Oral Answers to Questions

Kevin Hollinrake Excerpts

Thursday 30th November 2023 Commons Chamber

[Deidre Brock (Edinburgh North and Leith) (SNP)]

2. What recent progress her Department has made on bringing forward legislative proposals on reform of audit and corporate governance.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

We remain committed to reform. Significant reforms have already been delivered to the Financial Reporting Council to strengthen its capabilities and drive up audit quality.

[Deidre Brock]

The Institute of Chartered Accountants of Scotland has branded the Government’s decision to leave the audit and governance reform Bill out of the King’s Speech as a lost opportunity and a huge blow to the interests of UK businesses and the public. The Government have been promising the Bill since 2021. Will they reconsider that backward step and make the UK’s corporate regulatory framework fit for purpose in the 21st century?

[Kevin Hollinrake]

Time and again, Opposition parties seek to wrap businesses up in red tape, whereas Conservatives are keen to cut red tape. Consultation with businesses revealed concerns about imposing additional reporting requirements, while the Government are looking to simplify and streamline existing requirements.

[Mark Pawsey (Rugby) (Con)]

This week, the Business and Trade Committee took evidence from Wilko. Business collapses such as that of Wilko, Carillion, Thomas Cook and Patisserie Valerie have been a consequence of failures in the audit process, costing people their jobs and hurting investors and suppliers. Audit reform was recommended by the then Business, Energy and Industrial Strategy Committee in 2019, and the Government offered to bring forward a draft Bill. I know the Minister wants to reduce red tape, but does he agree that some form of action is now pretty urgent?

[Kevin Hollinrake]

I was delighted to give the Select Committee evidence on Wilko. The administration report on Wilko is continuing and clearly we need to see the findings, but investigations so far have not shown that director misconduct played an instrumental part in Wilko’s failure, although I think it is clear to all concerned that there were failures in management that led to the company’s demise.

[Mr Speaker]

I call the Scottish National party spokes- person.

[Richard Thomson (Gordon) (SNP)]

How strange the change from minor to major in that response. Financial transparency and accountability are essential components of economic stability. For three years now, the Government have been promising legislation and improved checks on company finances, but they have repeatedly failed to deliver. How can the Minister justify leaving the audit and governance Bill out of the King’s Speech, when it is supported by businesses, regulators and auditors alike?

[Kevin Hollinrake]

We work very closely with the Financial Reporting Council. No one can deny that the FRC has changed its approach completely and is now a much more effective regulator. Sir Jon Thompson did a fantastic job when he was there, and the current chief executive, Richard Moriarty, and chair, Jan du Plessis, are following his work. We are confident that the FRC can make sure that the UK’s corporate regime works effectively, without tying businesses up in red tape.

[Dame Nia Griffith (Llanelli) (Lab)]

3. What steps she is taking to prevent the use of fire and rehire practices.

[Mick Whitley (Birkenhead) (Lab)]

17. What steps she is taking to prevent the use of fire and rehire practices.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

The Government consulted on a draft statutory code of practice on fire and rehire earlier this year. The Government response and the final version of the code will be published in spring next year. The code sets out employers’ responsibilities when seeking to change contractual terms and conditions of employment, and is designed to ensure that dismissal and re-engagement is used only as the last resort.

[Dame Nia Griffith]

The very fact that only last week P&O Cruises felt able to say it would impose new contractual terms on workers through fire and rehire tactics shows that some employers still feel that they can use these tactics with impunity, in spite of the Government’s promise to clamp down on them. I thank the Minister for his answer, but is there any way he could bring in the legislation more urgently, so that we can protect our workers properly?

[Kevin Hollinrake]

I agree with the sentiment behind the hon. Lady’s question in terms of bringing legislation forward as quickly as possible. Of course, we have to get this right. I have to say that P&O was not a fire and rehire situation; it was a fire-only situation, which was strongly condemned by this Government and by many other stakeholders, and a civil investigation is ongoing into the matters surrounding that case. But yes, the hon. Lady is right, and we are keen to get the new statutory code of practice in place as soon as possible. We expect that to be in spring next year, and once it is in force, the employment tribunal can increase employees’ compensation by up to 25% when an employer fails unreasonably to comply with the code.

[Mick Whitley]

Last week, concerns were raised that the Carnival group was making provision to fire and rehire hundreds of staff working on P&O Cruises and Cunard Line, reviving memories of last year, when P&O Ferries sacked over 800 of its employees and replaced them with agency labour, while the Government sat back and let it happen. Does the Minister agree that the only way to provide workers with the security they deserve is by legislating to outlaw fire and rehire tactics once and for all? If not, it is time the Government came clean with the British public and admitted that they will always side with bad bosses.

[Kevin Hollinrake]

That is not the case at all. We take these matters very seriously, but we do not think that completely banning fire and rehire is the right thing to do because there are some situations in which companies need to restructure quickly. We think that employees’ proper consultation rights should be observed. Where they are not observed and where an employer does not follow the statutory code of practice, employment tribunals can impose a significant uplift on redundancy payments. We think that is the best way to deal with this, by striking a balance between companies and their workers.

[Mr Speaker]

I call the shadow Minister.

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

Fire and rehire is rife in this country. Research published by the Chartered Institute of Personnel and Development found that, between March 2020 and July 2021, 43,000 employers changed their employees’ contracts through fire and rehire techniques. The Government promised in March 2022 that they would take action following the P&O scandal, and we now learn that it will be a full two years since that time before anything actually changes. Given the propensity for using fire and rehire tactics, can the Minister tell us how many employees he estimates will have had their contract changed through fire and rehire in that two-year period?

[Kevin Hollinrake]

I do not have that number to hand. We want to strike a balance between employers and their workforces. We condemn what P&O did. We need to bring in new measures on fire and rehire, and we have committed to do that. A consultation is clearly needed to make sure those provisions are fair on both businesses and workers. That is what we are doing right now, and we intend to bring those provisions before the House next spring.

[Alistair Strathern (Mid Bedfordshire) (Lab)]

4. What steps she is taking to encourage businesses to open outlets on high streets.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

7. What steps she is taking to encourage businesses to open outlets on high streets.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

In addition to small business rate relief, under which businesses with a rateable value of less than £12,000 pay no business rates whatsoever, in his autumn statement the Chancellor announced a further business rate support package, worth £4.3 billion over the next five years, to support small businesses and the high street.

[Alistair Strathern]

My constituents in Flitwick have been dismayed over the past few years as their high street has been gradually hollowed out, losing much-loved businesses and, recently, both their post office and banking facilities. Sadly, that is far too familiar for people in towns and villages across my constituency, where businesses are weighed down by high cost pressures and a business rate system that no longer seems fit for purpose or fair. When will the Government commit to bringing forward the comprehensive business rates reform that my businesses are crying out for, so that we can get back to revitalised, much-loved high streets?

[Kevin Hollinrake]

I thank the hon. Gentleman for his question and welcome him to his place in the House.

Of course, we are very concerned about the high street. The pressures on the high street are largely caused by changing consumer habits, but the Government have stepped in to ease pressures, such as through the £20 billion energy bill support scheme and the £17 billion business rate package.

The hon. Gentleman talks about completely scrapping the current business rate system, which Labour has committed to do, but it is incumbent on Labour to set out how it will replace the £25 billion that business rates currently add to the Exchequer. What is the solution? It is not right for him or others simply to say they will scrap that £25 billion without setting out how they will replace it.

[Dr Huq]

The vanishing of Debenhams, Wilko and Paperchase has left huge holes in our town centres— I have lost a Wilko in both Ealing and Acton. Analysis shows that the incentivisation of out-of-town retail is the culprit. Labour has a five-point plan to revive our high streets, putting communities first. What are the Government doing about all this?

[Kevin Hollinrake]

I do not accept that, although out- of-town shopping can put pressure on the high street. Local authorities have to be very careful when they give planning consent for out-of-town shopping centres that could put pressure on the high street. That is clearly an important part of the planning process, but it is not the responsibility of central Government, of course. I would be interested to see that five-point plan, but if it includes the scrapping of business rates, which raise £25 billion, I ask the Labour Front Bench team once again—I have yet to receive an answer—where is that money coming from?

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Labour-run Leeds City Council has decided that it wants to bring parking charges to my market town of Wetherby—it currently has no parking charges. Does my hon. Friend agree that the investments we are making are all very well, but if local authorities make it harder for shoppers by increasing their costs, that will choke off the high street rather than help it?

[Kevin Hollinrake]

I thank my right hon. Friend for his question and he is absolutely right to say that some local authorities see parking charges as potential revenue raisers, but this is in effect a tax on business. Local authorities can, of course, make charges where appropriate, but they should only cover the cost of maintaining those car parks; they should not be a punitive tax on businesses.

[Sir Desmond Swayne (New Forest West) (Con)]

There are streets in the west end of this city, important to our economy, that would certainly benefit from the ability of tourists to reclaim VAT, aren’t there?

[Kevin Hollinrake]

My right hon. Friend raises an important point that this Department has looked at carefully. We are concerned about the impact of the withdrawal of that tax concession on businesses, not just for these businesses themselves, but for the other businesses that rely on foreign visitors—I am talking about hoteliers, restauranteurs and so on. We are keen to look at this matter. The Chancellor committed in his autumn statement to review the evidence to see what impact this was having. We will look at that with great interest and make our views known strongly to the Exchequer.

[Ashley Dalton (West Lancashire) (Lab)]

5. What steps she is taking to help small and medium-sized businesses to export.

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[John Penrose (Weston-super-Mare) (Con)]

8. If she will make a comparative assessment of the adequacy of the number of statutory duties of the Competition and Markets Authority and other regulators reporting to her Department.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

The CMA has a primary statutory duty to promote competition both inside and outside the UK for the benefit of consumers, which provides the CMA with a clear, strong focus on delivering for consumers. In our recent steer to the CMA, we did point out how very important it is that it focuses also on economic growth.

[John Penrose]

Regulators such as the CMA have huge powers, so Parliament must give clear instructions about how those powers should and should not be used. Does the Minister agree that the CMA’s instruction is a model of the kind of clear and strong legal duty that leaves no doubt in regulators’ minds about the job that Parliament has asked them to do. Will he join me in pushing for equally clear and focused duties for other economic regulators where, sadly, the same cannot currently be said?

[Kevin Hollinrake]

I thank my hon. Friend for his question and for his very important work in this area. I know that reducing the regulatory burden is a cause that is very close to his heart, and to the hearts of those in the Chamber today who supported his amendment in the recent Digital Markets, Competition and Consumers Bill. That view is also shared by myself and by the Secretary of State. We are very keen to make sure that, as well as ensuring that sectors are well regulated, our economic regulators focus on competition and economic growth.

[Andrew Bridgen (North West Leicestershire) (Reclaim)]

I disagree. The Competition and Markets Authority is not only the dog that does not bark, but the dog that does not bite. We see multinational corporations and investment funds of such a size that they have more power than a sovereign Government. When will the Government give the CMA the powers and authority needed to tackle the corporate monopolies and cartels that have so much sway over our lives?

[Kevin Hollinrake]

The hon. Member raises an important matter. That is why the Government are legislating in this space, through the Digital Markets, Competition and Consumers Bill, which gives the CMA huge new powers, particularly over some of our largest online platforms—platforms that have what we describe as strategic market status. This is world-leading legislation that will tackle many of the examples of detriment that he will be aware of and that he raises in his question today.

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

9. What steps she is taking to maintain access to high street postal services.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

The Government protect the post office branch network by setting access criteria and minimum service levels to be provided by branches across the country. More post offices have opened this year than have closed. The network is as large today as it has been for five years, with around 11,700 branches open, above the 11,500 target that we set for the Post Office.

[Florence Eshalomi]

The Minister mentioned that more post offices are opening. Actually, they are closing. The Clapham Common post office in my Vauxhall constituency has been earmarked for closure and there are no current plans to replace it. I am fighting this closure, along with my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) and local ward councillors in the Communications Workers Union. This is a pattern that we are seeing across the country. It has been identified that 260 postal shopfronts have closed across the country in the past 10 years. With those closures, we are seeing elderly and vulnerable people—people who need their post offices on the high street—having to travel further. Will the Minister tell me what more he and the Government are doing to protect these vital services?

[Kevin Hollinrake]

The hon. Member is absolutely right to raise this issue. The Post Office has launched a public consultation regarding the Clapham Common post office. The Post Office maintains that locals will continue to have good access to services. There is a post office within a mile of the Clapham Road branch, and three further branches within two miles. Nevertheless, the Government support the post office network with a significant amount of financial support—£2.5 billion over the past 10 years—so we do continue to support post offices. We know how important they are to constituents and other colleagues in this House. I am very happy to meet her to discuss this particular case.

[John McDonnell (Hayes and Harlington) (Lab)]

10. What her planned timetable is for the ratification of the comprehensive and progressive agreement for trans-Pacific partnership.

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[John Penrose (Weston-super-Mare) (Con)]

T7. In yesterday’s data Bill debate, Ministers gave clear and positive replies about the importance of interoperable data standards, and the need for an investable timetable of which sectors will get smart data and when. However, they were much less clear—one might even call it bashful—about giving a date for when that timetable will be published. Is my hon. Friend the Minister willing to be a little less coy this morning?

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

I am not known for my coyness. My hon. Friend has done very important work in this space, and we share his ambition: I chair the Smart Data Council, and we are planning to open up databases right across our economy to allow for more competition in the worlds of energy, telecoms, and buying and selling houses. He has been a great champion of all those measures. I am very keen to bring forward the roadmap that my hon. Friend has referred to, hopefully as early as January next year.

[Tonia Antoniazzi (Gower) (Lab)]

T2. At their busiest time of year, British cheese exporters are warning of damaging losses as the Government continue to fail to reach a deal that ensures access to the Canadian market. Every day that the Government fail, companies such as the Snowdonia Cheese Company in north Wales lose contracts, and they cannot make plans with the looming deadline of 31 December a matter of weeks away. Can the Minister update the House on the negotiations to extend the deadline for cheese tariff quotas between the UK and Canada?

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[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

T5. Under current laws, unions are required to use electronic means to communicate with their members about matters relating to work, yet are prevented from using the very same electronic methods when balloting their members for industrial action. Does the Minister accept that it should be possible to ballot trade union members on industrial action electronically?

[Kevin Hollinrake]

The hon. Lady raises an important point. That is something we are looking at; we have been looking at it for some time, and are keen to bring forward the results of our deliberations very shortly.

[Mr Laurence Robertson (Tewkesbury) (Con)]

May I ask the Trade Minister, whom I welcome back to his position, what efforts the Government are making to raise awareness of the developing countries trading scheme, particularly among African countries? What encouragement is he giving those countries to take advantage of that scheme, which would benefit them and us?

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[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

On Tuesday, we finally had answers from Lisa Wilkinson about the mistakes that led to the collapse of that much-loved firm, but Ms Wilkinson was not able to answer why 70% of the profits in the last four years were paid out in dividends to family trusts while the deficit in the pension fund amounted to now £50 million. Will the Secretary of State ensure that regulators explore every option to claw back those dividends so that Wilko pensioners are not short-changed?

[Kevin Hollinrake]

The right hon. Member raises a very important point. He has looked at this matter very carefully, including on the Business and Trade Committee, and I thank him for his work. I was pleased to give evidence to his Committee on Tuesday. Clearly, the Insolvency Service is looking at this. It is looking at the directors’ conduct report from PricewaterhouseCoopers, the administrator, which it needs to look at very carefully. It is clear from that report so far that there is no evidence of director misconduct, but further work is ongoing. The Insolvency Service is due to meet the administrator, PwC, in January, and we will look at the situation as it unfolds.

[Simon Fell (Barrow and Furness) (Con)]

One of the most effective ways we could strengthen both the public sector and the private sector is the creation of an office of the whistleblower, as long championed by my hon. Friend the Member for Cheadle (Mary Robinson). That would strengthen corporate governance, empower those who see wrongdoing to come forward and protect them from intimidation, and strengthen the UK as a place to do business. Given that this week is Whistleblowing Awareness Week, could I encourage Ministers to bring forward proposals to support this important initiative?

[Kevin Hollinrake]

I thank my hon. Friend for his question and his work in this area, in which he has great expertise. I met my hon. Friend the Member for Cheadle (Mary Robinson) yesterday to discuss this very matter. She has set out some key proposals in this area. We are currently undertaking a review of whistleblowing, and we hope to report to the House very shortly.