Brexit: Aerospace and Automotive Industries

Lord Foster of Bath Excerpts

Tuesday 14th March 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, clearly, trading with the countries of the European Union is extremely important. What we are discussing are the terms of that trade. The Prime Minister has made it very clear that she hopes to negotiate a deal that means trade that is as free and frictionless as possible. On that basis, there is a very good outlook for both industries.

[Lord Foster of Bath (LD)]

My Lords, the Vehicle Certification Agency is our national approval authority for new road vehicles and it is involved with EU policy formulation. Its approval certificates are recognised without question throughout the EU, bringing enormous access benefits to our vehicle manufacturers. What future do the Government see for the VCA’s activities post Brexit and what do the car manufacturers think about that?

Reporting on Payment Practices and Performance Regulations 2017

Lord Foster of Bath Excerpts

Thursday 9th March 2017 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)]

My Lords, the purpose of these regulations is to implement a requirement on large businesses to report on their practices and performance in paying suppliers. The first instrument on payment practices applies the requirement to large companies, while the second applies the requirement to large limited liability partnerships.

Late payment can be a significant issue for businesses, especially smaller suppliers. It is estimated that small and medium-sized businesses are owed £26 billion in late payments. This Government have several measures in place to tackle late payment. As well as the reporting requirement, which I will talk about in more detail, the Government are also currently recruiting the small business commissioner, which noble Lords discussed in this House in the last Session.

Alongside other measures, there is also the Government’s support for the Prompt Payment Code, which is an industry-led code of conduct. The code sets standards for payment practice, and the Government are committed to signing up strategic suppliers to the code. Small and medium-sized businesses often lack information about the larger businesses they supply. They have no choice but to take it on faith that they will be paid in line with the agreed terms and conditions. There are sometimes calls in the House for more prescriptive measures to support suppliers. However, in response to the 2013 discussion paper on options for tackling late payment, businesses said that they did not want to see government constraining their freedom of contract. Instead, the reporting requirement focuses on transparency.

We are not therefore banning business practices, or unduly interfering in customer- supplier relationships, but we want suppliers to have the information they need to make good business decisions, and to encourage a culture change in payment practices. When we consider new obligations such as these, we have to be careful to balance the burden on large business with the benefit to small business. That is why we have taken longer to implement this requirement than we estimated at the time of the debates on the Small Business, Enterprise and Employment Act 2015. This is the legislation enabling us to make the regulations before us today. We have taken time to ensure the requirement works in practice for large businesses, so that we can be confident that the resulting data will be robust and helpful for small businesses.

In our recently published impact assessment, we estimated the annual net cost to business at £17.7 million. That sounds like a large number—indeed, it is—but it has to be considered against the potential benefits to businesses that a reduction in late payment could bring. Even a small reduction in late payment could have a significant impact, especially for small suppliers, and especially for those for whom cash flow is of the essence. We have continued to engage with stakeholders following the public consultation on the policy. My officials have had an ongoing dialogue with stakeholders across different sectors on a wide variety of topics related to the reporting requirement. They have been listening to businesses, representative bodies and other stakeholders to make sure we get the balance right between the burden on large business and the benefits to small businesses. This has also included independent research commissioned to provide additional evidence for the impact assessment and user research to inform the development of the web service.

I now turn to the detail of the regulations. They implement an obligation on large businesses to publish information about a number of metrics relating to their payment practices. Businesses will need to report on these metrics for their first financial year, starting once the regulations come into force on 6 April 2017. Each reporting business will need to publish information twice each financial year. To ensure the information is up to date and relevant, it must be published within 30 days of the end of the reporting period. The metrics include three types of information. They require businesses to publish statistics about their payment performance, including the average time taken to pay and the percentage of invoices paid in 30 days or fewer, between 31 and 60 days, and later than 60 days. They require businesses to give narrative statements about the business’s standard payment terms and dispute resolution processes. They also require businesses to state whether the business’s payment practices and policies provide for supply-chain finance, e-invoicing and deductions for being on a supplier’s list.

These metrics were the subject of the 2014-15 consultation. We received diverse feedback about certain points and have sought to find a balance between the needs of small and large business. Specifically, we cannot require businesses to report on all pay-to-stay practices. The House was notified of this in a Written Ministerial Statement in December 2016. The metrics of interest owed and paid are not included in these regulations, but we will learn from the public sector’s introduction of a similar metric of interest owed from later this month.

The regulations require businesses to report on any deductions from payments to suppliers as a charge to remain on a supplier’s list. A broader metric to cover more types of pay-to-stay practices will be kept under review. Businesses will be required to publish their reports on a government web service and, as soon as the business publishes it, the information will be available to suppliers. The web service is being developed with input from users of the service and will be available from April 2017. To ensure that it is accurate, the information published must be approved by a named director. This will help late payment become a reputational issue. The public nature of the reporting will motivate businesses to comply. However, it is a criminal offence if a business fails to publish a report, or publishes false or misleading information.

On conviction, the business, directors or, in the case of false statement, the individual will be liable for a fine. The reporting requirement will increase transparency, making it easier for suppliers to find information about large businesses’ payment practices and performance. The improved transparency will help suppliers make better-informed business decisions and encourage large purchasers to make prompt payment. The public nature of the data will highlight good payment practice, while also shining a light on poor practice that is potentially damaging and unfair to suppliers. This measure is an important step towards a change in business culture to one where late payment is considered a reputational issue and prompt payment is valued by all sizes of business. I commend these regulations to the Committee.

[Lord Foster of Bath (LD)]

My Lords, I begin by saying how welcome these proposals are, as developed from the Small Business, Enterprise and Employment Act 2015. The duty to report, as the Minister said, is one in a package of measures that begins to address a problem that has existed for far too long around late payment to small businesses. As the Minister said, we have 5.5 million small businesses in this country and it is estimated that, between them, they are owed over £26 billion. The impact this has on them is incalculable. It has been estimated by a number of people that implementation of these measures—and further measures, which I will touch on in a second—could prevent the death of about 50,000 businesses per year.

The other measures that I welcome include the Prompt Payment Code, to which we have already heard reference, and there are further measures that I hope will be adopted, which are referred to within the corporate governance Green Paper. Reference is made, for example, to one board member having responsibility for representing the views of small businesses within the supply chain. I welcome, too, the increased transparency about payment in other regards, as also referred to in that Green Paper, but that is probably not directly relevant to today’s debate.

Having said that I support these proposals, I will confine my remarks to asking a few short questions. First, in reference to the duty to report, it remains unclear who is responsible for verifying the statistics contained in the report. The Minister has said—and it is clearly explained in the Explanatory Memorandum—that the figures must be approved by a named director of the company. However, as I suspect the Minister might accept, that looks rather like the company is marking its own homework. Will the Minister explain what opportunities there would be for people concerned about the statistics to draw attention to that, and to whom would they do so? Given that failure to report is a criminal offence, it is not at all clear whether failure to report accurately would be deemed a criminal offence and what the penalties would be. Again, I would be grateful for clarification on that matter.

--- Later in debate ---

[Lord Prior of Brampton]

I thank both noble Lords for their broad support for the general thrust of this statutory instrument.

Potentially misleading or inaccurate information is a criminal offence punishable with a fine. Who is responsible for verifying the data? Our view is that the public nature of the data will ensure their accuracy. Businesses can raise their concerns directly with BEIS or the Small Business Commissioner. The whole thrust of this instrument is culture change. It is the reputational damage that firms will suffer, rather than the prospect of a criminal conviction, that will have the biggest impact on changing behaviour.

In terms of the scope and the companies caught by this, the definition of a large business for the purpose of having to make the disclosures is two of the following three: an annual turnover of £36 million; a balance sheet total of £18 million—I assume that that means net assets; and 250 employees. The noble Lord asked about a subsidiary of an overseas company—it could be a subsidiary of a domestic company, for that matter. As I understand it, this applies to companies or LLPs that are incorporated in this country. So I do not think that a small company over here that is a subsidiary in the US is captured by the instrument, but I will double-check that.

The noble Lord said that payment terms in the US were more typically 120 days rather than net monthly or 30 days but I am not sure that that is necessarily right. Also, we should be clear that in some big contracting industries, where there is delayed payment and that is negotiated upfront by suppliers, that is entirely legitimate. In their disclosures, big companies are perfectly entitled to say in their narrative that in their industry, a different payment schedule is typical. Where you have a long-term contract, which requires a different kind of financing, again, that can be disclosed and explained, and it will be perfectly legitimate. We are not saying that a longer period is necessarily worse than a short one; it very much depends on the industry. What is important is the transparency and a narrative around it.

Both noble Lords spoke about the appointment of the Small Business Commissioner. I understand that we will be appointing that individual during 2017. We launched the recruitment campaign on 12 February, with the intention of appointing later on in the year.

[Lord Foster of Bath]

Since it has been made public that the commissioner will start work in October this year, I hope that it will be some time in the course of this year, or there will be a difficulty.

[Lord Prior of Brampton]

I just wanted to reassure the noble Lord that the process has started. As it started in February, that appointment will follow in due course.

I thank noble Lords for their contribution to the debate. The importance of transparency is clear. One economic reason that makes this statutory instrument so important is that for many small, particularly growing, companies, cash flow, rather than profit, is critical. Delayed payment terms can seriously undermine the ability of small companies to grow. I think that all parties in the Committee are apprised of that.

Opel-Vauxhall: Sale to PSA Group

Lord Foster of Bath Excerpts

Monday 6th March 2017 Lords Chamber

[Lord Prior of Brampton]

I thank the noble Lord for those questions. To pick them up in turn, Carlos Tavares, the chief executive of PSA, has given assurances that he is keen to see this business develop and grow. He made the point that since becoming chief executive of PSA, he has not closed a single plant.

Regarding future models, post the Astra at Ellesmere Port, clearly, we will have to compete with other factories within the PSA group, as would have been the case had it remained part of General Motors. We are all very confident that we have the competitiveness and effective abilities, and the quality and brand at Ellesmere Port and Luton, to compete on a fair basis with any plant in Europe. PSA is absolutely committed to the Astra brand. There will be no need for a new model post 2020-21 for Ellesmere Port, and the Navara will continue to be produced at the Luton factory for longer still.

The noble Lord is absolutely right about the supply chain: it was an issue with Nissan as well as PSA. Carlos Tavares made the point that there are opportunities and risks on leaving the European Union. One of the opportunities will be to make the new models in the UK more of a sterling player, as the noble Lord put it. That means having a higher proportion of sterling-sourced components going into the Astra or indeed into any new model. We are committed to working with the automotive sector to try to boost the supply chain in the UK to ensure that more sterling-based components go into these cars.

[Lord Foster of Bath (LD)]

My Lords, Vauxhall is our longest surviving car maker and has some of the most efficient plants in Europe. Like others, we commend the workforce for having achieved that.

I want to pursue one issue with the Minister. He will be aware that some 75% of the Astra’s components come from continental Europe, and that the supply chain stretches right across the free market and the customs union. Components travel across borders without any difficulty whatever. However, surely the imposition of a hard Brexit, which the Government are pursuing, could lead to tariffs, quotas and the end of the free movement of components across borders. That would place our plants at a real disadvantage.

In a climate in which we know that Nissan is now unsure about its long-term commitment to the UK, BMW is thinking of making the quintessentially British Mini in Germany, and we can get no long-term guarantees from the new owners of Vauxhall, should not the Government acknowledge that the unnecessary pursuit of a hard Brexit is putting the revival of our British car industry in jeopardy?

[Lord Prior of Brampton]

It is worth making the point that this transaction between General Motors and PSA is as a result not of Brexit but of a longer-term strategy on the part of GM, and, of course, GM is becoming a shareholder in PSA. This is not a Brexit-related issue. The noble Lord is laughing but this transaction has not come about because of Brexit.

The noble Lord says that the Government are pursuing a hard Brexit. We must get the terminology right. The Government are not pursuing a hard Brexit. The Prime Minister has made it absolutely clear that we are trying to negotiate a free trade agreement with the European Union that is as friction free as possible. That is the Government’s objective. Carlos Tavares, the chief executive of PSA, has said that there are opportunities whether it is a soft Brexit or a hard Brexit.

The noble Lord’s point about the supply chain is important. Given that it is so integrated across Europe, if there are tariffs or non-tariff barriers and more inspections, conformities and the like, that will disrupt the supply chain. That is why we are keen to negotiate a relationship that is as friction free as possible.

Economic Growth (Regulatory Functions) Order 2017

Lord Foster of Bath Excerpts

Tuesday 28th February 2017 Grand Committee

[Lord Mendelsohn]

My Lords, as I was saying before I was so rudely interrupted—I thank the noble Lord, Lord Foster, for that wonderful line—I will conclude with these points. I noted the sceptical faces from the other side on the point about whether businesses will do this. It was not addressed. In Committee in the other place, the Minister said:

“Businesses told us that they were unlikely to mount judicial reviews except in extreme circumstances. As we all know, judicial reviews are very costly”.—[Official Report, Commons, Deregulation Bill Committee, 20/3/14; col. 526.]


They are not that costly compared with regulatory impacts. The cost of lawyers may be quite significant, but compared with the benefits that can be gained from regulatory changes it is certainly a calculation worth making. If you give someone an instrument to do something, you have a duty to shareholders to do it if you have an operable option. Anyone involved in business will know that.

The impact assessment says:

“This duty will provide a framework for regulators explicitly to factor growth into their decision-making where they have not previously felt able to do so, enabling businesses to hold regulators accountable for their actions”.


The guidance provides far too many opportunities for the sorts of challenges and arguments that undermine the regulators’ principal role and functions. The way the guidance is written has no regard for any particular growth theory, target, goal or effective paradigm. It provides a lot of opportunity for options and arguments to be laid against it and against decisions on the basis of growth.

Again, the Government should not be surprised about this. Even its own report on the consultation said that,

“the business community sought clarity on how regulators can be held to account if they failed to comply with the Growth Duty, or to follow the guidance”.

I do not think the answer will be, “Look in the annual report and take a view”. This is a very important issue. Fundamentally, the core aspects, which this does not address or help, provide legal capacity on the one side and on the other do not give a real sense about the principal duties that regulators have in existing law without the growth duty and whether they will be able to fulfil them.

In conclusion, while we share the Government’s view on a variety of the objectives and goals and even on the journey they wish to take, we were sceptical when the main legislation passed. All these statutory instruments do is lay bare the lack of evidence, thinking and design of these policies, and how, through the unfortunate circumstance of unintended consequences, they are likely to cause more harm than good. I would be very grateful if the Minister responded to all, some, or even a few of my questions.

[Lord Foster of Bath (LD)]

My Lords, I am delighted to follow the noble Lord, Lord Mendelsohn. Like him and no doubt everyone else in the Room, I too am in favour of motherhood and apple pie. I am in favour of the removal of unnecessary red tape, bureaucracy and the gold-plating we have seen on too many EU directives. Like the Minister, I accept entirely that some regulations serve a vital purpose. The much-maligned health and safety regulations provide a very good case in point. If we are to take steps such as the ones proposed here, it is vital that we are aware of precisely what the targets are, what they are expected to achieve and what evidence we will gather to see whether they have been achieved, and that we ensure there is proper policing of any new directives, regulations or whatever is put in place.

I spent a relatively brief time in government. For a short period I was a junior Minister in the Department for Communities and Local Government. As a Minister in a Government who had introduced in 2010 the various proposals to encourage, as it says in our documentation,

“a cultural shift in Government Departments towards more proportionate and smarter regulation”,

I nevertheless came up against the difficulties that could be created by the one-in, one-out and later one-in, two-out policies. As a result of that experience, and subsequently as the Government Deputy Chief Whip serving on Oliver Letwin’s committee that dealt with these issues, I learned a number of lessons.

There are six lessons, and I will briefly share them and use this as an opportunity to probe the Minister about the proposal before us today. The first lesson related to energy performance certificates. Regulations were brought in requiring commercial buildings in certain circumstances—depending on their size, whether there was public access, and so on—to display an energy performance certificate visibly in the premises. The idea was that putting the energy performance certificate up would lead the owner of the building to try to improve energy performance, thereby saving overall cost to both the occupiers of the building and the nation as a whole. I was very much in favour of the certificates.

However, the lesson I learned was that often, those certificates never appeared in commercial buildings. Indeed, I would go so far as to say that they did not appear in a number of government buildings. The question I therefore ask is: what policing mechanisms will apply to the measures and what procedures will be put in place to ensure that we can assess whether they are successful—a point raised earlier by the noble Lord, Lord Mendelsohn—so we can learn from them in future? We have learned nothing from energy performance certificates because they were not properly introduced, policed or evaluated.

The second lesson I learned was from the introduction of zero-carbon homes, something I felt strongly about as a Minister. That fell under all sorts of difficulties, particularly from Conservative colleagues within the coalition, because they said that we had to ensure that we abide by the “one regulation in, one regulation out” rule, commensurate financial implications, and so on. It got into real difficulty because of the way the target was assessed. It was argued that the regulation’s requiring improved energy efficiency of domestic premises would impose an increased cost on the builders of those premises, so it had to be counted as a “one in” for which we had to find a “one out”. In truth, the most sensible way to look at it would have been to say that the improvement of the building’s energy performance when built would lead to a long-term saving for the resident occupants of the property and the nation as a whole but, whereas with energy performance certificates for commercial building, it was okay for the occupants to benefit, when it came to domestic property, it was not.

If we have targets, we must be careful that we do not hit the target but miss the point. I worry that in some of the regulations before us, particularly given the list of regulatory bodies, we may be missing the point.

The third lesson, which I am prepared to acknowledge is not relevant to the documents before us but I want to get on the record, is that these things are not always straightforward common sense. They are often political. I share with noble Lords my experience on Oliver Letwin’s committee when I proposed a measure that would have reduced the cost of business—not requiring certain things to be advertised in local newspapers. This was prevented on the purely political grounds that we did not want to upset local newspapers in the run-up to the 2015 general election.

I also learned that we have to apply common sense. On the basis of common sense, I will not go through the long list of regulatory bodies to which the noble Lord, Lord Mendelsohn, referred. I will just pick one at random and ask the Minister, to whom I have given a little advance notice, about the Northern Lighthouse Board. I wonder what the Minister sees as its ability to perform an economic growth responsibility. The Northern Lighthouse Board is there to serve Scotland and the Isle of Man, and to deliver a reliable, efficient and cost-effective aids-to-navigation service for the benefit and safety of all mariners. I genuinely have difficulty seeing how it will be able to fulfil its requirement.

That leads to my fifth and penultimate point: these things should be based on sound consultation. We have before us a very long list of regulatory bodies that will be brought in under these regulations. Yet, as the noble Lord, Lord Mendelsohn, has pointed out, and as it says in paragraph 8.2, there were 49 respondents, and 38 responses were received on the question of scope from a broad cross-section of stakeholders, including regulators, businesses and representative bodies. It is clear that only a small number of regulators responded to the consultation, as paragraph 8.3 hints at. It says that there were five objections to the inclusion of particular regulators within scope; the noble Lord, Lord Mendelsohn, dealt with the rest of the list.

--- Later in debate ---

[Lord Prior of Brampton]

May I finish off on a regulator that is not covered by BEIS, but is important none the less—the Care Quality Commission? We found there that the leading indicators of performance, whether you measure it in terms of patient safety, hitting waiting time targets or patient satisfaction, were around staff engagement, such as whether doctors and nurses enjoyed working in the hospital. A junior doctors survey done by the GMC was probably the single most predictive of all the indicators. Culture is hugely important.

The noble Lord referred to a duty to communicate, which plays into the point about culture. Putting that obligation to communicate on to regulators is important. In a sense, what we are trying to do by having a duty to promote growth is to change the culture and outlook of regulators. As the noble Lord, Lord Foster, said, they are not there to hit the target but miss the point —how often does that lead to unintended consequences? For example, we hit the waiting time target in an A&E department but the patient died. That is the kind of absurdity we can get into when targets become—

[Lord Foster of Bath]

I think that we are all singing from the same hymn sheet in our speeches, but the documents before us say something rather different. They talk of the sums of money that it is anticipated will be achieved by this. I entirely accept that the Northern Lighthouse Board is there to provide safety. Clearly, if it switched off the lights in all its lighthouses, ships would crash, the economy would be in difficulty and so on. Presumably, it could spend a lot of money and put up more lights and sirens and have more people sailing around rocky outcrops warning people to stay away, and there may be some more savings in that. That is all common sense. But the way in which it has been enumerated is about having a target but missing the cultural point that the Minister is rightly talking about. The papers do not talk about the culture.

[Lord Prior of Brampton]

One way to change the culture is to change the message. We are not setting specific targets for regulators. The purpose is to increase transparency, which I will talk about a little. I qualify it as “intelligent transparency”. If we can put people in the position of making intelligent decisions and provide them with useful information, in my book that is the best form of regulation.

We are all agreed on the objectives and outcomes that we want from this. I see the exercise as trying to get a cultural shift in the behaviour of regulators. Both noble Lords have given examples of the road to hell being paved with good intentions. The last thing that we want is to encourage bad behaviour by pursuing regulation to the letter and achieving the opposite of what we want to. On one level, we are in violent agreement and, on another, we are clearly not. However, some important points have been raised and I would like to reflect on them and write to noble Lords on those issues.

To conclude, I would like to read out a few notes, just to get them on the record and perhaps explain a little better what I have just said. The importance of extending the scope of the business impact target is clear. Businesses consistently tell the Government that the actions of regulators are as important as the content of legislation in determining their experience of regulation. That has to be true. It is the way we interpret laws and decide whether they are helpful or not. For example, in giving up broadband at home I want to get through to BT to cancel my existing contract. Can I get through to BT? Can I hell. No one will answer the phone. It is about customer service. Funnily enough, having spoken briefly to the Intellectual Property Office yesterday, I think that it has a client-friendly attitude, which is the kind of attitude that we want from regulators.

The rationale for applying the growth duty is also clear. While there is already a great deal of good, proportionate and effective regulation, evidence suggests that some regulators fail to take sufficient account of the economic consequence of their actions and place unnecessary burdens on businesses. I think that the noble Lord wanted some examples of regulators that fall into that trap. We will certainly write to him on that.

Some regulators consider the impact of their actions on economic growth. It cannot be wrong to do that. If we said that regulators should not take into account economic growth, we would be shot at, quite rightly, from all sides. Many regulators think that they are unable to take account of growth because they do not have a statutory requirement to do so. That tells you something about the psychology of some regulators, frankly. They have to be told that economic growth matters. You would not think that you would need to be told that. We need to write to the noble Lord on that point. The new duty will help to bring all regulators up to the same high standard.

The growth duty will help regulators to carry out their functions in a way that is conducive to economic growth and will ensure that regulatory action is taken only when needed and that any action that is taken is proportionate. Again, the key words are “accountable”, “transparent” and “proportionate”. It will encourage regulators to develop more mature and productive relationships with the sectors and businesses that they regulate, driving up the accountability of regulators to the business community.

I conclude by saying that it is very easy to knock the regulators. Few people will stand up for regulators. But in some of the Brexit debates that we have had, when you look at the performance of the British regulators—for example, the EMA, the MHRA, the CAA or in the nuclear world—they are universally respected throughout Europe. Our regulators are highly respected and in the main they do an outstanding job. All we are trying to do in this legislation is to tilt the culture a little further towards practicality, transparency, productivity and growth.

Industrial Strategy: Engagement

Lord Foster of Bath Excerpts

Monday 27th February 2017 Lords Chamber

[Lord Prior of Brampton]

It is interesting that only 15% of women graduate in this subject. In the case of medicine, for example, the figure is now well over 50% and is nearly 60%. It is a very good question. Interestingly, I went to Rolls-Royce last week and met a number of apprentices there, some of whom are doing degree-level apprenticeships. That may be one way of increasing the number of women going into this area. It has been a problem for many years and we are only in the foothills of cracking it.

[Lord Foster of Bath (LD)]

My Lords, does the Minister agree that share ownership can provide the motivation to help employees and managers deliver for their companies and, of course, deliver the industrial strategy? If he does, what more can the Government do to promote such share ownership?

[Lord Prior of Brampton]

Share ownership can be a part of this but engagement of people in their workplace goes much deeper and is much more of a day-to-day issue than share ownership or board directors and the like. John Lewis and the mutuals have demonstrated the value of mutuality and ownership, so this does have a part to play. However, it is only part of a much bigger picture.

Brexit: Consumer Rights Policy

Lord Foster of Bath Excerpts

Thursday 9th February 2017 Lords Chamber

[Lord Prior of Brampton]

Of course it will emerge over the next two years. It would be absurd for me to stand here to explain where all the issues that might arise over the next two years will arise. As the Prime Minister has said, the Government will keep Parliament fully informed of developments throughout the next two years.

[Lord Foster of Bath (LD)]

My Lords, the EU is currently planning the digital content directive, which will give EU-wide protection to consumers on digital content. Unfortunately, the current draft conflicts with UK consumer rights legislation. Since, after we leave, we will have to continue to sell into the EU, can the Minister assure us that the Government are putting all their resources into getting this right, to end the current legal uncertainty?

[Lord Prior of Brampton]

I can assure the noble Lord that we are doing everything we can to clarify the situation. He mentioned the consumer rights legislation. The Consumer Rights Act is generally recognised by consumers here as an extremely good piece of legislation, and we will be working to have as much of a free market within Europe as we can.

Economy: Productivity

Lord Foster of Bath Excerpts

Wednesday 8th February 2017 Lords Chamber

[Lord Prior of Brampton]

The right reverend Prelate makes an important point. Not only is mental ill health a disaster for people individually, it also affects the productivity of the whole workforce. It is hard to answer the question because companies vary so much. There are some great employers who do an excellent job of looking after the well-being of their employees, and there are some who, as we know, do a rotten job. I would like to take away the question the right reverend Prelate asked and write to him in more detail.

[Lord Foster of Bath (LD)]

My Lords—

[Lord Cunningham of Felling (Lab)]

My Lords—

[The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)]

My Lords, if we have two short questions, we can hear from the Liberal Democrat Benches and then the Labour Benches.

[Lord Foster of Bath]

My Lords, business investment in training is vital to improved productivity. We know that the apprenticeship levy was designed to help in that, yet the Government have missed the January deadline for setting up the online service and the IFS says that it is going to give poor value for money. How is business going to benefit when it is having to cope with this mismanagement of the apprenticeship levy by the Government?

[Lord Prior of Brampton]

My Lords, the apprenticeship levy is designed to produce another 3 million apprentices over the next four or five years, which will mark a transformation in the number of apprentices we have in this country. The noble Lord referred to the online service. I shall have to investigate that and write to him.

Important Public Services (Border Security) Regulations 2017

Lord Foster of Bath Excerpts

Tuesday 24th January 2017 Lords Chamber

In conclusion, the Government believe that the regulations before noble Lords today are proportionate and strike the correct balance between the interests of unions and those of members of the public. I beg to move.

[Lord Foster of Bath (LD)]

My Lords, neither the Minister nor I served on the committee that discussed the Trade Union Bill. However, he will be well aware, no doubt from reading Hansard, that my party made many of the proposals in what was then the Bill and is now the Act. We remain concerned about all those, including those aspects now being introduced through these regulations.

In the first set of regulations, the Government have identified within what they have defined as “important public services”—health, education, fire, transport and border security—the personnel that they believe should be covered, so refining, as the Government put it, the list of the important public services. Within education, for example, it is teachers and head teachers but not, one assumes, caretakers, although they are very important in the running of our schools. Although we are critical of the way that the Government have failed to listen to many aspects of the consultation that took place, we are at least pleased that in this one respect—in relation to ancillary workers—the Government have listened. We welcome that very much indeed.

These important public services are the ones that the Government have decided must meet not only the 50% turnout threshold criteria but also a requirement that at least 40% of those eligible to vote must have voted for strike action before it can proceed. That means, for example, that in a ballot where the turnout is just over 50%, taking industrial action would require some 80% of those voting to do so in favour. During the passage of the Bill, although we saw some merits in the setting of a threshold for turnout, we argued against the imposition of the 40% threshold. In the words of the noble Lord, Lord Kerslake, at Second Reading, it is,

“a very stiff test indeed”.—[Official Report, 11/1/16; col. 79.]

It is hardly, as the Minister sought to describe it, a proportionate approach to the problem as the Government see it.

We noted at that time, and continue to do so, that business support for these measures is lukewarm. The Chartered Institute of Personnel and Development has said that the plans are,

“an outdated response to the challenge of the modern workplace”.

Only yesterday, in the Evening Standard, we saw the results of an Ipsos MORI poll, which showed, for example, that nationwide only 37% of the public support limits on the rights of train drivers to strike, and only 35% support limits on teachers. Imposing a 40% threshold is a stringent limit. It is not a proportionate limit and it is one that is clearly not supported by the public.

As my noble friend Lord Stoneham argued during Second Reading, the 40% threshold brings with it other problems as well and would make resolving disputes more difficult. He said:

“Disputes have to be resolved through a bargaining relationship; if that is not understood, we will be led to unintended consequences. If you have thresholds, the unions will work to achieve those thresholds, so strikers could become more intransigent”.—[Official Report, 11/1/16; col. 118.]


On these Benches, we also argued that quite simply no evidence has been produced by the Government that the workers who did not vote in the strike ballot are any less willing to withdraw their labour than the ones who actually did. Of course, we noted, as many did during those deliberations, that in the 2015 general election the Conservative Party won by a majority of just 12 seats—the smallest majority since 1974. More importantly, it did so with less than 24% of registered voters. The noble Lord, Lord Kerslake, played a very active part in those deliberations, and I love quoting him. At Second Reading, he said,

“the current Government happily govern with fewer than one-quarter of the electorate supporting it, and fewer than 40% of those who voted”.

He went on to say:

“That tells me as much about why we need electoral reform in this country as it does about trade union democracy”.—[Official Report, 11/1/16; col. 79.]


I entirely agree with him.

Brexit: Single Market and Workers’ Rights

Lord Foster of Bath Excerpts

Monday 16th January 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, it would be a huge misjudgment and mistake for any British Government to think that eroding the rights of UK workers and making them less engaged and productive would contribute in any way to us being more competitive. In the same way that we want to have low tax rates, we want to have a fully engaged and well-trained workforce.

[Lord Foster of Bath (LD)]

My Lords, as the Minister confirmed, the Prime Minister has agreed that all workers’ rights enshrined in EU law will be transferred into UK law—but then “where practical” was added. Which workers’ rights cannot be practically transferred into UK law?

[Lord Prior of Brampton]

Off the cuff, I cannot think of any rights that would fall into the area of “not practical”. The Prime Minister went further: she is committed, as is our whole industrial strategy, to bringing decent, well-paid, skilled jobs to Britain, including to many parts of the country where they have been sadly depleted over many years.

Brexit: Medical Research and Innovation

Lord Foster of Bath Excerpts

Monday 21st November 2016 Lords Chamber

[Baroness Neville-Rolfe]

I entirely agree with the noble Baroness about the importance of our unique life science industries. Regarding the clinical trials regulation, preparations are continuing to implement that regulation in 2018 because we remain in the EU while negotiations continue. Of course, a great repeal Bill will come before Parliament after the next Queen’s Speech. That will end the authority of EU law and return power to the UK, but we will transpose current EU law into domestic law while allowing for amendments to take account of the future negotiated UK-EU relationship in this and other areas.

[Lord Foster of Bath (LD)]

My Lords, does the Minister accept that if we are to succeed in medical science research and innovation we need more home-grown science and maths graduates? That requires more science and maths teachers in our schools. Is she aware that teacher training targets are being missed, that vacancies are rising, that retention rates are falling, and that now more than a quarter of maths and science teachers have no relevant post A-level qualifications? What action are the Government taking?

[Baroness Neville-Rolfe]

The situation on STEM teaching is incredibly important. Indeed, thinking about our skills and how they relate to our industrial base, and our research and innovation will be a key strand of our industrial strategy, on which we will issue a consultation paper this side of Christmas.