Oral Answers to Questions
Margot James Excerpts(7 years, 3 months ago)
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Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
The gov.uk website and the business support helpline provide information on starting and running a business. Growth hubs also provide access to local and national support. Some 4.8 million people are currently self-employed.
James Cleverly
When I started a business, I found that one of the most intimidating elements was employing my first member of staff. What more can the Government do to encourage and support the self-employed to grow their company and become employers in their own right?
Margot James
We will support entrepreneurs across the UK to ensure that they can access finance and wider support so that they can grow. British Business Bank programmes are already supporting £3.2 billion of finance to more than 51,000 smaller businesses, including start-up loans to 39 entrepreneurs in my hon. Friend’s Braintree constituency.
Robert Courts
This matter is particularly close to my heart, given that I was self-employed until a few months ago. Of course, there are many self-employed businesses in rural areas of West Oxfordshire. Can the Minister assure us that the Government will continue to make it easier to start and grow a business by deregulating, creating an attractive tax environment, and helping businesses to attract and seek the finance that they need?
Margot James
We continue to work hard to make the UK a great place to start and grow a business. According to OECD statistics, we are internationally the third best place to start a businesses, but we are 13th when it comes to the best place to grow a business, which is where my focus as small business Minister is going to lie. I very much welcome the support of my hon. Friend.
Victoria Borwick
North Kensington, an area that the Minister knows, has several fantastic initiatives through which new start-ups have access to shared space. Are there any plans to reduce business rates and provide relief for small companies using shared space initiatives?
Margot James
The Treasury has no plans specifically for shared work spaces, but at the last Budget, the Chancellor announced £6.7 billion of cuts to benefit all business rate payers. They include permanently doubling small business rate relief and increasing the thresholds from 2017.
Dr Caroline Johnson
Will my hon. Friend tell us how the industrial strategy will support disabled people who want to start and grow their own businesses?
Margot James
The disabled employment programme is an important part of our work in labour markets, and it is backed by many top retailers. We will continue to press this issue and work with the Department for Work and Pensions for greater access to work for people with disabilities.
Dame Rosie Winterton (Doncaster Central) (Lab)
In order to grow the businesses of the self-employed, they need access to good-quality training. When I met the Doncaster YMCA and its apprentices last week, an issue was raised about clarity regarding funding during the transitional arrangements for the Skills Funding Agency going to the Department for Education. Will the Minister take an urgent look at this?
Margot James
I thank the right hon. Lady for bringing this to our attention. A new approach to improving access to skills and apprenticeships is a fundamental part of our new industrial strategy. I will raise the matter that the right hon. Lady mentions with the Secretary of State for Education.
Ms Margaret Ritchie (South Down) (SDLP)
Many self-employed people recruit apprentices and others who are seeking employment. Given that the report recently produced by the Institute for Fiscal Studies cast doubt on the effectiveness of apprentices, the training scheme and the apprenticeship levy, what are the Government going to do about this?
Margot James
Last week the Government launched the new industrial strategy, and the new academies programme for improving skills and access to apprenticeships is working with the existing apprenticeship programme to improve both the quality and number of apprentices.
Derek Twigg (Halton) (Lab)
Given that further education colleges have an important role in providing skills and training and help many people to become self-employed workers, does it make sense to cut their budgets?
Margot James
Further education colleges remain an important part of our strategy to improve skills and access to apprenticeships, but they are not the only route to apprenticeships. The apprenticeship levy will increase funding for overall access to skills for our young people.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Compulsory quarterly digital tax updates cause real concern to self-employed people and small businesses. Her Majesty’s Revenue and Customs says that support is available. Will the Minister tell us what support is available to self-employed businesses and how much money is set aside for that support?
Margot James
I am sorry; I did not follow all the hon. Gentleman’s question. However, I know that the Treasury is looking into the fairness of taxation as between self-employed people and the rest of the workforce. I will read the hon. Gentleman’s question in Hansard and write to him accordingly.
Richard Fuller (Bedford) (Con)
The ranks of self-employed people are being expanded by an increase in independent working. Will my hon. Friend ensure that labour market regulations are updated so that employee rights are maintained?
Margot James
I very much agree with the thrust of my hon. Friend’s question. The Prime Minister has appointed Matthew Taylor to undertake a review of employment practices in the modern economy to ensure that while we embrace new technologies, we also protect workers’ rights.
Rob Marris (Wolverhampton South West) (Lab)
What are the Government doing about the scourge of bogus self-employment, which too often is a rip-off of the workers concerned and a rip-off of HMRC?
Margot James
The Taylor review will also look into that very important issue. A worker’s contract with his or her employer is the fundamental basis on which he or she is judged to be self-employed or an employee, and that distinction will be closely scrutinised by Matthew Taylor.
Rehman Chishti (Gillingham and Rainham) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
SMEs in Kent are fundamental to our economy, as they are everywhere else. Through local growth funds, the work of Kent County Council and the business operations of Kent and Medway, the Government will ensure that the area benefits hugely from the increased number of SMEs.
Rehman Chishti
In view of the Government’s commitment to investment in infrastructure, which will assist businesses in Kent and Medway, will the Minister confirm their commitment to the Lower Thames crossing, along with extra investment for Kent roads, which will provide connectivity for local businesses?
Margot James
The Department for Transport will make an announcement, but my hon. Friend should be reassured that Kent County Council and the relevant business organisations are working closely with my Department to ensure that there are extensive improvements in the transport infrastructure in his constituency and the wider county.
Hannah Bardell
You can be assured of that, Mr Speaker.
The SMEs in Kent and Medway need someone in government to fight their corner. In July 2015, they were promised a small business commissioner who would focus particularly on late payments. The Federation of Small Businesses and others have raised concerns about the lack of power that the commissioner will have, and the fact that 18 months after the position was created, there is no sign of a commissioner. Will the Minister tell SMEs in Kent and Medway, for which I have the greatest regard, and others throughout the country when the commissioner will be appointed, and whether he or she will have proper powers to ensure that companies that do not pay are taken to task?
Margot James
First, I can reassure the hon. Lady that Kent and Medway is ably championed by my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti), who asked the original question, but apropos of her specific point, we are in the process of appointing the small business commissioner at the moment; he will be in post by the summer and able to take complaints on the important issue of prompt payment in the autumn of this year.
Tim Loughton (East Worthing and Shoreham) (Con)
Chris Davies (Brecon and Radnorshire) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
My right hon. Friend the Secretary of State has had discussions with the Chancellor on building the Government’s industrial strategy, which includes ensuring that businesses can access the finance they need. We already help businesses through the business finance and support finder on gov.uk, and we recently launched the finance platforms service, which offers small and medium-sized enterprises that have had finance rejected by the large banks the option of a referral to alternative finance providers.
Chris Davies
With many new online alternative finance companies springing up across the UK, what is my hon. Friend doing, first, to ensure that our small and medium-sized enterprises know about these alternative ways of accessing finance, and, secondly, to give them the confidence to borrow from such organisations?
Margot James
The British Business Bank has created the business finance guide, which is widely distributed and offers comprehensive information about the financing options available to businesses, including alternative sources of finance. The Financial Conduct Authority regulates peer-to-peer lending platforms and is currently reviewing its regulatory regime to ensure that it is robust and up to date.
Mr David Hanson (Delyn) (Lab)
What assessment has the Minister made of the impact of bank closures in town centres on the availability of business finance, to ensure that those such as my local one in Holywell, which is potentially losing three banks this year, will still have access to business finance and will still be positive town centres?
Margot James
The impact of bank closures is, to some extent, ameliorated by the Post Office’s announcement a few weeks ago that it will be enabling both personal and SME banking customers to have a massive increase in face-to-face banking services across the country.
Greg Mulholland (Leeds North West) (LD)
Last week, the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Stourbridge (Margot James), said that there had clearly been instances of the pubs code being flouted and that Members should bring such things to her attention. I have a case in her own constituency to bring to her attention, which also shows that the adjudicator is not doing his job. May we discuss this matter please?
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
I am very happy to discuss the case in my own constituency with the hon. Gentleman, but the Pubs Code Adjudicator is doing a good job. His line of inquiry has received 435 inquiries to date and 121 referrals for arbitration, but I will discuss the problem with the hon. Gentleman.
Kevin Hollinrake (Thirsk and Malton) (Con)
The industrial strategy makes a clear commitment that future rounds of infrastructure investment will take into account the balance of spending per head as between different regions. On the basis that there is a 60% imbalance between London and the rest of the country at the moment, what balance would the Secretary of State like to see going ahead?
Statutory Pubs Code and Pubs Code Adjudicator
Margot James Excerpts(7 years, 3 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
I congratulate the hon. Member for Leeds North West (Greg Mulholland) and my hon. Friend the Member for Tewkesbury (Mr Robertson) on securing today’s debate on the Pubs Code Adjudicator, and I thank all Members across the House who have contributed to the excellent and thought-provoking debate. Clearly this subject continues to attract strong views and passionate debate, and I want to reassure the House that the Government are fully committed to ensuring that tied tenants can operate in an environment that is fair and that allows them to thrive. That is why we introduced the pubs code. I pay particular tribute to the role that the hon. Member for Leeds North West played in bringing about that piece of legislation.
The pubs code regulates the relationship between around 11,500 tied pub tenants and the large pub-owning businesses that rent the pubs to them and sell them tied products. The pubs code applies to pub-owning businesses with 500 or more tied pubs in England and Wales. There are currently six pub-owning businesses that fall within the scope of the code: Admiral Taverns; Enterprise Inns; Greene King; Marston’s; Punch Taverns; and Star Pubs & Bars, owned by Heineken.
The two principles of the pubs code are: fair and lawful dealing by pub-owning businesses in relation to their tied tenants; and that tied pub tenants should be no worse off than if they were not subject to any tie. The pubs code should make sure that tied pub tenants: receive the information they need to make informed decisions about taking on a pub or new terms and conditions; have their rent reassessed if they have not had a review for five years; and are enabled to request a market rent only option to go free of tie in specific circumstances, including at a rent review or on the renewal of tenancy.
I will first address the appointment of Mr Newby and the performance issues raised in this debate. I am sure we can return to some of those important issues during my speech. We believe that he is the right person to ensure that the pubs code delivers its statutory objectives and, for reasons I will set out, we think he got off to a good start with his responsibilities.
Since his appointment, Mr Newby has made himself visible and accessible. He has attended at least eight conferences, various events and eight roadshows across the country, at which he has met many stakeholders, including several hundred tenants. He has also taken pains to pursue greater visibility for the pubs code and to raise awareness among tenants by appearing on various television programmes, including a pubs special of “The One Show” and “The Great British Pub Revolution,” with the aim of bringing the pubs code to the attention of a wider audience. I did not watch the programmes, so I cannot comment on their creative content, but they are a means of raising awareness with the target audience.
Through those appearances, Mr Newby has explained his role and responsibilities, and has shown his determination to help to create a fairer business environment for tied pub tenants that allows the pubs, which are so important to our communities, to thrive. Contrary to what we have heard, he has been raising awareness among tenants that under regulation 50:
“A pub-owning business must not subject a tied pub tenant to any detriment on the ground that the tenant exercises, or attempts to exercise, any right under these Regulations.”
It is important that he continues to make that case.
Toby Perkins
Will the Minister clarify that, in the context of that desire and regulation 50, a pub-owning business that moves from a tied model to a free-of-tie model will be able to do it with a simple deed of variation? That would make it the only change to the business’s terms and conditions, and all the other terms and conditions would not have to be reviewed as a result. Can she confirm that that is consistent with what she has just said?
Margot James
I have great sympathy with the hon. Gentleman’s point, and I hope that it will be clarified by the Pubs Code Adjudicator in due course. The pubs code itself is not clear on that aspect, and it will be up to the Pubs Code Adjudicator to pronounce on it when he feels that he has enough evidence. I reiterate that I have considerable sympathy with the hon. Gentleman’s point.
Mr Newby has received a positive response from tenants, with the majority supporting his role. I accept that some tenants are deeply opposed to his role, and I could not have sat here for the past hour and a half without realising that, even if I had not known beforehand.
Margot James
I might as well have given way to the hon. Gentleman, because he is making his point anyway. I will shortly come to his point about tenants who support Mr Newby. Suffice it to say that the number of referrals that Mr Newby is getting bears witness to there being tenants who support his role.
Tenants are coming to the Pubs Code Adjudicator to seek the protections provided by the pubs code. In its first six months, the inquiry line set up by the adjudicator to provide information about the pubs code received 435 inquiries, 91% of which were from tied pub tenants or their representatives, which bears out the imbalance that these businesspeople have had to suffer over many years. In the same period, the adjudicator received 121 referrals for arbitration.
I will now respond to a few of the comments made in the debate. My right hon. Friend the Member for West Dorset (Sir Oliver Letwin) and others observed that the Pubs Code Adjudicator has a dual role in both upholding and enforcing the code and in adjudicating on alleged breaches of the code. The pubs code was introduced in law to bring greater protection to tenants and to strengthen their position on what was a very un-level playing field. The PCA’s role is therefore to uphold the law and not to interpret it in a way that is biased towards one party or another on the adjudication side of his responsibilities.
We have heard allegations of ongoing abuse by pub companies, particularly from the hon. Member for Leeds North West, to whom I listened very carefully, and my hon. Friends the Members for Warwick and Leamington (Chris White) and for Tewkesbury. Tenants seeking the market rent only option, it is alleged, are being undermined by tactics deployed by the pub companies that threaten to make the pursuit of a market rent only option unviable, in direct contravention of regulation 50. There have clearly been instances in which the code has been flouted, and hon. Members are right to bring those cases to the House this afternoon. The code is designed to root out those cases, and I urge hon. Members to refer them to the Pubs Code Adjudicator.
On the performance issues, the hon. Member for Chesterfield (Toby Perkins) rightly raised his concern that there have not yet been any adjudications. There is a clear appetite, shared by the Pubs Code Adjudicator himself, for adjudications to start coming out, and I have no doubt that they will start coming out without further delay. There is no doubt that the Pubs Code Adjudicator will start to form some views, based on the evidence that he is seeing, so that we do not indefinitely have a situation in which every single case takes the same length of time as the cases in the first few months of his deliberations. I concur with that point, and I have questioned him about it. He assures me that although the law is technical and is not clear on every point, he will most certainly issue guidance when he is satisfied that he is in a position to do so.
Of course, the Pubs Code Adjudicator has already made statements that should give comfort to the House. On 9 September he made a public statement in response to information he received from stakeholders, in which he reminded the pub-owning companies of their obligations and what he expected of them in relation to the code:
“I expect pub-owning businesses to act in a manner that does not inhibit a tied tenant from accessing their rights”.
He also said that pub-owning companies must make available all relevant information relating to rent assessments and proposals for tenancies, and that they must ensure that MRO tenancies comply with the code and do not contain the sorts of unreasonable terms that we have heard about this afternoon. It is clear from our investigations prior to this debate that at least one pub-owning company is still not complying with the code and is making life difficult for its tied tenants. That needs to be rooted out.
Greg Mulholland
I remind the Minister of her wonderful work when she was a member of the Select Committee and shared exactly its view. She must substantiate her statement that the majority of tenants support Paul Newby. Does she realise that the only organisations he cited in support are: the Association of Licensed Multiple Retailers, which has a regulated pubco as a member; the British Institute of Innkeeping, which is run by someone who used to be a boss of a former pubco; the Federation of Licensed Victuallers Associations, which is run by a former director of Enterprise Inns; and Enterprise Inns, which pays for licensees to sign up to membership? Those are the only people who have signed up, so will she correct the record? The majority of tenant-representing organisations oppose Mr Newby and always have.
Margot James
I do not accept the hon. Gentleman’s criticisms. I am sure that he has not interviewed all 11,500 tied tenants. From the representations that I have seen, the number of tenants that the British Pubs Confederation represents is open to question. It is all very well for the hon. Gentleman to be so critical of the Association of Licensed Multiple Retailers and the Federation of Licensed Victuallers Associations—[Interruption.]
Margot James
Well, it is all very well for him to say what he said, but they are credible organisations. They welcomed the Pubs Code Adjudicator’s appointment and said that it is essential for the post to be held by someone with an in-depth knowledge of the market. When I visited the office of the Pubs Code Adjudicator in Birmingham and met the staff who work behind him, they were relieved that they had the leadership of someone who knew so much about the industry and the market.
Members raised other important issues, including the conflict of interest mentioned by the hon. Member for Hartlepool (Mr Wright). There have been two accusations against Mr Newby: that he has conflicts of interest through his financial interests in Fleurets and—I do take this seriously—that the perception that he is conflicted means that he is not able to carry out his role effectively. There is a delicate balance to be struck when saying that the perception is the reality, which can lead to opportunities to give further credence to the conflict of interest. However, as the Secretary of State explained to the BEIS Committee on 14 December, the appointment process for the post was run in full accordance with the code of practice for ministerial appointments to public bodies. It was a proper and rigorously followed process. The panel concluded that Mr Newby had no conflicts of interest that would call into question his ability to do the job.
The Commissioner for Public Appointments, Peter Riddell, also considered the matter and has confirmed his view that nothing was hidden and that there had been a proper, transparent process. He is also satisfied that the panel was entitled to conclude that Mr Newby has no such conflicts of interest. It would be wrong to deny the judgment of the independent figure responsible for overseeing such procedures. Mr Riddell is a man of great integrity who has a deep understanding of the principles of public appointment.
The Government do not agree that Mr Newby’s previous employment with and financial interests in Fleurets create a conflict of interest that could give rise to a reasonable perception of bias—[Interruption.] I am sorry that hon. Members are dissatisfied with that. We have heard the accusations that Mr Newby misled the BEIS Committee about his financial interests in his former company, but he has not attempted to disguise the nature of his financial interests in Fleurets. He answered the questions he was asked to the best of his ability at the time and there was no intention to mislead. He later became aware that some technical parts of his evidence were inaccurate and wrote to the Select Committee to set the record straight.
The request for early repayment was referred to by the hon. Member for Chesterfield, who was backed up by the hon. Member for West Bromwich West (Mr Bailey), whose speech I listened to with great attention having sat on the former Business, Innovation and Skills Committee in the early years of my time in Parliament when he was its Chairman. During his oral evidence, Mr Newby was open about the nature of his loan arrangements with Fleurets. In order to be helpful, he said:
“I could ask if it would be possible to be repaid more quickly, but that agreement was already in place when I left.”
Mr Newby took the opportunity to update them on that request when he wrote to the Committee. His willingness to seek to address the Committee’s concerns should not be construed as an admission that he is conflicted, nor that the Government think that that is the case.
In conclusion, the pubs code is important for the pubs sector. It is vital that Mr Newby is now allowed to get on with the job. Many adjudications are awaiting an outcome and I share the frustration that we have not yet seen any results. However, six months is not a long time, considering the burden of work associated with the role and the small team of nine people. It is therefore incumbent on us all to give Mr Newby the space to do his job properly over the next few months. I am sure that hon. Members will no doubt request a further statement or perhaps another debate, and I hope that we will be talking more about the outcome than the process. Mr Newby is doing a good job and has much important work to do. Through that work and his adjudications, it is important that the sector’s confidence is built up and, most important of all, that tenants in all our constituencies are protected as Parliament intended.
Draft Trade Union Act 2016 (Political Funds) (Transition Period) Regulations 2017
Margot James Excerpts(7 years, 3 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
I beg to move,
That the Committee has considered the draft Trade Union Act 2016 (Political Funds) (Transition Period) Regulations 2017.
It is a pleasure to serve under your chairmanship, Mr Stringer. During the passage of the Trade Union Act 2016, the House debated at length the principle that union members should make an active choice to contribute to a trade union’s political fund. The other place established the Select Committee on Trade Union Political Funds and Political Party Funding, under the chairmanship of Lord Burns. I would like to start by thanking Lord Burns and all the peers who sat on that cross-party Committee for their work.
I want first to remind hon. Members why the Act’s reforms to political funds are important. Under current legislation, a union member automatically contributes to a union’s political fund as part of their union subscription, unless they notify the union that they do not wish to do so. We have debated at length the principle of those rights of union members. The Select Committee also assessed the extent to which unions were, in practice, transparent to their members about the existing choice to opt out of contributing to their union’s political fund.
The Select Committee concluded that there is significant variation in how different unions convey opt-out information to their members. The Government’s analysis of online union subscription forms—the point at which an individual makes their first financial commitment to the union—found that nearly half of unions that have a political fund make no mention of its existence.
The provisions in sections 11 and 12 of the Act meet our manifesto aim to provide a transparent, active choice for union members by allowing new members joining a union to opt into making payments to a political fund. As required by the Act, we consulted the TUC, 24 unions with political funds and the certification officer to seek their views on the length of the transition period.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
First, I declare my proud membership of the GMB. I worked on the Trade Union Act in its early stages in Committee and on Second Reading, along with other Opposition Members. The Minister mentioned the consultation period and the TUC. Of course, the TUC and many individual unions have expressed concerns about the length of the transition period. Though willing to try to comply with the legislation, they have raised very reasonable concerns about the timeframe. Why has that not been taken into account?
Margot James
The hon. Gentleman is right to say that the Government consulted widely with individual unions, the TUC and the certification officer on the length of time deemed reasonable for the transition period. The unions gave differing views. Many have lobbied us for longer than 12 months, but, taken in the round, the Government have decided that 12 months is a reasonable amount of time for unions to introduce the necessary changes to comply with the legislation.
Christian Matheson (City of Chester) (Lab)
First, I declare my membership of the Unite and GMB trade unions, in common with my hon. Friend the Member for Cardiff South and Penarth. What was the point of consulting if the Government were simply going to ignore every response they received ?
Margot James
We conducted a consultation and took it seriously. We listened to people’s views and arrived at a judgment. I remind the hon. Gentleman and other hon. Members that this is not news to the trade unions concerned. It passed into law last May, following intensive debate on the Floor of the House and a great deal of publicity. In effect, the unions have had more than 12 months to introduce the necessary changes to their systems.
Chris Stephens (Glasgow South West) (SNP)
I, too, declare my membership of Unison and refer to the Register of Members’ Financial Interests and my post as chair of the Public and Commercial Services Union parliamentary group. Why was 1 March 2018 chosen as the specific date, when we know from trade union feedback that that will cause considerable problems? Trade unions discuss rule changes at their conferences, but many of them are held biannually.
Margot James
If trade unions hold conferences biannually, they will surely have at least one conference opportunity between now and March 2018. As the hon. Gentleman probably knows, under the Trade Union and Labour Relations (Consolidation) Act 1992, it is not necessary for unions to amend their rules in this regard at a conference. They can apply to the certification officer for the acceptance of any form of union ballot on such a change of rules. Although many unions would prefer to give effect to the changes at a conference, there is no obligation on them to hold a conference to achieve that.
Ms Eagle
I thank the Minister for giving way. I declare my proud membership of Unison and the journalists’ union. One of them allows members to opt in and has a political fund, while the other does not. Does the Minister not realise that trade unions rely on their rulebooks and the legitimacy of any changes to them in order to ensure that they are appropriately and politically accountable to members who may have different views on different policies? If they were to start amending their rules in this unorthodox way, to fit in with the Government’s purpose, that would set very unhelpful precedents for many other issues. I speak as someone who has very detailed knowledge of how trade unions operate their internal affairs. Will she at least acknowledge that point and go away and think about it? Will she also—
Margot James
I defer to the hon. Lady’s considerable experience of trade union matters, but she has just pointed out that trade union members have widely different views on many political issues. I think that that provides inherent justification for the measures.
Margot James
I have not finished responding to the hon. Lady. She correctly referred to a reliance on rules to provide proper accountability to members, and we respect that. However, the hon. Member for Glasgow South West said in an earlier intervention that many unions hold biannual conferences. There is therefore an opportunity between now and March 2018 for the vast majority of those unions with political funds to agree the rule changes at a conference. As I have said, if they cannot meet at a conference to introduce the new rules, they can at least ballot their members in consultation with a certification officer.
I am sorry that the hon. Member for Wallasey is frustrated and disappointed by my response, but I think that it is reasonable. The Government believe that a 12-month transition period is adequate for unions to ensure that they comply with the statutory requirement under the Trade Union Act. That balances the need to provide unions with sufficient time to implement the changes with the Government’s view that the measures are delivered promptly.
Once the regulations have received parliamentary approval, they will come into force on 1 March 2017 and the formal 12-month transition period will run from that date. The Government’s view is that unions have known about these changes for some time and it is not unreasonable to expect them to have already done some planning to meet the requirement. We are also grateful to the certification officer, who has consulted unions and issued model rules and guidance, which should assist them in complying with the new requirements.
Chris Stephens
I am grateful to the Minister for giving way again. It is important to note that the certification officer has indicated that there will be a period of at least five weeks for him to sign off the changes to a trade union’s rule book. Does the Minister agree that that means that, in effect, trade unions have only 11 months?
Margot James
The hon. Gentleman quibbles about weeks and months. We are approaching the end of January and the measure will not come into force until 1 March, from which point the unions will have 12 months in which to comply.
Stephen Doughty
The Minister is being generous in giving way. Unfortunately, she has mischaracterised what many unions have done with regard to planning. The Union of Shop, Distributive and Allied Workers will hold its annual conference on the last Sunday in April. It booked the venue many years in advance and informed the delegates, and they have had to book time off work. USDAW and other unions want to agree the changes in order to comply with the legislation, but they will not be able to do so because the Minister is not willing to move the deadline by a few months. That is absurd.
Margot James
I am sorry about the situation that the hon. Gentleman describes at USDAW. Perhaps it could make some progress at the end of April, if that is when its conference will take place. If it is not scheduled to take place until next April, I concede that that is a disadvantage for USDAW. It may have to take other measures, which I have outlined, to consult its members on the necessary rule changes.
The Secondary Legislation Scrutiny Committee noted that the Government had not published a summary of responses to their consultation with unions and the certification officer on the length of the transition period covered by the regulations. I apologise that we were unable to publish a summary of responses when the regulations were laid. We accept that we should have done so. The Committee advised us that it is best practice to publish a summary of consultation responses and we have now done so on gov.uk. The Government believe that the regulations are proportionate and strike the correct balance between the interests of unions and members of the public.
Margot James
I thank hon. Members for their contributions. This has been a thought-provoking, passionate debate. First, I thank the shadow Minister, the hon. Member for Sheffield, Brightside and Hillsborough, for her contribution. I have spoken before about our consultation process with individual unions, the TUC and the certification officer. I accept that there is a degree of complexity to the changes that unions are required to make. At least the certification officer has this month published the model rules and the changes to union rulebooks, which is important.
Margot James
Not yet. There are 13 months to go before the due date. The hon. Member for Sheffield, Brightside and Hillsborough talked about “wholly irresponsible” regulations, and many hon. Members challenged the basis of what we are doing, not just the length of time that we are allowing unions before they must comply with the law. We Government Members feel that if people’s money is directed into a fund that is used for political purposes, they should at least know that, and have a say in whether they want that to happen. There may be a divide between the two parties on this, but I am afraid that we Government Members feel strongly that if people have money taken off them, they should have a say in where it goes, and that is all that the measure ensures.
Mr Stringer, you rightly allowed Members a degree of liberty in going beyond the confines of what we are debating; I shall take advantage of that and challenge the idea that we have taken an ideological position on this matter. I do not for one instant believe that. In fact, our research showed that almost half of the money raised through donations to political funds is, as the hon. Member for Glasgow South West pointed out, devoted to other campaigns, and not Labour party funds. Almost half goes on the sort of good campaigns that he mentioned. It is a complete myth that this is some sort of political attack on the way that the Labour party is funded.
Stephen Doughty
The Minister is generous in giving way. She makes the argument that a lot of money goes to other important campaigns, such as the USDAW campaign on stopping violence against shop workers. Let us take the politics out of this for a moment; will she listen to the very reasonable concerns felt by a number of unions about the length of the transition—points echoed by the right hon. Member for West Dorset, a former Cabinet Minister who sits on her party’s Back Benches? He made an important point about the timing, and the impact that the transition period will have on some very reasonable unions that are trying to comply with the legislation.
Margot James
I thank the hon. Gentleman for his intervention; he made a powerful speech earlier. Of course I noted the comments of my right hon. Friend the Member for West Dorset, and I will give them consideration, but I have made the case—I will not repeat myself—for why we feel that 12 months is acceptable. This comes on the back of an Act that was passed almost a year ago.
Several hon. Members rose—
Margot James
I will not give way for a little while. I want to go back to our purpose, and remind Opposition Members that when we concluded the Act’s Public Bill Committee sittings, the shadow spokesperson, the hon. Member for Cardiff West (Kevin Brennan), said on the record:
“we recognise that the Government’s new proposal”—
that is, that only new members should be required to opt into the political funds—
“is a substantial improvement ?on the original Bill, which would have required all members to opt in within three months and to renew that opt-in within five years.”––[Official Report, Trade Union Public Bill Committee, 27 April 2016; c. 1510.]
Hon. Members are making a great deal of something that really ought to be happening already, and is a modest advance.
Chris Stephens
I thank the Minister for giving way; she has been most generous. As the right hon. Member for West Dorset pointed out, there is a real problem with the date given in the statutory instrument—1 March 2018. Is the Minister indicating that she is amenable to moving that date by a couple of months, as the right hon. Gentleman suggested?
Margot James
I am not going to proceed down that path at this point. As required by the Act, we have consulted and sought views on the length of the transition period.
Margot James
Sorry, I am not going to give way again; I have been very generous. [Interruption.] As it is the shadow Minister, I will give way, but for the last time.
Gill Furniss
Will the Minister take on board what the right hon. Member for West Dorset said and give us some flexibility in implementing the transition? She seems to have indicated that she may look at that, but it would be good to put on the record whether that will occur.
Margot James
I can only repeat what I said to the hon. Member for Glasgow South West. I am not going to repeat myself again. The regulations implement the Act’s provisions by providing for a 12-month transition period. We have taken a proportionate approach on the political funds opt-in transition.
Margot James
Sorry, I am not going to give way again. We have taken on board the comments from this debate as well as those during the consultation. Our view is that the 12-month period gives sufficient time.
Question put.
Corporate Governance and Social Responsibility
Margot James Excerpts(7 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
I congratulate the hon. Member for Sheffield, Heeley (Louise Haigh) on securing today’s debate on corporate governance and social responsibility. I know it is an area in which she has a long-standing interest and considerable expertise born of her previous career—she and I share a business background. However, I listened carefully to what she said, and I do not fully recognise the picture of corporate life she has painted, although, certainly, some of it had strong resonance.
We require no reminder of just how important it is that business is conducted in a socially responsible way. There are over 3 million businesses in the UK, from small start-ups to large established businesses with a presence across the globe. They provide employment for over 26 million people. Whether large or small, they are a critical part of our society. They are not in some way separate from it. The way businesses operate and the decisions they take have a big impact on their employees, customers and suppliers and on the communities in which they are based.
The Government have a key role in setting minimum legal standards that businesses must meet in areas such as employment and consumer protection, environmental standards, and the protection of creditors in the event of insolvency. These provide a vital underpinning for business activity; it is the corporate and legal responsibility of business to comply with that framework, and I believe the vast majority do. Where businesses fall short, they are rightly held to account.
However, corporate responsibility and the way businesses manage their impact on society go beyond simple legal compliance. If we are to achieve our objective of an economy that works for everyone, we need more businesses to aim at the high standards of responsible business practice achieved by our best companies. The Government’s role in that context is to encourage those businesses that lead in good practice and to encourage others to follow suit.
The hon. Lady mentioned diversity in senior business management and at board level. We are encouraging business-led moves towards a more diverse and inclusive culture in the top management of our biggest companies that will set a lead for others to follow. Boardrooms should mirror wider society, and businesses should make the most of all the talent they have in their diverse workforces. We are following up the success in increasing representation of women on boards of our biggest companies by working with businesses to ensure that more talented women achieve senior executive roles. We welcomed the report last month from Sir Philip Hampton and Dame Helen Alexander, who are now pressing ahead with proposals to drive up the representation of women at senior executive level and build on the pipeline for female management and talent.
We also welcomed last month the launch of the report by Sir John Parker and his recommendations for addressing the worryingly low level of representation of black and minority ethnic directors in UK boardrooms. Half the FTSE 100 companies do not have ethnic minority representation on their board, and that is shameful. Diversity at the top of our businesses is about trust. It shows workforces that their boards are representative of them and that routes to the top are open to them. People want to believe that if they work hard they too can get there, whatever their background.
As the hon. Lady reminded the House, the Government have recently published a Green Paper on corporate governance reform in which we are exploring options for strengthening aspects of our corporate governance framework. The UK has a good reputation for corporate governance that combines high standards with low burdens, but this reputation can be maintained only if Government and business review and upgrade those standards from time to time. She mentioned several recent reports on corporate governance, which followed landmark reports by Cadbury, Greenbury and Hampel in the 1990s.
The Green Paper invites views on three main areas. First, it asks for views on options to strengthen shareholder influence on executive pay, to improve the transparency of reporting on executive pay, and to strengthen the link between executive pay and long-term company performance. The hon. Lady was right to point out that the gap between rising CEO pay and corporate performance had grown too wide in recent years.
Secondly, the Green Paper asks for views on options for strengthening the connection between the boards of directors of companies and their employees, customers, and other stakeholders. All the best companies know that there are economic as well as societal benefits to be derived from maintaining strong links with interested groups. However, we need to consider what more can be done to ensure that all UK companies are equipped with an appropriate model of employee, customer, and wider engagement.
Finally, the Green Paper seeks views on whether some of the features of the corporate governance and reporting framework covering quoted companies should be extended to our largest privately held companies. Many of these companies have an economic footprint that is equal to that of listed companies. For example, there are approximately 2,500 private companies with more than 1,000 employees. In asking these questions, we want to improve the ability of UK businesses to take decisions that are informed by a wider range of views and better support long-term company performance and sustainability.
Louise Haigh
I absolutely support proposals to extend reporting to private companies, but will the Minister comment on how effective the current reporting regime is? Some businesses certainly report at an absolutely excellent level. However, I used to have the arduous and unenviable task of reading through some of these reports, and for many companies it is just a tick-box exercise. The FRC is not sufficiently resourced in terms of staff or sanctions properly to enforce the regime on companies that refuse to report properly and raise their standards, as she rightly said, to those of the businesses that are doing well in this area.
Margot James
I agree that the standard of reporting on the non-financial aspects of corporate performance is mixed and varied. One of the purposes of our Green Paper is to bring the standards of the poorer companies in terms of reporting, and indeed within other parameters, up to the standards of the best.
One option is for companies to appoint individuals to company boards to represent these stakeholder views. In the case of employees, this could be someone who works for the company—a worker representative. There is nothing in UK law to prevent unitary boards from including worker representatives as full members. Indeed, such arrangements can work well for some companies, FirstGroup plc being the best-known example. But very few UK companies have adopted it. There are undoubtedly more companies who could benefit from this approach, and the consultation period provides an opportunity for the case to be made.
Given the huge variety of UK companies, it is unrealistic to think that one size will fit all corporate requirements. For other companies a different approach to workforce engagement will work better. That is why the Green Paper makes it clear that we are not proposing to mandate the direct appointment of employees to company boards. Instead the Green Paper looks to generate a debate on the range of options that companies can choose to improve the connection between boardroom and workforce. The best companies know that there are economic benefits to be gained from understanding and maintaining healthy relationships with employees and customers. The key point is to ensure that all companies are equipped with an appropriate model of engagement to deliver a stronger voice for employees and other stakeholders in the boardroom.
The hon. Lady mentioned section 172 of the Companies Act 2006. We are not consulting on amending the wording in that section, but we are consulting on whether, and if so how, companies could provide more information on the steps that directors are taking to fulfil their duties under that section. We are also consulting on how to strengthen the connection between boardrooms and other voices, as I mentioned earlier. We would welcome comment—the hon. Lady’s views will be considered, along with those of other interested parties—on how we could get companies to report more fully on how directors are fulfilling their duties under that section.
I am very grateful to the hon. Lady for initiating this debate, which has drawn attention to the key contribution that businesses can and should make to society. It has also provided an opportunity to set out steps that the Government are taking to raise standards in responsible business practice.
Question put and agreed to.
Oral Answers to Questions
Margot James Excerpts(7 years, 5 months ago)
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Nusrat Ghani (Wealden) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
The proportion of women on FTSE 100 boards has increased from 12.5% in 2011 to 27%. Since 2011, the number of women on FTSE 350 boards has more than doubled to 23.5%. We support the business-led target of 33% of those on FTSE 350 boards being women by 2020.
Nusrat Ghani
I welcome the Minister’s response, but to get more women on boards we have to get more women into business in the first place. I championed and spoke at the Wayfinder Woman conference in Uckfield. The mission of the Sussex-based organisation is to get more women into business. What work do the Government do with such organisations to get women into enterprise so that they get the skills that they need to rise to the top?
Margot James
I congratulate my hon. Friend on all the work she does to mentor women. More than 16,500 start-up loans have been issued to female entrepreneurs and almost half the users of the business support helpline are women. The Hampton-Alexander review is looking beyond boards at building female pipelines among senior management. We also support the Women’s Business Council.
Ms Margaret Ritchie (South Down) (SDLP)
Is there a regional pattern in low numbers of women on boards? Will the Minister outline what discussions have taken place with ministerial colleagues in the devolved Administrations about increasing the number of women on boards?
Margot James
I welcome the hon. Lady’s commitment to increasing the number of women on boards in Scotland. I will have discussions with my right hon. Friend the Secretary of State for Scotland to ensure that the national target applies equally to Scotland as to elsewhere in the United Kingdom.
Mrs Sheryll Murray (South East Cornwall) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
I apologise to the hon. Member for South Down (Ms Ritchie)—I meant Northern Ireland, of course, in my earlier response.
The gov.uk website and the business support helpline provide information on starting and running a business. Growth hubs also provide access to local and national support, and 4.8 million people are now self-employed.
Mrs Murray
In South East Cornwall we have some fantastic self-employed people who make a host of excellent food products. Does my hon. Friend agree that there will be opportunities for them to grow their businesses and be released from excessive red tape once we leave the European Union? What advice does she have for them?
Margot James
The Government committed in their manifesto to reducing the burden of regulation on business by £10 billion during this Parliament. We will also carefully consider the implications of leaving the European Union for the business impact target, and the opportunities to reduce further the burdens on businesses such as the excellent self-employed food producers in South East Cornwall.
Louise Haigh (Sheffield, Heeley) (Lab)
False self-employment is a particular issue in sectors such as retail, care and construction. The Gangmasters Licensing Authority is now expected to regulate those industries, which contain more than half a million businesses, yet has only 79 members of staff across the entire UK. Its director of labour market enforcement has not yet been appointed, despite the new powers being in place. Will the Government ensure that they act speedily on that?
Margot James
I assure the hon. Lady that we are acting swiftly to appoint the director of labour market enforcement. I agree with her that it is a crucial role.
Mr Gavin Shuker (Luton South) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
The Prime Minister has made it clear that the Government will not, as a consequence of our withdrawal, allow any erosion of rights in the workplace, whether those rights derive from EU or UK law. She has further made it clear that the Government are determined to deliver an economy that works for everyone, and fundamental to that is the preservation of existing workers’ rights.
Mr Shuker
Is it not the fact that our EU-derived employment rights are upheld not by legislation but because they are enforced by the relevant European courts? Given that progress on a British Bill of Rights has been patchy at best, what will guarantee those rights after we leave?
Margot James
Such rights will be upheld by British courts after we leave the European Union. The UK enjoys record employment at the same time as employment rights that exceed what is required by EU law in the important areas of maternity leave, parental leave and statutory annual leave.
Jack Dromey (Birmingham, Erdington) (Lab)
Given the sorry history of Brexit broken promises, does the Minister understand the widespread cynicism expressed about the idea that rights will be protected post-Brexit, including on a continuing basis? Does she agree with the Brexit promise-breaker par excellence, the Foreign Secretary, that these crucial rights are back-breaking?
Margot James
The hon. Gentleman prejudges the situation by saying that we have had a chance to break Brexit promises before we have even started the negotiations. The Prime Minister could not have been clearer—she has been supported in this at the Dispatch Box by the Secretary of State for Exiting the European Union—that workers’ rights will be protected and possibly even enhanced.
Mr Bone
As always, I am very reasoned, Mr Speaker, but really, the shadow Minister, the hon. Member for Birmingham, Erdington (Jack Dromey) was talking absolute rubbish just then, which is not unusual. Does the Minister agree with the democratic principle that the Government of the day will decide on employment rights? Is that not what we want—employment rights decided in this House, not in Europe?
Margot James
This House will decide on employment rights, but it is important to remind my hon. Friend that during the lifetime of this Government, the Prime Minister could not have been clearer that workers’ rights will be protected after Britain leaves the European Union.
Emma Reynolds (Wolverhampton North East) (Lab)
Justin Tomlinson (North Swindon) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
The retail energy market works well for those who are able and have the time to switch, with customers able to make savings of up to £300 by moving on to the cheapest tariffs. However, we want a market that works for all consumers, not just those who switch supplier. That is why we have been clear that we want energy companies to come forward with proposals on how they are going to treat their loyal customers fairly.
Justin Tomlinson
The Competition and Markets Authority has found that two thirds of households are on expensive standard variable tariffs. Does the Minister agree that suppliers should do more to ensure that their loyal customers are on better-value tariffs?
Margot James
I absolutely agree with my hon. Friend. It is not right that customers are penalised for their loyalty. We want energy companies to treat all their customers fairly, and not just customers who switch between suppliers. That is why we have challenged them to come forward with proposals to ensure that all their customers get a fair deal.
Caroline Flint (Don Valley) (Lab)
I have been saying for about five years now that companies have been overcharging their customers who are on the standard variable tariff. That has been confirmed by the Competition and Markets Authority, Ofgem and the Government. The only way we will shift how those companies operate is by extending to those people on the standard variable tariff the protection we offer those on prepayment meters. Will the Minister meet me to discuss what more we can do to ensure that we give the big six energy companies a kick up the backside?
Margot James
I am happy to meet the right hon. Lady, who has extensive experience in this area. We are certainly considering the CMA remedies.
Antoinette Sandbach (Eddisbury) (Con)
A large number of rural properties are heated by oil-fired central heating. Will the Minister confirm that home efficiency measures are a vital way of cutting bills for those rural properties?
Margot James
I agree with my hon. Friend. Efficiency measures are fundamental to reducing the energy bills not just for people in rural areas, but for the population as a whole.
Sammy Wilson (East Antrim) (DUP)
This week, a senior Ofgem executive warned that, as a result of our higher reliance on renewable energy, consumers may face the possibility of having to pay a premium to ensure that they have a reliable source of electricity to their homes and without having their lights turned off. What discussions has the Minister had with Ofgem on that, and are the Government considering the policy of relying on costly renewable energy rather than on cheaper fossil fuels?
Margot James
We have an ongoing dialogue with Ofgem on a number of issues, but apropos the cost of supporting investment in low-carbon technologies, this is expected to increase, but so too are the savings from energy efficiency policies. This means that by 2020 household energy bills are still estimated to be lower on average than they would have been in the absence of those green policies.
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
Rehman Chishti (Gillingham and Rainham) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
I congratulate my hon. Friend on his work to bring the misuse of laser pointers to the Government’s attention. The Government are concerned about the misuse of high-powered laser pointers and will seek evidence early next year on the potential options for tackling such misuse.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
Mark Pawsey (Rugby) (Con)
Margot James
I am grateful to my hon. Friend for drawing attention to this type of fraud, which affects businesses in all sectors. It is essential that business owners and staff know what to do when they are notified of changes to bank account details. The best pointer in the first instance is the advice available on the Action Fraud website.
Steven Paterson (Stirling) (SNP)
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Margot James
Earlier this year, the Prime Minister commissioned Matthew Taylor to carry out an independent review of modern employment practices, such as in my hon. Friend’s example, as part of ensuring that our economy works for everyone. I am sure that my right hon. Friend the Secretary of State for Work and Pensions will also consider my hon. Friend’s suggestion.
Stephen Kinnock (Aberavon) (Lab)
The energy-intensive industries compensation scheme is due to end in April 2017. The Government have promised to bring forward legislation to exempt energy-intensive industries from renewable obligations and feed-in tariffs, but we are still waiting for that to happen. As things stand, the steel industry is therefore looking down the barrel of having to go back to the crippling energy costs it faced until the compensation package was introduced. Will the Secretary of State assure us that measures will be put in place before April 2017 to ensure that we do not go back to that situation?
Mr David Hanson (Delyn) (Lab)
Is it not time for the Secretary of State to order an investigation into the Royal Bank of Scotland’s practices on lending to small businesses?
Margot James
The situation with RBS is under review and I am sure proposals will be made in the near future.
Bob Blackman (Harrow East) (Con)
Jessica Morden (Newport East) (Lab)
When will the Government publish their response to the Law Commission’s report on “Consumer Prepayments on Retailer Insolvency”? We need to do more to protect consumers when businesses go into administration.
Margot James
I will note the hon. Lady’s comments and I will write to her. I am sorry, but I did not hear all of the question.
Graham Evans (Weaver Vale) (Con)
INEOS, Tata Chemicals and Banner Chemicals in my constituency provide high-quality, high-wage, high-skilled jobs. What consideration has been given to energy price competiveness in respect of our European neighbours, as a more competitive energy price would disproportionately benefit the northern powerhouse?
Retail Store Closure: Boxing Day
Margot James Excerpts(7 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
It is a pleasure to serve under your chairmanship, Mrs Moon. I congratulate the hon. Member for Warrington North (Helen Jones) on introducing the debate on the closure of retail stores on Boxing day. I must be of a similar vintage, because I can recall when there was no shopping whatever on Boxing day. I have great sympathy with some of her comments on the many changes that our society has undergone since those days.
Even in those days, however, people still worked on Boxing day. People in retail might not have worked, but I remember going to my first football match, Chelsea versus Ipswich, on Boxing day. That match employed a lot of people, as do horse racing and many other sporting events that used to take place on Boxing day, and still do.
Also like the hon. Lady, I can attest to the exhausting nature of work in the retail sector. I would hardly call my time in retail a career, but I worked in a shop for about six months—obviously a great deal less than my hon. Friend the Member for Morley and Outwood (Andrea Jenkyns), who colourfully described her extensive career and experience in the retail sector. Retail is an exhausting occupation on any day of the year. I completely agree that it is particularly exhausting in the run-up to Christmas, and I have great sympathy with workers who, as the hon. Member for Sefton Central (Bill Esterson) said, work until late on Christmas eve and have to be back at work on Boxing day, sometimes as early as 3 o’clock in the morning. When he asks what sort of Christmas that is, I agree with his sentiment.
Christmas is a time for family, which is why one of my constituents, community worker Julie Lees, signed this petition. She is fed up of losing some younger adults in her family to the world of work on Boxing day. There is no doubt that there is considerable feeling about the issue, as expressed in the debate. That feeling prompted the e-petition, which has now reached more than 140,000 signatures. I understand those who feel it unnecessary for shops to be open so soon after Christmas. Many points have been made about other sectors that are busy working straight after Christmas and about online trade, which I will address in a little more depth.
For a number of reasons, the Government do not support an outright ban on shops opening on Boxing day. Boxing day is a bank holiday, and the Banking and Financial Dealings Act 1971 specifies which days are to be bank holidays and contains provisions for appointing additional or substitute days. Additional bank holidays, including those created after 1971, are appointed by royal proclamation in early summer each year for the coming year. Bank holidays are so called because the Act makes provision for banks to close for business by deferring the placement of bills of exchange until the next appropriate day. However, there are no other statutory restrictions on trading associated with bank holidays; in fact, we have few legislative constraints on trading hours at all. There are no constraints on online retail trading, and few constraints apply to small shops.
Mr Hollobone
The Minister’s remarks are of great interest. I think that the general public do not fully appreciate that point; I certainly did not. A bank holiday is not a public holiday. Lots of employees have bank holidays off not because the Government say they should but because their contract of employment says that they should. She would serve the public well if she put what she just said into plainer English, so that everyone could understand it.
Margot James
I thank my hon. Friend for doing what he asked me to do by making that point simply. It would be good if more people were aware of it.
The Sunday Trading Act 1994 restricts the opening of large shops to a maximum of six consecutive hours between 10 and 6 on a Sunday. The Act also recognises the religious significance to Christians of Easter Sunday by obliging large retailers to close. By comparison, Boxing day has little if any religious significance. Neither the Christmas Day (Trading) Act 2004 nor the Sunday Trading Act contain provisions for varying their terms, so any additional constraints on retailers would require new primary legislation.
Although the House has considered changes to the Sunday Trading Act numerous times since 1994, it has always considered that the Act strikes a good balance between the rights of workers and those of retailers and consumers. My hon. Friend the Member for Kettering (Mr Hollobone) mentioned that he voted against the watering down of the Act; he will be pleased to hear that the Government have no plans to make changes to it in the coming years.
On statutory leave entitlement, although there is no statutory entitlement to time off on Boxing day, almost all retail workers, like those in other sectors, are entitled to a generous statutory paid leave entitlement of 5.6 weeks per year, which equates to 28 days a year for someone working five days a week. That is more than the 20 paid days of annual holiday a year mandated under EU law and ensures that workers in the UK get at least four weeks’ paid leave on top of bank holidays, assuming that they have leave on those bank holidays.
An employer has the right, whether or not it is explicitly reflected in the employment contract, to require a worker to work on a public holiday. It is common in industries such as retail or emergency services. We have also heard from hon. Members about other sectors such as hospitality, sport and leisure. Employers can determine when workers take their leave—for example, to cover an annual shutdown at work—and can refuse to give leave at a certain time, but they must give workers the opportunity to take their leave at some point during the leave year. The entitlement should give all workers sufficient time to see their families over the year, although I accept that Christmas and various other times of the year are absolutely associated with spending time with family.
In addition, there are special provisions for shop workers who do not wish to work on Sundays, at least. All shop and betting shop workers can opt out of Sunday working, unless Sunday is the only day they have been employed to work. A shop worker can opt out of Sunday working, even if they agreed in their contract to work on Sundays, by giving three months’ notice.
In putting the legal case before hon. Members, I am sympathetic to the fact that, in practice, many workers, fearing for their jobs, might find it more challenging to give effect to their legal rights than I find it to read them out. I regret that, but staff who opt out of Sunday working are protected from being treated unfairly. If an employer needs shop workers to work on Sundays, they must tell the employees in writing that they can opt out within two months of starting work.
In terms of the potential impact on retailers, the Government recognise the huge importance of the retail sector to both national and local economies, and the pressures under which it labours. The sector generated £91.7 billion in gross value added in 2015, and accounts for 5.6% of the UK economy and more than 3 million jobs. Boxing day sales are extremely popular; we have debated whether it is the busiest day of the year. House of Commons Library figures indicate that although it is not the busiest day, it is certainly very busy with consumers. Last year, an estimated £3.7 billion was spent with retailers, around 22% of it online. If we were to ban high street outlets from opening on Boxing day, that would result in a significant loss of business for them to online retailers, which would particularly disadvantage retailers without a strong online presence. We must bear that in mind, as my hon. Friend the Member for Kettering and a number of other hon. Members pointed out.
Mr Hollobone
The Minister is making an interesting speech. She has basically said that she is not in favour of a Boxing day trading Act to ban retail shops from opening on Boxing day, but she has also said that the Government have existing provisions to allow retail employees to opt out of working on a Sunday. There are 52 Sundays in a year. Why would the Government object to allowing retail employees to opt out of working on Boxing day, which is just one day a year?
Margot James
It would be interesting to look at the picture when Boxing day falls on a Sunday. Presumably that would give people greater rights, at least on those rare occasions. Any changes to the legislation that I have mentioned would require primary legislation. I would hope that there were other ways to afford shop workers some protection without recourse to primary legislation. The law is a balance that Parliament has accepted, and the Government are reluctant to disturb that balance. To change the law would risk opening new disagreements; new primary legislation would create new demands and new risks.
Bill Esterson
The Minister is making some reasonable points, but she said that she hoped that there was some recourse for the Government other than primary legislation. I thought that she was going to tell us what it was, but she seems to have moved on to another point. If I can bring her back, what does she see as the recourse, other than primary legislation, to ensure that staff who want time off get it?
Margot James
I have no suggestions at the moment to put to the hon. Gentleman, and I would not like to give the impression that the Government are exploring that. We are opposed to a ban on retail trading on Sundays. More generally, Boxing day is a day on which some people like to get out of the house. It has long been a major day for shopping and other events, and I have covered the point that an increasing number of workers in other sectors are busy at work.
Another argument against banning offline retail—that is what it is now—from opening on Boxing day is that many other workers would want to know why we were making an exception for the offline retail trade when employees in other sectors work on Boxing day. There are many aspects to the issue other than the threat posed to retailers by an outright ban, particularly, as I have mentioned, to retailers without a strong online presence.
May I respond to a few of the points made by the hon. Member for Warrington North in her interesting and well researched speech? Workers have many protections under the working time regulations, including entitlements to rest breaks, daily and weekly rest periods, and a maximum working week of 48 hours, normally averaged over 17 weeks. However, workers can choose to opt out of the 48-hour limit, and I accept that some jobs are more or less conditional on their exercising that opt-out. The qualifying period for unfair dismissal, which the hon. Lady also mentioned, is intended to strike the right balance between fairness for employees and flexibility for employers.
Helen Jones
The Minister mentioned the working time directive, but the problem in retail is that many workers work flexible hours, so it is difficult for them to enforce that provision.
Also, the Government often miss the point about unfair dismissal and the balance between employers and employees. The law does not say that employers cannot dismiss people; it says that they cannot dismiss them unfairly. That is the key point. Because the time has been extended, those who are forced to work on bank holidays find it difficult to enforce their rights without being dismissed, so they simply cannot make a claim.
Margot James
I take the hon. Lady’s point. It is true that employers can dismiss people, as long as they are not unfair about it and they go through proper consultation and so forth. The flexibility cuts both ways. People increasingly want to work flexibly, especially if they have caring responsibilities and suchlike; likewise, employers, certainly in the fast-changing world of retail, require some groups of workers to work flexibly.
I will finish by reaffirming that we do not believe that it is for the Government to tell businesses how to run their shops or how best to serve their customers. Notwithstanding the many very good arguments that I have heard this afternoon in favour of giving employees greater freedoms on bank holiday periods, particularly around the family-associated festive season, we believe that the current legislation provides the right balance between the interests of employers and workers, and at least provides workers with a generous leave entitlement. The Government therefore do not propose to ban shops from opening on Boxing day.
Draft Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016
Margot James Excerpts(7 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
I beg to move,
That the Committee has considered the draft Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016.
It is a pleasure to serve under your chairmanship this morning, Ms Buck. The main purpose of the draft regulations is to fulfil our obligation to transpose into law the non-financial reporting directive, or NFRD. While we remain a full member of the European Union, we will continue to implement EU legislation in a positive and cost-effective fashion. That is why we are in Committee today.
The NFRD builds on provisions in the EU accounting directive, which requires certain business entities to disclose a range of non-financial information alongside their accounts. The accounting directive applies only to certain types of business undertaking that have limited liability, including certain types of partnerships known as qualifying partnerships, as well as groups of business entities. I will generally refer to companies for simplicity’s sake, but the Committee should please bear in mind that my remarks apply also to qualifying partnerships and groups.
The NFRD applies only to large companies that are defined as public interest entities and that have more than 500 employees, or to groups with a public interest entity parent, which are large groups having more than 500 employees within the group. Public interest entities are entities whose activities are of major interest to the public and include banks, insurance companies and quoted companies. We estimate that the total number of UK companies impacted by the NFRD will be about 260 such public interest entities. However, some 15,000 subsidiaries of public interest entities will also be impacted by the need for reporting across the corporate group.
The requirements of the directive were strongly influenced by the UK’s existing regime for non-financial reporting. Consequently, the new framework broadly mirrors the requirements that apply to all the UK’s quoted companies, regardless of their size, so the regulations will not significantly change company reporting. In one change, the regulations will cover all large public interest companies, not only those quoted on the stock exchange. Companies do not have to be quoted for their activities to have far-reaching consequences.
At present, all companies except those eligible for the small companies regime must publish strategic reports. Within the strategic report, companies that do not qualify as medium-sized are required to provide analysis about the company’s development and performance using non-financial information, which includes employee and environmental matters. Quoted companies must also publish information about social, community and human rights issues, including information about any company policies in relation to those matters. They must also give specific disclosure on gender diversity for directors, senior managers and employees.
The strategic report is the narrative element of a company’s annual report. It should provide colour and context for the accounts and be forward looking to provide reassurance on the company’s direction of travel for investors and suppliers. The report should contain a fair review of the company’s position, as well as risks and uncertainties that are not easily quantified. Issues such as cyber-security and employee matters can be as significant as the fiscal issues covered in company balance sheets.
The draft regulations build on that by requiring eligible companies to disclose, to the extent necessary for an understanding of the company’s position, information on environmental, employee, social and human rights matters. That is already required by the UK’s existing regime for some of those companies, but the regulations also require disclosure of anti-corruption and anti-bribery matters.
Companies must also describe any policies they pursue in relation to any of these matters and identify the principal risks relating to them. These disclosures will provide companies with an opportunity to bring discussions on these issues to the boardroom and to demonstrate to shareholders and other parties that they are considering issues in their proper context and addressing potential risks.
The regulations strengthen the current regime by requiring companies that do not have policies in these areas to provide an explanation for not doing so. I stress that companies are not required to make policies in order to have something on which to report, but they will have to consider whether they should have policies on such matters. Furthermore, if they decide they should not, they will have to explain their reason for the omission.
The regulations also bring benefits by providing shareholders and investors with a greater level of consistency and conformity with EU counterparts in relation to non-financial information. This is important. Bringing entities of a certain size and type up to the same level will mean that UK companies within the scope of NFRD that currently provide such information will not face greater reporting requirements than EU counterparts.
The regulations are sufficiently flexible to enable disclosure to be specific to the company. This balance between specifying categories and allowing companies flexibility to provide relevant information should ensure that reporting is meaningful and cost-effective. Disclosure is important to ensure that shareholders can act as a critical friend to directors.
It is worth mentioning by way of reassurance that the regulations will not require disclosure of information about impending developments if the disclosure would be seriously prejudicial to the company’s commercial interests. However, non-disclosure should not prevent a fair and balanced understanding of its position or the impact of its activity.
In our consultation earlier this year, stakeholders recognised the need to transpose the NFRD. During the consultation, stakeholders raised concerns about how the requirements would interact with the UK’s existing regime. The regulations provide that a company that reports under the NFRD framework qualifies as having complied with overlapping elements of the UK’s domestic regime. They also permit voluntary compliance with the NFRD disclosure requirements, so that companies can avoid the complexities of moving between reporting obligations during their life cycle as their size, in financial terms or staff numbers, increases or decreases year by year. I acknowledge the contribution from representatives of business, professional bodies and national regulatory bodies throughout the development of the regulations, including KPMG and PwC. I am grateful to them for their engagement.
Another aspect that I must mention briefly is that regulation 3 contains a minor correction to the transposition of the accounting directive. This ensures that the parent company of a small group cannot benefit from an exemption from the requirement to produce group accounts just because that member is established under the law of a European economic area state and not in the UK. If a member of a group is a public interest entity in any EEA state, the exemption should not be available.
I am aware that some businesses struggle with regulatory change to financial reporting. The regulations do not fundamentally change the UK’s regime for annual reports. Many companies within the scope of the regulations will have to adapt their reporting only slightly. Although the changes are not substantial, I believe they will add value to company reporting in the UK.
Bill Esterson (Sefton Central) (Lab)
This statutory instrument and the non-financial reporting that the Minister is describing follow the recent announcement about a change in corporate governance. I wonder whether she could tell us how the regulations fit in with the Government’s plans for corporate governance.
Margot James
The regulations complement our framework in the corporate governance Green Paper but they do not touch directly on the main thrust of its proposals, which are mainly about the voice of workers and other stakeholders on boards and about executive pay. They are definitely in the same terrain, but I would not put them any closer than that.
It is greatly to our advantage for the UK to maintain its reputation as a hub of global transparency. However, as our future relationship with the EU becomes clearer, it may lead us to examine whether certain aspects of company law are cost-effective. In the meantime, I am sure Members will agree that building on the reputation of UK governance and the reliability of annual reports can contribute to making the UK an attractive place to invest. I commend the regulations to the Committee.
Margot James
I thank the hon. Gentleman for his thoughtful comments and questions. He mentioned the Green Paper on corporate governance again and asked whether we were going backwards on certain of the commitments made, particularly in relation to the voice of workers, suppliers and other stakeholders on boards. He mentioned one particular proposition in the Green Paper to have a non-executive director responsible for ensuring that those voices are heard, but that is just one of several options. The Green Paper is not prescriptive at all. We are consulting at this stage, and he is welcome to contribute his thoughts. We will be collecting the thoughts of many other stakeholders with a view to reaching conclusions in future, but it is certainly not prescriptive at this stage.
I agree with the hon. Gentleman when he points to section 172 of the Companies Act 2006. Since the Act came into being there has perhaps been an over-emphasis on the undoubtedly vital subject of ensuring that the board of directors ensures a return for investors. However, inadequate attention has been paid to the other requirements on a board of directors that contribute in their entirety to the long-term future of the company and to the responsibility of directors to secure that long-term future by their decision making. I very much hope that the outcome of our consultation on the Green Paper and the steps taken as a result will up-weight those other requirements on directors. That is an aspiration and not in any way prescriptive, because at this stage it is all a consultation.
The hon. Gentleman talked about gender reporting and the gender pay gap.
Bill Esterson
I want to work with the Minister on these points, so just to be clear and in no doubt, can she say whether she and the Secretary of State—and, as far as she knows, the Prime Minister—are open to all the elements of section 172 being implemented in full? [Interruption.] That is obviously a call from the Prime Minister to answer my question. This is an important issue for the wider stakeholders, so will the Minister please clarify whether the Government are open to that?
Margot James
I am sorry to disappoint the hon. Gentleman, but I have said all I can say about that particular matter.
The hon. Gentleman also asked about gender reporting and the gender pay gap. Gender pay reporting is in legislation at the moment. We intend for that to lead over time to a closure of the gender pay gap. It may not be adequate to the task in and of itself, but it has to be given a chance. I very much share the hon. Gentleman’s concerns about the unacceptable level of the current gender pay gap.
The hon. Gentleman mentioned the subject of omissions in the context of this directive being—
Bill Esterson
Before the Minister moves on, I have a question about gender reporting. The Government’s response referred to senior managers in gender reporting. Is the Minister saying that it applies to all employees, not just senior management?
Margot James
I am so sorry; I do not think I can answer that at this point. It is actually in relation to boards of directors, senior management and the entire workforce, I believe. If I am incorrect about that, I will write to the hon. Gentleman.
To continue answering the hon. Gentleman’s point about omissions, the directive places the obligations on companies on a “comply or explain” basis. He mentioned the quarterly reporting of financial information and the pressures that that bears on small and medium-sized enterprises, particularly the very small companies.
I have met the Federation of Small Businesses and listened to its concerns. This is a Treasury matter—it is not actually my or my Department’s area of responsibility —but I have also met the relevant Treasury Minister to raise the concerns expressed to me by the FSB. The Treasury is consulting on the matter of quarterly reporting and is prepared to make certain changes that the FSB has told me will be of benefit to its members. There is a move. It will not fundamentally alter the requirement for quarterly reporting, but it raises the threshold for a company’s turnover before it qualifies as being required to comply with the regime and in certain cases the requirement will be delayed. However, that is really a question that the hon. Gentleman should raise with Treasury Ministers.
I thank hon. Members, in particular the hon. Member for Sefton Central, for their valuable comments during this debate. The regulations strike the right balance between offering flexibility for companies to report on those issues of risk that relate to their activities and provide a structure that makes the disclosures meaningful. The regulations should help to increase the transparency of how our companies behave and better equip shareholders to be active stewards of the companies they own.
Question put and agreed to.
Payment Practices and Policies
Margot James Excerpts(7 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
Successful businesses create jobs, and are essential to economic growth. Late payment harms business cash-flow, hampers investment and in extreme cases can risk businesses’ solvency. This puts a strain on any organisation, but is especially difficult for small businesses. As of June 2015, the overall level of late payment owed to small and medium sized businesses was reported as £26.8 billion. This is why it is crucial for Government to take action to create a more responsible payment culture, which enables all businesses to thrive and develop.
Today, Government will publish its response to the Duty to Report on Payment Practices and Policies consultation, and draft regulations to implement section 3 of the Small Business, Enterprise and Employment Act 2015 for large companies and large limited liability partnerships to report on their payment practices and performance.
The duty to report on payment practices and performance
Following consideration of views received from stakeholders, large companies and large limited liability partnerships (LLPs) will be required to publish information about their payment practices and performance twice per financial year on a Government web service. They will be required to report on the following:
Narrative descriptions of:
the organisation’s payment terms. Including— standard contractual length of time for payment of invoices, maximum contractual payment period and any changes to standard payment terms and whether suppliers have been notified or consulted on these changes;
the organisation’s process for dispute resolution related to payment Statistics on;
the average time taken to pay invoices from the date of receipt of invoice;
the percentage of invoices paid within the reporting period which were paid in 30 days or fewer, between 31 and 60 days, and over 60 days;
the proportion of invoices due within the reporting period which were not paid within agreed terms.
Statements (i.e. a tick box) about:
whether an organisation offers e-invoicing;
whether an organisation offers supply chain finance;
whether the organisation’s practices and policies cover deducting sums from payments as a charge for remaining on a supplier’s list, and whether they have done this in the reporting period;
whether the organisation is a member of a payment code, and the name of the code if a company fails to publish a report as required, or publishes false information this will be a criminal offence, punishable by a fine on summary conviction.
I would like to draw Parliament’s attention to two matters:
Interest owed and paid
The regulations do not include a requirement to report on the amount of interest owed and paid, which the previous Government committed to include. Businesses have suggested that this metric could be difficult to understand and implement. The Government will keep this metric under review, taking into account any lessons that the introduction of similar metrics to public sector reporting can teach us.
Pay to Stay and Supplier Lists
During the passage of the Small Business, Enterprise and Employment Act through Parliament the previous Government committed that these regulations would tackle so-called ‘pay to stay’ practices. These practices include instances where businesses require payments either for joining or for remaining on a supplier list.
The Small Business, Enterprise and Employment Act allows the Government to require reporting on practices relating to payment of suppliers. As such, the draft regulations require businesses in scope to report on whether they deduct sums from payments to suppliers as a charge to remain on their list of suppliers. This does not cover all payments required from suppliers for joining or remaining on a supplier list. The Government will keep reporting on ‘pay to stay’ under review. The Small Business Commissioner, who will be in post from next year, will be able to tackle such unfair payment practices.
The benefits
This new reporting requirement for the UK’s largest companies and limited liability partnerships (LLPs) will shine a light on payment practices. It will increase transparency and make payment behaviour a reputational boardroom issue. The large businesses already treating suppliers fairly and paying on time can use the data to highlight their track-record. Poor payment practices and performance will be exposed, alerting organisations to issues and encouraging them to improve.
[HCWS311]
Backbench Business
Margot James Excerpts(7 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
It is a pleasure to serve under your chairmanship, Mr Wilson. I congratulate the hon. Member for Luton North (Kelvin Hopkins) on securing today’s very important debate on the future of the Post Office.
The Government recognise the crucial role that post offices play in communities across the country. I echo the numerous tributes that we heard in the debate to the sub-post offices and management and staff who work in the post office network, including our own excellent post offices here in the Palace of Westminster. They do a wonderful job.
Between 2010 and 2018, the Government will have provided nearly £2 billion to maintain, modernise and protect a network of at least 11,500 branches across the country. The Government set the direction for the Post Office. That means that we ask it to maintain a national network of post offices that is accessible to all, and to do so more sustainably, with less need for taxpayer subsidy over time. That includes the maintenance—this was a manifesto commitment of my party at the last election—of 3,000 rural and semi-rural branches, about which we have heard little this afternoon and which would otherwise be uneconomic to run. Post Office Ltd delivers that strategy as an independent business; we do not interfere in its day-to-day operations or decisions about the provision and location of branches.
Today, as I said, there are more than 11,600 branches in the UK and the network is at its most stable for decades—although people would not know that from the debate. That is because the Post Office is transforming and modernising its network, thanks to the investment that the Government have been willing to make. The Government support has enabled almost 7,000 branches across the UK—more than half the entire network—to be modernised, offering a better experience for customers and more sustainable retail propositions for postmasters.
Catherine West
Can the Minister explain the logic whereby a lot of public funds are put into a branch of the Crown Post Office and then it is promptly closed?
Margot James
The hon. Lady mentioned the Crouch End post office in her speech, and I made a mental note to look into that. I cannot comment on that particular branch. Occasionally in business, someone makes an investment, it does not work out and they have to cut their losses. That happens in any business. I cannot comment on the specific branch, but I will look into the matter.
Margot James
No, not for a few minutes. I have very little time and I am going to make some progress.
Customers benefit from an extra 200,000 opening hours every week and the largest Sunday retail network in the country. Indeed, the network in the constituency of the hon. Member for Luton North is in fine shape as a result of the modernisation programme. Across the 10 branches in his constituency, customers now have an additional 297 hours a week when post offices are open, with more than half his local branches open on Sundays.
The subsidy needed to sustain the network has dropped from a peak of £210 million in 2012 to just £80 million this year, and should continue to fall. The business continues to reduce its losses: it has gone from a loss of £120 million in 2012-13 to £24 million in 2015-16.
I would like to reassure my hon. Friend the Member for Yeovil (Marcus Fysh), who is not in his place now, that the number of branches is almost unchanged since 2011. In that year, there were 11,820; there are now 11,643. That is a very small difference. In fact, I would like to make the point, because I have been quite outraged by some of the comments made in the debate, that during the last Labour Government, virtually half the entire post office operation in this country was closed. Conservative Members were always outside with petitions in those days, and this Government and the coalition Government before them have stabilised the network with minimal losses. I congratulate the board, management and staff of Post Office Ltd on all they have achieved.
All that has led, of course, to customer satisfaction remaining high, at 95%. Also, the Association of Convenience Stores produced its local shop report, completely independently of the Post Office, a couple of months ago, and the post office was rated the No. 1 service on the high street. It was voted the most desired amenity by the public. People would not think that—[Interruption.]
Margot James
People would not think that from the tone and tenor of the debate this afternoon. [Interruption.]
Margot James
I will now answer a few of the points that were made. My hon. Friends the Members for The Cotswolds (Geoffrey Clifton-Brown) and for Tonbridge and Malling (Tom Tugendhat) understandably paid tribute to their Crown post offices, in Cirencester and Tonbridge respectively. I am very sorry that I am unable to join them in their campaign against franchising of their local Crown post offices, because both are currently running at a loss. For every pound that is spent in the post office in Cirencester in the constituency of my hon. Friend the Member for The Cotswolds, £1.30 has to be spent on running it. We have to be mindful of that. I say to the hon. Member for—I apologise for forgetting her constituency. [Hon. Members: “Paisley.”] I say to the hon. Member for Paisley and Renfrewshire South (Mhairi Black) that the Crown post office there was losing almost £2 for every pound that was spent. That is really why that unfortunate decision had to be made. I was sorry to hear what she had to say about the effect on some of her constituents.
Margot James
I am sorry, but I have to stop shortly to leave time for the hon. Member for Luton North.
As I said earlier, we cannot keep these Crown post offices open and losing money and stick to our commitment to keep post offices open in the rural and semi-rural areas, where often it is the only service left. Really, with some of these Crowns that are closing, walking a short distance away, sometimes to a more convenient location, to a WHSmith, is a small price for customers to pay to keep this network operating across the country, which has not proven to be economic.
Margot James
I am really sorry not to be able to give way again, but I have got to stop in two or three minutes’ time. I want to answer a couple of points made by the hon. Members for Sheffield, Brightside and Hillsborough (Gill Furniss) and for Harrow West (Mr Thomas).
Use of Government services at post offices is down by 40%, which is disappointing. I do not really foresee a huge improvement in that, because with so many Government services—for instance, on the motor vehicle front—so much is now done online that any operation in that sector would have experienced similar losses. I am much more hopeful about financial services. That sector has grown by 17% since 2012. It is steady, albeit slow, growth year on year. The Post Office has an arrangement with the Bank of Ireland and will be offering more services. Hon. Members have pointed out that bank branches around the country are closing at a swift rate, and that does create an opportunity for the Post Office. I will be lobbying, alongside Members, for the Post Office to embrace this opportunity even further, but I do think that it is doing a good job. I will sound a note of caution that unfortunately—well not unfortunately; it is just a development that we are all part of—more and more banking is now done online as well, but I do see some grounds for hope in that sector.
I want to talk a bit about WHSmith. A great many WHSmith branches are now either hosting or franchising post office services. Virtually all the services remain on offer to the public in convenient locations. I accept that some—a minority, I think, of 11 out of 61—post offices that operate in WHSmith branches are on the first floor. That does present issues for people with disabilities, but they are issues that the WHSmith branches have resolved in conjunction with local groups representing people with disabilities. They have managed to provide lifts and also, in case of lift breakdown, mobile tills so that people with disabilities can be welcomed into the branches.
Margot James
On the mutualisation that the hon. Gentleman mentioned, yes, the Postal Services Act 2011 requires that the Post Office be maintained either in public hands—public ownership—or in a mutualised setting. At the moment, it continues in public ownership and we have no plans to change that. Indeed, for it to be mutualised the model would have to be based even greater financial sustainability than it is at the moment. Currently, the Post Office is making losses and we would not be able to mutualise it, but the plan is for it to become more and more financially sustainable over time.
The hon. Member for Luton North also made the point about Royal Mail, and various Members have called for Royal Mail and the Post Office to be reunited. I do not see that happening—Royal Mail is now an independent public company—but thanks to Government investment, the Post Office is now in a far stronger position for its impending negotiations with Royal Mail about its business arrangements. That is thanks to the huge investment that we have made in Royal Mail.
Margot James
I am. Is it time for me to give way? Yes, I do apologise; I was looking at the wrong digit. I will give way now to the hon. Member for Luton North, and I apologise to him.
Oral Answers to Questions
Margot James Excerpts(7 years, 6 months ago)
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Carolyn Harris (Swansea East) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
The Government take consumer protection seriously, and robust legislation requires consumer products to be safe. My Department funds trading standards to prevent high-risk products from entering the UK. This month’s national consumer week, starting on 28 November, will focus consumer awareness on faulty electrical goods, in time for the peak Christmas retail period.
Carolyn Harris
I thank the Minister for that answer. She will be aware that, as chair of the all-party group on home electrical safety, I have a keen interest in faulty, substandard and counterfeit goods. Last year’s hoverboards debacle highlights to us the dangers of internet sales. Will the Minister consider talking to her colleagues in the Department for Culture, Media and Sport about introducing measures in the Digital Economy Bill to help prevent such incidents?
Margot James
I thank the hon. Lady for her question and congratulate her on the work of the home electrical safety all-party group. Manufacturers are required by law to take corrective action when they discover a fault, whether the fault emerges in products sold online or in the high street. In addition to local trading standards, we fund National Trading Standards, which prevents many substandard products from coming into the UK. I will liaise with colleagues in DCMS about the issue that she raises this morning and report back to her in due course.
Michael Fabricant (Lichfield) (Con)
The hon. Member for Swansea East (Carolyn Harris) is right, as ever, especially on this point. This is not just about safety. There is a disincentive for firms to undertake research and development and develop products if they are then going to be counterfeited. Is not the moral of the story that people should not buy cheap products from back-street traders but go to renowned department stores—perhaps those which are never knowingly undersold?
Margot James
I thank my hon. Friend for that advertisement for the John Lewis Partnership. I assure the House that there are many other retailers that consumers can trust, and I think I will leave my answer at that.
Toby Perkins (Chesterfield) (Lab)
We would not want to give the impression that poor-quality goods are bought from small businesses. We know that small businesses do an excellent job, and the Minister is right to make that point. She is right about the impact on consumers, but does she recognise that where there is a failure to follow standards it is often British manufacturers that are undercut by cheap imports from overseas? What does she intend to do as we head forward to ensure that coming out of the EU does not mean that standards slip and British manufacturers are unfairly treated?
Margot James
I can assure the hon. Gentleman that all standards derived from the EU that are considered by the UK Government to be necessary, as the vast majority will be, will continue to be enforced. I can reassure him also that National Trading Standards plays a vital role in cross-boundary enforcement, and the intelligence-led approach prevents many of those products from coming into the country in the first place.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
John Mc Nally (Falkirk) (SNP)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
Carbon monoxide poisoning is a very serious issue. Detectors must be safe, but currently compliance with the standard is not mandatory. I will consider any evidence the hon. Gentleman has and discuss it with colleagues in the Department for Communities and Local Government, who are responsible for the construction products regulations.
John Mc Nally
I thank the Minister for that answer. I know that the Department takes a keen interest in this issue, which is a matter of concern to the whole nation. She will be aware that in November last year the BBC reported on the dangers of substandard carbon monoxide detectors being purchased online, and Which? magazine has recently highlighted the problem as well. Given the potential for loss of life, what extra measures can she take here and now to stop the purchase of substandard detectors in the UK?
Margot James
I thank the hon. Gentleman for his question. I will definitely discuss the matters he raises further with the Department for Communities and Local Government. I am aware of the Which? inspection involving various tests, which found some equipment to be defective. However, last year the Government brought forward the smoke and carbon monoxide alarm regulations, covering private landlords; at least private tenants now have the absolute protection of carbon monoxide alarms being in every room used as living accommodation where solid fuel is used.
Mr Mark Williams (Ceredigion) (LD)
Mark Pawsey (Rugby) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
We are committed to creating the best environment for small businesses to start and grow. The British Business Bank has provided £3.2 billion of finance to over 51,000 small businesses. The doubling of the small business rate relief will mean that 600,000 small and medium-sized enterprises will pay no rates at all.
Mark Pawsey
The Minister will be pleased to hear from Rugby’s local chamber of commerce that our businesses are doing well—so well, in fact, that there is a shortage of industrial accommodation, especially smaller units, and that is holding back start-ups and small businesses wanting to grow. Can any steps be taken to encourage property developers to provide more accommodation for this important sector?
Margot James
My hon. Friend works tirelessly for businesses in Rugby, and it is great to hear about their growth. I urge him to get in touch with the Coventry and Warwickshire LEP. When I visited it in September, I was advised that the Coventry and Warwickshire growth hub is providing support to local businesses that are expanding and looking to move premises.
Stephen Timms (East Ham) (Lab)
According to the Federation of Small Businesses, of those small businesses that export, 82% export to other EU member states. What plan does the Minister have to support small businesses through Brexit?
Margot James
According to the World Bank, the UK is now ranked first in the G7 and seventh out of 190 countries for ease of doing business, and that includes trade and exports, whether to the EU or outside the EU. We achieved that status while belonging to the EU, and I have no doubt that the Government are doing all they can to ensure that we will retain that status as we transition to a new relationship with the EU.
Seema Kennedy (South Ribble) (Con)
On Small Business Saturday, I will launch my third annual small business competition in Penwortham. May I invite the Minister to join me on that day? What is the Department doing to promote Small Business Saturday?
Margot James
I thank my hon. Friend for her plans to get involved in Small Business Saturday on the first Saturday of December. My Department will support Small Business Saturday with events across the country to which hon. Members are invited. In particular, they should contact their LEPs to see what is going on locally and join the hon. Lady, and all of us, in visiting a small business on the first Saturday in December.
Bill Esterson (Sefton Central) (Lab)
In the United States, 23% of federal Government direct spending is with small businesses; in this country, the like-for-like direct comparison is just under 11%. Is it not time that we learned from President Obama’s success in government? If we did, we would improve quality and value for money for the taxpayer, support growth for small firms and help rebalance the economy. That is what I call a plan.
Margot James
I certainly agree with the hon. Gentleman that we need to invest more in support for SMEs, and that is precisely what we intend to do in my Department.
Kevin Hollinrake (Thirsk and Malton) (Con)
Diana Johnson (Kingston upon Hull North) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
Marks & Spencer has a good record of consulting its staff. It has a regional, a local and a national body, and it consults them widely on all its plans for any changes in terms and conditions. I would add that it is rather unfair on Marks & Spencer to put it in the same bracket as BHS.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
Many people in Suffolk welcome plans for a Sizewell C power station, but would the Minister not agree that it is vital that with those plans come the requisite improvements in rail and road infrastructure? Importantly, that includes looking at the pinch points on the road around the four villages of Stratford St Andrew, Farnham, Little Glemham and Marlesford.