Company Directors: Identification

Debate between Lord Leong and Lord Johnson of Lainston

Wednesday 22nd May 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I apologise to the noble Lord for the discovery that he does not have a significant interest in a goldmine. I am sure it will be something he would not want corrected on the register but I am pleased to say that now Companies House actually has the power to make common-sense changes, effective immediately. I assume that there is a process that requires some additional verification but Louise Smyth, the registrar, is particularly focused on this issue. It was something that was raised continually in the debates. For many people, the situation where they found themselves erroneously registered as directors or their address as a company’s address has been extremely traumatic. I am glad that we have now solved this problem with the 12,600 or so companies that we have taken action on, which is a good start, and we expect more to continue. I appreciate the anecdote.

[Lord Leong (Lab)]

My Lords, registering a UK company costs as little as £50. Companies House, as at today, does not verify the names and addresses supplied by applicants. It was recently reported that nearly 40% of money laundered in the world is going through the UK, and London in particular. Can the Minister tell the House how much of this laundered money goes to shell or ghost companies?

[Lord Johnson of Lainston (Con)]

I am grateful for that question. It is certainly work that we continue to do. I do not have that information to hand. The figure mentioned by the noble Lord seems like an incredibly high amount and a surprisingly large number. But the reality is that there is clearly economic crime in the system and we have done everything we can to remove that. I stress to the House the incredible cross-party consensus that we built around the Economic Crime and Corporate Transparency Bill to ensure exactly this. We have gone further than any Government for the past 120 years and I think we should get some credit for it.

Economic Growth (Regulatory Functions) (Amendment) Order 2024

Debate between Lord Leong and Lord Johnson of Lainston

Monday 15th April 2024 Lords Chamber

[Lord Leong (Lab)]

My Lords, I thank the Minister for introducing the regulation and all noble Lords who have spoken. Every day, we hear of sewage dumping. On average, a sewage dumping event now takes place every two and a half minutes. The lack of investment in our water systems over the past 14 years is a scandal that is increasingly hard to ignore. Billions have been extracted in shareholder dividends and millions in bosses’ bonuses, all while delivering a deteriorating system.

During the passage of the Environment Act, Conservative MPs had the opportunity to support a Labour-backed amendment that would have brought an end to sewage dumping. Of course, they did not do so. We should be extracting sewage from water supplies, not extracting value in unjustified dividends and overleveraged debt. Let us imagine the economic growth, the skilled jobs and supply chains that could have been created if, instead, this money had been funnelled into developing creaking infrastructure, repairing and upgrading pipelines, and preparing for the predicted increase in demand and increasing rainfall.

The Labour Party has long been making the case for the increasingly urgent need to invest for the long term and to improve quality in the short and medium term. So on this issue we agree with the Government that bringing these three regulators within scope of the growth duty will help to ensure they consider how best to promote growth in their sectors.

However, making the changes required by this instrument will obviously require dedicated resources within Ofcom, Ofwat and Ofgem. As the amendment to the Motion makes clear, these regulators already have a lot on their plates, so can the Minister indicate how they are expected to juggle this as well? Are the Government confident that the regulators have the capacity to deliver to the full extent that the order demands?

Like the regulators, we want to support businesses and stimulate the vital investment needed to ensure a quality service to current and future consumers. For example, Labour’s plan to establish “GB Energy” would create half a million new skilled jobs in the industries of the future, rebuild the strength of our industrial heartlands and reduce energy costs and carbon pollution. Labour is already thinking ambitiously about the long-term future of this country.

Given that the Government’s order is about long-term growth, could the Minister explain over what timeline they expect to see the benefits of the change, and over what timeline they will be reviewing its impact?

As far as Ofcom is concerned, the growth duty will also not apply to its regulatory functions under Part 3 of the Enterprise Act 2002, which concern mergers. In particular, it will ensure that Ofcom is not required to consider other factors when providing advice to the Secretary of State on the public interest considerations on media merger cases. Can the Minister explain the reasoning for that very specific exception?

In this regulator’s sector in particular, many noble Lords will know that I am passionately interested in the enormous potential for growth in our telecoms industry, especially in AI, but the world will not wait for us. We risk missing out on exploiting the potential commercial benefits from our world-leading research base if we do not have a clear industrial strategy, if we do not encourage and invest in tech start-ups and scale-ups, and if we do not develop a serious regulatory presence alongside the USA and the EU as global standards are being established.

To conclude, we support bringing the three regulators within the scope of the growth duty, but we regret—who could not?—the failure of the Government to prioritise the sanctioning of polluters and the cleanliness of waterways. Just last month, rowers in the world-famous boat race, some of the fittest people in the nation, fell sick because of their exposure to the water in the Thames. I would be hard pushed to invent a metaphor more apt to sum up why this Government have so comprehensively failed—on regulation, on public health, for young people today and in investing in their tomorrows. Labour stands ready to deliver the decade of national renewal that this country self-evidently needs.

While we support the regulation, we acknowledge the amendment to the Motion tabled by the noble Baroness, Lady Bakewell. We must address the sanctions needed against short-term profiteering by the CEOs of utility companies enriching themselves. I look forward to the Minister’s response.

[The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)]

My Lords, I am extremely grateful to all noble Lords for their participation in this debate. I particularly congratulate the noble Lord, Lord Leong, on what I thought was an excellent example of good rhetoric in terms of his parallels.

I shall cover some of the points in turn. I am happy to have further conversations with noble Lords about this important statutory instrument. I am grateful for the undertone of what I think the noble Lord, Lord Fox, was suggesting and the overtone of what the noble Lord, Lord Leong, was suggesting. Unfortunately, I did not hear a great deal of support from any other Member of the House; I am sorry to see that on my own Benches the enthusiasts of better regulation seem to have deserted me today.

Ultimately, the statutory guidance, which I will be happy to touch on in a few moments, is an important and useful document to help regulators by refreshing the statutory guidance that we already have. If noble Lords read the original document, as I suggested at the beginning of this debate, and compare it to what we have now, they will see that if you care about the economy, the environment and better outcomes then this is a far better document in terms of directing the regulators in how they perform and enact.

I also said—because this is a particular passion of mine—that this will enable us to have better regulation, not less regulation. This is about regulating in a better way for businesses, for the economy, for consumers and for this nation’s future growth. I said to my officials that I would like to avoid the topic of water and Ofwat and focus on the other 52 regulators and the opportunities this presents—but it is absolutely right, when we are looking at this broad waterfront of how we run our economy and how we regulate for our own safety, for trust in markets, for the consumer and for the environment, that we have this debate.

Steel: Port Talbot

Debate between Lord Leong and Lord Johnson of Lainston

Monday 15th April 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am extremely grateful to the noble Lord for making that point. The first visit of my colleague Minister Mak as a Minister in my department was to Port Talbot to meet Tata’s managers. They made it very clear that they want to manage the redundancy process as closely as possible and by using a voluntary scheme. They have a huge amount of interest in this country and have partnered with us by creating a giga-factory, which kick-started our EV car industry in a major way. I echo the noble Lord when I thank Tata for all it is doing with the United Kingdom.

[Lord Leong (Lab)]

My Lords, the Government’s decision to give £500 million to Tata means that 2,800 people will lose their jobs. These are desperate times. People are worried and angry. The Government’s negligence in the 1980s devastated industrial communities, and the scars of entrenched inequality are still evident today. The Port Talbot transition board has up to £100 million to invest in skills and regeneration. Seven months on, can the Minister tell your Lordships’ House if any of this has been spent and if the strategy for doing so will be set out?

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Lord for his comments. I point out that the Conservatives have not been in government continuously since the 1980s; there was a prolonged period when Labour was in power. However, the next meeting of the transition board, on 27 April, will discuss exactly that: how will that £100 million be spent on local regeneration? The Government have also invested just under £800 million in the four city deals and £150 million in the Swansea Bay area. We are also investing significant tens of millions, nearly £60 million, in the offshore wind industry in the area, so we are definitely putting our money where our mouth is.

UK Tradeshow Programme Closure

Debate between Lord Leong and Lord Johnson of Lainston

Monday 18th March 2024 Lords Chamber

[Lord Leong]

To ask His Majesty’s Government what recent assessment they have made of the impact of the closure of the UK Tradeshow Programme on the ability of small and medium-sized enterprises to export to new markets

[The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)]

Although the DBT has closed the specific Tradeshow Access Programme, it still provides considerable support to small and medium enterprises to attend trade shows, ranging from training in language and culture and pitching and negotiations to networking receptions that use our embassies overseas and Meet the Buyer events.

[Lord Leong (Lab)]

My Lords, the Tradeshow Access Programme provided vital support to thousands of SMEs to attend international trade events. The return on investment was remarkable; then the Government closed it. Last year, UK exports were £860 billion—well short of the £1 trillion target. Does the Minister agree that we need to get out there and sell, sell, sell? Can he tell the House when the replacement programme for SMEs and their respective trade associations—the beating heart of our export economy—will be announced?

[Lord Johnson of Lainston (Con)]

I thank the noble Lord for his mantra of sell, sell, sell. Mine is ABC: always be closing. The DBT is doing this. It is unfair to say that we closed this programme; it was not necessarily yielding the benefits we hoped for. We must look for value for money; we have instead gone to a more targeted approach, where the UK will take a pavilion and crowd in businesses in specific instances. Recently we have been to Mobile World, led by my noble friend Lord Offord; the World Defense Show in Saudi Arabia; Bett, the education show; and the Hydrogen show in Chile. Although the Tradeshow Access Programme looked like a good idea and was very popular among certain businesses, it was not used in the way we wanted. This approach is far more effective for getting to our £1 trillion target.

Regulator of Community Interest Companies

Debate between Lord Leong and Lord Johnson of Lainston

Monday 11th March 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Lord for his input in this important area. These principles absolutely need to be kept under review. I have looked into this myself in great detail; only 38 complaints were made last year about these entities, which, considering there are 31,000, is not a significant amount. I do not believe that any CIC has been struck off the company register. We have updated the procedures around Companies House—director verification, statements of accounts, and so on—which will also apply to CICs. I am therefore very hopeful that we will see continuing reforms. I refer back to my original comment about the work that the noble Lord, Lord Harris, is doing to regulate fundraising. That is a separate point that is not necessarily related to company law, and we fully support his efforts in trying to make sure that it is properly regulated and ordered.

[Lord Leong (Lab)]

My Lords, as the Minister said, there are 31,000 CICs in the UK. They deliver significant benefits to communities across sectors including the environment, education, health and sports. However, the number of CICs being dissolved is increasing year on year, reaching an alarming 3,100 last year. What assessment have the Government made of whether dissolutions are the result of fraudulent activities, potentially putting community assets at risk?

[Lord Johnson of Lainston (Con)]

I thank the noble Lord, Lord Leong, for that point. This is not an assessment that the Government have undertaken; it is the responsibility of Companies House. With more data now available following our reforms, the registrar will be able to undertake this research. I would say, however, that this is a sector where there will be relatively high turnover. A lot of these are social businesses with very limited amounts of capital; some are experimental and it is absolutely right that they behave like companies, with the element of success or failure. Ultimately, the number of CICs is growing every year, in significant compensation for those that are being dissolved, and we are very pleased to see that.

Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2024

Debate between Lord Leong and Lord Johnson of Lainston

Tuesday 5th March 2024 Grand Committee

[Lord Leong (Lab)]

My Lords, I thank the Minister for setting out these instruments so clearly and the noble Earl, Lord Russell, for his contribution. These four instruments implement key aspects of the British industry supercharger, as mentioned by the Minister, a package announced in February 2023 to make energy-intensive industries—EIIs—in Great Britain competitive. These industries face challenges in the coming decade. The primary issue is the relatively high cost of energy in the UK, which makes it difficult for them to remain internationally competitive. Furthermore, there is a need for them to implement transitions toward greener technology, with lower carbon leakage, as we strive to move towards a net-zero economy. We recognise these challenges and broadly support these instruments, in so far as they seek to address them for these industries, which are vital for our national security and the literal fabric of our national growth.

The first instrument exempts eligible EIIs from the costs associated with funding the capacity market and seeks to ensure that there is sufficient supply despite fluctuations in demand, especially at peak times of day or in colder periods, and in supply, for example when wind generation is low. While we support this instrument, have the Government considered whether this will lead to any shortfall in the capacity market? If so, what measures are in place to mitigate this?

The second instrument concerns additional costs due to green levies which the UK imposes and some of our international competitors do not. We do not want this differential cost to drive our energy-intensive industries abroad, so this instrument adjusts an already existing scheme and exempts EIIs from 100% of the costs of funding various environmental schemes. Industrial electricity costs in comparable neighbouring countries are evidently not static, so will the Government keep them under review? If there is movement, do they have plans to make further adjustments if necessary?

For both these instruments, the Government’s calculations accept expected increased electricity bills for non-eligible users, including small businesses, charities and households. For this instrument, that is cited at 20p to 30p per megawatt hour. With the current spot price at just under £60 per megawatt hour and the reduction since the start of this year already being closer to £30, that certainly does not seem a massive amount. However, will the Minister outline how much these regulations, in conjunction, will add to the average household electricity bill per annum? The third instrument follows by necessity to enable the Secretary of State to revise the renewables obligation level from 2024-25.

The fourth and final instrument makes minor amendments to the Energy Act 2023, sets out funding for the payments via a levy on suppliers and appoints an administrator. Such support payments are to be made to the EIIs quarterly. Will there be an automated process for eligible recipients to receive these payments with the minimum administrative fuss? Have the Government made forecasts as to whether the costs of this scheme will outstrip the contributions from the electricity suppliers, which will effectively be funding the EII support levy? Are there any provisions in place for this possibility, so that the scheme does not collapse if it is successful?

This instrument allows corrections to be made to support payment entitlements. It will also make provisions for the administrator to hold a reserve fund so that EIIs will always be able to receive payment. Do the Government expect this will need to be used? If so, how big will it be and is there a maximum time limit over which the administrator will be expected to cover the shortfall?

We will be very happy to support these four instruments if the Minister can provide some assurances on the concerns I have mentioned. I look forward to his response.

[Lord Johnson of Lainston (Con)]

My Lords, I am grateful to the noble Earl, Lord Russell, and the noble Lord, Lord Leong, for their comments. These measures are extremely important if we are to have a sustainable heavy industry in this country. If I may take my own experience as Investment Minister, I have unquestionably been able to land a significant amount of investment—some of the biggest investments that we have announced to date, particularly in the car and advanced manufacturing industries—because we have these mechanisms in place. It is not even ambiguous. It is a clear point of fact in these discussions and is very important.

The noble Earl rightly raised that we do not want to be subsidising carbon-intensive businesses out of some desire to keep historic organisations going, contrary to our net-zero ambitions and our overall industrial policy. It is right to challenge the principle of carbon leakage, which is exactly what would happen if we did not operate this process. It is designed to help these businesses to decarbonise. For example, for Port Talbot, which will obviously be a receiver of these support packages, the intention is clearly that it will decarbonise. If you look at the car industry, it is going to an EV industry, and rightly so.

The noble Earl asked when the next review will be, how we will review it and how we add companies. This is an issue with novel technologies coming forward and with industries that need this support, which may not already be under a current and easy-to-define classification. Quite rightly, we will review this. The next review point is 2026. This measure will come into force next month so it seems logical that there is an 18-month or two-year period for review. I am absolutely sure that, at that point, there will be some quite significant changes. It gives us an opportunity to take companies and sectors out and put new companies and sectors in. I am positive about that.

I am also positive about the ability to spread the cost. The noble Lord, Lord Leong, rightly asked how much this will add to the electricity bills of an average household. These are the dreaded averages but we are looking at £4 to £5. I am very aware that there is a cost of living crisis and that there are other pressures on people’s households but, when you look at the ability to target this type of support for that type of diffuse outcome, it makes a lot of sense. The noble Earl, Lord Russell, mentioned the power-generating and petrochemical industries, which do not qualify for this. I am sure that there are others that do not qualify; we would be happy to provide a specific list. It is a 1% increase overall.

Noble Lords will know that I have spent many years in investment and looking at financial markets. The energy markets present a high degree of volatility. The gas prices now are lower than they have been for a considerable period. We are very dependent on gas, which is why our own power structure is so complex to manage. Looking at the network costs, the capacity market charges that are made and other exemptions, these mechanisms are really about removing the obligations to invest in the net-zero ambitions of the UK while expecting businesses to do it for themselves. There is a sensible trade-off there. It is well balanced.

The noble Lord, Lord Leong, asked whether there would be a shortfall in the capacity market point because of the effective compensation being paid. As I understand it, that charge has never been utilised. We are confident that there is no effect on the capacity market in terms of the charges that are being made; I would be happy to investigate that further. On technical guidance and the transparency around these processes, let me say that, as Minister for regulatory reform, better regulation or smarter regulation—whatever the current title is—impact assessments are important to me. I hope that all noble Lords have read the impact assessment reports for these statutory instruments; anyone listening to this debate is also welcome to do so. It is a transfer rather than a new cost so it does not show up on the impact assessment process as clearly as it would do if it were a new principal regulation.

It is important that there is as much transparency as possible because these are, in effect, transfer charges. This is a transparent system; to some extent, it requires the complicit consent of industry in general and the public. It is important that this is happening in a private sector capacity with government direction. We feel that this is absolutely the right thing to do. It is highly diffuse in its impact and very targeted. We believe that it will allow the UK to be incredibly competitive when it comes to developing its advanced manufacturing ambitions.

I hope that I have answered all the questions from noble Lords today. If I have not, I will certainly scrutinise Hansard and welcome any follow-up, but this is a relatively uncontentious series of statutory instruments.

In summary, the noble Earl, Lord Russell, mentioned that he was not going to address each statutory instrument individually; he was quite right not to, not just in the interests of time but because this is one package—they are naturally separated for reasons of legislative complexity but this is the British industry supercharger. It presents a powerful package to industry and sends a strong message to the country and internationally that we want to support businesses as they develop and decarbonise. Support for our economy gives us great growth for the future. With that, I commend this instrument to the Committee.

Employment and Trade Union Rights (Dismissal and Re-engagement) Bill [HL]

Debate between Lord Leong and Lord Johnson of Lainston

2nd reading
Friday 1st March 2024 Lords Chamber

[The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)]

I am, as always, extremely grateful to noble Lords for this debate. Before we begin, I direct Members of the House to my register of interests, although I do not believe there is any conflict relating to the Bill today. I am very grateful to the noble Lord, Lord Woodley, for bringing this Private Member’s Bill to this House. It affords us an extremely helpful debate, and I will go through some of the points shared by so many Members of this House who are rightly concerned that the primary function of a strong economy is a fair workplace regulatory framework.

I absolutely agree with the noble and wise comments of the noble Lord, Lord Leong, at the end of his address, that we should have strong relationships between the people who work in our industry and the people who employ them—with the shareholders, investors and consumers, and in fact with our entire habitat and environment. That is exactly the sort of harmony that this Government are trying to deploy.

I will talk about some of the technical elements around the Bill and dispel some misconceptions. The first misconception to dispel, if noble Lords will allow me, is that the P&O situation was a dismissal and re-engagement process. It was not. If I may, I will correct noble Lords who have conflated that situation—which in my view was absolutely abhorrent behaviour by an organisation with such lineage as P&O towards its staff, who had such loyalty to the company. It was strongly condemned at the time by the Government and is continually condemned by the Government today, and by me personally. I am aware that there is an inquiry by the Insolvency Service into P&O, on which it would be inappropriate for me to comment, but at no point should noble Lords conflate what P&O did with the concept of dismissal and re-engagement.

I will also touch on the principles around the proclivity of companies to use this practice to control their workforce. There is a great deal of anecdotal evidence, but there is not a great deal of specific evidence to suggest that this is as widespread as noble Lords may recommend. In fact, some of the high-profile cases—they tend to be so because they are relatively unique; this is important—often resulted in better outcomes for the employees post the relationship renewal with the unions. It is important to understand how big a situation we are dealing with here; it is not as significant as people suggest. The statistics vary significantly—from one in 10 to 3%, whatever that may be—which causes me concern. I am delighted to make a commitment to continue to do more work on how significant a so-called problem this is.

I will make two very important points about the principle of dismissal and re-engagement. First, for me, it is an extremely useful and powerful mechanism to allow employers to engage effectively with their workforce to create and establish new terms and conditions that may be appropriate for the modern age or for the needs of the company at the time. It is very important that we retain those flexibilities. The concept of dismissal and re-engagement is also very valuable in resetting and clarifying employment terms; I am sure that I am surrounded by people with far greater legal expertise on that than me. As I said, it is not simply a question of using this as a mechanism to bully staff; it is a very important legal process for the contractual relationship between the employer and the workforce.

My next point is something I think we are all agreed on. While I have great respect for the Bill of the noble Lord, Lord Woodley, and indeed for the noble Lord himself, we must have the flexibility to enable companies to manage their workforce in times of crisis. I am sure that, when we are faced with these situations ourselves, either as employers or workers, and we need to come together to respond to an economic crisis such as Covid, it is absolutely right that we have mechanisms to enable us to protect the workforce. This is about fairness, protecting workers and allowing us to have a flexible workforce. It will allow me and my friends, associates and children, and the rest of our citizens, to have the opportunity to work in a flexible environment that has not become too rigid or ossified to respond to economic volatility.

However, very importantly, this should never be used to bully the workforce. The code is very strong on this; it is extremely clear that it is not to be used inappropriately to try to force unacceptable terms on a workforce. Instead, what the code does is clarify the obligations of the employer to ensure that they have to consult with their workforce. For the first time, they have to—this is very important, when you look at the other reasons for dismissal and re-engagement—look at alternatives, not just to the overall plan but to how the individual workers themselves are treated.

There is the 25% uplift, and I take noble Lords’ comments, including those of the noble Lord, Lord Browne, on the tribunal service; I am very sensitive to that. I will come back to the noble Lord on his comments on the workability of that process, because it must be an easy-to-use process that is accessible; that is absolutely at the core of protecting workers’ rights. But we do have the 25% automatic uplift that can be fed into the process. There is an obligation—I believe the code advises it in every case—to consult ACAS when it comes to using dismissal and re-engagement. These are actually quite significant.

Clarity is very important. As we know from statutory codes—again, I defer to noble Lords who have greater legal experience than me—they are central in ensuring that we have a strong framework for navigating employment law and giving protections to workers, and, very importantly, also giving obligations to employers. Having been on both sides, and certainly as an employer, the more clarity I can have about how I can work with my workforce, the better. It is very clear from the tone of the document and this Government that it is the expectation that this is a last resort, that there is a significant degree of consultation and that every other option is exhausted before it is appropriate to use dismissal and re-engagement.

[Lord Leong (Lab)]

I thank the Minister for giving way. Does he agree that the Bill offers employers the flexibility to consult their workers before the terms of the employment are changed? It does not ban the practice; it is just a last resort that offers a consultation period with the employees.

[Lord Johnson of Lainston (Con)]

I am very grateful for that challenge. I will now turn to the Bill. As I said, many elements of its sentiment are wholly welcome, but its practical application would result in less fairness, wealth and job security than the noble Lord might wish. There are several reasons for that. First, the increased consultation becomes extremely onerous on companies. Often you have a very limited period of time to react to a significant economic circumstance. As I said, this is dismissal and re-engagement, rather than simply some type of long-term planning for a business. We must be extremely careful about the onerous conditions that we are placing on companies. I have looked through the Bill, and they are substantial and, I am afraid, heavily tilted towards union practices—maybe because every Member of the House who has spoken so far, apart from the Front-Bench spokesman opposite, is a member of a union. In many instances, not all companies have union bodies represented within them and not all workers are members of unions, so it is possible to conflate those two consultation processes, which is inappropriate.

It is also very difficult. While I have a great deal of sympathy with the principle of a so-called bankruptcy clause, it is not a position that those running a business want to be in that they can do something only if they are about to go bankrupt. The reality, as I think Hemingway said, is that you go bankrupt:

“Two ways. Gradually, then suddenly”.


You have limited time to act and have to be precipitous. You must try to prevent the point at which you go bankrupt, because otherwise all your staff will lose their jobs.

The principle of what we are discussing is how to protect as many workers as possible, in a difficult situation. The code does, but I am afraid that the Bill that the noble Lord, Lord Woodley, has put forward would put at risk the security of more workers than it would protect. Importantly, it removes the breadth and range of principles around which dismissal and re-engagement can be used. That is difficult, because businesses require flexibility and it should not be up to politicians to decide this on a case-by-case basis. That would cause enormous problems, reduce flexibility, make it far harder for businesses to operate appropriately, and reduce employment in this country and security for workers.

However—and I personally will be pleased to engage in this—before the code comes into force in the summer, there will be a full debate in both Houses. I have been very clear with my officials in the department and to my colleagues that we will keep this under review. It is right that we understand exactly how many companies are using this practice and to assess that more appropriately. As I said, I will look into the comments from the noble Lord, Lord Browne, around tribunals.

As the noble Lord, Lord Woodley, knows, I continue to be extremely desirous of continuing to engage with him on this important subject. Nothing is more relevant to this Government than strong relationships between investors, companies, the people who work in those companies, consumers, the broader citizenry and the environment to create the sort of harmony that gives us growth and security for the future.

Reporting on Payment Practices and Performance (Amendment) Regulations 2024

Debate between Lord Leong and Lord Johnson of Lainston

Monday 26th February 2024 Grand Committee

[Lord Johnson of Lainston (Con)]

I greatly thank noble Lords for their passionate inputs into this debate. This is a serious issue. I should say that, although I do not believe I have any personal conflict, I would recommend that all noble Lords inspect my register of interests because, clearly, I have interests in businesses. Indeed, the noble Lords, Lord Leong and Lord Fox, and I have all had experience of working in small businesses, and late payment is a significant issue. We have these dry statistics, but the reality is that it has an effect on people’s lives, induces stress and wastes time, with an impact on the economy. It is something that we have to take very seriously. We are all in agreement that extending these rules until 2031 makes absolute sense. I am grateful to my colleagues for supporting us in this cross-party and cross-Committee view.

Some relevant questions were asked, and I will try to cover them briefly, but I would be absolutely delighted to have a further conversation. I know that my colleague, Kevin Hollinrake, is certainly available to hear further input from noble Lords, if that would be useful.

The noble Lord, Lord Aberdare, made a point about the Small Business Commissioner. Let me say something; it may help to cover some of the other points made by noble Lords. The Payment and Cash Flow Review Report issued by Minister Hollinrake at the end of last year—I thought that it was a clear and excellent report—covers nearly all of the questions asked by noble Lords today, in particular the point about the Small Business Commissioner. The intention, to which we are absolutely committed, is to introduce broader responsibilities, which will allow said commissioner to undertake better investigations and publish reports; this will help significantly, I think.

The noble Lord, Lord Leong, asked who currently enforces the payments process. It is the Department for Business and Trade. We publish that data—it is on the Government’s website—and we also have a team tasked specifically with ensuring that we monitor late payment. That information is published.

I am sensitive to the point made by the noble Lord, Lord Fox, about the competitive case. As someone running a small business, one is—I was, and we were—obliged to take whatever business one can get. That is not irrelevant when it comes to the publishing of businesses’ competitive positions among each other; it is important. Similarly, the work that we have done on Companies House, with input from many noble Lords opposite, allows us to have better data around companies’ behaviour, which will have a significant impact. As I understand it, at least anecdotally, there is a concept in the consultation of competition between companies in terms of wanting to be a better payer is something that is not to be taken lightly.

I refer noble Lords to the report, looking at concepts such as late payments to be embedded in environmental, social and corporate governance standards, and so on. This will all have ultimately important impacts.

I have two other points, before I conclude, about the construction sector. Again, we have been very clear that we are looking to severely control the principles around retention payments, how they can be levied and how that operates in the information that we publish on that. We have been working very closely with an organisation called Build UK, which now publishes league tables on payment performance within the construction industry. This is a very clear flagged issue and something we are certainly working on. I am happy to write to noble Lords with further information if that is useful.

Lastly, the noble Lord, Lord Fox, raised a very important point about government procurement: how can we ensure that the Procurement Act is used more effectively to ensure that, through the supply chain, government procurement, which accounted for however significant a percentage of all procurement in the UK, is used to drive payment terms from its suppliers? That is a core element of this and it is worth saying that, since legislation was brought in in 2017, average payment times have reduced from 81 days to 36 days, which is a significant reduction. That is a single statistic, and I am very aware that it does not represent the value of the deals or go into a huge amount of detail, but that is the information that I have been given and I think it is very encouraging. Clearly, there are outliers and industries where there are still issues over payments. The Government take this point extremely seriously. It is a cornerstone part of our policy agenda to help small businesses, and indeed help the economy, to function properly. I am very grateful to all noble Lords for their input.

[Lord Leong (Lab)]

The Minister mentioned the drop in procurement payment from 81 days to 36 days. That is obviously very encouraging, but do the Government have figures for how long it takes the main contractor to pay its subcontractors?

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Lord, Lord Leong, for that point. We will have this data. I am looking, and average payment times between businesses peaked in December 2020 at 30 days and is now down to 35.6. I do not have the data in front of me for what it was before these regulations came in, but there is a very clear downward trend that can be seen in a chart in the report. I am happy to show noble Lords and to write with more specific information. The whole point about this exercise is to have the information to demonstrate what the trends are and who is not following the right courses of action.

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Debate between Lord Leong and Lord Johnson of Lainston

Report stage
Tuesday 16th January 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

My Lords, Amendment 4 is a minor technical amendment that the Government have introduced. I will read out my brief to be clear, because it is quite technical. The Bill as currently drafted may lead to a degree of uncertainty for decision-makers over the date that should be used when assessing whether the new grounds for cancellation of a geographical indication apply in a case where the GI has successfully undergone a name change. Under the current drafting, it could be argued that, in such a case, the date on which the original application to register the GI was submitted under Article 49 of Regulation 1151/2012 should be the date used to carry out the assessment and not the date when the name change application under Article 53 was submitted. This amendment addresses that uncertainty by making it clear that the assessment should be carried out based on the factual position relating to the date when the name change application was submitted, rather than the date the original Article 49 application was submitted.

I will translate that a little. The provision is effectively looking at the date on which the name change is submitted, rather than the original name. If I have a GI—“Johnson’s Water” or whatever it may be—registered in 1990 and then change the name to “Lord Johnson’s Water” this year, then the reference would be made to the point at which the name change application was made, rather than the status at the time of the original GI. It is a clarification which we think is important, and I trust my officials’ view on that.

I will just answer briefly the very helpful comments raised about Japan and geographical indicators. I would be extremely grateful to my noble friend Lord Lansley for making representation to the authorities in Japan to speed the process up. We are fully committed to ensuring that our GIs are protected in Japan; it is part of the agreements we have undertaken, but these things take time to effect. We are doing everything we can to be sure that those indicators are protected. Anything that he can do to speed that process up will be gratefully received by this Government. I beg to move.

[Lord Leong (Lab)]

My Lords, as we have heard, this government Amendment 4 is really a relatively minor and technical amendment, so there is not much to add, except for some questions we hope the Minister will respond to. How often do the Government expect this test to be utilised, and are there any potential ramifications they will come across? What happens if the name change application is not successful—is that a possibility? Finally, if a name changes from a geographical indication into a generic term, does this amendment apply?

[Lord Johnson of Lainston (Con)]

I thank the noble Lord for that point. I am very comfortable having a more detailed discussion about GIs in principle. It is worth noting that many countries, including those in the CPTPP, do not have necessary GI processes. Sadly, too few do, so there is a great push on behalf of this Government to ensure that we advance the cause of geographical indicators to ensure that our rights are protected. It is correct that it is possible for a name change to be rejected; it is a process that takes time, as with any intellectual property issue. It is a detailed and thorough process to ensure that we can be comfortable that names, trademarks, GIs and so on are properly protected, and the research has been done. It can be six months or it can be a year, which is why we have built in this provision to ensure that it is the point of application rather than the point of approval that the data is referring to. That makes sense.

There have not been any cancellations of GIs undertaken by this Government, or indeed recently. I will check that, but I hope I am accurate; if I am not, I will certainly correct myself in the Library. The question from the noble Lord is about whether this is something that happens regularly, and is a constant and ongoing issue. Maybe there have been one or two exceptional examples but as far as I am aware, it is a relatively straightforward process; it seems quite uncontentious so far.

These regulations simplify the processes in respect of how we operate with the CPTPP. Often, we look at the activities that will take place in this country, which is right. How to protect our own GIs is what we are working on domestically. Really, this allows us to export the whole principle of geographical indicators—the wonderful concepts of Scottish salmon and Scottish whisky, to name just two enormously important and well-branded products. It allows us to work with our partner countries in the CPTPP to ensure that those brands and concepts are well protected, because a GI does not give us any strength unless it is domestically registered and the domestic legal system respects these principles. I therefore hope very much that the House will support me on this technical amendment and on the principle that it projects.

--- Later in debate ---

[Lord Leong (Lab)]

My Lords, I thank all noble Lords for their contributions and the noble Lord, Lord Alton of Liverpool, for presenting this amendment calling on the Secretary of State to publish a report assessing the potential impact of China’s accession to the CPTPP on the United Kingdom and saying that both Houses of Parliament must be presented with a Motion for resolution on the said report.

As the noble Lord, Lord Lansley, indicated earlier, we on this side of the House would have preferred this amendment to cover all new accession countries—but for the purposes of this amendment I will refer just to China. Several noble Lords spoke in Committee on the case for this amendment and I do not propose to repeat what was said. However, I will make noble Lords aware of China’s non-market trade practices and its history of using economic coercion against CPTPP members, which must be considered in any valuation of its prospective accession.

First, there are aggressive military exercises and drills in the Taiwan Strait that threaten peace and stability in the South China Sea. This could be destabilising to regional trade. In addition, China has ongoing territorial disputes with other CPTPP members, including Japan, Malaysia, Brunei and Vietnam. Its willingness to use coercion against countries that disagree with it has often strained relationships with several CPTPP members. For example, it halted imports of Canadian canola and meat products in response to the arrest of a Huawei executive in Vancouver. Japan was denied access to rare earth materials in 2010 and Australian exports have suffered from Chinese import bans. Furthermore, several CPTPP member states have expressed concerns that China’s subsidies of state-owned firms and arbitrary application laws would be likely to make it hard for the country to join the trade pact.

I wanted to quote two examples, but the noble Lord, Lord Alton, mentioned the Japanese State Minister, so I will leave it at that and bring in another example of our very own British CPTPP trade negotiator, Graham Zebedee. Without commenting specifically on China’s application, if a country’s economic rules are really quite far apart from what CPTPP says, inevitably there is quite a big question about whether they could undertake really massive reforms. These concerns alone seem to provide sound justification for the commissioning of a report and Motion for resolution, as required by this amendment, so that both Houses of Parliament have the opportunity to fully consider the case for and against China’s accession to the trading bloc.

Recent newspaper reports have shown the lengths to which President Xi will go to crack down on companies when strengthening his control of the economy. Business leaders in China are under immense pressure. Last year, more than a dozen top executives from sectors including technology, finance and real estate went missing, faced detention or were accused of corruption practices. China’s national security law, as mentioned by my noble friend Lady Kennedy, is dangerously vague and broad. Virtually anything could be deemed a threat to national security under its provision and it can be applied to anyone on this planet. This law has provided little or no protection to people targeted. Lawyers, scholars, journalists, pastors and NGO workers have all been convicted of national security offences, simply for exercising their freedom of expression and defending human rights. Business leaders may face the same treatment.

China’s current policies and practices are at odds with many of the provisions and requirements of the CPTPP, and it is unlikely to be able to conform to them unless current members agree to significant concessions in the negotiations. This is why concerns about coercion are particularly relevant. Without considerable concessions, it is hard to see how China would qualify for accession. Equally, China is highly unlikely to make the changes to its laws and regulatory systems that would be required to gain the acceptance of CPTPP.

We are obviously sympathetic to the arguments made by the noble Lord, Lord Alton, and others in support of this amendment. However, there is not yet any agreement for any other country to join the partnership. It would be improper to single out any one of the possible new members at this stage, including China. At Second Reading and in Committee, we put on record our strong concern about China’s human rights record, but we believe that our human rights concerns should be universal and that one country should not be singled out. Should the noble Lord, Lord Alton, decide to divide the House on this amendment, we will abstain.

[Lord Johnson of Lainston (Con)]

My Lords, I am grateful for this debate and I have the greatest respect for my noble friend Lord Alton, who, over the years, has demonstrated his significant level of passion on this very important matter, as have many other noble Lords today. I do not want to deviate from the important points I wish to make relating to this CPTPP Bill, so forgive me if I do not necessarily answer all the questions that have been presented in relation to some of the topics raised. However, I would like to say, very importantly, that I clearly personally strongly reject the sanctioning of our parliamentarians. We have made it very clear before that China’s attempts to silence those highlighting human rights violations at home and abroad, including, and specifically, their targeting of MPs and Peers here in the UK, are unwarranted and unacceptable. I begin discussion on this amendment with that very important statement.

I turn to the debate around the CPTPP. As I have made clear throughout the last few stages of this Bill, in joining CPTPP, we are securing our place in a network of countries that are committed to free and rules-based trade, which has the potential to be a global standard setter. CPTPP acts as a gateway to the dynamic and fast-growing Indo-Pacific region and delivers on last year’s integrated review refresh to continue to enhance our relationships in that region. I stress this point, which was raised, I believe, by the noble Lord, Lord Purvis. Expansion of this agreement’s membership will only bring further opportunities for British businesses and consumers.

On potential new accessions, there are currently six economies with applications to join the group: China, Taiwan, Ecuador, Costa Rica, Uruguay and Ukraine. China’s application, alongside the applications of the other five economies, is at the outset of the application process and has certainly not been determined. As noble Lords are already aware, the CPTPP is a group of 11 parties and will become 12 when the UK accedes, and decisions must be taken by consensus of the CPTPP parties. However, it has been agreed within the group that applicant economies must also meet three important criteria: they must meet the high standards of the agreement; they have to have demonstrated a pattern of complying with their trade commitments; and they must command consensus of the CPTPP parties. These are very strong criteria, and I hope that all Peers on all sides of the House hear this very clearly.

As a new member of the CPTPP group, it is right that we work within the principles of the group to achieve a consensus decision, rather than give our own individual narrative on each applicant, such as through the report proposed in this amendment. My kinsman and noble friend Lord Hamilton made a very strong point in support of that. As I indicated previously, the UK is already closely involved in discussions on this topic but will have a formal power to oppose an application only post-ratification. It is therefore crucial that we ratify the agreement and become a party, so that we can work with CPTPP members decisively on each current and future application. I stress that to be drawn in on individual applicants now, ahead of the UK becoming a party to the agreement, could risk significant repercussions to our own ratification, which is why this is such a sensitive and important issue.

The UK becoming a party of the CPTPP is dependent on CPTPP parties individually choosing to ratify the UK’s accession, so it is not in our interests to step outside the group on such a sensitive issue. As I have been clear throughout our debates, we must join first so that we are on the inside judging other applications, not vice versa. It is therefore crucial that the UK ratifies the agreement, which will in turn trigger other ratifications that will allow us to become a party.

I want to be clear that our own accession working group was successful because we are demonstrably a high-standards economy with a strong track record, we made a market access offer of the highest standard, and we garnered the support of every party for our accession. Our accession process has set a strong precedent: the robust experience the UK has been through has reinforced the high standards and proved the bar is not easy to meet.

Comments were raised about state-owned enterprises. I will give noble Lords an anecdote from the negotiating team, as I understand it. We received a great degree of scrutiny over the relationship between Channel 4 and the Government, which few people, I think, would necessarily equate with the concept of a state-owned enterprise. I hope that that demonstrates the sort of inquiry that was behind our own accession.

I also reassure the noble Lord, Lord Alton, and everyone else who participated in this debate, that the accession of new parties after the UK has joined will entail a change in the rights and obligations of existing parties. Any new agreement requiring ratification by the UK would therefore be subject to the terms of the Constitutional Reform and Governance Act 2010. So, if he will allow me, I push back against the noble Lord and his suggestion—I think the noble Lord, Lord Purvis, also suggested it—that there is no track for the CRaG process to be triggered should a new party be able or about to accede to the CPTPP.

--- Later in debate ---

[Lord Leong (Lab)]

My Lords, I am speaking to Amendments 7 and 8, and I thank all noble Lords for their contributions.

Intellectual property, particularly copyright, plays a pivotal role in the global trade in creative content, with the UK music industry serving as a prime example of its significance. It is imperative to acknowledge the substantial impact of copyright on fostering innovation and ensuring the efficient operation of markets. Additionally, it is crucial to recognise existing obligations under international copyright treaties and ensure their full and correct implementation by the signatories of the CPTPP. While the fundamental rights encompassing reproduction, broadcasting, communication to the public and distribution are addressed within CPTPP, it is disheartening to note that member states retain the option to opt out of certain obligations. Furthermore, the non-recognition of copyright protection for the utilisation of recorded music in broadcasting and public performance remains a regrettable challenge. To comply with obligations in the CPTPP, as mentioned earlier by the noble Lord, Lord Foster, changes need to be made to UK legislation with regard to rights in performance. We share some of the concerns in the noble Lord’s contribution earlier, and we would welcome an impact assessment to help us understand some of these non-compliance cases.

Will the Minister respond to the following questions, as mentioned earlier by the noble Lord, Lord Foster? Why is the extension of rights in sound recordings and performance to foreign nationals not covered under this consultation? At the same time, can the Minister share with the House when the results of this consultation will be published? Will there be a statement on collective management organisations, given their importance for the income of composers, performers and rights holders? Can the Minister also confirm that UK musicians are able to tour throughout CPTPP member states without any barriers and checks?

[Lord Johnson of Lainston (Con)]

I am extremely grateful to the noble Lord, Lord Foster, for bringing this amendment, for the discussions and dialogue we have had, for the correspondence I have enjoyed with the noble Earl, Lord Clancarty, and for the excellent summation by the noble Lord, Lord Leong—I was about to say “my noble friend” because he is a good friend—who asked some key questions. I am afraid I do not have the answer to the final question that the noble Lord, Lord Leong, asked about the touring rights of artists. I will write to him on that; it is a very good point, and we very much hope that clearly the additional facilities that we have, in terms of temporary business entry for CPTPP countries, may include this. I hope it will and I will confirm this.

Some good points have been raised. In response, first, I will say that the desire to treat performers equitably is the right thing to do. Currently, there are a number of performers who are excluded from receiving the 50% mandatory royalty payment, simply because they come from another country or their work has not been registered in the appropriate fashion. The consultation, which started yesterday and will report on 11 March, is not specifically a consultation on the CPTPP, because we wanted it to be a far wider consultation around the principles of broadcast rights—but clearly it will reflect on the discussion we are having now.

Retained EU Law (Revocation and Reform) Act 2023 (Consequential Amendment) Regulations 2023

Debate between Lord Leong and Lord Johnson of Lainston

Wednesday 13th December 2023 Grand Committee

[The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)]

My Lords, these regulations were laid before the House on 16 October 2023 under the Retained EU Law (Revocation and Reform) Act 2023. The retained EU law Act brought about significant changes to the domestic body of law named retained EU law. First, it provided that EU interpretive effects would cease to apply to UK legislation at the end of 2023. Secondly, it provided the Government with powers to revoke, reform and amend retained EU law more easily. Finally, to reflect the loss of interpretive effects, it provided that “retained EU law” would be renamed “assimilated law” at the end of 2023. Therefore, the Government are bringing forward this instrument to ensure that references to “retained EU Law” in primary legislation are changed to “assimilated law”, and to make related consequential changes.

The SI will enact consequential amendments to 107 pieces of primary legislation in order to implement the renaming of retained EU law as assimilated law and to make related textual changes. These changes reflect what has already been agreed to by Parliament as part of the passage of the REUL Act. This SI simply implements consequential changes that both Houses have already agreed. For example, the SI states that, in Section 4B(3A) of the International Organisations Act 1968, “retained EU” should be substituted by “assimilated”. The changes are necessary to ensure that the statute book reflects the REUL Act and to provide legal clarity and accessibility to users of legislation.

The SI will make technical amendments to Acts of Parliament containing areas of devolved competence, including making changes to Northern Ireland primary legislation. I am pleased to confirm that the Welsh and Scottish Governments have provided consent, as has the Northern Ireland Civil Service in the absence of an Executive and Assembly. I thank officials for their close working and collaboration on this matter.

It is worth noting that this SI is a standard example of using a consequential power. These powers are common in many Acts. They simply allow the Government to make consequential amendments to legislation that both Houses of Parliament have already passed. The fact that we are debating such technical changes as this demonstrates the Government’s commitment to ensuring proper scrutiny for all statutory instruments laid under the REUL Act.

Finally, although this SI does not enact reform or make any policy changes, the Government’s commitment to reform remains unchanged. Our priority is to bring forward reforms that will unlock innovation, reduce burdens for business and ensure that our regulations are the best fit for the UK. I am the Government’s lead on smarter regulation, so reforming our regulations is a personal priority for me. I look forward to sharing additional reform SIs with the House in coming months.

With all that in mind, the principles behind the changes we are proposing today have already been agreed by both Houses as part of the passage of the retained EU law Act. These changes are necessary to ensure that the statute book reflects the provisions enacted by that Act and to ensure that the terminology is consistent throughout primary legislation on our statute book. Nothing that this SI does will enact policy changes. I beg to move.

[Lord Leong (Lab)]

My Lords, I confess I struggled to find the controversy in this statutory instrument. All it actually does is bring into effect the use of the phrase “assimilated law” instead of “retained EU law”. Paragraph 7.1 of the Explanatory Memorandum states:

“This instrument does not result in any change in policy effect, but rather provides clarity to users of legislation that the specific changes made by the REUL Act have taken effect—thereby helping to further modernise our statute book and improve its clarity and accessibility for businesses and consumers alike”.


It is basically a linguistic update. We on this side of the Committee very much welcome any bit of clarity and assistance that can be offered to business. From what we can see, it certainly is not a controversial statutory instrument. On that basis, we will support it.

[Lord Johnson of Lainston (Con)]

I thank the noble Lord, Lord Leong, as I always do, for his wise words. I will say no more than that.

Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023

Debate between Lord Leong and Lord Johnson of Lainston

Wednesday 13th December 2023 Grand Committee

[Lord Leong (Lab)]

My Lords, I thank the Minister for introducing the regulations, and all noble Lords who contributed to this debate. It is a pleasure to see my noble friend Lord Stansgate and welcome him to the chair.

As we have heard, this instrument does three main things. It reduces requirements under the working time directive, simplifies annual leave and holiday pay calculation and streamlines the regulations that apply when a business transfers to a new owner. This results from the retained EU law Act removing the interpretive effects of EU law on the UK statute book.

As my noble friend Lord Hendy mentioned, during its passage through the House, many of us on these Benches made it absolutely clear that the Act should never be a vehicle for the removal of important existing rights of British citizens. The Government seek to assure us that these changes do not amount to that, and that they simply remove extra bureaucracy. However, in my relatively short time in this place, I have learned to be wary of such assurances. It is said that the devil definitely lies in the detail. However, accurate records leading to accountability surely should not be seen as an evil in itself.

First, I turn to the change to the working time regulations. This represents the greatest risk to workers’ protection. It means that businesses will not have to keep records of their workers’ daily working hours if they can demonstrate compliance without doing so. Will the Minister accept that removing the requirement for accurate record-keeping, tilting the balance of power away from workers to the employer, in fact removes workers’ rights, not unnecessary bureaucracy?

The Explanatory Memorandum says that the instrument will “remove the uncertainty”, without quite explaining what this actually means. The Government argue that the obligations were disproportionate and could damage relationships between employers and workers. Can the Minister expand on how removing clarity could damage this relationship and do anything but actually increase uncertainty? Can he also explain how businesses will demonstrate compliance without records and how a lack of compliance could be evidenced or enforced? Can he expand on the implied relationship between recording working hours and reducing economic activity, or is he prepared to accept that such a correlation does not in fact exist?

Secondly, the instrument provides a simplification of annual leave and holiday pay calculations. In all my years of owning and managing businesses and employing thousands of employees, I have never seen such a complicated system—so much for reducing unnecessary bureaucracy. Can the Minister guarantee that, as a result of this regulation, no workers will lose out on the annual leave and holiday pay to which they are currently entitled?

Finally, I turn to rights under the Transfer of Undertakings (Protection of Employment) Regulations —TUPE. My noble friend Lord Davies of Brixton eloquently set out why this change is totally unnecessary. As TUPE transfers currently stand, employers must inform and consult with representatives from a trade union or, if there is none, other employee representatives. Employers can inform and consult directly with employees only if there are fewer than 10 employees in the organisation. This instrument will amend TUPE consultations so that they can take place directly with employees in the absence of existing representation, if either the company has fewer than 50 people or the transfer involves fewer than 10 employees. This clearly represents a reduction in the existing rights of workers in such organisations. Can the Minister confirm whether ACAS has been consulted on these changes? I look forward to his response.

[Lord Johnson of Lainston (Con)]

As always, I thank noble Lords for their valuable input in this crucial statutory instrument debate. I also join in the thanks to the noble Viscount, Lord Stansgate, and welcome him to his position.

I will try to go through the various points raised, beginning with those of the noble Lord, Lord Hendy; by answering some of his questions, I will have a chance to answer others as well. The point about rolled-up holiday pay is important because, if you are an irregular-hours contractor and you work for an employer for a very short period of time, for example, it would be impractical for you to take a fraction of a day’s holiday paid in that way. It is much more reasonable, useful and suitable for the employee to have their holiday pay rolled up into the work they are doing.

This is important, and we consulted on whether we should bring it in for all employees in the UK. We decided that that was very much not the right thing to do, precisely for the reasons raised by the noble Lord: it is essential, in many respects—in order to have a good and functioning workforce—that holiday is taken at the right time and that people have the right level of rest, let alone in relation to the implications for health and safety. As a result, this only applies to part-year and irregular-hours workers. Whether the employees wish to receive their pay in that way is at the discretion of the employer, in consultation with them. From my point of view—I have been an employer—this strikes me as eminently reasonable. It does not necessarily change anything significant; it just clarifies the important point about how that can be rolled up. We also brought in important clarifications between part-year workers’ holiday entitlements and irregular hours workers’ holiday entitlements, which now bring them into line. Again, this is about fairness, which I know that the noble Lord is keen on.

On record-keeping, it is relevant to mention the court case that has been referred to: CCOO v Deutsche Bank—I will use the acronym “CCOO”, rather than try to pronounce the full name. It is important to note that we are not changing anything at all. I am not sure whether noble Lords realise that this was never implemented in the UK, so the point is that we will not implement it in the UK and it is currently not implemented. Tomorrow morning, or whenever the statutory instrument comes into effect, there will be no change in employment systems for any company—no one would see any difference—because we are not implementing this necessity to track every minute of every worker’s day. Instead, employers will have the rights that they have today, so if we are comfortable—which we are—with the obligations that employers have to confirm under the working time directive, we should be very comfortable with where we are.

We believe very firmly that bringing in this necessity would in many instances be unnecessary. This does not relate to making sure that irregular-hour workers, workers in part-time roles or those who work complex shifts, and so on, have worked the right amount of time. In most instances, this is for regular office-hours workers who work roughly nine to five; to have them clocking in and out, and having complex systems monitoring them, is entirely unnecessary. We do not do it now and do not see why we should do it. We think that the cost to industry in this country could be much as £1 billion in terms of new systems and familiarisation.

The noble Baroness, Lady Brinton, mentioned Ukraine. The consultation referred to the fact that in a cost of living crisis, and with other global headwinds and challenges, it would seem unnecessary and wrong to impose burdens on businesses that we are not already imposing on them. There is nothing to lose. It is important to be reassured that employers’ obligations have not been changed. There are no changes as a result of this instrument. It simply ensures that we do not have to conform to unnecessary and restrictive paperwork-oriented activities.

The noble Baroness, Lady Brinton, also raised an important point about the use of AI and technology. I completely agree with her raising those points. I do not think it is in doubt that employers will want to use AI to ensure that they are conforming to their obligations and that their workforces are properly managed, but we should not forget that it is important that we respect small businesses in this country, which may not have the time or capital to invest in such systems. In most of these instances, we think it is unnecessary. I believe that, collectively, we are doing a sensible act in not implementing this judgment, by keeping things as they are and ensuring that workers are protected. Employers have obligations and we are allowing the system to function appropriately.

The third point covered by noble Lords was on TUPE. I know that the noble Lord, Lord Hendy, has been described as the barrister champion of the trade union movement, and it is a title of which he should be proud, but this relates to organisations with fewer than 50 employees—currently, it relates to organisations with fewer than 10 employees—who do not have a representative force in place. While he is indeed the barrister champion of the trade union movement, it may surprise him to know that some companies do not have trade union movements or representative organisations in them. We find ourselves in a bizarre situation where small companies with few employees are obliged to have elections for representative organisations that do not exist. Even in the world of the noble Lord, that would seem bizarre, unnecessary and indeed unkind to small businesses. It does not at any point derogate the rights of employers when it comes to TUPE transfers where there are representative organisations.

The noble Lord, Lord Leong—perhaps it was the noble Baroness, Lady Brinton, or the noble Lord, Lord Davies—rightly raised whether this can be used as a way round, so that large companies transferring small units to other companies could do it piecemeal, say 10 employees at a time. I do not believe that that would be the case. The obligations of an employer under TUPE regulations—the liabilities accruing to them—have not changed in any material way whatever. Tribunals where they could be found at fault would clearly see through such a plan. I am sure noble Lords know that when you buy businesses that are relevant in terms of team transfers to other companies, it simply does not work in that way, so I do not believe there can be an abrogation of rights.

Let me give an example, which I am sure noble Lords will agree is common sense: if you are transferring a small unit of two people, I understand that you are currently obliged to have an election and a representative for two people who are not members of a union and do not have a representative organisation. That does not mean they cannot receive external advice; of course, we would always advise people to receive the advice they need. In this instance, we are clarifying the situation, simplifying it and making it completely reasonable. At no point are we rolling back on any of the workers’ rights that we hold so strongly in this country and which we are committed to, either through trade agreements with Europe or any agreements that we have undertaken.

Genuinely, I have looked very carefully at each aspect of this statutory instrument and think it is a welcome tidying-up of paperwork and bureaucracy, alleviating burdens on businesses while at the same time simplifying the rights of workers and ensuring that the economy can function effectively. I commend this instrument to the Committee.

Workers’ Rights

Debate between Lord Leong and Lord Johnson of Lainston

Thursday 23rd November 2023 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am delighted to be taking through the CPTPP Bill, of which one of the key tenets is ensuring that musicians receive a fair proportion of the money they earn from broadcast media. This is just one of the many areas that we are focusing on, and I will also mention the support allocated in the Autumn Statement yesterday to the creative industries in general. We make all the great films in the world here, including “Barbie”, and I hope that will continue, whether you are a self-employed musician or part of a larger organisation.

[Lord Leong (Lab)]

My Lords, I will follow on from my noble friend’s supplementary question. On Tuesday this week, the Supreme Court ruled that Deliveroo drivers are not entitled to certain rights, including unionisation, because they are considered to be self-employed and not workers. Do the Government have any plans to protect the growing number of workers in the gig economy, rather than allowing multinationals to dodge basic employer obligations by pretending that some of these lowest-paid workers are able to exercise their freedom to turn down work?

[Lord Johnson of Lainston (Con)]

The Government have done a huge amount to ensure that principles such as zero-hours contracts can remain flexible, allowing millions of people to do the work they wish to do and allowing students to participate in the workforce, while ensuring that they have the right levels of protection for holidays and other crucial concepts in workers’ rights. It is important that we have a strong economy, which will enable people to have these jobs. I remind all noble Lords that we have increased the number of employed people by over 3 million since we came to power in 2010.

Automotive Manufacturing Sector: Support

Debate between Lord Leong and Lord Johnson of Lainston

Monday 15th May 2023 Lords Chamber

[Lord Johnson of Lainston (Con)]

As I have expressed, the importance of investing in this area remains paramount. We have the automotive transformation fund, which is over £850 million, and the Faraday challenge. I have listed some other important aspects that the Government are focusing on. This has led to important investment, including into Pensana, Jaguar Land Rover, Mahindra & Mahindra, Motherson Group, TVS and the Hinduja Group, and a whole new range of investments into hydrogen-powered buses, which is a great success flag for Northern Ireland.

[Lord Leong (Lab)]

My Lords, my first car, which I loved, was a British-made MG Midget in racing green. It is very sad that we are now at a point where unless the UK Government develop a credible automotive industrial strategy, Britain will soon have no automotive industry and the memory-making cars that come with it. We have world-class British automotive designers, internationally renowned British engineers and a skilled and hard-working British workforce. What plans do the Government have to utilise these assets to improve productivity, invest in research and innovation and ultimately transform the sector as it moves away from petrol and diesel?

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Lord, Lord Leong, for telling us about his car history. My first car was a Fiat Regata; I doubt that anyone in this House has ever driven one of those, and I would not necessarily advise it. It is important to look at some of the other aspects of where we are investing and have been successful in this country, and to trumpet the successes and triumphant elements of our car industry. Formula 1 is a very good example of that: two-thirds of the Formula 1 teams are effectively located here and the technology is developed here. There is our luxury car industry, where Bentley has recently announced £2.5 billion for further investment. We lead the world in luxury cars including, I am pleased to say, the rebirth and renewal of the important brand of Lotus. I met those in its owning company a few days ago and heard of their commitment to investing in this country, because we have the expertise to do the design, development and, ultimately, manufacture.

Workers’ Rights

Debate between Lord Leong and Lord Johnson of Lainston

Monday 6th March 2023 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am grateful to my noble friend for that question. I am afraid this is not my department, but I would be delighted to come back to her with a Written Answer.

[Lord Leong (Lab)]

My Lords, both the Minister and I founded and ran our own businesses before coming to this place. I hope he will agree not just with me but with many business leaders and trade unionists, such as my noble friend Lord Woodley, that decent working conditions for employees’ security, health and well-being directly lead to improvements in productivity. Will he remind his government colleagues that a surefire way to make UK plc more productive would be to enshrine the highest standards of workers’ rights in legislation and not to seek to weaken or remove them through the Retained EU Law (Revocation and Reform) Bill or the Strikes (Minimum Service Levels) Bill going through both Houses?

[Lord Johnson of Lainston (Con)]

I thank the noble Lord for that point and for the extraordinarily high level of collaboration we engaged in last week when we were doing exactly this: bringing in protections for workers—in this case, the Carer’s Leave Bill, which will allow carers the flexibility to have a much-needed one week of unpaid leave. Ultimately, the best way to strengthen the workforce in this country and to enable businesses to give pay rises is to encourage the sorts of policies this Conservative Administration have brought into play, which have resulted in nearly 4 million new people in work, the average and minimum wages going up by over £8,000 and—