Whistleblowing Protections

Justin Madders Excerpts

Tuesday 22nd October 2024 Westminster Hall

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

It is a pleasure to see you in the Chair this afternoon, Sir Mark. I start by offering my triple congratulations to my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell): first, congratulations on returning to this place—it is good to see him back—secondly, congratulations on securing the debate; and thirdly, congratulations on being appointed chair of the all-party group for whistleblowing, which I am sure he will lead with distinction. We have heard a number of very important and passionate contributions today. I will do my best to sum them up, but it is fair to say that we are looking forward to working with all Members across the board on this very important topic.

Before addressing some of those points, I will start by discussing the current whistleblowing framework. As Members have said, it is essentially about employment protection, and that is the reason why I am here, as the Minister for Employment Rights, to respond on the Government’s behalf. The protections were introduced by the Public Interest Disclosure Act 1998, which amended the Employment Rights Act 1996.

The legislation was intended to provide a route for workers to make disclosures of information that they reasonably believed were in the public interest and tended to show a relevant failure or someone covering up a relevant failure. Those relevant failures could include criminal offences, the endangerment of health and safety, causing damage to the environment, a miscarriage of justice or a breach of any legal obligation.

Disclosures need to be made in line with the requirements of the legislation, usually to a worker’s employer or lawyer, or a prescribed person. As Members may know, there are more than 90 different prescribed persons under the legislation to whom relevant failures can be reported. They are usually regulators, such as the Equalities and Human Rights Commission and the Financial Conduct Authority. I will not go through every single prescribed person today, but most have a statutory obligation to report on the disclosures that they receive and to publish the reports annually.

Since the reporting requirements came into effect, there has been an increase in the number of disclosures that are made to prescribed persons. The volume of disclosures is around 50,000 a year and, as we can probably tell from the contributions today, they are highly concentrated in the health, public administration and financial and insurance sectors. The reports summarise the actions that a prescribed person has taken, but there is variation in how that information is protected. As we have discussed, workers have, under the law, a right not to be dismissed or subjected to a detriment as a result of making a protected disclosure, and there is recourse to an employment tribunal. The number of employment tribunal complaints under the jurisdiction for protected disclosure in each year since 2017-18 has increased, reaching 3,128 in 2020-21. That is the latest year for which a full dataset is available.

But enough of the overview. We need to talk about some of the important contributions that we have heard from Members. This debate is really about how whistleblowing affects individuals. We know that it can fundamentally and irrevocably damage, indeed end, that relationship with the employer. We know there are reasons why people will not speak up: some are in senior positions and fear for their career or their reputation, some may be at the other end of the spectrum and fear insecurity and power imbalances that may make it difficult to speak up, and some may have a link to the organisation but may not be covered under the legislation.

I would like to make a few comments about the contributions in this debate. I am grateful to my hon. Friend the Member for Redditch (Chris Bloore) for contributing. I am sure if he had come in earlier, his speech would have covered many of the points that had already been made, but that is the lottery of Westminster Hall, and I am sure there will be many opportunities for him to speak earlier in other debates. He referenced a number of Members’ speeches.

It was particularly pleasing to hear from my hon. Friend the Member for Congleton (Mrs Sarah Russell), who brought her professional experience to bear today. She made an interesting suggestion about the use of “some other substantial reason” as a potentially fair reason for dismissing someone in whistleblowing cases. We probably need to look at the use of “some other substantial reason”, as it is likely that it gets overused. However, as she will be aware, the current Employment Rights Bill has enough in it for us to be getting on with. She made an interesting suggestion in respect of the potential use of the Fair Work Agency here, and that is something we will bear in mind.

The Liberal Democrat spokesperson, the hon. Member for Wokingham (Clive Jones), highlighted some of the legal issues under the current legislation, including the question whether someone is within scope, the hurdles that they have to overcome to qualify for protection and the public interest test. Those are all things that we want to look at in a broader sense, if we get around to a review of the legislation. I take his point about officials in the Department for Work and Pensions, but I hope that this Administration would want to be an exemplar of best practice, and we would want people to feel confident that they can speak out if they see a wrong or an injustice.

It was a pleasure, as always, to hear from the hon. Member for Strangford (Jim Shannon), in his customary place—I may have swapped positions, but he remains a permanent fixture over there. He spoke very movingly about his friend Brian and the great personal cost of his efforts to expose wrongdoing. Brian’s resilience came through in the hon. Member’s description of his fight. As he said, it was about doing the right thing, and his message was that,

“you are not alone when you do the right thing.”

We should be sending that message to anyone who thinks about blowing the whistle. Of course, the matter is devolved to Northern Ireland, but that message should ring out across the whole of the United Kingdom and Northern Ireland.

My hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier) raised some specific issues about the Department of Health and Social Care and her constituent Sarah McMahon. I am sorry to hear of the three years of personal difficulties Sarah McMahon has suffered as a result of doing the right thing. Unfortunately, too many organisations make it very difficult for individuals who blow the whistle. I understand that the Department for Health and Social Care has concluded a review of the statutory duty of candour, and it has issued a call for evidence, which I think is ongoing. I take her message of frustration about the length of time that these things take, and I will pass that message back to the Department.

However, my hon. Friend made the important point that some organisations have got it right and encourage people to speak up when they see a wrong. There are some very good examples, including the aviation industry, which is a particular exemplar of that. It is the standard that we should be aiming for.

My hon. Friend the Member for Stoke-on-Trent Central, who opened the debate, said that the law looks at how things happen after the disclosure, and always through the prism of an employment relationship. That was a good analysis of where we are and perhaps why there are shortcomings in some of the legislation. I agree that this is about the law giving people the confidence to speak up. I am sure we will return to some of the things we hope to do on that.

[Gareth Snell]

I ask the Minister and his colleagues across Government to look at the way we fund and support our regulatory bodies. Often, the failure reported by a whistleblower would have been prevented from happening in the first place by a properly funded and resourced regulator. As much as anybody else, he will know that times are tough and budgets are tight, but investment in the regulatory framework early doors could help to save money and lives, and prevent people from having to put their own homes on the line to do the right thing.

[Justin Madders]

My hon. Friend makes a very fair point. I suspect that a week ahead of the Budget we will not get the kind of investment he would like to see. He talked about the legislation, focusing on existing employment relationships and the broader ambit of employment. The legislation was probably framed in that way in the first place because that is where the biggest power imbalance lies: between an employer and their employee.

We can consider how we would broaden this out, but we will bring in particular measures with our Employment Rights Bill. Hon. Members will be aware that Second Reading took place last night, when we made some specific announcements on our overall package. The Bill is the biggest upgrade in workers’ rights in a generation, and in it we will address specific issues about whistleblowing on sexual harassment. The Trades Union Congress states that 58% of women have been sexually harassed at work. That is a staggering, appalling figure that must be tackled, and it is one of the reasons why we want to improve people’s ability to ring the alarm bell when sexual harassment occurs.

The Bill will require employers to create and maintain workplaces and working conditions free from harassment, including by third parties. It will strengthen the legal duty of employers to take all reasonable steps to prevent sexual harassment before it starts, and it will enable regulations to specify steps that an employer must take to protect their employees from sexual harassment to ensure that effective steps are taken. It also includes protections for whistleblowers and will make clear that sexual harassment can be the basis for a protected disclosure, which is one of the most important steps we can take to make workplaces safer. Workers who make a protected disclosure will then have legal recourse if their employer subjects them to a detriment for speaking up.

My hon. Friend the Member for Stoke-on-Trent Central mentioned, as did several other Members, the possibility of an office for the whistleblower. There were a number of suggestions about the potential remit and role that it could have. Clearly, the cost and precise functions and powers of that would need careful consideration, particularly in how it would relate to current regulators. The point he made about the resources of regulators is relevant to that. There would also have to be some consideration given to how it would exist as an independent body from Government. I must disappoint my hon. Friend the Member for Congleton by saying that the pledge to create the office did not make it into our final manifesto, but that is not to say we are ruling it out forever and a day. We will consider it as we look at a broader review of the whistleblowing framework.

On that point, I will address the remarks made by the shadow Minister, the hon. Member for Orpington, about the review initiated by the previous Government, which was intended to assess the effectiveness of the whistleblowing framework against its original objectives. As he rightly pointed out, that review was not released before the general election. It certainly does not seem appropriate for us to let that work go to waste; I will talk to my officials about how and when we can release that information, but I see no reason why we should not do so. It will be a starting point for further work in this area.

The number of issues raised today shows that the appetite for reform in this area is much broader than the review commissioned under the previous Government recognised. Of course, other measures are due to be enacted in the next 12 months, but we can do more to ensure people feel confident when they speak out.

As several Members said, the King’s Speech made clear that we will deliver on our manifesto commitment to implement a Hillsborough law to introduce a legal duty of candour on public servants and authorities. The Prime Minister made clear that that Bill will enter Parliament before the next anniversary of the Hillsborough disaster. We believe it will be a catalyst for a change of culture in the public sector by improving transparency and accountability where public services have failed. It will help to address the unacceptable defensive culture that is prevalent across too much of the public sector. It has been said several times that the NHS is one of the worst examples of that; certainly, from my experience, there is a hard focus on trying to justify actions, rather than get to the root of the complaint.

Bishop James Jones’s report made it clear that those things have to change, not just in the NHS, but across the whole public sector. That Bill will be an important starting point in changing the culture both in the public sector and across the country. We all want it to improve so that whistleblowers have the confidence to speak out and have the assurance that, if something happens to them as a result, they will be protected and supported.

[Gareth Snell]

I thank my hon. Friend the Minister for his summation. I will make a couple of final points. I absolutely understand that the office of the whistleblower did not make its way into our manifesto, but I say to the Minister that the circumstances that led us in opposition to support to such a suggestion have not changed. Although I appreciate that we have had an election and Governments have changed, even an undertaking to meet those of us who think this proposal is part of the solution, to discuss it and go through it, would be welcome—

[Justin Madders]

indicated assent.

Digital Markets, Competition and Consumers Act 2024

Justin Madders Excerpts

Monday 9th September 2024 Written Statements

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

The Digital Markets, Competition and Consumers Act received Royal Assent on 24 May 2024. The Act will make significant changes to the UK’s competition and consumer landscape that will protect small businesses, save consumers money, boost innovation and drive growth.

Part 1 of the Act will establish a pro-competition regime for digital markets that will promote more dynamic markets and ensure the most powerful tech firms treat consumers and business fairly.

Part 2 makes several enhancements to our wider competition regime, to give the Competition and Markets Authority greater powers in tackling illegal, anti-competitive, behaviours and to focus competition regulation on the areas of greatest potential harm.

Parts 3 and 4 strengthen the enforcement of consumer law and introduce new consumer protections, including tackling fake reviews and drip pricing, new rules for consumer saving schemes and introducing new rights relating to subscription contracts.

Part 5 contains miscellaneous measures including provisions which deal with investigative assistance to overseas regulators, disclosing information overseas, providing for a duty of expedition on the CMA and sectoral regulators, and giving the CMA new information gathering powers to support a function of monitoring competition in the retail motor fuel sector in the UK.

A key focus of the Act is providing greater powers and responsibilities for the CMA, the UK’s primary independent competition and consumer protection authority. This will help the CMA meet the challenges of the modern economy.

The Government recognise the importance of implementing the Act as soon as possible so that businesses and consumers can reap its benefits. We also understand those affected by the Act need to know when its changes will come into effect. That is why the Government are publicly setting out our plans for implementation.

Key steps must be taken to implement the Act. Secondary legislation must be laid in Parliament, under powers set out in the Act, before the Act’s measures can be commenced and enter into force. The CMA must publish guidance setting out how it will carry out its functions and use its powers. The Secretary of State for Business and Trade must approve CMA digital markets guidance. The Government are working closely with the CMA to ensure these are in place as soon as possible. Of equal importance is the need for secondary legislation and guidance to be detailed, robust and clear to ensure the Act’s changes are understood and can be complied with.

The Government aim to commence parts 1, 2 and 5 of the Act in December 2024 or January 2025. In the autumn, secondary legislation will be laid before Parliament for scrutiny before it enters into force. Commencing part 1 will bring the digital markets regime into effect, and we expect the CMA to launch the first strategic market status investigations shortly afterwards. The reforms to the existing competition regime, the new motor fuels function and other part 5 measures will take effect on the commencement date.

The commencement order will be made at least 28 days before the commencement date.

In April 2025, the Government expect to commence part 3 of the Act, which provides for the consumer enforcement regimes, and part 4, chapter 1 of the Act, which replaces the unfair trading regulations. Secondary legislation will set out rules for the CMA’s new direct enforcement powers, alongside guidance on these new powers. New savings schemes rules will not commence before April 2025, and this timeline is subject to continuing engagement with consumers and industry. Reforms to subscriptions contracts and alternative dispute resolution will follow later, with subscriptions reforms not commencing before spring 2026, at the earliest. These timelines follow commitments made in the previous Parliament, and reflect the quickest possible delivery of the reforms, while ensuring that the necessary consultation and other steps can take place.

The Government’s implementation plans will deliver the Act’s benefits as quickly as possible, while ensuring its changes enter into force smoothly, allowing those that will be affected by them adequate time to prepare.

[HCWS74]

Strikes (Minimum Service Levels) Act 2023: Repeal

Justin Madders Excerpts

Monday 9th September 2024 Written Statements

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

Minimum service levels unduly restrict the right to strike and undermine good industrial relations. The introduction of the Strikes (Minimum Service Levels) Act 2023 was met with widespread condemnation from employers and trade unions. Many employers across different sectors pointed to its unworkability and impact on the ability of employers and trade unions to negotiate and to resolve disputes.

As such, the Government announced on 6 August 2024 that we will repeal the Strikes (Minimum Service Levels) Act 2023 to get public services back on track and strengthen the rights of working people. The Deputy Prime Minister and the Secretary of State for Business and Trade have also written to other Secretaries of State, the First Minister of Scotland and the First Minister of Wales asking them to encourage employers to avoid imposing minimum service levels on their workforce, until the Act is repealed.

We have begun preparations to repeal the 2023 Act as part of the forthcoming employment rights Bill. Amendments made by the 2023 Act to the Trade Union and Labour Relations (Consolidation) Act 1992 will accordingly be reversed and any minimum service regulations will lapse automatically once the employment rights Bill has Royal Assent.

Although the ability of employers to give work notices will legally continue until the Strikes (Minimum Service Levels) Act 2023 has been formally repealed and amendments to the 1992 Act are accordingly reversed, in this interim period we have strongly encouraged employers to seek alternative mechanisms for dispute resolution, including voluntary agreements, rather than imposing minimum service levels.

I also wish to make clear that, following the High Court ruling in August 2023 which upheld the judicial review challenge on the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022, employment businesses are prohibited from providing agency workers to cover the duties normally performed by a worker of an organisation who is taking part in a strike or other industrial action. In the light of the High Court ruling, it is not necessary to repeal these regulations.

The upcoming employment rights Bill will remove barriers to effective dispute resolution and we will continue to work with businesses as we develop and implement our plan to make work pay.

[HCWS75]

Oral Answers to Questions

Justin Madders Excerpts

Thursday 5th September 2024 Commons Chamber

[Adam Jogee (Newcastle-under-Lyme) (Lab)]

10. What steps his Department is taking to strengthen employment rights.

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

We have already taken a number of steps to improve employment rights in this country. We have written to the Low Pay Commission to ask it to end the discriminatory age bands, so that all adults will be paid the same minimum wage rates. We have also asked it to look at including the cost of living when setting future wage rates, and have announced that we will repeal the unconscionable and unworkable Strikes (Minimum Service Levels) Act 2023, but there will be more. We will transform workers’ rights in this country, and will introduce the employment rights Bill within 100 days of taking office, as we promised.

[Adam Jogee]

I thank the Minister for setting out just how much this Government are on the side of workers in our country. Can I ask him to gently remind the Secretary of State that there is a pint waiting for him at the Bridge Street Ale House in Newcastle-under-Lyme from the owner, Grum Newbury? The people of Newcastle-under-Lyme believe in hard work, decency, respect and dignity at work, so can the Minister set out what this new Government are doing to end the exploitative use of zero-hours contracts in north Staffordshire and across our country?

[Justin Madders]

My hon. Friend is right: the explosion of zero-hours contracts in this country has been shameful. Over 1 million people are now on zero-hours contracts, and one in five of those people report that they would like to be able to get more hours of work, so we are going to end the uncertainty of zero-hours contracts. We are going to make sure that work pays, and we are going to give those people a legal right to a contract that reflects the number of hours they regularly work over a 12-week period.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Secretary of State.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I welcome the Secretary of State and his Ministers to their places. The Secretary of State seems to imply that businesses are comfortable with his changes to the workplace, but this morning I and my fellow shadow Ministers met business representative organisations that are far from comfortable with the changes he is making, such as day one employment rights, a four-day week, a right to switch off and a higher and broader national living wage, as well as changes to business taxes, including in relation to business property relief, and the fair work agency. Does he not realise—do his Ministers not realise—that until he brings forward the detail on these plans, businesses’ recruitment and investment plans are completely on hold? When will he bring forward those plans?

[Justin Madders]

I thank the shadow Secretary of State for his question. I just remind him that he has to direct the question to the Minister responding—I am sure we will get there in the end.

I also remind the shadow Secretary of State that during the general election, the front page of The Times had 120 businesses supporting the Labour party in full knowledge of our plans to make work pay. We are consulting regularly and frequently—almost on a daily basis—with businesses about how the plans will work. I am afraid that the shadow Secretary of State has spent the summer putting out scaremongering statements about what this all means. In fact, the only statement he made over the summer on which I agreed with him was that his party deserved to lose the general election.

[Kevin Hollinrake]

The Minister talks about statements, so I will read him some. The Federation of Small Businesses says its members view these measures with “trepidation”. The Institute of Directors says that confidence is fizzling out, with the biggest one-month drop on record. The Recruitment and Employment Confederation says that these changes

“risked fuelling long, complex litigation”

for businesses defending themselves at employment tribunals. Will he—and the Secretary of State—at least consider exempting small and medium-sized enterprises from these ruinous, French-style regulations?

[Justin Madders]

Again, I have to point out that I am not the Secretary of State—perhaps one day.

We heard all these arguments 20 years ago with the minimum wage. Conservative Members were wrong about that, and they are wrong about this. I just hope they are a bit quicker to come round to realising that this country is going to prosper with improved workers’ rights, working in partnership with businesses to improve the economy for the benefit of everyone.

[Gregory Stafford (Farnham and Bordon) (Con)]

11. What steps his Department is taking with Cabinet colleagues to mitigate the potential risks posed by the Chinese share of the electric vehicle market.

--- Later in debate ---

[David Pinto-Duschinsky (Hendon) (Lab)]

T3. Many of my constituents in Hendon rely on the national minimum wage, but as we know from research, employers got away with failing to pay that wage to more than one in five workers who were due it under the last Government. Can the Secretary of State tell the House what steps his Department is taking to reverse that shameful legacy of weak enforcement?

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

The introduction of the minimum wage was one of the proudest achievements of the last Labour Government, but for too long the UK’s labour market enforcement system has been fragmented and ineffective. That is bad for workers and bad for the majority of businesses that want do to the right thing and comply with the law. That is why we will create a fair work agency to bring together employment rights enforcement, including of the minimum wage.

[Madam Deputy Speaker (Judith Cummins)]

I remind Members that these are topical questions, so can we have short questions and short answers?

--- Later in debate ---

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

My right hon. Friend will be aware of the disgraceful union-busting tactics and intimidation employed by Amazon against GMB members seeking union recognition at the Amazon warehouse in Coventry. Despite more than 1,000 votes in favour, union recognition was lost by just 28 votes. What steps is he taking to ensure that workers, such as the brave and determined GMB activists at Amazon, can more easily win union recognition?

[Justin Madders]

I draw the House’s attention to my proud membership of the GMB trade union. We believe that businesses work best when they give workers a voice through a recognised trade union. I would be very interested to hear more about what has happened at the Amazon warehouse in Coventry. The Government will look closely at that as part of our plan to make work pay. We will simplify the process and laws around statutory recognition.

[Matt Western (Warwick and Leamington) (Lab)]

Last weekend, hundreds of thousands of Oasis fans were left angered by the notion of dynamic pricing—a concern that we are seeing across the wider economy. Does the Minister agree that we need an urgent review of such price gouging systems?

[Justin Madders]

That certainly took the nation’s interest in more than one way. The Department for Culture, Media and Sport has already announced a review into it, and we will look at secondary pricing. The whole system needs urgent reconsideration, and we understand that the Competition and Markets Authority is looking into the matter, too.

[Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)]

What thought has the Secretary of State given to attending the Williams inquiry? The Post Office scandal is unfinished business. It is now vital that we not only learn the lessons, but accelerate redress for the innocent and, crucially, punish the guilty fast.

Post Office Horizon

Justin Madders Excerpts

Tuesday 30th July 2024 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

(Urgent Question): To ask the Secretary of State for Business and Trade to make a statement on financial redress for postmasters and outstanding issues relating to the Post Office Horizon scandal.

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

As hon. Members will know, convictions across the UK have been quashed through recent legislation, and those affected are now able to apply for financial redress under the Horizon convictions redress scheme. The scheme will be wholly delivered by the Department, not the Post Office. All the forms of redress, including those pursued under the group litigation order, will be delivered by the existing schemes.

Since taking office, this Government have continued to work closely with the Scottish Government and the Northern Ireland Executive to identify those who have had their convictions overturned. Letters have started to be issued to those eligible that will confirm that their conviction has been quashed and provide further information on how to access financial redress. But I would encourage those who believe that they are eligible not to wait for a letter. Please do come forward now and register for the Horizon conviction redress scheme.

We have put guidance on gov.uk to help people know where they stand: whether their conviction has been overturned and, if eligible, how to apply for redress through the registration and application process. Victims will be able to choose from two options: first, they can either accept a fixed settlement of £600,000; or, secondly, they can choose a full claim assessment if they believe their losses exceed £600,000 and wish to have their application fully examined by the Government.

No matter what route they choose to take, once an applicant’s eligibility is confirmed, they will be paid a preliminary payment of £200,000. We are making sure that they can access historical data from both the Post Office and His Majesty’s Revenue and Customs to support their decision and the application. We also recognise that, with the best will and support in the world, in a few cases, some information may not be retrievable, but I assure hon. Members that, even in those cases, we will do all we can to ensure that a fair offer is made to sub-postmasters who have suffered this terrible injustice. This House was united in the last Parliament in its wish to see justice for sub-postmasters. In this Parliament, we intend to deliver on that.

[Mr Speaker]

I call the shadow Minister.

[Kevin Hollinrake]

It is disappointing that I have again had to ask an urgent question to get the Government to come to the Dispatch Box. It is also disappointing that neither the Secretary of State nor the postal affairs Minister—the Minister of State, Department for Business and Trade, the hon. Member for Harrow West (Gareth Thomas)—has responded to either of the urgent questions. This is clearly an important matter that deserves full scrutiny by this House. Despite earlier promises only 12 days ago to give the House a significant update, only a written statement was available.

One of the final acts of the last Government was to pass legislation that, for the first time in history, overturned hundreds of convictions and set in train a process to provide redress to the victims. We made a clear commitment that the victims would be able to apply for redress before the summer recess. That commitment has not been honoured, although claimants can now register for redress. To do so, they need a reference number that is available only to individuals written to by the Ministry of Justice, which has today confirmed that only 10 of the 700 postmasters have received such a letter.

I ask the Minister: when will the other 690 postmasters be written to? Assuming claimants apply for the most rapid form of redress—a fixed sum award—when will the first £600,000 payments be made? The Secretary of State will acknowledge that we had conversations regarding Court of Appeal convictions and those refused leave to appeal that were not quashed by the legislation. What steps is the Minister taking to ensure that those cases are given assistance to overturn their convictions?

The last Government also announced that we would top up claimants in the Horizon shortfall scheme to a minimum payment of £75,000. How many of the thousands of claimants in this scheme have been written to to that effect? Finally, where is the Secretary of State, or where is the hon. Member for Harrow West, who has been appointed post office Minister?

[Justin Madders]

We promised to update Parliament before the summer recess, and we have done that by way of a written ministerial statement. I note that, when the shadow Minister was the Minister, he came and answered on most occasions for the Government. We certainly did not take that as an indication that the Government were taking this matter any less seriously than they should, and that is not the case now either. I understand the frustration that the shadow Secretary of State has about the number of letters that have gone out, but there have been difficulties in corroborating some of that data. I understand that, when he made that promise as a Minister, he did so in good faith, but it has turned out that additional physical checks have been required. We have had to access court documents—sometimes stretching back decades—which has meant that there have been delays. The Ministry of Justice has put more resource into that to ensure that work carries on at pace.

As the shadow Secretary of State has noted, the website is now up and running and applicants can register on it. I am pleased to report that, as of this morning, 89 people have already done so. We hope that, once verification checks have been completed, payments can be processed within 10 working days. We understand that the question on the Court of Appeal was discussed at length during the passage of the Post Office (Horizon System) Compensation Act 2024. The matter deserves further consideration, and I understand that the Minister for postal services has had conversations on what we can do in that respect.

[Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)]

I welcome the answer provided by my hon. Friend. He will remember that, when the Select Committee reported just four or five months ago, we noted that 80% of the budget for redress had not been paid out. We suggested to the now shadow Secretary of State a number of measures to put into the Bill to speed up the process. Those amendments were rejected. Can the Minister now assure us that he has a grip on this and that we will now begin to see cheques in the post much faster?

[Mr Speaker]

Order. May I just say that Members should speak through the Chair, not to the Minister? As an established Member of this House, I am sure that the right hon. Gentleman would not want to start on the wrong foot with me.

[Justin Madders]

My right hon. Friend makes an important point. We want payments to be processed as quickly as possible. Data is updated monthly on the Government website. We can see that, in terms of the group litigation order, 210 offers have now been made. Under the Horizon shortfall scheme, of 2,730 claimants, altogether 2,417 offers have been accepted. Of the 110 convictions on the overturned convictions scheme, initial payments have now been made to 103 of those people.

[Mr Speaker]

We come to the Liberal Democrat spokesperson.

[Sarah Olney (Richmond Park) (LD)]

It has been said many times across this House, but it bears repeating: this was an appalling miscarriage of justice. The shocking dishonesty of Post Office officials found its match only in the bravery of the sub-postmasters who stood up to them. The Liberal Democrats welcomed the legislation in the previous Parliament to finally deliver justice by quashing their convictions, and we likewise welcome measures to ensure that those affected get the compensation they deserve. However, what we have seen with previous compensation and redress schemes for the victims of this scandal is a pattern of delay, complication and inefficiency. Neither the Post Office nor the Department for Business and Trade has earned the necessary trust from the sub-postmasters to administer the schemes. With that in mind, the Business and Trade Committee recommended in 2022 that an independent intermediary body be set up. Does the Minister agree that it is now time to appoint that independent body to ensure that these schemes get delivered fairly, effectively and without delay?

[Justin Madders]

I thank the Liberal Democrat spokesperson for their contribution. We are concerned that matters are taking too long. We have been working with lawyers who have signed up to a framework for representing claimants, and we are looking at ways we can speed the process up. There are issues in terms of collating enough expert evidence to support the claims, but we are looking at how that can be accelerated. On the independent process, we are looking at an independent mediation step after the initial decisions and offers are made, and ultimately an independent appeal decision will be considered as well.

[Ian Lavery (Blyth and Ashington) (Lab)]

A whole number of individuals out there have been convicted and have paid huge amounts of money—£10,000, £20,000 or £30,000—back to the Post Office, but because they were directly employed not by the Post Office, but perhaps by their sub-postmaster, they cannot get any redress. They are victims of the Horizon scandal equally as much as anyone else. What advice can the Minister give to people in my constituency of Blyth and Ashington who find themselves in those circumstances?

[Justin Madders]

My hon. Friend refers to some specific circumstances that I would welcome further information on. If he can contact the Department, the relevant Minister will look through those circumstances to see whether there is anything we can do, because we do not want anyone to be out of pocket as a result of this scandal.

[Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)]

Communities across the country were impacted by the Horizon scandal, and one of those was Wheaton Aston. Not only did Wheaton Aston lose a much-loved postmaster, but it lost its post office. Will the Minister look at the specific case of Wheaton Aston not just in terms of that postmaster getting compensation, but to take up the issue with the Post Office to ensure that a post office is returned to the village?

[Justin Madders]

I will certainly relay that back to the Department, and we will look in some detail at that. It is important that communities have a post office that they can access. They are a vital part of our infrastructure in this country and a vital lifeline for many individuals, and we want to make sure that every community is served as much as possible.

[Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)]

I take a moment to pay tribute to my predecessor, Marion Fellows, for the work she did on this issue throughout her time in this House. I was delighted to hear from the Minister that there have been conversations with the Scottish Government regarding this issue and looking for justice and redress for sub-postmasters. How confident is he that no further obstacles will be put in the way of justice and redress in Scotland by the Scottish Government following those conversations?

[Justin Madders]

I join my hon. Friend in paying tribute to her predecessor, who was tenacious in her pursuit of this matter. We have had a number of conversations with the Scottish Government, and we do not want to see any difference between how this scheme is administered in any part of the country. We are confident that will be the case.

[Dame Caroline Dinenage (Gosport) (Con)]

This is a national scandal, and it is almost impossible to quantify the loss of trust in the Government and the Post Office that has resulted. Can the Minister set out a little more on what the Government intend to do to ensure that the information and support to make the applications to the redress scheme will be there for every single postmaster who has been affected and every single one who had a conviction quashed?

[Justin Madders]

The hon. Member asks an important question. Disclosure packs are being prepared for every claimant, which will contain what we believe is all the information they need to assess whether they wish to accept the fixed sum, or to proceed to a more detailed assessment of the claim. The pack will include details of their contracts and remuneration with the Post Office, details of whether they were eligible for the Royal Mail share plan and any other information that the Department can obtain that is requested. We want to work at pace with individuals to ensure they have all the information they need to make an informed decision.

[Kate Osborne (Jarrow and Gateshead East) (Lab)]

The Minister will be aware that I have long campaigned on this issue. He might not yet be aware of a letter I sent to his Department highlighting issues with the current compensation schemes, as well as calling attention to issues with the original 555 sub-postmasters, one of whom is my constituent Chris Head. Chris was one of the thousands of people impacted by the Horizon scandal, and he has still only been offered 17% of his verified claim. Will the Minister agree to meet me and Chris to discuss these issues?

[Justin Madders]

I am indeed aware of my hon. Friend’s letter and all the work she has done over a number of years in support of her constituents and the wider sub-postmaster community. I am sure that the relevant Minister will agree to meet her and her constituent, and I will make sure that request is passed on to him.

[Llinos Medi (Ynys Môn) (PC)]

As the Member for Ynys Môn, I represent Lorraine Williams and the formidable Noel Thomas, who spent his 60th birthday in jail for a crime that never took place. It is clear that sub-postmasters continue to be treated appallingly by the UK Government in the wake of the Horizon scandal and made to feel guilty for the cost of compensation to the public purse. Can the Minister give confidence to Noel that the new Government will compensate for the real human cost of the suffering caused by this awful scandal?

[Justin Madders]

We do not want sub-postmasters to feel guilty for claiming what is rightfully theirs. What this place has decided is their entitlement. We have taken measures to ensure that they will not have to foot any legal bills for taking advice in respect of their applications and we want to ensure that every potential head of loss is covered and adequately compensated for. We want to make the process as easy and swift as possible for those affected.

[Rupert Lowe (Great Yarmouth) (Reform)]

I am pleased to hear from the Minister that the Government will expedite payments to those people who have been extremely badly treated by a state-owned entity in this national scandal. Will he do anything about those people who arguably knew that the Fujitsu software called Horizon was deficient and yet still brought legal cases against sub-postmasters, many of whom went to prison? There must be some redress and, going right the way back, those who were responsible for bringing cases against innocent people in the knowledge that the software was deficient must suffer some form of penalty.

[Justin Madders]

The hon. Member makes an important point, which has been raised on a number of previous occasions. We believe that the correct approach is for the inquiry to assess those individuals’ particular culpability, and then we will take forward its recommendations. It is important that we see individuals take some responsibility and accountability for their actions.

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

The Horizon IT scandal is without doubt one of the greatest miscarriages of justice in our history. While we cannot change what has happened, we must establish what went wrong. Will the Minister assure the House that he will carefully consider the findings of the Post Office Horizon IT inquiry? Does he agree with the shadow Secretary of State that there should be prosecutions of those deemed responsible?

[Justin Madders]

We are taking a close interest, as the hon. Member would expect, in the evidence coming forward in the inquiry. Much of it is shocking. The amount of obfuscation and, shall we say, misinformation put out by a number of individuals is concerning. We think it is right to wait and see what the chair of the inquiry recommends in terms of future action, but we are committed to looking at that closely and ensuring that individuals take responsibility for their actions.

[Christine Jardine (Edinburgh West) (LD)]

One of my constituents was about to end more than 20 years of service with the Post Office with a comfortable package, but she was persuaded to take on a post office for two months. She did so and then got caught up in the Horizon scandal. She had months of trauma, trying to prove her innocence and arguing with the Post Office, and then she was sacked. She lost the package and incurred a lot of expense. I spoke to the previous Minister about that.

My constituent has applied for compensation, but she has been told that she is not entitled because she did not have a contract, which she says she did. Will the Minister meet me to discuss how we can protect such people and ensure that they get the compensation they are entitled to, and that we do not have this continual excuse-finding for not paying people who deserve compensation?

[Justin Madders]

I am grateful to the hon. Member for that question. Where there are evidential difficulties, we are looking at other ways of ensuring that those who should be eligible are entitled to claim. I am happy to have further conversations with her in that respect.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister very much for his answers to the questions posed. I make representations for the 26 postmasters from Northern Ireland who have been fighting for years to clear their names. While it is fantastic that movement has been made to undo the wrongs of this scandal—I thank the Minister and the Government very much for that—what steps have been taken to ensure that compensation is issued to all postmasters across the UK in a timely manner to avoid more delays and miscarriages of justice, including for those 26 from Northern Ireland?

[Justin Madders]

We are working closely with the Northern Ireland Executive to ensure that all the information required is verified and corroborated so that those individuals in Northern Ireland who have been caught up in this scandal receive that letter as soon as possible.

Post Office Horizon Scandal

Justin Madders Excerpts

Thursday 18th July 2024 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

(Urgent Question): I congratulate you on your re-election, Mr Speaker, and thank you for granting this urgent question, which is to ask the Secretary of State for Business and Trade if he will make a statement on financial redress for sub-postmasters and outstanding issues relating to the Post Office Horizon scandal.

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

I congratulate the shadow Secretary of State on his new position and on securing the first urgent question of this Parliament.

Members will know that the Government made a key manifesto commitment to ensure that justice and compensation are delivered as swiftly as possible for every postmaster caught up in the Horizon scandal. The Secretary of State has already met Sir Alan Bates, Kevan Jones and the chair of the Post Office, Nigel Railton, to discuss the progress being made and what more can be done. The Government intend to make a significant announcement on the new redress scheme before the summer recess. This scheme will apply to postmasters whose convictions have been overturned by the Post Office (Horizon System) Offences Act 2024 passed in the last Parliament.

[Kevin Hollinrake]

I welcome the Minister to his role. I say in all sincerity that I wish him the very best of luck. We on the Opposition Benches, in the national interest, wish the Government to succeed. It is vital that his Department succeeds in its brief. When British businesses do well, we all do well.

I hope this urgent question, on a matter on which the House has been in agreement, will set us off on the right foot in working together in the national interest. That matter is of course compensation for sub-postmasters affected by the Horizon scandal. I was the previous Post Office Minister, and the House will know of my commitment and my party’s commitment to the individuals whose lives have been torn apart by this scandal.

It is right that the Post Office (Horizon System) Offences Act received Royal Assent during wash-up to quash the convictions of hundreds of affected postmasters, but the Minister will know that the Act itself does not provide compensation, which is why, alongside that legislation, we announced plans for a new Horizon convictions redress scheme. This scheme will make compensation payments to those who have had convictions quashed by the Act.

In government, we ensured that Royal Assent was achieved as soon as possible so that there was no gap in the availability of compensation. It is only right that postmasters have access to swift and fair compensation. That is why we overturned those convictions. Those with overturned convictions have the option of immediately taking a fixed and final offer of £600,000. It is also why, in government, we changed the rules for those in the Horizon shortfall scheme so that they are entitled to a £75,000 fixed-sum award, bypassing the assessment process; so that all full and final settlements below that figure would be automatically topped up; and so that an appeal process for those in the HSS is also considered.

Although I am pleased that, as of 31 May, approximately £222 million has been paid to over 2,800 claimants across the scheme, I must push the Government for more detail on when the redress payments set out by the Horizon convictions redress scheme can be expected—we were told that it would be by July. I also note that the Department for Business and Trade has said that it “continues to work” on the new Horizon convictions redress scheme.

I ask the Minister—[Interruption]—when will the scheme be up and running? When does he expect the £75,000 top-ups and the HSS appeal process to be implemented, and the victims to be contacted to that effect? When will he open the scheme? Will he announce a date for full compensation under the Horizon convictions redress scheme?

[Mr Speaker]

Order. I gently say to the Chamber that it is a new beginning, and we want to start on the right foot, not the wrong foot. It is difficult to go from Government to Opposition, but there is a two-minute limit for the Opposition and a one-minute limit for the third largest party. Please let’s stick to the rules and start as we mean to go on.

[Justin Madders]

Thank you, Mr Speaker.

The shadow Secretary of State set out the intent he had in government, which we intend to carry on. We also believe there is absolutely no reason why we should not continue to work on a cross-party basis, as we agree with him on the importance of delivering fast and fair compensation, which is at the heart of all we are trying to achieve. We will be making a statement by the end of July, before the summer recess. As the shadow Secretary of State has already noted, we have committed to do that. We are working at pace with officials, victims and those who have been affected by the scandal to work up the detail, and an announcement will be made in due course.

[Jon Trickett (Normanton and Hemsworth) (Lab)]

It is good to see you back in your place, Mr Speaker. The new Minister will recall the old saying that a new broom sweeps clean, and I am sure he will make progress very quickly indeed. It seems to me that the Post Office scandal reveals a wider problem in British society. Whether it is Orgreave, Grenfell, contaminated blood or the problems at Hillsborough, the British establishment seems incapable of listening to the voices of ordinary people. Will he raise that matter with other Ministers and see whether there is a way for this Government to ensure that is not repeated?

[Justin Madders]

My hon. Friend raises an interesting point. In recent years, we, as Members, have reflected on the question of political accountability for decisions that have been taken and actions that have taken place over many years. We will be reflecting on how best to ensure there is genuine political accountability in the system.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

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

I also welcome you back to your place, Mr Speaker. It is a genuine pleasure for me, as the Liberal Democrat spokesperson, to be addressing the House on behalf of the third largest political grouping. My party will use the privilege of that position to hold the Government and Ministers to account. We will not be using it simply to stoke division and manufacture grievance. That is what the people of the United Kingdom, and Scotland in particular, voted for.

At the heart of the Horizon scandal was the culture at the centre of the organisation that failed to respect the work that was being done by sub-postmasters at the frontline. The Minister and the Secretary of State will meet with the chief executive of the Post Office. What evidence have they seen that that culture has actually changed?

[Justin Madders]

I do not know if the right hon. Gentleman is aware that the current chief executive officer has stepped aside for a brief period to concentrate on the inquiry. Over the coming months, we will be reflecting on the important questions that the right hon. Gentleman raises, particularly when the outcome of the inquiry is known.

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

Referring to the point raised by my hon. Friend the Member for Normanton and Hemsworth (Jon Trickett), what role does the Minister think this Government can find for third party organisations, such as WhistleblowersUK or those organisations that work with people to highlight such scandals? As my hon. Friend pointed out, this was a systematic failure across Government and society, and we simply cannot allow it to happen again.

[Justin Madders]

My understanding is that the last Government undertook a consultation on whistleblowing. We are reflecting on the outcome of that and on the important point my hon. Friend raises. Across a whole range of bodies in this country, whistleblowers have not been heard. We need to consider whether the current legislation gives them sufficient confidence to speak out, and whether their actions and concerns are being addressed.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

Many congratulations on your re-election, Mr Speaker. I congratulate the Minister on his appointment. I know he is genuinely committed to promoting British business at home and abroad, but is he aware of a serious issue flowing from the Horizon scandal that is now affecting current postmasters? In order to express their disgust at what has happened in relation to Horizon, some members of the public are not using the Post Office in the way they did previously. Will he and the Government commit to promote the view that the Post Office is safe to use, because the scandal has been resolved and because using post offices is good for the community?

[Justin Madders]

I am concerned to hear about such incidents. It should go without saying that the postmasters are not the ones who should take the opprobrium of the public on this matter. They are doing a fantastic job. They hold communities together and provide a public service. We should celebrate that and encourage people to use their facilities as much as possible. If the right hon. Gentleman has specific examples of postmasters receiving abuse or people being discouraged to use their services because of the scandal, I would be interested to hear about them.

[Caroline Nokes (Romsey and Southampton North) (Con)]

It is a delight to see you back in the Chair, Mr Speaker. There were many sub-postmasters and mistresses who were not convicted, but who are seriously out of pocket due to the shortfalls that they themselves made up and deeply traumatised by the experience that they went through. Can the Minister provide reassurance that the Department will seek to ensure that they are supported, and that the compensation scheme is swift, effective but also very straightforward for them?

[Justin Madders]

I thank the right hon. Member for her question. Those are the principles that we want to address and carry on with from the previous Government: the system should be fair, swift and simple. We know that postmasters have already gone through an incredibly difficult time. We do not want to make it even harder by having a convoluted system. We absolutely agree that justice should be fair, quick, complete and straightforward for people.

[Kit Malthouse (North West Hampshire) (Con)]

Beyond compensation, one of the most important things that campaigners are looking for is consequences for those people who played a part in the creation of this scandal. The Prime Minister has made much about the integrity and accountability of his Government. Presumably that is retrospective. What consequence does the Minister envisage for those current serving Government Ministers who are deemed by the inquiry to have been negligent in their conduct in ministerial office in the past?

[Justin Madders]

That is a very important question. It would be premature of us to draw conclusions before the inquiry has been completed but, absolutely, we should be looking very carefully at all those individuals whose behaviour unfortunately led to the scandal happening and to it taking far too long to address. That is a matter for the inquiry to make recommendations on and, certainly, we will be looking to follow those up.

[Jim Shannon (Strangford) (DUP)]

I welcome the Minister to his place. I know that he was vociferous on this issue when he was on the Opposition Back Benches, so I have absolutely no doubt that he will deliver on it.

Some 26 postmasters implicated in the scandal in Northern Ireland are worried and concerned. It is imperative that all postmasters feel that they can have an open and frank discussion with no fear of repercussion in the upcoming investigations, and there can be no further unwarranted delays. Can the Minister confirm that, as a priority, he will make sure that postmasters have access at every level to ensure that their concerns are addressed and that he will make every effort to take steps in the right direction? Thank you so much, Mr Speaker.

[Mr Speaker]

I do not see why that point should have come last. [Laughter.]

[Justin Madders]

What a surprise to see the hon. Member in his place today. I am sure that this will not be last time that we have an exchange across the Dispatch Box, but he does raise an important point. We absolutely agree that we need to make it as easy as possible for postmasters to raise their concerns and to get the justice that they have so long waited for.

[Mr Richard Holden (Basildon and Billericay) (Con)]

I congratulate you, Mr Speaker, on your return to your place, and the Minister on taking up his appointment.

Compensation is one part of this, but what victims of this scandal, such as Betty whom I met, want to see are truth and accountability. I am referring not just to Ministers, to whom my right hon. Friend the Member for North West Hampshire (Kit Malthouse) referred, but to those involved in the scandal. What can the Minister say to people in the Post Office and to Betty, who want to see those responsible in the Post Office properly held to account, as well as the compensation for their suffering?

[Justin Madders]

I thank the hon. Member for his question. He makes an important point. Justice is one side of the coin, but there is also accountability for what has happened. A lot of people want to see that: not just those directly affected, but everyone who has been outraged by the years of inertia and obfuscation that we have seen in this scandal. The purpose of the inquiry is to get to the heart of who knew what, who did what and who did not do what they should have done, and whether individuals should take some responsibility for their actions. I have no doubt that, when those recommendations are released, we will want to see some very swift action on the back of that.

[Andrew George (St Ives) (LD)]

I was privileged to be one of those MPs who, a decade ago, was campaigning on this issue in Parliament with the now Lord Arbuthnot and campaigning on cases in my constituency—people had been treated appallingly. Those people have not yet received compensation. If there is going to be any kind of delay in compensation to those who have suffered, is there any way that early, interim payments can be made to those who need the support now and certainly before too long?

[Justin Madders]

I thank the hon. Member for his question, and join him in praising Lord Arbuthnot’s work in this area. As of 31 May, £222 million has already been paid out in compensation. There have actually been significant interim payments as well. We understand that, while this is a very large scheme, it is important that we get early payments, so I assure the hon. Member that interim payments are a very large part of this programme.

[Dr Kieran Mullan (Bexhill and Battle) (Con)]

The legislation that we passed was a blanket measure. It might be clear to us who is or is not included, but for the individuals affected it will not necessarily have been clear. Will the Minister update the House on the progress that has been made in identifying them and writing to them to confirm that their convictions have been quashed?

[Justin Madders]

I thank the hon. Member for his important question. We have been working closely with colleagues in the Ministry of Justice to identify those people who are affected by the legislation, and they will be contacted in due course if they have not been already.

Terms and Conditions of Employment

Justin Madders 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.

--- Later in debate ---

[Kevin Hollinrake]

I thank hon. Members for their contributions, and will address their specific points. As we have discussed this issue before in separate venues, I fully understand that the shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders), does not feel that this order goes far enough. It is interesting to consider the briefings that came from recent discussions in the Labour party about its new plans for the workplace. There was a briefing that the party accepted some situations where dismissal and re-engagement may be needed. That may be a vicious rumour, but it seems to me that those on the Labour Front Bench decide their policy on the basis of whom they have talked to last—whether that is a business, employers or employee representatives.

[Justin Madders]

We remain committed to banning fire and rehire, but if the Minister wants to debate our policies properly, let us have a general election and see what the public think.

Employment (Allocation of Tips)

Justin Madders Excerpts

Tuesday 14th May 2024 Commons Chamber

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

I thank the Minister for his introduction. Once again, I refer to my entry in the Register of Members’ Financial Interests. I also join the Minister in paying tribute to the hon. Members for Watford (Dean Russell) and for Ynys Môn (Virginia Crosbie) for their work on the private Member’s Bill that led to where we are today.

As the Minister outlined, we are finally here to debate the code of practice on fair and transparent distribution of tips, which is necessary to deliver the provisions of the Employment (Allocation of Tips) Act 2023. I say “finally” not just because it has taken a year since Royal Assent for a code to be agreed, but because it has been seven years since action was first promised on tips.

As far back as 2017, the Conservatives promised to ensure fair tips for hospitality workers. In that time, it is estimated that workers will have missed out on some £200 million a year in lost tips. That is over £1 billion taken from workers in some of the economy’s lowest paid jobs. It is a little disappointing to see that the Government have delayed the Act’s implementation from July until October 2024. By our calculations, this further delay will cost people in the hospitality sector another £50 million.

With that out of the way, I make it clear that we will not oppose the code. Action on tips is already long overdue, and we do not want to see it delayed any longer. We believe that these measures will have a positive impact on the lives of workers in the hospitality sector and other industries that frequently receive tips, but we also consider that there is room for improvement. I will refer to those specific issues in due course.

However, I start by referring to the Government’s consultation, which starkly set out why action is needed. The proportion of respondents who reported that they did not receive the tips to which they were entitled was very significant. Only half of those who completed the consultation reported that staff receive all the tips. Of course, this means that half the respondents to the consultation do not. Extrapolated across those working in the sector, around 1 million workers will benefit from this legislation. Of those reporting that staff do not receive all the tips, 21% reported that there was an administrative fee, another 13% said there were other deductions, and a staggering 11% reported that no tips were passed on at all. It is jarring that, in the face of such clear mistreatment of workers, there has been such a delay to get to this point. That the Government chose to delay the implementation of the Act after discovering the staggering statistics in the consultation rubs a little salt into the wound.

Some 73% of workers who responded to the consultation reported that their employer had not sought agreement on the allocation of tips, and 40% of employers consulted did not pass on tips to agency workers, in part or in total, which clearly needs to be addressed, and it will be by this legislation. These statistics may be a reason why we face another delay, because clearly a lot of businesses need to get up to speed in order to be compliant, which begs the question of why more has not been done before now.

Will the Minister outline the Government’s approach to working with businesses to ensure that they are aware of their obligations under the new laws? What steps will the Department take to ensure support in the areas where businesses raised concerns in the consultation, such as transparency and record keeping on tip allocation and distribution? I am particularly interested in how the Department plans to engage with small and medium-sized enterprises to ensure that they remain compliant with the law once it comes into effect. Workers will benefit only if employers are aware of and compliant with the law, so it would be welcome to hear the Government’s plans.

I draw the House’s attention to a couple of specific elements of the code. Paragraph 25, on employers consulting their workforce on the policy, seems pretty minimal in setting out what a good consultation looks like. If an individual makes an employment tribunal claim, does the Minister envisage there being any opportunity for there to be an examination of the quality of the consultation?

The very important point at paragraph 26 needs further clarification. It says that employers should review their allocation policy “on a regular basis”, but there is no indication of the timescale within which this should take place. Does the Minister have a view on what the timescale might be? We are dealing with a workforce who might change quite regularly.

That leads me to the question of enforcement. I repeat the old adage that people’s rights are only as strong as their ability to enforce them. The sector to which the Act predominantly applies is made up of workers in insecure, low-paid jobs that are generally in non-unionised workplaces. Staff turnover is high, meaning that many workers do not stay with the same employer, or even within the same industry, for long periods of time.

These factors will doubtless have an impact on workers’ ability to assert the rights afforded under the Act. Many may be entirely unaware of the stipulations of the Act. Even if they are aware of the stipulations, they might not always be aware of the ways in which they can enforce them. Particularly if the Government persist with their plan to reintroduce employment tribunal fees, it may well not be financially viable for people to assert their rights, as the fee for lodging a claim might well be more than a worker is seeking to claim back.

More fundamentally, a worker on a zero-hours contract or in another form of insecure work may fear that asserting their rights will be detrimental to their future chances of receiving work. For example, if a worker on a zero-hours contract is concerned that they have been underpaid the tips to which they are entitled and requests to view their tipping record, as is their right under the Act, their employer might consider this behaviour to be stirring the pot and choose to reduce the hours they give that worker, or possibly even to stop giving them work at all. A worker with less than two years’ service can be dismissed without cause and have no claim for unfair dismissal.

The legislation does not cater for people to claim that they have been unfairly dismissed for asserting their statutory rights under the Act. If that is the case, it is a huge oversight given that there is protection against unfair dismissal for asserting most other statutory rights. Will the Minister consider looking at this point again, as there is a real concern that, unless people have legal protection and confidence that the law is on their side, they may be reluctant to avail themselves of their rights.

In terms of the impact on the tribunal system, have the Government made an assessment of the propensity of those in the hospitality sector to take forward claims? Has modelling been done to judge the expected number of workers who will take forward tribunal claims?

It seems to me that the lack of proper protections will mean that the minority of bad employers will be able to continue operating with impunity, withholding the tips that their workers have rightfully earned. As a minimum, I would expect there to be some monitoring of the legislation’s effectiveness, perhaps through surveys or consultations. After all, paragraph 35 of the code states:

“An employer cannot be said to have met its obligation to handle tips fairly and transparently if individual workers are not aware of their entitlements in line with the tipping policy.”

If we are to have confidence that those words mean something, surely we need monitoring to ensure that the code is effective.

There are a couple of other issues that I would like to raise. First, on when a worker is entitled to receive their tips for a given month, the code makes reference to the provision that a tip must be paid by the end of the next month. There is a question about why tips are not passed over on the same schedule as most workers are paid.

Secondly, according to paragraph 13, tipping by app is judged to be out of scope of the legislation. Can the Minister confirm exactly what “tipping by app” means? I take it to be a form of digital tipping, akin to leaving cash, but we need some clarity. Will he outline what work the Department has done to identify the types of tipping practices that will be in scope? There is a concern that, although tipping by app might not be widespread now, it could be seen as a way to avoid obligations under the Act in certain circumstances, to prevent staff from getting the tips that were intended for them.

In summary, we welcome the fact that the Government have finally got to the stage of being able to implement this policy. Sadly, we will have to wait another five months for it to be implemented, but the changes set out today will have a positive impact on workers, who for too long have been losing money that was always intended for them. We will monitor the progress of this legislation closely and, if necessary, take further steps to ensure the good intentions behind this Act are delivered in full.

Paternity Leave (Bereavement) Bill

Justin Madders Excerpts

3rd reading
Friday 26th April 2024 Commons Chamber

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

It is a pleasure to speak on Third Reading of this important Bill, which has cross-party support, as we have heard. I congratulate my hon. Friend the Member for Ogmore (Chris Elmore) on his success in steering the Bill to this point. I am aware of how much work he has done with the Government to get their support and to ensure that the legislation can go through the other place and gain Royal Assent. I also recognise that the hon. Member for Broxtowe (Darren Henry) has worked constructively on behalf of his constituent, Aaron, and with my hon. Friend, to ensure that the legislation will be in place. He spoke movingly about how the tragic circumstances of his constituent, who lost his wife, Bernadette, moved him to take action.

A number of Members have noted the importance of this work. The hon. Member for Hyndburn (Sara Britcliffe) spoke about the work that she has done in light of the very tragic circumstances of one of her constituents. She showed how Members can work constructively—with the NHS in her case—to makes changes so that no one else has to go through the experiences that we have heard about. The hon. Member for Stoke-on-Trent South (Jack Brereton) spoke with great sincerity about why this legislation is so important.

As we have heard, the Bill as amended will disapply the employment conditions to which an employee’s right to paternity leave is subject in the event of their partner dying. In effect, it will make paternity leave a day one right for the partner of a mother who has died, with no continuity of employment test. The right is also extended to the tragic circumstances in which both mother and child die, despite the fact that paternity leave is usually taken only for the purposes of caring for a child. As we know, partners of mothers who die in or just after childbirth are not currently entitled to paternity leave if they have not met the continuity of employment requirements. That means that some people find themselves in the unfortunate position of not being entitled by right to paternity leave. If their employer chooses not to show compassion by voluntarily providing leave, an individual could be left grieving for their partner, as well as undertaking the mammoth responsibility of being a single parent to their child, without workplace support. Like other Members, I find it very hard to imagine how anyone could face such a devastating situation with the added pressures of job insecurity on top.

It is right to acknowledge that most responsible and caring employers would react to such a devastating scenario with compassion and do the right thing by their employee, regardless of whether any law required them to do so. However, making it a legal requirement will mean that the vanishingly small number of employers who do not act in that way will now have to and the employee has one less thing to worry about.

My hon. Friend the Member for Ogmore said that he wants the Bill to help as few people as possible. That is an unusual statement to make in this place, but it is an important point. Thankfully, the legislation will apply to few people because death during or just after childbirth is very uncommon. The excellent work that our midwives and doctors perform means that the number of mothers who sadly pass away within 42 days of birth stands at roughly 12 for every 100,000 births. Of course, each death is a tragedy and a profound loss, but we should recognise that those tragic circumstances occur in only a small number of instances. The fact that it has taken Aaron’s situation for the matter to come before us means that it is important that we act to prevent people falling through cracks because of legislative oversight.

As we know, at present the only right to statutory bereavement leave is for parents who have lost children up to the age of 18. Leave is a day one right, but the entitlement to pay is conditional on their having been in employment and earning a certain amount over eight weeks. Shared parental leave provisions also may not always help people in facing the situation that this Bill was originally drafted to help. Not only is there a time restriction on access, but income requirements can differ for the mother and partner. The system is rather complicated, and we know that families have been discouraged from taking up shared parental leave; figures show that only 2.8% of partners decide to take it up. As we have heard, by virtue of the amendments agreed in Committee, by using paternity leave rather than parental leave as the vehicle for entitlement, hopefully more people will be protected. It would also mean that the surviving parents of adopted children or children born through surrogacy arrangements will be included, and we welcome those changes.

I commend my hon. Friend the Member for Ogmore for working constructively with the Department and the Minister to achieve the desired outcome. I also note with interest the new powers in clause 1(4), which provide for the ability to introduce regulations to enhance redundancy protection for bereaved employees when they return from extended paternity leave, and to allow bereaved parents to have keeping-in-touch days during their extended paternity leave. It would be useful when the Minister responds to hear whether it is his intention to use those powers to introduce regulations. In particular, as my assumption would be, will the regulations be analogous to current paternity leave provisions?

In conclusion, we are pleased to see the Bill reach this stage, and we now wish it safe passage through to the other place. Again, I commend my hon. Friend for his work on it, and I congratulate him on getting the Bill to this stage.

Football Index Collapse: Lessons Learned

Justin Madders Excerpts

Wednesday 24th April 2024 Westminster Hall

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

It is a pleasure to see you in the Chair this afternoon, Mrs Murray. I thank my hon. Friend the Member for Blaydon (Liz Twist) for securing the debate and for the work she has done over a number of years to highlight this issue, as well as other existing or future problems that need to be tackled.

We know that Football Index has been described as

“the biggest scandal in British gambling history”,

with thousands of customers suffering cumulative losses of up to £134 million. It is a scandal and a failure. I am sorry to say that we are all getting rather too used to saying in this place that, once again, people have been let down. Whether it the sub-postmasters, the Women Against State Pension Inequality Campaign, the leasehold scandal, infected blood, the loan charge, mortgage prisoners, Equitable Life or the myriad other investment scandals that have seen people’s life savings stolen, too often in this place we end up saying that what happened was totally wrong and should not be allowed to happen again. But yet again that is where we find ourselves today.

It is little wonder that public faith in our elected representatives continues to erode when Parliament seems to be incapable of learning from past mistakes. Whether it is regulatory failures, loopholes or bad actors, this place seems unable to stop them. Consumer protection and other basic safeguards for our citizens seem to have gone missing in action. We are failing in our basic duties; light-touch regulation has clearly had its day. We know the terrible stories of those affected by Football Index—losses into seven figures, individuals driven to the brink of suicide, marriages collapsed, families torn apart and life savings vanished—and those impacts have been part of all the other scandals I mentioned. Too many people in this country have suffered grave injustices that we seem incapable of putting right.

Football Index has been described as a Ponzi scheme. As we have heard, its executives were warned soon after its launch—in fact, as early as 2016—that their so-called football stock market would prove unsustainable. All the warnings came some five years before its eventual collapse, leaving serious questions about how effective regulation was. According to newspaper reports, the Gambling Commission was warned in January 2020 that Football Index was

“an exceptionally dangerous pyramid scheme under the guise of a football stock market”.

We all know that that warning proved to be correct.

Perhaps it was the unusual nature of the product that meant it carried on without effective intervention. However, I have looked at Trustpilot reviews for many of the major online gambling companies, and there are a litany of tales about frozen accounts, withheld funds and appalling customer service. It seems that even the more straightforward gambling propositions are able to get away with far too much, so it should be little surprise when an unusual scheme, which was unsustainable by design, also escapes attention.

The FCA took its time to get involved, and was also indecisive, changing its view twice as to whether Football Index fell within its regulatory remit. On two separate occasions, in September 2019 and September 2020, when it did indicate that Football Index fell within its remit, the FCA did not follow up with adequate action, and the product continued to be unregulated.

Those who used Football index talked about it being advertised as an investment product, with only a very small note squirrelled away on its website saying that it was a betting scheme, which is what it really was. FCA regulation allows for redress for losses through the Financial Services Compensation Scheme, but because Football Index was considered gambling—although not overtly advertised as such—the failure to regulate it meant that the losses were allowed to continue to stack up.

The Gambling Commission has now updated its framework on how it assesses risks, so that the novelty of the product is fully considered. Licences will not normally be issued if the product’s name contains language associated with financial products. The FCA now has, I understand, an executive director to oversee its relationship with the Gambling Commission where products appear to cross boundaries. However, despite those actions, the reality is that nobody has been held to account.

Even those originally involved in the company have got away with it. The Insolvency Service, which I wrote to, decided there was insufficient evidence to justify directors disqualification proceedings. The people who created Football Index in the first place are allowed to carry on with impunity. That is wrong, because they knew it was unsustainable and they were warned about that from the very start, but they carried on anyway.

That leads us on to KiX, which my hon. Friend the Member for Blaydon mentioned. The KiX website says:

“Digital Athlete Tokens (DATs)…represent the on-pitch performance of individual footballers…and are deployed as smart contracts on the blockchain”.

It says that the owner of a digital athlete token becomes

“eligible for twice weekly winnings.”

I do not really know what that means, but it has a familiar ring to it—as we have heard, some of the people behind Football Index are part of KiX. That quote about digital athlete tokens means it is as clear as mud to me whether this should be regulated by the FCA or the Gambling Commission—perhaps it is neither. KiX is apparently a “decentralised autonomous organisation” and apparently has a

“decentralised, egalitarian and democratised blockchain ethos.”

If that word salad is not enough to put you off investing, I hope that someone, somewhere, who actually understands what that means is going to take responsibility for regulating this.

We have let people down, and these products need proper regulating and policing. We really do not want to end up here again in another few years, bemoaning our lack of action. I have had too many constituents ripped off by one investment scheme or another, and the lack of accountability, justice and—I am sorry to say—interest from those whose job it is to ensure that there is justice says to me that we are letting people down on a systemic basis. We have to do much better than we are at the moment.