a level of dignity, respect and security, and, above all, pay a wage that people can live off. Sadly, that vision is but a dream for too many in Britain today. Under the current Government, average wages have fallen by £1,600 a year on average. They have fallen by more than £3,200 in my constituency. Almost 5 million people are not earning a wage that they can live off. We are seeing rising insecurity, with 1.4 million zero-hour contracts. There are 3.5 million people in work who say they want extra hours.

As a result of all this, our fiscal deficit remains stubbornly high at £91 billion. The Office for Budget Responsibility was clear in its autumn outlook published with the autumn statement that the Government have failed to meet their two fiscal mandates in this Parliament because stagnating wages have led to a fall in national insurance and income tax receipts. However, the living standards crisis that I refer to and the persistence of the deficit are symptoms of a bigger problem: the failure of Government to help raise productivity across our economy.

Sure, Britain leads in aerospace, the automotive industry, business services, chemicals, the creative and digital industries, food, green tech and pharmaceuticals, among other industries. We should celebrate the success in these sectors, but across the economy overall, the gap between UK productivity per hour worked and the rest of the G7 grew to 17% in 2013, the largest difference since 1992. So on average it now takes a British worker until the end of Friday to produce what a German or French worker has finished before they clock off on Thursday.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I am sure the hon. Gentleman will want to remark on the success in my constituency under this Government, with apprenticeships doubling to 1,500 a year. It is not just a matter of problems; it is also a matter of dealing with success. In many parts of the country where there is high growth and unemployment is falling—in Huntingdon it has fallen to 1%— we need better training so that employers can invest in their staff to deal with the lack of skills that exists as our economy improves.

[Mr Umunna]

I agree that quality is important, but apprenticeships in the hon. Gentleman’s constituency have fallen by 11%. Many apprenticeships are not the high-quality apprenticeships that I think he refers to. Many of them are level 2.

There has been much debate in economic circles as to why we have gone backwards on productivity so fast under this Government. People have pointed to the lack of business investment, which is compounded by the problems that businesses have faced in getting access to finance, but skills shortages in our economy are also holding Britain back. Too many young people in particular do not have the skills our businesses require when they leave secondary education, and even among those who do have skills and qualifications, there is a mismatch between their skills and the demand for technician-level competency, particularly for jobs requiring people with science, technology, engineering and maths skills—the STEM skills.

To address this we need a major expansion of high-quality vocational and technical education, in particular apprenticeships for young people, offering more and better work-and-train opportunities in all sectors of the economy, giving them those skills which employers say are lacking.

--- Later in debate ---

[Mr Umunna]

I will give way to—

[Mr Djanogly]

On a point of order, Madam Deputy Speaker. The hon. Gentleman said that the number of apprenticeships in my constituency had fallen, but I am looking at the House of Commons published figures—

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. Mr Djanogly, you are continuing the debate; that is not a point of order for the Chair. We are pressed for time, and we need to make sure we hear the opening speeches from both sides and have the debate. You have not indicated that you want to speak, whereas others have. We need to get on to the debate, so I call Chuka Umunna.

Post Office Mediation Scheme

Jonathan Djanogly Excerpts

Wednesday 17th December 2014 Westminster Hall

[Mr Arbuthnot]

That is a very difficult question to answer, because the Post Office pleads secrecy. It will not tell us what is happening in the mediation scheme. We asked in July how the mediation scheme was going, but it refused to tell Members of Parliament because it was all confidential.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I congratulate my right hon. Friend on securing this debate and on the huge amount of work he has done on this issue over many years.

Unfortunately, this saga has seriously affected the reputation of one of my constituents. I use the word “saga” because what I find so unacceptable—I think my right hon. Friend was just coming to this—is the delay. For year upon year, people’s reputations have been on the line and sub-postmasters have not known what their status or position is or how the issue is progressing. I find the Post Office’s foot-dragging, inefficiency, and years of delay absolutely unacceptable.

[Mr Arbuthnot]

My hon. Friend is absolutely right. When people’s houses are being repossessed, as is happening throughout the country, time really matters.

The Post Office has been arguing that these cases should be excluded. It has been doing it at a stage of the process when there is not professional representation in front of the working group, because no professional advisers have appeared before it. Even the sub-postmasters have not appeared in front of the working group when the Post Office is arguing that they should be excluded from mediation. Despite the Post Office’s heralding the payment of professional support for all those sub-postmasters, in practice it is a sham. It is doing it in the interests of the integrity of the scheme.

What conclusions must we reach, therefore? The Post Office has built up the hopes of sub-postmasters so the scheme has their support. It has broken its word to Members of Parliament in so many different respects that it is frankly bewildering. There are many ways to describe it, but I think the best is to say that the Post Office has been duplicitous. It has spent public money on a mediation scheme that it has set out to sabotage.

In the “Today” programme interview last week, the Post Office spokesman said:

“I am really sorry if people have faced lifestyle problems as a result of their having been working in Post Office branches.”

These are not “lifestyle problems”. Jo Hamilton had to get help from her parents as well as from her village. Her mother and her father then both had a stroke. Was that connected? I suspect that it was. Some sub-postmasters lost their businesses, their houses and their reputations; some went through divorces and lost their families; some had to live in their cars; some had health problems; and Noel Thomas and others went to prison. Those are not “lifestyle problems”.

The Post Office spokesman also said that, “It’s not yet over.” If it was up to the Post Office, it would be; the Post Office is trying to close down the mediation scheme. And for some who have been through mediation it is actually over, because they have experienced legal bullying and the Post Office has no intention of getting to the bottom of what went wrong. Documents have been destroyed or lost.

Small Business, Enterprise and Employment Bill

Jonathan Djanogly Excerpts

Wednesday 19th November 2014 Commons Chamber

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I declare my interests as they appear in the Register of Members’ Financial Interests.

On Second Reading I raised my concerns about the provisions in clause 75 and part 7, and related issues in part 8 and schedule 3, to set up a register of people with significant control—in effect, a register of beneficial ownership. I questioned whether they would have benefit in terms of countering illegal activity or investigating tax evasion, even if this was at the triple cost of loss of privacy, increasing the regulatory burden on companies and threatening investment in British companies. Since that time, my concerns that we are doing the wrong thing have increased, not reduced.

I am sorry not to have been given time to speak to my tabled amendments. It is of concern also that the issue of privacy was not raised by any amendments tabled in Committee, with the honourable exception of the wise remarks made by my hon. Friend the Member for Newark (Robert Jenrick) in the stand part debate. He raised the key question: how many of the 22.5 million English companies is it actually suspected may be subject to some wrongdoing that could be tackled by these proposals? This question has yet to be answered by the Minister or anyone else. I respectfully suggest that this is not the proper process for encouraging investment or portraying this Government as business-friendly.

The Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), replied in Committee that the impact assessments undertaken indicated that

“our proposed measures are lawful, necessary and proportionate”––[Official Report, Small Business, Enterprise and Employment Public Bill Committee, 30 October 2014; c. 423.]

So I went through the impact assessment, and I cannot find such justification at all. In fact, it is by some way the weakest case I have ever read in an impact assessment. For instance, the impact assessment makes it clear that there exists little or no data or academic literature quantifying the proposition that a reduction in crime will follow as a result of a register of people with significant control.

My prediction is that these part 7, clause 75 and schedule 3 provisions will not work. In many instances there will be confusion as to who or what is a shareholder with significant control—for instance, in terms of family holdings, let alone complicated trusts, with expensive advice then required. The proposed data collection method is based on self-reporting, with no verification mechanism, which could make it easy, especially for non-resident shareholders, to misreport or simply to give the shares to someone else to hold.

For the purpose of this debate, let us take as our starting point the G8 agreement that companies should know who their shareholders are. I repeat: companies—not commercial competitors, NGOs, direct marketers, spammers or providers of financial services looking for clients, let alone criminals, fraudsters and all the others who could use or misuse information provided under these provisions.

Now we have the further G20 communiqué proposing a crackdown on secret shell companies. However, this was not accompanied by a call for share registers to be made public. So how did we get from the narrow G8 and G20 proposals to what we have in the Bill?

[Robert Neill]

My hon. Friend is making a powerful case and I very much agree with him. Is it not significant that on the back of the G7 discussions these proposals might be extended to the British overseas territories and Crown dependencies, many of which are already well in advance of most other jurisdictions on transparency on an international scale?

[Mr Djanogly]

That may be the case, but it has not been said in public.

There is a hint in the impact assessment that, amazingly, provides only two alternatives—do nothing and rely on voluntary campaigns, or jump all the way to the Bill provisions and propose company registers, with companies reporting annually to Companies House. But why does the impact assessment not review more focused registration regimes? That will now need to be addressed in the other place.

This is not an academic issue. In particular, there seems to have been a wholesale disregard for the material impact that these provisions will have on privacy. People can buy assets privately unless the asset is public, such as a listed stock. They may not want other people to know what they own; they may have cultural, security or even religious-based concerns about people knowing that they own part of a company. What evidence do the Government offer in the impact assessment to justify destroying this right of privacy? Very little.

As for the increase in the regulatory burden, the impact assessment talks of implementation costs on companies and ongoing costs. It also says that the costs to people who need to register their interests cannot be ascertained, and those are the same people who may have to take expensive advice.

Investment in British companies is also threatened. The impact assessment methodology is again flawed, because it looks at the quantity of companies affected, not the quality. In other words, one lost huge Chinese investor deciding not to use or invest in an English company could be very damaging to UK plc, even if a thousand single-owner tiny companies say that this measure will not impact upon them. Again, the impact assessment does not support the Government’s contention that they remain convinced that this reform will be good for business and the UK business environment. What the IA actually says is:

“There is a risk that we have not accurately accounted for this potential impact on overseas investment in the UK and UK competitiveness . . . particularly since the UK will likely be a ‘first mover.’”

One has to ask why we should be the first mover, with associated risks as we claw ourselves away from recession.

And here’s the rub: foreign companies will not have to keep this register, which means that British people who legitimately wish to retain their privacy will be forced not to use English companies, but to use, say, Irish or British Virgin Islands ones instead. As always, it will be the relatively small, unsophisticated businessman who bears the weight of regulation aimed at catching drug smugglers, which I suggest these proposals will fail to do anyway.

Looking at this Bill as it goes to the other place, I would consider abolishing the need for companies to file annual returns of their PSCs—that is, returns that will be outdated within five minutes of being filed. Accepting that the company PSC register is instigated to comply with the G8 and G20 requirements, if the company does not wish to release the PSC register voluntarily, the applicant should have to ask the court for access. I suggest that the proper purpose grounds for access should be restricted to national security, personal safety issues and tax investigations.

In this way Government crime and tax agencies would be able to make their inquiries, but the registers would still protect privacy for those companies that wished to respect this right. At the same time, the unjustified costs and regulation of keeping the central register would be abolished and foreign investors would not be put off investing in the UK. Finally, investors, especially British investors, would be saved the irrationality of having to trade through UK branches of foreign companies in order to retain their privacy rights. There is time for the other place to review these provisions, and I hope it does so.

[Matthew Hancock]

Given that there will be no winding-up speeches in this debate, I would like to say for the record that many of the points that my hon. Friend has made, and made eloquently, will be considered in the consultation and, no doubt, in the other place. The key is to deliver on the agreements we have made internationally, and to do so in a business-friendly way. There are reassurances we can give on some of those points, and I know that he is meeting the Minister responsible in due course. I hope that gives him some satisfaction.

[Mr Djanogly]

I am very pleased indeed to hear that confirmation from the Minister. I look forward to having further meetings and seeing progress, because I can assure the House that there is a lot of concern about these provisions out there in the country, and it needs to be listened to.

School Funding

Jonathan Djanogly Excerpts

Thursday 13th March 2014 Commons Chamber

[Mr Laws]

I completely disagree with the hon. Gentleman. If he goes to some of the most disadvantaged communities in the country, he will find that they are extremely welcoming of the Government’s actions, particularly on the pupil premium that has been put into authorities, some of which were already receiving generous levels of disadvantage funding. Schools in many of those areas welcome the action that we have taken as a coalition Government. They welcome the pupil premium, which, because it follows disadvantage, has gone heavily to the areas he is talking about.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

This is welcome news for Cambridgeshire. As my right hon. Friend knows, Cambridgeshire receives less funding than anywhere else in the country. That has been really showing in our schools, which have been reducing their teachers and struggling under this unfair funding formula. In the past 10 days alone, 750 of my constituents have signed a petition calling for immediate support. I ask my right hon. Friend to look kindly on Cambridgeshire when he comes to administering his £350 million pot.

[Mr Laws]

I entirely agree with my hon. Friend and I compliment him on the work that he and other county MPs in Cambridgeshire have done to raise the issue. I know that there is real anger in Cambridgeshire about the fact that it has been left as such an unfairly underfunded authority for so many years. I hope that schools in that area will welcome the uplift. The increase on which we are consulting would take the per pupil funding in Cambridgeshire from £3,950 to £4,225, which is an increase of around 7%. That is a significant uplift for its schools.

Oral Answers to Questions

Jonathan Djanogly Excerpts

Monday 10th February 2014 Commons Chamber

[Matthew Hancock]

The resource spending that supports sixth-formers is exactly the same per student in free schools, sixth-form colleges and school sixth forms. We have a national funding formula. Before this Government came to office, we did not have a national funding formula; we had different funding for different pupils. We think it is fairer to have the same funding per pupil for all students, and that is what we are doing.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

The funding differential is being accentuated by very significant differences in funding grant around the country, negatively affecting the f40 authorities generally and the Cambridgeshire authority more than any other. How is my hon. Friend planning to put this right?

[Matthew Hancock]

That is exactly the sort of anomaly that we have put right by making sure that resource funding is exactly the same per student for 16 to 18-year-olds, no matter what type of institution or where in the country.

--- Later in debate ---

As the House will recall, part 1 of the Bill covers adoption, and we have made Lords amendments 1 to 11 to this part. Through Lords amendment 1, we have added a clause that will enable us, by regulation, to ensure that those with a prescribed relationship to people adopted before 30 December 2005 can apply to access intermediary services to facilitate contact with the adopted person’s birth relatives.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

Will the Minister please say whether there will be a presumption in favour of disclosure to children and grandchildren? Specifically, if an adopted person does not wish to have contact with the birth parents, does the amendment state that prescribed persons can go against those wishes?

[Mr Timpson]

I am very grateful to my hon. Friend for his continued interest in this important matter. The whole basis of the amendment is to extend the provisions that already exist, so that anyone who wants to make further inquiries, about accessing information or making contact, has to do so through the intermediary services. There is not a presumption, therefore, in that sense. We are looking to go beyond the direct line of descendants from the adopted person, who obviously fall within the prescribed relationship category, and consult on whether we should widen that to others. The provision certainly does not work on the basis that if someone does not want to have contact there is a presumption that that will take place.

[Mr Djanogly]

Is my hon. Friend saying that the intermediary might have more discretion than the adopted person, who may have a different view from the children?

[Mr Timpson]

The intermediary service is there to ensure that anyone who seeks access does so in a way that does not compromise the position of the person they are seeking either to gain access to or make contact with. That is in line with the approach that already exists, and which works well and successfully. What I can say on the record to reassure my hon. Friend is that this will not force anybody to have contact if they do not wish to do so. Clearly, there will be lots of reasons why people will either want to make contact or have access to records. For example, someone may want to understand the genetic history of direct descendants to see whether there is a prevalent hereditary disease to which they are more prone.

At this juncture, may I say how grateful I am to my hon. Friend the Member for Enfield North (Nick de Bois) for his tireless campaigning on this issue, as well as to my right hon. Friend the Minister for Government Policy, my right hon. Friend the Member for West Dorset (Mr Letwin), who has continued his personal interest in pursuing these important changes? I believe that the changes will ensure, where it is appropriate to do so and through the intermediary services, a greater prospect for those who want to establish contact or have access to information, to be able to do so without compromising those who may be also involved.

Children and Families Bill

Jonathan Djanogly Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I welcome the Bill. It is a Bill of many parts.

I intend to concentrate on the clauses that deal with family law. The core issue is the need to deal with the long-standing failure of the legal, judicial, social services and educational systems in order adequately to safeguard those of our children who need to be taken into care. The present arrangement is costing the taxpayer some £950 million a year, but is straining to keep up with increased demand. In 2007 it involved some 19,650 children, but by 2011 the number had risen to 29,492. In 1989 the average case took 12 weeks, but by 2011 the figure was 54 weeks. I know that by last year it had fallen to 48 weeks, and I was pleased to hear the Minister say that it has fallen again to 47 weeks—that is a great improvement—but there is still a very long way to go.

In the event, the reform approach supported by most parties was that adopted by the Norgrove family justice review, which finally reported in November 2011. We owe sincere thanks to David Norgrove and his team for their sterling work. As the report pointed out, there have been at least seven reviews of family justice since 1989, and more money would not be the answer even if it were available. What we need is fundamental reform.

The core of the Norgrove report attempts to pull together the disparate strands of the overall service. It aims to ensure that the best interests of children are met and to provide them with a voice, to unify the service into a family justice service sponsored by the Ministry of Justice, and to provide effective leadership. When I was a Minister, I encountered as poor a managerial situation as I have seen in any field and in any sector, complicated by regional variations and the lack of any proper measurement of performance. In some regions of the country, the judges were being blamed for delay on the part of the lawyers; in others, the Children and Family Court Advisory and Support Service was being blamed for delay on the part of the judges. However, that was mainly anecdotal, as we had no reliable measurements of success or failure and no recording mechanism.

It is important to emphasise that the implementation of family justice reform has not waited for this legislation, which forms only part of the overall picture. Indeed, I note that the vital aspect of the introduction of a single family court is proposed in the Crime and Courts Bill. It provides for an applicant to have, in future, a single entry point, avoiding what can currently be a complicated choice between the different family courts. It should also mean that the right level of judge is allocated to the case.

As the Minister noted, much of the framework of the family justice reforms has already been put in place over the past two years. For instance, the Bill’s key 26-week time limit for the completion of care and supervision proceedings would probably mean little if we had not already set up a national Family Justice Board to orchestrate a cross-agency strategy at the centre and local family justice boards to review performance at court level, backed up by new performance figures—starting from last year—for each and every court. The key point is that if the 26-week limit is not reached, we will know where and by how much it has been missed, the reasons for the delay and the patterns of poor performance in an area. In other words, it should result in more positive action and less of the old blame culture. I would be interested to hear from the Minister whether that is happening on the ground.

I am afraid, however, that the Government must play a part, too. For too long, policy has floated without effective leadership among the Department for Education, the Ministry of Justice and the judiciary, resulting in delay, confusion and the detriment of children’s best interests. When I was at the MOJ, I and my opposite number in the Department for Education, my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), who I am pleased to see in the Chamber, partly addressed that significant failing by holding regular meetings with the president of the family division. I hope that that joint working continues and that the new Family Justice Board will now be included.

A good working relationship with the judiciary is key to the implementation of these measures, but we must also appreciate that the Norgrove review proposed, and the Government agreed, that CAFCASS should be moved to the MOJ or Her Majesty’s Courts Service within the MOJ. Will the Minister advise the House on the timing? From my experience, although he might not agree with me, I would recommend that the Children’s Minister should be moved to the Ministry of Justice from the Department for Education in contemplation of that operational shift. Government must fall into line with everyone else and unify policy and delivery for children as far as possible.

The 26-week time limit represents the iconic change that family justice must undergo, which will involve nearly halving the average time. Even our best courts are nowhere near meeting the target. I note that some judges and practitioners are saying that the limit is unfair or unachievable for one reason or another, but we must stay resolute—I say that in the knowledge that pre-legislative scrutiny has already marginally diluted the time-limit clause. We need more effective management and better joint working by agencies backed up by targets and monitoring. We must drive the delay down; the children deserve no less. It was therefore entirely appropriate that the Government insisted on keeping the 26-week limit in the Bill and that is why I strongly support other aspects of part 2, including the measure to ensure that timetabling is child-focused. There can always be another report, but we must ask whether a delay is in the child’s best interest.

The 26-week limit is a target to be worked towards. It will not be reached overnight, but we need tough targets if the courts are to get down to it. Ultimately, the judge makes the decisions in the court and they need to be better managed than they have been in the past. In that regard, I recognise the sterling work on the modernisation of judges’ working practices carried out by Mr Justice Ryder.

We should also note that for too long family law has been the poor relation of criminal law, and the lack of time given to family cases has meant that judges have had to go back to their criminal work. Judges need to spend more time considering the causes for delay and why the service has been worse as a result.

Finally on the subject of private family law, I have long been a great supporter of mediation and I therefore wholeheartedly support the mediation information and assessment meeting requirement in the Bill. Although that has been supported by a pre-action protocol for more than a year, I hope that placing it in statute will mean that those parts of the country where the courts have overlooked the need under the PAP to go to mediation first will now have to take note. In my view, the Government were correct to be cautious about the proposal by the Select Committee on Justice that judges should make decisions based on the merits of compliance. Mediation is an alternative to judges and I am delighted that its use is increasing. It is cheaper and quicker than court, and as both parties need to buy into the process, its settlements are often better observed and less divisive than court judgments.

There is a long way to go in improving family justice in this country, but I believe that the Bill, along with other things that are now being done, helps to set us off in the right direction.

Oral Answers to Questions

Jonathan Djanogly Excerpts

Thursday 7th February 2013 Commons Chamber

[Vince Cable]

I would like to acknowledge the contribution the hon. Lady has made through debates in the House to this very important issue. The Minister of State, my right hon. Friend the Member for Sevenoaks (Michael Fallon), has launched a significant initiative with business in order to reduce that problem. We also have a trade financing scheme, working with Kingfisher to try to ensure that credit flows through the supply chain. The key point is that credit does not depend solely on banks; it also depends on the big primes, whether in the retail sector or in manufacturing, and we are providing substantial support to small companies caught up in that problem.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

Businesses in Huntingdonshire are reporting to me that access to credit has significantly improved over the last year, which is very good news indeed. The complaint I am increasingly getting is that banks are becoming detached from their customers—that, because of regionalisation and formulaic processes, they still cannot get to the right people. Are the Government addressing this issue?

[Vince Cable]

Yes, the decline of relationship banking has been a long-standing problem and it underlines the difficulties my hon. Friend describes. The factual position is that last year a third of all applications to the banks for loans were declined, according to SME Finance Monitor. When appeals were made to an independent arbitrator, some 40% were successful, which shows how bad the banks are in sifting good credit from bad.