Postmasters: Compensation

Paul Scully Excerpts

Tuesday 22nd March 2022 Written Statements

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

As the House is aware, the Post Office Horizon scandal, which began over 20 years ago, has had a devastating impact on the lives of many postmasters. The High Court Group Litigation Order (GLO) case against the Post Office brought by 555 postmasters exposed the Horizon IT scandal which had seen many postmasters forced to “repay” to Post Office sums which they had never received. Many were dismissed, prosecuted and even imprisoned.

The Government have long considered unfair the unequal treatment received by members of the GLO and their non-GLO peers. I am therefore pleased to announce that the Chancellor will make additional funding available to give those in the GLO group compensation similar to that which is available to their non-GLO peers.

Because they had signed a “full and final” settlement of their court case in 2019, postmasters in the group were ineligible to apply to the Historical Shortfall Scheme (HSS) which their legal action had established. So despite winning the case, the group was left worse off than the other affected postmasters for whom they had blazed the trail. Each postmaster in the group received an average of around £20,000.

To enable the GLO Group to undertake litigation against Post Office they secured funding from litigation funders Therium. Following extensive work to ensure the full compensation went to the postmasters, I am pleased that Therium have agreed to waive their rights to any claim on this compensation.

I plan to return to the House in due course to announce our next steps.

[HCWS705]

Parental Leave and Pay

Paul Scully Excerpts

Tuesday 22nd March 2022 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

It is a pleasure to serve under your chairmanship, Mrs Miller. I congratulate the hon. Member for East Renfrewshire (Kirsten Oswald) on securing this debate. I will indeed give her many more minutes than that, should she wish to fill the time.

We are committed to ensuring that employed parents have the right support available to them, so that they can balance family commitments with staying in employment. That is why our parental leave and pay entitlements are so important. I thank those who have taken part in today’s debate for their thoughtful and insightful comments, as well as their repeated engagement with this important issue.

I am pleased to say that this Government have support in place for both employers and employees on parental leave, to guide employers to do the right thing by their staff and to protect employees when they need to take time off. We have a range of leave entitlements that employed parents or parents to be may be eligible for, depending on their circumstances, which I will briefly set out. As a Government, we are committed to delivering a number of changes for new entitlements in this space, including making it easier for partners to take paternity leave, introducing neonatal leave and pay, and extending pregnancy and maternity discrimination protections.

This Government are committed to supporting the participation and progression of parents in the labour market, ensuring that it is fair and works for them. We are delivering this commitment through our framework of parental leave and pay entitlements, which are generous and flexible. Those entitlements support families whatever their circumstances or whichever stage of life they are in—from bonding with their child at birth, to grieving the loss of a child.

Parents have access to a range of leave and pay entitlements in their child’s first year, giving working families more choice and flexibility about who cares for their child and when. Our maternity leave entitlement is generous. To qualifying employed women, we offer 52 weeks of maternity leave, of which 39 are paid, which is more than three times the EU minimum requirement. For self-employed women and those who are not eligible for statutory maternity pay, maternity allowance is available. Both of those maternity payments are designed to provide a measure of financial security to help women to stop working towards the end of their pregnancy and in the months after childbirth, in the interests of their own and their baby’s health and wellbeing.

We recognise that fathers and partners play a crucial role in the first year of their child’s life, through supporting the mother and developing a relationship with the child. Paternity leave arrangements enable employed fathers and partners who meet the qualifying conditions to take up to two weeks of paid leave within the first eight weeks following the birth of their child or placement for adoption. We recognise, however, that paternity leave could be improved, so we made a manifesto commitment to make it easier for fathers and partners to take it. We will announce how we will be doing that in due course.

Shared parental leave and pay, which has been mentioned, provides parents with flexibility over their child’s care in the first year. It challenges the assumption that the mother will always be the primary carer and enables working parents to share up to 50 weeks of leave and up to 37 weeks of pay in the first year of their child’s life. That enables mothers who want to return to work early to do so, and it enables fathers and partners to be their child’s primary carer if that is the parents’ wish. When we introduced the scheme in 2015, we forecast take-up of between 2% and 8% of eligible couples. We now know that the take-up is broadly in line with those initial estimates and has increased each year. To help make shared parental leave more accessible, we launched a new online tool last year, which allows parents to check their eligibility and plan their leave.

We are currently evaluating shared parental leave, as has been said, and we will publish our findings in due course. Clearly, a lot of work has gone into that evaluation, including commissioning and interrogating information collected through large-scale representative surveys of employers and parents, and a consultation on high-level options for reforming parental leave and pay. We also commissioned a qualitative study of parents who have used the scheme, and those various data sources will help us to better understand the barriers and enable parents to take shared parental leave.

Admittedly, the analysis of the data has taken longer than originally expected, as we pivoted necessarily to prioritise work on supporting parents through the covid-19 pandemic, including ensuring that parents and individuals returning from parental leave could access the coronavirus job retention scheme. However, the evaluation remains important for the Government, and we will publish our findings in due course.

Turning to adopters, the Government are full of admiration for adopters who provide stable, loving homes to children who are unable to live with their birth parents. We recognise that it is crucial to the success of an adoption placement that an adopter takes time off work to care for and bond with their child. That is why employed adoptive parents have broadly the same rights and protections as birth parents. Adoption leave is a day one right, in line with maternity leave, which enables employed parents to take up to 52 weeks off work when they adopt a child.

We are also aware that that more needs to be done to support parents whose children are in neonatal care. In March 2020, following a Government consultation on the issue, we committed to introducing a new entitlement to neonatal leave and pay. Neonatal leave and pay will apply to parents of babies who are admitted into hospital up to the age of 28 days and who have a continuous stay in hospital of seven full days or more. Eligible parents will be able to take up to 12 weeks of paid leave on top of their other parental entitlements, such as maternity and paternity leave. Neonatal leave will be a day one right, meaning that it will be available to an employee from their first day in a new job.

As well as ensuring that parents have the leave and flexibility they need during this period, it is just as important to ensure that they are protected against discrimination and do not suffer detriment for taking that leave. That is why we are extending pregnancy and maternity discrimination protection for those returning from periods of eligible parental leave. We will ensure that the redundancy protection period applies from the point the employee informs the employer that she is pregnant and for six months after a mother has returned to work. We will also apply that protection to those taking adoption leave and shared parental leave.

Of course, our support for employed parents goes beyond the first year of a child’s life. We recognise that for a whole range of reasons, parents of school-age children need support in caring for their children throughout the various stages of their childhood and teenage years. To enable parents to offer that support, all employed parents are entitled to 18 weeks of unpaid leave for each child up to the child’s 18th birthday once they have completed 12 months of service with their employer. Employees also have access to time off for dependants, which provides a reasonable amount of unpaid time off work to deal with an unexpected or sudden emergency involving a child or dependant. In recognition of the particularly tragic circumstance of losing a young life before they have even had the opportunity to reach adulthood, we also introduced a new statutory entitlement to parental bereavement leave and pay. That entitlement gives all employed parents who meet the eligibility requirements a right to take up to two weeks off work in the 56 weeks following the death of their child.

Obviously, I appreciate the work done by the hon. Member for Lanark and Hamilton East (Angela Crawley) on extending that entitlement further. It is not something at which we are looking at this moment in time, but I will always enjoy continuing to discuss this issue and looking at what we can do for parents, because it is a tragedy to suffer a loss at any time. At the moment, we have drawn the line following the clinical measure of 24 weeks, but we also have other work in train that enables greater flexibility for all employees, including those who are employed parents. Although not a replacement for leave, having access to flexible working arrangements can be a really important tool to enable employees to balance work and family responsibilities or to support those in employment who experience a really difficult life event.

We have taken forward our manifesto commitment to consult on making flexible working the default unless employers have a really good reason not to do so. That consultation contained measures that would increase the availability and support the uptake of flexible working arrangements, including whether to extend the right to request flexible working to all employees from their first day of employment. That consultation closed on 1 December; we are now reviewing the 1,600-odd responses received, and will issue our response in due course. The consultation also introduced plans for a future call for evidence on the subject of ad hoc flexible working, through which we want to explore how non-contractual flexibility works in practice.

As we have heard, when it comes to helping employers understand how to be sympathetic and supportive to their employees, one of the most important tools is guidance. As an example of that, we recently commissioned a significant update of the guidance on managing a bereavement in the workplace, which includes a new section on supporting employees after a miscarriage before 24 weeks of pregnancy and offers examples of best practice. That guidance can be found right now on the ACAS website.

Another example is the flexible working taskforce, which is a partnership across business groups, trade unions, charities and Government Departments that shares knowledge and best practice on all forms of flexible working and takes on discrete pieces of work. Over the past 18 months, that taskforce has produced advice and guidance to support employers who may be interested in introducing hybrid working arrangements for the first time. Advice published by ACAS in July set out the key legal and practical issues associated with this way of working, and a practical guide offering top tips to businesses on how to effectively implement hybrid working was published independently by taskforce members in December, as part of our approach to support employers and employees to have conversations about what is happening in their lives and what support they need.

Employers are best placed to understand their own people and to develop a solution that works for the individual, as we heard from the hon. Member for Strangford (Jim Shannon) when he talked about happy employees being more productive employees. Clearly, there are great examples of companies treating their employees with compassion and going beyond the statutory minimum. That approach is valuable to the employer as well as to the employee, through the increased loyalty of employees.

I would like to reassure the hon. Member for East Renfrewshire. She asked about employment measures, but I am afraid that not much has changed since we last spoke about this, because Her Majesty has not yet told us the legislation for the next Session, since we have not finished this one. Nevertheless, the Government are committed to building a high-skilled, high-productivity and high-waged economy that delivers on our ambition to make the UK the best place in the world to work and to grow a business. We will continue to do that by championing a flexible and dynamic labour market. As we build back better, we will bring forward employment measures to make it easier for people to enter and remain in work as soon as parliamentary time allows. The hon. Member for Ellesmere Port and Neston (Justin Madders) can tick away on his employment Bill bingo when we do so.

I reiterate the Government’s commitment to support parents in the workplace and to enable them to be where their families need them while staying in employment. I have highlighted some of the broad range of support that the Government have in place to support parents through different life events, but employers also have an important part to play, because they know their employees. A supportive workplace brings benefits to both the employee and the employer, including on productivity and wellbeing. Once again, I thank the hon. Member for East Renfrewshire and everyone else for their contributions to this important debate, working hard to support parents in the workplace.

Sub-Postmasters: Compensation

Paul Scully Excerpts

Tuesday 22nd March 2022 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab) (Urgent Question)]

To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the steps taken to ensure that the group of 555 sub-postmasters are fairly compensated.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

I fully take your words on board, Mr Speaker, and humbly apologise. I thank the right hon. Member for his question. It is really important that we discuss this matter.

Over recent weeks, the House has repeatedly returned to the subject of the Post Office Horizon scandal. Members from all parts of the House are rightly united and outraged at what the sub-postmasters experienced and at the way that they have suffered as a consequence. Some people’s lives have been unjustly devastated, losing their roles as postmasters and often their other businesses as well. Some were imprisoned, and more faced the shadow of convictions over their working and personal lives. Saddest of all, some did not live to see justice, including some who took their own lives.

The Post Office has already apologised, but we know that that is not enough. The victims rightly want the truth to be known and those responsible to be held accountable. That is why we asked Sir Wyn Williams to hold his inquiry, which has lately heard so much tragic testimony from those affected.

As well as apologies and accountability, people want proper compensation to be paid. Those people who exposed the scandal in the first place—the postmasters who won the court case against the Post Office—have not been fairly compensated. But those who were not convicted were not entitled to receive historical shortfall scheme compensation themselves, which, paradoxically, could leave those postmasters eligible for receiving the HSS better compensated than those who won the court case.

The Government recognise that this is just not right, which is why the Chancellor announced today that we are making funds available to ensure that those in the group litigation order group are not financially disadvantaged by the decision to litigate against the Post Office. The GLO group will now be able to access the same levels of compensation as its non-GLO peers.

The postmasters’ legal case was funded by litigation funders Therium. Our worry in Government has always been that any compensation that we bring forward for this group of postmasters would not be fully passed on as Therium has a right to claim a proportion of any compensation received. However, following extensive negotiations with the company, I am really pleased that Therium has agreed to waive its rights to any claim on this compensation, meaning that we can now proceed.

We envisage that the funding will support payments under a new scheme similar to the HSS to compensate those GLO members who were not convicted. Those who have convictions overturned already have access to compensation, and we want this compensation to be paid as promptly as possible. We will be writing to the Justice For Subpostmasters Alliance to consult it about the scheme’s operations, and I am meeting representatives of the JFSA on 30 March to discuss these proposals. We will set target dates for compensation awards in the light of our discussions with them. It will not be a long and formal consultation. It will aid decisions on the approach, and I will then inform the House of our plans to deliver that just compensation, which these people so richly deserve.

[Mr Kevan Jones]

I thank the Minister for his statement. I congratulate him on moving this matter further than his predecessors who made pathetic attempts and showed such ignorance.

The Treasury statement this morning said that the 555 group will be fully and fairly compensated. Similar things were said by the Prime Minister, and the Minister said that before the Business, Energy and Industrial Strategy Committee. Can he outline what that means in practice? Is it just reimbursing the legal costs, or will we have a more sophisticated scheme? Certainly, my constituent Tom Brown, who paid back £84,000 that he did not need to pay, is £84,000 out of pocket. He needs that back.

I am also interested to know about interim payments. The sad fact is that there are people in abject poverty now, who are living from week to week, so the quicker we can get some interim payments to those people, the better.

On the overall historical shortfall scheme, has the Minister any idea about how many people were affected by it? I would like to reopen that, because the window given to these sub-postmasters was very short, so it needs to be looked at in detail.

The other question I would like to ask the Minister is about those who have died. He points to the fact that, tragically, some have taken their lives, but there are many others who have died. Will the scheme involve their estates? It would be a complete injustice if those families did not get any of that compensation. I urge him to take the administration of the scheme out of the hands of the Post Office. I, the 555, the hon. Member for North West Leicestershire (Andrew Bridgen) and others have no faith at all in the Post Office to administer it. It is important that it is seen to be independent of the Post Office.

The Minister talks about the 555. I am happy to meet the Minister and, I am sure, the hon. Member for North West Leicestershire and Lord Arbuthnot to talk about the details of the scheme, but I reiterate the point that we need to get this right now. I accept that this is a step forward, but this will not go away. The Minister knows that—can he tell the Treasury that? It will cost quite a lot of money, and I do not know whether he has established yet how much. Does he have an open cheque book now from the Treasury? He might need one.

[Paul Scully]

Once again, I thank the right hon. Gentleman for his work and for bringing this urgent question to the House today, because it is important that we continue to press on and get this done. I really welcome his attention to this matter. I also thank Lord Arbuthnot, whom he mentioned, who has helped in the past couple of weeks to unlock the situation we have today.

The right hon. Gentleman asks how the process will work and how quickly the 555 will get their money. That is the conversation I want to have with Alan Bates and the JFSA over the next couple of weeks, to ensure that we get something that they feel confident in. I envisage its sitting alongside and being similar to the HSS scheme, which starts on the basis of looking at losses and ongoing losses. It is important that we address those in the full and fair way I have described and make the compensation meaningful. Yes, we will absolutely work with estates; the HSS already works with the estates of those who have died and with the creditors of those who may be bankrupt, to ensure that they can be restored to a far better position.

I will happily meet the right hon. Gentleman and colleagues across the House who have campaigned on this issue for so many years. I would love to say I have a blank cheque from the Treasury, but that is clearly not going to happen in this place. However, the Treasury knows that we need to sort it out. I want to ensure that the scheme has the confidence of the JFSA. The HSS has an independent panel with it, so it has a degree of independence specifically to give people confidence, but we will work on that in the weeks to come.

[Andrew Bridgen (North West Leicestershire) (Con)]

I welcome the announcement that the 555 sub-postmasters, including my constituents, will now at long last get the compensation they deserve. Does the Minister agree, however, that it is important that the public inquiry currently running gets to the truth of why the Post Office decided to defend the action brought by the 555 for more than four years, at huge cost to the public purse, when back in 2015, following the investigation by Second Sight and Ron Warmington and the evidence from the Fujitsu whistleblower, I knew, the right hon. Member for North Durham (Mr Jones) knew and more importantly the Post Office knew that the Horizon system was faulty and that the convictions of the sub-postmasters were completely unsafe?

[Paul Scully]

I thank my hon. Friend for all the work he has done to expose this matter. That is why the independent statutory inquiry led by Sir Wyn Williams has been listening to testimony from those so badly affected. The next stage of his inquiry is exactly to get to the bottom of the questions my hon. Friend asks: who knew what and when in the Post Office, Fujitsu and Departments across Government. We will get to the bottom of that.

[Mr Speaker]

I call SNP spokesperson Marion Fellows.

--- Later in debate ---

[Paul Scully]

I thank the hon. Member for all the work that she does with the APPG, not just on righting this wrong but on the future as well. I thank her for her kind words. This is a moment in time that I hope we can all be really pleased with, as we are moving this on, but it is only a moment in time—it is not finished. There is a lot more of the process to go. I will be judged on this only when I know that the 555 and other members have had the full and final compensation. I accept and agree with that. I want that money to go into the pockets of the postmasters, and I want to minimise legal fees. Clearly the Post Office does not have the resources to pay that level of compensation without affecting the future network, which is why it has been separated so that the Post Office has the future that we all want it to have.

[Lucy Allan (Telford) (Con)]

I thank the Minister from the bottom of my heart for everything that he has done—I am extremely grateful. Does he agree that the conduct of the group litigation by the Post Office was shameful, that it was a war of attrition trying to grind down people who wanted to seek justice, and that it was intentionally trying to stop this coming to light? Thanks to the 555, it is now impossible to ignore. Does he join me in thanking the 555 for their tenacity and determination? Will he ensure that the Post Office apologises for what it has put them through?

[Paul Scully]

I thank my hon. Friend for all the work that she has done on behalf of her constituent Tracy Felstead and the 554 other postmasters. I will not comment on the Post Office, purely and simply because having instigated the independent inquiry, I want it to remain independent. I do not want to put undue pressure on it. Clearly the Post Office has apologised, and I suspect it will not be the last time that it does so. We absolutely want to get answers. I also thank Nick Wallis, who has done amazing work—his life’s work in journalism—in setting out the stall of the 555 and telling their story.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I thank my right hon. Friend the Member for North Durham (Mr Jones) for securing this urgent question and for his tireless efforts in standing up for all those affected by the Horizon scandal. I pay tribute to all the postmasters who fought for justice, and especially to the efforts and determination of the 555 litigants whose civil case paved the way for convictions to be quashed and compensation finally delivered.

Labour has consistently called for all those affected by the Horizon scandal to be able to access the compensation they deserve. It was simply unacceptable that those who led this slow march to justice had been excluded from the historical shortfall scheme. In a week in which we have had plenty of warm words from the Government on their commitment to British workers but little by way of action, it is vital that the Government get this right. Hard-working, honest people had their lives torn apart because of a misguided belief that workers are dishonest and technology infallible.

Today’s announcement is warmly welcomed on the Labour Benches. I thank the Minister for his work on this issue; his commitment has been unquestionable throughout. However, I do want to press him in saying that speed is now vital. The Government have delayed far too long in getting to this point, and there can be no further delays for all those affected to get the compensation that will go some way towards making amends for this appalling injustice. As such, will he say how many are affected and provide a timescale for when all compensation payments will have been made? Labour has called for all those involved to be held accountable, so will he update the House on what investigations are ongoing into the role of Fujitsu? Will he commit to regularly updating the House on the progress of the scheme? This has been one of the greatest miscarriages of justice this country has ever seen. Every day’s delay only compounds that injustice. I hope the Government can finally start to right these wrongs for good.

[Paul Scully]

I hope I can show by my actions that I will keep the House updated as we go along. On where we are with the compensation, I can announce that as of 11 March, 45% of people in the historical shortfall scheme had already received offers. That amounts to 1,067 individuals. The Post Office reports that it is firmly on track to make 95% of initial offers by the end of the year. The historical shortfall scheme started slowly, as it first worked through the cases and benchmarked those that would help inform future payments, so that we know so much more about the 555. Dovetailed with the HSS information that we have gained, I want to ensure that we can start delivering that compensation very quickly. I am still aiming for the end of the year for the HSS. We need to establish, once we know what the process is, an exact timescale agreed with the JFSA.

[Mr Speaker]

And we will hear it first in the Chamber, and we will make sure it is done via a statement, rather than by me granting urgent questions. Lovely, Minister.

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

I very much welcome what my hon. Friend has said today, and there is no doubt that he has been part of the resolution of this problem, but he will know that across the House for many, many months everyone has accepted that this is a huge miscarriage of justice and a disgrace. There is an independent inquiry, which he has rightly referred to today, but will he make sure that within Government there is a lessons learned process and lessons drawn for the future, so that the role of Government, too, is placed under the microscope, to ensure that nothing like this ever happens again?

[Paul Scully]

First, my right hon. Friend talked about the independent inquiry, and I want to answer the earlier question about Fujitsu. Fujitsu is not on the preferred list of Government suppliers, but it can tender for Government contracts. Indeed, when we hear from the independent inquiry, that will give us all the information we need for how we move our relationship going forward.

To speak to the point that my right hon. Friend made, we always want to learn lessons, not just on what happened with the scandal, but on how we have handled it recently. Covid has taught us how to accelerate decision making, which has given me some of the weaponry I needed to get to this point quicker than we might have done in normal times. There are plenty of lessons we will be learning in the Government.

[Karl Turner (Kingston upon Hull East) (Lab)]

I begin by thanking my right hon. Friend the Member for North Durham (Mr Jones) and the hon. Member for North West Leicestershire (Andrew Bridgen) for the work they have done throughout this scandalous issue. I thank the Minister, too. It is rare for me to congratulate Ministers, but he has ploughed through real barriers in Whitehall to get where we are today. What people are asking me is this: what are we doing to get some money back from Fujitsu? This will cost the taxpayer potentially hundreds of millions of pounds. How on earth are we going to allow Fujitsu to get away with it?

[Paul Scully]

I thank the hon. Gentleman not only for his kind words, but for the work he has done in representing members of the group litigation order in the first place, as well as for his work here and his determination. The frank answer is that we will not—we will push as much as we can in any avenue to tackle compensation. Wherever it comes from, it should not be the UK taxpayer who is picking up the tab for other people’s problems.

[Siobhan Baillie (Stroud) (Con)]

This scandal continues to shock, and I thank the campaigners and the Members in this House with greyer hair with me, perhaps caused by this horrendous situation. I echo the calls for interim payments and more information about the practical steps to manage expectations, but it is understandable that victims, such as my constituent Nichola Arch, want to see the details. They are also looking to see whether things such as mixed malicious prosecution are included. For those found not guilty, can the Minister provide some comfort from the Dispatch Box today?

[Paul Scully]

I thank my hon. Friend for the work she has done representing Nichola Arch and others. I saw her on GB News the other day talking with Nichola in the constituency casebook section. They both spoke excellently on this. I can confirm that our intention is very much to allow people who were prosecuted but not convicted full access, in the same way as members of the HSS. We have to work through that detail, but I have full confidence that we will get there.

[Andrew Gwynne (Denton and Reddish) (Lab)]

I add my thanks to the Minister for his tenacity in pushing this through some of the barriers that we have faced over a long time. I also thank my right hon. Friend the Member for North Durham (Mr Jones) and the hon. Member for North West Leicestershire (Andrew Bridgen) for sticking with this for such a long time. It is great that we are now getting a clearer picture of the compensation. I support what my right hon. Friend said about interim payments being key, because there is real hardship in this injustice, but I want to ask the Minister about the 736 who have been wrongly convicted of misdoing. Only 72 of them have had their convictions quashed or overturned. What are the Government doing to ensure justice for all sub-postmasters?

[Paul Scully]

Anyone who was convicted can apply for interim payments, and the majority of them have had their payments. The 555 will be able to have that, should they have been convicted. We are working with the Post Office to ensure that we can get to the remaining people so that they apply for their convictions to be overturned. Clearly we do not want anyone to have a conviction on their record that should not be there and is there through no fault of their own. We will ensure that we continue to push for that.

[Bob Blackman (Harrow East) (Con)]

I remember my first ever job was working on the Post Office counter automation project—it was some 40 years ago, I hasten to say, and for Burroughs Machines, not Fujitsu. I congratulate my hon. Friend on the work he has done thus far, but clearly this is a case of needing to compensating people quickly. He is going to do a short consultation. Will he consider now, after that consultation, making interim payments immediately, rather than waiting to the end of the year?

[Paul Scully]

First, I do not want to pre-empt anything that we may do, but when I talk about a short consultation, this is about 555 people who have a well organised group together and their lawyers. We have already started, so this is not something where we are writing out to people and waiting for answers to come back; this is a focused bit of work. What I can say is that we will start the process that is agreed with the JFSA as soon as possible—and as soon, Mr Speaker, as I have updated the House first.

[Peter Grant (Glenrothes) (SNP)]

The Minister will be aware of the plight of my constituent Myra, who jointly ran a post office with her mum. They begged and borrowed £70,000 from friends and families to fill a shortfall that they could not understand, but which we now know—and the Post Office probably knew at the time—was not a shortfall at all. They lost their jobs, lost their home and were branded thieves and liars. Myra’s mum did not live to see her name cleared. Myra was not allowed to claim under the historical shortfall scheme. Does the Minister agree that no matter how carefully the criteria for any compensation scheme are drawn, there will always be people who do not fit those criteria? Will he ensure that there is a catch-all clause in the compensation scheme so that nobody but nobody is left without the compensation for which they have waited far too long?

[Paul Scully]

Please send my condolences to Myra and the family. Within any scheme there will always be hard edges, but please let me know if particular people are falling through the gaps and let me see what further we can do to support them through this difficult time.

[Martin Vickers (Cleethorpes) (Con)]

I add my tribute to the Minister, who came after a long line of Ministers who did not grasp this issue, but he certainly has. Following other points that have been made, may I seek clarity on those who have died? Will their estates benefit?

[Paul Scully]

Yes. In the same way as with the HSS, we can work with the estates to ensure that compensation is paid through them. That is my understanding.

[Andy McDonald (Middlesbrough) (Lab)]

I congratulate my right hon. Friend the Member for North Durham (Mr Jones) on securing this urgent question. I also congratulate the Minister, who has stuck at this and been candid with us on every occasion. This is one of many battles—it is won, and I congratulate him—but the purpose of compensation is to put people in the position they would have been in had the insult not occurred in the first place. It is essential that this scheme properly compensates people for their past and future pecuniary losses, as well as compensating for their pain, suffering and loss of amenity, including the loss of liberty. Will he ensure that those principles are adhered to in this scheme, because nothing less than that will satisfy the people who have been so badly wronged by this terrible episode?

[Paul Scully]

I thank the hon. Gentleman for his kind words. In terms of loss of liberty, that comes up with the overturned convictions. In terms of the overall losses, as I said, the HSS works by looking at the past losses as well as what is ongoing and making an assessment of that with an independent panel behind it. I envisage that there will be the same scheme for the 555 so that there will be parity in their compensation.

[Jerome Mayhew (Broadland) (Con)]

As Back Benchers, we often ask Ministers for action and get absolutely nowhere, but today is different. I join the tributes to the Minister for how hard and how successfully he has been working in Government to get to a solution. I also put on record my recognition of Therium’s decision not to seek its extra compensation. This week of all weeks, it is nice to have a business doing the right thing. Can he give some indication to my constituents and others of the rough timeframe for receipt of the compensation payment?

[Paul Scully]

I thank my hon. Friend for his kind words. It is difficult for me to say, because it depends on what scheme we come up with. If it is the scheme that I am envisaging, which is similar to the HSS and runs alongside it, I expect those payments to be largely out of the door and in people’s pockets by the end of the year. I do not see there being a long time delay from adding the 555 to that, because we know so much about them and can include them in that scheme or something similar.

[Kate Osborne (Jarrow) (Lab)]

I thank my right hon. Friend the Member for North Durham (Mr Jones) and the Minister for their work in this area. I also pay tribute to the 555 for their long battle to get justice and compensation in one of the biggest miscarriages of justice in our history. I pay particular tribute to my constituent Chris Head, who is one of the 555 and a tireless campaigner on the issue. Chris would like me to ask the Minister whether the scheme will have independent oversight so that victims are fairly and independently assessed.

[Paul Scully]

I, too, pay tribute to Christopher Head, who was one of the youngest postmasters involved. We often have Twitter ding-dongs, shall we say, which have mellowed slightly since we have all got to the same point. The hon. Lady asks about independent oversight. The historical shortfall scheme has independent oversight with an independent panel. None the less, I want to ensure that the JSFA is as comfortable with the scheme that we come up with as it can be, because we want to give it the confidence that there is independent oversight of it so that those people can get full and fair compensation.

[James Wild (North West Norfolk) (Con)]

I join hon. Members in welcoming the announcement and the tenacity that the Minister has shown in addressing this injustice. Will the Government look to recover the compensation costs from those responsible for the scandal—the providers of the Horizon system—and to recover the bonuses paid to those who were running the Post Office during that shameful period?

[Paul Scully]

Nothing is off the table. We need to look at all those sorts of things, because the UK taxpayer should not be on the hook for other people’s mistakes and sometimes deliberate—often deliberate—approaches in that regard.

[Tony Lloyd (Rochdale) (Lab)]

I add my thanks and I welcome the Minister’s statement. The reality is that sub-postmasters have lost enormously and compensation will go only so far. One thing that they want is to know that there is genuine accountability. I know that the Minister does not want to anticipate the inquiry, but can he make it clear that where there is individual wrongdoing, it will be properly dealt with at whatever level is appropriate?

[Paul Scully]

Absolutely; I can make that clear. We want to know those answers. People want full and fair compensation, but they also want answers and accountability. We can have accountability only if we do exactly what the hon. Gentleman said.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I congratulate the Minister; there is light at the end of the tunnel for a lot of people now. My right hon. Friend the Member for North Durham (Mr Jones) has played a blinder, but this is another example of cross-party Back Benchers in this House working hard for their constituents and making a difference. I briefly mention the Criminal Cases Review Commission, which has a very small staff who have worked really hard on the issue. The chief executive Helen Pitcher and her team have done a solid amount of work. Can we recognise that and can the Minister give Helen and her team some help, because they desperately need to retain some commissioners to finish this work?

[Paul Scully]

I pay tribute to the CCRC. It is because of its resource that we want to ensure that people can go directly to the Court of Appeal to try to circumvent overloading it. I pay tribute to the work that it has done to get us this far.

[Jim Shannon (Strangford) (DUP)]

I commend the right hon. Member for North Durham (Mr Jones) for his endeavours and for his tenacity. I also commend the Minister for delivering on it; it is always good to have a Minister who does that, so I thank him. I welcome the news that payments will be equalised, but this is the second time in two days that I have come across a case where those who paid for litigation and went through the stress of a court case ended up worse off than those who did nothing. Could consideration be given to the court costs being covered as an act of good faith for those postmasters whose lives and reputations have been decimated?

[Paul Scully]

In terms of the original funding, the court cases will absolutely be taken into account—that is the entire process. They will be compensated as if they were going through the HSS and as if they had not gone through the court case in the first place and had those court fees and legal fees taken away from them. I totally agree with the hon. Gentleman.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

I welcome the Government’s move to ensure that the 555 sub-postmasters receive the compensation that they deserve. I thank the Minister for his work to fix this matter; he has really cared about it. Can he confirm what discussions he has had with his Cabinet colleagues about how we can ensure that future victims of such scandals do not face the same issues of accessing compensation that is swallowed up by legal fees?

[Paul Scully]

That is the last question, so I will say that although the last three quarters of an hour have been my moment in the sun, it is not about me: it is about the 555. I thank all hon. Members on both sides of the House who have been involved in ensuring that we have reached this point. There is plenty more to do. Clearly, we will all learn from this to inform us in other situations that may arise so that we can ensure that people get compensation as soon as possible.

Paid Miscarriage Leave

Paul Scully Excerpts

Thursday 17th March 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

I congratulate the hon. Member for Lanark and Hamilton East (Angela Crawley) on securing this debate, following the debate that we had in Westminster Hall, and I thank the Backbench Business Committee for allowing us to discuss this important and sensitive issue. It is so important that we hear the examples that she mentioned. We must give our sympathies to people who have lost a much-wanted baby at any stage of their pregnancy, including though miscarriage, and always reach out to them and support them. She spoke with much passion, as she always does on this issue, and I am grateful for her continued work to raise awareness of the significant impact of baby loss at any stage on those parents. I also thank everybody who contributed to the debate and supports the discussions around baby loss.

The hon. Member asked what the Government are doing to support people following a miscarriage. I am pleased to say that we have support in place for both employers and employees, to guide employers to do the right thing by their staff and to protect employees when they need to take time off. I have talked about how losing a baby at any stage is devastating and how those people need their employers to respond with compassion.

I want to set out briefly the wider work that the Government are talking forward on women’s health, including in the workplace, because this is integral to the strategy. In March 2021, we announced the establishment of England’s first women’s health strategy, led by the Department of Health and Social Care. Health in the workplace, fertility, pregnancy, pregnancy loss and post-natal support will be priority areas in that strategy. As we have heard, damaging taboos and stigmas remain around many areas of women’s health, and they can prevent women from starting conversations about their health or seeking support for a health issue, whether through medical help or help from their employers. When women do speak about their health, all too often they are not listened to. We are determined to tackle those issues. Women need to feel supported in the workplace, and those taboos are broken down through open conversation.

Our vision for the women’s health strategy, which was published on 23 December 2021, sets out an ambitious and positive new agenda to improve the health and wellbeing of women across England. We will publish the full strategy later this year.

The Government have an active agenda on work and health more widely. One example of that is our response to the “Health is everyone’s business” consultation published in July 2021, which sets out measures that we will take to protect and maintain progress made to reduce ill health and related job loss and to see 1 million more disabled people in work from 2017 to 2027. Those measures are part of the wider support system that I mentioned and are key steps in our effort to change the workplace culture around health and sickness absence. Changing that culture through opening up conversations in the workplace will benefit anyone who has health issues at work, including those who have lost a pregnancy.

So far I have talked about physical health, but for some people the feelings of grief and loss associated with a miscarriage are overwhelming and have an impact on their mental health. Our excellent national health service is there to support individuals when such feelings are particularly debilitating, or are likely to have a longer-term impact on their mental or physical health. We are expanding access to psychological and talking therapies within specialist perinatal mental health services, with 26 hubs due to open by April 2022. The hubs will offer treatment for a range of mental health issues, as well as bereavement services.

As part of the Government’s commitment to build back better, we published our mental health recovery action plan, which is backed by an additional £500 million this financial year to ensure we have the right support in place. That is in addition to the £2.3 billion of additional funding we are investing in mental health services by 2023-24. We also remain committed to achieving parity between mental and physical health services and reducing mental health inequalities. We are making good progress, with investment in NHS mental health services continuing to increase each year from £11 billion in 2015-16 to £14.3 billion in 2020-21.

I know that the hon. Member for Lanark and Hamilton East (Angela Crawley) is specifically interested in, and always speaks passionately about, a leave entitlement for miscarriage. Parental bereavement leave and pay may not be that entitlement, but it does two important things. First, it supports parents who have suffered that tragic unimaginable loss we have talked about. Secondly, it sets a statutory baseline for employers, sending an important message that the Government expect employers to support their staff following any type of bereavement. That bereavement leave is available to parents who have lost a child under 18 or who have suffered a stillbirth after 24 weeks. That definition of stillbirth is a clinical one.

Miscarriage is undoubtedly a very personal experience and some people affected may want to stay at home, while others may prefer to continue to work or alternatively need time off later. That is why the Government support employers and employees to have those conversations about what is happening in their lives and what support they need, giving them the flexibility to have that approach. Employers are best-placed to understand their own people and to develop a solution that works for the individual.

There are really good examples of companies treating their employees with compassion and going beyond the statutory minimum we set. That is valuable to the employer as well as to the employee. Increased loyalty to employees can improve the retention rate. There is a bottom-line argument for employers, because after investing time in people it seems daft to then not give them the flexibility to keep them within the workforce. Rewarding them well will keep them productive if they feel a valued member of the team.

We heard about the pregnancy loss pledge, which is an excellent example of exactly what I have been saying: encouraging employers to show empathy and understanding towards people experiencing pregnancy loss, and having a supportive work environment where people can openly discuss their needs following a loss.

In this difficult economic climate, the Government are mindful of placing extra statutory burdens on businesses, but for those businesses that can go further we strongly encourage them to do so. We fully expect that in time others will follow that lead. On flexibility, I can give the example of ASOS, which has life events leave. In recent debates we have talked about endometriosis, neonatal care, other caring responsibilities, menopause and now miscarriage. All those things fit partly within the women’s health strategy I was talking about, but in those life event situations it is absolutely incumbent on employers to value their people and show flexibility if they want the reward of their employees remaining productive and loyal in turn.

When it comes to helping employers to be sympathetic and supportive, one of our most important tools is guidance. We recently commissioned a significant update of the guidance on “Managing Bereavement in the Workplace”. That includes a new section on supporting employees after a miscarriage before 24 weeks of pregnancy and offers examples of best practice. The guidance can be found now on the ACAS website. Flexible working is integral to this issue. Yes, it is not a replacement for leave, but having access to flexible working arrangements can be a really important tool to support those in employment who experience a difficult life event. Changing a work pattern can provide individuals with the flexibility they need to balance their work commitments with their personal lives during such challenging times. Having a statutory right to request a temporary or permanent working arrangement could therefore be beneficial to individuals grieving a miscarriage.

We have taken forward our manifesto commitment to consult on making flexible working the default unless employers have good reason not to do it. That consultation contained measures that would increase the availability and support the uptake of flexible working arrangements, including whether to extend the right to request flexible working to all employees from the first day of employment. We have received 1,600 responses and we are going through them now. We will issue our response in due course.

[Justin Madders]

I just want to clarify: is the Minister seriously suggesting that someone who has had a miscarriage should make a flexible working application, which could take weeks or months to resolve?

[Paul Scully]

I am saying that it is one of the tools for employers to value their people, which is why we want to ensure that we can have a tailored response to people’s life events. I talked about miscarriage and we have also rightly talked about all the other areas, including women’s health and, indeed, men’s health, whether that is mental or physical. Flexible working can be at the heart of wraparound care for employees, but it is not the only tool.

[Chris Stephens]

Those of us on the SNP Benches often accuse the Government of stealing ideas from their distant cousin, the Liberal party of Australia. Is this not a case where the Liberal party of Australia is correct and more progressive than this Government on paid miscarriage leave?

[Paul Scully]

I am saying that we want to work with employers. We want to showcase the very best and to explain to employers—rightly—that any statutory limit we set is a minimum limit. Any sensible employer that values its people understands that very few businesses, if any, are anything without loyal, productive people. They can value them by showing increased flexibility, including through the examples that I gave of compassionate leave for life events.

Our consultation also talked about ad hoc flexible working and we want to explore how non-contractual flexibility works in practice. That can be done far faster than over the weeks talked about by the hon. Member for Ellesmere Port and Neston (Justin Madders). I have discussed the question with the flexible working taskforce, which will ensure that the role of ad hoc flexible working and the question of supporting women with health conditions are part of its considerations.

We have heard about employment measures and when they are coming to the House. I reassure Members that the Government are committed to building a high-skill, high-productivity and high-wage economy that delivers on our ambition to make the UK the best place in the world to work and grow a business. We will do that by continuing to champion a flexible and dynamic labour market and as we build back better we will introduce new employment measures to make it easier for people to enter and remain in work as soon as parliamentary time allows.

I extend my condolences once again to anyone who has experienced the loss of a baby. I understand and sympathise with the difficulties suffered by parents in this situation. I have highlighted some of the broad range of activity that the Government already have under way to support people in the workplace who experience difficult life events, including those who have lost a baby. It is also the case that employers have an important part to play because they know their employees and that a supportive workplace benefits both employees and employers, including on productivity and wellbeing.

I thank the hon. Member for Lanark and Hamilton East once again for her contributions to the debate and I thank everybody who has worked hard to raise awareness of the impact of miscarriage.

Professional Qualifications Bill [Lords]

Paul Scully Excerpts

Report stage
Monday 14th March 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Dame Eleanor Laing)]

With this it will be convenient to discuss the following:

New clause 2—Authority by whom regulations may be made (No. 2)—

“(1) In this Act ‘appropriate national authority’ means as follows.

(2) Where the regulations—

(a) contain provision relating to England only,

(b) apply to the United Kingdom as a whole, or

(c) contain provision which is not within the legislative competence of Senedd Cymru, the Scottish Parliament or the Northern Ireland Assembly,

the Secretary of State or the Lord Chancellor is the appropriate national authority.

(3) The Welsh Ministers are the appropriate national authority in relation to regulations under this Act which contain only provision which would be within the legislative competence of Senedd Cymru if contained in an Act of the Senedd (ignoring any requirement for the consent of a Minister of the Crown).

(4) The Scottish Ministers are the appropriate national authority in relation to regulations under this Act which contain only provision which would be within the legislative competence of the Scottish Parliament if contained in an Act of that Parliament.

(5) A Northern Ireland department is the appropriate national authority in relation to regulations under this Act which contain only provision which, if contained in an Act of the Northern Ireland Assembly—

(a) would be within the legislative competence of the Assembly, and

(b) would not require the consent of the Secretary of State.

(6) The consent of a Minister of the Crown is required before any provision is made by the Welsh Ministers in regulations under this Act so far as that provision, if contained in an Act of Senedd Cymru, would require the consent of a Minister of the Crown.

(7) In this section ‘Minister of the Crown’ has the same meaning as in the Ministers of the Crown Act 1975.”

This new clause is intended to replace the current Clause 16. It would mean that the Secretary of State would only make regulations under this Act if they relate to England or the whole of the UK, or are outside the legislative competencies of the Devolved Administrations.

New clause 3—List of regulators and regulated professions—

“(1) The Secretary of State must publish a list of all regulators of regulated professions and the associated professions.

(2) The list must be updated on a regular basis.”

New clause 4—Guidance and assistance concerning mutual recognition—

“Upon the request of a regulator, the Secretary of State must provide guidance and all reasonable assistance on how to make the most of the provisions in the EU-UK Trade and Co-operation Agreement.”

New clause 5—Consent of the devolved authorities—

“(1) Before making regulations under this Act, the Secretary of State or the Lord Chancellor must obtain the consent of—

(a) the Senedd, to the extent that the regulations contain provision which could also be made by the Welsh Ministers by virtue of section 16(2) (ignoring any requirement for the consent of a Minister of the Crown under section 16(5));

(b) the Scottish Parliament, to the extent that the regulations contain provision which could also be made by the Scottish Ministers by virtue of section 16(3);

(c) the Northern Ireland executive, to the extent that the regulations contain provision which could also be made by a Northern Ireland department by virtue of section 16(4).”

Amendment 2, in clause 7, page 5, line 16, at end insert—

“(1A) Before making the arrangements, the Secretary of State must consult the devolved authorities on the functions and operations of the assistance centre.”

This amendment would require the Secretary of State to undertake consultation with the Devolved Authorities on the functions and operations of the Assistance Centre before it comes into being.

Amendment 3, page 5, line 16, at end insert—

“(1A) Before making the arrangements, the Secretary of State must ensure there are representatives from each of the devolved nations on the board of the assistance centre.”

This amendment would require the Secretary of State to ensure there are representatives for each of the devolved nations on the board of the Assistance Centre.

Amendment 4, page 11, line 28, leave out clause 16.

Government amendment 1.

[Paul Scully]

I am today proposing two amendments in relation to the devolved Administrations. New clause 1 would place a duty on the Secretary of State or Lord Chancellor to consult the devolved Administrations before making regulations under the Bill that contain provisions that could be made under the Bill by the devolved authorities themselves. The new clause would also require the Government to publish a report on the consultation. Amendment 1 seeks to amend the Government of Wales Act 2006 so that a Minister of the Crown’s consent is not needed for Senedd Cymru to remove the Secretary of State’s and the Lord Chancellor’s ability to make regulations under the Bill that are within the Senedd’s legislative competence.

I know that hon. Members across the House have shown strong interest in the issue of concurrent powers and devolved competence. To underline the Government’s commitment to a collaborative approach on this issue, I am introducing into the Bill, through the new clause, a new duty to consult devolved Administrations. The duty includes a requirement to publish a report in advance of any regulations being made by the UK Government that would be within devolved legislative competence. That report should set out the consultation process, and whether and how the representations made by the devolved Administrations during the consultation have been taken into account.

My officials and I have engaged extensively with the devolved Administrations during the passage of the Bill and, although we strained every sinew to reach agreement on securing legislative consent, it is a great regret that, unfortunately, we have exhausted all available avenues. Lord Grimstone and I have held eight meetings with our devolved Administrations’ ministerial counterparts. Baroness Bloomfield and Lord Grimstone have held nine industry roundtables, including two specifically for devolved regulators. There have also been weekly official-level meetings during the Bill’s passage and numerous exchanges of letters.

The amendments were originally offered to the devolved Administrations in December 2021, in exchange for support for legislative consent motions from their respective legislatures, but that offer was rejected. But the UK Government are committed to delivering effective policies that work for the whole of the UK, so, to underline that commitment, I am now introducing those amendments without any conditions attached. I strongly believe that, if both Government amendments are accepted, the Bill represents the best outcome for both the UK Government and the devolved Administrations, without impinging on the UK’s ability to act where necessary.

The regulation of professions often falls within devolved legislative competence. For that reason, the Bill gives powers to both UK Government Ministers and devolved Administration Ministers. Some of the powers may be exercised concurrently to allow UK Government Ministers to make UK-wide regulations where appropriate. The most likely use of concurrent powers would be to implement international agreements on professional qualifications that are negotiated on a UK-wide basis. It is vital that the UK Government are able to implement such agreements across the UK in a timely and consistent manner, as failure to do so could jeopardise the UK Government’s credibility and ability to secure ambitious provisions to support UK services exports with global trade partners.

Amendment 1 would allow for an Act of the Senedd to remove UK Ministers’ ability to use powers in the Bill to make regulations that would be within Welsh devolved legislative competence, without the need to first obtain the consent of a Minister of the Crown. The Welsh Government would still be required to consult the UK Government on the removal of powers. That was a key ask from the Welsh Government. It is in line with similar approaches taken by the Government on the Environment Act 2021, the Fisheries Act 2020 and the Agriculture Act 2020.

In introducing those amendments, I hope that Members can see the UK Government’s determination to work collaboratively and transparently with all devolved Administrations and devolved regulators on the provisions of the Bill and on wider regulated professions policy.

[Mr Deputy Speaker (Mr Nigel Evans)]

Does the shadow Minister want to come in straightaway or shall I go to somebody else?

--- Later in debate ---

[Bill Esterson]

I will speak to new clauses 3 and 4 tabled in my name, then briefly come back to the Government amendment and to amendment 3. During the progress of this Bill through the Lords, it became clear that it had been thrown together in a completely unsatisfactory way. The Financial Times described the way in which the Government introduced it as a

“chaotic handling of a post-Brexit regime for recognising the qualifications of foreign professionals”.

Remarkably, the Government admitted introducing the Bill to Parliament without knowing which professions were in scope. We argued in the Lords that we had to know who and what was in the scope of the Bill. It stands to reason that the relevant regulators and professions need to be aware of these changes. Having initially listed 160 professions and 50 regulators that would be affected by the legislation, the Government twice published a revised list, ultimately increasing the numbers to 205 professions and 80 regulators. Due to do the increased number of regulators in scope, the Government also had to publish an updated impact assessment, with the total cost to regulators increasing by almost £2 million. That is hardly the way to inspire confidence that the legislation will help businesses or skilled workers.

The Government were criticised from all sides in the Lords, including by those on their own Benches. Baroness Noakes said that the legislation had

“all the hallmarks of being a Bill conceived and executed by officials with little or no ministerial policy direction or oversight…we learn that the Bill was drafted with a far-from-perfect understanding of the territory that it purports to cover. This is no way to legislate.”—[Official Report, House of Lords, 22 June 2021; Vol. 813, c. 149.]

How can regulators and regulated professionals know where they stand when the Ministers responsible for the Bill do not even know themselves? When I raised this in Committee, the Minister responded that he had

“reservations about enshrining a list in the Bill.”

This was because of concerns about not knowing which professions were ultimately covered. He went on to say that the Government had committed to

“maintaining a list of regulated professions and regulators to which they consider the Bill applies, and to keep that list readily accessible and in the public domain.”––[Official Report, Professional Qualifications Public Bill Committee, 18 January 2022; c. 30.]

It is of course encouraging that the Minister has made such a commitment to maintaining a list. I am not asking Ministers to place a list of regulators on the face of the Bill, but for the certainty that regulators and professionals need to be able to operate with confidence, it is important that they now know whether they are within the scope or not, and that means maintaining the list that Ministers have agreed to keep in the public domain. Web pages can be deleted, links can be lost, and without an amendment requiring the maintenance of a list, there will be no legal duty on Ministers to do so. Indeed, if they decided on the day following the granting of Royal Assent to this Bill that they no longer wanted to publish the list on the gov.uk website, they could remove it. This amendment, which I will not be pressing to a vote, is a reminder that the Secretary of State and the Minister need to maintain the list in the public domain, as promised, for the benefit of the professions and professionals who need certainty. This should not be a controversial point, and I hope the Minister will confirm that that is indeed what will happen.

Turning to new clause 4, the Bill provides a framework to allow mutual recognition of professional qualifications between regulators and professional bodies in the UK and the equivalent organisations overseas. The provisions in clauses 3 and 4 will allow for the implementation of regulator-to-regulator mutual recognition agreements and of the recognition arrangements in new international trade agreements. As the Law Society tells us, the Bill will enable the mutual recognition agreement provisions in the UK-EU trade and co-operation agreement to be implemented. However, the Law Society also says that the provisions for mutual recognition agreements in the TCA are largely based on the EU-Canada comprehensive economic and trade agreement—CETA—but that in fact no mutual recognition agreements have been signed between the EU and Canada using the provisions in CETA in the three years since CETA came into force. The failure to use the provisions on which the Government are relying raises the concern that the provisions are not sufficient. To remind ourselves, this legislation, if applied effectively, might well help to address shortages in a multitude of professions, including the chronic shortage of nurses and vets.

In Committee, I asked the Minister how his Department would put in place the additional support, co-ordination and guidance needed to make the most of the provisions in the trade and co-operation agreement, especially if they are to form the benchmark for future free trade agreements. There is real concern that the model on which the provisions in the legislation are based will not deliver results. That is why I tabled new clause 4, which would oblige the Secretary of State to provide guidance to regulators on how to make the most of the provisions in the TCA.

The Minister has written to me since the Committee stage to say that BEIS has engaged with 20 regulators of professional bodies. It will be important to see that such engagement leads to the delivery of mutual recognition agreements using the template on which the Government are relying. The Minister referred in Committee to a limited pilot recognition arrangement programme. I would be grateful if he could explain how effective that pilot has been so far, and how he foresees its leading to the successful implementation of new regulations.

I shall turn now to what the Minister said about new clause 1. In Committee we tabled two amendments to address the concerns raised by the devolved Administrations. We asked for consistency from the Government in the way they approach this Bill. The consistency we asked for in one of the amendments involved a similar amendment to that included in the United Kingdom Internal Market Act 2020. I see from new clause 1, having read it a number of times, that it is consistent with what is in the internal market Act and I thank the Minister for listening to the concerns that we raised, even though the Government voted against our amendments in Committee.

The Minister has addressed the concerns about those matters on which the devolved Administrations can make recommendations. That is an improvement on the more “flexible” approach to consultation that he talked about in Committee. That informal approach would have left no formal consultation mechanism. We have heard reservations expressed by a number of hon. Members on that, and I trust that the Government will still seek consent, in the spirit of new clause 1, when applying the regulations that are relevant to the devolved Administrations.

Briefly, I can tell the hon. Member for Richmond Park (Sarah Olney) that we will be supporting amendment 3. Representation of the devolved Administrations on the board is an important principle, and something that we return to again and again in legislation. We believe that, in the interests of the devolution settlement, that is entirely appropriate.

[Paul Scully]

I thank the hon. Members who have taken part in this important debate. I will whip through each amendment in turn, starting with new clause 2.

I thank the hon. Member for North East Fife (Wendy Chamberlain) for tabling new clause 2, and I wish her well as she recovers from covid. I thank the hon. Member for Richmond Park (Sarah Olney) for speaking to the amendment. I remind the House that clause 16 sets out the definition of an appropriate national authority for the purposes of the Bill. It also sets out the concurrent powers for making regulations in areas of devolved competence.

These powers could be used by the Secretary of State or the Lord Chancellor if, for example, a profession falls within devolved competence but is regulated at UK level. I understand the strength of feeling about the concurrent powers in the Bill, but I have been clear that any regulation made by the UK Government that falls within devolved legislative competence will be limited in scope and will always be made in consultation with appropriate Ministers from the devolved Administrations. The Government listened carefully to the concerns raised in both Houses, undertook extensive engagement with the devolved Administrations and negotiated in good faith in relation to those concerns. I am grateful for the devolved Administrations’ constructive and well-spirited engagement.

--- Later in debate ---

[Paul Scully]

I beg to move, That the Bill be now read the Third time.

This Bill is an important piece of legislation that will change our approach to recognising professional qualifications in a way that works best for UK professions and supports our status as an independent trading nation.

It is disappointing that, despite the UK Government’s best efforts, the devolved Administrations have not felt able to recommend the granting of legislative consent to their respective legislatures. However, the UK Government remain committed to the devolution settlements, and I trust that the amendment made to require the Government to consult the devolved Administrations before they regulate in areas of devolved legislative competence underlines that commitment. The Government will continue to work closely with the devolved Administrations on this and future legislation.

It gives me great pleasure to thank everybody who has supported the Bill’s progress. I recognise the good work of Members from all parts of the House, as well as in the other place, who have engaged closely with the Bill, and the constructive way in which the Opposition have engaged with the Bill. I pay tribute to my private office, my officials and, in particular, the Bill team for their work over the past few months—I thank Matt Leech, Jamie Wasley, Jen Pattison, James Banfield, Monique Sidhu, Haddeka Taj, Jack Palmer, Nick French, Raegan Hiles, Tom Corker, Alpa Palmar, Hannah Marshall, Ben Clifford, Funmi Olasoju, Aneesa Ahmed and Tim Courtney.

I recognise the commendable work of parliamentary counsel, the House authorities, parliamentary staff, Clerks and Doorkeepers. I thank the members of the Public Bill Committee, under the excellent chairmanship of my right hon. Friend the Member for The Wrekin (Mark Pritchard), for their swift but in no way less thorough scrutiny of the Bill, which I commend to the House.

Draft National Minimum Wage (Amendment) Regulations 2022

Paul Scully Excerpts

Thursday 10th March 2022 General Committees

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

I beg to move,

That the Committee has considered the draft National Minimum Wage (Amendment) Regulations 2022.

It is a pleasure to serve under your chairmanship, Dr Huq. The purpose of the regulations is to raise the national living wage and national minimum wage rates on 1 April 2022.

We should be proud of the labour market’s recovery from the pandemic. In the UK, the current number of payroll employees is over 400,000 more than pre-pandemic levels, while unemployment has fallen to 4.1%. That is in no small part down to Government intervention in protecting jobs and livelihoods, ensuring that businesses can get back to working with their customers, increasing footfall, and getting back to a sense of normality so that they can go through the gears. On the economic recovery, GDP recovered to the pre-pandemic level at the end of 2021 and increased by an estimated 7.5% over the year.

However, we are aware, clearly, that a key issue on people’s minds is the cost of living. We have already acted to support households with rising energy bills. We recently announced a package of measures worth £9.1 billion in the coming financial year, including a £200 reduction in energy bills and a £150 rebate in council tax bills for all households in bands A to D in England. That is in addition to measures already announced, such as the universal credit taper rate and freezing fuel duty for the 12th year running.

We are committed, in our recovery, to supporting the lowest paid. We cannot have a recovery off the backs of the lowest paid. Since 2015, we have increased the national living wage significantly faster than average wages, and more than twice as fast as inflation, meaning more money for the lowest-paid workers. An increase in rates this year will continue to protect the lowest paid against the increase in the cost of living.

The regulations will increase the minimum wage rates from 1 April. We estimate that that will give a pay rise to around 2.5 million workers, and I am delighted to say that we accepted all the rate recommendations made by the Low Pay Commission in October 2021. The independent Low Pay Commission brings together the business and worker stakeholder views, informed by expert research and economic analysis, and I am grateful for its well-informed recommendations and the work it has done to reach them.

We have set a target for the national living wage to equal two thirds of median earnings by 2024. When the Low Pay Commission made its recommendations last October, it took into consideration that target and the strong economic and labour market recovery—to that point—as well as the remaining uncertainty and feedback from the wide range of stakeholders it spoke to and engaged with.

We are pleased that the increase keeps us on track to reach the target for 2024, which we remain committed to. The LPC’s recommendations are based on significant stakeholder evidence from business, worker, and academic representatives. Businesses told it about the concerns they face, at this stage of the recovery, and how they continued to plan for the future, based on our target for the national living wage.

[James Gray (North Wiltshire) (Con)]

I thank the Minister for giving way. May I congratulate the Government on being able to increase the national minimum wage in this way? It is extremely good news. However, I feel that the figures, which the commission came up with, are a little odd. Would it not be easier, from the point of view of a worker or apprentice, if the figure was rounded, so they would know that they were getting £8.90 or £5.20—or whatever it might be—rather than these rather odd, random figures?

[Paul Scully]

The figures are based, as I said, first on the evidence, weighing the benefits for the lowest paid with the increased cost pressures on business. Of course, it is not only for the minimum wage or living wage itself, but pushing the differentials up for other people who are slightly further up the chain. I suppose that we could make the argument, “Do you want a rounded percentage or a rounded cost?”

Having had that evidence, there is then, effectively, a negotiation between the employers’ and workers’ representatives on the commission. They then come up with that recommendation, in between, of what they feel the economy can bear. It is not always rounded—clearly, that would be easier for everybody concerned—but we do not always allow perfection to be the enemy of the good. I think we have come up with something that is good for low-paid workers and for keeping to the manifesto commitment.

The national living wage for those aged 23 increasing by 6.6% to £9.50 is an increase of 59p. A full-time worker will be more than £1,000 better off over the course of the year. The regulations also increase the rates for younger workers and apprentices, and the accommodation offset, so workers aged 21 and 22 will receive an increase of 82p an hour to a minimum hourly rate of £9.18. Workers aged 18 to 20 will be entitled to an extra 27p an hour, taking their rate to £6.83. Under-18s will have an increase of 19p to an hourly rate of £4.81, and apprentices aged under 19, or those in the first year of their apprenticeship, will receive an increase of 11.9% to an hourly rate of £4.81—51p more.

I will announce another change to the regulations that we will shortly bring forward. Last year, we asked the Low Pay Commission to gather evidence on the use of the live-in domestic worker exemption to minimum wage entitlement, which exempts employers from having to pay the minimum wage to workers who live in the employer’s home and are treated as part of the family, such as au pairs. The Low Pay Commission heard evidence from au pairs, domestic workers, and agencies for those workers. The commission concluded that the exemption is not fit for purpose, and recommended that it be removed. We have accepted that recommendation, and will introduce legislation to remove the live-in domestic worker exemption when parliamentary time allows.

We have pledged to continue raising the minimum wage in the coming years. As I mentioned, our manifesto includes a target for the national living wage to reach two thirds of medium earnings by 2024.

[Chris Stephens (Glasgow South West) (SNP)]

The Minister talked a lot about consultation with business, but he will be aware that some businesses do not comply with the legislation. Can he tell us a bit more about that, what the Government are doing to invest to ensure that their national minimum wage compliance unit is fully staffed, and whether there will be any approach to increase staffing in that area?

[Paul Scully]

I thank the hon. Gentleman. Enforcement, which is covered by Her Majesty’s Revenue and Customs, is clearly really important. We work closely with HMRC to ensure that it is resourced to enforce in this area. We will also look at a single enforcement body, as part of our wider work. One of the things that it will look at, in a number of enforcement areas, is the national minimum wage and the national living wage. Clearly, that will bring even more experience and resource to bear for it to enforce in this area, along with a number of other areas that businesses may be encroaching on. That is really important, because if a business is falling short in one area there is every chance that it is falling short in other areas as well. By bringing those enforcement regimes to a single enforcement body, it will be more effective and efficient, and it will be able to drive out poor behaviour by employers.

We understand the difficulties faced by business, workers and consumers at the moment, and our targets remain dependent on the economic circumstances, but we will continue to monitor the labour market. The draft regulations ensure that the lowest-paid workers are fairly rewarded for their valuable contribution to the economy. We will continue to monitor the impacts of increasing the national minimum wage, and will remain abreast of concerns on the cost of living. We will shortly publish this year’s remit to the Low Pay Commission, asking it to provide recommendations for new minimum wage rates to apply from April 2023. In the meantime, I commend the draft regulations to the Committee.

--- Later in debate ---

[Paul Scully]

Thank you, Dr Huq, and I thank hon. Members for their contributions to this debate. The national minimum wage and the national living wage will make, and do make, a real difference to millions of workers across the country. The increase will be welcomed, I am sure, by the people who see a real, tangible benefit. Undoubtedly, as the hon. Member for Glasgow South West said, we have the ongoing cost of living issues, and we need to look at the measures in the round, but as you rightly say, Dr Huq, we do not want to go out of scope of the measure being debated. It is therefore important that in other debates we can look at support measures for everybody, but especially for the most vulnerable in our society. We can do that in other fiscal events and in other places, with other measures that we have. However, I am glad that there is agreement that the lowest-paid workers in this country deserve a pay rise, which will help to protect them from rising inflation and protect their standard of living.

This year’s change means that on 1 April, workers on the national living wage will be earning more than £5,000 more than they did in 2015, when the policy was first announced. Younger workers will also get more money through the increases to the other national minimum wage rates. There were a number of questions about the differentials between those. The apprenticeship figures were a lot higher because we are gradually aligning them with the under-18 rate, which was preannounced by the LPC back in 2020. It has given businesses the opportunity to become aware of that and to factor it into their cash flows, for the reasons that I have given.

Let me address the point about the differentials for people doing the same job—the example was flipping burgers. Young people have a competitive disadvantage when entering the labour market because of their lack of work experience, and because they have less knowledge of the area. They may have lower productivity while they are being trained and learning the job, and employers may need to provide additional training. Any minimum wage structure has to recognise and reflect that, because if we do not have that within the system, some employers may well be unwilling to give young people those critical first opportunities that are really important for them. None the less, we are starting to align more of the age group’s living wage to make sure that we can flatten it as much as possible, and we continue to monitor economic conditions.

We are indeed more cautious about increasing wages for younger people, but for the right reasons. We want to make sure that they get paid as much as possible, but we also want to make sure that they are in work. At the end of the day, the cost of living situation is far easier to face if people are in work in the first place, although it is still a challenge. What we do not want to do is to stifle our productivity. We do not want to stifle our recovery, which is one of the reasons why we have more people on payroll now than we did pre pandemic. That is a testament to our plan for jobs and growth.

The hon. Member for Ellesmere Port and Neston talked about enforcement and naming and shaming. Some cases can be incredibly complicated to go through and can involve quite technical breaches. None the less, it is right that we do not exclude companies from being named and shamed because of ignorance of the law, but it can sometimes take a while to enforce. Bear in mind that we paused the naming and shaming process throughout the early stages of the pandemic, and we are now effectively playing catch-up with some of those cases.

[Justin Madders]

I am grateful to the Minister for giving way. I appreciate that sometimes these things are quite technical, but it has been eight years. What is the reason why it has taken so long for some of the cases to be published?

[Paul Scully]

As I say, some of that was the pausing of the naming and shaming, and we are effectively playing catch-up on that.

On the percentage points that the hon. Member for Glasgow South West talked about, he asked whether I would write to him, but I recommend that he looks at the Low Pay Commission report, which details how the LPC came up with them. That content is already there. There are 400 full-time equivalents in the enforcement area of the national minimum wage under HMRC, but I will certainly look into the vacancies and fill in any more detail for the Committee in writing.

I think I have covered most of the points that have been raised.

[Chris Stephens]

I do apologise, but I think the only thing that has not yet been covered is whether the Government are keeping the minimum wage rates under review for the next year because of what is happening with the cost of living crisis.

[Paul Scully]

It is difficult to do mid-year, but there will be other fiscal events, and there are other areas of support for people during the cost of living crisis. At the moment, we are going through the process of setting the remit for the Low Pay Commission to consider. It is doing a lot of evidence work now. April and May are usually its busiest time for gathering evidence, which it then considers. The LPC effectively goes away on retreat in the autumn to have those negotiations, and we usually announce the figures in October so that they are ready to start in the next financial year. It is difficult to get something substantive mid-financial year, but, as I say, there is always scope for us to look at how we can work through the cost of living crisis and pressures, which will invariably increase.

We all know that with Putin’s war, he has inflicted misery on Ukraine, and it is right that we support Ukrainians and stand steadfast with them. Hon. Members will have seen the increase in sanctions this morning, and they will inevitably have an effect on us. That is the price we are paying for Putin’s war and for freedom, frankly, and we have to acknowledge and face up to that. We will certainly see what we can do in the round, whether it is on energy, inflation or supply chains. However, I am going slightly off on a tangent, and I do not want to push that too far.

Once again, I put on the record my thanks to the Low Pay Commission for the evidence gathering that it performs and the way it works to get a consensus between employers’ representatives and workers’ representatives, which is not always easy. The LPC believed that it would face a particular challenge this year, but it came up with a really good settlement that will benefit millions of people up and down this country. I am looking forward to receiving the Low Pay Commission’s recommendations for 2023 later this year, but in the meantime I commend the regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft National Minimum Wage (Amendment) Regulations 2022.

Penrose Review: UK Competition and Consumer Policy

Paul Scully Excerpts

Tuesday 8th March 2022 Westminster Hall

[John Penrose]

That is a particularly good example of the kind of problem that I was referring to when I mentioned public procurement reforms. I think we should be all extremely interested in what they show. When those reforms come, they should mean that local government, as well as national Government and many arm’s length bodies—from the NHS to English Heritage, and everyone else in between—should be able to make much faster decisions in a way that is more accessible to small firms that are not equipped to wade through pages and pages of tender documents, some of which require a PhD and actually have little to do with whether a product or service is better than the big incumbent’s. That will be an essential change.

Speeding up the CMA is absolutely essential. One of the most glaring and—I am afraid to say—saddest omissions from the recommendations is on better regulation. There is a difference between deregulation and better regulation. I am sure that you are thoroughly familiar with it, Mr Efford, but for the record and for everybody else, deregulation is where standards are got rid of and there is a sort of race to the bottom—that is not what I am recommending in this report at all—whereas better regulation says, “How do we deliver the same standards in environmental quality, food standards, workers’ rights and all the other things that we regard as essential in our modern society, in a way that is cheaper, quicker, simpler, or more digital or more modern? How can we do that in a way that costs the providers of those things less?” If it costs the providers less, that means they can do it at lower cost, which means that consumers can get the same product or service at a lower price in the first place. It is up to everybody and it will be for all our benefit if we can do that.

However, getting rid of red tape and regulation is one of the hardest things to achieve in Westminster and Whitehall, because everybody here knows that the culture of this place is framed in terms of making new rules. That is how civil servants or—dare I say it?—one or two MPs make their career; it is by inventing new rules and not by getting rid of old ones. That is the culture of this place.

Better regulation is an extremely easy thing to say and an extremely difficult thing to do, although there have been examples—rare ones—in the past where we have succeeded. There was a brief flowering of success between 2010 and 2015, under David Cameron when he was Prime Minister, whereby the pro-regulatory ratchet got reversed and for a couple of years we were genuinely making progress, and in fact local firms and small firms and their organisations, particularly the Federation of Small Businesses and similar bodies, noticed it and said, “This is working”.

Unfortunately, when David Cameron left office, the blob pounced; I do not know whether a blob can pounce, but perhaps it enveloped the new regime. When David Cameron left office, the blob looked at what worked—basically, it was having a gateway condition saying, “If you are the Minister for paper clips, you can’t have new rules about paper clips until you have found two old ones to get rid of”; that was the thing that had been making things work until then—and said, “That’s a terribly old-fashioned way of doing it. We’ve got a much better way of doing it. Why don’t we have a big target and we’ll hit the target and that will be good?”

However, because the blob had got rid of all the rigour and all the mechanisms for getting rid of the red tape, what happened instead was that there was a huge target, which was completely missed. In two years, we went backwards, by £8 billion-worth of extra costs, when we had expected to remove £9 billion-worth of extra costs. Instead of removing £9 billion-worth of extra costs, we added £8 billion-worth, which was a £17 billion miss in two years.

That was absolutely disastrous compared with what we had been doing for the previous five years, and the thing that worries me is that it is being recommended that we go back to something rather similar. I do not care whether it is one in, one out or one in, two out, but it is essential that we have that gateway condition, because if we do not have it we will carry on going backwards.

I am afraid, and very sorry to report, that the benefits of Brexit report—another piece of bedtime reading, Mr Efford, which I am sure you have gone through in detail—says on page 27 that we will not reintroduce the old system at all but will stick with the one that has just failed, and we will carry on repeating the same mistake that we made before. I really hope that my hon. Friend the Minister will be able to tell me that that has now changed around, but I fear that he will be unable to. If we do not change around, then we will fail again, and—let us be very clear about it—that is what we are currently heading towards.

I have final thoughts on the economic regulators, Mr Efford; I am nearly there. As I say, we have had some progress here, because, as I mentioned, the Government have said that they are consulting on trying to improve the statutory duties of economic regulators to add extra competition, which should lead to shrinking the regulators over time.

However, as I also mentioned, we do not have a date for when the report on the economic regulators is due, so we do not know if anything will ever be done about them; I hope that my hon. Friend the Minister will be able to say that the Government will do something about them. Without a date and without a firm commitment in principle that the report will genuinely try to normalise as much of the market as it can, outside the network of monopolies that I was talking about, the suspicion has to be that we are not trying to normalise these markets and that what will happen—unacknowledged, but none the less firmly—is that there will be no appetite for normalising as much of these markets as we can, and that instead the preferred destination is perpetual heavy regulation. I really hope that my hon. Friend the Minister can reassure me that that is not the de facto intention behind what we are currently doing.

My final point is about the final chapter in the report, which is on subsidy control. Subsidies are a very heady political drug, if we are not really careful. No matter the political party we belong to, it is always tempting when lobbyists come knocking. It does not matter whether a Member is in opposition or in government, nor whether it is local government or national or sub-national Government. When lobbyists come knocking, they say how terrible it is that this big, important local employer has been left behind—it did not invest in whatever it was it was doing and is now 20 years out of date, so it has been overtaken by plucky entrepreneurial upstarts from other parts of the country or, indeed, from other countries—and they say, “Isn’t it terrible that these jobs are now at risk? What we need is a just a temporary wafer-thin subsidy to tide us over for a couple of years while we fix things.” Of course, they do not fix things and then, a couple of years later, they come back and ask for more.

That is expensive for taxpayers and it reduces both the productivity of industry and the long-term security and sustainability of British jobs, which become progressively more and more vulnerable to international competition. Ultimately, it is the thing that did for us in the 1960s and 1970s, and which we had enormous pain trying to fix in the 1980s and 1990s. Subsidy control is vital. It is one of those rules that has just come back, post Brexit, from being run by Brussels. We have a Subsidy Control Bill before Parliament at the moment—it is in the Lords. It will do all sorts of really good things to speed up our subsidy control process; it is much more nimble and light-touch. If authorities are compliant with six or seven different principles—

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

Seven.

[John Penrose]

I thank the Minister for that information. If they comply with seven different principles of good subsidy, as opposed to bad subsidy, they can just get on with it—whether that is a local council or a national Government Minister, or anybody in between.

That is fine, except that we are keeping them a secret. We are not telling anybody what the subsidies are that we are dishing out. The EU system, which is what we are trying to replace, says that it is necessary to disclose any subsidies above half a million euros, which is quite a high level, actually. It means that a lot of subsidies are never disclosed at all, particularly if they are dished out by local councils. We are saying that it is not necessary to declare any subsidies under half a million pounds. The last time I looked at the euro-pound exchange rate, that is a higher level of disclosure than the old EU system. There are some other levels that are a bit lower for other bits and pieces, about which I am sure the Minister will remind us.

However, broadly speaking, we are going to declare less in future: we will be less transparent than we were in the past. That leaves the door open to cronyism—to local authorities or national Governments dishing out money to their mates, secure in the knowledge that nobody will know because we will not be able to see. It also leaves the door open to higher levels of subsidisation, potentially of less competitive firms, and therefore to wasting taxpayers’ money in future. Given what is happening to the cost of living at the moment, none of us wants to waste a single penny of hard-won taxpayers’ money, particularly when we have to take it as taxes in the first place.

It is a curate’s egg. It is sort of two cheers, rather than three, for what has been done so far. After a year, there has been genuine progress, and I am delighted to celebrate the points on the positive side of the ledger that I started off with. However, there is quite a lot—marginally more—on the negative side of the ledger; those things have not yet happened, but they could. The advantage is that most of the reforms that I have gone through—which have not yet happened, but which could—will not cost the Treasury a bean. They will not cost the taxpayer a bean. They will mean that British jobs and companies will become more competitive, more sustainable and safer in the long term, because, ultimately, the only thing that protects us against international competition is the fact that we are better than the international firms we compete against. It is a cheap route to economic success.

I am hoping, therefore, that it is a bit of a no-brainer. It is one of those things about which we say, “Why wouldn’t you do all of this stuff? Why on earth would you not?” The only reason, I am sure, is that there are genuinely significant vested interests behind some of these things that make them difficult to shift. However, we have a doughty warrior in the shape of the Government Minister responding to this debate. I am therefore looking forward to hearing how quickly he will be able to fight and smite the various different vested interests that would otherwise slow us down.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

It is a pleasure to serve under your chairmanship, Mr Efford.

I congratulate my hon. Friend the Member for Weston-super-Mare (John Penrose) on securing the debate and on his report. Wolfie Smith will be turning in his Afghan coat when he sees that “Power to the People” has become the mantra for fixing broken markets to encourage good competition and free markets, but the report is an interesting read. That reference got tumbleweed from some of the younger Members, but I hope that my hon. Friend remembers Wolfie Smith.

My hon. Friend’s report is an important contribution to the debate on reforming the UK’s competition policy. It has had a significant role in shaping the Government’s thinking on the priorities for reform, and I reiterate my thanks to him for his work and for his continuing engagement with and advocacy for reform.

In the report, my hon. Friend argues that the UK’s competition and consumer regime should be one of the best in the world and the Government are absolutely four-square behind that objective. Now that the UK has left the EU, we must build on this country’s innovative foundations to create a robust and agile economy that works for everyone and that is fit for future generations.

Competition and consumer policy has a central role in creating a thriving free market economy that encourages innovation, enterprise, growth and productivity. Competition policy is crucial in creating the right conditions for healthy competition between traders in markets to win over consumers by offering the best deals and innovation. Consumer policy is vital in underpinning consumer confidence. It empowers consumers to engage in markets in an assured manner, knowing that they have a strong set of legal rights that will be respected and enforced.

That is why we committed in our manifesto to give the CMA enhanced powers to tackle consumer rip-offs and bad business practices. It is also why the Government committed in our plan for growth to the UK’s having a best in class competition regime that will raise innovation and investment across the economy.

An effective competition and consumer policy will help us to build back a better and fairer economy, giving businesses confidence that they are competing on fair terms and giving the public confidence that they are getting a good deal. The UK’s competition regime is already well regarded internationally, so we are starting from a strong foundation. However, we should always strive to be better and to go further.

Markets and the way that consumers and businesses engage with each other have changed dramatically since the current legislation was enacted. That change is particularly stark in the digital economy. The tech revolution has brought huge benefits. Recent research has shown that about 15% of all businesses have adopted at least one artificial intelligence technology. In recent years, we have also seen that some digital markets have certain characteristics that make them more prone to weak competition.

Despite the actions that the UK has taken to promote competition, there is evidence from the CMA that competition may have weakened over the last 20 years. In 2020, the Government commissioned the CMA to produce an expert state of competition assessment to improve our collective understanding of the level and nature of competition across the UK economy. In its first “State of UK Competition” report, the CMA found that mark-ups, the ratio of prices to costs, had increased by 7% from 2000 to 2018. It found that in 2018 the average combined market share of the 10 largest firms in an industry was 3% higher than in 1998. It is essential that the competition regime does more to encourage and maintain competitive markets.

The Government published two consultations on legislative reforms in July last year, building on the work of my hon. Friend the Member for Weston-super-Mare. The consultation, “Reforming Competition and Consumer Policy”, set out a vision for the future of our competition and consumer policy. The separate consultation, “A New Pro-Competition Regime for Digital Markets”, set out a vision for a new agile and flexible regime to promote competition in digital markets, something that my hon. Friends the Members for Weston-super-Mare and for Folkestone and Hythe (Damian Collins) highlighted that we need to improve.

The package of reforms in the Government’s two consultations shares the ambitions of the report by my hon. Friend the Member for Weston-super-Mare. Those proposals seek to enhance the powers of the CMA and consumers’ rights, and ensure that those rights are robustly enforced. They will work to protect consumers and help businesses thrive. In addition to sharing those ambitions, my hon. Friend’s detailed report has had a considerable influence on where Government see opportunities for reform.

[John Penrose]

Will the Minister clarify when the Government expect to respond to the consultations he mentions? Clearly, they will inform what might or might not be in any future competition and consumer Act.

[Paul Scully]

Indeed. My hon. Friend is right to have used the near anniversary of his report as an opportunity to discuss the issue. Unfortunately, he has slightly missed the target of the consultation response, which we hope to bring forward very shortly. To answer my hon. Friend the Member for Truro and Falmouth (Cherilyn Mackrory), the Penrose report did not need Her Majesty to give a notification that it was coming forward. Unfortunately, I cannot pre-empt what Her Majesty will say in the Queen’s Speech about future legislation.

A central recommendation of the Penrose report, which my hon. Friend the Member for Weston-super-Mare has repeated today, is that the Government should take steps to ensure that the enforcement of competition and consumer law speeds up to keep pace with the modern digitising economy. We agree and propose a range of measures to make enforcement more efficient. For instance, we propose that the CMA should have stronger powers to penalise businesses that obstruct or slow down investigation. The Government have also proposed new ways for businesses and the CMA to reach agreements on the actions needed to resolve competition issues in market-wide investigations and merger reviews. Both those changes were recommended by my hon. Friend in his report.

He also recognised the need for UK competition regulators to work in partnership with regulators overseas, to help address competition and consumer issues that span borders. We agree that effective international co-operation is an important part of the UK’s competition and consumer regime. Promoting that co-operation is a key objective in our free trade agreements, and we have successfully secured text on that in the UK’s recent agreements with Australia and New Zealand. We have consulted on legislative proposals to ensure that the CMA and consumer authorities can work as effectively as possible with their international counterparts.

My hon. Friend’s report also emphasised the role of consumer protection law in empowering consumers and driving effective competition. We agree that our already strong consumer rights framework must continue to support consumers into the future, allowing them to benefit from new technology and business models and to feel empowered to make the best decisions available to them. We have consulted on measures to tackle subscription traps, where a consumer enters into a subscription for a product or service but has difficulty leaving. We have also consulted on measures to tackle fake reviews, as mentioned by the hon. Member for Makerfield (Yvonne Fovargue), which undermine competition and give unfair advantage to traders who are willing to use them.

In taking steps to strengthen the protections for consumers, the Government are aware of the need to consider any new burdens on businesses. We want to ensure that consumers get that fair deal and that businesses are not overburdened by regulatory barriers. My hon. Friend the Member for Weston-super-Mare is absolutely right to talk about better regulation, and I will speak a little more about that, if I have time.

My hon. Friend talked about how we can have better dispute resolution, because when consumers enforce their rights, poorly performing firms face more pressure, and consumers know they can trust the system to be on their side if they need it. That is what we need.

[John Penrose]

The Minister is being very generous. I just want to press him a bit on the point about better regulation. So far, he has not said that he wants to go back to one in, one out, or to one in, two out. Could he clarify what mechanism the Government have to ensure that better regulation happens, as opposed to being wished for with a target that will not be hit?

[Paul Scully]

We consulted on reforming the better regulation framework, and the Government do not think that a one in, two out rule—or whatever number out—is consistent with delivering world-class regulation to support the economy in adapting to a new wave of the technological revolution or in achieving net zero, so we want to reduce costs to business wherever we sensibly can do so and regulate only where strictly necessary. We intend to do that by looking at the merits of each case rather than using the one in, two out system, and we plan to change the better regulation system so that it will do that. However, it is very important that we get the balance right.

The Government believe that a well-functioning alternative dispute resolution system can make markets work more effectively, increase consumer confidence in spending and generate higher trader compliance with the law. It is an important avenue to redress for consumers that more easily allows for mediated settlements and is less confrontational than a court process, which is often more costly and time intensive, so we sought views on proposals to enhance the role of ADR in resolving consumer disputes.

My hon. Friend the Member for Weston-super-Mare also recommended that the CMA’s civil consumer enforcement powers should be upgraded, which would allow it to decide cases and impose fines in the same way as it does for civil enforcement of competition law. Again, we sought views on empowering the CMA to enforce consumer law directly, and we consulted on giving the CMA new powers to decide whether consumer law has been broken. Under the proposal, the CMA could directly impose directions, remedies or monetary penalties on firms that mistreat their customers without having to go through the courts, as is currently the case. That would allow the CMA to intervene earlier and to go further.

My hon. Friend the Member for Weston-super-Mare also mentioned the CAT. I have to say that although there are plenty more things that the CAT could do, changes have been brought on by covid. I visited CAT’s virtual court the other day, when it heard the case of Newcastle United’s takeover by the Saudi buyers. It had 35,000 people tuning in, which is more than all but the top nine average gates in the premier league, so a lot of Geordies and Newcastle fans elsewhere are now experts on competition law—I am not sure whether that is a good thing or a bad thing. None the less, it really shines a light—being with the transparency tsar—on the work of the CAT and the competition regime.

Clearly, there are also challenges in some markets in the digital economy, which my hon. Friend the Member for Folkestone and Hythe talked about. That is why we looked at what we can do to have a bespoke regime in the digital consultation. Frankly, government is not particularly good at keeping up with technology—I am talking about government as an overall body, rather than any particular government—so it is right that the market looks at how we can introduce conduct requirements and how we can have pro-competitive interventions by the digital market unit to keep up with an ever-changing regime. We also consulted on a merger regime, which is exactly the point that my hon. Friend the Member for Folkestone and Hythe was talking about—the so-called killer acquisitions and other stifling of innovation. I remember the days of Netscape, Mozilla Firefox and all the other browsers that were available but have now fallen by the wayside—again, tumbleweed from my hon. Friend the Member for Bolsover (Mark Fletcher), who is far younger than me.

My hon. Friend the Member for Truro and Falmouth talked about Cornwall. She did not just talk about regulation and competition regimes and legislation to promote things such as the direct sales of fish and the secondary industries around the exciting opportunities for lithium. Actually, it is about promoting enterprise and innovation. If regulation is there, that is fantastic, but it does not always need to resort back to a constructed regime if there are businesses ready to grab opportunities. That needs to be part of a suite of measures to ensure that the UK is the best place to start, grow and scale up a business. Part of that is the strategy that BEIS is coming up with, to show that we are ready to invest in—and are investing in—and support, for the long term, those kinds of technologies, which will give businesses the confidence to invest in areas such as Truro and Falmouth in order to make the most of that.

Looking at some other areas, the hon. Member for Makerfield talked about weddings. That was an interesting point about the covid pandemic, because I think that shows the difficulty of having a consumer policy. I was the Minister charged with engaging with the wedding sector, and that was a challenge. We had brides and grooms looking forward to their special day, which costs a lot of money. The whole point about the wedding sector is that it builds up anticipation and expectation. Clearly, however, venues and organisers especially had spent a lot of money and had a lot of reservations, but they have only a single day to provide their service. When they were compelled to lock down, or when demand was stifled, if they had refunded everything in one go, they would have been out of business. The balance was hugely difficult, with a lot of arguments between them and the CMA within that. I am glad that we got through that, largely, and that we were able to navigate through it by working with the CMA and the sector to make progress.

I will conclude on the report of my hon. Friend the Member for Weston-super-Mare, because I want to give him time to respond. His report represents a significant milestone in the process of reforming competition and consumer policy. I reiterate my thanks for his work. We will continue the conversation as we bring legislation to bear, as we make the changes where primary legislation is required, despite the fact that changes are already happening. He has acknowledged the direct impact of some of his proposals, on which we have consulted, so we will bring that all together. I continue to work with stakeholders—I spoke with them only last week on this very subject—and we are carefully considering the feedback. We will come back with measures in good time.

Paid Miscarriage Leave

Paul Scully Excerpts

Tuesday 8th March 2022 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

It is a pleasure to serve under your chairmanship, Mrs Cummins. I congratulate the hon. Member for Lanark and Hamilton East (Angela Crawley) on securing today’s important debate. This is a really important and sensitive issue, and I want to express my deep sympathy for anybody who has experienced the loss of a baby. Sometimes the most poignant debates in this place are when we talk about baby loss at any stage of pregnancy, or indeed after birth.

The hon. Member has spoken with candour and passion, and I am grateful to her not just for today’s debate, but for our exchanges and the rest of the work that she has done, and for raising awareness of the significant impact of baby loss at any stage on parents. I also want to thank others who have contributed to this debate for their thoughtful and insightful comments, especially, as the hon. Lady rightly notes, on International Women’s Day when we come together to showcase the issues that are so important not just for women, but for families and couples across this country and the world.

As a Government we understand that there is plenty more that needs to be done to support women’s health. I will begin by first setting out the wider work that the Government are taking forward in relation to women’s health, including in the workplace. In March 2021, we announced the establishment of England’s first women’s health strategy, which is being led by the Department of Health and Social Care. Health in the workplace and fertility, pregnancy, pregnancy loss and postnatal support will be priority areas within the women’s health strategy.

We know that damaging taboos and stigmas remain around many areas of women’s health. They can prevent women from starting conversations about their health or seeking support for a health issue. When women do speak about their health, all too often they are not listened to, but the Government are determined to tackle those issues. We want to ensure that women feel supported in the workplace, that taboos are broken down through open conversation, and that employers feel well equipped to support women in managing their health within the workplace. “Our Vision for the Women’s Health Strategy for England”, published on 23 December 2021, sets out an ambitious and positive new agenda to improve the health and wellbeing of women across England. We will publish the full strategy later this year, but in the meantime I reiterate that the levelling up of women’s health is an imperative for us all.

The Government have an active agenda on work and health more widely. One example is the Government’s response to the “Health is everyone’s business” consultation. The response sets out measures that will protect and maintain progress made in reducing ill health-related job loss, and will see 1 million more disabled people in work from 2017 to 2027. The measures include a national digital information and advice service to provide greater clarity around employer and employee rights and responsibilities, working with the Health and Safety Executive to develop a set of clear and simple principles for employers, and increasing access to occupational health. Those measures are key steps in our effort to change the workplace culture around health and sickness absence, which will benefit those who have lost a pregnancy.

The hon. Member for Lanark and Hamilton East is specifically interested in a leave entitlement for miscarriage. In April 2020, we introduced parental bereavement leave and pay for employed parents who lose a child under the age of 18, or who suffer a stillbirth from 24 weeks of pregnancy. That new entitlement recognises that the death of a child or the stillbirth of a baby is particularly tragic. Although parental bereavement leave does not apply when a baby is lost before 24 completed weeks of pregnancy, there is support available. Women who are not able to return to work because of ill health following a miscarriage may be entitled, for example, to statutory sick pay or annual leave, and their entitlements need to be looked at in the round with the wider benefits system.

Parental bereavement leave and pay is a statutory minimum, and in introducing that entitlement the Government sent an important message to employers that staff members who have suffered a bereavement should be supported. Indeed, I am pleased to say that there are many good examples of businesses that offer compassionate leave for their employees following a miscarriage. The hon. Member for Lanark and Hamilton East talked about ASOS as one of those examples. I have spoken to ASOS. What it offers is not miscarriage leave per se; as she rightly described, it covers “life events”. ASOS is particularly forward looking in understanding that miscarriage is one of a series of really important life events that affect people in different ways. ASOS has that wrap-around care because it understands that investing in the workforce is the right thing to do—to keep people in the workforce, keep them happy and keep them content.

Flexible working may not be an alternative, in the view of the hon. Member for Sheffield, Hallam (Olivia Blake), but different people have different responses to a life event such as miscarriage. It is a really personal experience. Some of those affected may want to stay at home; others may prefer to continue to work, or alternatively may need time off later. That is where flexible working can make a difference for many people, but not all people—as I say, it is a very personalised experience. Individuals are best placed to understand their own specific needs, and good employers will respond to requests made by their employees in a sensitive way. It is right that we showcase those employers doing well, and that we also explain that it is the right thing to do not only morally—from a humanity point of view—but from a business point of view. It makes no sense to take a different view from that of those far-sighted companies that are making a wider, longer-term investment in their workforces. However, we are in a difficult economic climate, and that cannot be ignored. We are mindful of placing additional burdens on business, but, as I have mentioned, we strongly encourage employers to go beyond the statutory minimum wherever they can.

The hon. Member for Lanark and Hamilton East noted that miscarriage and the associated grief are not illness. However, when an event negatively affects someone’s mental or physical health, they may have the option of taking sick leave, and may also be eligible for statutory sick pay. Employees who are able to claim sick pay can self-certify as sick for the first seven days that they are off work; after that time a fit note is required, and their employer can request medical evidence if they wish. In addition, there are protections in place for those who need to take sick leave following a miscarriage, which mean that any sick leave taken during the two-week period after pregnancy ends should not count towards a total sickness record or be used as a reason for redundancy or disciplinary action. Individuals who are not eligible for statutory sick pay and those who require additional support may be eligible for universal credit and the new-style employment and support allowance.

[David Linden]

I am grateful to the Minister for giving way. It would be remiss to allow the debate to pass without putting on record that statutory sick pay on these islands is among the lowest rates in Europe. It is fine to talk about statutory sick pay, but not at the pitiful levels that the UK pays at the moment.

[Paul Scully]

I understand the hon. Member’s point of view. I ask him to look at it in the round, alongside universal credit and other means of welfare. We have said we would always look at statutory sick pay, but we do not believe that now is the time to do it, as we are coming out of a pandemic. That is certainly something that we are keeping under review, as part of that wider holistic approach to welfare, benefits and workplace support.

All employees are also entitled to take 5.6 weeks a year of annual leave, in some cases more if their contract of employment allows. Normally, employees need to give notice of leave dates, but employers may agree to waive the notice period.

[Olivia Blake]

Can the Minister understand how deeply insulting it is to be told to take annual leave, having gone through a traumatic experience, and to take a holiday when grieving? Does the Minister understand how deeply offensive that is?

[Paul Scully]

That is exactly what I was going to say. That provision is there, and the hon. Member for Strangford (Jim Shannon)—a good friend of mine—talked about people taking holiday leave to go through a miscarriage. When I have employed people, either here or in my previous life running businesses, I would never have dreamed of counting absences for such life events as holiday. They may want to apply for it, but I would treat them far more sensitively, for the reasons given by the hon. Member for Sheffield, Hallam. It is so important that businesses and employers have that approach, to invest in their time and future.

[Angela Crawley]

The Minister has worked extensively with me to find ways—through ACAS, for example—to ensure that employers can do more to support employees. If he accepts that sick leave, holiday pay and flexible working are not the correct methods to support an employee who has experienced pregnancy loss, and if he will not commit to a distinct miscarriage leave policy, will he consider extending bereavement leave to include parents who experience that loss before 24 weeks?

[Paul Scully]

We will outline employment measures when parliamentary time allows. The hon. Lady earlier talked about the Miscarriage Association pregnancy loss pledge. I am not in a position to commit to a pledge here and now but, looking at the sentiments in there, there are very sensible approaches that employers should take: encouraging a supportive work environment; understanding and implementing rules around pregnancy-related leave; ensuring that staff feel able to take time off if they need; showing empathy and understanding, which is seemingly fundamental and basic, though not all employers do so; encouraging line managers to access in-house or external guidance; supporting people back to work, by being responsive to those needs; and showing flexibility wherever they can. Those are all common sense, and it is great that they have been brought together in that pledge.

Having access to flexible working arrangements can be important for those who experience a traumatic life event of any sort. Changing a work pattern can provide individuals with the flexibility they need to balance their work commitments with their personal lives during such challenging times. Having a statutory right to request a temporary or permanent working arrangement can be important.

I have outlined some of the support and options that are also available to employees when they have suffered a loss. Businesses do have that important role to play. We have commissioned guidance from ACAS on managing a bereavement in the workplace, which has been well received and was updated in 2020, to take into account the introduction of parental bereavement leave.

The hon. Member for Lanark and Hamilton East made it clear that miscarriage is not an illness. We want to ensure that grieving families and friends who have lost loved ones receive the support they need, when they need it. We have given more than £10 million to mental health charities, including bereavement charities, to support people though this. Our excellent NHS is also there to support individuals with mental health and wellbeing issues. I am pleased to have had this debate and appreciate the discussion and contributions.

Question put and agreed to.

Delivery Charges: Scotland

Paul Scully Excerpts

Monday 7th March 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

Thank you, Mr Deputy Speaker. I congratulate my hon. Friend the Member for Moray (Douglas Ross) on securing today’s really important debate. He is right to say that we have had a long day and we have debated some really important global events and our response to them. None the less, he is absolutely right, at this hour or any hour, to speak up for his constituents who, when they see the situation in Ukraine and Russia, and even the situation of property in London and the sanctions that we are looking at in London and elsewhere, feel distant from them. They are worried about the ongoing cost of delivery from places that they see at a distance in the UK. Those delivery companies clearly feel that Moray is distant from them, but we are one UK and we have to ensure that we are shrinking this country, because we are one community.

I congratulate my hon. Friend on his continued championing of his constituents’ cause. It clearly continues to be an important issue for his constituents, and I know that other Members have raised similar issues. I have a lot of sympathy for their concern that consumers in some parts of Scotland are charged differently from consumers in other parts of the UK. I also recognise that similar issues exist for some consumers in Northern Ireland. I am pleased to be able to take part in this debate and outline what has happened since the previous Westminster Hall debate, which was secured by my hon. Friend in December 2020.

It is not unreasonable for a business to seek to recover its costs, and the Government recognise that delivery costs can be higher when reaching some parts of the UK, but any delivery surcharges applied should be based on real costs such as the additional cost of longer transportation, and clearly not on the cost of Neymar, as my hon. Friend described. The Government strongly encourage businesses, as far as possible, to provide consumers with a range of affordable delivery options. Thanks to the Government’s universal service obligation, which is implemented by Royal Mail, retailers across the UK have access to parcel delivery at uniform rates. The Government’s aim is to secure sustainable, efficient, affordable and universal postal services, which ensures everybody, including small retailers, has access to affordable, consistently priced postal services for deliveries across the UK.

Royal Mail, through the universal service obligation, must deliver parcels weighing up to 20 kg five days a week at uniform rates throughout the UK, but, of course, the delivery operator chosen by the retailer is a commercial choice for that retailer. The Government believe that businesses should be free to choose partners and make the contractual arrangements that best fit their commercial needs. At the same time, as my hon. Friend said, consumers need transparent information on any delivery charges and restrictions so that they can choose the supplier that best meets their requirements.

Consumer protection laws require costs, including delivery charges, to be transparent. Retailers are therefore required to be up front about their charges, including on where they deliver, what they charge and when any premiums may apply. That way consumers know exactly where they stand and can decide accordingly whether to proceed with a purchase with that retailer or whether to look elsewhere.

For retailers to take advantage of the considerable opportunities of online sales, particularly given the rise of online shopping, they will need to take heed of the needs of consumers in all parts of the country by developing delivery solutions to realise the sales potential in those areas and taking advantage of the universal service obligation, where appropriate.

[David Duguid (Banff and Buchan) (Con)]

I congratulate my hon. Friend the Member for Moray (Douglas Ross), my constituency neighbour, on bringing this important issue to the House. Does the Minister agree there is an issue not just for customers who are looking for things to be delivered to their homes and businesses in the north of Scotland but for the businesses across the UK that are missing out on achieving that custom simply because they are shutting themselves to those with an IV or AB postcode?

[Paul Scully]

My hon. Friend makes a good point. Businesses need to be competitive and open but, by choosing the wrong delivery partner, they are missing out on great consumers across Great Britain and Northern Ireland. As we have heard, there are remote parts of Northern Ireland and Moray, too. It is important that we are inclusive not just to tick a box but because it is the right thing to do and the practical and economic thing to do, too.

The deliverylaw.uk website established by Highland Council trading standards provides advice on delivery charges for consumers and businesses. Any consumer who believes those rules are being breached should report it through deliverylaw.uk so that incidents are recorded and appropriate enforcement action can be taken.

Furthermore, the Competition and Markets Authority and the Advertising Standards Authority have undertaken a significant volume of enforcement work to ensure compliance with transparency on charges and restrictions. The ASA issues enforcement notices to online retailers where parcel surcharging practices are raised, and it has achieved a compliance rate of over 95%. My hon. Friend the Member for Moray described one of the 5%, where, because of the way it was phrased, the ASA let them get away with it.

The CMA continues to issue advisory notices to the major retail platforms and has published guidance to retailers that sell via these platforms. It continues to work through primary authorities to ensure improvements in this area. The Chartered Trading Standards Institute has also produced a good practice guide on delivery charges, which is available on its business companion website and sets out clearly how businesses should comply with consumer law.

On legal compliance, our enforcement partners are continuing to take action where issues of non-compliance are brought to their intention. As guidance is freely available to all businesses, large or small, through both the business companion website and deliverylaw.uk, there is no excuse for businesses not to comply with their legal responsibilities.

As we have heard, in November 2020, the postal sector regulator, Ofcom, published updated information on how the parcels market was operating, as part of its annual postal service monitoring update. Ofcom found that operators take different approaches to the pricing of parcel delivery services. Some vary their prices by location, but others do not, so businesses have options.

Of the subset of suppliers that vary their delivery prices by location, some use a binary standard charge and an out-of-area charge and some set different prices for different areas. In other cases, the prices charged for parcel delivery are bespoke. Operators may start with a standard rate but will often negotiate charges on a bespoke basis with individual retailers.

As I have outlined in previous debates on this issue, some major retailers, including Argos and Wayfair, have taken positive steps and vastly improved their delivery services by removing surcharges for most customers in the Scottish highlands and islands. The parcel delivery market is competitive and the steps taken by suppliers to remove delivery surcharges will put downward pressure on other charges from other suppliers.

Ofcom is reviewing its future regulatory framework and consulting on its proposals. The consultation was launched on 9 December 2021 and closed on 3 March. Once responses have been considered, Ofcom will issue a statement in the summer of 2022-23—so in the next financial year.

In its review, Ofcom found that the parcels market is generally working well overall and that competition is driving benefits for consumers, but the evidence suggested that some problems for consumers still need to be addressed. Those problems relate to the handling of consumer complaints and contact-handling processes, as well as the fact that disabled consumers’ needs are not being met and they are more likely to experience detriment. Ofcom is therefore consulting on its proposal to issue guidance on how complaints should be handled and to require parcel operators to have in place policies that better meet the needs of disabled customers.

Ofcom is also examining improvements in respect of the accessibility and convenience of parcel services, including the expansion of pick-up and drop-off locations and the improvement of consumer control, such as through the ability for consumers to nominate delivery windows and specify delivery preferences. On geographical variations, or surcharging, Ofcom does not propose any new regulation at this stage but will continue to engage with stakeholders and policy makers.

[Douglas Ross]

The Minister will understand how disappointing that is. Ofcom has to treat this issue seriously. He has mentioned competition a lot. It seems that these businesses, and many of the couriers, do not really care about the north of Scotland and are quite happy to leave it to other people. That is a cost issue, but a significant proportion of Scotland’s population—and part of the UK population—continues to be affected by the issue and the response from Ofcom makes it look like the couriers do not care and nor does the regulator.

--- Later in debate ---

[Paul Scully]

I appreciate and understand my hon. Friend’s view. Ofcom will continue to look at this issue and will undoubtedly continue to push on it. I assure him and other Members that the Government will continue to monitor the issue of the fairness of charges through the work of the Consumer Protection Partnership, which he mentioned. The partnership has a dedicated working group that includes consumer advocates, trading standards and Government representatives who focus on the issue. The group includes the Scottish Government, who have their own fair delivery action plan, and continues to engage with stakeholders to better understand the drivers of charging. It is also considering whether there are initiatives that could help to improve or drive down delivery costs to rural and remote communities. That work could include, for example, looking at infrastructure, but as such issues are devolved they are for the Scottish Government and the Scottish Parliament to consider.

To conclude, the legislative framework is robust and provides the appropriate protections for consumers. The Government remain committed to ensuring that the universal service obligation, including the delivery of parcels at a single charge rate throughout the UK, remains affordable and accessible to all users. My priority is the continued enforcement of the law to ensure that customers are not surprised by delivery charges and are able to make choices based on clear information. In that way, consumer decisions will apply competitive pressures that can drive down delivery charges to the benefit of all.

I am happy to meet my hon. Friend and representatives of the industries. I thank him again for his contribution to the debate and look forward to meeting him soon.

Question put and agreed to.

Economic Crime (Transparency and Enforcement) Bill

Paul Scully Excerpts

Committee stage
Monday 7th March 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

Over the last 10 days, the world has watched the actions of Vladimir Putin in shock and horror. The ability to tackle dirty money and impose economic sanctions has never been so important. We are putting the Bill through in an expedited way. It is important that I put on the record what the Bill will do and set out the intention behind the Government amendments. I will seek to be brief because a number of right hon. and hon. Members are keen to speak to their amendments.

As my right hon. Friend the Home Secretary set out earlier, the Bill has four main objectives. First, it will prevent and combat the use of land in the UK for money laundering purposes through the establishment of the public register of beneficial owners of overseas entities owning land in the UK, which will be held by Companies House. Secondly, it will reform the UK’s unexplained wealth order regime to enable law enforcement to investigate the origin of properties and recover the proceeds of crime. Those measures remove key barriers to the effective use of UWO powers and will increase and reinforce operational confidence in relation to their use. Thirdly, it will amend financial sanctions legislation, including the test for imposing monetary penalties and powers, to publicly name those breaching financial sanctions. That will make it easier for the Government to act against those who fail to comply with sanctions. Fourthly, it will amend the Sanctions and Anti-Money Laundering Act 2018 to streamline the current legislation so the Government can respond even more swiftly and effectively to sanction oligarchs and other businesses associated with Putin’s regime.

Part 1 establishes the new register of overseas entities, which will require overseas companies owning or buying property in the UK to provide the information about their true owners. Clauses 1 to 6 provide an overview of the register, define an overseas entity and establish the register and registration process. Clauses 7 to 11 set out the duties for updating and removing entities from the register. Clauses 12 to 19 set out mechanisms for obtaining, updating and verifying information, penalties for non-compliance and exemptions to various requirements.

[Chris Bryant (Rhondda) (Lab)]

Amendments 24 and 25 would require that, when someone is registering or updating, they also have to notify the fact that one of the people to whom they are referring as an overseas person is a sanctioned individual. Will the Government accept those amendments tonight?

[Paul Scully]

I thank the hon. Gentleman for his intervention. I have spoken to colleagues across the House. We will certainly look at how to draft the measure correctly to ensure that it serves its purpose. We will certainly look in the other place to debate that further.

[Dame Angela Eagle (Wallasey) (Lab)]

Will the Minister give way?

[Paul Scully]

I will not give way for a second, because I want to ensure that we can cover the ground. I will deal with some of the opposing amendments at the right time: at the end of the Committee.

Clauses 20 to 30 cover the annotation and inspection of the register, and the disclosure, protection, correction and removal of information. Clauses 31 to 39 cover measures including the false statement offence and amendments to land registration as well as provisions about offences and penalties. The schedules define key terms such as “registrable beneficial owner” and cover amendments to land registration laws, for example, regarding land ownership and transactions for England and Wales, Scotland and Northern Ireland respectively.

[Dame Angela Eagle]

Will the Minister give way?

[Stewart Hosie (Dundee East) (SNP)]

Will the Minister give way?

[Paul Scully]

I will.

[Stewart Hosie]

Schedule 2, paragraph 6 describes a beneficial owner as meaning someone, for example, who

“has the right to exercise, or actually exercises, significant…control over”

an “entity”. However, part 4 of schedule 2—on beneficial owners exempt from registration—goes on to describe such a person as someone who has

“the right to exercise, or actually exercises, significant influence or control over”

an “entity”. It may be that that apparent confusion is dealt with in part 3 of schedule 2, which deals with an entity

“subject to its own disclosure requirements”,

but it is not at all clear whether someone has to be a registrable beneficial owner, or whether they are exempt for precisely the same criteria.

[Paul Scully]

I thank the right hon. Gentleman for that point; it comes back to something that was said in the previous debate about persons of significant control, which I did not address at the time. However, I will take that point away and discuss it with the right hon. Member for Barking (Dame Margaret Hodge) and others to make sure that we can get any drafting on that exactly right.

[Dame Angela Eagle]

Will the Minister give way?

[Paul Scully]

I will not just because I want to make sure that we can cover all the areas, and we will be short of time.

Important changes in part 2 include changing the unexplained wealth order regime, increasing the scope of the existing powers to ensure that an enforcement authority can obtain the information that they need even when the assets in question are held in trusts or other complex ownership structures. That is to ensure that the true owners cannot hide their claim over assets to avoid the force of the law. The introduction of an alternative test to the existing income requirement also provides flexibility for agencies to tailor the UWO applications to the facts of a case.

Clauses 44 to 47 will mitigate the significant operational risks to an enforcement authority and provide a more encouraging basis for them to use their powers to seek a UWO: first, by extending the period for which an interim freezing order has effect, enabling agencies to review material provided in response to a UWO without significant time pressures; and secondly, by reforming the cost rules to protect law enforcement against incurring substantial legal costs following an adverse ruling.

Part 3—clauses 48 to 51—strengthens the financial sanctions legislation to change the monetary penalty test and internal review process. Those changes will allow the Office of Financial Sanctions Implementation to publicly name sanctions breaches even when no monetary penalty has been imposed and allow for greater information sharing across Government.

We are really grateful for the support of all parties in passing this legislation as quickly as possible, but in the light of the deteriorating situation and the Government’s desire to work together to strengthen and accelerate this package, I want to outline further measures that we have tabled as Government amendments.

New clauses 32 to 40 will amend the Sanctions and Anti-Money Laundering Act 2018 to streamline the current legislation so that we can respond even more swiftly and effectively to sanction oligarchs, individuals and businesses associated with Putin’s regime and others like them in the future. New clause 32 will simplify the procedural requirements that can delay the implementation of sanctions. New clauses 33 and 34 are designed to streamline the designation of individuals and entities, allowing us better to respond to fast-moving events. New clause 36 will ensure that the proposed changes in new clauses 33 to 35 will apply to sanctions regulations that are already in place. New clause 37 will remove the requirement for Ministers to review each sanctions regime every year and to review each designation every three years. That will free up vital resource to focus on developing new designations.

[Dame Angela Eagle]

Will the Minister give way?

[Paul Scully]

I will—the hon. Lady has been trying so hard.

[Dame Angela Eagle]

I thank the Minister for giving way finally, but it all counts. He seemed to be saying to colleagues earlier that his attitude to our amendments is that he is willing to discuss them after the Commons stages of the Bill and to do something in the Lords. Is that what he is saying? Is he telling us today that the Government will not accept any more Opposition or Back-Bench amendments and that he will leave it to the House of Lords to change these things? Clearly, if that is going to be his attitude, we need to know.

[Paul Scully]

I will cover the amendments more fully in my closing remarks, once they have been spoken to. None the less, I want to ensure that the amendments with which I have sympathy do exactly what they are intended to do and that the drafting is right. I am happy to work with colleagues who have tabled them to make sure that we can get that right and to see what more we can do in the other place.

[Sammy Wilson (East Antrim) (DUP)]

Does the Minister accept that many of the amendments have been tabled today because people genuinely want to make the Bill better? There would be no better signal to send from this House tonight than the Government accepting the reasonable amendments, regardless of where they come from, if it is believed that they strengthen the Bill. If we find that they do not do what they are meant to, the opportunity is available to make them do that in the other House. At least that would send a great message from this House tonight that there is widespread support for the Bill and that the Government are listening.

--- Later in debate ---

[Paul Scully]

There are a number of amendments and they do not all do what is intended. On amendments 24 to 26, I respectfully ask the Members concerned not to push them to a vote, but I will happily work with them to see what more we can do in the other place.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

My understanding is that the Government accept amendments 24 to 26 in principle and will work in the Lords to put something in the Bill that delivers what they suggest. Am I correct in that?

[Paul Scully]

Essentially, yes. We want to make sure that we can work with hon. Members on that. I do not want to accept all those amendments here and now, but I want to make sure that we can get it right in the other place, working with them at that stage.

[Mr David Davis (Haltemprice and Howden) (Con)]

I would like this to be rendered in English for the world at large to understand. If the Minister puts into law in the Lords all the amendments that we proposed, will it not still be the case that nothing can be done to stop a Russian oligarch from moving, selling or transferring his assets, even if we know all about it, until the moment when he is actually sanctioned?

[Paul Scully]

First, I thought that when I said, “Essentially, yes,” it was a clear, two-word answer to a simple question. I will cover my right hon. Friend’s amendments in my closing remarks, but I wanted to speak to the Government amendments at this point. However, his new clause 29 would give a huge amount of powers not just to the Foreign Secretary in relation to Putin’s regime, but to future Foreign Secretaries. We need to tread carefully and look at that carefully before the House acts in that way.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

We can see that the sanctions regulations will become much stronger, but our sanctions regime is still a long way short of the kind of sanctions that have been imposed on, for example, Iran, whereby we are able to sanction secondary entities trading with sanctioned companies. Does this legislation allow us to enforce Iran-like sanctions on Russia, because ultimately, that is what will be needed?

[Paul Scully]

I think the right hon. Gentleman comes from a place of supporting the proposal from my right hon. Friend the Member for Haltemprice and Howden (Mr Davis). I do not want delay the Committee in debating the amendments in full before I respond towards the end of the debate.

On the provisions on the register of overseas entities, we will increase the ceiling of criminal penalties for non-compliance from £500 a day to up to £2,500. Again, we have listened to representations from Members across the House. We are increasing the limit to allow for stronger enforcement mechanisms, but, by making it “up to” that amount, we are also making sure that we do not criminalise people who do not have their house in order but who are using these entities for perfectly legitimate reasons.

We are reducing the transition period for existing overseas entities to register their beneficial owners from 18 months to six months. We want to ensure that there is no place for corrupt elites and kleptocrats to hide, but there are many legitimate individuals and businesses that are likely to be holding property through overseas entities for understandable reasons, such as personal security. As I said, we want to make sure that we can work with people from across the House, including my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), to make that more secure and to see what more we can do to tackle the issues that we face here and now. It is important to remember that once the register is in place, new transactions will be caught on day one.

I am grateful for the engagement of the Scottish Government on part 3 of schedule 4. We are committed to consulting Scottish Ministers on regulations made under that part that contain provisions within the legislative competence of the Scottish Parliament. Similarly, we are committed to consulting Northern Ireland Ministers on regulations made under the similar mechanism for Northern Ireland in clause 32(4), (5) and (6).

[Sammy Wilson]

There should not be any part of the United Kingdom where money can be hidden or moved to be hidden. Will the Minister clarify a point that I was not quite clear about from his response to my hon. Friend the Member for Belfast East (Gavin Robinson) on Second Reading? Does the relevant schedule require a legislative consent motion from the Northern Ireland Assembly, or does its inclusion in the Bill mean that all the registration requirements and so on will apply to Northern Ireland regardless?

[Paul Scully]

As I say, the Bill touches on devolved matters in Scotland and Northern Ireland in particular. Ideally we would have an LCM, but I do not think that we can achieve one, given the current status and the timescale in which we are trying to formulate these measures. However, we are working with representatives in the Northern Ireland Assembly and the Scottish Government to ensure that we can carry on our positive approach.

[Sammy Wilson]

Given what has happened in Northern Ireland as a result of the Northern Ireland protocol and so on, will the Minister confirm just for clarity that if a legislative consent motion is not available, that will not mean that this legislation cannot apply in Northern Ireland?

[Paul Scully]

We will be moving on it so that it does apply in Northern Ireland. It is really important that we get this running so that there is no hiding place in any part of the UK for dirty money. It is important that we all work together on this, and I am really pleased about the positive nature of that work.

In that spirit of working together to strengthen and accelerate this package, I urge all parties to accept our Government amendments. I commend them to the Committee.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

On my own behalf and on behalf of my hon. Friend the Member for Halifax (Holly Lynch), it is a pleasure to speak in support of the amendments tabled in our names and the name of the Leader of the Opposition. I echo the sentiments that the Minister expressed about the horror of what is happening in Ukraine and about the importance of today’s debate. We stand in solidarity with the people of Ukraine.

We need the Bill to succeed and to achieve its goals. The Government have dragged their feet on stopping dirty money flowing through our economy. These measures were first promised six years ago, and even now the Bill will be implemented too slowly and with serious loopholes. I thank the Minister for our conversation last week and for tabling amendments that recognise Labour’s concerns about the Bill, but key problems remain.

Time is tight, so I will keep my remarks brief on our amendments and our concerns about the Bill. Part 1, “Registration of overseas entities”, establishes a public register of beneficial owners of foreign entities that own or buy land in the UK. Far too many corrupt individuals are currently hiding their identity behind a foreign company. Under the Bill, a foreign entity need only annually update its entry on the register. We are concerned that that gives the opportunity to register an entity in a non-controversial individual’s name, change the beneficial owner the following day and have 12 months before having to declare the change, by which time property can be sold and money laundered without a record.

The integrity and quality of the data on the register will matter. From the start, the register needs a framework of rules that commands confidence and ensures the completeness and accuracy of information, so our amendments 5 and 6 to clause 7 would require that entries on the register be updated within 14 days of any trigger event, namely the change or removal of a beneficial owner. UK companies have clear obligations to notify Companies House in the days after an ownership change, so why do overseas entities have a year to do the same? Have the Government considered that issue? What measures will they take to address it?

Our amendments 7 and 8 to clause 8 relate to the £500 fine that the Bill would impose on entities that fail to update the register. The idea that such a fine would deter those who fail to comply is frankly ridiculous, so we support Government amendments 45 and 46, which directly replace ours and will raise the fine to at least £2,500 a day.

Our amendments 10 to 12 focus on verification. The Government have accepted Labour’s argument that a verification process needs to be established before the register is operational, so they have tabled amendment 49, which we support. It was unacceptable that the register would have become operational without verification regulations. Will the Minister therefore confirm when the secondary legislation that is needed to design that verification process will be published?

Labour has a wider concern that the Government have not yet addressed. The Bill does not stipulate that verification must take place between an application being made and the registrar entering the overseas entity on the register and allocating an overseas entity ID. We are clear that the regulations that the Government introduce must specify that the registrar must take action to verify the registrable beneficial owners before an entity is put on the register; it is not good enough to rely on the compliance of the entity itself. I would be grateful if the Minister confirmed that point.

Our amendments 15 to 17 would shorten the transitional period. We urgently need to close in on Putin’s cronies who have illicit money in our economy. This is about not just oligarchs, but money launderers and tax evaders. We need to know where the money is and who owns what in Britain. Transparency is vital and the register is essential.

The Government have seen some sense and have reduced the transitional period from 18 months to six months, but we are not being unreasonable in saying that it should be 28 days. As my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) said, this legislation was promised by David Cameron in 2016 and began its passage in 2018, so when we say 28 days, we really mean 28 days plus the preceding six years. Six months still provides ample time for criminals to sell properties and find other assets in which to invest—a concern that has rightly been raised by hon. Members, including in today’s manuscript amendments. Labour’s amendments 15, 16 and 17 to schedules 3 and 4 would reduce the transitional period to 28 days, which in our view would provide enough time for overseas entities to get documents in order, while recognising the need to act urgently.

But that is not enough. It is unacceptable to say that the Bill applies not to all properties owned by overseas entities, but only to those bought after 1999 in England and Wales and after 2014—just eight years ago—in Scotland. It does not matter whether corrupt oligarchs bought property four weeks or four decades ago; the point is that UK property should not be used as a vehicle for money laundering. Under Labour’s amendments 9, 13 and 14, all foreign-bought properties would fall within the Bill’s scope, regardless of when they were purchased. We recognise that registering properties bought before 1999 in England and Wales or 2014 in Scotland may take more time, for reasons that the Minister has discussed, so our new clause 6 would allow an 18-month transitional period for such properties, but it is important that we make sure that they are included in the scope of the Bill.

I turn to reform of Companies House. Changes to Companies House’s regulation are long overdue. It beggars belief that despite how long the issue has been on the agenda, all we have had from the Government in the past week is a White Paper. I know that the Minister knows this is urgent. The legal framework in which Companies House operates needs an overhaul. It has been called for by business, by law enforcement agencies and by civil society. Companies House is a key tool in our fight against economic crime. That is why Labour has tabled new clause 7, which would require that the Secretary of State lay draft legislation on Companies House reform within 28 days of this Act coming into force. I acknowledge the arguments being made by the hon. Member for Glasgow Central (Alison Thewliss) in new clause 4 on some of the areas associated with Companies House reform and verification.

Let me turn briefly to parts 2 and 3 of the Bill, which relate to unexplained wealth orders and the Sanctions and Anti-Money Laundering Act 2018. Since their introduction in January 2018, UWOs have failed to live up to expectations. The Government expected them to be used 20 times a year, but the National Crime Agency has so far obtained only nine, with none in the past two years. We welcome measures to make these orders more effective. Clause 40 grants enforcement agencies the ability to apply for more time to consider the information related to UWOs. The Government have accepted the principle of Labour’s new clause 8, which would require an annual update to be made to the House on the use of UWOs, in their new clause 31. However, these changes on their own will not lead to more effective use of UWOs.

The Prime Minister announced the creation of a combating kleptocracy cell in the NCA, which is welcome. However, money laundering prosecutions have dropped by 38% in the past five years and the NCA’s budget has dropped by 4.2% in real terms since 2016. As the Treasury Committee made clear in January, on financial crime there is a “mismatch” between the scale of the problem and the Government’s response. We all recall as well the Business Secretary’s suggestion that fraud is not a crime affecting most people—he could not be more wrong. Economic crime affects us all, and the Government must match the reforms with adequate resources. So our new clause 30 calls on the Government to create a funding plan that sees enforcement and investigative agencies benefit from the assets seized. The Government have so far failed to adequately resource this vital work, but this new clause would allow for a rebalancing of the risk appetite, which the Government are seeking to address with their cost capping proposal in clauses 46 and 47.

The Government have also accepted, with their amendments 59 to 62 and new clauses 32 and 40, Labour’s argument that the designation process under the 2018 Act was not fit for purpose. It cannot be right that the UK is slower at targeting oligarchs who prop up Putin than the EU, where unanimity is required across 27 member states. It is also worth noting that in all four of the NCA’s high-profile dirty money cases brought in the past two years, all of those under investigation had entered the UK with a golden visa. We have not tolerated dirty money but courted it. We must amend the Act to remove the barriers that stop the UK keeping pace with allies on Russian sanctions. We are pleased that the Government have agreed with us on that, and we expect to see the raft of promised designations soon.

Finally, important amendments have also been tabled by my hon. Friends the Members for Rhondda (Chris Bryant) and for Walthamstow (Stella Creasy), my right hon. Friend the Member for Barking (Dame Margaret Hodge) and the right hon. Member for Haltemprice and Howden (Mr Davis). I thank colleagues, including my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne), for their commitment and work on tackling economic crime. We support amendments 26, 27, 37 and 38, new clauses 2 and 9, and new clause 29, among others. They would tighten up the register requirements and enforcement; address the issue of a lack of resources; and strengthen the effectiveness and powers of the registrar.

This Bill is long overdue and we support its passage. We acknowledge that the Government have taken on board a number of our amendments in the past few days, but we know that a lot more needs to be done. I cannot stress enough how important it is that the UK acts now and acts effectively to start to put right our embarrassing reputation as an international soft touch on fraud and money laundering. Putin and those who prop him up should have nowhere to hide, least of all in the UK. I hope that Members from across the House will support us in the proposals we have put forward to improve the Bill.

--- Later in debate ---

[Sir Iain Duncan Smith]

Let me simply say that the purpose of this debate is to tease out exactly that. I wish that we had less debate on Second Reading and more on the details, but that is water under the bridge, and this is an important factor. In a second—although not quite yet so he need not worry—I will ask my hon. Friend the Minister to explain what he actually plans to do, so that we are clear about that. However, I agree that we need to understand what that relationship is. My assumption was that they come together, but it may not be right, and if it is not right, we will end up back in the courts with delay upon delay and we will never get these people sanctioned.

I know that we must make progress, so I will not go into the details of each amendment, but, as I said earlier, amendments 24 to 27 are connected. We will, I hope, be able to vote on all those amendments, but I am prepared to give some leeway, for the reasons given by the right hon. Member for Barking (Dame Margaret Hodge). Will my hon. Friend the Minister tell me now what his attitude is to amendments 24, 26 and 27?

[Paul Scully]

I will cover this at the end of the debate, but I should like to work with my right hon. Friend on amendments 24, 25 and 26 to ensure that we can make changes in the other place. However, we want to go further than amendment 27 in the second economic crime Bill.

[Sir Iain Duncan Smith]

I am grateful to my hon. Friend. I take it from what he has said that he accepts amendments 24, 25 and 26 in principle, and that he will seek in the other place to deliver their meaning through other amendments, so that by the time they return here, this point has been established. May I draw to his attention the debate that we have just had on the definition of whom this provision encompasses? That will be a vital issue, as my hon. Friends have said, but it is not clear. I hope he agrees with me. I will take a nod from him at this point. Hansard can register his nod, because that is how it works.

[Paul Scully]

indicated assent.

[Sir Iain Duncan Smith]

I am grateful.

Let me end by saying to my hon. Friend that this legislation is probably one of those great critical junctures at which we finally decide and agree in this place, as a result of an emergency that is going on elsewhere, that our procedures and our laws are wrong, and that we have to make change. When we have to make change, we should not baulk at it; we should make wholesale change, and ensure that what we deliver leaves the next generation clear about where they will be, and clear about the fact that we did not fail them. I therefore ask my hon. Friend to stick to his agreement with us, and when the Bill comes back, we will look to it. Otherwise we will have to amend the Bill, but I take my hon. Friend at his word.

--- Later in debate ---

[Kevin Hollinrake]

I was just trying to establish whether this would be done in the Lords if it was not done here tonight, Dame Eleanor. Perhaps the Minister will say it later in his summing-up.

[Paul Scully]

indicated assent.

[Kevin Hollinrake]

He is nodding—thank you very much. Hansard have got it on record that he is nodding. That is very important.

I want to mention one other important thing that is often missed. Many hon. Members in all parts of the House have talked about resources, and they are absolutely right. New clauses 2 and 9 deal with that. There are nowhere near enough resources applied to economic crime: it represents 40% of all crime, but 1% of the resources. For example, last year I think the Office of Financial Sanctions Implementation, one of the bodies charged with enforcement, sanctioned two individuals or companies with collective fines of £85,000. In the US, a similar body levied 87 fines totalling £1.5 billion, because it is properly resourced. That is hugely important.

New clauses 14 and 27 seek to approach the problem in a different way, because they would provide protection for whistleblowers. It is pointless having lots of law enforcement people charging around not knowing where to look. Whistleblowers tell us where to look. Some 43% of all financial crimes are identified through whistleblowers, yet it is something we do not talk about. We do not just need more regulators; we need somebody to point us in the right direction. Regulators will always be watchdogs, never bloodhounds. We need the bloodhounds in the organisations who are willing to speak up if things are going wrong.

Every single economic crime I have dealt with in my work on the banking side of things has come to light as the result of information provided by whistleblowers. On GPT Special Project Management, it was my own constituent Ian Foxley. Airbus paid $3 billion in fines internationally and £900 million to the UK Treasury, and all that money came as a result of a disclosure from whistleblowers. In every single case you can think of, whether HBOS or the PPI scandal, they were all about whistleblowers. Yet the protection and compensation that we offer whistleblowers in the UK is pretty much non-existent. In the case of Lloyds/HBOS, the FCA itself was guilty of not protecting the whistleblower. Barclays tried to identify the whistleblower in a case within Barclays. Yet very little or nothing is done. So if you are thinking of blowing the whistle, will you do it? My constituent, Ian Foxley, who was involved in the GPT Special Projects case that resulted in £28 million of financial sanctions at Southwark court last year, has been 11 years without a single penny. That man was earning £200,000 a year. Do you think he would step forward next time, or somebody else would do the same? We have to make sure that we protect whistleblowers.

--- Later in debate ---

[Kim Johnson (Liverpool, Riverside) (Lab)]

I rise to speak in support of new clauses 7 and 8, but I want to start by expressing my solidarity with the people of Ukraine, who face unimaginable heartbreak and horror, and particularly to black residents who have been subject to unacceptable levels of racism and brutality. I call on this Government to open our doors and welcome without discrimination all refugees who are fleeing oppression, violence, occupation and war. I applaud the courageous protesters in Russia, at home and across the world who are demonstrating for peace.

The National Crime Agency estimates that £100 billion of dirty money flows through the UK every single year. This is not a new phenomenon. Since as early as 2016, the Government have been making empty promises for tighter regulations to prevent these illicit activities, but since then, £1.5 billion-worth of property here has been bought by Russian oligarchs accused of corruption with links to the Kremlin. As long ago as 2018, draft legislation was published by this Government for a register of beneficial ownership to consolidate and clarify our legal structures in order to prevent profiteering by way of laundering money through the UK property market, but despite a wealth of evidence pointing to the illicit activities of oligarchs in London and elsewhere in the UK, the Government have done nothing but kick the can into the long grass. Given the almost £2 million received in Russia-linked donations by the Tory party since the current Prime Minister entered No. 10, it seems pretty clear why.

Labour has consistently been on the front foot when it comes to clamping down on oligarchs. Our plan included an oligarch levy to tax secret offshore purchases of UK residential property, the application of the Magnitsky clause to apply sanctions against human rights abuses, and to extend the beneficial ownership register for Crown dependencies and overseas territories. Labour has not just jumped on the bandwagon now that this has become the issue of the day; we have been putting forward detailed plans to tackle this injustice for many years, as my hon. Friend the Member for Rhondda (Chris Bryant) has pointed out. Our amendments today will give this toothless Bill some bite, speeding up action against some of the worst offenders and bringing forward reforms to Companies House that will root out the activities of criminal elites who are legitimising their loot in the UK without scrutiny or repercussions. I hope the Minister will commit today to backing our amendments.

[Paul Scully]

I thank all hon. Members who have spoken in this important debate for their constructive approach to this important legislation, and for their engagement prior to today as well. Let me quickly whip through as many of the points that have been raised as possible. The right hon. Member for Birmingham, Hodge Hill (Liam Byrne) talked about SLAPPs. The Deputy Prime Minister made a call for evidence on Friday, and it is definitely not just a listening exercise. It is important that we act when we need to act.

Nominees were raised both on Second Reading and in Committee. If nominees are directed by someone else—say, the beneficial owner—the person doing the directing is caught by condition 4 in paragraph 6 of schedule 2 and is therefore a registerable beneficial owner. My hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) and the right hon. Member for Barking (Dame Margaret Hodge) both made important points, and I am keen to work with them in the coming days to make sure we do not leave any gaps. We have a common interest in doing so.

The Government tabled the amendments to reduce the transition time from 18 months to six months but, as I said in my closing speech on Second Reading, I see merit in requiring all those selling property to submit a declaration of their details at the point of transfer of land title during the transition period. In effect that means we will be giving sellers a zero-day transition period. They will have to register ownership, so we will get their ownership details either when they sell or at the end of the transition period.

I am keen to work with my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) to see how far we can go in the other place, because this is difficult to draft. I hope he is satisfied will an invitation to sit down with me in the coming days so that we can give further consideration ahead of finalising the Bill in the Lords. I therefore ask that the other amendments in this area are not pressed.

On new clause 7, tabled by the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), it would serve little purpose to introduce new legislation at the end of this parliamentary Session as it would actively harm the quality of the measures we are introducing in the broader economic crime Bill early in the third Session—I accentuate the word “early.”

We spelled out the Government’s position on the further reforms to increase the reliability of the information on the register and the ability of Companies House to share data in the “Corporate Transparency and Register Reform” White Paper, and the forthcoming economic crime Bill will introduce those measures early in the next Session, but we want to make sure that we get it right because this is the biggest change to Companies House law for nearly 200 years.

On amendments 10 and 11, also tabled by the right hon. and learned Member for Holborn and St Pancras, I point out that the Government tabled amendment 49, which commits to introducing regulations under clause 16 on information verification so that they come into force before any applications for registration may be made under clause 4(1). Amendment 49 achieves in practice what amendments 10 and 11 seek, so I hope those amendments will not be pressed.

The hon. Member for Glasgow Central (Alison Thewliss) talked about Companies House reform and verification, which is something we are introducing. People with anti-money laundering expertise will look at this within Companies House.

I think I have highlighted my intentions regarding amendments 24 and 25, which obviously seek to add to the list of statements an overseas entity must provide to the registrar when applying for registration or when complying with the updated duty. I see the merit of the proposals made by the hon. Member for Rhondda (Chris Bryant), and we take these matters seriously. As I said, we will look further at these proposals and we will work together to make sure we can do this in the other place.

I heard the hon. Gentleman’s protestations that amendment 26 takes out three words. However, it is our opinion that removing those three words may have unintended consequences. It is not quite as easy as simply taking out those three words. I would like to work with him to make sure that, if there are any unintended consequences, we can have something that gets the drafting absolutely correct. I therefore ask him not to press the amendment, in the spirit of unity in this House on standing together to make sure we have the strong measures we all want in the Bill.

[Chris Bryant]

The more we can present a united front—particularly tomorrow—the better, so I will of course not press the amendment.

[Paul Scully]

I am grateful for the spirit the hon. Gentleman shows.

Let me turn to new clause 29, tabled by my right hon. Friend the Member for Haltemprice and Howden (Mr Davis). I thank him for his innovative suggestion to provide a power for the Secretary of State aimed at the prevention of asset flight prior to the formal imposition of sanctions. Members will have seen that since my right hon. Friend tabled his new clause we have expanded the Bill with new provisions from the Foreign, Commonwealth and Development Office. Those additional measures aim to ensure that we can respond even more effectively to world events using sanctions.

We strongly support measures to ensure that sanctions are effective. The Government amendments will ensure that we can go further and faster to make new sanctions designations. It is hoped that our amendments will go a significant way towards dealing with the kinds of situation that my right hon. Friend may have in mind. I remind the House that the register is not a seizure mechanism in itself. Law enforcement agencies already have the powers to seize property if there is evidence of wrongdoing. Such powers underpinned the restraining, freezing or seizure of more than £979 million-worth of assets in 2020-21. We have swiftly implemented the strongest set of economic sanctions ever imposed against a G20 country.

I see the intent behind amendments 3 and 40, the latter of which would have no effect as the Bill already provides that a beneficial owner must register as a trustee of a trust if they are one. Amendment 3 would not have the effect that we believe is sought, but I can see the potential merit in such an amendment and assure the House that we will look further at the intent behind the proposal to see whether there is a workable alternative.

I thank the right hon. Member for Barking for tabling new clause 2, which seeks to place an obligation on the Secretary of State to provide additional reporting on the funding of enforcement agencies. The NCA and enforcement agencies like it have a duty to be open and transparent in their deployment of public funds. The agencies publish annual reports on their expenditure that can be found online. The Government have developed a sustainable funding model that demonstrates our commitment to tackling economic crime. The combination of this year’s spending review settlement and the private sector contributions through the levy will provide around £400 million of funding in respect of economic crime over the spending review period. Since 2006-07, just under £1.2 billion-worth of assets recovered under the Proceeds of Crime Act 2002 have been returned to law enforcement agencies, prosecutors and the courts to fund further asset-recovery capability or work that protects the public from harm.

New clause 4, tabled by the hon. Member for Glasgow Central, would make the registrar of companies the AML supervisor of overseas entities. We believe that is unnecessary as the Bill already requires the verification of registerable beneficial owners and the managing officers of overseas entities. We expect that that will be done by a UK anti-money laundering supervised professional so believe that such supervision is already in place.

On amendment 4, the Bill currently enables the Secretary of State to exempt a person from the requirement to register in three circumstances. The circumstances outlined in the Bill have been carefully considered to provide clarity and flexibility for unforeseeable but legitimate scenarios. Given that the register’s key objectives are to improve transparency and combat money laundering, the exemptions will be used carefully for evidenced and legitimate reasons.

I thank everybody who has been involved in the Bill. The process has been done at such pace but we are determined to use the next few days to get this absolutely right.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.