Protection from Redundancy (Pregnancy and Family Leave) Bill

Kevin Hollinrake Excerpts

3rd reading
Friday 3rd February 2023 Commons Chamber

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

It is a pleasure to speak in this debate with you in the Chair, Madam Deputy Speaker. First, let me thank my friend the hon. Member for Barnsley Central (Dan Jarvis) for bringing this important Bill forward for debate. It is one of three very important measures we are taking through the House today. We have this Bill on protection from redundancy, the Bill on carer’s leave introduced by the hon. Member for North East Fife (Wendy Chamberlain) and the Bill on the right to request regular hours, promoted by my hon. Friend the Member for Blackpool South (Scott Benton). Those measures are on top of other workplace changes that we have made or are making, such as those on neonatal care leave, the Employment (Allocation of Tips) Bill, which we debated only a couple of weeks ago, and measures on the right to request flexible working.

That is not really consistent with the implication of the hon. Member for Bradford East (Imran Hussain) that the Government are going backwards on workers’ rights; far from it, we are absolutely taking this forward. He talked about the vehicle for doing so, and personally I think it is an absolute honour to be able to take through a piece of legislation such as this; it is a great honour for the hon. Member for Barnsley Central. I have had the chance to take through legislation on a couple of occasions during my career as a Back Bencher, and it is great to be able to do that, so I do not agree with the point made by the hon. Member for Bradford East. There are different ways of taking legislation forward in this place, and a private Member’s Bill is a perfectly appropriate one. The Government support this measure.

As we improve workers’ rights, it is however important to say—a number of my colleagues have referred to this, as did the hon. Member for Barnsley Central—that we must also consider the impacts on business. Clearly there are extra costs in measures such as these; the costs here are about £30 million initially for business through familiarisation costs and ongoing costs of about £1 million a year. We must consider the burdens on businesses as we take these measures forward.

There is a recognition now that, although covid’s effects on our freedoms were temporary, the effects on the workplace are much more long term, and workers clearly now want a fairer and more flexible workplace. Business needs to provide that fair and flexible workplace if we are to solve some of the labour challenges across our nation. Those challenges are not just affecting this nation; many are attributing our labour shortages to Brexit, but I do not accept that characterisation. These problems are arising across the world; for instance, the USA currently has 10.7 million vacancies with only about 6 million people looking for work, a higher ratio of vacancies to people looking for work than ours. There are challenges right across the globe.

[James Sunderland]

The Minister is making a persuasive argument and I agree with everything he is saying. We heard earlier about the economic benefits of the Bill, and it is imperative to get more people back into the workplace. In Bracknell Forest in 2009, the birth rate was 1.86. It came down in 2019 to 1.65, and has come down again in 2022 to 1.58. Fewer women across the country are having children, which will have a detrimental effect on our economy in the future. Does the Minister agree that this Bill might encourage women to start families and have children, because they know employers will respect their rights and that they will not be discriminated against?

May I also raise the importance of early years funding, even though that is not a responsibility of the Minister’s Department? It is essential that we do more to allow women to go back to work with their young children in early years care, for which we need more funding.

--- Later in debate ---

[Kevin Hollinrake]

I heard my hon. Friend’s comments earlier about recognising the pressures on businesses and making sure that we consider their interests when making legislation, and I entirely agree with what he says. Some 575,000 people of working age have left the workplace since the pandemic started. We want to attract more of those people back to work, because they have an important role to play. There are talented people outside the workforce, and businesses need more people in the workplace; measures such as those in the Bill are required.

I liked the description of this legislation by the hon. Member for Barnsley Central as a sweet spot. It is absolutely right that we consider the interests of business alongside those of workers. My hon. Friend the Member for South West Hertfordshire (Mr Mohindra) talked about his small business background in his speech, rightly again looking at the interests of business as well as those of workers.

I thank all Members who have spoken on this important matter today and in previous stages; I am grateful for their participation. I also repeat the thanks from the hon. Member for Barnsley Central to my ministerial predecessors, my hon. Friends the Members for Watford (Dean Russell), for Sutton and Cheam (Paul Scully) and for Loughborough (Jane Hunt) and to others for their work in getting us to this stage, and I am pleased to confirm that the Government continue to support the Bill.

It has been heartening to observe support for the Bill from across the House, and I was pleased to hear that reflected in the debate. No one should have to face pregnancy and maternity discrimination. It has a pernicious effect on the immediate and longer-term employment prospects for women, and for businesses it can act as a drag on equality, productivity and, indeed, their reputation generally. That is why I am pleased that we are here today. The Government—indeed, the Business Secretary and I—are committed to ensuring that the UK is the best place in the world to start and scale a business. We need a strong and flexible labour market that supports participation and economic growth.

I would like to put on the record why the Government are supporting the Bill. When we talk about female economic empowerment, we tend to talk about positive, facilitative policies—parental leave and pay, flexible working, women on boards and so on—looking to drive positive action to achieve good or better outcomes. To help those policies have maximum impact, we also need to clamp down on poor or inappropriate practices such as discriminating against pregnant women or new mothers, or waiting for a woman to return from maternity leave when the current protected period ends and then making her redundant.

We know that one of the key drivers of the gender pay gap is the time when women stay away from work. Ensuring that women are not needlessly forced out of the workplace is therefore an important way of tackling that inequality and maximising the economic contribution that women can make. As the hon. Member for Barnsley Central explained to the House, the incidence of pregnancy and maternity discrimination and the poor treatment of pregnant women and new mothers is far too high. This is an unacceptable situation.

The law is absolutely clear that discriminating against women on the grounds of their pregnancy or because they are on maternity leave is unlawful. Legislation is in place in the Equality Act 2010, which every employer must follow. There are also regulations under the Employment Rights Act 1996 and the Maternity and Parental Leave etc. Regulations 1999—the so-called MAPLE regulations—which currently put a woman on maternity leave, or a parent on adoption or shared parental leave, in a preferential position in a redundancy situation. My hon. Friend the Member for Orpington (Gareth Bacon) made the key point that that also applies to adoptive parents. It was announced in the December 2019 Queen’s Speech that the Government would extend those redundancy protections to prevent pregnancy and maternity discrimination.

Earlier in 2019, the Government had consulted on extending the existing redundancy protections into pregnancy and for a period of return to work following relevant leave. The relevant types of leave are maternity, adoption and shared parental leave. Consultation respondents strongly agreed that six months would be an adequate period of time for redundancy protections to be in place after an individual on maternity leave has returned to work. Consultation respondents also strongly agreed that protection should be extended to parents who had taken adoption or shared parental leave. The Government’s consultation response committed to extend redundancy protection during pregnancy and for six months after a new mother has returned to work, and to afford the same protections to those returning from adoption leave and shared parental leave.

Under MAPLE, before making an employee on maternity leave redundant, employers have an obligation to offer them, and not just to invite them to apply for, a suitable alternative vacancy where one is available. The Bill is important as it will allow us through regulations to extend MAPLE protection into pregnancy and for a period following the birth of the child covering the return to work period. The existing protection that applies when a parent is taking relevant leave will remain unchanged.

Let me now address some of the points made by Members today. The hon. Member for Barnsley Central made an important point about extending the window of access to employment tribunals. As I think he knows, tribunals do have discretion; they can, in specific circumstances, look at individual cases brought outside that three-month window which might normally be deemed to be out of time. The number of circumstances that might not fit within the window has increased owing to covid and other pressures, such as waiting lists. We are considering these matters, and will, I am sure, engage in further conversations with the hon. Gentleman.

We have talked before about the requirement for six consecutive weeks of leave that needs to be taken to qualify for extended leave, which was mentioned today by both the hon. Member for Barnsley Central and the hon. Member for Bradford East. We are looking carefully at that requirement, but the purpose of the qualification period is to ensure that these measures are targeted at those who need them most—those who have taken an extended period of leave, not just, for example, two weeks’ paternity leave. Consultations are ongoing, and we are giving the issue earnest consideration. However, I can assure the hon. Member for Barnsley Central and other Members that our interests are aligned with those of workers, and that the people who really need this extra support are at the front of the queue.

My hon. Friend the Member for Orpington rightly raised the issue of balance between workers and businesses. My hon. Friend the Member for Guildford (Angela Richardson) spoke movingly of her own experiences. It was wonderful to hear that she has three children, but she also had three mishaps along the way. I am lucky enough to have four healthy children, but along the way my wife and I had a number of miscarriages, so we have had similar experiences and I do know how distressing it is when this happens. My hon. Friend talked about her experiences of miscarriage, and I think it is fair to say that it is far from straightforward. Pregnancy can be a wonderful time, but it can also be very challenging—a period of highs and lows even at the best of times. There can be pretty severe mental and physical impacts, which we should always bear in mind, and that is why this kind of flexibility in the workplace is so important. The last thing that any employer should do is add an injustice to insult and injury.

My hon. Friend the Member for Blackpool South talked about the Government’s excellent record on workers’ rights. The death of workers’ rights has often been greatly exaggerated during debates in the House, but we are strengthening rather than diminishing them. In this regard we have always been way ahead of the pack, including European Union member states. I look forward to the debate that we shall have later today on the Second Reading of my hon. Friend’s excellent Workers (Predictable Terms and Conditions) Bill.

My hon. Friend the Member for South West Hertfordshire talked about his nieces and nephews, and his wish to ensure that they would be given equal treatment when they entered the workplace. Good employers always do that, of course, but in this instance we have in mind employers who do not do the right thing, and this legislation is intended to ensure that they do in future. As Members know, I spent 30 years in business. What we are proudest of in business is our legacy and our reputation, and it seems to me that our reputation is founded on how we treat not only our customers but the people who work for us. That approach has tremendous recruitment and retention benefits for business.

My hon. Friend the Member for North West Norfolk (James Wild) rightly said that we were here to protect people from various types of mistreatment. That is indeed one of our jobs here in the House. He asked how we could promote these measures so that employers knew about them. We are consulting and working with key stakeholders such as the CBI, the Federation of Small Businesses and the TUC to try to ensure that these changes are as widely known about as possible in the business community. He also asked about regulations, as did the hon. Member for Bradford East. We are making good progress on regulations and officials are working at pace, although I cannot give an actual date for when those regulations will be in place. My hon. Friend will probably understand that we have some key considerations here and we want to ensure that we get things right as we bring them forward.

As I conclude, may I thank the civil servants who have worked fantastically hard on this Bill? They are coping with a huge amount of legislation at the moment, some of which has been brought in very rapidly, for obvious reasons. Let me name them individually: Tony Mulcahy; Jenni Aara; Aoife Egar; Faye Penlington; Bryan Halka; Roxana Bakharia; Jayne McCann; Keisha Parris; and Cora Sweet, from my private office, who is sitting in the Box there.

To conclude, as my predecessors have said to this House before, these measures will provide invaluable support and protection for pregnant women and new parents. A little bit more security during these times in people’s lives is so important. The evidence and analysis of the need to introduce additional protection is absolutely clear. Through the Government and the Equality and Human Rights Commission’s own research, and the work of the Select Committee on Women and Equalities and others, we see that there is clearly a need for further support for parents at these times. The Government are pleased to support this private Member’s Bill, which is wholly in line with our ongoing commitment to support workers and build a high-skilled, high-productivity, high-wage economy. The Government look forward to continuing work with the hon. Member for Barnsley Central and those in the other place to support the passage of these measures.

Carer’s Leave Bill

Kevin Hollinrake Excerpts

Friday 3rd February 2023 Commons Chamber

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

It is a pleasure to speak in this important debate, and I thank the hon. Member for North East Fife (Wendy Chamberlain) for her tremendous work in bringing forward this important legislation, which I am pleased to say the Government support. I am also very grateful for the cross-party support for these measures. It was a pleasure to attend the hon. Lady’s carer’s leave drop-in event on 25 January, and I was pleased that there is support from TSB and Centrica, and to see at first hand the good work led by Baroness Pitkeathley and Carers UK.

The Bill recognises the importance of the 4.2 million unpaid carers up and down the country, 2 million of whom are in work. It will provide employed unpaid carers with a new right to one week of unpaid leave per year to care for a dependant. Importantly, this will be a day-one right, available from the very first day of the job. From older employees to women and those with disabilities or long-term health conditions, where they are providing or in need of care, the Bill represents an important step forward in supporting their needs and giving them a better chance of remaining in work.

Some fine points were raised in the debate. The hon. Member for North East Fife made the interesting point that many carers do not even know they are carers. That point was also raised in a side conversation I had with the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Mid Sussex (Mims Davies), who told me that for 25 years her mother was a carer to her father. She talked about some of the situations they faced, such as when she needed to attend a doctor’s appointment with her parents to make sure that the needs of her father were understood. I know that the Bill is very important to her. The hon. Member for North East Fife also set out the broad range of such situations, including just going out to do some shopping.

The hon. Member for North East Fife also pointed out that this change in legislation reflects the change in our workplaces, and that it can improve trust between workers and employers, which is also very important. She rightly pointed out that lots of employers are already doing these things, and that the Bill merely formalises it for those who are while raising the bar for those who are not, because such steps serve to improve motivation, loyalty and productivity in the workplace.

My hon. Friend the Member for Devizes (Danny Kruger) quoted one of my favourite songs—it is probably best if I do not burst into song on this occasion, on the basis of the interesting lyrics. He rightly pointed out this is a day-one right and that it meets the needs of both employers and workers. Some 575,000 people of working age have left the workplace; we need them back and flexibility is key. He also pointed out the cost to business, which is £39.9 million every year.

I was delighted to hear from my hon. Friend the Member for Orpington (Gareth Bacon), who had actually read the impact assessment, quite rightly—not everybody participating in such debates does. The impact assessment always sets out the financial impact on businesses.

My hon. Friend the Member for Bracknell (James Sunderland) talked about the notice period, and he asked about very short notice situations. I can reassure him that there is an existing right to do that in law for emergency situations, but as for the notice period—also raised by my hon. Friend the Member for Blackpool South (Scott Benton)—a decent notice period is required which is twice the length of time expected to be taken plus one day, so a minimum of three days. It is fair on employers that they be given at least some notice, and there is a maximum likely allowance of seven days per year.

In response to the shadow Minister, the hon. Member for Bradford East (Imran Hussain), let me reiterate what I said in the previous debate: this Government are committed to improving workers’ rights by any mechanism we can use. We are bringing forward this legislation and doing so much more quickly than by using the other ways he described.

My hon. Friend the Member for Guildford (Angela Richardson) paid a handsome tribute to unpaid carers up and down the country. My hon. Friend the Member for North West Norfolk (James Wild) also paid tribute to those who have campaigned for this leave over the years—that campaigning has been absolutely critical, and today must be a very good day for them. My hon. Friend the Member for South West Hertfordshire (Mr Mohindra) gave some really touching examples, including that of Mrs Graham, who has had to care for her husband who has Parkinson’s. It must have been very difficult for her to do so for such an extended period of time.

To conclude, carer’s leave is important in improving carers’ quality of life, but it will also benefit those who depend on the care provided by unpaid carers and, indeed, employers. We know that there are already some brilliant, supportive and flexible employers out there who are taking great steps to support those in their workforce with caring responsibilities, recognising the value of policies that help carers to stay in work. The Government are supporting the Bill, in line with our manifesto commitments, and I will end by thanking our wonderful civil servants who have worked so hard on this legislation: Tony Mulcahy, Leona Hoxha-Kartallozi, Amanda Marsh, Ana Pollard, Sarah West, Bryan Halka, Elena Hartley, Roxana Bakharia, Jayne McCann and, from my private office, Cora Sweet. I commend the Bill to the House.

Workers (Predictable Terms and Conditions) Bill

Kevin Hollinrake Excerpts

2nd reading
Friday 3rd February 2023 Commons Chamber

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

I thank my hon. Friend the Member for Blackpool South (Scott Benton) for proposing this important Bill, and I thank all hon. Members who have spoken on this subject. I am pleased to say that the Government support the Bill and are committed to ensuring that the UK is the best place in the world to start and scale a business—a phrase hon. Members will hear a lot more, after the Business Secretary’s recent speech from Davos about scale-up Britain, which is music to my ears. To do that, we need a strong and flexible labour market that supports participation and economic growth.

I would like to take a little time to talk about the Bill before addressing some points raised by hon. Members on both sides of the House. It is good to see cross-party support, for the third time today. Unlike the shadow Minister, we believe that zero-hours contracts are an important part of the UK’s flexible labour market, both for employers that do not have a constant demand for staff and for individuals who need to balance work around other commitments such as childcare and study. Around 1 million individuals are on zero-hours contracts—around 3% of the UK workforce.

The Government are keen to ensure that everybody can enjoy the benefits of flexible working. We are determined to tackle unfair working practices, such as the issue of one-sided flexibility where workers have to be available to their employer, with no guarantee of work. Employers may schedule or cancel shifts with little notice, leading to insecurity of work and income. I declare my interest, because my daughters are in a similar situation—one is of school age and works at the local pub, and that has happened to her. To be fair, a zero-hours contract works for her to provide flexibility from her side, too.

We recognise that receiving unpredictable and varying levels of income each month can make it difficult for some workers to meet the cost of rent, mortgage and household bills, especially during a cost of living crisis. My hon. Friend’s Bill will allow workers to request more predictable working arrangements, addressing the issue of one-sided flexibility, while ensuring that workers are able to continue working on a zero-hours contract or another form of non-guaranteed hours or temporary contract, if that is the type of arrangement that works best for them.

[Wera Hobhouse (Bath) (LD)]

Does the Minister agree that it is important that employers feel that there is loyalty to their companies and loyalty to the work that the employee is doing? It should very much be a win-win.

[Kevin Hollinrake]

I agree entirely. That is what modern employers are looking for. One of the biggest pressures that employers are facing is recruiting and retaining people. This is another measure where people can demonstrate that the workplace is fairer and more flexible, which should attract more people back into it.

The Bill will allow individuals and businesses to strike the right balance between flexibility and job security. Workers will be empowered and encouraged to start conversations with their employers about their work patterns, with the confidence that starting such a conversation will not result in detriment. We expect that employers will benefit from the new right, too—the point that the hon. Member for Bath made—through improved worker satisfaction and productivity. By allowing employers to retain skilled staff as workers, those workers will not have to look for a new role in order to secure a working pattern that meets their needs.

Facilitating higher productivity, both through this measure and the other five private Members’ Bills that we are supporting, will help to drive higher employment, wages and economic growth. As my hon. Friend the Member for Blackpool South has explained, the right will function in a similar way to the existing right to request flexible working. An employer will be able to refuse a request for more predictable working patterns on specific statutory grounds similar to those established for flexible working. We know how important it is to balance new workers’ rights with the impact on businesses, and those grounds will ensure that employers do not experience disproportionate burdens.

The Government consulted in 2018 on the right to request a more predictable contract, and the vast majority of respondents agreed with the creation of a right to request a more predictable working pattern.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

I congratulate the Minister on his usual excellent summation of the legislation. On that final point, does he agree that giving employers certainty and giving employees the ability to have flexible working is a win-win and a good thing for both sides?

[Kevin Hollinrake]

I entirely agree. That is why we have carefully struck a balance so that there will not be too much of a burden on employers. That would be detrimental to employees, too, because employers would be less likely to take people on. The right to consider it is clear, and the process is clear, but if it cannot work for the business, the process of saying, “I’m sorry, we can’t do that” is simple and set out in regulations.

The Government consulted in 2018 on the right to request a more predictable contract, and in response to that consultation we committed to introducing a right to request a more stable working pattern for all workers, including those on zero-hours contracts. Those workers will be able to make a request if their existing work pattern lacks predictability in terms of the length of their contract or the days or hours that they are required to work. The 2019 Conservative manifesto contained a commitment to introduce for workers

“a right to request a more predictable contract”.

I am therefore delighted that the Bill introduced by my hon. Friend the Member for Blackpool South reflects our previous commitments on this important issue.

The Bill will also build on the progress that the Government have already made in bringing forward measures allowing additional flexibility for workers on zero-hours contracts and those in low pay. As my hon. Friend the Member for Devizes (Danny Kruger) pointed out, in 2015 this Government banned exclusivity clauses in zero-hours contracts, helping workers on zero-hours contracts to secure additional employment and boost their incomes. As of December 2022, that ban has been extended to workers who have a guaranteed weekly income equivalent to or below the lower earnings limit of £123 per week. On top of that, on 1 April 2023 the Government will increase the national living wage for workers aged 23 and over by 9.7%, to £10.42. That keeps the Government on track to achieve our manifesto commitment for the national living wage to equal two thirds of median earnings by 2022 if economic conditions allow.

This is the sixth private Member’s Bill on employment rights that the Government are backing. As a package, those Bills will increase workforce participation, protect vulnerable workers and level the playing field, ensuring that unscrupulous businesses do not have a competitive advantage. The Bills build on the strengths of our flexible and dynamic labour market and give businesses the confidence to create jobs and invest in their workforce, allowing them to generate long-term prosperity and economic growth.

I will address some of the specific points made by colleagues. This is the Bill of my hon. Friend the Member for Blackpool South, and I am pleased to be able to explain the Government’s policy position on any points that he has raised. My hon. Friend the Member for Cities of London and Westminster (Nickie Aiken), who is no longer in her place, made a point about the over-50s. It is important that we try to attract more over-50s who have left the workforce back into the workplace. We know that about 575,000 people of working age have left the workforce since the start of the pandemic. I joined a cross-ministerial group, put together with business groups, to look at how we can attract those people back into the workforce. That body of work is ongoing, and we are very keen to find solutions, which will be partly about making the workplace fairer and more flexible, as this legislation will do.

As my hon. Friend the Member for Blackpool South pointed out, the legislation will lead to a happier and more engaged workforce. He also mentioned the 26-week qualification period, which aligns with other, similar measures in employment law. As he points out, this results from a manifesto commitment, which is why we are delighted to be able to support his Bill today.

My hon. Friend the Member for Devizes made similar points and also talked about the balance to be struck between employer and employee and the other work we are doing and have done to improve workers’ rights, including that ban on exclusivity clauses. The shadow Minister, the hon. Member for Bradford East (Imran Hussain), said that the Opposition were considering banning zero-hours contracts and other measures if they ever got into government—I very much hope that day will not come. By implementing things like that, there could be some serious damage to the economy, were that situation to come to pass. Nevertheless, we will let the electorate decide on that.

To conclude, this Bill will introduce an important new right that will help to address the issue of one-sided flexibility and support those with unpredictable working arrangements to gain security of hours and income. It has been encouraging to see support across the House for this Bill, as is evident from today’s good-natured debate. The Government look forward to continuing to work closely with my hon. Friend the Member for Blackpool South to support the passage of these measures, and I commend the Bill to the House.

Register of Overseas Entities

Kevin Hollinrake Excerpts

Wednesday 1st February 2023 Written Statements

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

The Minister for Business, Energy and Corporate Responsibility, my noble Friend Lord Callanan, has today made the following statement:

The register of overseas entities is a vital new information tool for our law enforcement agencies and is part of the Government’s comprehensive and ongoing programme to tackle and prevent economic crime and illicit finance.

The Government legislated for it within weeks of the invasion of Ukraine and, with the assistance of Parliament, expedited the regulations needed to launch the register, which opened on 1 August 2022.

Yesterday marked the end of the six-month period for overseas companies and other legal entities in scope to register. By 5 pm yesterday, about 19,665 overseas entities were successfully registered and there were approximately 5,054 pending registrations that were submitted before the deadline. As such, the UK now has a valuable new database for law enforcement and others to access.

Throughout this period Companies House has been working closely with the three UK land registries to ensure that overseas entities are aware of and comply with the new requirements. Companies House sent 57,000 notice letters to all entities in scope in August, including duplicate letters to those that had multiple contact addresses recorded at the land registries. In October 2022, HM Land Registry issued a notice letter to the entities registered in England and Wales to alert them that a restriction notice had been placed on their land. In early January 2023, Companies House issued further reminders to those that had not yet registered.

Companies House has endeavoured to ensure that it has the best possible information about those that have not yet complied, matching registrations against data from the land registries. While some entities may have changed their name, not updated the land registry records or may no longer exist, Companies House continues to research and to work with company registries in those jurisdictions with the highest number of in-scope entities to determine the status of all unregistered entities.

An estimated 7,000 overseas entities have not yet complied with the provisions of the register. From today, those entities will find that they cannot freely lease, charge or dispose of their land. This is a significant and effective sanction for non-compliance. Data about unregistered entities may also provide valuable information for law enforcement.

Companies House is now assessing and preparing cases for additional enforcement action. These cases will be prioritised using an intelligence-led approach and Companies House will work with those entities making a genuine attempt to comply. Warning letters will shortly be issued to all unregistered overseas entities. Those wilfully failing to comply may find themselves subject to financial penalties or criminal prosecution.

The Government are also announcing that, through an investment of up to £20 million of allocated spending on economic crime, new anti-money laundering intelligence teams will be created to tackle the misuse of UK companies, corporate entities and property. Intelligence analysts and data scientists will be recruited over the coming months. They will play a key role in supporting the prevention, detection and disruption of money laundering, terrorist financing and kleptocracy through identifying, analysing and disseminating intelligence about high-level threat actors and enablers of those activities, to a wide variety of law enforcement and regulatory agencies. There will be a strong focus on networks controlled from overseas, for example those operating from former Soviet states. The new functions will be based within Companies House and the Insolvency Service, and will work closely with the National Economic Crime Centre and their private sector partners. The teams will use and support the existing powers of both agencies and new powers being introduced by the Economic Crime and Corporate Transparency Bill.

[HCWS538]

Strikes (Minimum Service Levels) Bill

Kevin Hollinrake Excerpts

Committee stage
Monday 30th January 2023 Commons Chamber

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

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

It is well known that the first and foremost job of any Government is to keep the public safe. Every one of us in this Chamber will know of people who have been impacted by industrial action. Every one of us will know constituents who work hard and expect access to essential and life-saving services when they need them. It is clear that that is not happening in all cases. That is why this Government are taking proportionate and sensible steps through the Bill. Our position, which has the support of the majority of our constituents—in a recent YouGov poll, 56% of those polled said that they support the legislation—is that we need to maintain a reasonable balance between the ability of workers to strike and the ability to keep the lives and livelihoods of the British public safe.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The Minister has started with a red herring about keeping people safe. Can he explain, then, why teachers and education are included in the Bill?

[Kevin Hollinrake]

Clearly, there is a wider context for children. It is about services and safety—those are both contexts in this—as well as livelihoods. All those things are affected when people do not provide a minimum service level.

[Chris Stephens (Glasgow South West) (SNP)]

rose—

[Kevin Hollinrake]

If I may, I will respond to the question from the hon. Member for Kilmarnock and Loudoun (Alan Brown). All those things are affected when there is a universal strike. The Bill is about guaranteeing a minimum service level.

[Several hon. Members rose—]

[Kevin Hollinrake]

I am happy to give way to the hon. Member for Coventry South.

[Zarah Sultana (Coventry South) (Lab)]

I thank the Minister for giving way. This anti-worker, anti-strike Bill applies to the fire and rescue service, which has seen a 30% cut in central Government funding since the Tories came into power, with one in five firefighter jobs being lost. Today the Fire Brigades Union won a historic ballot against another insulting real-terms pay cut. Does the Minister agree that if the Government really cared about minimum service levels, they would properly fund the fire and rescue service, alongside other key services, and give pay rises, rather than this pathetic attempt to cosplay as Thatcher, pretending that firefighters and workers are the enemy rather than the people keeping the country running?

[Kevin Hollinrake]

Negotiations need to go on. This does not stop—

[Alexander Stafford (Rother Valley) (Con)]

On a point of order, Mr Evans, is it acceptable for Members to speak on an issue and not declare an interest when they have received money from trade unions?

--- Later in debate ---

[The First Deputy Chairman]

That is exactly the same point. Let us just move on please. We have got a lot to deal with today, and it is six hours of protected time.

[Kevin Hollinrake]

In answer to the point from the hon. Member for Coventry South (Zarah Sultana), negotiations need to continue, and they need to be fair to workers, but also to the taxpayer, which I will touch on in a second.

I reject the characterisation of this Bill by the Opposition, who clearly put their relationship with their unions over the interests of this country. This is not a radical Bill. What we are doing is not even new. We are taking reasonable, proportionate and balanced steps and aligning ourselves with many of our European partners, such as France and Spain.

[Barry Gardiner (Brent North) (Lab)]

Will the Minister accept that health and safety legislation in this country—to ensure guards on machinery, for example, to stop people’s hands being chopped off—was won because workers withdrew their labour? Does he understand that the ambulance workers and the nurses say that the very reason they are going on strike is to make sure that the service is safe? What he is saying at the Dispatch Box is complete rubbish.

[Kevin Hollinrake]

I do not accept the hon. Gentleman’s point. On nurses, we already have voluntary agreements, yet still they go on strike. The two things are consistent and are not mutually exclusive, but I recognise his point on the right to withdraw labour and bring attention to certain things, whether pay or other matters at work. It is absolutely right that people should be able to do that, but it should not prevent others going about their daily business and, indeed, feeling safe in terms of such things as healthcare.

[Several hon. Members rose—]

[Kevin Hollinrake]

I will give way to the hon. Gentleman.

[Jim Shannon (Strangford) (DUP)]

In relation to safety—others have mentioned this—the nurses that I have spoken to and been on the picket line with have told me that they want better pay and conditions and more staff, but they have also made sure that at no stage was emergency cover not available. The ambulance service staff who went on strike always made sure emergency cover was available. It is really a matter of staffing and wages. Does the Minister, who I respect greatly, understand that nurses have already ensured cover, and all they are looking for is fair pay?

[Kevin Hollinrake]

The hon. Member makes an important point. We are happy with the agreement we have with the Royal College of Nursing, and that is why we are not consulting on minimum service levels for nurses. On ambulances, we got only last-minute agreements—we had to negotiate on a trust-by-trust basis—that provided no confidence that the service would be in place and did not cover things such as strokes and chest pains in all cases. That would put somebody who is worried about having a stroke in a state of anxiety, and that is what we are trying to protect against.

[Several hon. Members rose—]

[Kevin Hollinrake]

I will make some progress.

We clearly want to resolve these disputes, but we must do it in an affordable way. An inflation-matching pay increase of 11% for all public sector workers would cost £28 billion, which would put just under £1,000 on to the bills of every household in all our constituencies. That is on top of the Opposition’s spending plans, which would add £50 billion of recurrent costs annually on to our economy, where we are already running a £175 billion deficit. As we have seen in recent months, we cannot take the market for granted, so that level of borrowing is absolutely unsustainable.

The disputes are already costing our economy and threatening businesses and livelihoods. The estimated cost to the economy so far is £6 billion, including £2.5 billion to the already challenged hospitality sector. I will conclude my comments there. I am happy to hear contributions from hon. Members on both sides of the Committee. I will listen with interest and look forward to responding later.

[Angela Rayner (Ashton-under-Lyne) (Lab)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests, because I continue to be a proud trade unionist and I am proud to represent my constituents in the Chamber when I speak today.

We are in an absurd situation: we are back to debate the Conservatives’ sacking nurses Bill—[Interruption.]— not just nurses, but millions of other key workers. The Bill is controversial and divisive, and as irrational as it is impractical. It is strongly condemned by all Opposition parties.

Some 110 amendments and new clauses have been selected for consideration today, including more than 35 tabled by the Labour Front-Bench team. Given that we have had just a few days to draft and table them, that is quite some feat. We will have only five hours to debate those amendments, however, with no reasonable timetable; there would have been more if we had had that. We have had no line-by-line scrutiny of the Bill and we are unable to hear any evidence. The Government have simply prevented the House from doing its job, so it will be left to the other place to scrutinise the legislation properly, which should be a major concern to us all.

--- Later in debate ---

[Angela Rayner]

I thank my hon. Friend for that intervention. I think we all have an interest in ensuring that we have good, valuable public services. Like our other key workers, firefighters put in place local agreements to ensure that services continue if life is at risk or there are major incidents. There is not a single firefighter who would not attend a major incident. These are our brave heroes who run towards danger when the rest of us run away. There are also already legal obligations on fire services to provide contingency plans for strike days, dating back to the Civil Contingencies Act 2004. Yet again, we have a Government fixated on creating a problem and trying to fix a problem that does not actually exist, instead of dealing with the problem that they have created—penalising and causing great hardship for our key workers, such as the firemen and women who protect our lives every single day.

Can the Minister promise that we will get separate assessments of the impacts of this legislation on all six of the sectors named? Can he guarantee that there will not be any impact on workforce numbers? Can he guarantee that work notices will not put undue burdens on overworked, under-resourced employers? Can he guarantee that equalities law will be upheld and that these new measures will not be used to discriminate against workers with protected characteristics? I fear we already know the answer to that question.

That brings me to our biggest concern with this Bill: the “sacking key workers” clause—

[Kevin Hollinrake]

Nonsense.

[Angela Rayner]

I gave the Minister the opportunity to back our amendment. I give him the opportunity to intervene now and say that he will back the amendment and that he does not want to sack those nurses or key workers, as is set out in the current Government proposal. I will happily stop again and allow the Minister to confirm that.

[Kevin Hollinrake]

indicated dissent.

[Angela Rayner]

No. Thought not. The “sacking key workers” clause will give the Secretary of State the power to threaten every nurse, firefighter, health worker, rail worker or paramedic with the sack—on his whim. These are the workers who got us through the pandemic; the workers who run towards the danger as the rest of us run away; the workers who have been pushed to exhaustion by austerity. And how does the Secretary of State pay them back—by ripping up their protections against unfair dismissal, with no regard for our NHS, schools, or transport lines that cannot cope with mass sackings. How can he seriously think that sacking thousands of key workers will not just plunge our public services further into crisis?

One hundred and thirty-three thousand and four hundred—that is the latest vacancy number in our NHS. One thousand six hundred—that is the latest number of teaching vacancies. One hundred and twenty thousand—that is the number of new vacancies that City & Guilds estimates the rail sector will see in the next five years. We all know that we have a national staffing recruitment and retention crisis and that business groups from the Confederation of British Industry to the British Chambers of Commerce are crying out for vacancies to be filled. How is this a rational and proportionate response? Labour Members are not the only ones asking that question. Has the Secretary of State listened to the right hon. Member for Stevenage (Stephen McPartland) who said earlier this month:

“I will vote against this shameful Bill…It does nothing to stop strikes—but individual NHS Staff, teachers & workers can be targeted & sacked if they don’t betray their mates.”

The right hon. Gentleman understands the Bill, but the Minister clearly does not understand his own Bill. I know that many Conservative Members will share the feelings of the right hon. Member for Stevenage, and that they will be uncomfortable with this awful attack on individuals and with taking away workers’ basic freedoms and removing hard-won basic rights and protections.

--- Later in debate ---

[Mary Kelly Foy]

I could not agree more with the hon. Member. Government Members must remember that these nurses, teachers and firefighters are themselves the general public who they claim are the ones feeling the pinch and who have the right to a decent service. They are the people who are striking now.

To finish, this Bill just shows, if ever proof were needed, that this is a Government whose every action is allowing the rich to get richer and the poor to become poorer.

[Kevin Hollinrake]

I thank hon. Members on both sides of the Committee for their contributions.

Consistent with the contributions that have been made, this Government firmly believe that the ability to strike is an important element of industrial relations in the UK—it is rightly protected by law—and we understand that an element of disruption is likely with any strike. However, we need to maintain a reasonable balance between the ability of workers to strike and the rights of the public, who work hard and expect the essential services that they pay for to be there when they need them. We need to be able to have confidence that, when strikes occur, people’s lives and livelihoods are not put at undue risk.

[Andy McDonald]

Will the Minister give way?

[Kevin Hollinrake]

I will make a little progress and then bring the hon. Member in, although I might cover his point in my next comments.

To respond to some of the points made in the debate, particularly on scrutiny and process, clearly the consultations offer plenty of opportunities for hon. Members, their constituents, employers and unions to play a role in shaping minimum service levels before regulations are made, and both Houses will be able to provide additional scrutiny.

[Andy McDonald]

A lot of the remarks made this evening have focused on safety, but section 44 of the Employment Rights Act 1996 provides workers with the means to contest the adequacy of safety arrangements and withdraw their labour—they can walk away. Given that, can the Minister explain to the Committee which statute would take precedence: the Employment Rights Act 1996 or this Bill?

[Kevin Hollinrake]

I think it is quite clear. I was interested in the comments of my hon. Friend the Member for Newbury (Laura Farris) when she talked about the International Labour Organisation and its specifying of minimum service levels. It has stated that they do apply to essential services but could also apply to other services, such as education and railway workers. We think the legislation is consistent with international law and the International Labour Organisation.

[Andy McDonald]

rose—

[Kevin Hollinrake]

I will give way one last time; then I want to make some progress.

[Andy McDonald]

I am sorry, Minister, but that really does not address the point I made. There is an inalienable right under the Employment Rights Act 1996 for people to withdraw their labour. It is nothing to do with the International Labour Organisation. We are going to have two UK statutes that are in direct conflict with each other; which one will prevail—that Act or this legislation?

[Kevin Hollinrake]

I am very happy to write to the hon. Gentleman to confirm that point, but we absolutely believe that this legislation is lawful and compatible with human rights legislation and international obligations.

My right hon. Friend the Member for North East Somerset (Mr Rees-Mogg) made a typically insightful and thoughtful speech that no doubt provoked thinking on both sides of the Committee. He talked about the Henry VIII powers in the legislation, but I reassure him that they are restricted only to genuinely consequential amendments. I do not believe they are as wide ranging as he set out.

My hon. Friend the Member for Crewe and Nantwich (Dr Mullan) was absolutely right—this was also reflected in the contribution of my hon. Friend the Member for Southend West (Anna Firth)—that we are not anti-union, but we are pro-protecting the public.

[John McDonnell]

Will the Minister give way?

[Kevin Hollinrake]

I will make some progress, if I can. I may come back to the right hon. Gentleman in a moment.

My hon. Friend the Member for Newbury speaks with great authority on these matters and, as I said, pointed out clearly that the ILO says that as a general principle MSLs are not restricted to essential services, as some Members have claimed, and can cover other elements such as education and railway workers. She also said quite rightly that from their speeches the Opposition seem to want the country to grind to a halt.

[John McDonnell]

It is irresponsible for a Minister to come to this House, when there is a clear conflict in the law that needs to be interpreted, without that interpretation and just to say that he is going to write to us. That is irresponsible. Will he now define to us what reasonable steps he expects a union to take to comply with the legislation as it is and to instruct its members to go to work during a strike? What are those reasonable steps?

[Kevin Hollinrake]

That would be for a court to decide—[Hon. Members: “Oh!”] Of course it would be for a court to decide, because the only action that can be taken against a union can be by the employer in the courts. A union would then define what the reasonable steps would be. I will move on.

[Several hon. Members rose—]

[Kevin Hollinrake]

I will make some progress, if I can—

[David Linden]

Will the Minister give way?

[Kevin Hollinrake]

No, I will not.

On the other points, the impact assessment will be available shortly. It is fair to say that we see the Bill as having a net benefit to the economy. Individual impact assessments will support secondary legislation.

To respond to the right hon. Member for Ashton-under-Lyne (Angela Rayner), we do not believe that the Bill reduces requirements for employers to adhere to health and safety and equality legislation. It is compatible with convention rights and international obligations—

[Richard Burgon]

Will the Minister give way?

[Kevin Hollinrake]

No, I am making some progress.

The Bill does not target union members, as clearly stated in proposed new section 234C(6) on page 4 of the Bill. In terms of devolution, we believe that minimum service levels are necessary across Great Britain, but we are of course keen to engage with the devolved Governments through consultation.

[David Linden]

rose—

[Kevin Hollinrake]

I give way one last time.

[David Linden]

I am grateful to the Minister for giving way. The Welsh Government and the Scottish Government have already made it crystal clear that they oppose this legislation; why is the Minister seeking to ram it though at the Dispatch Box in the House of Commons and completely ride roughshod over the devolution settlement?

[Kevin Hollinrake]

This legislation is subject to parliamentary scrutiny. This is the Parliament of the United Kingdom: it has every right to legislate. We believe this is needed across Great Britain, and industrial relations are clearly reserved to this Parliament.

[Chris Stephens]

Will the Minister give way?

[Kevin Hollinrake]

No, I will move on.

As we have made clear, we hope not to use the powers in the Bill if adequate voluntary agreements are in place where they are necessary. However, we cannot continue to rely on existing legislation or voluntary arrangements to help protect the lives and livelihoods of the people we represent. The public and workers reasonably expect the Government to intervene to protect people’s lives and livelihoods, and that is what we are doing by ensuring that essential services continue, even while workers are exercising their right to strike.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clauses 2 to 4 ordered to stand part of the Bill.

Clause 5

Commencement

Amendment proposed: 32, in clause 5, page 2, line 15, at end insert—

“(2) But no regulations may be made under this Act or the Schedule to this Act before the Secretary of State has laid before Parliament statements of consent to the Act from—

(a) the Scottish Parliament,

(b) Senedd Cymru, and

(c) the Greater London Assembly.”—(Alan Brown.)

The intention of this Amendment is to prevent the Act coming into operation until after consent to the Act has been obtained from the Scottish Parliament, Senedd Cymru and the Greater London Assembly.

Economic Crime and Corporate Transparency Bill

Kevin Hollinrake Excerpts

Report stage
Tuesday 24th January 2023 Commons Chamber

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

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Dame Rosie Winterton)]

With this it will be convenient to discuss the following:

Government new clause 9—Disqualification on summary conviction: GB.

Government new clause 10—Disqualification for persistent breaches of companies legislation: NI.

Government new clause 11—Disqualification on summary conviction: NI.

Government new clause 12—A limited partnership’s registered office: consequential amendments.

Government new clause 13—Removal of limited partnership from index of names.

Government new clause 15—Reports on the implementation and operation of Parts 1 to 3.

New clause 16—Reporting requirement (objectives)—

“(1) The Secretary of State must publish an annual report assessing whether the powers available to the Secretary of State and the registrar are sufficient to enable the registrar to achieve its objectives under section 1081A of the Companies Act 2006 (inserted by section 1 of this Act).

(2) Each report must make a recommendation as to whether further legislation should be brought forward in response to the report.

(3) Each report must provide a breakdown of the registrar’s annual expenditure.

(4) Each report must contain the details of the steps the Registrar has taken to promote the registrar’s objectives under this Act; and

(5) Each report must provide annual data on the number of companies that have been struck-off by the registrar, the number and amount of fines the registrar has issued, and the number of criminal convictions made, and of cases of suspected unlawful activity identified by the registrar as a result of the registrar’s powers as set out in this Act.

(6) Each report must provide annual data on the number of cases referred by the registrar to law enforcement bodies and anti-money laundering supervisors.

(7) Each report must provide annual data on the total number of company incorporations to the registrar, and the number of company incorporations by authorised corporate service providers to the registrar.

(8) Each report must detail all instances in which exemption powers have been used by the Secretary of State, as introduced by this Act.

(9) The first report must be published within one year of this Act being passed.

(10) A further report must be published at least once a year.

(11) The Secretary of State must lay a copy of each report before Parliament.”

This new clause creates an obligation on the Secretary of State to submit an annual report to Parliament on progress of the reforms in this Bill, data on the register, breaches, use of exemption powers by the Secretary of State and penalties imposed.

New clause 17—Checks on persons with significant control status—

“(1) The Companies Act 2006 is amended as follows.

(2) After section 790LP (Offence of failing to comply with sections 790LI to 790LN) insert—

‘790LQ Duty to check person of significant control status

(1) This section applies when a registrable person’s identity is verified under section 1110A(1) and a risk assessment carried out under section 1062A(1A) has identified a matter of concern in relation to the registrable person.

(2) The registrar must take steps to ensure that the registrable person whose identity is being verified is a person with significant control over the company.

790LR Duty of registrar to cross-check identity of person with significant control

(1) This section applies where—

(a) the registrar has received—

(i) the information required by subsection (6) of section 853G (Duty to deliver shareholder information: certain traded companies), or

(ii) relevant membership information as required by subsection (2) of section 49 (Membership information: one-off confirmation statement) of the Economic Crime and Corporate Transparency Act 2023; and

(b) the risk assessment carried out under section 1062A(1A) has identified a matter of concern in relation to any of the information in paragraph (a).

(2) The registrar must carry out a further assessment to establish whether the people notified to the registrar as persons with significant control of the company are not people notified to the registrar as holding at least 5% shares of the company, and that the reason for the discrepancy is that the company is involved in economic crime.

(3) If following the assessment required by subsection (2) the registrar considers that there is a real risk that the people notified to the registrar as persons with significant control of the company are not people notified to the registrar as holding at least 5% shares of the company, the registrar must carry out the check required by subsection (4).

(4) If this subsection applies, the registrar must take steps to ascertain whether the people notified to the registrar as persons with significant control of the company are people notified to the registrar as holding at least 5% shares of the company.’”

This new clause creates a duty on the registrar to check whether the person declared as the “person of significant control” (PSC) does indeed have significant control of a company, by cross checking company records, on a risk-based approach.

New clause 18—Disclosure of control of 5% or more of shares in a public company—

“(1) This section applies to shareholdings in public companies as defined by section 4 of the Companies Act 2006.

(2) A person who controls 5% or more of the shares in a public company must declare this fact to the registrar.

(3) The duty in subsection (2) applies whether the person controls the shares directly or indirectly.

(4) The registrar may impose a penalty on any person who fails to comply with the duty in subsection (5).

(5) Subsection (6) applies where—

(a) a person has made declaration under subsection (2), and

(b) the registrar has identified a matter of concern under subsection 1062A(1A) of the Companies Act 2006 in relation to the person or the declaration.

(6) The registrar must—

(a) verify the identity of the person, and

(b) verify the number of shares the person claims to control.”

This new clause requires any person holding 5% or more shares in a public company to declare this fact, and empowers the registrar to penalise non-compliance.

New clause 19—Risk-based examination of accounts of dissolved companies—

“(1) The Companies Act 2006 is amended as follows.

(2) After section 1062A (analysis of information for the purposes of crime prevention and detection) insert—

‘1026B Risk-based examination of accounts of dissolved companies

(1A) In a case where the registrar’s risk assessment under section 1062A(1A) has identified a matter of concern in relation to a dissolved company, the registrar must examine the accounts of the dissolved company with a view to establishing whether any economic crime has been committed.

(1B) The registrar must share details of any evidence gathered under subsection (1A) with the relevant law enforcement agencies.’”

This new clause creates new duties for the registrar to examine the accounts of dissolved companies with a view to establish whether an economic crime has been committed, using a risk-based approach.

New clause 20—Fees and penalties—

“(1) Section 1063 (Fees payable to registrar) of the Companies Act 2006 is amended in accordance with subsections (2) to (4).

(2) Before subsection (1) insert—

‘(A1) The registrar must charge a fee of £100 for the incorporation of a company.

(B1) The Secretary of State must once a year amend the fee in subsection (A1) to reflect inflation.’

(3) In subsection (1)—

(a) after ‘fees’ insert ‘other than the fee in subsection (A1)’,

(b) in paragraph (a) after ‘functions’ insert ‘other than the incorporation of a company’.

(4) In subsection (5), in paragraphs (a) and (b) after ‘regulations’ insert ‘or subsection (A1)’.

(5) The Secretary of State must lay before Parliament a report examining the case for fees paid under section 1063 of the Companies Act 2003 being paid into a fund established for the purposes of tackling economic crime.

(6) The report must also examine the case for penalties received by the registrar under section 1132A of that Act being paid into the same fund.

(7) The report must be laid before Parliament within six months of this Act being passed.”

This new clause raises the fee to incorporate a company to £100 (amended annually for inflation), and requires the Secretary of State to report on the case for these fees, along with penalties received by the registrar, to be paid into a fund to be used for tackling economic crime.

New clause 22—Person convicted under National Minimum Wage Act not to be appointed as director—

“(1) The Company Directors Disqualification Act 1986 is amended as follows.

(2) After Clause 5A (Disqualification for certain convictions abroad) insert—

‘5B Person convicted under National Minimum Wage Act not to be appointed as director

(1) A person may not be appointed a director of a company if the person is convicted of a criminal offence under section 31 of the National Minimum Wage Act 1998 on or after the day on which section 32(2) of the Economic Crime and Corporate Transparency Act 2022 comes fully into force.

(2) It is an offence for such a person to act as director of a company or directly or indirectly to take part in or be concerned in the promotion, formation or management of a company, without the leave of the High Court.

(3) An appointment made in contravention of this section is void.’”

This new clause would disqualify any individual convicted of an offence for a serious breach of the National Minimum Wage Act 1998, such as a deliberate refusal to pay National Minimum Wage, from serving as a company director.

New clause 24—Application for administrative restoration to the register—

“In section 1024 of the Companies Act 2006 (application for administrative restoration to the register), for subsection (3) substitute—

‘(3) An application under this section may only be made by a former director, former member, former creditor or former liquidator of the company.’”

This new clause would make it possible for a creditor or liquidator to apply to restore a company administratively.

New clause 34—Report on the authorisation of foreign corporate service providers—

“(1) Within six months of the day on which this Act is passed, the Secretary of State must publish a report on the authorisation of foreign corporate service providers.

(2) The report in subsection (1) must include but is not limited to—

(a) the number of authorised corporate service providers with a head office based in a territory outside the United Kingdom,

(b) the number of foreign corporate service providers authorised as set out in section 1098I(1) of the Companies Act 2006, and

(c) the number of foreign corporate service providers identified in subsection (2)(b) by territory.”

This new clause creates an obligation for the Secretary of State to publish a report into the number of Authorised Corporate Service Providers with a head office based outside the United Kingdom and the number of foreign corporate service providers authorised by the regulations set out in new section 1098I(1) of the Companies Act 2006.

New clause 35—Supervisory functions of registrar—

“(1) The Companies Act 2006 is amended as follows.

(2) After section 1081A (inserted by section 1 of this Act) insert—

‘1081B Supervisory functions of registrar

(1) The registrar must carry out supervisory duties, and must uphold standards and compliance with money laundering and terrorist financing legislation.

(2) The Secretary of State must ensure that the registrar has adequate resources to enable them to carry out this new role.’”

This new clause seeks to make the Registrar an AML supervisor in their own right.

New clause 36—Integrity of the register—

“(1) The registrar must ensure that information set out in the register prior to the provisions of this Act coming into force is accurate, up to date, and meets the requirements set out in the Act.

(2) The duty under subsection (1) includes ensuring that each entry lists the unique identification number of the Director of a company.

(3) The registrar will also make an annual report to Parliament on the status of its work to update existing company registrations.

(4) The report under subsection (3) must include—

(a) information on how many existing company registrations the registrar has evaluated to check the accuracy of the information provided, and

(b) details of how many existing company registrations have still to be evaluated by the Registrar to check the accuracy of the information provided.”

This new clause seeks to ensure that existing company registrations contain accurate, up to date information. It also imposes a requirement for the Registrar to update Parliament on the progress of updating the register.

New clause 37—Prevention of continued trading for companies repeatedly declared insolvent—

“(1) A company may not be registered under the Companies Act 2006 if, in the opinion of the registrar, it is substantially similar to a company which has been subject to winding up procedures under the Insolvency Act 1986 on more than three occasions in the preceding five years.

(2) For the purposes of subsection (1), ‘substantially similar’ can include, but may not be limited to, a company having the same or similar—

(a) name;

(b) registered office;

(c) proposed officers; or

(d) principal business activities

as another company.”

This new clause seeks to prevent companies from repeatedly becoming insolvent and then continuing to carry on the same business activities through a new company (the practice of “phoenixing”).

New clause 38—Bar on directors in breach of duties receiving public funds—

“(1) A company with a director or directors which are in breach of the general duties outlined in Chapter 2 of the Companies Act 2006, or who have been found to have committed statutory breaches of employment law or avoided taxation, may not receive Government provided funds or financial support, unless subsection (2) applies.

(2) A company whose director or directors meet the criteria outlined in subsection (1) may receive Government provided funds or financial support if such funds or support are provided solely and specifically for the direct benefit of the company’s employees.”

This new clause seeks to prevent directors who fail to comply with their duties as a company director or with employment law provisions and/or tax obligations from being able to access funds in instances where these funds are for the benefit of the company and not the company’s employees.

Amendment 104, in clause 1, page 2, line 13, at end insert—

“Objective 5

Objective 5 is to act proactively by—

(a) making full use of the information, intelligence and powers available to the registrar in order to identify issues of concern, and

(b) sharing information about any issues of concern with relevant public bodies and law enforcement agencies.

(4) In this section, an ‘issue of concern’ includes—

(a) inaccurate information,

(b) information that might create a false or misleading impression to members of the public,

(c) an unlawful activity.”

This amendment would insert a fifth objective requiring the registrar to act proactively.

Government amendments 1 to 9.

Amendment 108, in clause 62, page 46, line 41, at end insert

“and that the individual has signed a confirmation statement stating whether they already have a unique ID on the register.”

This amendment would add a requirement on ACSPs to confirm the individual they’re verifying has signed a confirmation statement stating whether they already have a unique ID on the register.

Amendment 101, page 46, line 41, at end insert—

“(2A) No verification statement may be made by an authorised corporate service provider until—

(a) the Treasury has laid before Parliament a report confirming that the Treasury’s reform of the UK’s anti-money laundering supervisory regime, as set out in the document entitled ‘Review of the UK’s AML/CFT regulatory and supervisory regime’ published by the Treasury in June 2022, has been completed and implemented; and

(b) the registrar has put in place a risk-based approach to review the work of authorised corporate service providers which includes spot checks of providers’ data to ensure providers are properly and accurately carrying out processes to verify identification documents and other data submitted by authorised corporate service providers.”

This amendment would ensure that Corporate Service Providers are not authorised to carry out ID verification until the consultation on anti-money laundering supervision announced by the Government is completed and implemented.

Amendment 103, in clause 63, page 52, leave out from line 20 to line 4 on page 53, and insert—

“1098H Duty to provide information

(1) The registrar must carry out a risk assessment in relation to any authorised corporate service provider to establish whether the verification of identity by the authorised corporate service provider is likely to give rise to a risk of economic crime.

(2) If the risk assessment identifies a real risk of economic crime, the registrar may—

(a) require an authorised corporate service provider to provide information to the registrar; or

(b) require a person who ceases to be an authorised corporate service provider by virtue of section 1098F—

(i) to notify the registrar;

(ii) to provide the registrar with such information relating to the circumstances by virtue of which the person so ceased as may be requested by the registrar.

(3) The registrar may require information to be provided on request, on the occurrence of an event or at regular intervals.

(4) The circumstances that may be specified under section 1098F(2) or 1098G(1) (ceasing to be an authorised corporate service provider and suspension) include failure to comply with a requirement under subsection (1)(a).

(5) A person who fails to comply with a requirement to provide information under this section commits an offence.

(6) An offence under this section is punishable on summary conviction by—

(a) in England and Wales a fine;

(b) in Scotland and Northern Ireland a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.”

This amendment creates an obligation on the registrar to carry out a risk assessment to establish whether the identity checks carried out by authorised corporate service providers are accurate and valid.

Government amendment 10.

Amendment 105, in clause 66, page 55, line 14, leave out “power” and insert “a duty”.

This amendment would ensure that all directors would be issued with a unique director identifier to be used for all their directorships regardless of whether they or an ACSP form the company.

Amendment 106, page 55, line 18, at end insert—

“(iii) To link the unique identifier to the person and to any other entries they have on the register under the same name or a different name.”

This amendment would allow the registrar to link all unique identifiers to any other entries the person has on the register whether under the same name or a different name.

Government amendments 11 and 12.

Amendment 102, in clause 89, page 68, line 37, at end insert—

“(1A) As part of the risk-based approach under subsection (1), the registrar must carry out a risk assessment to identify where the information it holds might give rise to a matter of concern.

(1B) Where the assessment identifies a matter of concern, the registrar must—

(a) carry out whatever further analysis it considers necessary; and

(b) share any evidence of unlawful activity it identifies with the relevant law enforcement agency.

(1C) For the purposes of this section, a ‘matter of concern’ includes—

(a) inaccurate information;

(b) information that might create a false or misleading impression; or

(c) evidence of economic crime.”

This amendment requires the registrar to carry out a risk assessment of the information it holds, and act on any matters of concern identified.

Government amendments 13 to 38.

Amendment 107, in clause 136, page 123, line 28, at end insert

“and,

(d) be published on the registrar’s website and remain published on the registrar’s website for a minimum of 20 years from the date on which it was first published.”

This amendment would require the limited partnership dissolution notice to be published on the registrar’s website and remain published for a minimum of 20 years.

Government amendments 39 to 43, 52 and 53.

Amendment 109, in schedule 2, page 172, line 40, at end insert—

“167GA Unique identification number for directors

(1) On receipt of notification of a person becoming a director, the registrar must allocate that director a unique identification number, unless such a number has already been allocated to that person.

(2) Any information supplied to the registrar under or by virtue of this Act about a person who has been allocated a unique identification number under subsection (1) must include that number.

(3) The Registrar should ensure existing registrations allocate a unique identification number to Directors.”

Government amendment 54.

Amendment 111, page 174, line 38, at end insert—

“167KA Limit on number of directorships held

(1) Where notice has been given to the registrar that a person (P) has become a director, the registrar may determine that P may not hold that directorship.

(2) The registrar may make a determination under subsection (1) if the registrar considers that P holds an excessive number of directorships.

(3) The factors that the registrar may take into account in making a determination under subsection (1) are the experience, expertise and circumstances of P, as well as the nature of the industry/company they are operating within and the time commitment their role as a director requires.

(4) If the registrar makes a determination under subsection (1), P may not hold office as a director of the company.”

Amendment 110, page 174, line 41, after “167G,” insert “167GA”.

This amendment would provide for penalties to apply to anyone failing to provide their unique identification number to the registrar.

Government amendments 55 and 56.

New clause 26—Beneficial owners in overseas territories—

“(1) The Sanctions and Anti-Money Laundering Act 2018 is amended as follows.

(2) In section 51, after subsection (5) insert—

‘(5A) The Secretary of State must ensure that the Order in Council under subsection (2) above comes into effect on date no later than 30 June 2023.’”

This new clause would amend the Sanctions and Anti-Money Laundering Act 2018 to ensure that an Order in Council requiring open registers of beneficial ownership in the British Overseas Territories comes into force no later than 30 June 2023.

Government amendments 50 and 51.

[Kevin Hollinrake]

It is a pleasure to speak to the Government’s amendments to the Economic Crime and Corporate Transparency Bill. I know that all hon. Members agree with its core ambition to bear down on the kleptocrats, criminals and terrorists who abuse our open economy and, critically, to strengthen the UK’s reputation as a place where legitimate business can thrive.

[Catherine West (Hornsey and Wood Green) (Lab)]

I want to say at the beginning of proceedings how fantastic it is to have a Minister who deeply cares about the topic—we are expecting significant movement on amendments. On the UK’s reputation, Transparency International and other non-governmental organisations do important work in this area, including finding out about companies such as the Azerbaijani kleptocrats’ laundromat that had a slush fund of £2.9 billion, and its malign influence particularly on the Ukrainian war. Does he agree that it is not a moment too soon for the Government to tackle such issues?

[Kevin Hollinrake]

The hon. Lady gives me a significant reputation to live up to. She is right, however, that some of the things that we have seen, not least with regard to the Ukraine war, have been the catalyst for much of this overdue legislation. We are keen to bring forward exactly the measures she refers to.

The Bill contains a very considerable package of measures to deliver on our ambition. It includes the largest reform of the UK’s company registration framework in 170 years. Crucially, it provides transparency, exactly as the hon. Lady says, and affords and enables scrutiny. There are significant penalties—indeed, criminal penalties—for those, both individuals and their advisers, who seek to avoid that scrutiny. It also provides significant new powers for law enforcement and the private sector to protect the UK from fraud, international money laundering, illicit Russian finance and terrorist financing.

It is for this reason that I want to record my sincere thanks to all the right hon. and hon. Members who served on the Public Bill Committee. We had very constructive, frank and open debate—which I think should be welcomed on both sides and from both different perspectives—and really diligent scrutiny of the Bill. Their work has very much helped us to ensure that this legislation does not fall short of its important aims, and indeed has been improved as a result.

[Layla Moran (Oxford West and Abingdon) (LD)]

May I echo the voices of those saying how delightful it is to see the Minister at the Dispatch Box? I shall not say more than that.

On a similar matter, the Minister may be aware of the revelations this morning from openDemocracy about the UK Government helping the head of the Wagner group circumvent sanctions already imposed on it to sue a British journalist working for Bellingcat. Is he aware of this story, has an investigation been done into this story, and would he take this opportunity to condemn what would seem to be very egregious in that—how shall I put it—these are sanctions we have imposed, yet we are somehow not imposing them in practice? This is not right.

[Kevin Hollinrake]

I think it would be wrong to make any representations on any particular case, but seeking to enable somebody to avoid sanctions is entirely unacceptable, clearly. I am sure that those allegations will be looked into very carefully. We should definitely make sure that those are properly reviewed before we come to any firm conclusions, but in essence I agree with the principle behind the hon. Member’s statement.

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

Will the Minister give way?

[Kevin Hollinrake]

I will make a little progress, if I may. I appreciate that there are a large number of Government amendments, hence the need to make some progress. I would like to reassure the House that they are intended to ensure that the measures in the Bill will work as intended, and in most cases they reflect issues raised in Committee.

I will briefly summarise our amendments relating to parts 1 to 3 of the Bill. First, and importantly, our new clause 15 requires the Government to publish an annual report on the implementation and operation of parts 1 to 3, which includes reforms to Companies House.

[Dame Margaret Hodge (Barking) (Lab)]

Will the Minister give way?

[Kevin Hollinrake]

I will give way to the right hon. Member on that point, because her many speeches in Parliament have led to some of the changes we have made.

[Dame Margaret Hodge]

I am very grateful that the Government have listened to our representations on accountability. I would simply say to the Minister that there is also a new clause down on this issue—new clause 16, put together by Back Benchers from across the House and members of the all-party parliamentary groups—which has more detail. Would he be willing to incorporate the detail of that amendment into his new clause? At the moment, his new clause 15 seems a little vague, and we would just like to button it down a bit better.

[Kevin Hollinrake]

Again, we discussed this at length in Committee. The right hon. Member’s perspective is that we should be very prescriptive about how the registrar—Companies House—should operate and set out specific things it should do. We would prefer those at Companies House to do what they think is right. They are the experts at making sure the register is accurate, and we have given them the resources to do it, which is crucial. I think it is wrong to specify exactly how the registrar should do its job. We are parliamentarians, not experts in registers and Companies House.

[Dame Margaret Hodge]

I am extremely grateful to the Minister for giving way again. This is not telling Companies House what to do; it is the information that Parliament would want to hear. I think that, in discussions with him, he actually suggested we set out in greater detail the sorts of areas we wanted to cover, and that is what we have attempted to do in our new clause. It is not a question of instructing Companies House; it is a question of enabling Parliament to really hold Companies House to account on the breadth of issues for which it will be responsible.

[Kevin Hollinrake]

I am happy to respond to the right hon. Member’s new clause later when we have debated it. I have read it, and it sets out some interesting ways of doing this. I absolutely agree with the principle of Parliament holding Companies House to account, which is why we want it to report annually on the implementation and operation of this legislation. That is how I think we should do it. I think we want the same thing, and I am happy to have an ongoing discussion with her. Many of the things she has listed in her new clause are already reported on by Companies House, so I think it is important that we do not overly prescribe how Companies House should operate, in my view.

[Liam Byrne]

Let me echo the wide welcome that the Minister has received at the Dispatch Box. Has he had a chance to reflect on how the report that parliamentarians need actually stretches beyond the compass of Companies House to the business of tackling economic crime more generally? After this morning’s revelations, for example, it was said that a junior official in the Office of Financial Sanctions Implementation was the individual who signed off the new flexibility for one of Putin’s warmongers to fly over London lawyers in an attempt to silence English journalists in English courts. That is surely a matter of concern to the Minister and to all parliamentarians, and that is the kind of issue that could be surfaced in a more wide-ranging and forensic report, if he were able to publish it.

[Kevin Hollinrake]

Again, I think it would be wrong to comment on individual cases, but I take the right hon. Member’s point. In general terms, the UK sanctions regulations permit the OFSI to license reasonable legal fees. That is clearly something on which officials make decisions, rather than Ministers—I think it is important to say that—and the merits of any case are for the appropriate court to judge. However, he has certainly campaigned extensively for making sure that people cannot close down the raising of understandable concerns. In essence, I absolutely support that and the work on SLAPPs—strategic lawsuits against public participation—to which my hon. Friend the Member for Isle of Wight (Bob Seely) referred in introducing his ten-minute rule Bill earlier. So that is work in progress, rather than anything that relates specifically to this legislation.

We are taking a power to expand the registrar’s data-sharing ability. That will future-proof the legislation and provide scope to expand the data-sharing gateway, if needed. We are also strengthening the range of sanctions for non-compliance with the register of overseas entities. Our new clause 8 will mean that a director can be disqualified if they breach an obligation under part 1 of the Economic Crime (Transparency and Enforcement) Act 2022, ensuring a consistent approach to tackling non-compliance between that Act and the Companies Act 2006. Following discussions in Committee, we are also removing the power to exempt certain individuals from identity verification requirements, having concluded that it is not essential.

As well as those important amendments, we are making improvements to the limited partnership reforms. We will ensure that a limited partnership’s dissolution and deregistration is transparent and properly drawn to the attention of the public. There will be a legal requirement for these to be published on the Companies House website as well as in the Gazette. Again, this was discussed by Opposition Members in Committee.

[Peter Dowd (Bootle) (Lab)]

I understand that every year there are about 1,200 disqualifications of unfit directors. Does the Minister have any indication of how that number may expand? We have the qualitative element. How about the quantitative element?

[Kevin Hollinrake]

I did not quite hear the hon. Member’s whole point. Is it about the quality and quantity of information in Companies House?

[Peter Dowd]

No. There are about 1,200 disqualifications a year. How many more does the Minister believe may arise from this new legislation?

[Kevin Hollinrake]

We do not have the data to be able to say. It obviously depends on numerous factors. As I say, we are keen to give Companies House the resources it needs, which it currently does not have, to undertake this work. In many ways, this will prove a deterrent against people registering a company for nefarious purposes, rather than necessarily lead to many more disqualifications. It is the transparency element and the scrutiny that is the ultimate deterrent against using these corporate vehicles for the wrong purpose.

Partners of limited partnerships will also have to notify the registrar about a dissolution within 14 days of becoming aware, ensuring that the register can be kept up to date and accurate. New clause 12 clarifies the interactions of the limited partnership reforms with regulation of UK investment funds. That will ensure that the measures work as intended.

Amendments 30, 31 and 32 give the Northern Ireland Department for the Economy and Scottish Ministers powers to petition the courts to wind up a limited partnership registered in their jurisdictions, ensuring a cohesive approach across the devolved nations.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I join others in welcoming the Minister to his place.

Two of my constituents have lost their entire life savings as a result of Harewood Associates, a property investment company that went into administration having offered unregulated loan notes to the public. I therefore commend new clause 19. But in the meantime, I would appreciate it if the Minister could advise me on what course of action I might take to pursue that case further.

[Kevin Hollinrake]

It sounds like a matter for the Financial Conduct Authority, which does not directly relate to my portfolio, but that would be my first call as a constituency Member of Parliament. The case the right hon. Lady raises sounds very distressing for her constituents. If I can help in any way I will of course be happy to do so.

[Mary Robinson (Cheadle) (Con)]

I congratulate my hon. Friend on bringing this Bill forward and welcome him to his place. He knows of my concern that whistleblowing is not mentioned in the Bill, yet whistleblowers are key to exposing the type of crime we are talking about. In the implementation of the Bill, will he reconsider the role of whistleblowers and recognise how important their role is in this space? Will he also look at examples of good practice from around the world because existing whistleblowing laws—I know he agrees—are not fit for purpose?

[Kevin Hollinrake]

That may not be part of this Bill, but it is part of my portfolio, I am pleased to say. My hon. Friend and I have worked together to further the cause of whistleblowers on many occasions. I am keen to bring that forward quickly. We have work under way now that will lead to a review. I am keen to complete that work quickly and come up with some firm recommendations. I am also keen to look at international examples of best practice. She is keen to have an office for the whistleblower, for example. It is right to look at other jurisdictions to see how that is working elsewhere, which can inform our work. I am keen to make significant changes as quickly as possible.

I shall draw my comments to a close and listen to the rest of the debate. I am interested to hear about the amendments tabled by Members on both sides of the House. I am sure today’s debate will be as well considered and beneficial as those on the Bill thus far. I hope Members on both sides of the House will continue to support the measures in parts 1, 2 and 3, so that we can deliver these much-anticipated and much-needed reforms. They will help to protect our constituents and the country, and ensure that the UK remains a great place for legitimate businesses to thrive.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is a pleasure to follow the Minister and to speak to our amendments.

The Labour party has supported this important Bill’s passage in a cross-party spirit through Second Reading and Committee. I pay particular tribute to my right hon. Friends the Members for Barking (Dame Margaret Hodge) and for Member for Birmingham, Hodge Hill (Liam Byrne) for their contributions during our proceedings. May I add my words of support? The Minister has a long track record on these issues and a reputation through the all-party group on anti-corruption and responsible tax and other campaigns, which I hope bodes well for further progress and amendments to the Bill. However, it was frustrating that in Committee the Government did not accept a number of amendments tabled by the Opposition and other Members that would have significantly strengthened the Bill even further. The Minister did agree to keep some issues under review, which we will pick up on today.

This long overdue second economic crime Bill is an opportunity to finally end Britain’s role as a global hub for dirty money, and to support honest businesses to trade and flourish, with better standards and more transparency, helping to level the playing field for businesses and co-operatives. I echo the Minister’s words on the importance of that in tackling terrorism, economic crime and illicit finance, and in cleaning up our economy in the way we all want to see.

The amendments we have tabled seek to ensure that the Bill goes further in areas including reporting and parliamentary scrutiny, strengthening the objectives of the registrar to see a more proactive role in preventing and detecting economic crime, and tightening up the authorisation and supervision of corporate service providers. Amendments scheduled for tomorrow include provisions on the failure to prevent economic crime and director liability.

--- Later in debate ---

[Seema Malhotra]

I thank the hon. Member for his intervention. Perhaps he is missing some of our argument around the central question, because it does not happen in all cases. We have not received any further information on the work and research that the Minister started during Committee on what happens with those directors, which he committed to follow up.

In our view, new clause 22 would strengthen the Bill. We are talking about people whom we hope to have trust in to undertake their responsibilities as a director. The Bill introduces a substantial amount of regulation about who can and cannot serve as a company director as a result of criminal or potentially criminal practices, so this feels like the right place for consideration of such a measure. I would be grateful for the Minister’s response. I am happy to give him forewarning that, subject to his response, we may well press the new clause to a vote.

New clause 24 calls for a creditor or liquidator to be able to apply to restore a company to the register administratively. Currently, if creditors, former creditors or liquidators wish to apply to restore a company, that is done through the court in what is often a complex and costly procedure that may well take 12 to 18 months or longer. In Committee, the Minister said that there ought to be a basis for a “less cumbersome” process for creditors and particularly for liquidators. We agree. Currently, when companies are struck off the register—that happens on average to about 400,000 companies a year—little is done to check whether fraud has occurred. As a side issue, the Minister may helpfully confirm whether directors of companies that have been struck off will also be subject to verification checks so that we do not have a period through which they may escape ID verification as Companies House looks to undergo those checks with existing directors.

The key issue is that unscrupulous directors can misappropriate the strike-off process to avoid scrutiny and rack up debts or sell company assets ahead of the company dissolution, absconding with the proceeds. The Minister said he appreciated the case for widening access to the less cumbersome process of administrative restoration, and he undertook to consider the matter further. If he does not agree to our new clause 24, I would be grateful if he would commit to bringing forward proposals during the passage of the Bill. This is a window of opportunity that we should not miss.

On new clause 34, the processes set out in the Bill rely on effective ID verification of company directors. There has been a debate as to whether that should be done in-house. The Government have chosen to use a model whereby authorised corporate service providers are trusted to undertake ID verification on behalf of Companies House and effectively certify that through a confirmation statement. The debate is ongoing on how that introduces risk into the process. Indeed, if the registrar can do only part of the verification and we need to use authorised corporate service providers, that only works if the ACSPs are known, trusted and effectively regulated.

New clause 34 seeks transparency reporting on the involvement of foreign corporate service providers in the two main routes by which they may be authorised to conduct ID checks and to incorporate a company in the UK that is registered with Companies House. Such a company being registered could have an office address in the UK; a postal address in the UK, with all the risks we debated in Committee; or an address abroad as an overseas company. The directors of the company registered in Companies House by the foreign corporate service provider may be living abroad and may never come to the UK. New clause 34 seeks to create an obligation for the Secretary of State to publish a report, first, into the number of authorised corporate service providers with a head office based outside the UK, by which we mean where the authorised UK subsidiary supervised by His Majesty’s Revenue and Customs is beneficially owned by a company that is outside the UK; and secondly, on the number of foreign corporate service providers authorised by regulations set out in proposed new section 1098I(1) of the Companies Act 2006, which is amended by clause 63.

Clause 63 enables the Secretary of State, by regulations, to authorise a person abroad to become a foreign authorised corporate service provider

“even if the person is not a relevant person as defined by regulation 8(1) of the Money Laundering Regulations”.

For example, they could be a lawyer or an art dealer. They would therefore not be supervised. Proposed new section 1098I(2) specifies that a

“‘relevant regulatory regime’ means a regime that, in the opinion”—

I stress, in the opinion—

“of the Secretary of State, has similar objectives to the regulatory regime under the Money Laundering Regulations”.

However, it does not specify any transparency on how that conclusion is reached. Clause 63 is a risk for a backdoor route to the authorisation of foreign corporate service providers—

[Kevin Hollinrake]

indicated dissent.

[Seema Malhotra]

It is a risk—the Minister is shaking his head, so I am going to repeat it—for a backdoor route to the authorisation of foreign corporate service providers in a high-risk territory that falls outside money laundering regulations.

[Kevin Hollinrake]

rose—

[Seema Malhotra]

I will just complete my point and then bring the Minister in if he wishes to intervene. I would be grateful if he could confirm why that is in the Bill in that way, and the extent of the safeguards that are in place. He will, I am sure, be mindful of the need for trust and confidence, and for transparency on who our corporate service providers are and for whom they are undertaking ID verifications, which we are then expected to trust. Subject to the Minister’s response, we intend to press this transparency reporting new clause 34 to a Division.

[Kevin Hollinrake]

I am grateful to the hon. Lady for giving way. It is not a backdoor to try to get around the legislation. I cannot think why she would think we would write 309 pages of legislation and then create a purposeful backdoor. On the reason for the measure, imagine an international free trade agreement, not with a high-risk jurisdiction—why would we do that?—but where the international partner had an anti-money laundering regime that we felt was equivalent to our own. We might consider it in that context. In no way, shape or form is this about creating a backdoor, and we would very much expect this sort of thing to be in the annual report to Parliament on the implementation and operation of the Bill.

--- Later in debate ---

[Seema Malhotra]

That is part of what we seek, but there is further to go. I know that amendments tabled by other colleagues also draw on the issue of phoenixing and the importance of preventing it. Checks on directors of companies that have been struck off and measures addressing the ease of administrative restoration are tools that we could employ to tackle phoenixing and protect customers along with other businesses and creditors.

Amendments 105 and 106 draw on a wider theme, which is that what we want in the Bill is duties, not powers. We want to see a clear outcomes focus. We want to legislate for things to be done, not for the potential for the registrar to do things—a very important distinction. First, amendment 105 specifies that it should be a duty, not a power, for the registrar to allocate a unique identifier to a director. Secondly, amendment 106 states that the registrar should ensure that the same unique identifier is used for that person in

“any other entries they have on the register under the same name or a different name.”

Thirdly, through amendment 108, we want to reduce the risk to the integrity of the register by tightening up the arrangements for the confirmation statement. A proposed director must confirm in writing either that they already have a unique director ID with the register under the same or a different name and state what it is, or that they do not yet have a unique ID. If an individual chooses to go by a different name, or may have dual citizenship and use a different passport for ID, or may even have a fake birth certificate suggesting a different date of birth, how will the registrar know? This is a protection for the system in the event that an individual is subsequently found to have lied about their identity.

I suspect that, broadly, we are in the same place when it comes to what is intended to happen through this legislation, but it would be helpful if the Minister could confirm that by answering a couple of questions. First, does he expect the registrar, under the arrangements that he has proposed, to issue a unique ID to each new director and to existing directors on the database, and should we understand that, for all intents and purposes, the power will operate in practical terms as if it were a duty? Secondly, in a search on the Companies House website, will clicking on a director’s name bring up all their directorships, linked internally by the unique ID, even if they go by different names in different companies? Perhaps the Minister would like to intervene in response to those two points.

[Kevin Hollinrake]

That is exactly how it will work.

[Seema Malhotra]

I thank the Minister for his confirmation. The legislation is not as tight as we would like it to be, but if he puts his intentions on record, that does take us a step further.

Amendment 107 would require a limited partnership dissolution notice to be published on the registrar’s website and to remain published for a minimum of 20 years. The Minister has previously said that he would like to explore with Companies House the feasibility and costs associated with introducing that requirement. I should be grateful if he confirmed that he has concluded those discussions, and tell us what decision he has reached.

New clause 20, which we support, concerns resourcing. It would raise Companies House fees to £100 to help to properly fund the fight against crime. The current fee of just £12 makes this country the sixth cheapest place in the world in which to set up a company. The Treasury Select Committee recommended a fee of £100. Will the Minister tell us what his plans are? Having a plan to resource Companies House is fundamental to achieving the goals of the Bill.

I thank Scottish National party Members for their amendments, whose arguments are similar to ours. In particular, we support new clause 36 and amendment 109, which deal with reporting and unique IDs—although we think that some minor changes might be made to new clause 36—and would also support any attempt to push them to a vote.

New clause 26, which is being debated today but will be subject to a decision tomorrow, would amend provisions in the Sanctions and Anti-Money Laundering Act 2018 to require the introduction of open registers of beneficial ownership in each of the UK’s overseas territories. There should be no double standards in the legal requirements for transparency of beneficial ownership across different parts of the UK, including the overseas territories. We have witnessed too many scandals involving money being laundered through territories for whose administration the UK is ultimately responsible to accept the idea that we must simply leave them to their own devices. According to the spin that the Government chose to put on the wording of the 2018 Act, its obligation had been met simply by the publication of a draft Order in Council, regardless of when, or even whether, such an order might actually come into force. The result is that we are here yet again, nearly five years later, still discussing how to ensure the implementation of registers to the same standards across all the UK’s territories. Surely it should not have been beyond the wit of Ministers, even in this Government, to have sorted this out by now. [Interruption.] With the exception of the Minister who is present today.

--- Later in debate ---

[Kevin Hollinrake]

My hon. Friend is making some valid points, as I would expect from the Chair of the Treasury Committee.

The Treasury Committee’s report does not say that we should adopt a fee of £100, but that

“A fee of £100 would not deter genuine entrepreneurs”.

I agree, but, as my hon. Friend says, the figure has been pulled out of thin air. It depends on what principle we follow, and the Government’s position is that Companies House needs to set out exactly what resources it needs to be able to perform its obligation to implement the objectives, from which we can decide how much money we need to raise. We will then look at the fees charged by Companies House. Members on both sides of the House have mentioned the incorporation fee, but an annual fee might raise more money. More work is needed with Companies House to consider this in the round before we come to a settled position. I would therefore rather not specify £100 in the Bill, for all those reasons.

[Harriett Baldwin]

I think I heard the Minister acknowledge that Companies House needs more resources, and that those resources should be raised not through a one-off fee when setting up a business but through ongoing registration fees. I also think I heard him say that he rather likes our proposal to increase the fees every year to reflect inflation. I think he substantially agrees with the thesis of new clause 20, so this is a great opportunity for him to endorse it so that Companies House is able to start budgeting right away.

I heard the Minister make the valid point that he wants to ensure the budget is worked from the bottom up, and that an arbitrary number should not be put into legislation. I have sympathy for his point of view, but I want him to understand the urgency of the matter. I want him to appreciate that we have waited long enough for this Bill, and that the Treasury Committee will therefore not allow this measure to be kicked into the long grass. We will continue to scrutinise progress, and we expect that progress to be urgent and rapid.

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[Dame Margaret Hodge]

I welcome the Minister to his place. I enjoyed working with him for a number of years on the Back Benches. We have co-operated well, and I look forward to that co-operation continuing now that he is a Minister. I am pleased to be working closely with his successor at the all-party parliamentary group on fair business banking, the hon. Member for Barrow and Furness (Simon Fell), who has tabled a number of the amendments put forward by the APPG.

I join others in welcoming the Bill. I welcome the fact that we are having this debate. This could be legislation that fundamentally transforms the landscape that has enabled economic crime to flourish in the UK. It could be the moment when we, in Britain, through the decisions that we make here in Parliament, give a message loud and clear to the world that there will be zero tolerance of money laundering fraud and other economic crime in our country. It could be the moment when, by acting against economic crime, we lay the foundations that would enable our financial sector, and with it our economy, to flourish and grow. As I have often said, we will never achieve sustained economic growth on the back of dirty money, but we could achieve it as a trusted jurisdiction that openly and firmly rejects illicit finance. It could be all of those things.

The Bill before us is welcome; it enables us to have these debates and to legislate, but in its current form it fails in too many ways. First, as it currently stands, I fear that it cannot achieve its stated purpose. Omissions and loopholes mean that there is a real danger that we could be setting up a new Companies House that will fail. One library filled with dud information will simply replace another. Secondly, in my view and that of the all-party parliamentary group on anti-corruption and responsible tax, which we will certainly make clear in tomorrow’s debates on new clauses, the Bill is too cautious and unambitious in its scope. It fails seriously to tackle the challenge that we in Britain face because of the exponential growth of economic crime. It is worth the House remembering what that is. Every year, economic crime costs this country somewhere in the region of £300 billion. That is a conservative estimate—in fact, I think it is a gross underestimate. That is 14.5% of GDP.

To look at just the fraud element of that, reported fraud affects one in 11 adults. I have been a victim of fraud that I have never reported, and we all know that there are victims of fraud who do not report it. One in 11 adults are affected, so this is a massive issue. That figure of £300 billion is double what we spend on the NHS. We are talking about mega sums that get lost in the UK economy every year and impact on all sorts of things: the quality of our public services, the raising of taxes, the economy as a whole and the reputation of the UK. There is an endless impact, and we have to tackle it.

I ask the Minister, as we did in Committee, to put aside the natural instinct to resist amendments tabled by Back Benchers. Our purpose is simply to strengthen the Bill, so that when it is passed, it can support our shared mission across the House to eradicate money laundering, fraud and other economic crime. I urge him and the Government to support our amendments, and I hope that Members in the other place will reflect on our debates today and in Committee when they consider the Bill in detail over the coming weeks.

I welcome the new clause that the Minister has tabled in relation to the accountability of Companies House. However, if he were to accept new clause 16, tabled by my hon. Friend the Member for Feltham and Heston (Seema Malhotra), it would improve what he wants to do and the information that we in Parliament expect to receive about the performance of Companies House.

I warmly support all the new clauses tabled by members of the all-party group. As the right hon. Member for South Northamptonshire (Dame Andrea Leadsom) said, those measures would strengthen the duties of Companies House, which is really important; giving powers is one thing, but duties really matter. Those duties would ensure that we can validate the information contained in Companies House and that it has the integrity it needs to fulfil the purpose for which it is intended.

I look forward to tomorrow’s debate on important issues such as the reforms to corporate criminal liability, the strengthening of support for whistleblowers, tackling the growing problems associated with SLAPPs and introducing new powers that could help us to seize as well as freeze the assets that the Government control from people they have sanctioned.

I will focus my comments today on two sets of amendments that we in the all-party group are convinced are necessary to ensure that the reforms work and that the appropriate resources are in place to properly fund the reforms. Otherwise, our legislation is in danger of simply gathering dust on the shelves of the Library.

[Kevin Hollinrake]

I am always interested in what the right hon. Lady has to say. We have shown that we are willing to engage with her suggested amendments, although we perhaps draft them in a different way, and the debate we had in Committee has been useful and fruitful for both sides.

On the question of duties, which my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) also referred to, I point Members to clause 1. It is very clear that the registrar

“must… seek to promote the following objectives.”

The first is to ensure that documents are delivered to the registrar. The second is to ensure that the documents delivered are accurate. The third is to ensure that those documents do not create a “false or misleading impression”, and the fourth is to minimise the extent to which companies and others carry out unlawful activities. That is a duty—the registrar must do those things—so Members’ concerns should be assuaged by that clause.

[Dame Margaret Hodge]

It is an important clause—I agree with the Minister on that—but equally, if we introduce a duty to ensure that persons with significant control of companies are who they say they are, it will strengthen the Bill. It will not undermine or contradict any of its clauses; it will simply strengthen it. With all my experience in this House as both a Minister and a Back Bencher, I know that if we are not very specific about what we place in legislation, we come back to it in subsequent years and regret that lack of determination. We see that particularly in our attempts to fight economic crime; so many times we think we have achieved something, then we come back and find it has not worked.

I turn to the first set of amendments that we in the all-party parliamentary group think are necessary, many of which have been tabled by the hon. Member for Barrow and Furness. We have tabled several amendments to create new duties on Companies House, rather than giving it powers, the most critical of which is about corporate service providers. If the Minister does not accept that, I predict that we will end up creating another database that is infected with falsehoods and errors, and will simply reinforce in people’s minds across the globe the growing acceptance that the UK is the best place to hide and launder dirty money.

--- Later in debate ---

[Dame Margaret Hodge]

My hon. Friend makes an important point, because we legislated last year to create a register of properties that are owned through corporations in foreign jurisdictions, but I understand that Companies House is having real difficulty in establishing it, because it is very difficult for it to assess the real beneficial owners of trusts and companies incorporated somewhere such as the British Virgin Islands. That is why the amendments tabled by the Labour Front Bench to ensure that company service providers are located here so that we have better control and supervision are hugely important.

Last week, as I am sure the Minister saw, Danske Bank agreed to forfeit $2 billion in the US courts as part of an agreement to resolve the criminal liabilities facing it. On top of that, civil litigation has led to a fine of more than $400 million and individual employees could yet be charged by the US courts. That is massive. It is worth reflecting on the words used in that court verdict, including that

“Danske Bank, the largest bank in Denmark, deliberately disregarded U.S. law of which it is well aware, facilitated the laundering of criminal and suspicious proceeds through the United States, and placed the U.S. financial network at risk, all in the name of its bottom line.”

The judgment also says that it

“lied and deceived U.S. banks to pump billions of dollars of suspicious and criminal funds through the U.S. financial system… If you want to use the U.S. financial system, you must play by the rules. If you don’t, we will hold you accountable.”

[Kevin Hollinrake]

The right hon. Member is raising a very important case, which she rightly says I have referred to on many occasions, and I welcome that fine. One of the things I know she will be debating tomorrow is corporate criminal liability, which I think would have a profound effect on companies willing to turn a blind eye to that, as Danske Bank did.

May I raise a couple of points about what the right hon. Member said earlier? It is always the Government’s position on this Bill that any overseas company service provider needs a UK branch and needs to be regulated by a money laundering supervisor. That is not something we were asked to do, but something we very much wanted to do.

On the point made by the hon. Member for Bootle (Peter Dowd), which the right hon. Member mentioned, about the register of overseas entities, the onus is on the entity itself to register the person who is the enterprise’s beneficial owner. If it does not do so—and it has to be done by the end of this month—it cannot sell or lease the property, and there are sanctions available such as fines, or potentially criminal prosecutions can be taken forward. That is the method of making sure we have such information.

[Dame Margaret Hodge]

On the last point, the Minister is right that such companies cannot sell or lease the property, but I think it is probably almost impossible to verify whether the data they provide is accurate, because it is based on the incorporation of an entity in a foreign jurisdiction. That is the problem, and as I understand it from discussions I have had with those at Companies House, it is a problem it is currently facing.

I think the Minister and I would both wholeheartedly endorse the words of the court in the United States—I hope he would; I am sure he would—but let us start by recognising the truth. UK limited liability partnerships and companies were the preferred vehicle for all those clients, most of whom were not Latvian at all but were called non-resident clients—the Russian kleptocrats, drug smugglers, people smugglers and all those sorts of people—who used the Latvian branch of Danske Bank. It was UK company formation agents who worked closely with that Danske Bank branch in setting up those shell British registered companies.

To give one example in today’s context, it was a UK registered company, registered by a UK company service provider that set up Lantana Trade with an address in Harrow, and that company then set up a bank account in the Latvian branch of Danske Bank. According to the whistleblower in the Danske Bank case, the real beneficial owner of that company, which of course has now been dissolved—surprise, surprise—was Igor Putin, Putin’s cousin. The real purpose of setting up that company was to launder money stolen from Russian citizens out of Russia, and our company service providers facilitated that.

We know from an analysis of the FinCEN files submitted to various Committees by the people we have mentioned before—Simon Bowers and Richard Brooks, two very good investigative journalists—that the UK stood out in the FinCEN files as the jurisdiction where there was the largest concentration of companies about which suspicious activity reports had been filed. Over 3,000—3,267—shell companies revealed in the FinCEN files were UK companies. We know that just four of the largest company formation agents in the UK were associated with over half of those 3,267 companies, and they were named in those leaks. We also know that an address in Potters Bar was used by over 1,000 companies featured in that body of leaks. So again, company service providers facilitated the creation of companies that then appeared in that massive FinCEN leak.

My final example comes from a story last week in The Guardian and concerns the infamous Mr Usmanov, the Putin ally whose wealth is said to amount to £14 billion—I have seen different figures in different publications. He claims to have divested himself of most of his UK assets before he was sanctioned on 3 March last year, seven days after Russia invaded Ukraine, but ever more evidence is emerging suggesting that while he has created companies and trusts, using our company service providers to do so, with nominee owners, nominee trustees, nominee shareholders, nominee directors, he remains the real beneficial owner and controller of his assets.

This concerns not just his homes—Beechwood house in Highgate, said to be worth over £80 million, or the 16th century Sutton Place estate in Surrey—but his investment in Everton football club, now bottom of the league. He claims to have sold his interest in the club to his friend and long-time colleague Farhad Moshiri. Our professionals helped to structure these transfers of assets; our company service providers were involved. Yet when Everton was interviewing potential managers after 2016—after he claims to have sold his interests, but before he was sanctioned—Usmanov was always there. According to The Guardian, one candidate to become Everton manager said Usmanov stated during the interview that he owned the club, and another candidate said Usmanov left him with the impression the club belonged to the tycoon. Even Frank Lampard said that when he attended his interview

“Mr Usmanov was on Zoom call with Mr Moshiri”.

I have chosen just three examples, but there are too many bad apples among our company service providers, the people we are proposing to entrust with providing verified, reliable data for the new Companies House register.

We also know that, as colleagues have mentioned, the current system for supervision is broken. The Treasury commissioned a report that found that 81% of the bodies responsible for the legal and accountancy sectors were not supervising their members effectively on anti money-laundering regulations.

--- Later in debate ---

[Nigel Mills]

rose—

[Kevin Hollinrake]

rose—

[Dame Margaret Hodge]

I will give way to the hon. Member for Amber Valley (Nigel Mills) and then I will give way to the Minister.

[Dame Margaret Hodge]

If that has been proposed, it has not been proposed in the Bill. I am not hostile to that; it is a perfectly good suggestion. At the moment, all we have is a fee which we are trying to tie to inflation so it does not get caught up in annual arguments over priorities in the Budget. However, if there is a proposal, it would have been nice to see it. If there is a proposal to fund it in a different way, that would be great.

[Kevin Hollinrake]

My hon. Friend the Member for Amber Valley (Nigel Mills) has made absolutely the right point: as I said earlier, there are annual fees as well as incorporation fees, and we should look at both elements.

On the question of specifying a fee in the Bill, as the right hon. Member for Barking (Dame Margaret Hodge) says, we do not even know yet what duties will be required of the registrar, because the Bill has not yet passed through both Houses. The registrar may end up having more duties that will cost more to perform, so it is impossible to say right now what resources she will need. As the right hon. Lady says, we may discover further down the line that more will be required, so why would we set out the fee in the Bill rather than in regulations, where we can vary it more easily?

[Dame Margaret Hodge]

My simple response to the Minister is to invite him to share with us the current budget estimate for Companies House, if the Bill is enacted in its present form, and to tell us what that will mean. I just cannot believe that the information is not in the mix somewhere, but the Minister is not choosing to share it with us Back Benchers at this point.

[Kevin Hollinrake]

indicated dissent.

[Dame Margaret Hodge]

Well, an estimate must be available, because we know where we are in the cycle. We know that somewhere or other this is being discussed. If the estimate changes, there is nothing to stop us changing the new clause at a later date.

More importantly, if 100 quid is too much, if the registrar does not need that much, or if the Minister wants to change the law and move from charging a fee on incorporation to charging an annual fee, I can see the logic of that, but presumably he would still have to come back to the House to put that in legislation—

[Kevin Hollinrake]

In regulations.

[Dame Margaret Hodge]

Okay. But if the fee is too much, I still suggest that the Minister looks at subsections (5), (6) and (7) of new clause 20. We hope that he will set up an economic crime fund. Any surplus that results from raising the fee to 100 quid could then be well used by the NCA, the Serious Fraud Office or another agency with access to the fund. Our new clause would ensure that the money is ringfenced for use against economic crime, rather than being taken away by the Treasury and used for other purposes.

We also suggest that the Minister comes back to us on the issue of penalties to fund the fight against economic crime. Since 1984, all forfeiture proceeds in the USA have gone to an assets forfeiture fund. Just think what it will do with the $2 billion it has got out of the Danske Bank criminal settlement! We do not have that system in the UK: at the moment, something like 40% of the current fines and penalties go towards fighting economic crime. That is too little: it should be 100%.

There are precedents. The Information Commissioner has announced a new arrangement with the Department for Digital, Culture, Media and Sport whereby it can retain the money that it accesses through penalties to support its arguments and its work against the big tech companies. The Gambling Commission accepts contributions to compensate victims or payments to charity, rather than imposing a fine: that is another ringfencing hypothecation. Ofwat’s penalties levied against Southern Water were used to reimburse customers.

I have spoken for too long, Mr Deputy Speaker, but I have focused on two of the issues that I consider most critical among today’s group of amendments. That is not to say that the others do not matter—they do—but these are practical, common-sense proposals that are supported by the all-party group, and I know from conversations with Members that they command wide support across the Chamber. There is no badge of honour for Ministers in the Government if they fail to listen to their Back Benchers.

More importantly, we have to make this reform work. If we ignore these proposals, we will risk consigning much of the reform to the dustbin. The fight against economic crime is utterly vital. We all know that this is a once-in-a-generation opportunity. We know what the problems are, and we know that the solutions are multifaceted and complex. For heaven’s sake, let us work together and do what we can to make these reforms effective, efficient and fit for purpose. In that spirit, I will wait for the Minister to cheer me up by saying that he will accept these amendments from by Back Benchers of all political parties.

--- Later in debate ---

We have seen a number of cases, the most high profile being P&O, in relation to which Mr Hebblethwaite told a joint sitting of Select Committees of this House that he broke the law and would do it again. British Airways breached its duties as employers and breached employment law—its chief executive happily admitted to breaking the law. Such blatant and open law breaking cannot be rewarded with taxpayer support. The new clause will ensure that those breaching laws that are meant to protect workers cannot then dip into the same workers’ pockets for financial support. That would not impact on workers because, despite the answer the Minister gave in Committee, any such funding such as the furlough scheme would not be affected by the new clause.

[Kevin Hollinrake]

It is always a pleasure to follow the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), who referenced many of our debates in Committee. I thank hon. Members on both sides of the House for their kind words about my role in the Department and in taking forward this legislation. Let me first say that any reports of the death of my ambition in this area have been greatly exaggerated.

I will aim to respond to as many points as possible in the time allocated by my hon. Friends the Whips. Today we have seen broad agreement across the House on the importance of accountability to Parliament on the implementation of the reforms. I thank the hon. Member for Feltham and Heston (Seema Malhotra) for new clause 16 on this topic, and for her work in Committee. As she might understand, I feel that the new clause would duplicate the Government’s new clause 15, which would require the Government to produce for Parliament an annual report on the implementation operations of parts 1 to 3 until 2030.

I believe that the Government’s amendment is broader and capable of providing more information to assist parliamentary scrutiny. I welcome the suggestion in some areas of reporting that may be of interest. However, I do not believe that setting a prescriptive list of those in advance is the best way of achieving our intent. I fully subscribe to the view that no one goes to work to do a bad job, and I have every confidence that the registrar, given the requirements on her to oversee the integrity and accuracy of the register, will do that well and will ensure that those measures are reported to Parliament. I therefore respectfully ask the hon. Lady for Feltham and Heston not to press her amendment.

[Seema Malhotra]

I thank the Minister for giving way. Would he commit to a meeting with the right hon. Member for Barking (Dame Margaret Hodge) and me on this issue? It is not the case that my new clause duplicates the Government’s new clause. The new clauses are very complimentary and there is more to be done to make sure that we get this right.

[Kevin Hollinrake]

I am always happy to have a meeting with the hon. Lady—we met only last week to discuss her amendments and the Government amendments. Some of the things in her new clause are already reported to Parliament, such as the number of businesses struck off the register. It is important that we do not duplicate in this legislation things that are already being done, but I am always happy to have a meeting with her.

[Seema Malhotra]

The Minister has made the point today and in Committee about this data being collected and reported elsewhere, but that should make it easier to have a more comprehensive report, so that all the information on economic crime is in one place. Perhaps that is something we can pick up in the meeting that he has kindly agreed to.

[Kevin Hollinrake]

I am happy to have a meeting with the hon. Lady to discuss the different things that she thinks should be reported. Clearly, the annual report should be comprehensive and cover many of the matters that she raises.

Much has been made about creating duties and obligations for Companies House. As my hon. Friend the Member for Huntingdon (Mr Djanogly) said, we should not assume that these things will happen by right. Oversight by Ministers, Parliament, public and press is needed to ensure that these measures are properly implemented. Companies House is an Executive agency of my Department, and I can commit that it will be obliged by the Government to deliver on the policy intent and resourced to do so, which I will talk about in a second. Government new clause 15 is not just about process; it will ensure that Parliament is provided with reassurance on the further work that will be required after Royal Assent, such as the laying of secondary legislation or the development of IT.

[Alison Thewliss]

The Minister talks about the need for secondary legislation. Does he have an idea of the timescale for that coming before the House, so that we know how long it will be before things actually happen?

[Kevin Hollinrake]

I cannot give a fixed timescale for the regulations, but clearly the quicker we get the Bill to Royal Assent, the better. I am sure that the hon. Lady will assist with that; she has been very co-operative in the past, despite the lengthy debates we have had about various matters.

The Opposition’s new clause 16 would require the report to set out the number of fines issued by the registrar. Companies House not only already does that but goes much further, publishing annual data on the fines issued by the registrar broken down by type of company. For example, in the last financial year, 171 penalties of £1,500 were issued to companies registered in England and Wales for filing their accounts up to three months late.

I can reassure Members that it is the Government’s policy to issue unique identifiers to all individuals who will be required to verify their identity. That includes new and existing directors of companies, as well as anyone filing information with Companies House. These unique identifiers will mean that Companies House can link an individual’s verified identity across multiple data points, roles and company associations, to enable users of the register to search for an individual and find all relevant records.

[Alison Thewliss]

I made the point earlier about my name appearing in three places on the register, with three different addresses where I have lived at different points of my life. How will Companies House tell me that my entries have been consolidated, and how will it contact me?

[Kevin Hollinrake]

As the hon. Lady knows, the unique identifier will not be public, because we think that could increase the chances of fraud. It is already possible to search the Companies House database to a certain extent; for example, if she searches my name, my previous directorships all link together. We intend to improve the database by linking the hon. Lady’s name, year and month of birth, address and any other companies she may be associated with. That will link those records, to give a holistic overview of her company associations.

[Seema Malhotra]

Of course, the Minister will not want accounts to be inadvertently linked where there may be two people with the same name and, possibly, date of birth. Has he had any discussions with Companies House about writing to current directors to ask them to confirm whether they are on the register with any past addresses, to speed up the linking with the unique ID at the back end?

[Kevin Hollinrake]

That is an operational matter for Companies House; it is not for me as the Minister. The registrar clearly has a responsibility to ensure the integrity of the database, and how she seeks to do that will be up to her.

Amendment 101 is clearly key. The Government are committed to ensuring that the checks carried out by ACSPs are robust. ACSPs will be required to carry out checks to at least the same standard as the registrar, who will be able to query any suspicious information. The registrar will establish a robust scrutiny process with AML supervisors for onboarding ACSPs. If necessary, she can suspend or de-authorise an ACSP to exclude it from forming companies. The vast majority of accountants, lawyers and other agents who make filings on behalf of companies operate to high standards. It would be disproportionate to block them all from making such filings while the Treasury works through the reform of the supervisory regime—something that we all clearly want it to get right.

New clause 34 requires the Government to report on the number of foreign corporate service providers that have been registered at Companies House. Clause 63 gives the Secretary of State the power to permit the authorisation of foreign corporate service providers subject to equivalent AML regimes abroad. That is obviously in the context of a potential trade deal that is not currently on the table.

On amendment 104, tabled by the hon. Member for Feltham and Heston, I cannot agree with this fifth objective for the registrar. The Bill already places a legal duty on the registrar to seek to promote the objectives, which inherently demands proactivity. Tentative use of her powers would result in the registrar being in danger of failing to satisfy the duty.

On the accuracy of existing data, I thank the hon. Member for Glasgow Central (Alison Thewliss), whose new clause 36 would have the registrar ensure the accuracy and veracity of all register information prior to the commencement of the Bill’s reforms. Clearly, that constitutes many millions of pieces of information, with many thousands being added every day—the analogy of painting the Forth bridge springs to mind. If we were to do what she asks and the registrar were to fulfil the requirements of the new clause, it is unlikely that the beneficial reforms of the Bill would ever be realised, because of the duty it would place on the registrar.

[Dame Margaret Hodge]

Will the Minister give way?

[Kevin Hollinrake]

I have been told that I need to make progress, but I thank the right hon. Lady—my former partner in fighting economic crime—for her amendment on Companies House fees, which is clearly key. It is critical that the registrar is sufficiently funded to carry out her duties.

The right hon. Member for Birmingham, Hodge Hill (Liam Byrne) is wrong to say that the Bill does not provide extra resources to Companies House to implement the measures, because clause 90 sets out exactly what areas will be taken into account when fees are set. The Bill gives the Government more flexibility to increase the fees and charges by broadening the range of functions that can be funded through those fees. The Government are reviewing funding arrangements in the context of the reforms and are committed to ensuring that Companies House is fully resourced to perform its new role and functions. As I said earlier, Companies House levies a range of fees, not just the up-front charge on incorporation, and I confirm that we are exploring a range of options about how fees will evolve.

New clause 22, on the national minimum wage, tabled by the hon. Member for Feltham and Heston, seeks to ban those convicted under the National Minimum Wage Act 1998 from being appointed as directors. The national minimum wage enforcement team at HMRC, whose resources have been doubled over the last six years, as have the penalties for non-compliance, already refers appropriate cases to the Insolvency Service, which, as part of its normal remit, considers director disqualifications where appropriate. Indeed, three people were disqualified in 2021 for such transgressions.

I thank my hon. Friend the Member for Barrow and Furness (Simon Fell) for his new clause 18, which would require a person who controls more than 5% of the shares in a public company to disclose that information to the registrar. I very much note his concerns about shareholder transparency. However, we must balance transparency concerns and the benefits of having additional information against imposing undue burdens on businesses.

[Dame Margaret Hodge]

Will the Minister give way?

[Kevin Hollinrake]

Very briefly, and just to the right hon. Lady.

[Dame Margaret Hodge]

Will the Minister accept any of the amendments or new clauses brought forward by Back Benchers today?

[Kevin Hollinrake]

As the right hon. Lady knows, new clause 15, which we tabled today, is based on some of the debate we had and the ideas she brought forward in Committee. So I say to her that she should keep bringing forward the ideas, and we will certainly consider them.

The Companies Act already requires traded companies to maintain up-to-date lists of their shareholders and report any changes in shareholders above 5% on an annual basis.

New clause 37—and indeed amendment 112—on phoenixing, which was debated by the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), requires the registrar to block the registration of companies that share common characteristics with more than three companies wound up in the preceding five-year period. Successive companies being wound up in this manner is known as phoenixing. We feel there are provisions that will be implemented through this Bill that will provide safeguards against such behaviour. Suitable coverage is already provided by the existing rules, and there are new powers in the Bill that give the registrar of companies a power to compel people to provide information in the context of the examination of information on the register, and to interrogate and share that data with other authorities.

[Gavin Newlands]

Will the Minister give way briefly?

[Kevin Hollinrake]

I am sorry, but I must conclude. I do apologise.

To conclude there, I thank all the Members who have spoken in today’s debate for their insights, and I am sorry if I have not spoken to their points directly. I call on the House to support the Government amendments, and I hope that the explanations I have given provide reassurance that their amendments are not needed to make the Bill and the implementation of the reforms effective.

Question put and agreed to.

New clause 8 accordingly read a Second time, and added to the Bill.

New Clause 9

Disqualification on summary conviction: GB

“(1) Section 5 of the Company Directors Disqualification Act 1986 (disqualification on summary conviction) is amended as follows.

(2) In subsection (1), for the words from ‘provision of the companies legislation’ to ‘the registrar of companies’ substitute ‘of the relevant provisions of the companies legislation’.

(3) For subsection (3) substitute—

‘(3) Those circumstances are that, during the 5 years ending with the date of the conviction, there have been no fewer than 3 relevant findings of guilt in relation to the person.

(3A) For these purposes, there is a relevant finding of guilt in relation to the person if —

(a) the person is convicted of an offence counting for the purposes of this section (including the offence of which the person is convicted as mentioned in subsection (2) and any other offence of which the person is convicted on the same occasion),

(b) a financial penalty of the kind mentioned in section 3(3)(aa) is imposed on the person, or

(c) a default order within the meaning of section 3(3)(b) is made against the person.’

(4) In subsection (4), omit paragraph (b) and the ‘and’ before it.

(5) For subsection (4A) substitute—

‘(4A) In this section “relevant provisions of the companies legislation” has the meaning given by section 3(3B).’”—(Kevin Hollinrake.)

This new clause replicates the effect of the amendments made by clauses 41(3) and 102(3) (which are left out by Amendments 7 and 15). The restructuring of the material is in consequence of NC8.

Brought up, read the First and Second time, and added to the Bill.

New Clause 10

Disqualification for persistent breaches of companies legislation: NI

“(1) The Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150 (N.I. 4)) is amended as follows.

(2) In Article 6 (disqualification for persistent breaches of companies legislation)—

(a) in paragraph (1), for the words from ‘provisions of the companies legislation’ to the end substitute ‘relevant provisions of the companies legislation (see paragraph (3ZA))’;

(b) in paragraph (2), for ‘such provisions as are mentioned in paragraph (1)’ substitute ‘relevant provisions of the companies legislation’;

(c) in paragraph (3), after sub-paragraph (a) (but before the ‘or’ at the end of that sub-paragraph) insert—

‘(aa) a financial penalty is imposed on the person by the registrar in respect of such an offence by virtue of regulations under—

section 1132A of the Companies Act 2006, or

section 39 of the Economic Crime (Transparency and Enforcement) Act 2022,’;

(d) after paragraph (3) insert—

‘(3ZA) In this Article “relevant provisions of the companies legislation” means—

(a) any provision of the companies legislation requiring any return, account or other document to be filed with, delivered or sent, or notice of any matter to be given, to the registrar,

(b) sections 167M and 167N of the Companies Act 2006 (prohibitions on acting as director where identity not verified or where there has been a failure to notify a directorship), and

(c) sections 790LM and 790LN of the Companies Act 2006 (persons with significant control: ongoing duties in relation to identity verification).’;

(e) for paragraph (3A) substitute—

‘(3A) In this Article “the companies legislation” means—

(a) the Companies Acts,

(b) Parts 1A to 7 of the Insolvency (Northern Ireland) Order 1989 (company insolvency and winding up), and

(c) Part 1 of the Economic Crime (Transparency and Enforcement) Act 2022 (registration of overseas entities).’

(3) In Article 25A (application of Order to registered societies), in paragraph (2)(c), for ‘Articles 6(1) and 8(1)’ substitute ‘Article 6(3ZA)(a)’.

(4) In Article 25B (application of Order to credit unions), in paragraph (3)(b), for ‘Articles 6(1) and 8(1) references’ substitute ‘Article 6(3ZA)(a) the reference’.”—(Kevin Hollinrake.)

This new clause replicates the effect of the amendments made by clauses 42(2) and 103(2) (which are left out by Amendments 8 and 16) and contains changes to ensure that a person can be disqualified for breaches of obligations under Part 1 of the Economic Crime (Transparency and Enforcement) Act 2022 etc.

Brought up, read the First and Second time, and added to the Bill.

New Clause 11

Disqualification on summary conviction: NI

“(1) Article 8 of the Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150 (N.I. 4)) (disqualification on summary conviction) is amended as follows.

(2) In paragraph (1), for the words from ‘provision of the companies legislation’ to ‘the registrar’ substitute ‘of the relevant provisions of the companies legislation’.

(3) For paragraph (3) substitute—

‘(3) Those circumstances are that, during the 5 years ending with the date of the conviction, there have been no fewer than 3 relevant findings of guilt in relation to the person.

(3A) For these purposes, there is a relevant finding of guilt in relation to the person if —

(a) the person is convicted of an offence counting for the purposes of this Article (including the offence of which the person is convicted as mentioned in paragraph (2) and any other offence of which the person is convicted on the same occasion),

(b) a financial penalty of the kind mentioned in Article 6(3)(aa) is imposed on the person, or

(c) a default order within the meaning of Article 6(3)(b) is made against the person.’

(4) Omit paragraph (4).

(5) For paragraph (4A) substitute—

‘(4A) In this Article “relevant provisions of the companies legislation” has the meaning given by Article 6(3ZA).’”—(Kevin Hollinrake.)

This new clause replicates the effect of the amendments made by clauses 42(3) and 103(3) (which are left out by Amendments 8 and 16). The restructuring of the material is in consequence of NC10.

Brought up, read the First and Second time, and added to the Bill.

New Clause 12

A limited partnership’s registered office: consequential amendments

“(1) Regulation 2 of the Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773) (interpretation) is amended as follows.

(2) In paragraph (1)—

(a) at the end of paragraph (a) of the definition of ‘EEA AIF’ insert ‘(but see paragraph (1A) if the AIF is a limited partnership)’;

(b) at the end of the definition of ‘Gibraltar AIF’ insert ‘(but see paragraph (1A) if the AIF is a limited partnership)’;

(c) at the end of paragraph (b) of the definition of ‘UK AIF’ insert ‘(but see paragraph (1A) if the AIF is a limited partnership)’;

(d) at the appropriate places insert—

‘“established”: a reference to the place where an AIF is established (however expressed) is, in relation to an AIF that is a limited partnership, a reference to—

(a) the country in which the AIF is authorised or registered, or

(b) if the AIF is not authorised or registered, the country in which it has its principal place of business;’;

‘“limited partnership” means a limited partnership registered under the Limited Partnerships Act 1907;’.

(3) After paragraph (1) insert—

‘(1A) In the application of the definition of “EEA AIF”, “Gibraltar AIF” and “UK AIF” to an AIF that is a limited partnership, a reference to the AIF’s registered office is to be read as a reference to its principal place of business.’”—(Kevin Hollinrake.)

This new clause would mean that whether or not a limited partnership is an EEA AIF, Gibraltar AIF, UK AIF or established in the UK does not change solely because it complies with the new requirement introduced by clause 112 of the Bill to have a registered office in the UK.

Brought up, read the First and Second time, and added to the Bill.

New Clause 13

Removal of limited partnership from index of names

“After section 26 of the Limited Partnerships Act 1907 (inserted by section 138 of this Act) insert—

‘26A Removal of limited partnership from index of names

(1) The registrar must remove a limited partnership from the index of names as soon as reasonably practicable if the registrar—

(a) becomes aware that the limited partnership is dissolved (whether on the receipt of a notice under section 18, the publication of a dissolution notice under section 19(6) or otherwise), or

(b) publishes a deregistration notice under section 26 in respect of the limited partnership.

(2) If the registrar removes a limited partnership from the index of names, the registrar must include a note in the register of limited partnerships stating either—

(a) that the limited partnership has been removed from the index of names because of its dissolution, or

(b) that the limited partnership has been removed from the index of names because of its deregistration under section 26.

(3) The registrar must also publish a notice of the removal in the Gazette if the limited partnership is removed from the index of names other than following the publication of a dissolution notice under section 19 or a deregistration notice under section 26.

(4) Notes included in the register of limited partnerships in accordance with subsection (2) are part of the register of limited partnerships.

(5) A note may be removed if it no longer serves any useful purpose.

(6) In this section “the index of names” means the index kept by the registrar under section 1099 of the Companies Act 2006.’”—(Kevin Hollinrake.)

This new clause requires the registrar to remove a limited partnership from the index of names as soon as practicable following dissolution or deregistration. The registrar must place a note in the register when a limited partnership is so removed and publish a notice in the Gazette in certain circumstances.

Brought up, read the First and Second time, and added to the Bill.

New Clause 15

Reports on the implementation and operation of Parts 1 to 3

“(1) The Secretary of State must—

(a) prepare reports on the implementation and operation of Parts 1 to 3, and

(b) lay a copy of each report before Parliament.

(2) The first report must be laid within the period of 6 months beginning with the day on which this Act is passed.

(3) Each subsequent report must be laid within the period of 12 months beginning with the day on which the previous report was laid.

(4) But the duty to prepare and lay reports under subsection (1) ceases with the laying of the first report on or after 1 January 2030.” —(Kevin Hollinrake.)

This new clause imposes a duty on the Secretary of State to prepare and lay before Parliament reports about the implementation and operation of Parts 1 to 3.

Brought up, read the First and Second time, and added to the Bill.

New Clause 22

Person convicted under National Minimum Wage Act not to be appointed as director

‘(1) The Company Directors Disqualification Act 1986 is amended as follows.

(2) After Clause 5A (Disqualification for certain convictions abroad) insert—

“5B Person convicted under National Minimum Wage Act not to be appointed as director

(1) A person may not be appointed a director of a company if the person is convicted of a criminal offence under section 31 of the National Minimum Wage Act 1998 on or after the day on which section 32(2) of the Economic Crime and Corporate Transparency Act 2022 comes fully into force.

(2) It is an offence for such a person to act as director of a company or directly or indirectly to take part in or be concerned in the promotion, formation or management of a company, without the leave of the High Court.

(3) An appointment made in contravention of this section is void.”’—(Seema Malhotra.)

This new clause would disqualify any individual convicted of an offence for a serious breach of the National Minimum Wage Act 1998, such as a deliberate refusal to pay National Minimum Wage, from serving as a company director.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

Online Sale of Goods (Safety) Bill

Kevin Hollinrake Excerpts

Friday 20th January 2023 Commons Chamber

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

Thank you, Mr Deputy Speaker. I congratulate the hon. Member for Gateshead (Ian Mearns) on securing a Second Reading for his private Member’s Bill, which is on an important issue for hon. Members on both sides of the House, and it is certainly important for me. I and the Government greatly sympathise with the points he made. We know that this is a hugely important issue.

As the Minister for business, the No. 1 thing that I seek to achieve for all businesses is a fair and level playing field. That is good for our businesspeople and good for our consumers and citizens. We must try to establish and maintain that.

As a new business Minister, I did not know what might come under my portfolio. One of my first meetings was with the Office for Product Safety and Standards, which I thought might be quite dry, but it was far from it. I could see what hugely important work it does and how earnestly its officials go about their work. One of the first things we discussed was how we are about to undertake a product safety review—the hon. Member was right about that—looking at many issues, including some of those that he rightly raised. We discussed how although, I think it is fair to say, we would look on many of these online marketplaces as retailers or distributors of products, they argue that they are marketplaces and that other businesses distribute products in their marketplaces. I do not think that is the whole picture.

Clearly, there are a number of different practices. Amazon, for example, will look at a business selling products in its marketplace, see which products sell well and undertake to sell them directly. For me, that indicates work as a distributor or retailer rather than simply as a marketplace. In that first meeting, we looked at that, and I had a number of questions for officials, who understood that I want to be pretty robust and ensure that things are fair. I did not understand why we would expect, for example, a hardware store or a high street retailer to ensure that the products that it was selling were safe and conformed to British safety standards—UKCA or CE marking—and yet not expect that of Amazon. Those were some of the questions that I had.

The hon. Member made some interesting points about what other jurisdictions do in this area and how, when they are made aware of a product not meeting a certain standard, that product has to be removed quickly. I think that, potentially, we should go further than that and require marketplaces to ensure that such products are not on their sites at all, ever, and that they check to ensure that they do not appear and, indeed, remove retailers who have transgressed.

[Ian Mearns]

I am glad that the Minister raised that point. I raised examples of other jurisdictions for what could be done, but I concur that, if those measures would not be strong or robust enough, the Government should introduce regulations to clean up the market completely.

[Kevin Hollinrake]

It is important that we look at other jurisdictions for best practice, but not limit ourselves by that if we think we can go further. Amazon plays a very important part and we welcome it as a retailer which, like eBay, Etsy and others, many of us use. We welcome its investment in this country and its services. It adds to the consumer offering, which is absolutely what we should be supporting, but nevertheless it needs to be fair.

I had a meeting with Amazon—it is fair to say that that was a pretty robust meeting—in which we discussed some of these issues. Following the meeting, I received a lengthy letter from Amazon—I am happy to share it with the hon. Gentleman—about some of the work it undertakes to remove businesses that do not operate appropriately on its site. Like me, he will be very keen to read about the measures it is undertaking. They are welcome, but as I say we should go further and that is what the product safety review will identify and deal with. It is fair to say that some of our current safety rules are not made for the digital age we are in today and we want to ensure that they are.

The hon. Gentleman rightly mentioned some tragic cases, including those of Rebecca and Linda. I have heard about some cases, too. As my hon. Friend the Member for Watford (Dean Russell) set out, my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon) has undertaken a campaign on button batteries following the tragic death of Harper-Lee, who swallowed button batteries. There are many things we need to do in this space to make sure the world of online purchases is safer.

E-commerce has revolutionised global supply chains, facilitating new business models and transforming how products are bought and sold. Internet sales have grown significantly over the past decade, based on consumer demand. Over the past 10 years, shopping online has almost quadrupled. In 2011, just 8% of all UK retail sales occurred online. By 2021, 31% took place online. The trend was accelerated by covid-19, when online shopping became a lifeline for many people. Online shopping has continued to form a higher percentage of retail sales than before covid-19. Within that growth, the rise of online marketplaces, as we have discussed, has been a very notable trend. They include Amazon Marketplace, eBay, Etsy, Wish, AliExpress and many others who provide services for third-party sellers to advertise and sell their products to consumers. That has brought benefits for both businesses and consumers. For businesses, it is easier to sell their products across the world and, often, to trade at lower cost. For consumers, there is greater choice and convenience. However, the rise of e-commerce has also created challenges.

I want to be clear on the law. Existing laws already require that all consumer products must be safe before they can be placed on the UK market, however they are sold. However, the current legal framework for regulating the safety of products was not designed with online business models in mind. That means that in online supply chains the responsibility for ensuring safety may not always be clear. The traditional boundaries between manufacturer, importer and distributor can become blurred. In particular, there are understandable concerns about the ease with which unsafe products can be sold by third party sellers on online marketplaces. As well as presenting a risk to consumers, this potentially places businesses who play by the rules at an unfair disadvantage.

This is a challenge not just for the UK, but one that is witnessed across borders and shared by many jurisdictions around the world. The hon. Gentleman set out some of the measures that have been taken in other jurisdictions to deal with this important issue. As I have said, the Government, too, recognise the need to address it. In fact, we are opposing the Bill—I am sorry to tell the hon. Gentleman—precisely because we are already taking action. That includes both ongoing regulatory action and reforming the product safety framework through our product safety review.

[Ian Mearns]

I regret that the Government are not supporting the Bill, but to a certain extent I am heartened by what the Minister has just said. Of course, though, he will expect me to hold him to account on that.

--- Later in debate ---

[Kevin Hollinrake]

I am very happy to be held to account by the hon. Gentleman, whom I consider to be a friend as well as a Member on the Opposition Benches. I am very keen to work with him on this issue and include him in my discussions regarding the review of the consultation, to make sure that he can hold me to account and that we get to the right place.

Neonatal Care (Leave and Pay) Bill

Kevin Hollinrake Excerpts

3rd reading
Friday 20th January 2023 Commons Chamber

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

I thank the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) for all his work in bringing forward this very important legislation. It is a great honour to bring forward a private Member’s Bill. I have been lucky enough to bring forward two: one on guardianship, and one that sadly has a connection with this Bill, on parental bereavement, of which the hon. Member was very supportive. It is not just a great honour; it is a great deal of work, and I pay tribute to him for all his work on this Bill over the last month. We often get asked when we bring forward new measures such as this, “Does not that exist already?” When we get that reaction, it is time we moved quickly to bring the legislation forward. I thank him and all Members who have spoken on this important matter today.

I also thank my predecessors. I have only been in this role a short time, which has been a common feature of small business Ministers over the last three months. Many of my predecessors have done hugely important work on this issue, not least my hon. Friends the Members for Sutton and Cheam (Paul Scully), for Loughborough (Jane Hunt) and for Watford (Dean Russell). I thank my hon. Friend the Member for Watford for his contribution today and his wholehearted support for this Bill and the next Bill that we will consider, the Employment (Allocation of Tips) Bill. I know he is keenly awaiting that debate, as is the Bill’s promoter, my hon. Friend the Member for Ynys Môn (Virginia Crosbie). It is another important piece of legislation.

The Government are deeply committed, as I am, to ensuring that the UK is the best place in the world to work and grow a business. We need a strong and flexible labour market that supports participation and economic growth. The Neonatal Care (Leave and Pay) Bill will enable thousands of parents to care for and be with their children in neonatal care without worrying about whether their job is at risk. The Bill is supported across the House, and I was pleased to see that support reflected in today’s debate.

I wish to put on record the Government’s reasons for continuing to support the Bill, but let me first pick up a couple of points that hon. Members have raised. The shadow Minister—the hon. Member for Putney (Fleur Anderson)—and the hon. Member for Pontypridd (Alex Davies-Jones) spoke about other measures that we might take forward in the employment Bill or by other means. The hon. Member for Pontypridd spoke very movingly, for which I commend her, but I think she said that the Government were eroding workers’ rights. I cannot think of anything further from the truth.

Let me set out some measures that the Government are taking, other than in this legislation. They are all measures for which I am responsible as a Business Minister: making flexible working a day one right, as we intend; allowing all workers a week of carer’s leave; providing more protections for people who are pregnant or returning to work from pregnancy or paternity leave; the tips Bill—

[Alex Davies-Jones]

I am sorry, but I cannot sit here and listen to the Minister saying that his Government are not eroding workers’ rights. They are literally bringing forward legislation to prevent workers from using their fundamental right to withhold their labour and go on strike. As any worker knows, that is the last armour that workers have to protect themselves. If the Government are not eroding workers’ rights, what are they doing?

[Kevin Hollinrake]

We can have a good debate about this a week on Monday, but the Opposition parties seem to be arguing simultaneously that minimum service levels exist across Europe, that strikes are happening across Europe, and that the two things are incompatible. Clearly we are not taking away the right to strike: we know that nurses have voted to strike on 7 and 8 February. We are simply saying, “Yes, you can strike, but put a voluntary agreement in place to have minimum service levels,” as the nurses do—a derogation, as they call it. The two things are not incompatible.

[Mr Deputy Speaker (Sir Roger Gale)]

Order. With respect, this is the Neonatal Care (Leave and Pay) Bill.

[Kevin Hollinrake]

I do apologise, Mr Deputy Speaker. Several Members referred to the matter in this debate, so I felt I needed to address it, but under your instructions I will move on. Other Government measures, of course, include increasing the national living wage to £10.42, which we shall do very shortly—so we have a number of measures to strengthen workers’ rights rather than reducing them.

As the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East explained, an estimated 100,000 babies in the UK are admitted to neonatal care every year following birth, for a range of medical reasons. As my hon. Friend the Member for Cheadle (Mary Robinson) said, tens of thousands of children are in neonatal care for a week or longer, so the issue clearly affects many, many parents. In 2018, our study identified that 37,400 children were in neonatal care for more than a week after birth, so it is clearly a hugely important issue.

The United Kingdom has generous entitlements and protections designed to support employed parents to balance their family and work commitments and maintain their place in the labour market while raising their children. However, for parents who are in the worrying position of having their newborn admitted to neonatal care, it is clear that the current leave and pay entitlements do not provide adequate support. The Government consulted on the issue, and in March 2020 we committed to introducing a new entitlement to neonatal leave and pay. We are therefore pleased to support the Bill, which will bring that policy into effect.

As the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East set out, the Bill will provide a statutory leave entitlement that protects employees against any detriment. Many considerate employers provide that anyway, but the Bill will ensure that the minority who perhaps do not must do so in future. The Bill gives a day one right to leave to anyone with a child in neonatal care for seven full days of continuous care. It is a right to pay based upon continuity of service.

I will touch on some points made by Members, but I first thank my hon. Friend the Member for Thornbury and Yate (Luke Hall) for his work on this Bill. The issue was first introduced to the House in an Adjournment debate, which was responded to by my hon. Friend the Member for Sutton and Cheam. I know the hon. Member for Pontypridd has campaigned long and hard on this issue, as has the hon. Member for Glasgow East (David Linden), who chairs the all-party parliamentary group on premature and sick babies. We should pay tribute to all those people.

Many Members in this debate and previous debates have spoken about their personal experiences very movingly. I am the father of four children; our first child was in neonatal care, as he was very jaundiced when he was born. That is a massive worry for any parent. It is not just about the jaundice, as there can be other health implications including deafness. For the first child it is even more worrying. All those contributions resonated with me and, I am sure, others in the House.

The hon. Member for Cheadle rightly thanked the charity Bliss and other charities that support families through their difficult time. The hon. Member for Pontypridd also thanked the charity Bliss. She is vice-chair of the all-party parliamentary group on premature and sick babies. I thank her for her work on that. She directed the House’s attention to her personal experience of this issue, as her son was born prematurely. I am grateful that her husband’s employer was flexible.

My hon. Friend the Member for Watford showed huge empathy, as always, for parents who go through that experience. He has much experience with the issue, having been the Minister in the Bill Committee at one point. He emphasised the impact that having a premature or poorly baby has on parents’ mental health. This Bill will massively help ease anxiety. The shadow Minister, the hon. Member for Putney, and the hon. Member for Pontypridd asked how long it has taken to introduce the Bill to the House. Legislation is never that speedy—only in emergency times, perhaps. This legislation was a 2019 manifesto commitment, and in 2020 we conducted a consultation. Clearly, there have been other issues that we have had to deal with over recent years, but we are keen to expedite this legislation and we are pleased to see it passing through its final stages in the House.

The shadow Minister also asked about a single enforcement body. We have this matter under review, but she can see that a tremendous amount of work is happening on other legislation that we are keen to bring forward. I am happy to have a conversation with the hon. Lady at any time about other measures that she would like us to implement. My hon. Friend the Member for North Devon (Selaine Saxby) emphasised how the Bill will benefit fathers and non-birthing partners, as they will have leave to spend time with their child in hospital. She spoke of the benefits to businesses, as they will be able to reclaim the money via HMRC and have less financial burden.

My hon. Friend the Member for North East Bedfordshire (Richard Fuller) raised interesting points, as always. I was pleased to hear him talking about the potential impact on business. It is right that we consider that. We ask businesses to do more and more for employees, quite rightly. Nevertheless, we should always consider the impact. He talked about the impact assessment, which states that the financial impact on business is estimated at around £22 million per annum. That is an insignificant amount, and it is right to consider that, but on balance is the right thing to do.

My hon. Friend questioned why it costs £5 million for HMRC to set up the entitlement. That is a good question. As he said, I do not look after HMRC directly, but I am told that they need to update their IT systems and support employers and payroll providers to do the same. This is a sizeable project that is primarily a matter for HMRC and the Treasury, so he may want to ask a Treasury Minister. He also asked about the assessment of legal risk if employers do not claim at the time but claim later. The regulations will specify how long an employee has to claim entitlements to leave and pay, but the Bill specifies that it cannot be less than 68 weeks after the birth of the child. When it comes to pay, there is a power in the Bill that could require someone to still be employed by the same employer when the claim for pay starts. We acknowledge the point that my hon. Friend makes and it will be considered carefully when the regulations are drafted.

[Richard Fuller]

The Minister has just alerted me to a question, although I do not expect him to have the answer to it right now: there may be a change of employment situation for the individual between the moment they had their child and when they make their claim. Can he ensure that the regulations are flexible enough for the right claim to be made at the right time in the right way? More broadly, where there are statutory rights that individuals should claim, it should be easy for them to do it automatically. I do not know whether other hon. Members have the HMRC app—[Interruption.] No? They should get it; it is a really good idea. We should be moving to the principle that these are automatic things that individuals can control without having to go through a paper process. That is better for the individual, results in a higher proportion of claims and reduces the burdens on business, as well as ensuring they are more likely to be legally compliant.

[Kevin Hollinrake]

I am grateful to my hon. Friend for his comments and I agree we should make the process as easy as possible to ease the burden on businesses. That is certainly something we will look at within the regulations.

We will also look at the definition of neonatal in the regulations, but hospital and outreach care and, tragically—as hon. Members have said—perhaps palliative care would be the key areas. The hon. Member for East Dunbartonshire (Amy Callaghan) told the moving story of her friend Kirsty, whose daughter needed neonatal care. My hon. Friend the Member for Ynys Môn shared her own experiences of a child who spent time in neonatal care.

My hon. Friend the Member for Wantage (David Johnston) mentioned bags of sugar—I think bags of sugar are 2.2 lb each—and spoke about the other measures the Government are taking to improve workers’ rights. My hon. Friend the Member for Clwyd South (Simon Baynes) also paid tribute to the Bliss charity’s campaigning on this issue. My hon. Friend the Member for Sedgefield (Paul Howell), even without notes, spoke about the charity Leo’s, named after a baby who tragically died.

Without further ado, the Government are supporting this Bill in line with our ongoing commitment to support workers and build a high-skilled, high-productivity, high-wage economy. It is good to see support in the House from across the political spectrum for this important measure, as is clear from this debate.

In conclusion, I thank civil servants who worked on the Bill: Rosie Edmonds, Tolu Odeleye, Roxana Bakharia, Abi Bridger, Bryan Halka, Jayne McCann and Cora Sweet, who is in the officials’ box today. I look forward to continuing to work with the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East to support the passage of these measures.

[Mr Deputy Speaker (Sir Roger Gale)]

With the leave of the House, I call Stuart C. McDonald to wind up the debate.

Employment (Allocation of Tips) Bill

Kevin Hollinrake Excerpts

3rd reading
Friday 20th January 2023 Commons Chamber

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

First, like the shadow Minister, let me declare my interest. I have two young daughters who work in the hospitality sector and who may benefit from this legislation. Happily, I am pleased to say that the Bill will also benefit around 1 million other people to the tune of £200 million per annum.

I thank my hon. Friend the Member for Ynys Môn (Virginia Crosbie)—I hope I have pronounced her constituency correctly because we have had some problems with pronunciation this morning—for her very hard work in bringing the Bill forward to Third Reading. The Bill is about fairness, transparency and, again, our efforts to make this society a fairer one. I am pleased that she has taken on the sponsorship of the Bill. Obviously, I thank the previous sponsor, my hon. Friend the Member for Watford (Dean Russell), for his work on such an important piece of legislation and for his campaigning on this issue. This is not just about his work in taking the Bill forward, because he has been amazing in campaigning on this. I thank my predecessors —not just him, but my hon. Friends the Members for Sutton and Cheam (Paul Scully) and for Loughborough (Jane Hunt).

It has been brilliant to hear the support in the House for these measures, and I will briefly reiterate why the Government are supporting the Bill. A few years ago, stories were highlighted in the news about bosses wrongfully pocketing tips intended for their workers. Both the Government and the public were appalled by that; money left by customers who wanted to recognise the hard work and excellence of staff was in some cases simply treated as part of the revenue of the business. That is why my Department took action to understand the scale of the problem and launched consultations, as has been mentioned. We were then able to publish a full impact assessment to support the Bill. The Government believe that tips should go to the staff who earn them, rather than the business, and that businesses that withhold tips from staff are wrongfully benefiting from money intended for hard-working staff.

The Bill prevent therefore employers from making deductions when distributing tips, apart from those required or permitted by existing legislation, such as under tax law. That will ensure that all money left by customers is passed to workers in full, as intended. The Bill also establishes a requirement to allocate tips fairly between workers at a place of business. That protects vulnerable workers and prevents exploitation. As we have mentioned, a voluntary code of practice on tipping was published in 2009. Our evidence shows that voluntary guidance alone was not enough to stamp out bad practice. Therefore, this Bill goes a step further and requires employers to give consideration to a statutory code of practice when considering how tips should be distributed. The code will continue to be developed by the Government, in partnership with key stakeholders, and will be subject to a full consultation period before the final version is brought to this House for approval.

Let me address some specific points made by hon. Members in this debate. The hon. Member for Reading East (Matt Rodda) talked about the benefits to lower-income workers and to towns with lots of hospitality workers, such as Reading, and indeed places in Thirsk and Malton and many other constituencies represented here today. My hon. Friend the Member for Watford talked about snollygosters. I do not know whether that piece from Quentin Letts referenced my hon. Friend personally, but being mentioned in one of his articles is always a badge of honour, regardless of whether the comments are derogatory. My hon. Friend also said that this measure is about fairness and clarity, and the simple question when one is handing over a tip: “Do you get this?” He said this should not be about topping up salaries. I say that it should be about driving up service, as these tips are paid to people who do a good job. Let me answer the question put by my hon. Friend the Member for North East Bedfordshire (Richard Fuller) on my tipping policy shortly.

There are some burdens on businesses as a result of this measure, particularly on record keeping. We should bear that in mind when we legislate, but, on balance, I think this Bill is fair. My hon. Friend the Member for Cheadle (Mary Robinson) talked about fairness and about how most employers do the right thing but some do not. She also talked about the confusion regarding making cash or card payments, and what happens to such payments. This is not just about hospitality, as this applies to other industries, such as the beauty industry. I should point out that this Bill does not cover every sector; requirements in here about record keeping and the like, and the passing on of tips, apply only to businesses that receive tips on a more than exceptional or occasional basis. So this does not cover every instance; it applies just where tips are routinely paid.

My hon. Friend the Member for Wantage (David Johnston) talked about not just hospitality, but the key element of access to cash, on which the Government are undertaking another stream of work.

My hon. Friend the Member for North Devon (Selaine Saxby) talked about the fantastic hospitality venues that are essential to the economy in her area—as, indeed, they are to the economy in mine. She is a huge advocate for business. Many of us on the Government side of the House are for business because we are from business. I know that she is, and I welcome that.

My hon. Friend the Member for Sedgefield (Paul Howell) talked about his local hospitality venues. I have visited a number of them, not least Sedgefield racecourse on occasion, which is always a treat. He talked about how this change will be overseen and gave the example of sole traders. This legislation will be employment law and will apply only to people who are employees. The code of practice will go into that in more detail.

My hon. Friend the Member for Clwyd South (Simon Baynes) was born and bred in the hospitality sector and so speaks with real authority. He used the words that I probably mention more than any other in my role as Minister for business: “fair” and “level playing field”. That is absolutely right, and that is what we seek to achieve. He also talked about the representations from Michael Kill from the Night Time Industries Association and how this change is important to attract workers into the sector, and about the great work of Kate Nicholls for the hospitality sector.

My hon. Friend the Member for Leigh (James Grundy) talked about this being a token of thanks. That is absolutely right, because that is what drives service.

My hon. Friend the Member for North East Bedfordshire, as always, challenged us in a number of areas. He mentioned the number of consultations we have held, and basically told us to get on with it. That is what we are doing today, of course: getting this legislation through and putting it into effect as quickly as possible. He talked about whether employment tribunals will have the capacity to deal with these issues. Work is under way across Government to expand capacity within employment tribunals. He talked about cash and cards, and what goes to whom. As he said, cash is by right the property of the employee, unless the employment contract says that it is not. The Bill will clarify that, in any circumstance, whether there is a service charge or not—that is also covered—this money will go to the employees. That is a critical part of this legislation.

[Richard Fuller]

It would be helpful if the Minister confirmed that, as of this Bill passing, when people see a service charge on a bill, they can say that it is covered, that it counts as a tip and that it will go to the employees rather than to other uses within the firm.

[Kevin Hollinrake]

That is correct.

My hon. Friend also talked about my personal tipping. Do I tip? Yes. By standard, if there is no service charge, I would usually tip 10%, or sometimes more, based on performance. Sometimes I will tip nothing, if I do not feel that the service has been at that level. Do I tip if I do not pay for the meal? I normally pay for the meal as well actually, but I have offered to on occasion. I think that covers all his questions, but if he has any more, we can deal with them by separate means.

To respond to the shadow Minister, I again refer to my earlier comments about an employment Bill. The key thing is that we are getting on with key legislation that we think is important. It is not just this legislation; there are other pieces of legislation addressing flexible working, carer’s leave and other issues. She talked about enforcement, which is hugely important. Legislation without implementation is pointless. One of the most effective parts of our regulatory system in the UK, in my view, is employment tribunals. There is no pan-employment regulator in the UK, which, when we think about it, is quite a surprise—there are some in some sectors. There are 30 million people employed in this country, and employment tribunals do a fantastic job, at a fraction of the cost of other regulators. It is ex-post regulation, and I think a more effective means of doing that is through employment tribunals, which are principally a mechanism for enforcement.

The hon. Member talked about zero-hours contracts. A very small proportion of people in this country are on zero-hours contracts—2% to 3%. Many of them are on a zero-hours contract for good reasons and want to be on one, but she raised an important point. This is something we are looking at and determined to tackle. There are some abuses of the system, and we are keen to bring forward new regulations to make sure we tackle that area.

In conclusion, bringing forward the new rules will protect more than 2 million workers from bad bosses and give them an avenue to seek remedies. Businesses will be assured they are not being undercut by companies where bosses keep tips for themselves and consumers will have increased confidence that their tips go to the workers they are intended for. The new rules are backed by Government evidence and analysis. The Government are therefore pleased to reiterate their support for this private Member’s Bill. It has been wonderful to see the support for it in the House during today’s debate.

If I may, I would like to list the civil servants involved, and there are a number of them: Flora Strange, Lucy Allatt, Yasna Reynolds, Mary Smeeth, Tony Gordon, Joe Giles, Simi Bhamra, Bex Lowe, Richard Lewis, Abigail Bridger, Rachel Senior—I can see the Whip moving closer to me; oh no, it’s not, it is the next Minister. I will conclude very shortly!—Anthony Morris, Cora Sweet, Nadine Othman, Laura Matthews, Clara Thiel, Patrick Day and Harry Ravi. Finally, I very much look forward to working with my hon. Friend the Member for Ynys Môn and stakeholders to support the passage of these measures as the Bill moves to the House of Lords. I commend the Bill to the House.

[Mr Deputy Speaker (Mr Nigel Evans)]

If the Minister was ever to invite us all out for dinner one night, I think we would like to see his tipping style in action, wouldn’t we? Fascinating.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Tuesday 17th January 2023 Commons Chamber

[Stephen Hammond (Wimbledon) (Con)]

16. What steps he is taking to support small and medium-sized businesses.

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

It is absolutely right that we direct support where we can to our SME community. We have reversed the national insurance rise, saving SMEs approximately £4,200 a year on average; provided £13.6 billion of business rates support over five years; cut fuel duty for 12 months; and raised the employment allowance to £5,000. The energy bill relief scheme is also protecting SMEs from high energy costs, as will, from April, the energy bills discount scheme.

[David Simmonds]

Before Christmas I held a session with hospitality businesses in my constituency. Although they were appreciative of the energy bill relief scheme, they expressed some concern that they were not necessarily seeing it reflected in their bills. What assurances can my hon. Friend provide to ensure that companies, such as Hop and Vine in Ruislip High Street, see Government support reflected in reduced energy costs?

[Kevin Hollinrake]

The £18 billion energy bill relief scheme is set out clearly in legislation, so it should be applied in a uniform way by all licensed suppliers. The regulations include a robust monitoring compliance and enforcement regime. Suppliers are required to inform customers about the details of support, including the amount of the discount and the supply price, to ensure transparency. That will also be the case with the energy bills discount scheme, which starts in April.

[Maggie Throup]

Many SMEs are facing increasing pressure to agree lengthy payment terms of up to 90 days as a prerequisite to securing contracts with larger firms. That has significant cash-flow implications for businesses that already operate on a tight margin. To support further SMEs such as those operating across Erewash, will my hon. Friend commit to working with Treasury colleagues to review the UK’s payment terms regulations with a view to reducing the maximum credit period, as has happened in Germany?

[Kevin Hollinrake]

I thank my hon. Friend for raising that point. This is a very significant problem for many businesses, particularly micro-businesses. Our prompt payment and cash flow review will examine business behaviours and small business experience of late payment and long payment terms, to help ensure that the UK has arrangements in place to best support small businesses. It will include looking at the payment reporting obligations and a review of the role of the Small Business Commissioner.

[Stephen Hammond]

Wimbledon’s clubs and pubs are at the heart of our community and, like my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds), several have asked me how the Government will ensure that the scheme meets the needs of hospitality. Will my hon. Friend ensure that Ofgem takes action against suppliers whose actions damage small businesses in my constituency and across London?

[Kevin Hollinrake]

My hon. Friend raises a very important point. My r hon. Friend the Minister for Energy and Climate and I recently had a roundtable with energy suppliers to discuss exactly that point: ensuring that the support the Government are providing is passed on to SMEs. The energy suppliers assure us that that is happening. We have asked Ofgem to take a closer look at that and it will report back to us shortly.

[Mr Speaker]

I call the Chair of the Business, Energy and Industrial Strategy Committee.

[Darren Jones (Bristol North West) (Lab)]

Britishvolt, the once valued £3.8 billion site of national importance for the production of electric vehicle batteries in our country, is today going into administration. Does the Minister agree with me that the future of UK car manufacturing relies on UK battery production? If so, what is he going to do about it?

[Kevin Hollinrake]

The hon. Gentleman raises a very important point. It is important to note that we have not withdrawn any money from Britishvolt, but clearly British taxpayers’ money is important and it is important that we dispense that money in a responsible way. There are clear milestones that we expect anybody in receipt of public money to hit. We are looking at the situation very carefully to make sure that they are doing so.

[Samantha Dixon (City of Chester) (Lab)]

In Chester, we are fortunate to have a high street full of wonderful small and medium-sized businesses. The Chancellor’s announcement of cuts to the energy bill relief scheme from April will be devastating to many of those businesses. The cost of living crisis continues, yet the support is being pulled. Does the Minister agree that businesses need support to continue driving our economy?

[Kevin Hollinrake]

I do agree that we need to continue to support businesses. The £18 billion energy bill relief scheme package was very generous. We are now seeing prices moderate, which will help lots of SMEs, and particularly the high street businesses to which the hon. Lady referred. The replacement scheme—the EBDS—is another £5.5 billion of taxpayers’ money. We have to be careful in terms of balancing the books and being responsible with the public finances, but I absolutely agree that businesses need continued support, which is what they are getting from the replacement scheme and from several other measures I mentioned in my first answer.

[Mr Gregory Campbell (East Londonderry) (DUP)]

In the next few months small businesses will, like many others, face massively increased council tax bills here in Great Britain and rates bills in Northern Ireland. Does the Minister agree that the early payment discount scheme should be looked at and revised to 4% or 5% across both domestic and non-domestic council tax and rates payers?

[Kevin Hollinrake]

Most of the businesses that we deal with pay business rates rather than council tax, but we nevertheless have to make sure that the schemes are as affordable as they can be, which is why we have stepped in with £13.6 billion of business rate discounts, targeted at SMEs. We have to look at the ongoing situation and make sure that support is available, as we are doing in many different respects, not least by helping those small businesses that have premises.

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

AMLo Biosciences is a Newcastle University spin-out whose groundbreaking research will save lives by making cancer diagnosis easier and more accurate. AMLo spends millions on research and reinvests all its research and development tax credits into R&D. The Government’s tax credit changes will halve what AMLo can claim, meaning less research and fewer new jobs. Its investors may ask for it to move abroad, where R&D is cheaper. Many Members have similar examples in their constituencies. Will the Minister explain why the Government issued no guidance, gave no support and had no consultation on the changes to SME R&D tax credits? Does he accept that whether in respect of hospitality heating bills or spin-out science spend, the Government are abandoning small businesses?

[Kevin Hollinrake]

Clearly, we have to balance the interests of the taxpayer with the interests of small business. We have to make sure that the money that is being utilised for R&D is properly spent, and there were concerns about abuse of the small business R&D scheme. It is good that the Treasury is now looking into the matter and looking to move towards a simplified universal scheme, which I would welcome and on which there is a consultation. I absolutely agree that we need to make sure we have the right support for research and development in this country, not least for SMEs.

[Nick Smith (Blaenau Gwent) (Lab)]

7. What assessment he has made of the adequacy of the number of onshore wind farms developed in England since 2015.

--- Later in debate ---

[Ian Lavery (Wansbeck) (Lab)]

15. What steps he is taking to help ensure the effective provision of postal services.

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

Ofcom has a duty to ensure the provision of a financially sustainable and efficient universal postal service. Ofcom oversees Royal Mail’s contingency plans to mitigate disruption to universal postal services, and it continues to closely monitor Royal Mail’s performance.

[Ian Lavery]

Does the Minister share my deep concerns about the creeping increased shareholding in Royal Mail by Vesa Equity Investment, a company whose chief executive, Daniel Křetínský, has close ties to Russia? What guarantees can the Minister give about the future of our cherished, 500-year-old Royal Mail?

[Kevin Hollinrake]

As I say, we have no plans to change the universal service requirements of the postal service. This Government are proud of their credentials on foreign direct investment, and we encourage foreign investment into this country. I notice from the global chief executive officer survey today that the UK is third in the world in terms of the places where people want to invest, and we want to make sure that that continues. We looked at this matter from a national security perspective and we did not feel there was an issue, so we welcome that investment.

[Kelly Tolhurst (Rochester and Strood) (Con)]

Sadly, a long-established post office will be closing in my constituency in November, owing to an expansion of the pharmacy there, which is a success story. Many businesses locally, including the council, are desperate to take on a post office franchise. Will the Minister meet me to make sure we can secure Rochester’s having a post office after November?

[Kevin Hollinrake]

Of course I will meet my hon. Friend; I have suffered closures of post offices in my constituency, so I know how difficult this is. We are committed to maintaining a network of 11,500 post office outlets and making sure that 99% of the population are within 3 miles of a post office. I am keen to meet her to see what we can do in this instance.

[Mr Speaker]

I call the shadow Minister.

[Kevin Hollinrake]

The Royal Mail is facing a difficult year—there is no doubt about it. One reason quoted in the update from the Regulatory News Service—this is a regulator-issued news bulletin, so it has to be accurate—on why the company has gone from a profit to a loss was the industrial action by the Communication Workers Union, which is putting tremendous strain on the Royal Mail and its customers, many of whom are going elsewhere, and indeed on the post office network. Will the hon. Lady condemn the fact that this is causing extra difficulties for the Royal Mail and some of these financial problems?

[Holly Mumby-Croft (Scunthorpe) (Con)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[Stephen Hammond (Wimbledon) (Con)]

T4.   Wimbledon is one of the best places for young diverse entrepreneurs to start up. The recent London Chamber of Commerce and Industry report suggested that there were problems and additional problems for those entrepreneurs to access finance. What exactly are the Government doing to make sure that access to finance is open to as many people as possible?

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

The UK, including Wimbledon, is one of the best places in the world to start a business, as evidenced by the OECD report. My hon. Friend is right to raise the issue of access to finance, particularly for diverse groups. The Start-Up Loans Company has provided £1 billion of loans to around 100,000 businesses, including £2 million of loans to businesses in his constituency, and 40% of those loans go to people from a black, Asian and minority ethnic background.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

There is an inconsistency in how the public sector is required to report greenhouse gas emissions. That makes it difficult to keep a track on progress as we approach net zero, and difficult for citizens to hold the public sector to account on delivery. What is the Minister doing to rectify that so that we can keep a proper track on what is happening?

--- Later in debate ---

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Last year, a pay transparency came into law in Colorado. It requires employers to publish the salary range when they advertise for jobs, saving considerable amounts of time, and sometimes costs, for would-be employees. Would such a common-sense rule not be good for British job applicants and employers, too?

[Kevin Hollinrake]

That is an interesting point. We are looking at pay reporting, especially in larger companies. We want to minimise the burden of regulation on smaller companies, of course, but the hon. Gentleman raises an interesting point, and we will have a close look at it.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

My right hon. Friend knows only too well our energy triple challenge of keeping the bills down, keeping the lights on and decarbonising. As chairman of the 1922 Backbench committee on Business, Energy and Industrial Strategy, I draw his attention to the fact that we have just published a report on the future of energy. In my humble opinion, the report is packed full of incisive and actionable policy suggestions. May I invite him to meet me and my vice-chairs to discuss it and the implications for his Department?