Oral Answers to Questions

Debate between Margot James and Louise Haigh

Thursday 7th March 2019 Commons Chamber

[Margot James]

The Department has just launched the digital inclusion innovation fund, which has been specifically designed to tackle digital exclusion among older and disabled people. A few weeks ago I visited a 5G test bed in the Kensington part of Liverpool, where I saw at first hand how we are harnessing this technology to improve social care and tackle loneliness among older people.

[Louise Haigh (Sheffield, Heeley) (Lab)]

The Offensive Weapons Bill bans the online sale of offensive weapons to residential addresses, but it has revealed a significant gap in the legislation around the sale of offensive weapons on platforms. Will the Secretary of State address that gap in the upcoming White Paper?

Data Protection Bill [ Lords ] (Fifth sitting)

Debate between Margot James and Louise Haigh

Tuesday 20th March 2018 Public Bill Committees

[Margot James]

I can only be the Minister I am. I will try to improve. I was not saying that Lord Mitchell’s amendment is not within the scope of the Bill; I was making the point that some of the databases and sources referred to by the right hon. Gentleman in his speech went into the realms of general rather than personal data. I therefore felt that was beyond the scope of the Information Commissioner’s remit.

I share the right hon. Gentleman’s appreciation of the value and the uniqueness of the NHS database. We do not see it just in terms of its monetary value; as the hon. Member for Edinburgh South made clear in his intervention, it has tremendous potential to improve the care and treatment of patients. That is the value we want to realise. I reassure the right hon. Gentleman and put it on record that it is not my place as a Minister in the Department for Digital, Culture, Media and Sport, or the place of the Bill, to safeguard the immensely valuable dataset that is the NHS’s property.

[Louise Haigh]

Before the Minister concludes, given that she has focused so much on NHS data, can she update the Committee on the Government’s progress on implementing Dame Fiona Caldicott’s recommendations about health and social care data?

[Margot James]

I cannot give an immediate update on that, but I can say that Dame Fiona Caldicott’s role as Data Guardian is crucial. She is working all the time to advise NHS England and the Secretary of State for Health and Social Care on how best to protect data and how it can deliver gains in the appropriate manner. I do not feel that that is the place of the Bill or that it is my role, but I want to reassure the Committee that the Secretary of State for Health and Social Care, to whom I am referring Lord Mitchell, is alive to those issues and concerns. The NHS dataset is a matter for the Department of Health and Social Care.

Amendment 122 agreed to.

Schedule 13, as amended, agreed to.

Clauses 117 and 118 ordered to stand part of the Bill.

Schedule 14 agreed to.

Clauses 119 and 120 ordered to stand part of the Bill.

Clause 121

Code on personal data of national significance

Data Protection Bill [Lords] (Sixth sitting)

Debate between Margot James and Louise Haigh

Tuesday 20th March 2018 Public Bill Committees

[Margot James]

The Information Commissioner has a breadth of corrective powers at her disposal to investigate breaches of data protection legislation. One such power is the ability to issue an information notice on a data controller requesting that they provide the commissioner with specified information. Article 2 of the general data protection regulation states that certain types of processing of personal data, including purely personal or household activities, are exempt from the provisions of the GDPR. That includes the list of all those hon. Members who deserve a Christmas card this year.

Although such processing is exempt, it is important that in certain situations the Information Commissioner is able to verify that the processing actually meets this test and does not fly under the radar of GDPR requirements unduly. Government amendments 51 and 52 will ensure that the Information Commissioner is able to issue an information notice, in order to determine whether the process is genuinely being undertaken in the course of a purely personal or household activity.

Government amendment 54 is a consequential amendment. It ensures that the reference to processing of personal data in the subsection added by Government amendment 52 means any type of processing, pulling on the definitions provided in subsections (2) and (4) of clause 3, rather than those under parts 2, 3 or 4, none of which apply to processing in the course of purely personal or household activities.

Government amendments 58 and 126 make further consequential changes to clause 159 and paragraph 9 of schedule 16. The amendments ensure that certain safeguards for controllers and processors in the context of enforcement action extend to all persons, since their exact status may in fact be the source of dispute.

All in all, this is a common sense set of changes that enjoy the full support of the Information Commissioner’s Office.

Amendment 51 agreed to.

Amendments made: 52, in clause 143, page 77, line 40, at end insert “, or

(b) require any person to provide the Commissioner with information that the Commissioner reasonably requires for the purposes of determining whether the processing of personal data is carried out by an individual in the course of a purely personal or household activity.”

This amendment and Amendments 51 and 54 enable the Information Commissioner to obtain information in order to work out whether processing is carried out in the course of purely personal or household activities. Such processing is not subject to the GDPR or the applied GDPR (see Article 2(2)(c) of the GDPR and Clause 21(3)).

Amendment 53, in clause 143, page 78, line 23, leave out

“with the day on which”

and insert “when”.

This amendment is consequential on Amendment 71.

Amendment 54, in clause 143, page 78, line 30, at end insert—

“(10) Section 3(14)(b) does not apply to the reference to the processing of personal data in subsection (1)(b).”—(Margot James.)

This amendment secures that the reference to “processing” in the new paragraph (b) inserted by Amendment 52 includes all types of processing of personal data. It disapplies Clause 3(14)(b), which provides that references to processing in Parts 5 to 7 of the bill are usually to processing to which Chapter 2 or 3 of Part 2, Part 3 or Part 4 applies.

Question proposed, That the clause, as amended, stand part of the Bill.

[Louise Haigh (Sheffield, Heeley) (Lab)]

In this of all weeks, it is particularly relevant that we debate this clause, which relates to information notices, and the powers and enforcement sanctions available to the Information Commissioner, given the horrendous breaches of our data regulation that have been exposed by Channel 4 and The Guardian.

The Secretary of State for Digital, Culture, Media and Sport told the House yesterday that the Information Commissioner was seeking further powers to compel compliance with information notices, testimony from other individuals in complex investigations, such as that into Cambridge Analytica, and criminal sanctions for breaches of information notices.

Under the current data protection legislation, breach of information notice is a criminal offence that carries a custodial sentence. The maximum sentence under this Bill is only a fine. That is a significant weakening of the data protection regime and its sanctions. Indeed, in her own evidence, the Information Commissioner said:

“The new approach in the Bill of failure to comply with an”

information notice

“no longer being a criminal offence but punishable by a monetary penalty issued by the ICO is likely to be less of a deterrent, as data controllers with deep pockets might be inclined to pay the fine, rather than disclose the information being requested.”

I would be grateful if the Minister could set out exactly why the Government have decided to weaken the powers given to the Information Commissioner and the sanctions available to her.

Crucially, the Information Commissioner has requested the power to compel compliance with information notices. As things stand, it is an offence not to deliver information, but the Information Commissioner does not have the power to demand compliance with information notices. She has said that that puts us out of step with our closest EU member state neighbour, Ireland, which has a much stronger data protection regime, with much tougher sanctions and, indeed, powers to compel compliance with an information notice.

That gap in the Information Commissioner’s enforcement powers has not caused significant problems up to now, because formal action has largely centred on security breaches or contraventions of the privacy and electronic communications regulations. In such cases, the commissioner rarely needs to use her information notice powers, because the evidence of a contravention is usually clear and in the public domain.

Where the Information Commissioner has used her enforcement powers against a data controller for contraventions of the data protection principles under the Data Protection Act, she has generally found data controllers to be co-operative because, under the current framework, financial penalties are reserved only for the most serious contraventions of the law. However, as investigations become more complex—and as we are seeing this week—the Commissioner will be unable to obtain the information she needs.

The Minister has said that the Government are considering potential amendments to the Bill, as laid out by the Secretary of State yesterday. It is baffling, however, that those amendments have not already been tabled, given that the Information Commissioner suggested them in her written evidence earlier in the process. The provisions represent a serious weakening of the existing regime and a failure of the Government to step up to the plate on the matter of the complex investigations conducted by the Information Commissioner.

[Margot James]

I do not accept that this Bill represents a reduction in the powers of the Information Commissioner, and I do not think that that is her view either. Obviously, I accept what she said in response to questioning from Select Committee on Digital, Culture, Media and Sport. As I have already said, my right hon. Friend the Secretary of State is considering her request, and we are working on the areas where she feels there is a shortfall.

I reassure the Committee that the Bill strengthens ICO’s overall powers. The hon. Member for Sheffield, Heeley has mentioned fines. There are fines of up to 4% of global turnover, or £17 million, both for malpractice itself and for blocking investigations and inquiries mounted by the ICO.

--- Later in debate ---

[Louise Haigh]

Earlier, we debated the requirement for law enforcement agencies to conduct data protection impact assessments ahead of developing or using any new filing system, and we debated several examples of what those filing systems or methods of data collection could be, including automated facial recognition software, automatic number plate recognition and the use of algorithms to determine decisions made in the criminal justice system.

In relation to the clause, the Information Commissioner has requested that she be given the power to impose corrective measures where necessary, when a data protection impact assessment has revealed that the processing of that personal data is of high risk to individuals and where there are no measures to mitigate that risk in relation to law enforcement processing, as she has for other processing. She maintains that a different approach to law enforcement is not justified and might lead to adverse consequences in an important area affecting individuals. That is important because it gives weight to the important aspects raised earlier that require law enforcement agencies to conduct that DPIA. There is little point asking organisations and data controllers to conduct impact assessments and then, even when they are falling short dramatically, to let them carry on conducting assessments and collecting data in that way.

In evidence, the Information Commissioner has said that part 3 of the Bill

“requires these types of assessment to be undertaken”

and provides

“for requirements to consult the Commissioner where such a high risk is present but measures cannot be put in place to mitigate these. They also provide requirements for the Commissioner to use her corrective powers in relation to GDPR but the way the Bill is drafted these corrective powers will not be available in relation to concerns arising from a DIPA involving law enforcement processing. Nor are there any powers available to ensure that the Information Commissioner can take action if a DIPA for law enforcement processing is not carried out when required.”

Not only are there no enforcement powers if the DPIA is conducted and falls short, but the Information Commissioner is not provided with any powers under this legislation to compel a DPIA to take place. Given, as we discussed earlier, the serious threats not just to data rights, but to prevention with respect to an individual’s rights to liberty and freedom, it is very serious indeed if law enforcement agencies will be able to carry out impact assessments without any adherence to the provisions in the Bill.

The Information Commissioner says:

“Having the ability to issue corrective measures based upon the DPIA or indeed requiring a DPIA to be undertaken when it should have been, is an important measure which is missing in relation to law enforcement processing”.

The commissioner has raised her concerns with the Government and suggested drafting solutions. Will the Minister clarify why those were not introduced in Committee?

[Margot James]

The clause gives the commissioner the power to issue an enforcement notice, which requires a person to take steps or refrain from taking steps specified in the notice. For example, the commissioner can use an enforcement notice to compel a data controller to give effect to a data subject if they have otherwise failed to do so. Section 40 of the Data Protection Act 1998 made similar provision. In respect of the hon. Lady’s questions concerning the law enforcement aspects of the clause and the need for impact assessments, and the powers that the ICO might need to ensure that those impact assessments are done and are appropriate, I will have to write to her on the details of those latter points.

Question put and agreed to.

Clause 148 accordingly ordered to stand part of the Bill.

Clause 149

Enforcement notices: supplementary

Amendment made: 56, in clause 149, page 83, line 36, leave out “with the day on which” and insert “when”.—(Margot James.)

This amendment is consequential on Amendment 71.

Clause 149, as amended, ordered to stand part of the Bill.

Clause 150

Enforcement notices: rectification and erasure of personal data etc

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Margot James]

As part of the Information Commissioner’s suite of corrective powers, she can issue penalty notices to data controllers requiring them to pay a fine. Fines can be issued where a controller has failed to comply with a previous notice or where significant breaches of data protection legislation have taken place. Members will be aware from our debate this afternoon that the maximum such penalty will increase from £0.5 million to £17 million, or 4% of global turnover, for the most serious breaches.

When imposing a penalty for breaches of the GDPR, the commissioner must follow the procedures set out in article 83 of the GDPR, which include acting on a case-by-case basis; ensuring that the fine is effective, proportionate and dissuasive; and taking into account various factors. Because law enforcement and intelligence services processing falls outside the scope of the GDPR, the clause makes parallel provision in respect of breaches of those parts of the Bill, including by listing matters that the commissioner must take into account when deciding whether to issue a fine for that type of processing and when determining the magnitude of that fine.

Government amendments 179 and 180 make it clear that, when considering a person’s failure to comply with notices—an information notice, for example—the commissioner is to have regard to the matters listed in article 83(2) of the GDPR and, in relation to law enforcement processing and intelligence processing, to clause 154(3) and (4) of the Bill. Clause 154 prescribes such requirements only for decisions regarding the issuing of a monetary penalty notice in relation to certain failings. The commissioner has powers to prepare guidance on how she uses her enforcement powers, so she could decide, as a matter of policy, to have regard to those matters in relation to other failings. However, the Government’s view is that there should be a requirement for her to do so in the Bill.

Government amendment 57 makes an addition to clause 154(3)(c) to ensure that the Information Commissioner takes into account any actions the controller has taken to mitigate not only damages, but distress suffered by the data subject. The amendment will bring the clause into line with other similar clauses in the Bill, where the Information Commissioner must take into account damage or distress caused. They include clause 149 regarding enforcement notices, where the Information Commissioner must take into account the magnitude of the damage or distress caused by the controller. I am sure right hon. and hon. Members will agree that providing consistency across the Bill is important; the amendment is a step to ensure that that is provided.

Amendment 179 agreed to.

Amendments made: 57, in clause 154, page 86, line 10, at end insert “or distress”.

This amendment is for consistency with Clause 149(2). It requires the Commissioner, when deciding whether to give a penalty notice to a person in respect of a failure to which the GDPR does not apply and when determining the amount of the penalty, to have regard to any action taken by the controller or processor to mitigate the distress suffered by data subjects as a result of the failure.

Amendment 180, in clause 154, page 86, line 28, at end insert—

“(3A) Subsections (2) and (3) do not apply in the case of a decision or determination relating to a failure described in section 148(5).” —(Margot James.)

See the explanatory statement for amendment 179.

Question proposed, That the clause, as amended, stand part of the Bill.

[Louise Haigh]

I am sorry to labour the point; it is pertinent to the clause but also relates to the debate that we just had on information notices. The Minister has failed to set out why the Government have removed the custodial sentence as an enforcement power of the Information Commissioner when data controllers or processors breach information notices. The Minister said earlier that she does not accept that it is the Information Commissioner’s view that that weakens the existing data protection regime, but the commissioner explicitly set that out in her written evidence to the Committee:

“The new approach in the Bill of failure to comply with an IN no longer being a criminal offence but punishable by a monetary penalty issued by the ICO is likely to be less of a deterrent”.

We very much welcome the increased penalty as a sanction by the Information Commissioner, but the Minister has so far failed to set out why she has removed that custodial sentence, which, as the Information Commissioner has laid out, is a serious deterrent. That could weaken her abilities to investigate complex situations and, as I mentioned earlier, it is in direct contrast to the Irish Government’s approach, which carries a fine but also a custodial sentence of up to five years’ imprisonment if the data controller fails to comply with an information notice.

In written evidence, again, the Information Commission suggests that the Government’s approach pales in comparison to that taken by Ireland. Will the Minister take this opportunity to explain why she has so significantly weakened the Information Commissioner’s important powers?

[Margot James]

The clause replicates section 55(a) of the 1998 Act, which gives the commissioner a power to serve a monetary penalty, requiring the data controller to pay the commissioner an amount determined by the commissioner. The maximum penalty is specified in clause 156. Before the commissioner can issue a penalty notice, she must be satisfied that a person has failed to comply with certain provisions of the GDPR or the Bill, or has failed to comply with an information notice, assessment notice or enforcement notice.

Clearly, it is up to the commissioner to decide whether a penalty notice is appropriate. She has stated:

“It’s about putting the…citizen first. We can’t lose sight of that…It’s true we’ll have the power to impose fines much bigger than the £500,000 limit the DPA allows us.”

[Margot James]

I was coming on to answer the hon. Member for Sheffield, Heeley, but as the hon. Member for Cambridge has raised her question again, I will jump to it. We are not removing all criminal powers under this new legislation. Under paragraph 2 of schedule 15, the commissioner may enforce assessment notices. That power includes the new offence of obstructing a warrant, which is a criminal offence, so criminal offences do remain. As I said, we are looking at the commissioner’s desire for stronger powers in certain areas, but under the current law there is a criminal sanction only for non-compliance with a notice, and that offence is not used. A civil penalty is a better way forward and is provided as the appropriate sanction by the GDPR itself.

[Louise Haigh]

The Minister has just confirmed that under the existing arrangements a custodial sentence is the maximum penalty if an individual fails to comply with an information notice. She has not given a coherent reason why she is removing that through the Bill. Is she really arguing that criminal sanctions are less of a deterrent than civil? That is a direct contradiction of the Information Commissioner’s evidence.

[Margot James]

I have just been advised that the existing law is non-custodial criminal sanctions. I have referred to the criminal sanctions with respect to assessment notices, and I will get back to the hon. Lady on the question of the sanctions on the information notices that she has asked about. I am told what I am told; the existing law is non-custodial.

Question put and agreed to.

Clause 154, as amended, accordingly ordered to stand part of the Bill.

Schedule 16

PENALTIES

Amendments made: 123, page 203, line 26, leave out “with the day after” and insert “when”.

This amendment is consequential on Amendment 71.

124, page 204, line 10, leave out “with the day on which” and insert “when”.

This amendment is consequential on Amendment 71.

125, page 205, line 5, leave out “with the day after the day on which” and insert “when”.

This amendment is consequential on Amendment 71.

126, page 205, line 37, leave out “controller or processor” and insert “person to whom the penalty notice was given”.—(Margot James.)

This amendment is consequential on Amendment 52.

Schedule 16, as amended, agreed to.

Clause 155 ordered to stand part of the Bill.

Clause 156

Maximum amount of penalty

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Louise Haigh]

My hon. Friend the Member for Bristol North West has raised important questions about social media providers. Before I entered this place, I worked in the insurance industry. Will the Minister confirm whether insurers would be covered by the clause if they re-identified individuals from datasets to inform the pricing of risk? That is potentially serious when considering the implications of loyalty card, bank or shopping information for health insurance.

[Margot James]

I will have to write to the hon. Lady on that. I do not think it would provide cover for insurance companies in those circumstances, but I would like to double-check before I give a definitive answer to her question.

Question put and agreed to.

Clause 171 accordingly ordered to stand part of the Bill.

Clauses 172 to 176 ordered to stand part of the Bill.



Clause 177

Jurisdiction

Data Protection Bill [ Lords ] (Second sitting)

Debate between Margot James and Louise Haigh

Tuesday 13th March 2018 Public Bill Committees

[Louise Haigh]

Given that the Minister asked so nicely, I will. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: 87, in schedule 1, page 127, line 30, at end insert—

“( ) The reference in sub-paragraph (4)(b) to a data subject withholding consent does not include a data subject merely failing to respond to a request for consent.”

This amendment clarifies the intended effect of the safeguard in paragraph 15(4) of Schedule 1 (processing necessary for an insurance purpose).

Amendment 88, in schedule 1, page 127, line 39, at end insert—

“( ) is of data concerning health which relates to a data subject who is the parent, grandparent, great-grandparent or sibling of a member of the scheme,”.

This amendment provides that the condition in paragraph 16 of Schedule 1 (occupational pension schemes) can only be relied on in connection with the processing of data concerning health relating to certain relatives of a member of the scheme.

Amendment 89, in schedule 1, page 128, line 6, at end insert—

“( ) The reference in sub-paragraph (2)(b) to a data subject withholding consent does not include a data subject merely failing to respond to a request for consent.”

This amendment clarifies the intended effect of the safeguard in paragraph 16(2) of Schedule 1 (processing necessary for determinations in connection with occupational pension schemes).

Amendment 90, in schedule 1, page 131, line 14, at end insert—

“( ) If the processing consists of the disclosure of personal data to a body or association described in sub-paragraph (1)(a), or is carried out in preparation for such disclosure, the condition in sub-paragraph (1) is met even if, when the processing is carried out, the controller does not have an appropriate policy document in place (see paragraph 5 of this Schedule).”

This amendment provides that when processing consists of the disclosure of personal data to a body or association that is responsible for eliminating doping in sport, or is carried out in preparation for such disclosure, the condition in paragraph 22 of Part 2 of Schedule 1 (anti-doping in sport) is met even if the controller does not have an appropriate policy document in place when the processing is carried out.

Amendment 91, in schedule 1, page 133, line 17, leave out from “interest” to end of line 21.—(Margot James.)

This amendment removes provisions from paragraph 31 of Schedule 1 (extension of conditions in Part 2 of Schedule 1 referring to substantial public interest) which are unnecessary because they impose requirements which are already imposed by paragraph 5 of Schedule 1.

[The Minister of State, Department for Digital, Culture, Media and Sport (Margot James)]

I beg to move amendment 92, page 134, line 18 [Schedule 1], leave out “on the day” and insert “when”.

This amendment is consequential on Amendment 71.

--- Later in debate ---

[Louise Haigh]

The case that my right hon. Friend raises is certainly not hypothetical. The Metropolitan police have been trialling facial recognition scanning at the Notting Hill carnival for the last three years with apparently no legal base and very little oversight. We will move on to those issues in the Bill. That is exactly why the amendments are crucial in holding law enforcement agencies to account.

[Margot James]

As the hon. Lady says, the police are trialling those things. I rest my case—they have not put them into widespread practice as yet.

Returning to the GDPR, we have translated the GDPR protections into law through the Bill. As I said, the data subject has the right to request that the decision be retaken with the involvement of a sentient individual. That will dovetail with other requirements. By contrast, the amendments are designed to prevent any automated decision-making from being undertaken under article 22(2)(b) if it engages the rights of the data subject under the Human Rights Act 1998.

Corporate Governance and Social Responsibility

Debate between Margot James and Louise Haigh

Wednesday 14th December 2016 Commons Chamber

[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

Debate between Margot James and Louise Haigh

Tuesday 13th December 2016 Commons Chamber

[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.

Education and Adoption Bill (Second sitting)

Debate between Margot James and Louise Haigh

Tuesday 30th June 2015 Public Bill Committees

[Louise Haigh]

Q 99 Yet it is a major issue in our education system. Sir Michael Wilshaw himself has said so.

Mr Gibb: The vacancy rate in the teaching profession is about 1% and it has been at that level since 2000. We know that we face challenges with a strong and growing economy: the competition now for graduates is very fierce and we are aware of that. All teaching recruitment organisations—Teach First, the National College for Teaching and Leadership—face that challenge, but you describe this as some sort of crisis. Teacher vacancy levels are very stable at 1%, we are above where we were this time a year ago in terms of acceptances, so I am not complacent about making sure that we have measures in place such as good marketing and bursaries to attract top graduates in shortage subjects such as maths, physics and modern languages. We are doing everything we can to make sure that we recruit graduates into teacher training, but we are actually doing very well considering the strength of the economy and the fact that we have a relatively small number of graduates coming out of our universities this year.

[Margot James (Stourbridge) (Con)]

Q 100 We heard this morning about Downhills primary school and the campaign against its academisation. I am a governor of a school in Stourbridge which is now an academy and the process of academisation there took place against an orchestrated campaign, which ran for more than 12 months. Given those experiences and the potentially even greater struggle that failing schools or struggling schools in poorer areas would have in the face of such a campaign, do I take it from you, Mr Gibb, that the speed with which the measures in the Bill will enable the Secretary of State to turn a failing school into an academy will be the answer to those sort of problems? Under the measures in the Bill, how quickly do you think the improvement in a child’s education and the life chances of those children in a school that was failing will be turned around?

Mr Gibb: We heard from Sir Dan Moynihan this morning about how they managed to turn Downhills school around in two years and it is now good with some outstanding features. He also cited the metrics of the improvement in the proportion of pupils reaching level 4. It is quite staggering. That is in the face of delays that were caused by the “save our failing school” protests. It is a tragedy that any month is wasted when children only get one chance at an education. The Bill is designed to speed up that process and that is why a school that is in special measures or category 4 will automatically be issued an academy order. The whole issue of whether a school is going to become an academy will vanish. There is no point in protesting because that is going to happen and then we can get these outstanding academy groups to take over the school and bring in support and leadership and transform it very rapidly. I think Lord Nash might want to say how rapidly.

Picking up the earlier question from Louise Haigh about morale, I would say that this is a great time to be a teacher. We have between 400 and 500 new academy groups developing that are based on a good school. A headteacher can use their expertise to develop other schools. We heard that earlier today from the lady from Sunderland—her name escapes me—who runs the WISE academy chain. It is a wonderful professional thing to be able to do, to take your expertise and experience and to spread it into three, four or five other primary schools and raise their standards. Those opportunities were not available before the coalition Government came in in 2010 and there will be increasing numbers of those opportunities available to the profession in years ahead.

Lord Nash: Our mottoes are “Every child deserves to go to a good school” and “children before adults”. I know the experiences you are talking about from personal experience as an academy sponsor appointed by Andrew Adonis for a school in Pimlico which was in special measures. We had a group of teachers and parents who were very against the whole idea and came up with a lot of appalling tactics, including breaking into my office and various other things, but two years after we took the school over, it went from special measures to outstanding, thanks to the leadership team and teachers that we recruited. The people I have just referred to asked after a year if they could change their name from, I think, the Pimlico School Association to the Friends of Pimlico Academy. They got quite a short answer from me on that. We do not want other people to have to go through that experience because it is just adults putting their dogmatic prejudices before the interests of children. That is what part of the Bill is about.