Horizon: Compensation and Convictions

Lord Offord of Garvel Excerpts

Wednesday 10th January 2024 Lords Chamber

[Lord Fox (LD)]

My Lords, as we have heard, it has taken a television drama to set light to what has been smouldering for a very long time. I suppose that all those associated with that drama should be congratulated, because they have managed to do what we failed to do: to ignite public indignation to such an extent that the Government had to move. In that respect, they deserve a great deal of congratulations. Of course, the script has been played out here and, thanks to the noble Lord, Lord Arbuthnot, at the start, and others, we are very familiar with it.

I have a few questions about where we are now. First, we welcome the news that Scotland Yard is looking into potential offences in relation to the Post Office overall, but can the Minister confirm that this will be able to progress in a speedy way in a twin-track approach alongside the public inquiry? It is very important that both these things can happen as fast as possible. We do not want one to impede the other, so can the Minister assure us that this twin-track approach will be pursued?

Turning to compensation, in the case of individual assessment, can the Minister please enlighten your Lordships’ House on the role of retired judge Gary Hickinbottom’s panel? This was announced only on Monday and, according to the Minister then, this panel is apparently going to assess the pecuniary losses for those with overturned convictions if there is a disagreement. Is this now obsolete, or will it still be operating? If it is still operating, why does it deal with only pecuniary issues when the Secretary of State has on a number of occasions said that this harm goes way beyond simply those? How is this to be incorporated into the two announcements spread over three days?

In the Commons, the Father of the House, Peter Bottomley, said that

“the titanic error was a belief in technology”—[Official Report, Commons, 8/10/24; col 86.].

It was that belief, coupled with zero faith in the decency of the sub-postmasters, that set the problem going. In that, the role of Fujitsu was central, and it is clear that the failure of its technology was at the heart of the issue. It remains to be seen how it perpetuated the myth of its technology, and that is what the public inquiry will address; but however you look at it, it continues to benefit from UK consumers’ and taxpayers’ money. It is still operating Horizon for POL, and benefiting as a result to the tune of tens of millions of pounds annually. That is not all: further government contracts have been issued. Is this right? Is it appropriate that this should continue?

Speaking yesterday, the Work and Pensions Secretary, Mel Stride, is quoted as having stressed that not only the taxpayer will be on the hook for this compensation. The spirit of that was reiterated by the Parliamentary Under-Secretary, Kevin Hollinrake, today. So, does this now signal that the Government are going after Fujitsu for money to support the compensation of these people?

It is a terrible saga, but it has demonstrated characteristics of other sagas we have seen. For example, the process of compensating the victims of the Windrush scandal has been achingly slow. The contaminated blood scandal has dragged on and on. Another terrible example is the way the Hillsborough tragedy victims have been denied justice. There is a pattern of denial, cover-up, and then redress being delivered at a very slow pace. Does the Minister agree that there appear to be institutional problems that we ought to try to address?

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

I thank the noble Lords, Lord Nicol and Lord Fox, for their contributions and detailed questions. It is worth reminding ourselves of the timeline of this sorry story. The Horizon accounting system was introduced in 1999, and between 1999 and 2013—a 14-year period—the 700 postmaster direct prosecutions in England were brought. In 2017, the group litigation order was got together and in 2019 the High Court judge discovered that the case was flawed and the judgment was made, whereupon 75% of the settlement money had to go to fund the litigation.

In 2020, the then Prime Minister committed to holding an inquiry into the Horizon scandal, so that starts the clock on government action. The Criminal Cases Review Commission then began its work and referred the initial 39 cases to the Court of Appeal. In 2020, the Horizon shortfall scheme was set up, designed on the understanding that compensation was going to have to be made. So at that moment, there was an understanding that there was a major problem.

In 2021, the High Court quashed the 39 convictions in a landmark judgment, and the Government announced funding for Post Office Ltd to pay the compensation. On 19 September, my predecessor, my noble friend Lord Minto, made the announcement in this House on the £600,000 upfront offer, so that pre-dates the TV series.

My DBT colleague in the other place, Minister Hollinrake, was vocal on this issue when he was on the Back Benches, and now, as a Minister, he has committed entirely to getting justice. He has come up with the £600,000 scheme, which is saying to people, “You don’t need to go through any more trauma or see any more lawyers. Here is an interim payment of £163,000, and you can get up to £600,000 without seeing another lawyer, get your conviction overturned and be done and dusted”. Yes, it is clear that the TV series brought this to light and to public attention. However, it has been acknowledged in government that this is a big problem that needs to be sorted. I commend my colleague, Minister Hollinrake, for what he has done so far.

In the process going forward, time is of the essence. The timeline will involve a triple track. First, there is overturning the convictions, which will require primary legislation. This breaks a lot of precedents in terms of legal procedure; ordinarily, convictions are given by a court and should then be overturned by a court on an individual basis. It is possible that in respect of some individuals, an otherwise safe conviction in another matter will be overturned. We do not have the time to dwell on that. We talked about the Blackstone principle: it is better that we get justice for the many as fast as we can. That process will be immediate.

The second part of that process is accountability. We need to know what happened; we need the facts and to get to the bottom of this. We cannot repeat the mistake the Post Office made, which was to go half-cocked, without evidence, against people who cannot then defend themselves. We need to go through a process to understand who is accountable; people are innocent until proven guilty. We will take this on with the Williams inquiry, which is determined to report through the rest of this year and will get to the bottom of the accountability issue. The third track, as the noble Lord, Lord Fox, mentioned, is the police making their own inquiries. It is fair to say that, post the TV series, this is uppermost in all minds, and the timeline will be expedited considerably.

Going back to accountability and culpability, there are a number of players in this: the Post Office management, Fujitsu and, obviously, the role of various Ministers. That is why the Williams inquiry must do its work and get to the absolute bottom of this, in order to understand what we are dealing with. In the case of Fujitsu, are we dealing with rogue employees, corporate malfeasance, or was the Post Office instructing its client to do what it wanted it to do? We do not know the answers to these questions, so we must get to the bottom of that. That process will run through and when we have that, we can then discuss accountability. As the noble Lord has said, Fujitsu has been involved in many government contracts across many departments for the last 20 years and continues to do its business according to the contracts it has with the Government. I am sure that there is heightened awareness now around some of its performance. But this process will continue until such time as we find evidence to suggest that it has been outside of its contract, and if so, the consequences will follow.

We have to separate out the payment of compensation, speeding this process up and making it as painless as possible. Today, my colleague in the other place, Minister Hollinrake, announced that the 2,100 postmasters who were not convicted and who were not part of the GLO 555 have already had a compensation scheme, which is running though; 80% of those claims have now been met, and we see that process continuing. Retired judge Sir Gary Hickinbottom is there to deal with those sub-postmasters who feel despondent at being back in dialogue with this thing called Post Office Limited: “Why is the compensation being done by Post Office Limited?” Therefore, to give assurances around that relationship, with Post Office Limited paying compensation through the HSS, the presence of Sir Gary Hickinbottom ensures some level of independence and an appeal process, which will come through.

So I believe that everything is being done now to expedite the process on the compensation side. In terms of accountability—as was asked by the noble Lord, Lord McNicol, and the noble Lord, Lord Fox—we will let the Williams inquiry move through. As far as the timeline is concerned, this has to happen with all speed and, again, we are very grateful that we have my noble friend Lord Arbuthnot and Kevan Jones MP, who are so vital to this and have the trust of the sub-postmasters. That advisory committee will be clear in making sure that everything is done as fast as possible.

[Baroness Manzoor (Con)]

My Lords, I will ask the Minister a follow-up question to the question from the noble Lord, Lord Fox. What happened to the sub-postmasters and how long it has taken to deal with these issues is, of course, absolutely outrageous, but there are other scandals that we know about as well, such as infected blood, Hillsborough, Windrush and Grenfell. These too involve people who have been badly affected by what has happened to them and they have caused significant harm and distress to those individuals and also to their families. Can the Minister say what the Government are doing to ensure that, once we know a scandal has happened, we deal with it quickly and in a very timely fashion so that it does not take almost a generation?

[Lord Offord of Garvel (Con)]

I thank my noble friend for that question. We must recognise the common interest of people impacted by the Horizon scandal and those affected by, for example, the infected blood scandal and Hillsborough and other tragedies. It is important to recognise that each of those circumstances was different and unique and unprecedented; each case is a personal tragedy.

In the infected blood case, the Government have already made interim support payments of £100,000 to individuals and bereaved partners, and the cost of that will be £400 million in terms of interim compensation. That compares with a likely figure of £1 billion for the Horizon postal scandal. I cannot speak with any great authority on the wider picture, but it must surely be the case that, as the Government look at this case, there will need to be a wider conversation and look at the broader picture on all these issues.

[Lord Browne of Ladyton (Lab)]

My Lords, I accept that with this particular scandal the priorities should be the exoneration and compensation of those who have been so badly damaged by it, the exposure of the reality of the corruption that led to the scandal in the first place and accountability for those who have been acting so corruptly. However, at the heart of this, the biggest miscarriage of justice in terms of scale that this country has ever seen, there is another issue that needs immediate attention: a faulty legal presumption that requires immediate re-evaluation. In England and Wales, there is, as a matter of law, a presumption that computers are working properly, unless there is evidence to the contrary, and therefore that what they produce is reliable. If it were not for the group litigation, the fundamental unreliability of the software in the POL Horizon system would never have been revealed. That is because challenging that computers are not working properly is far outwith the resources of most people in this country and, unless they work together in this way, they have no chance of doing this in our courts. It is time now to re-evaluate this and replace this presumption with a requirement that those who rely on computer evidence should justify to the court that it is reliable and not the other way around. We could do that relatively quickly and easily, and the onus would then lie on the people who are relying on that evidence to show that it is reliable and that the computer is working properly. In the Horizon case, without perjury, nobody would have been able to do that.

[Lord Offord of Garvel (Con)]

The noble Lord highlights perhaps one of the most cynical aspects of this terrible case: each of the sub-postmasters was told that they were alone and that this was happening only to them. We have all seen the programme and we all know the people in our communities who do these vital jobs. They work alone in small shops in small towns and villages and do not necessarily have the support that they need. That was perhaps one of the most invidious parts of the drama series and, at the end of the day, perhaps the help given by one or two constituency MPs was to believe these folks and get them together, which resulted in the group of 555 coming together. It is very relevant to say, “Why does the little guy have to keep convincing the big guy? What is going on?” Again, I know that the Lord Chancellor and the Ministry of Justice are now very focused on this issue and that they will come out of this with some serious questions that need to be answered. That will be part of the follow-up to the Williams inquiry. Let us find out exactly what happened. Out of this, I think that some serious questions will be asked about future processes and that this House will come back to this issue more in the coming years.

[Lord Maude of Horsham (Con)]

My Lords, nothing that is done at this stage can even get close to putting right these terrible wrongs, which will be a dark stain on our polity for a long time. The whole House will welcome what is now being done, which is the best that can be done at this stage. I will focus on the issue of the company, Fujitsu. In 2010, we found that it was deeply entrenched across the whole of central government. Its performance in many of these contracts was woeful, and the procurement system regulations then in place made it impossible—although we tried—to prevent it getting further contracts. Does my noble friend agree that, if that company has any sense of honour, let alone a concern for its reputation, it should come forward very quickly, without waiting for the results of these inquiries, which we know will take some time, and make a big ex gratia payment towards the compensation that is rightly being paid?

[Lord Offord of Garvel (Con)]

I thank my noble friend for that. He speaks with great experience of the inner workings of Whitehall, obviously, and has seen the way that these anomalies arise. The public would be entitled to say, “Why has this company been so embedded for so long and made so much money out of the taxpayer?” So, with emotions running high at the moment, we understand the calls for compensation. It has been made very clear in the other House that the cost of this should not fall solely on the taxpayer. If there are other sources of compensation, there must be access. I must say that, if I were the chief executive of a company in this situation, I would be thinking about that matter very carefully.

[Baroness Chakrabarti (Lab)]

My Lords, I am grateful for the Minister’s approach so far to this very difficult subject. He has spoken very clearly of exoneration and compensation, which it would seem could be achieved by primary legislation fairly swiftly. He is right to say that accountability may take longer, because that is about due process, investigations and, we hope, prosecutions and quite possibly restitution, including in relation to Fujitsu. In a previous answer, I believe he said that government involvement had started around 2021. What about the fact that Governments were represented on the Post Office board? What about the question of what these arm’s-length entities, including privatised entities such as Post Office Ltd, do to the concept of ministerial responsibility? What will we do about that precious constitutional principle going forward?

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for that. This is another area that will demand further consideration. Within the system of government now, we have a lot of quangos, third-party agencies and off-balance-sheet activities. The question that must always arise is what the relationship is between those and the shareholders, who are effectively the taxpayers. What is the role of Ministers to sit in between them, and what is the accountability of Ministers to make those decisions? A large number of noble Lords in this House have been Ministers and understand how that works and that we have conservations with officials. But we also need to have a sniff test, do we not, about what sniffs right and what sniffs wrong. There is a requirement to look at this again, so as to not be in a position where we just always take what officials tell us, and a need to actually be a bit more canny about the questions we ask.

[Lord Harries of Pentregarth (CB)]

My Lords, the enormity of this seems so appalling that, even when the sentences have been overturned, the compensation paid, and the committee inquiry taken place and blame apportioned, we will need some great public, symbolic act to recognise that something terrible has gone wrong and that hundreds of people who were wrongly accused have now been clearly and publicly vindicated. Will the Minister think about the possibility of doing something, perhaps in Westminster Hall, on behalf of the state and in a public and symbolic way, to express the sorrow of the state and the clear, public vindication of these hundreds of people?

[Lord Offord of Garvel (Con)]

I thank the noble and right reverend Lord for that intervention; it is a very insightful comment. Ironically, when the management were asked in court what they felt one of their core duties was, they said it was to protect the reputation of the Post Office. But what of the reputation of the Post Office today? I would argue that, funnily enough, the reputation of the Post Office has in some ways gone up, in that people now understand the value of sub-postmasters. Are they not what the Post Office actually is? Those who have suffered reputational damage have been the management of the Post Office, and rightly so, but has not this sorry saga perhaps brought to our attention just how valued the sub-postmasters must be in our community? What the noble and right reverend Lord has called for is a demonstration of that. It is a very good idea, and one that I will take back to the department.

[Lord Sterling of Plaistow (Con)]

My Lords—

--- Later in debate ---

[Lord Palmer of Childs Hill (LD)]

My Lords, following on from what the Minister said, could he explain the role of the audit committees, at any level, and the National Audit Office? Where were they in this scandal? There are audit committees and they had a role to play. The elementary precaution used by all firms of accountants is that, when a new system is put in place, you run a parallel system for a few months to make sure there are no errors. Why was that not done?

[Lord Offord of Garvel (Con)]

The noble Lord is absolutely right to raise these points. This is what the Williams inquiry will be looking at in fine detail. My understanding of the situation is that there was no shortage of committees all over this terrible saga, but there was a shortage of good judgment, inquiring minds, sympathy and common sense. These questions will all be answered. They need to be run through the Williams committee, and we need to know the answers to all of these. I know that he will do his work in great detail.

[Lord Sterling of Plaistow (Con)]

My Lords, can I comment as follows? There was a most sad interview this morning on the “Today” programme; it was really upsetting, to say the least. On following up with Fujitsu, could I suggest that the Prime Minister ring the Prime Minister of Japan, who was elected to bring back the standing of Japan in world terms? In practice, trust and respect is a key factor to them. It is not impossible that, in the case of wanting that recognition, trust and respect, the Prime Minister of Japan would quietly ring the chairman of Fujitsu and that, in a charitable form, they could arrange something which would suit us. They would consider it generous while we would not. Nevertheless, it is something to try; it would just be a phone call.

[Lord Offord of Garvel (Con)]

I thank my noble friend for that idea, which is a good one. With his permission, I will take it back to the department.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, in the other place today, Minister Kevin Hollinrake said that engagement with the Scottish and Northern Ireland Administrations would take place. How will that happen in Northern Ireland whenever there are no political institutions up and running? Who will the Government actually engage with, since post offices are very much the financial hub, and have been over the last 20 years, particularly in rural communities?

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for that point, which is well made. We have to work with the situation we find ourselves in, and this has to be moved along at great speed. I am happy to write, as I do not know the exact answer to that question in detail, but I do know that conversations and dialogue happen between the MoJ and those in both Scotland and Northern Ireland. I am happy to find out more about the precise mechanics of that.

[Lord Forsyth of Drumlean (Con)]

My Lords, further to the question which was asked earlier this afternoon by a right reverend Prelate, the BBC is reporting that Paula Vennells was shortlisted to be the Bishop of London. The media are very much focused on her, but there was a board and there were successive chief executives, all of which seems to be being ignored. It is really important that accountability is clear. We cannot wait for the inquiry. Does my noble friend not think that something is desperately wrong with our procedures, and with the judicial system, when it takes 20 years for this to be established, and where the net beneficiaries have been the lawyers? They have earned millions and millions of pounds, while ordinary people have been bankrupted and unable to defend themselves. Does he accept that this requires, as has been pointed out, a root-and-branch assessment of how these systems operate and the arrangements with agencies, where Ministers—far be it for me to defend the leader of the Liberal Party —are held to account for bodies with which there are arm’s-length relationships and where they are unable to execute responsibility, although they are held accountable for it?

[Lord Offord of Garvel (Con)]

I thank my noble friend for that contribution. On the lawyers, that is certainly a point well made—it is quite extraordinary how much has been made out of this so far by the lawyers. That is why my colleague, Minister Hollinrake, has been so assiduous in coming up with a plan which allows for compensation to be paid immediately—whether that is the £75,000 minimum to the GLO group or the £600,000 for those who are having their convictions overturned—without the need to have any more legal input. That is a very important part of the process. If any claimant feels that they want to make a bigger claim than that, they will need to interact with lawyers again to do so; again, we have given a tariff and a certain cap, which will at least minimise that. On the wider point from my noble friend Lord Forsyth, I completely agree that this highlights serious flaws in the corporate governance of the Post Office, and in the role of the board and its interaction with government officials of whichever colour and creed. We need to have a serious look at this. Once we have gone through the Williams inquiry, I believe that this will be worthy of much further consideration in this House.

[Baroness Fox of Buckley (Non-Afl)]

My Lords—

--- Later in debate ---

[Baroness Fox of Buckley (Non-Afl)]

My Lords, one of the reasons this has resonated so widely is not just because it was a brilliant drama but because so many ordinary people recognise what it feels like to be fighting the establishment and getting nowhere. We have all spent hours shouting at the phone on those helplines on the computer—that is in relation not just to HMRC but to the NHS and everything you deal with—but people were also treated as though they were criminals, not believed, and gaslit by these experts who know what they are talking about.

Anyway, there is an issue here. The whole establishment, not just the Post Office but the judiciary, seems to have a lot to answer for. I therefore ask, if the judges believed the computer, how we feel about the fact that the police national computer is maintained by Fujitsu. Britain’s criminal records database is run by Fujitsu. It has all the details of convictions, cautions, fingerprints, DNA data and—something I have been banging on about for a while—non-crime hate, when you have not committed a crime but you are on a database run by the police. Fujitsu has it. I do not feel safe in these circumstances, and I identify with the little man against the establishment.

[Lord Offord of Garvel (Con)]

I completely concur with the noble Baroness’s sentiments. Emotions run high at this moment, and quite rightly because we have seen a lot of very decent innocent people treated very badly over such a long period; it is quite extraordinary. We are now at a point where we are facing this issue. We are going to move fast to get compensation into place. Let us get the inquiry under way, and out of that will flow a lot of further debate.

Horizon: Compensation and Convictions

Lord Offord of Garvel Excerpts

Wednesday 10th January 2024 Lords Chamber

[Baroness Chakrabarti]

To ask His Majesty’s Government whether they plan to introduce legislation to quash the convictions of, and compensate, those sub-postmasters and post-mistresses prosecuted and convicted of fraud by the Post Office as a result of faulty Horizon software.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, the Prime Minister has announced today in the other place that the Government intend to bring forward legislation to overturn the convictions of all those convicted in England and Wales on the basis of Post Office evidence during the Horizon scandal who have not yet had their cases considered by the courts. Following measures to prevent fraud, the person will become eligible for compensation—this includes the upfront offer of £600,000—or to claim more through the individual claim assessment process.

[Baroness Chakrabarti (Lab)]

My Lords, I am grateful for that, but forgive me for being even more grateful to Mr Bates and his colleagues, the noble Lord, Lord Arbuthnot, who is now in his place, and the dramatists and broadcasters who captured the imagination and sense of righteous indignation of the decent people of this country. What might we learn from this? Why did it take a prime time TV drama to cause the Government to leap into action? What might we learn about the appropriate relationship between Ministers and arm’s-length agencies, about the unthinking reliance on new technologies, about using public inquiries to kick scandals into the long grass, and about government procurement and corporate greed?

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for those sentiments, which are shared on all sides of the House. The Post Office scandal is one of the biggest miscarriages of justice in living memory and the victims must get the justice they deserve. It is important that everyone knows the truth about what happened and that steps have been taken to right the wrongs of the past. Truth and accountability are one part of providing justice; another part is the compensation, which we are dealing with in this House next week. It is crucial that lessons are learned. I also pay tribute to our noble friend Lord Arbuthnot, who has acted tirelessly on behalf of the victims. He has been in the other place as well, to hear my colleague the Postal Minister give the Statement this morning, and has now taken his place in this House. He is a member of the advisory committee which will be a key part of the process as we work through this terrible chapter in our legal history.

[Lord Weir of Ballyholme (DUP)]

My Lords, I join everyone in this House in recognising the appalling scandal that has been placed before us and the appalling position sub-postmasters have been put in. Any quashing of convictions is to be welcomed, but what is the position as regards prosecutions in Scotland and Northern Ireland, which are under a different system? The Minister made reference to the quashing of convictions in England and Wales. What action are the Government taking to ensure that all victims across the UK, from whatever jurisdiction, are able to have their convictions quashed? Justice has got to be for all, across the UK.

[Lord Offord of Garvel (Con)]

I thank my noble friend for his point. There have been 983 wrongful convictions, of which 24 are in Northern Ireland and 76 in Scotland. We in this House know well that we have separate legal systems in Northern Ireland and Scotland. Conversations have begun with the devolved Administrations; formal discussions are going on now between the justice department in Scotland and the Lord Chancellor. The compensation remains a reserved matter, and will be paid by the UK Treasury, but due process must take place in Northern Ireland and Scotland. Those discussions are under way, to make sure that all are treated equally in all parts of the United Kingdom.

[Lord Arbuthnot of Edrom (Con)]

My Lords, I will say two things. First, I give my thanks to my noble friend the Minister, to the Minister in another place, Kevin Hollinrake, and to noble Peers across this House for helping to produce a solution which, while difficult and inevitably a compromise, resolves the vast majority of the issues in this dreadful case. Secondly, does my noble friend the Minister agree with Sir William Blackstone, of a little time ago, when he said:

“It is better that ten guilty persons escape than that one innocent suffer”?

[Lord Offord of Garvel (Con)]

I thank my noble friend again for being so dogged in his pursuit of these matters. We are absolutely indebted to him for continuing his role on the advisory committee; my colleague in the other place, Minister Hollinrake, is meeting actively with that committee. The William Blackstone principle has been around for 250 years, and it could not be said better than in this House.

[Lord Butler of Brockwell (CB)]

My Lords, following the debacle of the failed prosecution of Matrix Churchill in the 1990s, the role of Customs and Excise as an independent prosecutor was brought to an end and supervision passed to the Attorney-General. In the light of what has happened, should not the same thing happen in the case of the Post Office? Is it not wrong in principle that a public body should have independent powers of prosecution when it has a financial interest in the success of that prosecution?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his question. He highlighted exactly the anomalies that this case has thrown up; the Lord Chancellor in the other place and the Ministry of Justice are looking very carefully at them. In fact, the Post Office has not pursued any private prosecutions since 2015—thankfully —and there is a debate to be had as to whether this power should be withdrawn. We know that, in the Scottish jurisdiction, private prosecutions are not capable of happening; perhaps the English and Welsh system will follow the Scottish system.

[The Lord Bishop of Gloucester]

My Lords, this awful situation highlights so many of our inadequacies in focusing our attention on the right things at the right time and within the right timescale. It is obviously far too early for restorative justice processes to be put in place, but could the Minister offer assurance that attention is being given to mental and emotional support, as well as financial, for all who have lived with the consequences of this injustice for so long?

[Lord Offord of Garvel (Con)]

I thank the right reverend Prelate. The consequences of this are absolutely wide-ranging and beyond just the immediate financial matters. Our Government are working hard to make the process full, fair and quick. Interim payments have already been made to GLO members, and those with lower-term convictions are having their full claims processed. The emphasis now is on speed and supporting the victims with the immediate issue of compensation. The second issue is getting to the bottom of this awful matter; that is where the Williams inquiry will do its detailed work, and we will get detailed answers to these questions.

[Lord Fox (LD)]

My Lords, we welcome the Prime Minister’s announcement that primary legislation will be brought forward, but we still would like to have some more details. Given the speed with which this has been moving, I understand that it is difficult to be specific, but it would help if the Minister could tell your Lordships’ House whether it is the intention that the pardons will come en bloc or still have to be pursued individually. Will these people actually receive pardons? They have been publicly humiliated for years, so the process of exonerating them has to be more than just the stroke of a pen. It is very important that, more than just receiving a pardon, they are seen to be pardoned.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that very important question. I can clarify that this is not a case of being pardoned; these convictions are being overturned. The primary legislation will take account of all of these convictions en bloc; it would take too long to go through each individual case and it would be too stressful. Of the 983 convictions, only 20% of the victims have actually come forward—so many people are just scunnered with the situation that they are in. Therefore, this will be a blanket overturn of convictions.

[Lord McNicol of West Kilbride (Lab)]

My Lords, we on the Labour Benches welcome the Government’s Horizon announcement, although more details would be appreciated, especially on the timescale. I hope there will be more detail in the Statement. Given the emergence of new pilot scheme victims since the ITV drama, how confident are the Government that they are aware of everyone who has been affected? What steps are they taking to make sure that all those affected are identified and fully compensated—surely Fujitsu has that data?

[Lord Offord of Garvel (Con)]

When it comes to data, there are all sorts of confidentiality requirements that need to be kept. We know that a considerable number of claimants have come forward—more than 100—since the TV programme. We think that the total number of postmasters involved is about 3,500. We have compensated 2,700 of those already, and we will leave no stone unturned to make sure that we reach everybody affected by this scandal.

Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022

Lord Offord of Garvel Excerpts

Tuesday 19th December 2023 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, the High Court overturned the Government’s previous repeal of Regulation 7 of the conduct regulations due to insufficient consultation. The Government continue to believe there is a strong case for removing what is a blanket restriction, which disproportionately interferes with the freedoms of both employers and agency workers. The purpose of the consultation is to gather views and evidence to better inform a future decision on whether to proceed with repealing Regulation 7.

[Lord Balfe (Con)]

I thank the Minister for the reply, but I am sure he realises that there is no demand whatever for this measure from employers or trade unions. Rather like the deduction of TU subs, which was debated yesterday, this is seen as a being a rather spiteful attack on trade unions. How many more Conservative votes does the Minister wish to dispose of from the trade union movement? I also have a question for the Labour Opposition. I was at the TUC on 9 December, and there was a widespread feeling of “We’ll believe it when we see it” around the changes we may or may not get to trade union legislation. I did send the Leader of the Opposition an email—

[Lord Balfe (Con)]

I think I have asked my question to the Minister.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his supplementary question. The right to strike is enshrined in UK law. There is no ambition on the part of the Government to undermine that fundamental right. But there is a balance to be struck between the rights of employers and agency workers being able to find work if there is work available. Therefore, this consultation will focus entirely on whether there is a need for private companies to be able to provide agency staff where they have a need for employment.

[Lord Woodley (Lab)]

My Lords, the REC, which supplies agency staff, warns that allowing bosses to bus in strike-breakers risks extending disputes by inflaming tensions between trade unions and employers. Unions and even the Government’s own impact assessment agree it will undoubtably worsen industrial relations and lead to prolonged strike action. How can the Minister possibly justify pushing ahead with these damaging and counterproductive measures when employers, unions and even the Government—that is a first—all agree it will poison industrial relations and make it much more difficult to resolve disputes?

[Lord Offord of Garvel (Con)]

Well-run companies can operate only with the consent of their workforce. Well-run bosses run companies well with the consent of their workforce. Therefore, no well-run company wants to be a position where there are disputes with its workforce except in extremist situations. Bringing in agency workers is never a panacea, and is quite often more expensive. Well-run companies would not want to do that. It would be only in extreme situations where I could ever envisage this happening.

[Lord Hendy (Lab)]

My Lords, on 20 June 2016, the relevant committee of the International Labour Organization called on the Government to review the proposal to revoke Regulation 7 with the social partners—that is to say the unions and employers’ associations—bearing in mind that

“the use of striker replacements should be limited to industrial action in essential services”.

The Government’s response was to undertake to the ILO that they would conduct such a review. However, by 13 July this year—seven years later—in the judgment to which the noble Lord refers, the Government had not done so. Will they do so now?

[Lord Offord of Garvel (Con)]

To be very clear, the appeal was put forward on two bases: the first was on the lack of consultation and the second was on the merits of Article 11. The court did not find on the second, only on the first. Therefore, the consultation is being done between now and mid-January, with a view to collecting views from all registered parties so that a decision can be made in the future or not.

[Lord Watts (Lab)]

My Lords, given that nobody wants this—the employers and the trade unions do not want it—what is motivating the Government to bring forward legislation that nobody wants?

[Lord Offord of Garvel (Con)]

As I said before, a decision has not been made on this—a consultation is going on. Regulation 7 is in some ways interference with the operation of private companies and other employers, and sometimes prevents work-seekers being offered employment in legitimate circumstances. We are trying to get the balance right here between maintaining the right to strike and providing companies with the ability to service their clients and fulfil their revenue.

[Lord Sikka (Lab)]

My Lords, could the Minister inform the House, either now or in a Written Statement, of the cost of developing, processing, enacting and defending this unlawful legislation? Can he also promise to refer this legislation and the court case to the newly appointed Minister of State without portfolio as an example of how the Government waste public money?

[Lord Offord of Garvel (Con)]

I think the decision was made on the basis that the court decided that full consultation had not taken place on what we would all agree is an important matter in employment law. It was quite legitimate to say that the consultation should be rerun. It was decided not to appeal the decision—so public money was saved in that regard—but that the consultation should be now run in the ordinary course.

[Lord Leong (Lab)]

My Lords, first, I thank the noble Lord, Lord Balfe, for his support and his dogged opposition to this terrible legislation. I want to state again that employers do not want it, trade unions do not want it and the High Court has ruled against it, so what are these exceptional circumstances that the Minister has just mentioned?

[Lord Offord of Garvel (Con)]

There are legitimate circumstances where a company wants to fulfil its orders and contracts, and look after its clients, and, for whatever reason, it can find agency staff but the workforce do not want to work. I agree that it is an unusual situation. All this is doing is trying to balance the rights of employers and employees.

[Lord McLoughlin (Con)]

My Lords, will my noble friend at some stage—he may not have the answer today—look at all the legislation that has been passed by successive Conservative Governments on trade union reform? Will he place in the Library a list of all those that have been reversed subsequently by any Labour Government?

[Lord Offord of Garvel (Con)]

It actually exists—it is three pages long and will take 10 minutes to read. It is very clear: most of it outlines the Conservative reform agenda for trade unions, and there is a very small section on Labour reverses.

Construction Sector: Cash Retentions

Lord Offord of Garvel Excerpts

Monday 11th December 2023 Lords Chamber

[Lord Aberdare]

To ask His Majesty’s Government what progress they are making in determining how to end the practice of cash retentions in the construction sector, and whether they plan to meet the 2025 target date for achieving zero retentions proposed by the Build UK Roadmap and endorsed by the Construction Leadership Council in 2019.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

I thank the noble Lord for his Question. The Government will add a requirement for reporting on retention payments to the Reporting on Payment Practices and Performance Regulations 2017. Work also continues with the Construction Leadership Council to reduce defects in construction and end the abuse of retentions. This includes supporting a pilot project with the Get It Right Initiative to reduce defects, as well as collaboration with the bodies responsible for construction contractual documentation, to discourage the withholding of retentions.

[Lord Aberdare (CB)]

My Lords, the announcement made last month, which was mentioned by the Minister, is a small step forward but it is too little, too late, and it does not go nearly far enough to end the bane of retentions, which cause huge damage to numerous small construction firms, and indeed to the sector as a whole. What further steps are the Government considering? Let me suggest two possibilities. First, they could ensure that the undesirability of retentions is included in the Construction Playbook, which sets out key policies and guidance on how public works projects and programmes are assessed, procured and delivered, but, rather shockingly, makes no mention of retentions. Or, secondly, they could put an effective system of enforcement in place for the measures he has just described when they are eventually implemented. If the Minister does not like those two ideas, I have at least half a dozen more that I could suggest to him.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that contribution. The Government understand well that the practice of cash retention can create problems in the supply chain, due to late and non-payment. We are committed to improving payment practices, but we have to work with the construction industry in this. The prompt payment and cash flow review report was just published on 22 November, and a key measure includes extending and amending the Reporting on Payment Practices and Performance Regulations, basically to increase transparency in this vital area to allow large businesses to provide data to the smaller companies to see how retention payments are working. We have to work with the construction sector in this.

The Construction Leadership Council has identified some solutions to mitigate cash retention payments. Our long-term aim is to remove the need for retentions altogether and, as I said, we are supporting the Get It Right Initiative and Cranfield University to reduce the rate of defects within the buildings commissioned across the public and private sector. The aim is to establish a quality metric as a viable alternative to the withholding of cash retentions as a form of insurance against defects. There is a lot going on. We are working with the industry and a lot of consideration has been given to this matter, but, ultimately, the construction industry itself needs to come to a consensus on how to improve this area.

[Lord Stunell (LD)]

My Lords, the Minister has just said that the industry needs to come to a consensus. What he is asking for is the greedy lions to sit down with the defenceless lambs and decide what menu is going to be eaten. The reality is that the upper-tier contractors have not just the whip hand but the bank balance. He will know that many of them have a business model that functions only because they retain retentions to which they are not legally entitled. Will he now introduce a simple measure to put the retention money that is levied into an escrow account so that it cannot be used and cannot incentivise upper-tier contractors to use it to fund their business model?

--- Later in debate ---

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that question. Indeed, this has been the practice in the building industry for 150 years; it is the standard mechanism to ensure that work is done on time and to the right standard. There is about £4 billion held in cash retentions against a total turnover in the construction industry of about £430 million, so, guess what, that works out at 1%, which is roughly the margin in construction. Various plans have been put forward: there was a plan for insurance, but that did not work because of the Carillion failure and Grenfell Tower, and there have been various plans such as a retention deposit scheme in escrow. We have consulted the building industry, and there is a level of support for banning retentions and a level of support for not changing the system. The construction industry needs to come together and work out how to do this better.

[Lord Greenhalgh (Con)]

My Lords, does my noble friend the Minister accept that this is not a time to assume that the status quo is good enough? The noble Lord, Lord Stunell, is absolutely right: what we see is the big players squeezing the supply chain, and the result is often that the smaller players benefit not one penny and the big players do profit. I pay tribute to the noble Lord, Lord Aberdare, who, when I was in the hot seat, was pushing on cash retentions. We need to do something about this. It is very similar to when we rent a home: the landlord does not get his hands on the deposit; it is held, essentially, at a distance from the landlord who is renting the home. We need to change the system. Does my noble friend also agree that we need to improve the quality of construction? After all, that is something that needs to get better, and then we would not have to worry about retentions.

[Lord Offord of Garvel (Con)]

I thank my noble friend for that contribution. The Reporting on Payment Practices and Performance Regulations 2017 require the larger UK companies to report on a half-yearly basis on payment practices, policy and performance. The onus is increasing on them around transparency. The sector welcomes increasing reporting regulations. Build UK, the leading construction trade body, has been benchmarking construction companies on their payments since 2018, and improvements have been considerable. In 2018, the average time for paying invoices was 45 days, and it is now 32 days; the figure for invoices paid within agreed terms is now 82%, versus 61%, and for invoices paid within 60 days it is now 95% versus 82%. That shows that the construction industry can work positively in this area.

[Lord McNicol of West Kilbride (Lab)]

My Lords, similar to cash retention, late payments are a perennial problem, especially for SMEs and microbusinesses. Over the last 10 years, the Conservative party in government has launched no fewer than seven reviews into late payments. What recommendations have come from those reviews, and what benefits have SMEs seen from those seven reviews?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that question. As I indicated, the direction of travel has improved considerably, with the construction sector working positively to reduce the amount of late payments. Working with the contractors’ umbrella body, Actuate UK, and the new Get it Right initiative, I think we will see some improvements. We are trying to get defects and collection and completion certificates using processes developed by the Get it Right initiative, which are going to be data-based, to try to get a metric system which is more objective and less subjective and which can measure performance and indicate at an early stage whether it has been to the right standard. That will go a long way towards allowing earlier payment on retentions.

[Lord Watts (Lab)]

My Lords, could not the Government introduce legislation that separates any money that is being held and pay the interest to the contractors, rather than the person who is benefiting now?

[Lord Offord of Garvel (Con)]

As the noble Lord from the Cross Benches said, there are many suggestions as to how we go about doing this, and this is another one. On statutory bans on cash retentions, my department is fixated on trying to remove regulation from business, not increase it. We are looking to the industry to come forward with viable plans on how to make this work. Progress is being made and more can be done, but there is still not complete consensus on how to move this forward.

[Lord Londesborough (CB)]

My Lords, can the Minister explain why the Government are dragging their heels over the anti-enterprise practices of cash retentions and late payments, especially as SMEs in the construction sector are running the highest rate of insolvencies of any sector in this economy? Over the last three decades, the SME market share has dropped in new housebuilding from 40% to less than 10%, leaving the big housebuilders to increasingly dominate a sector that continually fails to meet demand. Why is there not more urgency?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that question. There is urgency, to the extent that we are consulting the industry, which has demonstrated that it can improve these terms. We have put the road map together and it is being worked on, but we need consensus in the industry to do that. I understand the concerns of SMEs, but transparency on data, as well as a metric system which shows more transparency and more independent KPIs on work being delivered, will go a long way, and that is what the road map envisages.

Digital Markets, Competition and Consumers Bill

Lord Offord of Garvel Excerpts

2nd reading
Tuesday 5th December 2023 Lords Chamber

Moved by

[Lord Offord of Garvel]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, I start my opening speech with a reference to the importance of digital. In recent decades, digital technologies have brought untold benefits to people around the world. From connecting us with loved ones in faraway places to streaming our favourite album or TV series in an instant, our lives are enriched by the services that these technologies enable. In the UK, digital technologies were fundamental to our collective response to the Covid-19 pandemic, helping businesses to continue operating and helping friends and family to stay in touch in challenging times for us all.

The digital revolution has also had transformative and hugely beneficial effects on our economy. The UK has the largest tech ecosystem in Europe. Last year, our start-ups and scale-ups raised more investment than France and Germany combined. We have more tech unicorns than any other country in Europe with eight cities having at least two unicorns, including Edinburgh, Nottingham and Leeds.

The strengths of our vibrant digital sector are numerous and closely interlinked. From our world-class universities and breadth of tech talent to our support for start-ups and our innovative financing sector, the UK is a global tech powerhouse. Furthermore, the UK leads the world in our approach and response to developments in digital technology. Just last month at Bletchley Park, the UK hosted the first AI Safety Summit, bringing together Governments, leading technology organisations, academia and civil society to inform action at the frontier of AI development.

I turn to the rationale for the Bill and the detail of its parts. Part 1 is on digital markets. The continued success of our tech sector relies on highly competitive digital markets. Firms with alternative market offerings and innovative ideas should have the freedom to grow and challenge powerful incumbents on a level playing field. This benefits consumers by giving them access to the best products at the lowest prices.

However, the UK’s competition framework is not set up to keep pace with developments in fast-moving digital markets. A handful of powerful tech firms now dominate strategically critical services, such as online search, app stores and digital advertising, and in effect set the rules of the game for other businesses and consumers. Jurisdictions around the world are now considering how best to address the unique competition challenges presented by digital markets, and the UK is playing a major part in these efforts.

The Digital Competition Expert Panel and the Digital Markets Taskforce—expert groups set up to examine competition issues in digital markets—both independently concluded that digital markets have specific features which may lead them to tip in favour of one particular firm. This restricts choice for consumers, growth for emerging digital companies, and the potential of small businesses that rely on large firms to reach their customer base. As such, both groups recommended the establishment of a new pro-competition regime for digital markets, which the Bill delivers.

Noble Lords from across the House have also investigated these competition challenges and called for action. My noble friend Lady Stowell of Beeston and the Communications and Digital Committee conducted a review of the Bill earlier this year, for which I am very grateful. They consulted a broad range of stakeholders, including tech firms of all sizes. The committee recommended some further actions for the Government’s consideration, and I have no doubt that we will discuss these in detail during the passage of the Bill. I was, however, very pleased to hear its conclusions that the Bill’s objectives are “sound” and its measures “broadly proportionate”.

The noble Baroness, Lady Jones of Whitchurch, and the noble Lord, Lord Clement-Jones, also expressed their strong support for the Bill and provided suggestions for improvement, which I also look forward to discussing further. The advice of the noble Lord, Lord Tyrie, on legislative and institutional reforms to safeguard the interests of consumers and public confidence in markets, is also at the heart of the Bill’s measures.

The Bill is divided into six parts. Part 1 establishes a new pro-competition regime for digital markets, which will be overseen by the Digital Markets Unit. The Digital Markets Unit is an administrative unit within the Competition and Markets Authority. The Bill gives the CMA tough new powers to force the most powerful tech firms to treat businesses in the UK fairly, including through targeted action to address the root causes of competition issues, and to create opportunities for innovative start-ups in the UK to compete with these powerful firms. Greater competition in digital markets will lower the prices of everyday online goods and services, giving consumers more choice and control over the fundamental services they use online. This came across clearly during the Communications and Digital Committee’s evidence sessions. For example, the consumer advocacy organisation Which? noted that the Bill will benefit consumers through “more competition” and “more innovation” in digital markets.

Part 2 concerns competition. Competitive markets deliver a variety of good-value, high-quality products for their customers, because firms which fail to deliver will be overtaken by their competitors. They also enable innovative, dynamic companies to enter markets more easily, compete on level terms, and grow and gain market share. Measures in Part 2 of the Bill will refine the CMA’s competition tools, making investigations better targeted and its enforcement action faster and more effective. These changes will allow the free market to operate more efficiently. Market inquiries will become more efficient, flexible and proportionate, while the merger regime will be updated to focus on transactions with the greatest potential to weaken competition. The measures will also grant stronger powers to investigate illegal anti-competitive conduct.

Parts 3 and 4 deal with consumer enforcement and protection. Alongside effective competition, well-functioning markets require strong consumer protections. Such protections give people confidence to spend their money, safe in the knowledge that they have the right information to make sound purchasing decisions and have ways to seek redress if something goes wrong. Noble Lords on all sides will likely have had first-hand experience of the difficulties surrounding subscription contracts, including unexpected charges and unduly complex cancellation processes. Such subscription traps cost consumers £1.6 billion a year. A host of other unfair trading practices and consumer rip-offs also remain far too common, particularly online. Research commissioned by the Government has found that, for example, on the nine most frequently used platforms by UK consumers, up to 15% of reviews are fake, with consumers more likely to unknowingly rely on well-written fake reviews when purchasing products. Moreover, many Christmas and similar savings schemes are not protected in the event of business insolvency, so if a business enters insolvency, consumers face losing the money they had deposited.

At present, public consumer law enforcement lacks teeth: the UK is currently the only G7 country not to have any civil penalties for common consumer protection breaches such as mis-selling. Enforcers can apply for court orders to stop or prevent breaches and to obtain compensation for consumers. However, businesses may still profit more than they lose from breaches of consumer law, because no financial penalties can currently be imposed for such wrongdoing.

The measures in Parts 3 and 4 beef up enforcement of consumer protections and address these consumer rip-offs. Part 3 creates a model that will allow the CMA to act faster against breaches of consumer protection, tackle more cases and protect consumers’ interests, while creating a level playing field for businesses. Part 4 includes a raft of measures to help consumers keep more of their hard-earned cash. New rights to subscription reminders and easier cancellations will help consumers exit the contracts they no longer want. This part of the Bill includes a power to add to the list of banned unfair commercial practices. This will ensure that the legislation keeps pace with changes in online consumer harms, which will give consumers greater confidence when spending and reward businesses which treat their customers fairly. Moreover, there are new protections for consumer payments to consumer saving schemes. These will ensure that financial failures such as the collapse of the Farepak Christmas savings club, which leave vulnerable consumers out of pocket, can never happen again.

Parts 5 and 6 contain cross-cutting and general provisions, including new information-gathering powers for the CMA to help boost competition in the road fuel market and protect consumers from unfair fuel prices. In addition, the Government recognise the importance of international co-operation for effective cross-border enforcement in a globalised economy. Measures in Part 5 will enhance the ability of UK regulators to co-operate internationally on competition and consumer matters, including introducing new powers to provide investigative assistance.

I come now to the Commons Report stage amendments. The Government engaged closely with parliamentarians and stakeholders throughout the Bill’s passage in the other place. Based on this engagement, a number of amendments were brought forward on Report in the House of Commons to strengthen the Bill. These amendments had two overarching aims. First, the amendments sought to strike the right balance between accountability over the CMA’s regulatory decisions and the flexibility needed for targeted and proportionate action to tackle the unique competition challenges in digital markets. Secondly, the amendments aimed to ensure that the Bill is strongly focused on consumers with the new and improved rights to deal with bad business practices, such as subscription traps, in ways that will not disproportionately burden businesses and potentially reduce consumer choice.

At a briefing I chaired last week with my noble friend Lord Camrose, I promised my noble friend Lady Stowell of Beeston that I would provide some assurances regarding the digital markets regime. First, I turn to consumer benefits. Amendments brought forward by Ministers in the other place reinforce the regime’s focus on consumers, by clarifying how the DMU will consider consumer benefits when imposing conduct requirements or taking enforcement action. Requiring the CMA to explain the consumer benefits that it expects to result at these points ensures that its decisions to impose conduct requirements are transparent and carefully considered. Clarifying the wording of the countervailing benefits exemption will improve legal clarity, and I reassure my noble friend that it maintains the same high threshold. These changes make sure that consumers get the best outcomes possible.

Secondly, I turn to the appeals of penalty decisions. Appealing penalty decisions on the merits will allow firms to challenge the value of potentially significant fines, but will not allow firms to frustrate the regime or delay regulatory intervention. This brings the regime in line with the Enterprise Act 2002, and will provide reassurance to firms that the value of a fine imposed on them is appropriate. To be clear, all other decisions, including whether or not a breach of the regime occurred, remain appealable on judicial review principles. I hope this helps address my noble friend’s concerns.

The amendments agreed in the other place bring further clarity about the DMU’s approach to regulation. Together, they ensure that the DMU’s interventions are proportionate and drive the best possible outcomes for consumers.

In closing, this Bill will drive innovation, grow the economy, and deliver better outcomes for consumers throughout the UK. It is a hugely important piece of legislation and I thank noble Lords for their involvement in and support for the Bill so far. I look forward to hearing their views today and throughout the rest of the Bill’s passage. I beg to move.

--- Later in debate ---

Moved by

[Lord Offord of Garvel]

That the bill be committed to a Grand Committee, and that it be an instruction to the Grand Committee that they consider the bill in the following order:

Clauses 1 to 36, Schedule 1, Clauses 37 to 57, Schedule 2, Clauses 58 to 124, Schedule 3, Clauses 125 to 127, Schedule 4, Clause 128, Schedule 5, Clause 129, Schedule 6, Clauses 130 to 136, Schedule 7, Clause 137, Schedule 8, Clauses 138 to 142, Schedules 9 to 11, Clause 143, Schedule 12, Clause 144, Schedule 13, Clauses 145 to 149, Schedules 14 to 15, Clauses 150 to 207, Schedule 16, Clauses 208 to 213, Schedule 17, Clause 214, Schedule 18, Clauses 215 to 223, Schedule 19, Clauses 224 to 253, Schedule 20, Clause 254, Schedule 21, Clauses 255 to 282, Schedule 22, Clauses 283 to 293, Schedule 23, Clauses 294 to 299, Schedule 24, Clauses 300 to 307, Schedule 25, Clauses 308 to 323, Schedule 26, Clauses 324 to 325, Schedule 27, Clauses 326 to 355, Title.

Motion agreed.

Recognition of Professional Qualifications and Implementation of International Recognition Agreements (Amendment) Regulations 2023

Lord Offord of Garvel Excerpts

Monday 27th November 2023 Lords Chamber

Moved by

[Lord Offord of Garvel]

That the draft Regulations laid before the House on 17 October be approved.

Relevant document: 1st Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, these regulations were laid before the House on 17 October 2023. They implement the world-leading recognition of professional qualifications provisions within the UK’s free trade agreement with Norway, Iceland and Liechtenstein—the EEA/EFTA states. This was one of the first free trade agreements to be agreed by the UK following our departure from the EU and continues our strong trading relationship with these valued partners. They provide certainty for professionals with qualifications from these countries who want to be recognised by UK regulators and work in the UK.

Given that the provisions in the agreement are reciprocal, UK professionals also benefit from reduced barriers when having their qualifications recognised in Norway, Iceland and Liechtenstein. I will begin with some background to explain what the provisions achieve. I will then move on to discuss the regulations in detail.

The UK signed a world-leading free trade agreement with Norway, Iceland and Liechtenstein in July 2021. Chapter 12 of the agreement outlines an ambitious system for the recognition of professional qualifications between the parties. Under the agreement, UK regulators are required to recognise comparable professional qualifications obtained in Norway, Iceland and Liechtenstein. Regulators in those countries are required to recognise comparable professional qualifications obtained in the UK.

Reciprocal provisions on recognition of professional qualifications are an important part of the UK’s services trade agenda, helping UK professionals enter new markets and deliver our world-leading services overseas. They also help at home, supporting overseas professionals to enter the UK labour market. Enabling this free flow of skills internationally leads to enhanced UK prosperity. Recognition of professional qualifications is a common feature in the UK’s modern trade deals, but the provisions we agreed with Norway, Iceland and Liechtenstein are relatively distinct by introducing binding obligations on regulators.

This agreement underpins our valued co-operation with long-standing trading partners on the recognition of professional qualifications. The Government understand the importance of continuity for British businesses. As such, this agreement seeks to maintain similar recognition of professional qualifications outcomes to the UK’s previous arrangements with these countries.

The UK is required to meet the terms of the agreement by 1 December 2023, and the Government are using powers contained in Section 3 of the Professional Qualifications Act 2022 to do so. Enshrining this system in legislation is necessary to ensure that the UK fulfils its obligations under international law. Without these regulations, some regulators will not have the necessary legal powers to meet the requirements of the agreement. These regulations will come into force at the same time that the UK’s EU-derived system for recognition of professional qualifications ends. This will ensure clarity and a smooth transition for regulators and professionals.

If it is helpful, I will now provide some detail on these regulations. They place a duty on all regulators of professions across the UK to recognise comparable professional qualifications obtained in Norway, Iceland and Liechtenstein. The regulations also give regulators the powers to recognise these qualifications where necessary. Regulators will be required to treat qualifications in accordance with the system set out in the agreement and in the regulations.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

I thank the noble Lord, Lord McNicol, and the noble Baroness, Lady Randerson, for their contributions to this SI debate. We can deal with the points about the devolved Governments right now. Of course, the UK has a strong tradition of different professions and different countries doing different things. It is only since 1707 that we have all been working with one Parliament, and we had lawyers long before then. But on balance, we want to try to work as one country, and the whole point of doing these FTAs is that we form up to the rest of the world as one United Kingdom.

But there is a lot of flexibility within the devolved Governments. We have consulted with the Governments, and the devolved Administrations have confirmed that they can work with this SI—and they will then implement it in their own territories. It is perfectly within the rights of the Welsh to make a Welsh language requirement, in the same way as it might be in the Western Isles in Scotland to do it in Gaelic. That would be for those Governments to decide.

On the specific question raised by the noble Lord, Lord McNicol, on immigration, these three countries, Norway, Iceland and Liechtenstein, are pretty—well, we should not use the phrase “small countries”, but they are contained in terms of their interaction with the UK. Where is Liechtenstein? We would not expect there to be any eventual impact on immigration with reference to those three countries.

On the FTAs, as I said once before, we want to form up to the rest of the world as one UK. In fact, in my own portfolio, dealing with the utilisation of a lot of the FTAs, such as the one we have just done with Australia, we are finding that the key thing in their implementation is to make sure that we benefit the whole United Kingdom.

There has been extensive discussion with the regulators. As required by Section 15 of the PQ Act, we consulted affected regulators. When using the regulations using Section 3, we formally consulted the regulators, in January 2023. We are not required to publish a report online on that consultation. I hear what the noble Lord says about the SLSC, but there is very much a commitment from this Government to broaden and deepen trade policy. Probably the main benefit that we get from Brexit is going to be international trade, so we have an obligation to broaden and deepen trade policy.

With that, we can say that we now have these arrangements in place to proceed. As a reminder, this instrument places a legal duty on the UK regulators to recognise comparable qualifications in Norway, Iceland and Liechtenstein, and it gives regulators the power to recognise those qualifications, when they do not currently have the power in the relevant sector legislation.

This instrument has UK-wide application, and it will ensure that the UK is fully compliant with our obligations in the agreement. It will provide consistency across the statute book and provide clarity for Norway, Iceland and Liechtenstein, as well as for our own professionals.

Motion agreed.

Retained EU Law (Revocation and Reform) Act 2023 (Revocation and Sunset Disapplication) Regulations 2023

Lord Offord of Garvel Excerpts

Tuesday 17th October 2023 Lords Chamber

Moved by

[Lord Offord of Garvel]

That the draft Regulations laid before the House on 4 September be approved.

Relevant document: 52nd Report from the Secondary Legislation Scrutiny Committee. Special attention drawn to the instrument.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

As Minister for the Department for Business and Trade, I am glad to be leading this debate. As my noble friend Lord Callanan promised several times, we are committed to ensuring that the appropriate level of parliamentary scrutiny is applied to all SIs utilising the powers in the retained EU law Act. I am pleased to commence today’s debate just as we commence our ambitious REUL reform programme.

I thank the SLSC for its report on this instrument. We have acknowledged the committee’s recommendations and have now revised the Explanatory Memorandum, adding a link to the line-by-line explainer into the document.

This instrument will revoke a further 93 pieces of retained EU law found to be obsolete or inoperable. This continues the work already begun by the retained EU law Act in tidying up and bringing further clarity to the statute book. Indeed, one of the key purposes of the retained EU law Act was to bring legislative clarity. Redundant retained EU law remaining on the statute book only causes unnecessary complication and confusion.

It is the duty of all responsible Governments to make our law as clear and accessible as possible, and therefore we must continue to identify REUL that is redundant or inoperable and ensure its removal from the statute book. This instrument is another step forward in that work.

These regulations will also preserve seven pieces of retained EU law that are on the REUL Act’s schedule for revocation at the end of 2023. Further analysis of the legislation listed in Schedule 1 to the REUL Act by UK government departments has established that these seven pieces of REUL must be preserved to maintain the current policy position for one of a number of reasons.

There are, for instance, plans to reform legislation in the area of merchant shipping, but until that reform process has been completed, there is a need for legislative continuity, for which reason one piece of REUL is being preserved. Three pieces of legislation have been identified by the Northern Ireland Civil Service as requiring preservation because their revocation would represent a policy change that cannot be agreed in the regrettable ongoing absence of an Executive. These three instruments are preserved for Northern Ireland only, while the four instruments identified by UK government departments will be preserved to the extent that they apply across the United Kingdom.

This SI represents a further step in the Government’s programme of retained EU law reform. We have already set out a range of ambitious reform plans, including on working time reporting requirements and streamlining the rulebook for wine. We will continue to use the powers in the retained EU law Act between now and June 2026 to reform and replace unnecessary regulations, providing regular updates to Parliament on our progress. The reform agenda is a crucial part of this Government’s agenda. We are committed to ensuring that REUL is reformed to be fit for the UK, reducing unnecessary burdens on businesses and helping them grow, while also reducing costs for businesses and consumers. I assure the House that this SI is just the beginning. I commend the regulations to the House.

[Lord Hope of Craighead (CB)]

My Lords, the Minister has said that the work is just beginning, and I understand that there is an enormous amount of work still to do. Can he give us any impression of the amount of work that has been done by the devolved Administrations, who have obligations to perform under this statute as well as the UK Government?

Contemplating Part 1, I wonder whether there is anything else that needs to be attended to, bearing in mind that the power being exercised in Part 1 expires at the end of this month. Time is short and the pieces of legislation listed are the product of oversight. It is nice to see that being corrected, but is there a risk that something else may be discovered, and is there time to unravel the situation enough to cure the problems that might emerge?

Otherwise, I think the work done is to be commended. It is good to see that the Act is being put into operation in the way the Minister has described.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

I thank noble Lords for their contributions to this debate, which has obviously had a lot of airtime in this House. I turn to some of the points raised. The noble and learned Lord, Lord Hope of Craighead, made many contributions to the Act. The point about the devolved Administrations is well made, in particular in relation to the Scottish and Welsh consents that are required for this, both of which have now been received. The timing of this is that it has to be through these Houses by 31 October, with limited time to seek agreement with the devolved Governments, but these agreements have now been sought and given by the Welsh Government and the Scottish Government. This completes the suite of amendments in this parliamentary time, so this is going on the statute book. We will then go forward in the new Session of Parliament as the need arises, as and when reform is required and as and when revocation is required. As far as this process is concerned, the devolved Governments have been consulted properly.

In relation to some of the specifics, and there are a lot of specifics with 93 Bills being dealt with here, I take the very specific point raised by the noble Lord, Lord Hacking, on alcohol, as one point of many. With all these laws one can access the GOV.UK website where there is a line-by-line explainer for each one. This particular one is the Alcoholic Liquor Duties Act 1979. It restricts the carrying on of certain other trades by a distiller or rectifier within three kilometres of a distillery or rectifying house. Prior to August 1992 that restriction was within two miles. This legislation is now inoperative as it amends provisions that were revoked in 1979.

It is an example of quite a lot of Acts that were on the statute book and have indeed been updated, not least the Companies Act, revoking previous Acts. This is literally a tidying-up exercise. It falls within the remit of REUL, and is one of the benefits of the wider process that we are going through.

I turn to the general principle on which the noble Baroness, Lady Suttie, has requested further detail. It is clearly to do with the fact that this comes across all departments, and all departments are required to give their views. In fact, taking the 93 revocations, we already have 11 departments contributing to that. The Government have already reformed or revoked over 1,000 pieces of REUL. In addition to the list of 587 in the REUL Act, we have the Financial Services and Markets Act 2023 and the Procurement Bill, which will repeal around 500. All told, this comes to more than 2,000 revocations and reforms already completed or under way, of the original estimate of 6,000—this work is well under way.

[Baroness Young of Old Scone (Lab)]

I thank the Minister for giving way. He highlights an issue that was absolutely centre stage during the REUL Bill discussions: that this is a very complicated situation with a lot of pieces of legislation. It is very heavily dependent on individual departments spotting the right things and not forgetting things that should be retained or got rid of. The original dashboard is not much help in that, quite frankly; it should be the common hymn sheet that we are all singing from.

With that in mind, would it not be advisable in future, if further statutory instruments come forward, that there is more general consultation in advance of the statutory instrument being laid, because by that time it is too late? Apart from that, most people could not find the explainer; it was not terrifically visible—you had to work hard to get your hands on it. I just think it is too risky.

With this vast range of legislation—which has to be scrutinised and decisions made on whether it is “snog, marry, avoid”, as I typified it in the last debate—it would be better to have lots of eyes focusing on it in the form of a public consultation; it could be very brief, just to make sure that we do not drop any balls as this goes through. It is very nice for the Government to say that they have looked at all this and it is undoable, no longer required or obsolete, but, if we cannot have proper scrutiny, we have only their word for that.

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for her contribution. This is a complicated area—there is no question about it. The dashboard is continually updated and has just been updated again. There is, therefore, full transparency on this matter, but, as was referenced by the noble Lord, Lord Hacking, one can go through each one of these and their detail each time, and there is no question that it is a complicated process. However, we have embarked upon the process and it is under way, and I think the revision that we came to is sensible and pragmatic.

I point out that, at the end of the day, with these revisions, we are talking about the preservation of four out of 587. I would say that that is a pretty good result, looking back to see that the original assessment was correct. During the debate—and in particular regarding the amendment in the name of the noble and learned Lord, Lord Hope of Craighead—assurances were given that this process would be done in full consultation with the House. Within those protections, we now have a road map.

I turn to the final point raised by the noble Lord, Lord Leong, in relation to the overall process around the issue of leaving the EU. There were two points in particular. First, on the Northern Ireland Civil Service, we all regret the fact that there is no Executive in place at the moment, but, again, this is referring to only three situations. There is constant dialogue with the Northern Ireland Civil Service, and that is working well, so we can continue the process as is. However, we all hope that the Executive will come back into being as soon as possible.

Secondly, on the issue of divergence, there is no concept of divergence for its own sake. There is to be no diminution in our trading standards, our employment law standards or how we feel about the environment and so on within these rules, but we have the opportunity to modernise, revoke, get rid and tidy up, and that major process is going ahead. On the face of it, with the Brexit deal that we did, we have a free trade agreement with Europe and we continue to trade strongly with Europe. There is no diminution in our business ability effectively to trade with Europe, and I do not envisage that that will be the case. This is part of an ongoing process that will now run through in the normal course of business through each parliamentary Session, where government departments will, as a matter of the ordinary course of business, review these laws and regulations and, when required, they will come back to the House by means of the SI process.

With that, I believe I have addressed all the questions posed by noble Lords. I hope I can look forward to the House’s commendation of the regulations.

Motion agreed.

Workers (Predictable Terms and Conditions) Bill

Lord Offord of Garvel Excerpts

3rd reading
Monday 18th September 2023 Lords Chamber

[Lord Leong (Lab)]

My Lords, it is a great pleasure to support this Bill at its final stage. I particularly thank my noble friend Lady Anderson for taking the Bill through the various stages of the process. Of course, I also thank the Conservative MP Scott Benton for his willingness to work collaboratively to achieve this laudable objective. The passage of the Bill is an excellent reminder that good outcomes can be achieved even in politically and economically turbulent times. I am sure that many of us in this House will agree that when workers are treated with dignity, higher levels of well-being can lead to a range of benefits to businesses, especially around productivity, which will frequently be of more benefit to the employers than can be measured in wage costs. We fully support the Bill, which brings us one step closer to the protection of workers, and I look forward to seeing it passed in this House.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, I thank the noble Baroness, Lady Anderson, for bringing the Bill through this House and I am delighted to confirm the Government’s ongoing support for the Bill, which will fulfil our 2019 manifesto commitment to introduce a right for workers to request a more predictable working pattern. The Bill will allow workers to request more predictable working arrangements, addressing the issue of one-sided flexibility while ensuring that workers can continue working on a zero-hours contract, another form of non-guaranteed hours contract or, indeed, a temporary contract, if that is the type of contract that suits them. This will allow individuals and businesses to strike the right balance between flexibility and predictability.

This new right will function in a similar way to the existing right to request flexible working. An employer will be able to refuse a request for a more predictable working pattern based on one of six statutory grounds similar to those established for the right to request flexible working. These grounds build in vital flexibility for businesses, ensuring that they are not unfairly burdened by accepting requests that would, for example, generate burdensome additional costs.

In conclusion, I am delighted to see the Bill progress, and I thank the noble Baroness, Lady Anderson, for sponsoring the Bill as it moves through this House and my honourable friend Scott Benton MP for sponsoring it through the other place.

Electronic Trade Documents Act 2023

Lord Offord of Garvel Excerpts

Thursday 14th September 2023 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my financial services and technology interests as set out in the register.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

The Electronic Trade Documents Act will provide an economic boost estimated at just over £1 billion over a decade, substantially reducing paper use. We are the first G7 country to put digital and paper trade documents on an equal footing. Given the international prominence of English law, this will kick-start digitalisation globally. We advocate similar change by trading partners. We will support businesses through international trade advisers, trade and investment hubs and initiatives promoting digitalisation, including the Centre for Digital Trade and Innovation.

[Lord Holmes of Richmond (Con)]

My Lords, does my noble friend agree that the Electronic Trade Documents Act offers us the potential of combining our common-law tradition with our expertise in new technologies such as blockchain and our excellent financial services ecosystem? Does he agree that we must work to ensure that everybody in the business department communicates through every channel—particularly to SMEs in the UK—the opportunity that exists through this Act and, similarly, that all our missions overseas communicate to companies and politicians around the world to enable them to see the benefits of passing similar legislation? As my noble friend the Minister knows, it takes two to trade.

[Lord Offord of Garvel (Con)]

I thank my noble friend for those comments and questions. This is a quite remarkable Act. In fact, it is the only Act of Parliament that I have read from beginning to end. It is only four pages long and 1,500 words; I recommend it for its brevity and its conciseness. It simply does one thing, which is to take the architecture of 300-plus years of mercantile trading which has been done in paper form and translate that into digital to have the same legal impact. The onus is now on the Department for Business and Trade to communicate this to our SMEs, as my noble friend indicated. To that end, we are using international trade advisers and the International Chamber of Commerce, and we have set up the Centre for Digital Trade and Innovation at Teesside University. A lot of work will now be done to raise awareness of this, which will be for the great benefit of our trade.

[Lord Lansley (Con)]

My Lords, in reading the Act, my noble friend will have realised that reliable systems for authenticating electric trade documents is one of the central operational issues. Will the Government therefore give their full support to the International Chamber of Commerce, which I am glad he mentioned, as it did so much good work in helping to bring this Act forward? Will they also try to put together assurance for what those reliable systems look like that will help traders to trade confidently?

[Lord Offord of Garvel (Con)]

I thank my noble friend for that. I can report that, as the Minister in this area, I have chaired a forum with the International Chamber of Commerce where we are at the forefront of this initiative. By the UK leading the way here, with G7 and others following through, this will become a standard mechanism of trade and will be followed by the new operating border and the single trade window. We will therefore be moving rapidly to 2025 and a situation where trade can be expedited across international markets to the great benefit of our economy.

[Baroness Blake of Leeds (Lab)]

My Lords, estimates suggest that this important legislation could save businesses approximately 50% in costs by moving to forms of electronic trade. The impact assessment attached to the Act had a best-estimate adoption rate of 5% in year 1 and 45% by year 10, while the highest adoption rate predictions suggested 10% in year 1 and up to 80% in year 10. The difference in extremes between these adoption rate predictions will have far-reaching consequences. Given the potential for major cost savings and increased efficiency, can the Minister reassure us that the Government will develop a clear strategy, including guidance and awareness-raising, to support stakeholders and businesses who are keen to move towards early adoption and to inform those who are not yet engaged or are unaware of the benefits of so doing?

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for that question. I can assure her that this is a great focus for the Department for Business and Trade. At the moment in the UK, only 10% of our SMEs are exporting. Overall, we are a great exporting nation; we have recently gone from sixth to fifth in the table, and we are second in services, so we have a strong export tradition, but we could do better among our SME community. My personal ambition is to drive that number up, and digital has a key part to play in that. There are some 280,000 SMEs exporting. We want to double that, and the digital route will be the way to do so. We have already identified 100,000 essentially new business which are born digital and born international, which will be a great boost to the SME trade. That will be a great focus for our department going forward.

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, we have a virtual contribution from the noble Baroness, Lady Harris of Richmond.

[Baroness Harris of Richmond (LD) [V]]

My Lords, in a letter to Peers in June, the Minister, the noble Viscount, Lord Camrose, stated

“industry stands ready and eager to support the delivery of this Act for UK businesses of all shapes and sizes, developing guidance and standards to ensure it’s a success”.

Notwithstanding the Minister’s response, how are the Government actually working with industry, as well as others he mentioned, to ensure this? Should not we now have more detail about the implementation of the Act?

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for that question. That is the nub of what we are dealing with: we have passed the Act, which is a great first step, but we now need to implement it inside our ecosystem. There are going to be great advantages, some of which have already been identified in terms of cost. There are also advantages in data collection. We believe that we can greatly increase our trade finance to SMEs; currently trade finance for exporting is perhaps not the most accessible. We believe that the digital mechanism for data collecting will greatly increase the ability to access finance and reduce its cost, so we see benefits everywhere around this legislation.

[Lord Kirkhope of Harrogate (Con)]

My Lords, while supporting my noble friend Lord Holmes, I want to ask my noble friend the Minister two questions. The first is about the transferability back into a paper form in cases where there has to be default due to a lack of digital experience. Secondly and perhaps more importantly, given that other international bodies have not yet come on board with this very useful initiative by the British Government, is it not a good idea to confirm what nature of law is to apply in each document coming through this system?

[Lord Offord of Garvel (Con)]

I thank my noble friend for that. The purpose and intent of the Act is to give equal weight to paper and digital proof of ownership—bills of lading, letters of credit et cetera—so they can be in either form. On the legal regime, the Bill is modelled on the United Nations law, so it comes from, as it were, a higher authority, but through custom and practice and mercantile law over the last 300 years or so, maritime law is governed largely under English law. There is therefore an easy adoption and an understanding that mercantile trade can continue under English law. As the rest of the G7 countries come forward and adopt similar legislation, I am sure we will find alignment in these matters.

[Lord Bellingham (Con)]

My Lords, the Minister and his colleagues need to be congratulated on making sure that the UK is very much in the lead. He mentioned that the UK would encourage other countries to make sure that their systems are moved on to a digital and electronic platform. Which international organisations will he work with to ensure that this is encouraged and happens? One point puzzled me: why does Part 1 refer only to Scotland?

[Lord Offord of Garvel (Con)]

I will take my copy of the Act here to refer to. In terms of international bodies, this has come through the UN system and the major body we are working with to get to businesses directly is the International Chamber of Commerce. On the small jurisdictional point in relation to Scotland, under the devolution settlement Scots law needs to be separate from English law—although it is largely the same when it comes to mercantile. There is a provision in the Act to make sure there is alignment between Scotland and England.

[Viscount Waverley (CB)]

My Lords, this Act should be a major boost to UK corporates and indeed corporates around the world. As an aside, is the Minister aware that, apparently, up to 67% of British SMEs as yet do not have a website? That is another area which the Government might wish to consider in helping to push the trading figures forward.

[Lord Offord of Garvel (Con)]

I thank the noble Lord. The world has gone digital now and I think even that 67% are aware of that. The DBT is very much at the forefront of raising that awareness.

Employers: Fire and Rehire Tactics

Lord Offord of Garvel Excerpts

Thursday 14th September 2023 Lords Chamber

[Lord Woodley]

To ask His Majesty’s Government what steps they are taking to prevent employers from using fire and rehire tactics.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, earlier this year the Government consulted on a new statutory code of practice on fire and rehire. We are currently analysing responses to that consultation. A government response and the final version of the code will be published in spring next year. The code sets out employers’ responsibilities when seeking to change contractual terms and conditions of employment and seeks to ensure that dismissal and re-engagement is used only as a last resort.

[Lord Woodley (Lab)]

The code of practice as published is toothless, unfortunately. It contains no legal obligations on employers and adds only 25% to any compensation, no matter how small it may be—that is no solution. As we all know, what is needed is legislation—as there was in Australia this week—to end the scandal of fire and rehire; most decent people in this place and across the country support that view. When the Bill was proposed in the other place, the Government disappointingly ordered an unprecedented Friday three-line Whip and gerrymandered to filibuster and therefore embarrass a proper vote. I have been informed—

[Lord Woodley (Lab)]

With respect, I will continue. I have been informed that my Bill will not get a Second Reading. Can the Minister explain why the Government seem to be using every trick in the parliamentary playbook to prevent us even debating this much-needed change in the law?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his follow-up question. The UK labour market is strong by historical and international standards. In fact, in all employment law we are trying to get the balance right between workers’ protection and employers’ flexibility. The employment rate is at 75% right now, and wages have gone up by just short of 8% in the last year, so we think we have the balance right. The Government are taking action to ensure that this practice is a last resort. We are not banning it outright. In the code, we have measures whereby employees’ compensation in certain circumstances, as the noble Lord alluded to, can be increased by 25% if the employer has unreasonably failed to comply with the code, which is quite a big disincentive for the employer. But we believe that there are certain circumstances in which flexibility is required, so we are seeking to get the balance right.

[Lord Watts (Lab)]

My Lords, when we left the European Union, the Government said that they would introduce legislation to protect workers and that it would be better than in the European Union. Can he name countries in Europe where this could happen?

[Lord Offord of Garvel (Con)]

As I said, when we look at the standards of employment law against our competitors in Europe, we have a strong labour market, a strong rate of employment and a long-established suite of protections for all our workers, employees and self-employed people.

[Lord Palmer of Childs Hill (LD)]

My Lords, what is the assessment of the Minister’s department of how much compensation would have been received if the proposed guidance had been in force when P&O sacked hundreds of its employees? As another noble Lord said, 25% of nothing is nothing; it is all smoke and mirrors.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for raising that rather infamous case. What P&O did was illegal. It was not fire and rehire but dismiss and replace. It would remain illegal whether or not the code had been in place, and P&O has received considerable censure as a result. The code, which will come through in the spring, will give real guidance and protection to both employers and workers.

[Lord Kamall (Con)]

My Lords, we know that companies quite often have to close down or change their practices, either because of a competitive market or because they have been managed badly. In one-factory towns, for example, where one company is a major employer, when it has to close, are there any forums for the Government to work together with trade unions to retrain those workers who have lost their jobs to compete in the new global economy?

[Lord Offord of Garvel (Con)]

This is exactly why flexibility is required, because certain changes of circumstances require the workers and managers of a company to get together with the trade unions and the directors to solve the problem through consultation and consensus, and that is generally what happens in the UK. Indeed, as my noble friend will know, we have a number of measures to help employees back into work.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, is there a code of fire and rehire for Ministers in the Government?

[Lord Offord of Garvel (Con)]

I welcome the noble Lord back to Questions. I think that is a very good proposal; we can put it forward to the relevant department.

[Lord Whitty (Lab)]

My Lords, this Session has been plagued by thick Bills. To effect the change that my noble friend calls for would take only a very simple Bill. Can we expect it to be announced in the King’s Speech in November?

[Lord Offord of Garvel (Con)]

As we have said clearly, we are consulting and there will be a code of practice. This practice is used very rarely. Even the TUC in 2020 indicated that only 3% of employers had used fire and rehire and only 9% of employees had experienced it even as a threat. Therefore, the code is the right way forward in this case.

[Lord Forsyth of Drumlean (Con)]

My Lords, further to the question from the noble Lord, Lord Foulkes, does my noble friend not think it a disgrace that a third of our Ministers on the Front Bench are unpaid and that there are instances of paid Ministers being fired and then rehired on the basis that they do the job on no salary? Should the Government not tackle this in the interests of democracy and fair dealing to our Ministers, who do such an excellent job in this House in very difficult circumstances?

[Lord Offord of Garvel (Con)]

My noble friend raises an interesting question—this is going off on all sorts of tangents at this point. Those of us who are in this House consider it to be a great privilege, those who are asked to serve the Government consider it a great honour, and we continue to serve the country as best we can.

[Lord Brooke of Alverthorpe (Lab)]

I am sure the House has a great deal of sympathy for many of the new Ministers who have come in, especially as they are not being paid. They may not recall, although I hope the Minister does, that his Government gave a promise in 2019 that an employment Bill would become an Act during the course of this Parliament. I go back to the earlier question: will the Minister say whether an employment Bill will be in the King’s Speech in November, or is this another broken promise?

[Lord Offord of Garvel (Con)]

Throughout the course of this Parliament, commitments have been made around the manifesto commitments on employment given by the party on this side of the House. Over the last Parliament, six Private Members’ Bills have been brought through to enhance and protect workers’ rights. As I said, we are trying to strike the balance between workers’ protection and employers’ flexibility.

[Lord Fox (LD)]

My Lords, in answer to my noble friend’s question about P&O Ferries, the Minister rightly characterised its behaviour as an illegal act. However, P&O Ferries is now economically active and out there, doing what it always did. Will the Minister undertake to do an analysis of the turnover and profit of P&O Ferries now versus the sanctions it received? If those sanctions prove to have been insufficient, as I believe they will, will the Minister undertake to increase them to prevent a repeat of that disgraceful activity?

[Lord Offord of Garvel (Con)]

My understanding is that the P&O case is still under consideration with the insolvency authorities, so I cannot comment further on it. Further consultation is going on, taking account of this case and specifically the difference between dismissal and redundancy. That will also be in the code of practice. P&O has received censure. It continues to operate within the laws of the United Kingdom and should be allowed to continue to do so.

[Lord Leong (Lab)]

My Lords, good business leaders recognise that without workers they have no business. Valuing workers, treating them with dignity and respect, and mutual trust build a dedicated, motivated workforce. Unfortunately, some employers still adopt fire and hire practices with relative impunity, disrespecting their employees’ livelihoods and well-being. In turn, that damages the reputation and profitability of their business. Do the Government think it just for workers to be treated in this manner? Why will they not stop it?

[Lord Offord of Garvel (Con)]

As I indicated, only 3% of employers have ever used these tactics. The majority of good employers understand full well that the health of their company requires a happy and motivated workforce. This is a minority situation. The code of practice will give it greater clarity going forward.