Unpaid Work Trials

Kevin Hollinrake Excerpts

Wednesday 29th March 2023 Westminster Hall

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

I beg to move,

That this House has considered the matter of the use of unpaid work trials.

It is always good to see you in the Chair in Westminster Hall, Mr Hollobone. You will remember, because I think you might have been present, that I introduced in the previous Parliament a Bill to amend the National Minimum Wage Act 1998 in order to outlaw the practice of unpaid work trials. I will come back to the substance of that Bill, which is now a piece of history, but I want to begin with the genesis of this entire issue and why I decided to take it up as a Member of Parliament in the private Members’ Bills selection.

There is a bubble tea company called Mooboo, which had an outlet in Glasgow that was offering unpaid work trials—the practice of inviting applicants to apply for a job and making them work for a trial period for which they are not paid. Although there are many variations on what an unpaid work trial looks like, this was perhaps the most extreme version that I have come across, because the applicants were invited to work for a full 40 hours without payment, at the end of which they were or were not offered a job. That is a particularly egregious and extreme example, but when I decided to take up the case on behalf of a constituent who went through that process, I started to find that this practice was rife and much more common than I had first thought. As I mentioned, it presents itself in many guises.

Although that example is at the extreme end of the practice of unpaid work trials, there are many intricacies and differences in the way it presents itself. When I started to talk about this issue publicly and wrote to Ministers and His Majesty’s Revenue and Customs, I started to gather in my inbox various horror stories about the practice of unpaid work trials across the country. A study in November 2017 by Middlesex University and the Trust for London, called Unpaid Britain, shows that unpaid work trials contribute to about £3 billion in missing wages in the United Kingdom. That figure is six years old, and I do not know what it is today—perhaps the Minister has a better idea—but I would wager that it is probably higher now than it was then. Polling from YouGov shows that 65% of Brits say that such a practice is unfair and only 24% think it is fair.

The way in which unpaid work trials present themselves is often different, as I mentioned, but it is none the less insidious. Quite often an applicant will apply for a job where the trial period may be an hour or two, so that they can come in and show what they are made of—whether that is in a restaurant, a cocktail bar, a hotel, a retail setting or whatever it might be. I discovered that quite often those trials were being offered to applicants for jobs that did not actually exist. Applicants were being exploited to cover staffing shortages and busy periods, such as Christmas trading. Those poor people had often spent hours applying for jobs, sending in CVs and filling out application forms, often going through the soul-destroying process of hearing nothing back. They were being invited to unpaid trials for jobs that did not exist, that were never going to materialise and that they would never be offered.

I suspect the Government position is the same as it has always been—that legislation is not required. I think we can all agree that that it is an egregious thing to ask somebody seeking employment to go through. It is fraud; it is morally fraudulent and must almost certainly be legally fraudulent—except it is not. I have no ambition to relitigate the Government talking out my Bill. The Minister who did so is no longer a Member of Parliament, and I am, so I like to think I won that fight with that Member at the time. When I talked to Ministers and officials about this at the time, we all agreed it was an abhorrent and unacceptable practice, but the Government position was that legislation was not required to fix it.

I would say to the Government today that the fine guidance they produced for employers on unpaid work trials has not had the effect that we all wanted, which was that they would not be used at all and certainly not used in the egregiously fraudulent way that I described. At the time, there was some good will on the Government side, among Labour colleagues and on my own side, which even in today’s Scottish National party environment still exists.

The fact that the practice is still going on and partly contributing to billions of pounds in missing wages that people should rightfully receive—

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

I am listening carefully to the hon. Member’s speech, and he is making some very valid points. I agree that such behaviour is egregious. Is the £3 billion he quotes for unpaid work trials or unpaid work? There is an important difference between the two.

[Stewart Malcolm McDonald]

Yes—and no, in terms of the Minister’s final point about there being a difference. The unpaid work trials contribute to the figure of £3 billion. I am not saying that the trials are worth £3 billion, but the study by the university concluded that that was part of the bigger £3 billion picture. I confess I do not think there has been an updated study. I do not know if the Government have anything to share with us this afternoon. I would be amazed if that figure had not grown since that study was done six years ago.

Among all the good will to try to stop this miserable exploitation, the Opposition and the Government arrived at different conclusions. I was of the view, supported by colleagues in the Opposition, that legislation was required —an amendment to the National Minimum Wage Act 1998—to outlaw the practice. The Government took the view that guidance was adequate, but it is not. It was proven not to be as recently as December last year in a court ruling. The ruling in Ms P Karimi and Ms C Patricio v. Fadi Ltd, published by His Majesty’s Courts and Tribunals Service on 2 December 2022, found that the claimant was entitled to the minimum wage for all hours worked during the trial period. Reasoning the judgment, the employment judge, Judge D Wright, stated that the

“legislation does not give explicit guidance”

as to how long these unpaid trial shifts may last.

An exploitation had taken place, whereby someone had worked in an unpaid trial, and the tribunals service determined that they should have been paid for it, but the judge said that the guidance is not sufficient on the regulation of work trials. I am not against work trials. I entirely support an employer’s right to say to someone, “Come in and show us what you are made of. Come in and show us that you actually have the skills and experience that you set out in the interview process.” What I do not support is exploiting people for jobs that do not exist, or for covering staffing shortages and doing so for 40 hours, as in the extreme examples that I mentioned at the start of my remarks.

Forty hours is an extreme and unusual example. What I thought I would find initially was that the norm would be two or three hours—half a shift or a morning. What I found more often than not was that the time was longer, and the physical experience of the unpaid work trial was demeaning. The number of people—mostly young people—who would work their unpaid trial shift and then just be left, not told whether they had a job, confused as to what was supposed to happen next, clearly tells us that better regulation of trial periods needs to be forthcoming from the Government. I do not think that that is too much to ask in this day and age. A fair day’s work for a fair day’s pay; it could even be said that it is a broadly Conservative value. It is something that even my colleague, the hon. Member for Glasgow South West (Chris Stephens) can rally around.

Let us be clear about what my proposed legislation was not; it was not about banning trial periods, and it did not concern itself with things like unpaid internships. Although I find them objectionable, I felt that would require its own piece of separate legislation. The aim of my proposal—the banning of exploiting people through unpaid work trials—remains an entirely just one.

--- Later in debate ---

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

It is a pleasure to see you in the Chair this afternoon, Mr Hollobone. I thank the hon. Member for Glasgow South (Stewart Malcolm McDonald) for securing the debate and for the work he has done over six years to try to deal with this wholly egregious situation.

We can probably start on a note of common concern, because every right-minded person would regard it as wrong that workers should be expected to work for free. In many cases, as we have heard, they actually end up out of pocket after working a trial shift. I firmly believe that we should all adhere to the principle that there should be a fair day’s pay for a fair day’s work, and any action to stop exploitation—whatever form it takes—should be welcome.

As we have heard, there clearly ought to be means by which an employer can test an individual’s suitability for a position, but—call me old-fashioned—I have always thought that that was what a job interview was for. If not that, what about a paid probationary period for someone to be assessed for their suitability? Let us not forget that people have to work somewhere continuously for two years before they get any protection against unfair dismissal, which could be seen as a very long trial period, albeit one that is paid. When we consider the many options available to employers to assess the suitability of potential employees in the round, we inevitably get drawn to the conclusion that, in the main, trial shifts are not necessary—certainly not unpaid ones. When we are confronted with the evidence that we have heard today and on previous occasions, the suspicion continues to grow that they are often used as a quick way to get free labour.

We have to ask what is being done to stop jobseekers being exploited. Although it is welcome that the Government have published guidance on the practice of unpaid trial shifts, it is not worth the paper it is written on without proper enforcement. There is a problem with both the wording of the guidance and the Government’s general attitude to upholding UK employment law. In particular, I have concerns about the fact that, as the guidance notes, there are no definitive rules or tests for whether a trial shift is legal.

As we know, there are six factors in the guidance that a court or tribunal will consider when making a judgment about whether a trial shift should be paid. I ask the Minister to consider how many people have the legal knowledge, patience, time or money to pursue an employer for a handful of hours of lost earnings at the tribunal, particularly if they are in a legally vulnerable position from having no employment protection at that point. Does the Minister agree that the threat of being taken to a tribunal for an unpaid trial shift is self-evidently a hollow threat to employers, and that the Department should be much more proactive in pursuing complaints on behalf of workers? Does he agree that, given that the majority of people in these sectors are young people, because of the nature of the work, and are unlikely to be members of a trade union, they need support in enforcing their rights?

Let me give an example from my own family of what is probably a pretty typical situation. My son has plenty of experience working in bars—quite often in Glasgow, actually. He has applied for various jobs in bars, including one at a bar in Chester. He had an interview. He has all the experience needed to work there, but was offered a trial shift despite the fact that he clearly could do the job. It transpired that the trial shift would run for eight hours and finish in the early hours of the morning, when there is no public transport, so he would have to pay for a taxi out of his own pocket to get home. That looked to me like blatant exploitation. Luckily for him, his father was the shadow employment rights Minister so he could be guided on what to do in that situation, but it begs the question: how many other times have they gotten away with that? How many hours each week are young people being asked to work trial shifts for which they get no payment? The Minister should be tasking his officials with trying to find out exactly how many times this happens each week, because we are probably seeing only the tip of the iceberg.

[Kevin Hollinrake]

What guidance did the hon. Member give his son in that situation? I would be interested to know.

[Justin Madders]

I am not sure Hansard can record in a polite way the suggestion that I conveyed to him. Let me put it this way: the employment relationship did not continue.

The six factors contained in the guidance are useful, but a lot of subjectivity is applied to them. For example, how is observation—which is one of the criteria—defined? How long is a reasonable period of observation? Ultimately, how can a jobseeker be expected to know if their employer has acted in line with the guidance, given how ambiguous it is? The ACAS website does not make any reference to trial shifts at all. People need a lot more support to understand when they are being asked to do something that is unlawful.

Ambiguities aside, the guidance needs to be properly enforced. As has been mentioned, we have this figure of £3 billion for unpaid work in various forms—it is probably is an even greater figure now. The continued reliance on an underfunded and overstretched tribunal system is failing our workers. Surely it is time for a single enforcement body to follow through for workers to ensure that their rights are enforced. I know the Government promised that along with an employment Bill, which we unsurprisingly have touched on. Will the Minister give us a timescale for when this single enforcement body will emerge?

The Government’s record on national minimum wage enforcement in recent times has been concerning. A naming and shaming list has not been published since December 2021, and I know the Minister has expressed his support for that as an important pillar of enforcement. As I have mentioned to him on previous occasions, a number of Departments have awarded lucrative contracts running into the hundreds of millions of pounds to companies that have appeared on the list of shame. What kind of message does it send to companies about the importance that the Government place on enforcement of the national minimum wage if they are then rewarded with Government contracts? I hope the Minister can give us an update on when the next list will be released.

In conclusion, the debate is a useful reminder that this is unfinished business. We can see very clearly how current ambiguities are being used to exploit workers. I want to hear from the Minister about what more can be done to ensure that people get paid for the work they do, and to ensure that these ruses, in all their forms, are put to an end, so that we get to a point in this country where a fair day’s work means a fair day’s pay.

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

It is a pleasure to speak with you in the Chair, Mr Hollobone. I congratulate the hon. Member for Glasgow South (Stewart Malcolm McDonald) on introducing this important debate, and on his persistence. I think it is his seventh year of talking about this issue. He rightly feels strongly about it. He, like me, the rest of Government and probably every parliamentarian, absolutely believes that people who are at work should get paid the national living wage. I am delighted to be the Minister responsible for national living wage policy and workers’ rights.

Broadly, I agree with the points the hon. Member made. As others have said, if employers are engaging in the behaviour to which he referred—I accept that there is some evidence that some are—that is a scandalous practice. It is absolutely our case that all workers should be fairly rewarded for their work. Most people think that. Who would not agree with the point that a fair day’s work should mean a fair day’s pay? We are all on the same page on that.

We are also all on the same page on a related and very important point. As Minister responsible for national living wage policy, I am pleased to see the largest ever increase to the national living wage: a 9.7% increase to £10.42. That applies from Saturday. It is great to see it go over that £10 mark. Some 2.9 million people across the country will benefit from that measure, including 210,000 in Scotland and 160,000 in Northern Ireland. It is a very welcome move.

We should pay tribute to the vast majority of businesses and employers who—I think we all agree—are decent, do the right thing and do not engage in these scandalous practices. It is really important that we reiterate that, as well as the fact that lots of businesses are already struggling in the cost of living crisis, not least because of high energy bills, for example. They are suffering because of numerous cost pressures, and their paying this increase in the national living wage will not only affect the people on the bottom rung of the pay ladder, but have a knock-on effect on others in their workforce. We are determined to build the high-skill, high-wage economy that most people would like to see.

We have further ambitions. We want the national living wage to reach two thirds of median pay by 2024. That remains our ambition. It is the right thing to do. We are putting in place other measures that reinforce our point that we are absolutely protecting and indeed strengthening workers’ rights. The hon. Member for Glasgow South West (Chris Stephens) made an interesting point about finding parliamentary time; we are effectively finding parliamentary time for a number of pieces of legislation, including six private Members’ Bills for which I am personally responsible. Those Bills include measures to ensure workers get full allocation of tips and service charges; to protect neonatal care for new parents who have difficulties with a newborn, ensuring more leave—up to 12 weeks; to entitle everybody to at least a week’s carers’ leave, which could help many people in the workplace look after dependent relatives; and to ensure redundancy protections pre and post maternity, which, again, is a welcome change.

A further change, and a key measure in the Taylor review, to which the hon. Gentleman referred, is the right to request predictable terms and conditions. It will give people on, for example, zero-hours contracts the right to request predictable hours. We support legislation on that, and on making flexible working something that people have the right to request on day one. Those are all things that we are doing to strengthen workers’ rights and make the workplace more attractive.

[Chris Stephens]

I have been listening to the Minister very carefully, and I welcome what he says about the right to request, but a right to request does not necessarily mean that the right will be given. Will the Minister talk about how he intends to enforce that legislation, and increase enforcement around unpaid work trials?

[Kevin Hollinrake]

I do not want to get too distracted from the issue at hand, but I am happy to address that point in detail afterwards. We think those measures strike a balance. The recommendation from Matthew Taylor was not that there be a right to insist; it was the right to request. The employer could reject that request only on one of eight grounds, and in doing so, has to adhere to a process. We think that strikes a balance and meets the needs of businesses. For example, businesses can refuse a request in order to ensure that they have the right customer service availability and are not put under an undue burden. Those criteria have been set out, and I am happy to have that discussion with the hon. Member after the debate.

On the issue that the hon. Member for Glasgow South raised, there are two things that the Government would question about his policy: is it necessary, and what is the extent of the problem? It is important that we reflect the actual extent of the problem. He said that there is £3 billion of unpaid work; clearly that is a different issue. Following my intervention, he clarified that unpaid work trials are an element of that. The figure of 29% is also about unpaid work; the hon. Member for Glasgow South West said that among the 29% of employers that use unpaid work, work trials were a factor. The extent of the problem is not clear. I would describe people who are abusing the system as rogue employers, rather than something to benchmark.

Anybody who is defined as a worker should receive the national living wage. We updated the guidance in 2018, probably prompted by the work of the hon. Member for Glasgow South. The guidance is clear on the time that someone is allowed to have a work trial for. It says:

“in the Government’s view an individual conducting work in a trial lasting longer than one day is likely to be entitled to the minimum wage in all but very exceptional circumstances”.

Employment tribunals, for example, have a basis on which to make a judgment, and there are other bases.

[Stewart Malcolm McDonald]

I am unclear. Do the Government and the Minister’s Department collect data on the use of unpaid work trials?

[Kevin Hollinrake]

I do not have access to that data. The hon. Member refers to a survey that was done some years ago. It is our belief that unpaid work trials are not widespread, and there are measures to deal with the problem, which I will set out shortly. As the hon. Member for Ellesmere Port and Neston (Justin Madders) said, there are six criteria applied to unpaid work trials.

[Jim Shannon]

Some of the responses have been very positive. The Carer’s Leave Bill, which I have been following, is really welcome. The Minister mentioned the outcome of tribunals, but a person cannot take a case to a tribunal if they have not been in the workplace long enough, which means that a tribunal may not be an option. Can the Minister also give some direction on the uniform issue?

[Kevin Hollinrake]

I thank the hon. Gentleman for all the good work he does in this House. In all the debates he speaks in, he is a champion for doing the right thing. As he said, we have been on the same side of the fence in debates on many occasions, and I am sure that will continue despite my ministerial position. I will come back to both of those points shortly.

Six different criteria apply in deciding whether an unpaid work trial is appropriate. The first is the length of time. The trial should be no longer than a day. Observation is another: is the employer observing, or is somebody just working unobserved? Other criteria relate to the nature of the work, and the value to the employer—is there a value to that work? That would be inappropriate. If the worker is observed, the work would have less value, because somebody has to observe them, and they might as well be doing the work themselves. All those things are taken into account in judging whether that shift should be paid.

There are reasons for having an unpaid work trial; for example, a teacher might be required to do a model lesson. It might be appropriate to ask teachers who are being interviewed to show what they would do in the actual situation. It would not be right to ban the practice altogether.

On having more specific guidance, which the hon. Member for Glasgow South mentioned, the problem is that being too specific in guidance could result in a race to the bottom by some employers—something that he is looking to clamp down on. If we said, “This categorically is the perimeter of work trials,” rogue employers may well take advantage. There needs to be a balance of judgment, rather than exact criteria.

The Government think that work trials can be a legitimate recruitment exercise at times, which is why we are not legislating in this area and do not intend to. I know the hon. Member disagrees, and I respect his opinion, but we do not think it is right to legislate further in this area. What we already have strikes the right balance.

[Chris Stephens]

On the one hand, the Minister says that the Government do not collect data, and on the other, he says that legislation is not necessary. That seems a bit confusing to those of us in the House who study these matters. Before the Government decide whether to legislate, would it not be better to do some investigation into the root of the problem to see how widespread it is?

[Kevin Hollinrake]

Of course, we will always look at information and evidence. As parliamentarians, we get information and evidence from lots of different sources, but we tend to work by seeing where there is obvious detriment and therefore loopholes that we need to close. I do not think it is practical for the Government to look at every single problem and then decide where to legislate; it is usually the other way round. I think we disagree on that, but we will always look at information. If the survey was updated and specified unpaid work trials as an issue, the hon. Gentleman would have a more compelling case.

On uniforms required for a place of work, deduction of the cost of the uniform should not take a person’s earnings below minimum wage. If it did, the employer would be guilty of an offence under the National Minimum Wage Act 1998. It can be appropriate for an employer to say that there is a uniform that an employee must wear, at the employee’s cost, but that must not take that employee below the minimum wage.

[Jim Shannon]

The example I gave was a true one—I bring all my examples with honesty. The person had to buy a black shirt and black trousers to have the trial. If they did not get the job, they were out of pocket. Where is the comeback? It might be better for the employer, who will probably have spares, to make them available.

[Kevin Hollinrake]

I agree with the hon. Member, but that is a different point; I am speaking more to uniforms and how they relate to the minimum wage. It would be entirely inappropriate for an employer to say, “I want you to come on an unpaid work trial, and I want you to buy a new shirt and a new pair of trousers to do that.” I would define them as a rogue employer for taking that approach. As I have said, I was an employer for 30 years, and we would never have even considered that kind of behaviour.

The hon. Member for Strangford talked about awareness. His Majesty’s Revenue and Customs undertakes a programme on best practice for employers. It is an enforcement body, as well as one that tries to help employers meet the relevant employment conditions.

A number of contributors said that an employment tribunal is the only way to deal with the issue. I quite understand that employment tribunals can be expensive and time-consuming. There are other processes; if people feel that they have been wrongly and inappropriately asked to do an unpaid work trial, they can report that to ACAS or His Majesty’s Revenue and Customs, through its online form. All reports are investigated.

We are keen to expand the reach of HMRC’s enforcement capability. We have doubled our investment in national minimum wage enforcement since 2015-16. We spend nearly £28 million every year on ensuring that employers meet their legal responsibilities. Employers who are found to underpay their staff must repay all arrears that they owe to their staff and a penalty of up to 200% of the underpayment, and may be eligible to be publicly named by the Department for Business and Trade.

In 2021, HMRC returned more than £6.7 million in arrears to over 155,000 workers, and issued fines totalling more than £14 million to businesses that had failed to pay the minimum wage. Since 2015, the Government have ordered employers to repay over £100 million to more than 1 million workers, which demonstrates that it is never acceptable to short-change hard-working employees. The shadow Minister rightly asked when we will do the next naming and shaming. It has been too long. The last one was in December 2021. I have absolutely met my officials and said, “We need that list out very shortly.” It will happen very shortly.

I conclude by again thanking the hon. Member for Glasgow South. We absolutely agree that it is vital that the right of workers to be paid the minimum wage continues to be upheld. That is why the Government listened to concerns relating to work trials, and issued new guidance in 2018—prompted by his work, I would say, though I was not in this role at the time. That revised guidance, combined with strong enforcement of existing legislation, will continue to ensure that workers are not exploited through unpaid work trials.

P&O Ferries Redundancies

Kevin Hollinrake Excerpts

Tuesday 28th March 2023 Westminster Hall

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

It is a pleasure to speak with you in the Chair, Sir Gary. I thank the hon. Member for Wansbeck (Ian Lavery) for bringing forward this important debate.

G. K. Chesterton said:

“Too much capitalism does not mean too many capitalists but too few capitalists”.

I absolutely agree with that. I think there is agreement across the House that the vast majority of employers are decent people who treat their employees properly. However, some of the egregious behaviour we have seen in this case, and in others as well, happens when there is too much power in the hands of a few very large operators that dominate certain sectors. The title of this debate is absolutely right, in that there are lessons we can learn from the case of P&O.

The hon. Member for Wansbeck made lots of points. He said to me before that he did not expect me to respond to them all today, and I probably cannot, but I will write to him about the ones I do not pick up on. Some are dealt with by other Departments such as DFT, but I am keen to facilitate responses on all his points where I can. We are in total agreement here: the behaviour of P&O and its chief executive was disgraceful and gratuitous, running roughshod over UK legislation, as I saw in the testimony referred to by the hon. Member for Middlesbrough (Andy McDonald). That is absolutely appalling, and we must deal with it. Yes, we need to learn the lessons, and we have learned some already. We are determined to look at this issue carefully and to go further where we need to. I think the hon. Member for Wansbeck knows that we have taken some action already, but I fully understand that he might want us to go further.

So much attention has been drawn to this appalling behaviour because it is very unusual. I was an employer for 30 years, and most employers would never have considered not carrying out the requirements around consulting the workforce. That is because it was the right thing to do and because we wanted to have a good reputation as an employer with our existing staff and any staff who would join us in future. There is something fundamentally wrong when an employer can set aside the clear requirements to consult the workforce in these instances.

It is fair to say that the Government were very clear in their condemnation early on. The Secretary of State wrote to P&O to ask it to reverse its decision and asked the Insolvency Service to investigate whether the law was complied with. That investigation has not yet concluded. The criminal side of the investigation has reported back. A senior prosecution barrister looked at the matter and decided there were not sufficient grounds to take forward a criminal prosecution. The civil investigation is still live, and it is important we give it the opportunity to run its course.

We all believe in the principle of due process in these cases. Certainly, there is still a chance, as the hon. Member for Middlesbrough noted, of an up to 15-year ban of a director if there are sufficient grounds, so we should let the Insolvency Service conduct its work. Like others, I urge the service to do that work as quickly as possible so that it can come to a resolution and more lessons will hopefully be learned. Indeed, if lessons are learned, I am keen to take further action where necessary to clamp down on such behaviour.

[Andy McDonald]

Does the Minister accept that we were told that action would be taken urgently and it was not? In that vacuum, there is no reason why DFDS, Stena and other ferry services could not do the exact same thing and more seafarers could lose their jobs.

[Kevin Hollinrake]

The hon. Gentleman raises an important point. I do not accept that no action has been taken, and we are consulting on some things now to try and beef up the requirements in terms of consultation. We have already done some things.

The hon. Member for Wansbeck referred to the Seafarers’ Wages Act and the requirement to pay a minimum wage in UK waters. He is right to say that the seafarers’ charter is a voluntary code for now, and we want to see how that operates. I fully respect his perspective that this should be mandatory across the piece, but when there is a proportionate approach—we do not feel at this point that it is. Nevertheless, we have legislated in that area. That legislation has received Royal Assent and is now law, but the hon. Member for Wansbeck is right that some secondary legislation is required for it to be fully and effectively implemented.

On the Thames freeport, let me clear: we have not given any money to DP World, but we have given money to Thurrock Council. However, some of the land needed to operate a Thames freeport includes land owned by DP World. It would be cutting off noses to spite faces if we said, “You can’t use that land, because of its ownership,” and we do not believe in compulsory purchase, except in certain circumstances. I think that would be the wrong—

[Andy McDonald]

You’ve just done that on Teesside!

[Kevin Hollinrake]

Well, that is a slightly different case.

It was interesting that none of the contributions suggested that we would ban fire and refire. Interestingly, the deputy leader of the Labour party, the right hon. Member for Ashton-under-Lyne (Angela Rayner), said Ministers would not ban the behaviour, judging that it is “acceptable in some circumstances”. So I think we are probably all on the same page in terms of making sure the bar is high on the requirements for anybody using these kinds of tactics and making sure that people cannot just run roughshod over them.

New guidelines from ACAS in 2021 were clear that this kind of action should be taken only as a last resort. In terms of a statutory code of practice, there is a 12-week consultation from January 2023. The principle behind that is that there is a 25% compensation uplift in employment tribunals if consultation requirements are not adhered to. We think that sets a sensible balance between the two. Having said that, I am keen to go further, where we can, and to look at the different provisions we can put in place to make sure that the requirements on employers work in practice. It is clear that has not been the case in this case, which is why we have gone further.

To conclude, I thank the hon. Member for Wansbeck again. He knows I am as incensed as he is by the actions of this employer because they bring into disrepute the good name of many other employers, which cannot be right.

[Andy McDonald]

Just briefly, on fire and rehire, we have to be clear about what we are talking about here. This was not firing and rehiring the same workers; this was firing workers and replacing them with cheaper workers. That is the point that concerns us. If companies get into financial difficulties, there has to be a proper mechanism for protecting people if they have to have lower terms and conditions. That is the point we are making.

[Kevin Hollinrake]

We are totally on the same page. The fire element is the worry here. Setting aside the consultation requirements, hon. Members will remember the case of British Airways, which threatened fire and rehire during the pandemic. It did not go ahead with that tactic, as P&O did, but consulted the workforce and found a way through. That shows why the consultation period is so important. Making sure that the provisions we have work in practice is key.

As I say, we already have the Seafarers’ Wages Act. We will keep the issue under review. We are keen to see the outcome of the Insolvency Service investigation and, as far as I am concerned, where action can be taken, it will be taken. We should bear it in mind that we want to act in a proportionate way. Most employers do the right thing. I have never heard of a case like this one before. Most employers do adhere to consultation requirements. We should celebrate the good employers we have in this country, as well as clamping down on the bad ones, and I am determined that we do so.

Question put and agreed to.

Workers (Predictable Terms and Conditions) Bill

Kevin Hollinrake Excerpts

3rd reading
Friday 24th March 2023 Commons Chamber

[Imran Hussain]

The hon. Gentleman’s constituency is known for the things he has said. He will appreciate there is a huge difference between shift working and zero-hours contracts. Those are two very different concepts, and I do not think anybody is arguing against shift working. Equally, nobody is saying there should be no flexibility. I accept that in a minority of situations—perhaps, for example, in the case of students, as was mentioned earlier—there may need to be that flexibility.

To answer the question from the hon. Member for Crewe and Nantwich (Dr Mullan)—I will cover this later as well—the reality is that over the past decade we have gone from around 150,000 people on zero-hours contracts to more than 1 million, as the Minister will know. To suggest that the majority of those people somehow benefit from some flexibility in zero-hours contracts—or some of the points that the Minister may outline later—is just not true.

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

The hon. Gentleman suggests that it is not true that a majority of people like that relationship, but surveys show that some 64% of people do not want more hours. He would ban zero-hours contracts, even though 64% of people want them. Where is the sense in that?

[Imran Hussain]

I will refer the Minister to another survey. By far the most over-represented groups of people on zero-hours contracts are women and those from ethnic minority backgrounds. The Minister quotes statistics, but in the current market people who have a choice between zero-hours contracts or no work at all are a different case altogether.

--- Later in debate ---

[Kevin Hollinrake]

I start by thanking my hon. Friend the Member for Blackpool South (Scott Benton) for all his work. He has been a delight to work with all the way through and I have been delighted to support his Bill through its various stages. I reiterate the Government’s support for the Bill.

It has been encouraging to observe the support for the Bill from across the House. I was pleased to hear that reflected once again in this debate, including by the shadow Minister, the hon. Member for Bradford East (Imran Hussain), who represents part of the fine city of Bradford, in my county of Yorkshire.

As my hon. Friend the Member for Blackpool South pointed out, zero-hours contracts are an important part of the UK’s flexible labour market, for both employers and individuals who may need to balance work around other commitments. We believe they play an important role, and 64% of people surveyed said they do not want more hours and that they are happy with the basis of their current contracts. As my hon. Friend the Member for Crewe and Nantwich (Dr Mullan) pointed out, Labour is determined to take that option away from people, which once again illustrates that the Government believe in freedom of choice while the Opposition believe in state diktat.

Around 3% of workers in the UK workforce are on zero-hours contracts and such contracts may offer many of those individuals the kind of flexibility they want, but, of course, we are determined to tackle unfair working practices used by a small minority of employers. I endorse the comments made by my hon. Friend the Member for Newbury (Laura Farris), who speaks in this House with such authority on employment matters, given her background. Many of those employers take advantage of what she describes, quite rightly, as “a grey zone”. Workers may be left waiting on standby for work that never materialises, unsure whether they will receive the hours they need to pay their bills.

We have already made significant progress in bringing forward measures that support individuals on zero-hours contracts and in low-paid work. In 2015, we banned exclusivity clauses in zero-hours contracts; in December 2022, we extended the ban to workers who have a guaranteed weekly income equivalent to or below the lower earnings limit of £123 per week; and on 1 April, we will increase the national living wage by 9.7%, to £10.42 per hour.

[Mr French]

In reference to the comments made by the shadow Minister, does the Minister agree with me that the Labour party’s words on sticking up for workers are rather hollow, particularly when they support the Labour Mayor of London’s ultra low emission zone expansion and tax rise, which will impact over 850,000 drivers in London and have been described as “anti-worker” by Unite the union?

[Kevin Hollinrake]

My hon. Friend is a fine champion on that issue; I would describe the measure as anti-worker and also anti-business, particularly at a time when we are all seeing cost of living challenges. It is simply the wrong measure to take and I applaud him for his constant campaigning on it.

The Bill in the name of my hon. Friend the Member for Blackpool South represents a further step towards addressing one-sided flexibility, as he says. In 2018, the Government consulted on the right to request predictable working and in 2019 we committed to introducing a right to request a more predictable contract in our manifesto. That militates against the hon. Member for Bradford East’s argument that we have suddenly discovered this concern. We have always committed ourselves to legislating in this area.

The new right to request a more predictable working pattern will apply to all eligible workers, not only those on zero-hours contracts, meaning that a wide range of workers who have unpredictable working conditions will benefit, including temporary workers, agency workers and workers with non-guaranteed hours. Crucially, that is a right to request more predictable hours, not a right to insist on them, because we also need to look after the interests of businesses in this conversation.

My hon. Friend’s Bill includes a list of eight specific grounds on which any employer may decline a request, similar to those established for the existing right to request flexible working—for example, if the costs of providing a worker with a more predictable pattern would be too burdensome, or if accepting a request would have a detrimental impact on the ability to meet customer demand.

The Bill forms part of a wider package of six private Member’s Bills on employment rights that the Government are supporting. I pay tribute to the businesses and business representative groups that have supported them, despite the obvious impact on businesses—if hon. Members have read the impact assessment, they will know the additional impact on business is £16.9 million, at a difficult time for them, so we should pay tribute to businesses that are willing to take on these extra duties.

The hon. Member for Bradford East talked about a ban on zero-hours contracts. I gently ask whether he is doing that in the full and certain knowledge of the costs on business, because I have not seen a figure from Labour to say what would be the cost to business of doing that. That is a reasonable concern that businesses may have about the extra costs of doing business under a potential Labour Government.

Taken as a package, these Bills will deliver on our 2019 manifesto commitments to enhance workers’ rights and support people to stay in work. They will help new parents, unpaid carers and hospitality workers.

Before I close, I want to thank the officials who have worked on this Bill: Sasha Ward, Bex Lowe, Lizzy Blakeman, Mel Thomas, Sarah Boulton-Jones, Louis Ariss, Laura Robinson, Richard Kelly, Adrienn SzNagy, Rose Jefferies and Dan Spillman and, from my private office, Cora Sweet. I commend the Bill to the House.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Thursday 23rd March 2023 Commons Chamber

[Dan Carden (Liverpool, Walton) (Lab)]

2. What recent assessment her Department has made of the effectiveness of businesses’ actions on corporate responsibility.

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

The Government are rightly proud of the record of UK companies when it comes to corporate responsibility. The UK is home to 10 of the world’s top 100 companies, ranked by social responsibility. These standards are reflected in the UK being considered by business leaders to be the world’s third most important country for investment.

[Dan Carden]

The Government have recently taken action on deforestation in supply chains through the Environment Act 2021, and they have made progress on regulating British companies overseas through the Bribery Act 2010 and the Modern Slavery Act 2015, but I want them to go further. The Cerrejón coalmine in La Guajira, Colombia, has been responsible for widespread, persistent, harmful pollution, and for the diverting and polluting of many rivers, causing the displacement of more than 20 indigenous communities. The companies involved have ignored local court rulings. What more can be done to ensure that businesses registered in the UK uphold human rights and do not commit environmental damage? Will the Minister look again at this case?

[Kevin Hollinrake]

The hon. Gentleman raises an important case. The UK is a signatory to the OECD’s declaration on international investment and multinational enterprises, a voluntary set of standards intended to promote responsible business conduct worldwide. My Department is the UK’s national contact point on these guidelines, allowing anyone who thinks there are problems to make a complaint, which will then be investigated. I am very happy to work with him on that basis.

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

Will my hon. Friend update the House on any recent discussions that he or his Department have had with the Home Office on the Economic Crime and Corporate Transparency Bill?

[Kevin Hollinrake]

I regularly meet Home Office colleagues, including this week to make sure this legislation is fit for purpose and will do what it says on the tin: tackle economic crime.

[Mrs Sheryll Murray (South East Cornwall) (Con)]

3. What steps her Department is taking to help protect critical minerals supply chains.

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[Patrick Grady (Glasgow North) (SNP)]

16. What steps she is taking to support the post office network.

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

I thank the hon. Member for Motherwell and Wishaw (Marion Fellows) for the fantastic job she does as chair of the all-party parliamentary group on post offices. I met the Post Office leadership this week to reiterate our commitment to ensuring the long-term sustainability of the post office network. We have funded the network to the tune of £2.5 billion over the last 10 years, and have set access criteria to ensure that vital services remain within local reach of our citizens.

[Marion Fellows]

I thank the Minister for his kind words. Last month, London Economics issued a report showing that the Post Office has a greater economic impact on the UK than Heathrow airport, with three in 10 small and medium-sized enterprises using it at least once a week. The Minister has said that he will invest lots of money in the post office network, but could he also look at “drop and collect” locations? They have a Post Office lozenge, but they are not the properly functioning post offices that most Members in this House would expect.

[Kevin Hollinrake]

The hon. Lady raises an important point. Drop and collect locations offer important services for our citizens, and can be counted towards the commitment to having 11,500 branches. Having said that, the access criteria overlaid on that commitment ensure that branches offering core services, including the sale of mail products, access to cash, and banking and bill payment facilities, remain within 3 miles of 99% of our population.

[Patrick Grady]

The report to which my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows) referred found that the social value delivered by the Post Office is 16.5 times greater than the financial input it receives from the Government, so will the Minister carry out an analysis of how additional investment in the post office network will allow it to continue to grow, so that it can help our communities and small businesses to grow and develop?

[Kevin Hollinrake]

That is a very good point. We are working all the time with the Post Office—as I said, there was a meeting earlier this week. Around half of its 11,500 branches are in rural areas. They are hugely important to our local communities, as the hon. Gentleman says. The Government’s funding for the network helps to ensure the viability of rural branches. Of course, this will always be work in progress. We are keen to make sure that the facilities are there for our communities.

[Mr Speaker]

I call the SNP spokesperson.

[Peter Grant (Glenrothes) (SNP)]

Thank you, Mr Speaker, and may I wish Ramadan Mubarak to all those who today mark the beginning of the holiest period in the Islamic year?

The Minister will be aware that the model of sub-post offices is based on the expectation that most of them will be run by small, semi-independent or independent retail businesses. Those businesses are under desperate strain for a number of reasons, some of them within the Government’s control and some not. The people who run these businesses tell me that they are put off the possibility of taking on the responsibility for a sub-post office because it is now more a drag on the business than a benefit. What steps is he taking to review the business model on which sub-post offices operate? It is quite clearly not fit for purpose, and we are getting to crisis point. If it is not changed soon, we will lose even more post offices.

[Kevin Hollinrake]

The hon. Gentleman makes a fair point. The model of a post office is evolving to a more diversified approach, but it is important that remuneration is fair and makes post offices sustainable. I was pleased to see that in August 2022 some improvements were made to remuneration. I appreciate that they may not have gone as far as some might wish, but nevertheless we want to see a sustainable network and make sure that our sub-postmasters are fairly remunerated.

[Peter Grant]

In an hour or two we will hear the latest update on the Horizon compensation scheme. Has the Minister made an assessment of how much damage that scandal has done and is continuing to do to the willingness of businesspeople to take on responsibility for running a sub-post office, given how severely badly treated, and indeed betrayed, so many of their potential colleagues have been in the past?

[Kevin Hollinrake]

Again, that is a very fair point. It was a horrendous scandal, and the first thing we need to do is properly compensate the victims. Alongside that there is an inquiry going on, headed by Sir Wyn Williams. It is important that we find out exactly what went wrong and who was responsible, and where possible hold those people to account. I think that will restore some measure of confidence to those who have been subject to such disgraceful mistreatment.

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[Bob Seely (Isle of Wight) (Con)]

8. What steps her Department is taking to support the growth of micro- businesses in rural and isolated communities.

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

As somebody from a business background who also represents a rural area, I fully understand the importance of provision of a range of support to help small and microbusinesses to grow, including those in rural areas. Such businesses can find support through the free business support helpline, the 38 growth hubs across England, and the newly launched “Help to Grow” website, as well as through start-up loans. I note that 240 businesses on the Isle of Wight have benefited from start-up loans.

[Bob Seely]

I am delighted that that is the case. I want to tie this question into previous comments about post offices. Some microbusinesses and small businesses are incredibly reliant on post offices and sub-post offices. My sub-postmasters—Andy Smith in Ventnor was the last I spoke to, a couple of weeks ago—are increasingly concerned about the payments regime for sub-post officers. They have asked me to look into several specific instances, and I have written to the Minister about that. One area in which I think we could make improvements is banking payments. Banks are increasingly shutting down. Why? To save money. They pass the responsibilities for cash takes on to sub-postmasters, who do not get the remuneration—or anything like enough—to make it economically worthwhile. Will the Government look at the payments system, specifically in relation to banks?

[Kevin Hollinrake]

That is an interesting point. That relationship between banks and post offices is important for post offices and the banks, so we urge for fair terms to be struck. We also have concerns about the banking deposit limits that were introduced recently to cover money laundering issues. I am looking into that in great detail and at great pace to ensure that those issues are resolved, because they are limiting remuneration for postmasters, too. I am very happy to take that forward.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Minister will know that my constituency has large rural areas and lots of farmers. Like many microbusinesses, they have difficulty in getting a bank account at all. Could he do something or talk to other colleagues about it? Social and trade enterprises cannot get a bank account. Could we get some action on that?

[Kevin Hollinrake]

If the hon. Gentleman writes to me about specific instances, I will be very happy to look at them. There has been a significant increase in the number of new banks entering the marketplace, such as Starling Bank and Tide, so it is getting easier to open a bank account. I know that it is difficult with some of the larger banks. I am very happy to look into the specific instances that he refers to and see if we can help.

[Christine Jardine (Edinburgh West) (LD)]

10. What recent assessment she has made of trends in the level of business insolvencies.

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

In total, 22,109 companies entered insolvency in England and Wales in 2022, which was 57% higher than in 2021. There were lower rates of insolvency in 2020-21 because of the measures that we put in place to prevent the foreclosure of certain businesses. The trend over the last three years is pretty consistent with previous trends, but it is something that we are looking at very closely.

[Christine Jardine]

Notwithstanding that the trend may be consistent, in the last quarter of 2022, 313 companies in Scotland were insolvent. In my Edinburgh West constituency, companies are struggling, particularly those in the hospitality sector, in which there is high energy use. The Federation of Small Businesses has criticised the Budget by saying that there is nothing for businesses once the energy prices support ends at the end of next month—there is nothing for cashflow; there is nothing for tackling late payments. For the sake of small businesses, will the Government review their decision to take away support for businesses at the end of the month?

[Kevin Hollinrake]

The Government have not taken away support; they have replaced one scheme with another. The scheme we have now reflects the fact that wholesale prices have come down significantly since the peak between July and December last year. Of course, we are concerned about businesses that are suffering, particularly those that entered into contracts between July and December on fixed rates that last up to a year. We are working with Ofgem and suppliers to see what can be done to ensure that those businesses are not unfairly treated.

[Anna Firth (Southend West) (Con)]

Does my hon. Friend agree that the tax cut for business worth £25 billion in the Chancellor’s Budget will benefit national and international businesses in the new powerhouse city of Southend such as Olympus KeyMed and ESSLAB, incentivising investment, boosting growth and delivering more jobs not just in Southend but across the UK?

[Kevin Hollinrake]

What an excellent question—I absolutely agree with my hon. Friend. In previous Budgets, the Chancellor has set the annual investment allowance effectively for SMEs at £1 million; that is permanent policymaking. He has now introduced full expensing across the piece, which, as she says, costs around £9 billion a year. We are the only country in the developed world, to my knowledge, that has done full expensing across the board in that way, and it will be a massive boost to business investment, not least in Southend.

[Mr Speaker]

I call the shadow Minister.

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

Our great British businesses are being let down by 13 years of Tory failure, with little to help but sticking-plaster policies. The Minister may not be aware, but insolvency numbers are at their highest level in four years, which is perhaps no surprise when we look at this Government’s record on small businesses, with Help to Grow: Digital ditched, energy bill support slashed and business investment the lowest in the G7. It is no wonder that the Federation of Small Businesses says that the Budget has left many businesses feeling “short-changed”. It is clear that for this Tory Government, small businesses are an afterthought, so will the Minister follow where Labour leads—reform business rates, boost skills, make Brexit work and make Britain the best place to start and grow a business?

[Kevin Hollinrake]

I wish I could say I was surprised that the hon. Lady is once again talking Britain down. The reality is that UK growth since 2010 has been the third fastest in the G7. The private sector is now bigger than it was pre-pandemic. Private sector growth has been on trend in terms of other countries, with businesses growing. The FSB says that three out of five businesses are more resilient than they were pre-pandemic. Of course, we would all like to reform business rates, and it has been looked at on a number of occasions, but simply saying that we will scrap something that would cost £22 billion a year without putting in place a replacement for that funding is irresponsible. What will she do to replace business rates—[Interruption.] She made the point. She wants to scrap business rates, but what will replace it with, given that it would cost £22 billion a year?

[Scott Benton (Blackpool South) (Con)]

11. What steps she is taking with Cabinet colleagues to help support energy-intensive industries.

--- Later in debate ---

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

Through finance, we are making sure that the Government are supporting UK SMEs through our recovery loan scheme and through the start-up loans scheme, which has provided 101,000 loans and nearly £1 billion. On business support, a network of 38 growth hubs across England provides access to information and advice, and we are removing barriers by supporting SMEs seeking to export through the Export Academy, UK Export Finance, cutting red tape and incentivising investment.

[Jo Gideon]

Businesses and traders in Stoke-on-Trent city centre are supported by the fantastic team at our Hanley business improvement district. This week, with investment from the safer streets fund, they are giving a much-needed facelift to shop fronts in Hope Street, making the gateway route to our city centre more attractive. Does my hon. Friend agree that such initiatives, which make our shopping areas more attractive, are a good investment that encourages business growth locally? Will he join me in congratulating my city centre BID?

[Kevin Hollinrake]

It is a great pleasure to do so. I congratulate my hon. Friend on her work. The money that has been invested in Hope Street will contribute to its being a safer, more welcoming place to visit and shop, which in turn will support the local economy. Regenerating streets such as Hope Street is essential to making our high streets and town centres successful, and I congratulate her on the work she does in this regard.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

The financial viability of the high street continues to decline as businesses struggle to compete with online shopping, the impact of which will be felt most keenly in local and small to medium-sized businesses. What discussions has the Minister had with the Chancellor about the urgent need for a long-term, local-scale economic plan to support high streets?

[Kevin Hollinrake]

The hon. Lady is right to raise this issue. We have put in place £13.6 billion of business rates support to help businesses over the next few years, but we are also improving access to finance, improving business support through our growth hubs and cutting red tape, making it easier for businesses to start up and scale up in the UK. That work will continue.

[Sir John Whittingdale (Maldon) (Con)]

18. What steps her Department is taking to help businesses increase their level of trade in the Indo-Pacific region.

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[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

T5. The crypto and digital assets all-party group has been informed, shockingly, that many businesses are struggling to even open a UK bank account. What support can be given to address that issue, and ensure that the UK remains an international hub for fintech innovation?

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

My hon. Friend raises an interesting point, which is similar to the one raised earlier. I am happy to look at any particular instance where businesses cannot open a bank account. My hon. Friend the Economic Secretary to the Treasury is also interested in this issue, so if my hon. Friend writes to me about any instances I will look into them.

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

T7. Every time I speak to those running sub-post offices in my constituency, I hear the same message: the various packages that are available and the business models are simply not sufficient for them to run a viable business. What will the Government do about that, or are we just going to wait until it becomes a crisis?

[Kevin Hollinrake]

There is no waiting at all and the issue is constantly on our agenda. This week I met the Post Office leadership to look at the sustainability of post offices. We are keen to ensure that the post office network is sustainable, and that sub-postmasters are remunerated fairly. We provide financing to the post office network to ensure it is sustainable, with £2.5 billion over the past 10 years, and that will continue. We are determined to ensure that that network is sustainable and provides those services for our citizens.

[Bob Blackman (Harrow East) (Con)]

T6. This month we are due to have the seventh round of trade talks with our partners in India, working towards a free trade agreement. My right hon. Friend’s predecessor but one promised a free trade deal by Diwali. What assessment has she made about achieving a free trade deal by Diwali this year?

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

T8. In all the discussions about the Post Office, the Minister did not mention meeting the trade unions. Is he aware of current research by the Communication Workers Union on the opportunities to develop the role of the Post Office and postal workers within the communities of Scotland? Will the Minister engage with the trade unions to discuss the work of protecting post office services across these islands?

[Kevin Hollinrake]

I have met CWU representatives. I am always keen to listen to new ideas on how we make the post office network more sustainable, so yes, I am absolutely willing to do that. Perhaps the hon. Gentleman will put them in touch with me.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

May I ask about the CPTPP? Unlike the European Union, this organisation is growing all the time as a percentage of global population and global GDP. When will we finally enter this very exciting trade agreement? When will we have a campaign across the United Kingdom to inform businesses of the tremendous opportunities of us joining the CPTPP? When I talk to my constituents about how excited I am about the CPTPP, they ask me, “What is the CPTPP?”

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[Liz Twist (Blaydon) (Lab)]

The retail sector is a hugely important part of our economy and a huge employer in my constituency. What are the Government doing to support it in difficult times?

[Kevin Hollinrake]

The retail sector is benefiting from the £13.6 billion of business rates support and the 75% discount up to £110,000 per premises. These are difficult times for many businesses, not least retail, but we are keen to ensure that we end up on a fair and level playing field. Also, businesses will benefit from the economic turnaround that we expect later this year.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Is the Secretary of State aware of just how much wonderful research is going on in our universities in medical technology, environmental technology and all the rest? Will she do something to make our universities more entrepreneurial? Some are lagging in their expertise. What can we do to make universities partner with business to make them more entrepreneurial?

Post Office: Horizon Compensation

Kevin Hollinrake Excerpts

Thursday 23rd March 2023 Commons Chamber

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

With your permission, Madam Deputy Speaker, I would like to make a statement on the Post Office and compensation for the Horizon scandal.

The Horizon scandal was a truly appalling episode in this country’s history. Our postmasters—those hard-working, thoroughly decent people, who give so much to our communities right across the country—were made to suffer horrifically and for many years. We want the postmasters who fought to expose that injustice through the High Court to receive compensation on a similar basis to their peers. I put on record our thanks to Alan Bates and the Justice for Subpostmasters Alliance, and to many others, journalists and parliamentarians, who were key to the campaign.

On 7 December we announced the outline of the group litigation order compensation scheme. I am delighted to tell the House that from today, the scheme is open to receive claims. Details of how to claim can be found on the gov.uk website. I am writing to GLO members today with further information and placing copies of that information, the scheme application form, scheme guidance and principles, and questions and answers for the scheme in the Library of the House.

Our legal powers to pay compensation expire in August 2024. We certainly intend and expect to make payments much faster than that. We said in December that we would follow an alternative dispute resolution model. We have appointed Dentons as claims facilitators to promote the fair and prompt resolution of each case. We have also appointed Addleshaw Goddard as our external legal adviser on the scheme. They have been instructed to recommend fair offers.

In December we also announced an independent advisory board to oversee the scheme. Reports of its meetings are available on gov.uk. I put on record my thanks to board members Professor Chris Hodges and Professor Richard Moorhead, as well as to the right hon. Member for North Durham (Mr Jones) and Lord Arbuthnot—who is in the Public Gallery—both of whom have long been tireless campaigners for the wronged postmasters. I am pleased to announce that the remit of the advisory board will be expanded to cover the historical shortfall scheme, postmasters’ suspension pay, and compensation for postmasters with overturned convictions.

I am pleased to report that good progress is also being made by the Post Office on compensating other groups of postmasters. As of 20 March, the Post Office has paid out more than £17.6m in compensation to postmasters with overturned historical convictions, 79 postmasters have received interim compensation payments, and 49 non-pecuniary claims have been paid. The Post Office has reached full and final settlement in four cases.

On the historic shortfall scheme, 98% of eligible claimants had been issued offers of compensation, totalling £90.2 million, as of 21 March. I recognise that in recent weeks concerns have been raised about the tax position of claimants in that scheme. It has always been the intention of the scheme to return postmasters to the position that they should have been in had they not been affected by the Horizon scandal. The Government want to see fair compensation for all victims, and my Department is working urgently to address that issue with the Post Office, the Treasury and His Majesty’s Revenue and Customs.

As we talk about financial compensation schemes, we must never lose sight of the human cost of this dreadful injustice. That is why, as the House will know, Sir Wyn Williams is chairing a statutory inquiry to establish what went wrong, and to identify those responsible for what has happened so that, where possible, we can hold them to account. I commend this statement to the House.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Secretary of State.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I thank the Minister for his statement and for advance sight of it.

I too begin by paying tribute to Alan Bates and the Justice for Subpostmasters Alliance, which has campaigned for decades for compensation, justice and the truth. In addition, I recognise the campaigning efforts of Members from across this House on behalf of their constituents, and join the Minister in paying tribute to my right hon. Friend the Member for North Durham (Mr Jones) in particular. There can be no doubt that he has played an instrumental role in helping to chart a route to justice for thousands of people. We all wholeheartedly thank him for that.

The House is in unanimous agreement that the Horizon scandal has been a shocking injustice. Indeed, I think it is no exaggeration to say that it is one of the greatest scandals of modern times. As we continue to hear in the public inquiry the accounts of lives torn apart by the scandal, we can never lose sight of how devastating its impact has been on those victims. Today’s announcement of the group litigation order compensation scheme is very welcome. I was pleased to hear about the appointment of claims facilitators and external legal advisers—in the interests of full transparency, I declare that I am a former employee of Addleshaw Goddard.

I thank the Minister and his predecessor, the hon. Member for Sutton and Cheam (Paul Scully), for their work on this matter. I am sure that the Minister will appreciate that I feel duty-bound to put on record the level of frustration that many people have felt about how protracted their fight for justice has been, particularly the 555 litigants excluded from the original historic shortfall scheme. Indeed, one of the first speeches that I made from this Dispatch Box as shadow Business Secretary was in support of calls for compensation to be expanded to them—a campaign that was established long before that exchange nearly 18 months ago. The most important step now is for that compensation to reach victims as quickly as possible, so may I press the Minister on the steps that we will all take to ensure that the process is completed as swiftly as possible?

I am also grateful for the update on the historic short- fall scheme. The Government’s ambition was for that scheme to be completed at the end of last year, but in December, the then Secretary of State said that 93% of eligible claimants had been issued offers of compensation. The Minister has given the figure of 98% today, so can he confirm that the scheme’s completion is imminent? I also was pleased that he raised the tax issue. Will he commit to coming back to the House when he can to provide more information on the work that he said he is doing?

Today’s announcement is certainly welcome, but as we all await the conclusion of the public inquiry, and its recommendations, surely this is one of many steps that we need to take to make amends for what has been the most insidious of injustices.

[Kevin Hollinrake]

I thank the hon. Gentleman for his words, and for welcoming the statement and the opening of the scheme. I absolutely concur that we should all be grateful for the work of my predecessors—not least, as he said, my hon. Friend the Member for Sutton and Cheam (Paul Scully).

The hon. Gentleman is right to say that we want to do this as quickly as possible. I am very pleased with the work of the advisory board, which is helping with the scheme. The scheme is based on a set of principles that should mean that compensation is delivered more rapidly and that there is a clear route to claims being settled quickly. We very much hope that that is the case—we want to get those payments out of the door at the earliest possible opportunity.

Again, we are working at pace on the tax issue. Clearly that is a matter of law as well as of tax policy, so getting that right is key. We have to work with the Treasury and HMRC to ensure that we get it right, but that is a determination and a commitment that I am very happy to make. We hope to make a further announcement on that work shortly.

[Mr David Davis (Haltemprice and Howden) (Con)]

At last. I remind the House that 27 people have died in the wait for justice. That said, I commend the Minister and his processor for their fabulous compassion, energy and drive in delivering what we are seeing today. However, there are people I represent among the 555 who have still not received any compensation for a variety of reasons, so can the Minister tell the House whether the scheme, under its brilliant advisory board—some of whom are in the Chamber—will cover all 555 claimants?

[Kevin Hollinrake]

I thank my right hon. Friend for his words. He is absolutely right that it has taken too long and people have died waiting for compensation. That is totally unacceptable, and the worst part of that delay was the obfuscation and denials of the Post Office when clear evidence that something was sadly amiss was brought to light by parliamentarians. Yes, it is absolutely the case that we want every single person of the 555 who merit compensation to get it so that it is fair across the board—so that, between them, the three schemes deliver fair outcomes and there is parity across them. I am determined to make sure that that happens, as is the advisory board. We will report back to Parliament regularly to ensure that Members are aware that that is the case.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson.

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I thank the Minister for his statement. Of course, I welcome what he outlined, and, as chair of the all-party parliamentary group on post offices, I am very grateful to him for keeping me updated.

We now have three streams for former postmasters and sub-postmasters who were affected by Horizon to claim compensation—that is really important. The Minister has talked about achieving parity, and I think he will agree that that must be done. I would be keen to for him come back to the House to tell us that it is happening and that the latest compensation scheme will not run out of time.

I think it worth mentioning again the hard work done by the JFSA, by journalists such as Nick Wallis, by Members of this House and by former Members who are now in the other place. They have all been of great help to the APPG. I came into the House not knowing anything about Horizon—I wish I did not know what I know now. I congratulate the Minister and his predecessor, the hon. Member for Sutton and Cheam (Paul Scully), on grabbing hold of this matter and making things happen. So many people will be grateful.

[Kevin Hollinrake]

I thank the hon. Lady for her kind words and for all the work she does as chair of the all-party parliamentary group on post offices. She is right to say that there are three separate schemes, and there was probably a good reason for that at the time. It is not ideal to have three schemes, and Sir Wyn Williams referred to that in his comments, but we are all keen to see consistency across the three schemes. That is why I welcome the work of the advisory board, which will cover all three schemes to make sure there is consistency across them. I am determined to make sure that happens, and I will keep her fully informed on progress.

[Sir Edward Leigh (Gainsborough) (Con)]

This is a terrible scandal, and Post Office Ltd is not fit for purpose. Thirty years ago, when I was a Post Office Minister, I tried to privatise this body, and it is still in a mess. Only last week, I had a meeting with sub-postmasters led by David Ward, one of my excellent local sub-postmasters, and they are calling for something good to come out of this scandal—namely, that we pass control directly to sub-postmasters, for instance through mutualisation.

We have the chief executive of Post Office Ltd paying himself a salary five times more than the Prime Minister, with a bonus of £400,000 a year on top of that. We have banking remuneration to Post Office Ltd coming to £205 million, of which only 27% went to sub-postmasters. We have 11,000 sub-postmasters in a state of managed decline, earning virtually the minimum wage. I wrote to the Minister on 14 March, so he will have received the letter by now. I do not expect him to reply immediately to my question, but will he at least have an open mind about trying to take us forward and preserve the wonderful world of our sub-postmasters, particularly in rural England?

[Kevin Hollinrake]

I thank my right hon. Friend for his points, and I also hope that some good comes out of this terrible scandal. I am a big fan of mutual organisations. I am happy to have a conversation with him. I will respond in writing, and perhaps we can meet following that.

[Madam Deputy Speaker (Dame Rosie Winterton)]

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

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

I thank the Minister for his statement and advance notice of it, and the members of the advisory board for their important work.

I want to focus on one particular sentence of the Minister’s statement, which is very important. He said that the intention of the compensation scheme is

“to return postmasters to the position that they should have been in had they not been affected by the Horizon scandal”.

He will know that that has an important meaning in law for the calculation of compensation. Some victims of this scandal feel that they have not been fully put back into the position they would have been in had they not been a victim of this scandal. Can he confirm for those victims what process they should follow to ensure that the compensation scheme delivers on its intention as stated on the Floor of the House today?

[Kevin Hollinrake]

I am grateful to the hon. Gentleman for his work as Chair of the Select Committee. There is a clear process in the GLO scheme for a claim being submitted and then settled. There is claims facilitation if a case cannot be settled, and an independent panel following that. Through those processes, there should be a mechanism to get fair compensation. If he has evidence of people who feel they are in the situation that he refers to, I would be keen to meet him to discuss those cases.

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

I thank my hon. Friend for his statement. I started campaigning on this issue only weeks after being elected to the House in 2010 when I was approached by two of the victims of this scandal, my constituents Mr and Mrs Rudkin. Thanks to the diligent work of Ron Warmington and his team of forensic accounts at Second Sight, by 2015, I and other Members of this House with an interest, the Post Office and, importantly, the Government were well aware of the overwhelming evidence produced that showed these convictions were at least unsafe and that there had been a huge miscarriage of justice. That was in 2015. Will the Minister tell the House why it has taken a further eight years to get to a position where convictions have been overturned and compensation is now beginning to be paid out to the victims? How will we hold to account those who are responsible for this prolonged injustice against the sub-postmasters?

[Kevin Hollinrake]

I thank my hon. Friend for his work; he is a long-standing campaigner on this issue. He is right to point to the work of Second Sight, which was pretty critical to our getting to this point. The work of Members across the House in drawing attention to these issues shows Parliament at its best and what it is capable of doing, and I pay tribute to all Members of this place and of the Lords who have done that.

As I said, it took too long initially for the Post Office to hold its hands up and say that things were wrong. It had to be held to account in a court, which resulted in the settlement in December 2019. I agree that we need this as quickly as possible. It is also important that we get these schemes right. We want to make sure we get the compensation right the first time, and that is why it has taken a little bit of time, but we are in a much better place now. We are keen to get these payments out by August 2024, and ideally a lot quicker than that.

[Mr Kevan Jones (North Durham) (Lab)]

I declare an interest, as a member of the GLO advisory board. Today would not have happened without Alan Bates and the Justice for Subpostmasters Alliance’s tireless campaign over many years. I pay tribute to the hon. Member for Sutton and Cheam (Paul Scully) and the Minister for the way in which they have approached this scheme. Now the test is to get money to these claimants as quickly as possible.

I thank the Minister for agreeing to the advisory board’s request to extend our remit to cover both the historical shortfall and the overturned conviction schemes, but he knows what I am going to say now. There must be equalisation of the schemes, to ensure that individuals under the historical shortfall scheme are not taxed or liable to bankruptcy clawback. He will not be surprised to know that that will be one of our first requests at the first meeting.

I thank the Minister for his work. This is a historic step forward, but there is still a lot of distrust, and the postmasters and victims will not be happy until those who were responsible for this scandal are held to account in a court of law. That obviously will come after the public inquiry, but their day of reckoning needs to come.

[Kevin Hollinrake]

I am grateful to the right hon. Gentleman for his work, including on the advisory board, which is much appreciated. He is right to reference Alan Bates, as I did. I spoke to Alan this morning, and he is pleased with the steps we have taken, as I think the right hon. Gentleman is, but the proof of the pudding is in the tasting. We need to make sure these schemes work properly. When he and Lord Arbuthnot asked to expand the board’s remit to the other two schemes, I was pleased to support that wish. He is right to point to tax and bankruptcy. We need to make sure these people are treated fairly across all three schemes. We will leave no stone unturned—and I know he will not either—in making sure that happens.

[Duncan Baker (North Norfolk) (Con)]

I thank the Minister, who has followed in his predecessor’s footsteps in following this up. It is right that wrongly convicted postmasters get the justice and the compensation they deserve. I echo the wise words of my right hon. Friend the Member for Gainsborough (Sir Edward Leigh). As a former postmaster, I ask the Minister to turn his attention to a decent investment in the branch network and a decent remuneration and commission package for postmasters, who, operating a stand-alone post office, cannot make it work at the moment because the package is not good enough. Slightly cheekily, may I also ask the Minister to wish my constituents Jigen and Nisha Patel all the best for tomorrow, when I will formally open the new post office in Sheringham on the north Norfolk coast?

[Kevin Hollinrake]

My hon. Friend speaks as one of the few experienced sub-postmasters who have taken a seat in this place, and I appreciate his work in this area. We are looking at the future sustainability of the Post Office, and that will require investment. It is important that we get to a position where there is a bright future for the network and for the sub-postmasters who work in it and they have sustainable businesses. I am keen to liaise with him as we move towards that position. Of course, I congratulate the Patels on their new post office and hope the launch goes well.

[Jeff Smith (Manchester, Withington) (Lab)]

Two of my constituents who were innocent victims of this scandal recently contacted me to raise their concerns about the appropriateness of Herbert Smith Freehills as what they describe as aggressive litigators of compensation claims on behalf of the Post Office, as well as concerns about the level of Government and independent oversight of the process operated by the Post Office with public money. Could the Government look into this situation again and report back to the House?

[Kevin Hollinrake]

If the hon. Gentleman writes to me, I will be happy to look into the situation. The solicitors involved in this are Dentons and Addleshaw Goddard. We believe they are the right people to help us make sure these claims are fair and to facilitate negotiations between the two parties, but I am keen to talk to him about any issue he wants to raise with me.

[Clive Efford (Eltham) (Lab)]

My constituent served a prison sentence as a result of a prosecution by the Post Office. His conviction was subsequently overturned on the recommendation of the Criminal Cases Review Commission, but because he pleaded guilty on the advice of the National Federation of SubPostmasters, the Post Office is saying that his case is not a malicious prosecution, and therefore he is not included in the scheme and is not to be compensated. It is only offering him what it would cost the Post Office to defend his case if he were to take it to court. Can the Minister say whether my constituent will be included in the schemes he has outlined today?

[Kevin Hollinrake]

I am very sorry to hear what has happened to the hon. Gentleman’s constituent; that must have been a devastating situation for him. I do not think it would be appropriate for me to talk about individual cases on the Floor of the House today—I do not think that Madam Deputy Speaker would want me to do so—but I am very happy to liaise with the hon. Gentleman. If he writes to me, we can take that up on his behalf.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

I thank the Minister for his statement and for the work of his predecessor, the hon. Member for Sutton and Cheam (Paul Scully). The emotional toll that this tragedy has had on the Horizon victims and their families is devastating, particularly those who passed away before they were exonerated, one of whom was a constituent of mine. New evidence has revealed that the Post Office-Horizon help desk was a toxic and resentful environment where racism was reportedly a daily occurrence. What investigation have Ministers made of that workplace culture and how it may have hindered the system error from coming to light sooner?

[Kevin Hollinrake]

The hon. Lady is absolutely right to point out the emotional distress that many people felt, and the fact that some people have passed away while this process has been ongoing, a point also made by my right hon. Friend the Member for Haltemprice and Howden (Mr Davis). To be clear, any compensation can, of course, be paid to family members in that situation—a situation that, clearly, is entirely unacceptable. The Sir Wyn Williams inquiry will look at all the different factors at play in terms of why this happened, what could have been done, what should have been done, and who is responsible. I am absolutely determined to make sure that we learn the lessons from it, but not just that: if people can be held to account for what they have done, they should be, and I will do everything I can to make sure that they are.

[Madam Deputy Speaker]

I thank the Minister for his statement.

Royal Assent

Whistleblowing Awareness Week

Kevin Hollinrake Excerpts

Thursday 23rd March 2023 Westminster Hall

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

It is a pleasure to serve with you in the Chair, Ms McDonagh. I thank my hon. Friend the Member for Cheadle (Mary Robinson) for all the work that she does on the all-party group. As she rightly points out, I was formerly the co-chair with her on that group. We can sometimes move from a Back-Bench position where we speak about an issue that we feel strongly about, and then we can be put in a ministerial position that covers that brief, but I can reassure Members that I am as ambitious as ever to make sure we get the right reforms for whistleblowing.

My hon. Friend had a reception, which I was pleased to attend. She has had a number of events this week, and I pay tribute to her for her work in drawing attention to the importance of whistleblowers for our society. Whistleblowers are clearly the eyes and ears of our organisations, in terms of potential wrongdoing. As my hon. Friend knows, I have had a number of experiences with constituents. Ian Foxley blew the whistle on GPT Special Project Management, and did an incredible job. Paul Moore blew the whistle at HBOS prior to its financial distress and collapse. Sally Masterton was the whistleblower of the HBOS Reading scandal, which took five years to reach court, where she was vindicated for her statements.

The hon. Member for Feltham and Heston (Seema Malhotra) referenced Danske Bank, and the £234 billion of money laundering. She is right to talk about some of the UK corporate vehicles used for that. We are working together on the Economic Crime and Corporate Transparency Bill to tighten up the opportunities people have to use those vehicles. One of the biggest scandals in that case was Danske Bank allowing that to happen on its watch. Howard Wilkinson was the whistleblower; the £234 billion of Russian money washing through Danske Bank in Estonia resulted in a $2 billion fine from the US authorities.

According to the statistics, 43% of economic crimes are highlighted by whistleblowers, but in my experience, and as my hon. Friend the Member for Cheadle stated, it is much higher than that. Every case of economic crime I have dealt with has come from a whistleblower, and I pay tribute to them. It is not just financial crime; my hon. Friend the Member for Bury North (James Daly) highlighted issues with the Met police, which might have been brought to light much sooner if people had felt more confident about the whistleblowing framework. My hon. Friend the Member for Erewash (Maggie Throup) talked about Winterbourne View; that also might have come to light much sooner, with people being brought to justice much sooner, if people had more confidence.

It is right that we seek to more effectively protect and compensate whistleblowers for doing the right thing. It is excellent that we have so many top-quality parliamentarians in this debate who will throw their weight behind the campaign for change. I am keen to do so too.

Our whistleblowing framework was introduced through the Public Interest Disclosure Act 1998. It was intended to build openness and trust in workplaces by ensuring that workers can hold their employers to account, and are then treated fairly. It provides a route for workers to make disclosures of wrongdoing, including criminal offences, the endangerment of health and safety, causing damage to the environment, a miscarriage of justice, or a breach of any legal obligation. Disclosures usually need to be made to the employer, a lawyer or a prescribed person. Workers who believe they have been dismissed or otherwise detrimentally treated for making a protected disclosure can make a claim to an employment tribunal, which can award unlimited compensation.

Workers are often the first people to witness any type of wrongdoing within an organisation. Information that workers may uncover could prevent wrongdoing that may damage an organisation’s reputation or performance, and, in extreme circumstances, even save people from harm or death. In relation to whistleblowing protections, the standard employment law definition of a worker has been extended, and includes a wide range of employment relationships, such as agency workers; individuals under -taking work experience; self-employed doctors, dentists and pharmacists in the NHS; job applicants in the health sector; police officers; and student nurses and student midwives.

I fully understand that there are people who are not protected by the current legislation. Indeed, Ian Foxley was not covered by the legislation, and suffered hundreds of thousands of pounds of detriment for blowing the whistle. He spent 11 years without any employment, and he was a well-paid contractor prior to that time.

[James Daly]

What does the Minister mean by protected?

[Kevin Hollinrake]

Protected from detriment. In Ian Foxley’s case, he feared for his life. It could be detriment in terms of loss of employment. There are a number of different detriments. Both protection and compensation should be fairly made.

[James Daly]

As my hon. Friend the Member for Cheadle (Mary Robinson) said, there is a 4% success rate at employment tribunal. Those protections do not seem to be translating into ones that are enforceable in an employment tribunal, which is the problem.

[Kevin Hollinrake]

I will come on to what we are trying to do to make the legislation more effective. Do I think the legislation is where it needs to be today? No, I do not. That is the case for the changes we need to make. We need to look at all the different evidential points to ensure we move to the right place. Ian Foxley was a contractor, which is why he did not have the opportunity to get compensation in his case.

The SNP spokesman, the hon. Member for West Dunbartonshire (Martin Docherty-Hughes) made a good point about volunteers. They may also be the eyes and ears we need. He made the alarming point that people who blow the whistle could lose everything, which all of us should take into account. People who clearly do not feel they will be properly protected or properly compensated should feel more assured that they will.

My right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) pointed to the fact that the legislation was implemented 25 years ago by one of her predecessors. To give some reassurance, since the introduction of that legislation, the Government have continued to strengthen some of its provisions using non-legislative and legislative measures. We have produced guidance for whistleblowers and prescribed persons, as well as guidance and a code of practice for employers. We have produced guidance on how whistleblowers can make disclosures.

In 2017, we introduced a new requirement for most prescribed persons to produce an annual report on whistleblowing disclosures made to them. That duty is a direct response to concerns about the lack of transparency surrounding how disclosures were being handled. Most prescribed persons are now required to report on the number of disclosures, state whether they decided to take further action and give a summary of any action taken. We have also expanded the list of prescribed persons—the individuals and bodies to whom a worker can blow the whistle. In December 2022, I took forward some legislation to add six new bodies and all Members of the Scottish Parliament to the prescribed persons order. We continue to welcome proposals for appropriate additions to that order.

[Wendy Morton]

I appreciate that there have been updates to the original 1998 Act, and I recognise that work needs to continue. I want to push the Minister on the review. Will he give us any timescale or any indication of when we will see the Government undertake further work in the light of some of the thoughts, ideas and recommendations from the APPG?

[Kevin Hollinrake]

I was just coming on to that. As a former Chief Whip, my right hon. Friend will be familiar with a word we often hear in this place: soon. I will say very, very soon. It is fair to say that we talking about days, not months. We are closer to days than months; that is where I would say we are.

Many have spoken passionately today, and on previous occasions, about the experiences of whistleblowers, and raised concerns about the whistleblowing framework. As I said, the Government have committed to reviewing the framework. It is clearly a major priority of mine, and it has been since I joined the Department. My right hon. Friend the Member for Aldridge-Brownhills made the important point that while we must ensure we protect the right people, we do not want to allow for vexatious whistleblowers because that could have a detrimental impact on businesses and other organisations. It is important that we protect those who should be protected.

Indeed, as my hon. Friend the Member for Bury North said, we must protect the people who would have blown the whistle had they had confidence in the framework. That is one of the big problems here. People are not coming forward because of their concerns and because of what has happened to other whistleblowers. That includes, as my hon. Friend the Member for Cheadle mentioned, Jonathan Taylor, who blew the whistle in the oil scandal and was pretty much under house arrest for a year in Croatia. That was disgraceful treatment.

As I said, making progress on the review has been a priority of mine from day one. There will be an announcement on that very, very soon. That is what we are expecting. We are keen to engage with parliamentarians from across the House, both here and in the other place. Once that review is announced, I am keen to engage particularly with my hon. Friend the Member for Cheadle so she can make her points about the right way forward in terms of the provisions we need to make and future changes to legislation.

My hon. Friend talked about the policyholder for this particular brief and whether it should be the Department for Business and Trade or the Cabinet Office, as my right hon. Friend the Member for Aldridge-Brownhills suggested. I am very keen to keep it under my auspices, because, as Members have said in the debate today, I have a long-standing interest in this particular area. I am very keen and ambitious for it, so I am keen to keep hold of it. However, it is right to point out that it is the legislation around whistleblowing and employment that is held with me. Of course, the particular issues around Departments—the whistleblowing requirements—are held by each individual Department. For example, as my hon. Friend the Member for Erewash will confirm, whistleblowing in the NHS is very much a matter for the Department for Health and Social Care. That is the right situation regarding this particular policy.

[Wendy Morton]

From my experience as a Minister, I know how whistleblowing policy does cut into other Departments. I understand the Minister’s passion and willingness to drive this policy forward, but looking to the future, in whatever work he is doing can he really ensure that it embraces all of Government? That is why I was pointing towards the Cabinet Office.

[Kevin Hollinrake]

I quite understand my right hon. Friend’s point and why she made it. My view, both as a Back Bencher and as a Minister, is that we need to work more on a cross-Government basis than perhaps we do now to make sure that these kinds of measure are properly implemented across Government.

A number of Members, including the spokesman for the Scottish National party, the hon. Member for West Dunbartonshire, talked about NDAs. As he will know, being a member of the legal fraternity—

[Martin Docherty-Hughes]

indicated dissent.

[Kevin Hollinrake]

No? I thought the hon. Gentleman was.

In law, NDAs cannot be used to prevent a worker from blowing the whistle, so there are some protections in law in that respect. I believe the shadow Minister, the hon. Member for Feltham and Heston, also brought out that point.

[Mary Robinson]

On NDAs being used to prevent a worker from blowing the whistle, the Minister is quite right to make that point, but of course another point to consider is when a person blows the whistle, an employment dispute might arise that could be the subject of a case that goes to law, or lead to that person being dismissed from their job. At that point, the person might accept an NDA, so the harm that was being reported and brought to light in the first place is thereby effectively covered up.

[Kevin Hollinrake]

That brings me to my next point. My hon. Friend makes a very good point, but the employment tribunal is there to settle compensation. It is the regulators in the various sectors that are there to look at the problem, the detriment, and to consider the whistleblowing concerns and act on them. That cannot be restricted by an NDA in that kind of compensation settlement, I think.

What I regard as the key point in my hon. Friend’s contribution today is the proposal for an office of the whistleblower. I quite understand that the intent is to provide one central place for whistleblowing and to make sure that we have best practice across the piece. Such an office would provide consistency in standards for regulatory investigations triggered by whistleblowing information. I am also interested in the issues that dealing with whistleblowing disclosures might raise for the prescribed persons, and vice versa.

I know there are concerns, not just in Government but in wider circles, about how such an office would interact with the role of regulators, who are experts, of course. It is important that we look at the arguments for and against the proposed office, and I am keen to look at international examples. My hon. Friend referred to the USA. The numbers of disclosures there are interesting. According to my figures, there were 50,000 protected disclosures in the UK in 2020-21. I think my hon. Friend said that 20,000 were dealt with by the Office of the Whistleblower in the US, which is obviously a much bigger country in terms of population and potential whistleblowing. I am interested in the gap.

One point to make is that a UK office of the whistleblower would of course need extensive resources to be able to handle or to oversee 50,000 protected disclosures, and significant expertise to ensure that it fully understood the nature of the problem and was able to work alongside the regulators, which I think is what my hon. Friend envisages, rather than replace the regulators in terms of their functions. Clearly, regulators themselves, be it the FCA or the regulators in the NHS, would have a responsibility to ensure that the issues were addressed properly and whistleblowing guidelines and processes were followed. It is a question of understanding the interaction between the two and what resources would be needed to fully and properly fund an office of the whistleblower.

All these matters need to be taken into account in deciding how to proceed. The review, as I have said, is something that we want to bring forward very quickly, and we want hon. Members on both sides of the House to be able to input into it.

[Martin Docherty-Hughes]

Will the Minister assure hon. Members that in the review he will take cognisance of the question about what an employee delivering a service is? The millions of volunteers across these islands need reassurance. They need to be protected and given the ability to be a whistleblower within the system.

[Kevin Hollinrake]

The hon. Gentleman makes a very fair point, which I think was referred to earlier. Some of the whistleblowers I have dealt with were outside the current legislation because of their employment status, so I think that it is a very fair point and it is one that we are very keen to explore through the review.

I thank my hon. Friend the Member for Cheadle again for initiating this very important debate. We are in complete agreement: there should be no doubt that to blow the whistle is an act of real value to both business and society at large. Government, including my Department, will continue to examine and make reforms to the whistleblowing regime, and we will be setting out details of the review of the whistleblowing framework very soon.

Post Office: Horizon Compensation

Kevin Hollinrake Excerpts

Thursday 23rd March 2023 Written Statements

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

The Post Office Horizon scandal, which began over 20 years ago, has had a devastating impact on the lives of many postmasters. Starting in the late 1990s, the Post Office began installing Horizon accounting software, but faults in the software led to shortfalls in branches’ accounts. The Post Office demanded sub-postmasters cover the shortfalls, and in many cases wrongfully prosecuted them for false accounting or theft.

The High Court group litigation order case against the Post Office brought by 555 postmasters exposed the scandal. The House will know that Sir Wyn Williams is now chairing a statutory inquiry to establish what went wrong and identify those who were responsible for what has happened.

The settlement of the High Court case ensured that postmasters who had not been party to it would receive proper compensation through what is now the historical shortfall scheme. However, group litigation order postmasters had much of their compensation taken up by the associated costs of funding their case and they were ineligible to access further compensation through the historical shortfall scheme. This meant that they received less than those in similar circumstances who were not party to the case. Government have agreed to run an additional compensation scheme to put this right and to allow group litigation order postmasters to access similar compensation as that available to their historical shortfall scheme peers in similar circumstances.

On 7 December the then Secretary of State announced the outline of the scheme. Since then, a great deal of work has been done to finalise the details, drawing on helpful input from the Justice for Subpostmasters Alliance and claimants’ legal representatives as well as utilising lessons learned from the historical shortfall scheme and compensation for those with Overturned Historical Convictions. On 10 February the Government published a tariff (agreed with claimants’ lawyers) for reasonable legal fees and a registration form.

In December we announced an independent advisory board on the scheme chaired by Professor Christopher Hodges and includes Lord Arbuthnot, Professor Richard Moorhead and the right hon. Member for North Durham (Mr Jones), all of whom have long been distinguished campaigners for postmasters. I am pleased to report that the advisory board has met three times, and reports of its meetings are on gov.uk.

We also said that we would follow an alternative dispute resolution model delivered by the Government. I can report today that we have appointed Dentons as our independent claims facilitators. Its role will be to promote fair and prompt resolutions of each case. We have also appointed Addleshaw Goddard to act as my Department’s external legal advisers on the scheme. They will take a collaborative approach, ensuring that there is no place for aggressive litigation in resolving claims.

I am delighted to tell the House that the scheme is open to receive claims from today. Details of how to submit claims can be found on gov.uk. Our legal powers to pay compensation run out in August 2024, but we certainly hope to make payments much faster than that. As the then Secretary of State told the House in December, we hope that most cases can be resolved before the end of 2023. I am placing documentation on the scheme in the Library of the House.

I am further pleased to report that the statutory instrument exempting group litigation order compensation from income tax, national insurance contributions and capital gains tax was laid before the Commons on 23 February and came into force on 16 March.

Historical Shortfall Scheme

I am also pleased to provide an update on Post Office’s progress in delivering compensation to those in the historical shortfall scheme. I am pleased to see the progress that Post Office has made in delivering compensation to post- masters. As of 21 March, 98% of eligible claimants have been issued offers of compensation, totalling £90.2m. Post Office is working to issue offers to remaining claimants as soon as possible.

Post Office has also received 231 late claims to date, with 15 offers issued so far.

I also recognise the concerns that have been raised in recent weeks around the tax position of claimants in the historical shortfall scheme. It has always been the intention of the scheme to return postmasters to the position they should have been in had they not been affected by the Horizon issues. The Government want to see fair compensation for all victims and my Department is working urgently to address this issue with the Post Office, HM Treasury and HMRC.

Overturned Historical Convictions

I am also pleased to provide an update on Post Office’s progress in delivering compensation to those with overturned historical convictions.

As of 20 March, Post Office had paid out over £17.6m in compensation. 79 of the 84 postmasters with overturned historical convictions had received interim payments, totalling over £10.2m. Post Office has reached full and final settlement with 4 postmasters. In order to deliver compensation as quickly as possible, Post Office is handling non-pecuniary and pecuniary claims separately.

A further 63 non-pecuniary claims had been received, of which all but three had received offers. 49 of these had been paid and settled, with one more claim paid, subject to settlement paperwork, which will bring the total to 50, once received.

In addition to the four full and final settlements, Post Office had made pecuniary settlement offers to four of the nine postmasters who had submitted a pecuniary claim.

[HCWS664]

Business and Trade

Kevin Hollinrake Excerpts

Tuesday 21st March 2023 Ministerial Corrections

The following is an extract from the opening speech by the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake), in the debate on the draft National Minimum Wage (Amendment) Regulations 2023 in the Second Delegated Legislation Committee on Monday 6 March 2023.

[Kevin Hollinrake]

The Government have continued to take action to fulfil their manifesto commitment to enhance the rights of workers and support people to stay in work. We are backing six private Members’ Bills in this Session to deliver on our commitments. Once passed, those measures will ensure that all tips, gratuities and service charges are allocated to workers; create a statutory entitlement to neonatal care leave for workers with caring responsibilities; protect workers from redundancy during or after maternity; and grant workers the right to request flexible working from day one.

[Official Report, Second Delegated Legislation Committee, 6 March 2023, Vol. 729, c. 4.]

Letter of correction from the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake).

An error has been identified in my speech.

The correct information should have been:

[Kevin Hollinrake]

The Government have continued to take action to fulfil their manifesto commitment to enhance the rights of workers and support people to stay in work. We are backing six private Members’ Bills in this Session to deliver on our commitments. Once passed, those measures will ensure that all tips, gratuities and service charges are allocated to workers; create a statutory entitlement to leave and pay for employees with responsibility for children receiving neonatal care; protect workers from redundancy during or after maternity, adoption and shared parental leave; and grant workers the right to request flexible working from day one.

The following is an extract from the winding-up speech by the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake), in the debate on the draft National Minimum Wage (Amendment) Regulations 2023 in the Second Delegated Legislation Committee on Monday 6 March 2023.

[Kevin Hollinrake]

Only 3% of the population is on a zero-hours contract. Sixty-four per cent. of those people do not want more hours, so the contracts kind of work for both sides, but we recognise that there is an issue with exploitation in some situations and we are trying to create the conditions for a conversation between employers and employees while not putting too great a burden on employers. That is why we are legislating for a right to request predictable hours.

[Official Report, Second Delegated Legislation Committee, 6 March 2023, Vol. 729, c. 13.]

Letter of correction from the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake).

An error has been identified in my speech.

The correct information should have been:

[Kevin Hollinrake]

Only 3% of the population is on a zero-hours contract. Sixty-four per cent. of those people do not want more hours, so the contracts kind of work for both sides, but we recognise that there is an issue with exploitation in some situations and we are trying to create the conditions for a conversation between employers and employees while not putting too great a burden on employers. That is why we are legislating for a right to request a predictable working pattern.

Oral Answers to Questions

Kevin Hollinrake Excerpts

Wednesday 8th March 2023 Commons Chamber

[Edward Timpson (Eddisbury) (Con)]

7. If she will make an assessment of the potential impact on educational opportunities of the entrepreneur support programme set out in “Inclusive Britain: government response to the Commission on Race and Ethnic Disparities”, published in March 2022.

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

The Department for Business and Trade is keen to support entrepreneurs from all communities, as evidenced by a disproportionately high proportion of start-up loans accessed by ethnic minority-led businesses. The Government have supported actions aimed at improving opportunities for ethnic minority entrepreneurs, as set out in the “Inclusive Britain” report, and we will be reporting back to Parliament shortly.

[Edward Timpson]

Decision making, leadership, commitment, confidence, resilience, teamwork and self-esteem are all skills and attributes essential to entrepreneurialism. It is also the case that these can be fostered by high-quality physical education in schools, which is why today’s announcement of £600 million over two years to support primary school PE and sport is so welcome. Sport England reported in December:

“Children and young people with Black, Asian and Other ethnicities are the least likely to be active.”

So will my hon. Friend use his good offices to upgrade from Government aspiration to Government policy the Association for Physical Education’s recommendation to make PE a core subject in schools to help tackle this unacceptable disparity?

[Kevin Hollinrake]

Hear, hear. As someone who benefited from playing football, rugby and cricket at my state school, I am delighted at the announcement that my hon. and learned Friend refers to. My right hon. Friend the Secretary of State for Education has today announced a package of activity to boost equal opportunities in school sport, both inside and outside the classroom.

[Ian Levy (Blyth Valley) (Con)]

8. What recent steps she has taken with Cabinet colleagues to help end violence against women and girls.

Workers (Predictable Terms and Conditions) Bill

Kevin Hollinrake Excerpts

Committee stage
Wednesday 8th March 2023 Public Bill Committees

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

It is a pleasure to serve under your chairmanship, Sir Robert. I was interested in serving on this Committee because the Bill sits in employment law, which is a reserved policy area. As we know, the territorial extent will include Scotland when the Bill secures Royal Assent.

We have heard about difficulties with zero-hours contracts for years. It is fundamentally unfair that those on zero-hours contracts are expected by employers to be completely flexible and available at short notice, with no guarantee of shift patterns or even paid work at all. Although the Bill does not give workers the right to a fixed and predictable working pattern, it sets out clear grounds on which an employer can decline, limiting spurious refusals. That is a positive step.

If the Bill is enacted, it will have some very positive impacts, such as reopening the door to employment for those currently out of work. We have heard a lot in recent weeks about the impact of a lack of suitable childcare on women and single parents, and their ability to participate fully in the labour market, which costs the economy £38 billion a year by some estimates. I can only imagine how much more difficult finding childcare becomes for someone on a zero-hours contract, or someone working in the gig economy who may need it at incredibly short notice. I thank the hon. Member for Blackpool South for introducing a Bill that will begin to make the necessary changes and I congratulate him on seeing it through its legislative stages so far.

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

It is a pleasure to serve under your chairmanship, Sir Robert. I start by thanking my hon. Friend the Member for Blackpool South for bringing this Bill before the House and for his clear explanation of its clauses. I am delighted to be here today to reiterate that the Government fully support the Bill, which will introduce an important new employment right and tackle the issue of one-sided flexibility.