Post Office: Horizon Compensation Arrangements

Paul Scully Excerpts

Thursday 24th February 2022 Commons Chamber

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

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on compensation arrangements for those sub-postmasters/mistresses who have been impacted by the Post Office Horizon software scandal.

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

First, I apologise, Mr Speaker, for the misunderstanding. I was prepared to make a statement, but obviously the current situation and affairs have got in the way. I am happy to provide an update on Horizon matters since I last made a statement in December. I met the Business, Energy and Industrial Strategy Committee last month, and last week the Select Committee published its interim report on the Post Office and Horizon IT scandal. The Government will consider the Committee’s recommendations and respond in due course.

People need to know about how this scandal came about and what protections are in place to avoid history repeating itself. That is why the Government established the Post Office Horizon IT inquiry to investigate exactly what went wrong. The evidence from postmasters who have participated since the inquiry hearings began last week has been harrowing to hear, and I thank those postmasters for their courage and their willingness to revisit the trauma they have experienced. Compensation cannot take away the suffering that affected postmasters have experienced, but we are determined that each eligible person gets what is due to them, and that that is paid as quickly as possible. Of the 72 postmasters whose convictions have been overturned, more than 95% have applied so far for an interim compensation payment of up to £100,000, of which 63 offers have been accepted and paid. The Government are pushing for final settlements for quashed convictions to follow as quickly as possible, and negotiations on the first two have begun. The Government are determined that all unjust convictions are quashed. The Post Office is reaching out to affected postmasters.

The Post Office is also in discussion with other public prosecuting bodies responsible for the convictions of postmasters that may have relied on Horizon evidence to ensure that those postmasters are also contacted and enabled to appeal. Offers have been made to over 40% of applicants and compensation has been paid to 764 postmasters who have applied to the historical shortfall scheme. So far, 28 postmasters are proceeding through a dispute resolution process aimed at achieving acceptable settlements. At least 95% of those cases should have been dealt with by the end of the year.

With compensation for overturned convictions and the historical shortfall scheme well under way, the postmasters on whom my attention is now focused are those who exposed the whole scandal by taking the Post Office to the High Court. I know that many hon. Members support the Select Committee’s view that it is unfair that they received less compensation than those who were not part of the case. I sympathise with that view too. I cannot yet report a resolution of that legally complex issue, but we are doing everything we can to address it.

The compensation that postmasters are due will exceed what the Post Office can afford, so the Government are stepping in to meet a good deal of the cost of that compensation. I recognise that is an unwelcome burden on the taxpayer, but the House, and I am sure taxpayers themselves, will agree that the alternative is unacceptable.

[Andrew Bridgen]

I thank the Minister for his response. As he is aware, the right hon. Member for North Durham (Mr Jones), who I am glad to see in his place, and I are the only remaining Members of the House who were part of the original Post Office review working party that was set up to address the issue over a decade ago. In the years that have followed, we and others have been repeatedly dismissed and fobbed off by all the previous incumbents of my hon. Friend’s current ministerial position when we called out what we saw at the time, the evidence we had uncovered and what, in retrospect, with so many cases, was an obviously flawed computer system and a huge miscarriage of justice.

The issue was first highlighted to me by my constituent Michael Rudkin in 2011. He had been forced out of his position as a national representative of sub-postmasters and his wife had been advised to plead guilty to a crime that she had not committed because of a flawed computer system, which Post Office officials were too arrogant to believe could possibly be to blame, and because of a Post Office management whose relationship with the sub-postmasters I described in this House as “feudal” in 2015.

My constituents are just two of the hundreds who lost their jobs, assets and reputations in what is the largest miscarriage of justice in this country’s recent history. Their lives have been affected for 20 years or more. There is no excuse for further delays to compensation. They were wronged by the Post Office and let down by Ministers and officials who apparently took the Post Office’s word without question. They deserve justice and adequate compensation now—not in months and years when the Department, which is partly culpable for the situation, finally gets its act together.

I have written to the Minister, as I have been passed a letter from the Under-Secretary of State for Business, Energy and Industrial Strategy, Lord Callanan, addressed to Lord Arbuthnot, who was also part of the original Post Office working party and maintains a strong interest in the issue from the other place. The letter states that no formal request for the funding of sub-postmasters’ compensation has been submitted to the Treasury by his Department. Can the Minister clarify whether that is still correct?

Does the Minister agree that all the sub-postmasters who lost out due to the faulty Horizon accounting system should be compensated? I need not remind him that many hundreds of sub-postmasters are due compensation, not just those who have been wrongly convicted, who number at least 736, but the many hundreds—I suspect thousands—who made up shortfalls created by the faulty Horizon system out of their own pocket under threat and coercion from the Post Office but who were not criminally prosecuted. Can he inform the House whether a system has been set up to identify those individuals and put in place a scheme for their compensation?

I warn the Minister and the Government that it is better for us to get on the front foot with the issue, rather than let a claims management company look at the opportunity, which will undoubtedly result in more litigation and delay at a far greater cost to the Government, and ultimately the taxpayer. The Minister will have read the damning Business, Energy and Industrial Strategy Committee interim report by now. It is time that we accelerated compensation, got closure for the sub-postmasters and ensured that it can never happen again.

[Paul Scully]

I thank my hon. Friend for his work in the campaign for both his constituent and for many other sub-postmasters across the country, and I thank the right hon. Member for North Durham (Mr Jones), whom my h F mentioned, and James Arbuthnot—Lord Arbuthnot—to whom I spoke earlier this week. I have spoken to Nick Read, the chief executive of the Post Office, and officials about this because, as I was quoted as saying in The Times last week, this, of all my wide range of responsibilities, is the one area that keeps me awake at night and absolutely drives me to get resolution.

My hon. Friend asked about the 555 and our commitment. As I have said, the 555 have been pioneers in this area, and I will absolutely work at speed. I do not want this to go on a moment longer than necessary, which is why we have tried to do everything we can to short-circuit any bureaucratic processes to be able to get on and compensate everybody fairly. The 555 postmasters who secured the group litigation order exposed this whole scandal by taking the Post Office to the High Court, and they performed a massive public service by doing so. I have written to the Select Committee with details of the costs and the preparations we have made with the Treasury.

When talking about this legally complex issue, we must remember the timeline of this and the timescale with which we are working. Horizon was installed in 1999, and the prosecutions started in 2000. In 2004, Alan Bates set up the Justice for Subpostmasters Alliance, and in 2009 press reports really started to look into the concerns about those prosecutions. Over this 20-year period, many different Ministers have been involved and there have even been Post Office reorganisations, but now—after this 20-year scandal, frankly—we want to make sure, at pace, that everybody, including the 555, get justice, answers and fair compensation.

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

I, too, thank the hon. Member for North West Leicestershire (Andrew Bridgen) for securing this important urgent question, and I really pay tribute to my right hon. Friend the Member for North Durham (Mr Jones) for all his work on this issue.

The Horizon scandal is perhaps the most devastating miscarriage of justice in British history, damaging the lives of over 700 wrongly convicted sub-postmasters and their families, and the lives of so many who have been affected but have not been convicted. I join the Minister in paying tribute to those postmasters who have been relentless in their quest for justice. As the judge-led inquiry into this scandal has just begun, we have now been hearing extremely moving and devastating testimonies. I recommend that every Member spends time listening to the accounts just to understand how widespread this injustice has been.

Last week’s very important Select Committee report shows that, 12 years on, we are still painfully far from all the sub-postmasters receiving the compensation they deserve. Sadly, 33 of them have died before receiving any recompense. My thoughts and those of the whole House will be with their loved ones.

Given the cripplingly slow pace of justice, I want to press the Government on a few issues. First, without the extraordinary efforts of the 555 litigants, much of what we know would not have come to light. The Minister expressed his sympathy, but as Labour has pushed for time and again, will he now confirm that this group will be able to claim the compensation that is due, as he has hinted, and if so, when? Secondly, a year on from the historical shortfall scheme closing—I understand that over 2,500 have applied—only 30% of claims have been processed. Can the Minister outline what steps he is taking to hold the Post Office to account in urgently getting through this backlog, and can he clarify the definition of “eligible” that he stated? Finally, could he provide the House with an update on how long it will be before we get closure on compensation for all those affected?

The Minister is right that we will need to learn the lessons, understand the causes and ensure that this never happens again. The devastating reality of this scandal will be felt by so many families for years. The Government have taken some of the right steps, and we do appreciate that, but justice is not happening quickly enough and it is not going far enough.

[Paul Scully]

I thank the hon. Lady, and I sympathise and empathise with everything she said. I know that for everybody affected, whether the 555 or those who were not prosecuted but lost money, nothing will be quick enough, and there is nothing we can do to restore up to 20 years of hurt and distress. On the 555, yes we want to ensure that those people who broke open the case and were the pioneers get full compensation. I am not yet able to outline a resolution for them, but I am working at pace within my Department, and with our legal representatives, Post Office legal representatives, and those of the Justice For Subpostmasters Alliance. I hope to have news for the hon. Lady as soon as possible.

Again, the historic shortfall scheme is not moving as fast as anybody would like. The Post Office has paid the de minimis cases and the most straightforward, smaller amounts. For the rest, it is working through the early cases, which will then benchmark the value of compensation for others. That will then allow the Post Office to start rattling through these cases a lot quicker. The Post Office says that it wants this to be 95% finished by the end of the year. I want to say 100% by the end of the year, and that is the kind of timescale I am working on.

[Lucy Allan (Telford) (Con)]

I thank the Minister for his response, and for his tone. My constituent, Tracy Felstead, is due to give evidence to the inquiry on Friday. She wants people to be held to account, and so do I. We know that civil servants were non-executive directors on the board of the Post Office, and that they were principal accounting officers for UK Government Investments. We know that civil servants told Ministers to come to this place and to tell MPs that there was “nothing to see here.” Those civil servants are not on the list of the core participants giving evidence to Sir Wyn Williams. How can those civil servants be held to account by Ministers for their failure to act in this case for so many years?

[Paul Scully]

I thank my hon. Friend for the work she does on behalf of Tracy Felstead and others. Tracy’s case is one that I often hold up as someone who was so young that she has spent more than half her life under this absolute shadow, explaining to her children now what happened all those years ago. On civil servants, I set up an independent inquiry to get those answers, and it is right that it remains independent. I do not want anybody to feel that they can get away with this, or that they do not have to answer those questions. I will ensure, as I am sure will my hon. Friend, that Sir Wyn calls up exactly who he needs to call as the facts are uncovered, so that everybody answers without fear or favour.

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

I congratulate the hon. Member for North West Leicestershire (Andrew Bridgen) on securing this urgent question, and I join him in thanking Lord Arbuthnot for his tenacious efforts over the years. I congratulate the Business, Energy and Industrial Strategy Committee on its report. It is clear that the only reason this scandal was unearthed was that 555 postmasters, including my constituent Tom Brown, took the Post Office to court. They were forced to settle because the Government and the Post Office used a tsunami of public money to defend the indefensible. The Minister and I have spoken. He knows that these people need compensation. The report recommends an independent comprehensive scheme, outside of the Post Office, and that is what we need now. I congratulate the Minister on what he has done in this area, but if the problem is the Treasury, can he not call that out now, so that we can put the fire on the Chancellor of the Exchequer to ensure we get the funding that is needed properly to compensate these individuals? The Minister knows as well as I do that this scandal will not go away.

[Paul Scully]

I reiterate my thanks to the right hon. Gentleman for the work he has done for Tom Brown and all the postmasters. There is no single blockage in the Treasury. We are trying to work through the holistic view about where the money is coming from and how that is justified to taxpayers—as I said at the beginning, however, when taxpayers understand the scale and depth of this, they will clearly want to ensure that those postmasters get their review. We are also trying to unpick that legal settlement, which was, as he rightly describes, pushed through the Post Office under considerable pressure, considerable cost and considerable might. That will take a few days, but I want it to take days, not months—certainly not years—and I am working as quickly as I can to get that resolution. I am really hoping that I will be able to come back to the Dispatch Box and have good news for him in the next few days.

[Siobhan Baillie (Stroud) (Con)]

My hon. Friend the Minister may have just answered my question, but I will press him. I do not doubt the complexities and legalities, and I know how sincere he is on this issue for the brave group of postmasters who fought and were acquitted at the earlier stages. However, my constituent Nicola Arch and her family’s lives are on hold. She lost her job, and she tells me that when the Stroud newspapers covered the story, she was spat at and she lost her home. She thinks that she will have to litigate again. She is waiting. I was going to press him on a timeline, but I think he said days, not weeks or months. Will that be the case—for more information, at least—so that they can have some comfort in the knowledge that information is coming?

[Paul Scully]

I believe from my Twitter feed that my hon. Friend is meeting Nicola Arch tomorrow—Nicola and I have those exchanges. Again, my heart goes out to Nicola, because being spat at and stigmatised shows the extra suffering that people experience. It is not just about the convictions, tragic as they are, or the money, difficult as that is; it is about what has happened to these people in their communities as former champions of those communities. I cannot give her the timescale. As I said, I am working at pace and need to give myself a little bit of leeway, but it is days or weeks—it certainly will not be a moment longer than is necessary to put these people out of their misery and give them compensation and justice.

[Mr Speaker]

I call the SNP spokesperson, Marion Fellows.

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I am speaking in a dual role as I am also chair of the all-party parliamentary group on post offices. The Minister, the APPG and I meet regularly. He has described the Horizon case as “harrowing”, but it is beyond that, and it has gone on far too long. I commend all hon. Members of this place past and present—I will not name them all—who have worked tirelessly on it. The nub of the matter is: is the Treasury really on board for all the money required to compensate for this farcical tragedy and for supporting the continuation of the Post Office network? It is disgraceful that people in Government and the civil service have known about it for so long—far too long—and almost refused to do anything about it. I do not include the Minister in that, because I know that he is working hard, but it requires more than him to work hard; the different silos of Government need to come together and completely sort it out.

[Paul Scully]

I thank the hon. Lady for her work on the Post Office in general as chair of the APPG. She talks about the case being harrowing, and that is why I am so determined to get it done. We have heard about Tracy Felstead and all the years of it that she has had, and frankly nothing that I say at the Dispatch Box will make her trust me because every member of authority, whether in Government, the Post Office or the judicial system, has let her and all those people down. We need to act—actions and outcomes are what matter—which is why I am so driven to ensure that we can resolve the case as quickly as possible.

The Treasury is not a blockage. Clearly, we are having conversations with the Treasury not only to ensure that we can underwrite the additional costs for the Post Office beyond what it can afford, as it has outlined in its accounts, but to give the Post Office the future that it needs. Realistically, we will not be able to get to that until we have sorted out the past. We continue to work constructively.

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

I associate myself with the remarks of my hon. Friend the Member for North West Leicestershire (Andrew Bridgen) and the right hon. Member for North Durham (Mr Jones). They are absolutely right, and they have been long-term campaigners on the issue. Mr Speaker, I smiled to myself when you made your statement, but I understand it and support it. This Minister cares passionately about the issue, and, whatever he says, as a long-term Whitehall hand, I see the symptoms of a Minister caught between the jaws of the Treasury and Whitehall lawyers. Lawyers do not always deliver justice and the Treasury rarely does. What I will say to him is this: nobody deserves justice more than the 555. They opened up the worst miscarriage of justice in modern Government. If it helps him in his battle to get this done quickly and properly, I will say this to him: if he cannot do it, we will find a way of having this House instruct the Government to do it. Let him use that in his battle with the Treasury and the lawyers.

[Paul Scully]

I can quote the Francis Urquhart line back at my right hon. Friend, but any pressure will be gratefully received. The last two years of covid have been about learning to speed up Government. As someone who has been running small businesses for 25 years, I am used to making decisions, cracking on, getting on and doing things. The Government do not always work that way. We have learnt in the past two years how to do it and I fully expect it to happen in this case.

[Kim Leadbeater (Batley and Spen) (Lab)]

As a relatively new Member of this place I am coming to this frankly unbelievable scandal much later than many of my colleagues. However, I recently met a former postmistress in my constituency, Alison Hall and her husband Richard, who have suffered unbelievable stress and financial hardship as a result of this scandal. As well as losing their existing business in Hightown, they were also forced to abandon plans to open a new post office in Roberttown. Does the Minister agree that alongside the dreadful personal trauma that this scandal has been for so many, and which must be urgently addressed, it has had a seriously detrimental impact on communities like mine in Batley and Spen?

[Paul Scully]

My heart goes out to Alison and Richard. Absolutely. Post offices offer not just economic value. Having more branches than banks and building societies put together has a social value, bringing communities together, and at the heart of that are sub-postmasters. That is why we need to give the Post Office a real future by sorting out the past.

[Mary Robinson (Cheadle) (Con)]

I am grateful to my hon. Friend the Member for North West Leicestershire (Andrew Bridgen) for securing this urgent question. I know he will agree with me that the role of the whistleblower has been pivotal in highlighting the known issues with the Horizon system. This has been a devastating series of events for many people, but for constituents like mine who saw their father die in the premises of their shop without seeing his name cleared, the devastating impact has been absolutely tremendous. There is a difference between a settled sum in a civil court and compensation. People need to be adequately compensated for the traumas and the experiences they have had. They have had their names cleared, but they now need to be compensated for what has happened to them.

--- Later in debate ---

[Paul Scully]

I thank my hon. Friend for all the work she does on protecting whistleblowers. As I say, I want to make sure we can get fair justice and compensation for everybody involved. That needs to go through a process and we need to get the balance right. That will be done by benchmarking people’s losses and how they have been affected. We have regular conversations both with postmasters and, importantly, their legal representatives to fully understand the harm done to them, so we can reflect that in any scheme we put forward.

[Andy McDonald (Middlesbrough) (Lab)]

I thank the hon. Member for North West Leicestershire (Andrew Bridgen) for securing this urgent question and I pay tribute to the Minister, because I know he cares passionately about this issue. He came before the Business, Energy and Industrial Strategy Committee and expressed himself with great candour. May I press him on the issue of fair compensation? We have heard from many Members today, and we will hear more, that the correct way to address this situation is not by fair compensation, but by full compensation for all those past losses and expenses. They have paid money back to the Post Office and they need that money back. They need their future losses recovered, their pension losses recovered, and psychiatric injury and exemplary damages for their loss of liberty. That needs to be reflected in the system. We cannot have a compensation system on the cheap. These people have to be compensated in full. Will he commit to that?

[Paul Scully]

I thank the hon. Gentleman for his kind words at the beginning of his question. He outlines the complexity of what we need to do and what the Post Office needs to do to right this wrong. That will be reflected in conversations with legal representatives to ensure, without being able to restore the past 20 years to the people affected, we do everything we can to make sure they get full and fair compensation.

[Duncan Baker (North Norfolk) (Con)]

As a former postmaster, I think I speak for everybody when I say that this Minister has done more than anybody else in his position to pursue this injustice. Last night, I was told that the community of Sheringham in my North Norfolk constituency is losing its post office and I will do everything I can to get it back for them. That shows how important it is for everybody to have postmasters and mistresses in their areas.

Compensation is one thing, but over 800 people were prosecuted and fewer than 80 have had those overturned. What pressure can my hon. Friend put on to speed up that process, and when are we going to start talking about Fujitsu and its role in this?

[Paul Scully]

My hon. Friend brings to the House his experience of being a sub-postmaster and of the social value of the post office in his area. He is absolutely right; we have asked people to come forward to have their prosecutions overturned. Clearly, some of those people have been let down. They do not trust the Post Office and the Government, but we are trying to work through legal representatives of other organisations to encourage them to do that. We want to ensure that we can get people through this system as quickly as possible. I will make sure that I do everything I can with him and others to get this sorted out.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

If the Minister really wants to borrow quotes from Francis Urquhart, I suggest to him that he might want to

“put a bit of stick about”,

because the Post Office’s handling of the historical shortfall scheme has been nothing short of another scandal in itself. I recently took part in what I can only assume was ironically titled a “good faith meeting” in which the Post Office itself was not represented. It only had a lawyer from Herbert Smith Freehills, which, I understand, is not exactly at the budget end of the market. At the end, they said to us, “Of course, if you want to take this further, you should be aware that the offer we have made could be withdrawn”. That is how the Post Office is approaching the issue. It is still the same culture that caused the problem in the first place. My more recent meeting was a bit more promising, but it is clear that anybody who has settled under that HSS has probably not had a just settlement and the Minister and his Department need to look at it.

[Paul Scully]

I will certainly continue to look at it. We want to encourage people to go through such things as the alternative dispute resolution so that we do not need to have prolonged cases going through the courts yet again. As I said, we want to get this sorted out quickly, but not in haste. We do not want to get it wrong so that we have to start all over again. I will certainly keep the Post Office’s feet to the fire.

[Lee Anderson (Ashfield) (Con)]

In 2008, Harjinder Butoy, who ran a post office in Sutton-in-Ashfield, was jailed for three years and four months after he was wrongly convicted of stealing over £200,000. It has taken him 14 years to clear his name. He is bankrupt, he cannot get a job and it has destroyed his life. Compensation is one thing, but when are the people responsible for this going to be brought to justice?

[Paul Scully]

I thank my hon. Friend for that question; my hon. Friend the Member for North Norfolk (Duncan Baker) said much the same sort of thing. I set up the inquiry with Sir Wyn Williams to get to the answers on this. The prosecutions department has been keeping this in abeyance as well. It is important to be able to investigate. That will come up with the answers and, whatever those are, legal proceedings or whatever will flow from that.

[Ian Mearns (Gateshead) (Lab)]

The individuals concerned who have had so much damage done to them need not only compensation, but damages awarded for grievous injustice, reputational damage, emotional trauma, mental health damage, stress and the wrongful contempt from their communities. The Minister referred to the importance of post offices to their communities. What the Post Office also did as part of this process was to cynically use it to permanently close post office branches, so many communities, first, had their postmaster or mistress taken from them in dreadful circumstances and then they had their branch closed. Will he review that because an awful lot of branches were permanently closed in an awful lot of places as a result of this scandal? To reiterate comments from across the House, there needs to be a day of reckoning for those who perpetrated this dreadful injustice on these people.

--- Later in debate ---

[Paul Scully]

I want to make sure that everybody comes before the inquiry to give evidence and feels confident in doing so, so I do not want to impose my opinions at this stage about who did what; otherwise, the inquiry would not be independent. Once the answers are known, however, there will be that day of reckoning, I am sure.

On post office closures, at the moment we are exceeding the 11,500 criterion, which still stands, alongside the access criterion. It is incredibly important to have that social value that I have talked about.

[Philip Dunne (Ludlow) (Con)]

My constituent Rubbina Shaheen lost her livelihood and her home. She was wrongfully convicted of stealing £40,000 from the Post Office and served 12 months in jail in 2000. She is one of the fortunate ones who have received some compensation, but it has all gone to the lawyers she had to engage to protect her name. I back the calls across the House for a proper compensation scheme to reflect the damage that has been inflicted by a faulty computer programme. I endorse the comments of colleagues: why has Fujitsu not been held to account for the damage that it has caused to so many people?

[Paul Scully]

My heartfelt thoughts go out to Rubbina Shaheen and her family. That is exactly why those who were convicted had the £100,000 interim compensation: to ensure that they could go a little way towards restoring some of their losses and that, if they needed legal representation, they had those costs paid for. We are working at pace trying to achieve full compensation.

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

The hon. Member for Bromley and Chislehurst (Sir Robert Neill) and I co-chair the all-party parliamentary group on miscarriages of justice. This is the greatest miscarriage of justice that anyone can remember in this country. Most of us have had such tragic cases, and we have worked across parties as Members of Parliament doing our job. I have found the people I have helped pathetically grateful for MPs of all sorts standing up in this House and working on an all-party basis to get this right. Justice and compensation still need to be delivered fast—the faster, the better.

[Paul Scully]

I agree with everything the hon. Gentleman said. What he says about individual MPs doing amazing work goes to the heart of the early part of the problem, when all the sub-postmasters thought that it was just them. They did not realise that so many people—hundreds across the country—were suffering the same issue because of a faulty bit of software. It was only when they came together, when pressure built, when there was coverage in the media and when other champions raised the issue in this place and elsewhere that it burst open with the 555. Now we need to make sure that we bring it to a proper conclusion.

[Martin Vickers (Cleethorpes) (Con)]

I welcome what the Minister has said today. To be honest, previous Ministers have failed miserably to grasp the situation; I welcome the fact that since his appointment we have made rapid progress. I had a couple in my surgery who were elated a few months ago because they thought that real progress was being made, but were deflated when they came a few weeks ago. They are an elderly couple. When convictions are quashed, surely compensation can follow pretty quickly—a quashed conviction is clear evidence to all that they are innocent. They should get at least an interim payment. What can the Minister do to assist in those circumstances?

[Paul Scully]

As I say, we have made good progress on interim payments. If my hon. Friend’s constituents have not applied for or received their interim compensation of up to £100,000, will he please let me know? I will certainly look into it, because that is exactly why those payments are there: as a stepping stone to the final sums.

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

I pay tribute to the fortitude and strength of character of my constituent Della Ryan, the former sub-postmistress of Dukinfield post office in my constituency. Compensation is one important side of the equation, but another is ensuring that natural justice is not just seen to be done, but done. The hon. Member for Telford (Lucy Allan) posed an important question about the involvement of civil servants in that justice over a long period. What assurances can the Minister give the House that there can be no hiding places at all for those involved in perpetuating this injustice?

[Paul Scully]

I ask the hon. Gentleman to pass on my heartfelt sympathies to Della for what she has been through.

This is exactly why we set up the inquiry. My Department has said from the beginning that we will work with the inquiry in the fullest sense to ensure that we offer all the information, support and evidence that Sir Wyn wants, and I have received an assurance to the same effect from Fujitsu and the Post Office itself. I am determined that that process will be carried out.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I thank Members on both sides of the House, and indeed the Minister, for their efforts. As for the 555, lives have been ruined. Now lives have been lost; people die. The compensation must be delivered quickly. Why can people not have access to interim payments? That is the least we could provide. I accept that there are the legal challenges that the Minister mentioned, but this is something that we could and absolutely should do now.

As for the independence of the scheme, Herbert Smith Freehills acted for the Post Office in the litigation to reduce compensation, so how can it be right that it now acts with the Post Office in delivering compensation? That cannot be right, especially given that Herbert Smith Freehills oversaw the Lloyds Bank compensation scheme that was judged independently to be unable to deliver fair and reasonable outcomes to the victims, so it all had to be done again. If we do not put independent oversight into this—with a High Court judge—it will all have to be done again as well. We must act now to change the way in which this is working.

[Paul Scully]

That is why the Post Office has an independent panel to oversee the process. So there is independence. On the interim payments for the 555, they are there for overturned convictions. That is a legal issue that I am working through at the moment because, in the eyes of the law, it was a full and final settlement. That is what I have to tackle at speed because the 555 will understandably not understand this and want to crack on now; they want to receive the compensation. I am determined to ensure that that happens.

[Jim Shannon (Strangford) (DUP)]

I concur with those who have thanked the Minister in particular for his genuine interest and commitment, which we all recognise.

The report produced by the Business, Energy and Industrial Strategy Committee makes difficult reading for those who took their cases to court and are worse off than those who did not. Constituents of mine who are affected have been asking, where is the equality for all that was promised? Their reputations are shattered and they are financially bereft. Will the Minister direct his team to right this wrong as quickly as possible?

[Paul Scully]

I thank the hon. Gentleman for his kind words and for his ongoing interest. I am pleased to say that, as the first week of evidence to his inquiry finishes, Sir Wyn will be travelling around the country. He will go to Cardiff, and also to Belfast. It is important for him to hear from people close to where they live, so that they can feel comfortable and confident about giving evidence. However, the hon. Gentleman is right: we need to crack on with this and secure the equality that he seeks.

[Scott Benton (Blackpool South) (Con)]

Sadly, some of those who have suffered so much are no longer alive to see justice served. Will the Minister do all in his power to ensure that the full inquiry reports back as soon as possible, so that those who are accountable can finally be held to account?

[Paul Scully]

I can assure my hon. Friend of that. People have died because this has taken so long, and other people have died because they have committed suicide. It has been horrendous, and that is why we are determined to ensure that we can get this sorted out as soon as possible.

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

Soon after I was elected, I was contacted by a constituent whose father had been wrongly caught up in this scandal. He lost everything: his livelihood, and, more important to him, his reputation. He sadly passed away before he had the opportunity to clear his name, and he will never see the benefits of this compensation. Have the Government any plans to offer personal, individual apologies to the family members of postmasters who are no longer with us?

[Paul Scully]

I cannot give a particular commitment, but what I can say is that the Prime Minister is personally exercised by this, which is why we met some postmasters last summer. I was talking to him about the matter just yesterday. He is personally involved, and he gives me the kick that I need in order to give other people a kick to ensure that we can get everyone the apology, the compensation and the justice that they need.

[Mr Speaker]

That is the end of the statement—the urgent question, actually. It should have been a statement.

Oral Answers to Questions

Paul Scully Excerpts

Tuesday 22nd February 2022 Commons Chamber

[Angela Crawley (Lanark and Hamilton East) (SNP)]

8. What stakeholder engagement his Department has undertaken on the Government’s forthcoming Employment Bill.

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

We have engaged extensively with stakeholders, both formally and informally, on a range of reforms to our employment framework, and will continue to do so in order to ensure that they deliver on our plan to build a high-skill, high-productivity, high-wage economy.

[Angela Crawley]

May I first express my thanks for the Minister’s kindness to my partner and me when our son was born last month?

This week the Northern Ireland Assembly gave a commitment to legislate for miscarriage leave, and the Scottish Government have given a commitment to introduce three days’ paid leave in the public sector. Will this Government give a commitment to introducing paid miscarriage leave in the Employment Bill?

[Paul Scully]

I congratulate the hon. Member and her partner on their fantastic news. It was a pleasure to meet her to discuss her private Member’s Bill on the subject that she has raised. We recognise that losing a baby at any stage is incredibly difficult, and we encourage employers to be compassionate. There is no statutory entitlement to leave for women who lose a baby before 24 completed weeks of pregnancy, but those who are unable to return to work may be entitled to statutory sick pay, and women are protected against workplace discrimination due to any pregnancy-related illness, including illness caused by miscarriage. That protection extends to two weeks after the end of the pregnancy.

[Mrs Maria Miller (Basingstoke) (Con)]

The Government have already taken important steps to stop the abuse of non-disclosure agreements in universities. Will my hon. Friend look at how he can take this forward in his Employment Bill by talking to organisations such as Can’t Buy My Silence, which are doing important work on ensuring that non-disclosure agreements are not misused in the workplace to cover up criminal allegations?

[Paul Scully]

I congratulate my right hon. Friend on her work in this and many other areas. I would happily meet her and that organisation to continue our conversation on NDAs.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I wonder if the Minister has done any stakeholder engagement with the new Minister for Brexit Opportunities and Government Efficiency, the right hon. Member for North East Somerset (Mr Rees-Mogg). I ask that question because in The Times at the weekend the new Minister said:

“Sometimes the employer would think they need more protection from the employee.”

That view is wrong. Too many people are in precarious employment and do not have strong workplace rights, and the Employment Bill is a chance to begin to address that. Does the Minister agree with us that it is employees who need more protection, or does he agree with his colleague that it is the employers who need more help?

[Paul Scully]

We will bring forward changes to the employment framework in due course. While we are working on that, and when parliamentary time allows, we are working on employment. That is why we have record numbers of people on payroll—men and women and people from all backgrounds, abilities and situations.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

9. If he will make it his policy to make flexible working the default.

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

The Government strongly support flexible working. Only by championing a flexible and dynamic labour market will we grow our economy. I would like to thank the hon. Member for her response to the consultation we closed in December and I look forward to publishing our response in due course.

[Tulip Siddiq]

I have listened carefully to what the Minister has said and I am pleased that the Government are talking about making flexible working the default, but their proposal merely makes the existing right to request flexible working available from day one in the job. I am sure the Minister knows that that will do nothing to address the fact that a third of all requests for flexible working are rejected, which puts single parents and carers at a considerable disadvantage in the workplace and affects the recruitment process as well. What legislation will the Government undertake to address the fact that unscrupulous employers can pick on a range of often pathetic, unfair and broad reasons when they want to reject a request for flexible working? Will the Government be introducing any actual legislation, because that is what the Opposition want to support?

[Paul Scully]

The hon. Member has reflected her consultation response in her questions. The consultation stuck to the principle that there is no one-size-fits-all approach to flexible working. We support the “right to request” framework, which facilitates an informed two-sided conversation but ensures that employers have the right to refuse requests that are unworkable within their business operations. Clearly, that will need to be robust if they feel that they need to reject a request because of the business situation.

[Mary Glindon (North Tyneside) (Lab)]

10. What recent steps he has taken to support small businesses to meet rising energy costs.

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

We recognise the impact that rising energy prices will have on businesses of all sizes. To understand the challenges that they face and explore ways to protect consumers and businesses, Ofgem and the Government are in regular contact with business groups and suppliers.

[Mary Glindon]

Given that the Federation of Small Businesses has said that small business confidence in the north-east is now at minus 64%, can the Minister say what consideration he is giving to the measures put forward by the FSB to support small businesses in the energy crisis, including scrapping the planned national insurance contributions increase and extending the household rebate to be matched by an equivalent business rate rebate?

[Paul Scully]

I met representatives of the FSB and other organisations yesterday, when we touched upon energy for businesses. We will always listen to those representative organisations. Clearly we want to ensure that the £408 billion of support in the last two years to protect businesses, livelihoods and jobs will help us to shape the recovery, with ongoing support from this Government—the Government for business.

[Yvonne Fovargue (Makerfield) (Lab)]

11. Whether he is taking steps to support prepayment meter customers following the increase in the energy price cap through the energy bills rebate.

--- Later in debate ---

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

Unscrupulous employers have used the pandemic to slash their loyal workforce’s terms and conditions and threaten them with the sack. Court cases have been lost by Uber and more recently by Tesco, yet all we have from this Government are platitudes. They have done absolutely nothing to stop brutal fire and rehire practices. Will the Government’s much-fabled Employment Bill finally ban them once and for all?

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

This Government have been really clear that such practices should not be used as bully-boy negotiating tactics. Employers should refer to the strengthened ACAS guidance that sets out that dismissal and re-engagement should be considered only as an option of last resort.

[Mrs Sheryll Murray (South East Cornwall) (Con)]

T10. Cornwall is famous for its creativity and its inventions—whether it be Richard Trevithick’s steam engine, Cornishman Richard Lower, who did the first blood transfusion, or Sir Humphry Davy’s lamp. What assurance can the Government give that research and development funding is getting to Cornwall?

--- Later in debate ---

[Mr Speaker]

Order. Mr McDonald, I gave you the privilege of getting in. Questions are meant to be brief. There are two other people who have to come in as well; it is not just about you.

[Paul Scully]

During isolation, we made it easier to claim statutory sick pay. We also changed universal credit to make it easier to claim and more generous. We continue to support people as this pandemic becomes endemic.

[Robert Largan (High Peak) (Con)]

Last year I organised the first ever High Peak jobs and apprenticeships fair, working with organisations such as Buxton & Leek College and fantastic employers such as Tarmac, Breedon Group and Ferodo. It was a huge success, with hundreds attending and many reporting that they had found jobs as a result, so I am delighted to announce the second High Peak jobs and apprenticeships fair, and I would love to invite the Minister to attend.

Endometriosis Workplace Support

Paul Scully Excerpts

Wednesday 9th February 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, Mr Davies. I congratulate my right hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) not only on securing this debate, but on his bravura performance in setting out the case. He gave examples that were difficult to listen to, to help us to understand what women are going through on a day-to-day basis.

I thank hon. Members who have taken part in the debate for their thoughtful and insightful comments. I would just pick out two contributions: the personal experience of the hon. Member for Streatham (Bell Ribeiro-Addy) and the example of his wife that the hon. Member for Strangford (Jim Shannon) shared. I thank them both for sharing those examples and what we can learn from them.

A number of Government Departments could have led the response to the debate, because endometriosis sits within a range of wider Government initiatives and strategies. The Department of Health and Social Care is developing the women’s health strategy. The Department for Work and Pensions and DHSC are following through on the “Health is everyone’s business” consultation response. The Government Equalities Office carries out wider work on equalities, and there is of course my Department’s work on labour market questions, such as how to make flexible working the default.

We each talk to businesses and employers on a range of issues. I am pleased to reflect the words of the “Women’s Health—Let’s talk about it” call for evidence. The more we talk about women’s health, the more we tackle the stigma and the taboos. Before I became a Minister, I was a vice-chairman of the all-party parliamentary group on women’s health. I am really pleased that this issue is being debated today and that we keep on addressing it and tackling the stigma.

In the interests of time, I will not describe the condition of endometriosis again, but we know that it is a condition that can be especially debilitating for many people. There are some factors, such as time to diagnose, which can exacerbate the situation. Endometriosis has a debilitating impact on a significant number of women across the UK. A respondent to the call for evidence said:

“I have had my endometriosis over looked and just told it was period pain and to deal with it. ‘It’s part of being a woman.’…‘my period is normal and I am exaggerating my pain, it’s all in my head’.”.

That is just plain wrong. No one’s pain and discomfort should be dismissed out of hand and nobody should be told: “It’s just part of being a woman”. We have got to do better.

To understand how best to support people with endometriosis in the workplace, we need to look across the whole system—at educating society at large, at the health sector and at the role of employers, as well as individuals. Only in that way can we start doing the right things for women’s health.

We know that damaging taboos and stigmas remain around many areas of women’s health. They can prevent women from starting conversations in the first place about their health or seeking support for a health issue. When women do speak about their health, too often they are not listened to.

The Government are determined to tackle these issues, which is why we are embarking on the first women’s health strategy. Last year, on 23 December, the Government published “Our Vision for the Women’s Health Strategy for England”, alongside the results of the “Women’s Health—Let’s talk about it” survey. A number of priority areas for action came through that. On women’s voices, more than four out of five women feel, or are perceived to feel, comfortable talking to healthcare professionals about general physical health concerns. That falls to less than three in five women when discussing mental health conditions.

On information and education, as we have heard, my right hon. Friend the Member for Elmet and Rothwell talked about teachers in schools. If we cannot get it right there, how will we get it right further down the line? Our ambition is for women to have access to high-quality information and education, starting from childhood and continuing right the way through to adulthood, to empower women to make informed decisions.

On access to services, just two in five respondents said that they, or the woman that they had in mind, can conveniently access the services they need in terms of location, and around one in four said the same in terms of timing. On health in the workplace, around one in three respondents said women feel comfortable talking about health issues in their workplace, and one in two said that their current or previous workplace had been supportive with regard to health issues. That clearly leaves a massive gap, which is why we need to go further.

[Hannah Bardell]

Will the Minister give us an indication of when that women’s health strategy will be implemented, because I know there has been a delay? Will he also make sure that it addresses the profound issues in terms of employment and the DWP? Those matters are not devolved to Scotland, but are still reserved to Westminster, and we will look closely and will want to work with him on those issues.

[Paul Scully]

I appreciate that, and I will discuss the strategy going forward. Health in the workplace will be a priority area for that strategy. We want to support women and ensure that they 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 in the workplace.

In addition, “Menstrual health and gynaecological conditions” will also be a chapter in the final strategy. It will explore ways to improve awareness and the care and treatment of those suffering with severe symptoms from conditions such as heavy menstrual bleeding, endometriosis, and PCOS. The strategy will set an ambitious and positive new agenda to improve the health and wellbeing of women across England, and it will be published later this year.

We are working to put flesh on the bones of the six priority areas. That will need to be marked by effective co-operation and collaboration across Whitehall. As an illustration of that collaboration and co-operation, the Government also have an active agenda on work and health more widely. We want employers and employees in the round, male and female, to have better interactions on work and health to improve employee retention. It is so important to address these issues from both sides of the lens.

I heard what Members said about the gender pay gap, and we could easily make a business case. Employers invest time and resource in training and developing people’s experiences, so why on earth would they then want to lose someone with a long-term debilitating disease and have to start the entire process again? They should do the right thing.

The Government’s response to the “Health is everyone’s business” consultation was published in July last year. It sets out some of the measures that we will take to protect and maintain the progress made to reduce ill-health-related job losses, and will see 1 million more disabled people in work from 2017 to 2027. The consultation was not specifically on endometriosis, because it did not specify any health conditions. It looked at system-level measures to support employers and employees to manage any health condition or disability in the workplace. We are looking at providing greater clarity around employer and employee rights and responsibilities, with a national digital information and advice service.

We are working with HSE to develop a set of clear and simple principles that employers would be expected to apply. We are increasing access to occupational health, especially for small and medium-sized enterprises that we know are currently underserved. Although the measures are not endometriosis-specific, they are key steps in our effort to change the workplace culture around health and sickness. The Department for Business, Energy and Industrial Strategy looks at labour market regulation. We are responsible for a policy that has been mentioned and which we know can be helpful for those who suffer from endometriosis: flexible working. I must correct the hon. Member for Livingston (Hannah Bardell). Flexible working did come out of the pandemic; it started under the previous Prime Minister, my right hon. Friend the Member for Maidenhead (Mrs May). We have been able to reset our understanding of flexible working in the light of the pandemic.

A respondent to the women’s health strategy call for evidence said:

“Working from home has helped me hugely, as it gives me flexibility to work in ways that are more comfortable for my body. I can work from my bed on a bad day, or have a hot water bottle on my stomach when I have cramps.”

We are taking forward the manifesto commitment to consult on making flexible working the default, unless employers have good reasons not to do so. That consultation contained measures that would increase the availability and the support of the uptake of flexible working arrangements, including whether to extend the right to request flexible working from the first day of employment. By making it easier for everybody to access flexible working, we hope to help those who may need it most, including women suffering from endometriosis.

That consultation closed on 1 December, having received more than 1,600 responses. We are going through those now and will come back in due course. That consultation also introduced plans for a future call for evidence on the subject of ad hoc flexible working, where we want to explore how non-contractual flexibility works in practice. I discussed that with the flexible working taskforce on Monday. We will ensure that the role of ad hoc flexible working, in supporting women with health conditions, is part of its considerations.

My right hon. Friend the Member for Elmet and Rothwell had five questions. We absolutely welcome the work of Endometriosis UK, in particular the employers’ scheme, which we are pleased to see has a high number of participants. Debates such as this will help to fuel more businesses, of all sizes, to join that scheme and share those practices. All that work clearly needs to come under the remit of the women’s health ambassador. I am looking forward to working with that person once appointed.

My right hon. Friend asked about the definition of disability and whether it is included. We have heard the definition: a person is considered disabled if they have a physical or mental impairment that

“has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities.”

We have heard examples where that is absolutely the case.

On benefits and how the definition is approached in practice, the work capability assessment determines eligibility for employment and support allowance, and the additional health-related amounts of universal credit. That will indeed be taken into account. It is difficult to have a number of discrete schemes for employers from Government. None the less, big HR departments can take on these things. What we must do is explain to smaller businesses the benefits of tackling these areas.

To conclude, I want to ensure that, through the women’s health strategy, we can get the culture on work and health right. To ensure that the package is as effective as it can be, we need to continue to collaborate. I am looking forward to working with the women’s health ambassador, and I am determined that BEIS should play a full role in driving this agenda forward. I close by thanking everybody for their excellent contributions in this helpful and informative debate.

Neonatal Leave and Pay

Paul Scully Excerpts

Wednesday 9th February 2022 Commons Chamber

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

I congratulate my hon. Friend the Member for Thornbury and Yate (Luke Hall) wholeheartedly on securing today’s debate. This is an important issue, and I am very grateful to him for bringing it to the attention of Parliament in the way he did, baring his soul. I know Roisin will be proud of him today.

We have heard his personal account that the impact of having a young baby in neonatal care has on parents, and the additional pressure that having to balance employment with caring for their child places on them. My hon. Friend has spoken with such depth of personal experience and it brings home that what we do here, when we are looking to bring forward the Employment Bill, and all the work the officials do matters. This really matters on a human scale to people on a day-to-day basis, as we have just heard. I am grateful to him for his candour, and for raising awareness of this issue. It is a shame that the rhythm of this House means that that speech has not had the audience in the Chamber, but I know people will be watching it and reading the account in the Official Report. Bringing this matter to our attention is amazing.

In the UK, an estimated 100,000 babies are admitted to neonatal care every year following their birth. Many of those babies spend prolonged periods of time on a neonatal care unit in a hospital as a result of having been born prematurely, or for other health conditions. It is, as we have heard, an incredibly worrying and stressful time for parents. They will naturally want to be able to focus their attention on getting through that period, supporting each other and their baby. However, some may have concerns about their ability to do that and keep their jobs. I sympathise with anyone who has found themselves in that position.

Currently, parents in those circumstances tend to rely on their statutory leave entitlements, for example maternity or paternity leave. In practice, that means a considerable proportion of their leave may be used while the baby in still neonatal care or that they do not have sufficient leave to remain with their baby for the necessary period.

A survey conducted by the charity Bliss in 2019 found that 66% of fathers had to return to work while their baby was still receiving specialist neonatal care, and that 36% of fathers resorted to being signed off sick in order to spend time with their baby in a neonatal unit. That can, in some cases, have a negative impact on their employment record. Fathers and partners may also experience negative effects on their physical and mental health from trying to combine work with caring for the child and the mother. Other parents of babies in neonatal care have reported that they had to return to work earlier than they had planned due to suffering financial hardship from being away from work.

Considering those different scenarios, it is clear that the current leave and pay entitlements do not adequately support parents of babies in neonatal care. In March 2020, following a Government consultation on the issue, we committed to introducing the new entitlement to neonatal leave and pay, and I can assure my hon. Friend that we remain very much committed to that. Our planned neonatal leave and pay entitlement will allow parents to take additional time off work in circumstances where their child is admitted to neonatal care, ensuring that they are no longer in the incredibly difficult position of having to choose between risking their job and spending much-needed time with their baby.

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 paid 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. Statutory neonatal pay, like other family-related pay rights, will be available to those employees who meet continuity of service and minimum earnings tests.

While we understand that the introduction of neonatal leave and pay will create a small burden on businesses, we believe that the benefit to business will outweigh any costs. Policies such as neonatal leave and pay that enable parents to participate in the labour market and to succeed and progress in work not only benefit individual employees but give employers access to a bigger pool of talent. Such reforms will also help businesses, because employers who embrace family-friendly policies are so much more likely to see greater employee loyalty, commitment and motivation.

In addition to our plans to introduce neonatal leave and pay, the UK has a range of policies in place that support employees to balance work with family life and other personal commitments and responsibilities. They include: a right to request flexible working; generous family-related leave and pay entitlements; and protections from detriment for parents who take or seek to take family-related time off work. The UK’s maternity leave system is one of the most generous in the world. Pregnant women and new mothers are entitled to take up to 52 weeks of leave—that is a day-one right with no qualifying period of service—and up to 39 weeks of statutory maternity pay if they are eligible. Maternity leave can be started up to 11 weeks before the expected week of childbirth.

Fathers of premature babies have the flexibility to take their one or two weeks of paternity leave and pay within eight weeks of the expected date of birth rather than having to take the leave within eight weeks of the baby’s actual birth, if they wish. We also have a manifesto commitment to make paternity leave more flexible and will set out our response on that in due course.

The right to emergency leave—time off for dependants —allows all employees a reasonable amount of unpaid time off work to deal with an unexpected or sudden emergency involving a child or dependant and to put care arrangements in place. Additionally, all employed parents have a right to up to 18 weeks of unpaid parental leave for each child up to a child’s 18th birthday.

The Government are committed to introducing new employment measures as we seek to build a high-skilled, high-productivity, high-wage economy that delivers on our ambition to make the UK the best place in the world to work and grow a business. I reassure my hon. Friend that further detail on reforms to our employment framework will be published in due course. Naturally, covid-19 has affected our progress in introducing the new entitlement to Parliament, but we remain committed to doing so as soon as parliamentary time allows. In the meantime, we are moving forward with the work. That includes working with lawyers on our legislative approach, which is likely to include both primary and extensive secondary legislation, as well as considering how the entitlement will be implemented. It will also, in due course, require accessible and thorough guidance for both employers and employees.

As I mentioned, delivery of the new entitlement will need primary legislation as well as changes to the HMRC IT payment system to allow employers to administer statutory neonatal pay on behalf of the Government. Officials are in discussion with HMRC colleagues about the establishment of that IT system. It is a large-scale project, and we are ensuring that the relevant teams in HMRC are as prepared as possible, that they fully understand what is required and how much resource will be needed. We are doing the necessary groundwork so that we are in the best position to implement neonatal leave and pay once legislation is in place.

I recognise my hon. Friend’s points about whether the entitlement could be delivered through a stand-alone Bill or alternative measures. Due to pressures on parliamentary time, it might be challenging to introduce a stand-alone Bill, but we remain committed to introducing neonatal leave and pay and will do so as soon as parliamentary time allows. We understand and sympathise with the position of parents with children in neonatal care and remain fully committed to the introduction of neonatal leave and pay. In the meantime, we have other parental leave entitlements that are available to new parents and we encourage employers to continue to respond with flexibility and compassion to parents in that very difficult position. I have spoken to a number of businesses that have great schemes in place to deal with such life events, such as ASOS. I try to showcase that good work, because they do not need to wait for a legislative framework.

I close by thanking my hon. Friend for his incredible contributions to the debate and I thank everyone who has worked hard to raise awareness of the difficult situation of parents remaining in employment when their children are in neonatal care. As always, I would be delighted to meet my hon. Friend and other Members of the House to discuss the issues further as we move towards getting these provisions on the statute book.

Question put and agreed to.

Sutton Decentralised Energy Network

Paul Scully Excerpts

Friday 4th February 2022 Commons Chamber

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

I congratulate my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) on securing this important debate today. I think we are at well over three figures now for the number of times he has stood in this place and raised matters to do with Carshalton and Wallington.

My hon. Friend has had to mention SDEN far too many times. Residents in New Mill Quarter have had to suffer and I have seen a lot of the comments that have been made, although not as many as he has as a dogged champion for those residents. Local Facebook groups and newsletters that I have read as a Sutton Member of Parliament call out for someone to come in and sort the situation out. In May, we will have that opportunity.

I am sorry to hear about my hon. Friend’s constituents, including those at New Mill Quarter, who have been experiencing all those issues with their heat network. I sympathise with them for the difficulties that must cause and agree with my hon. Friend about the need for protections for heat network consumers.

The experiences of constituents that we have heard highlight the importance of the Government’s commitment to regulate the heat networks market within this Parliament. Heat networks are vital to our net zero ambitions. As we have set out in the heat and buildings strategy, they are the only way that we can unlock large-scale renewable and recovered heat sources such as energy from waste, waste heat and heat from rivers and mines. When they are deployed effectively, heat networks can bring together greater heat efficiency than individual gas boilers, lower costs for consumers, unlike what we have just heard, and support for local regeneration. We recognise when we hear examples such as this that we need to regulate the market to ensure protections for heat network consumers.

In 2017, the Government commissioned a survey to quantify consumer experiences with heat networks in England and Wales. Those results showed that consumers connected to a heat network generally receive a good service and are as satisfied as non-heat network consumers. They also showed that on average a heat network consumer is likely to pay £100 less a year for heating and hot water than consumers on other utilities. We can see that heat networks per se can be a good thing, but unfortunately, as we have just heard, they are clearly failing residents in Carshalton and Wallington and in New Mill Quarter in particular.

We acknowledge the 2018 report from the Competition and Markets Authority, which, like my hon. Friend, considered a number of examples from around the country and showed that a significant minority of heat network consumers experienced high prices, frequent outages and a lack of transparency. We committed to the CMA’s recommendation of regulating the market, consulted on establishing a heat networks market framework and in December published the Government response to the consultation in which we confirmed that we would appoint Ofgem as the heat networks regulator.

The document includes summaries of responses received, and sets out our proposals on consumer protection, regulating the carbon emissions of heat networks, and technical standards. That will include introducing consumer protection rules to combat cases of detriment, such as the outages being experienced by residents of New Mill Quarter. We want heat network consumers to have comparable levels of service and protection to those using electricity and gas.

As part of the market framework, we will introduce quality of service standards requiring notification periods for planned outages and compensation for all outages. Consumers will have access to an independent redress scheme and a consumer advocacy body, which will provide a consumer helpline and priority services for consumers in vulnerable circumstances. The regulator will have powers to enforce price transparency, introduce guidance on fair pricing, set requirements on cost allocation, and conduct investigations into heat networks where prices are disproportionately high.

Finally, consumers will be provided with a minimum level of easily accessible information and guidance on heat networks at the pre-contractual stages of property transactions and during residency. There will be requirements on the provision of heat supply agreements and billing information.

We are preparing to introduce that legislation to regulate the market, but measures are already in place to improve standards for heat network consumers. Heat Trust provides an independent, market-led voluntary standards scheme. Consumers on heat networks registered with Heat Trust benefit from terms of service similar to those in the gas and electricity markets. They are also able to access the energy ombudsman if they have a complaint against their heat supplier. In 2019, the Department for Business, Energy and Industrial Strategy wrote an open letter to all heat networks encouraging them to register their schemes with Heat Trust. We continue to encourage schemes to sign up, raise standards now and prepare for regulation. We also support the Heat Networks Industry Council’s work to establish the consumer protection agreement and the heat network emergency responders group in response to the covid-19 pandemic. We encourage heat suppliers to sign up to this agreement, and we have written to signatories urging them to do more to tackle outages and improve compensation standards for outages.

Though these schemes have benefitted many consumers, we recognise that regulation is needed to drive up consumer standards across the heat networks market. I therefore reiterate our commitment to regulation, as pushed for by my hon. Friend. We have introduced several schemes to support heat network deployment. The Government’s heat networks investment project has made £320 million of capital funding available for investment in heat network projects through grants and loans in England and Wales. This will be succeeded by the green heat network fund in 2022, which will support and incentivise the use of low-carbon heat sources in heat networks. Both of these investment projects ensure adequate consumer protection measures are in place by requiring projects to demonstrate Heat Trust standards or equivalent levels. This ensures that we only support heat networks that deliver fair pricing and are that well-designed, efficient systems.

Furthermore, we have been carrying out work on improving performance across a number of existing heat networks. This provides an evidence base for the development of the heat networks efficiency scheme, which will part-fund operational performance improvements and carbon emissions reductions in existing systems. Further details will be announced later this year.

I was really interested to hear my hon. Friend’s description of what has happened in Sutton. He has raised this on a number of occasions with my hon. Friend the Secretary of State, while he was Energy Minister, and with the new Energy Minister. BEIS officials were concerned about the issues raised by customers connected to phase 1 and so asked the council how the grievances were addressed before approving phase 2 funding. Sutton Council clearly had to recognise that there were service interruptions in 2020 as a result of technical failures caused by the housing developer during the network installation phase of the New Mill Quarter development in Hackbridge. At the time, it apologised and made goodwill compensation payments to all affected customers as part of the apology. The move in the primary heat source connection from temporary to permanent at the Beddington landfill gas site was successfully completed in March 2021.

This is an interesting point: I have seen my hon. Friend’s videos on social media around New Mill Quarter talking about the outages that were happening just last month. However, the council has given us figures that say that, since the heating network was connected to the primary heat source, its reliability has significantly improved, with an availability rate of 99.8% being achieved from March to September 2021. However, the residents I have heard from, and the story that my hon. Friend tells, suggest a different story entirely.

We have to remember that councils do not exist to install heat networks or to install incinerators in one of the most polluted roads in London. They exist to provide a service for their residents who elect them in the first place. They would be nothing if it was not for the people they serve. They should be there to make sure that they keep people warm, to give them hot water and to get rid of their rubbish in an environmentally responsible way. That is their purpose. The incinerator and the heat system are mechanisms to achieve all that, but they are not a means of it themselves.

The council needs to be responsive to its electorate and to those residents. It is disappointing to hear my hon. Friend talk about the lack of empathy and sympathy being shown to them. If it is the council that is providing that service directly, rather than a third party, then it should be more responsive and it should be serving those residents. I hope that, in May, those residents will be able to reflect on that in their consideration, because councillors need to be accountable. If we are to devolve power to local authorities—I am, and always have been, a big fan of devolution—it is really important that residents are able to pull councillors up, so that they do not get arrogant and they do not get complacent. Residents should remember that they will be voting in councillors who will be there for the next four years. Four years is a long time—just think how long ago 2018 seems. Over the next four years, we want to make sure that those residents in New Mill Quarter get the hot water and the heating that they have paid for—it is a service—so they need councillors who will be far more responsive.

Let me have a final word on the incinerator. When I was the leader of the opposition on Sutton Council, I remember speaking about incinerators to one of the previous environment spokesmen on the council. When one was brought in, so much of the debate on pollution was actually about vehicle movements. It is disappointing that, despite burning 70% of the waste of the boroughs that it serves in the south-west London partnership, it does not have enough to feed it. My hon. Friend was absolutely right to talk about the circular nature of the argument in the bid, which included some dubious numbers. It is not appropriate that the talk now is of more vehicle movements in that area. We need to be really careful about that, which goes back to the responsiveness that I was talking about.

In the round, it is essential that heat network consumers are provided with clean and reliable heat at an affordable price. It can work; it does work in other parts of the country. As I have said, it is a real marker of our net zero ambitions, which is why we are developing a heat networks market framework that places consumers at its heart, delivers sustainable investment in the sector, and maximises heat networks’ potential economic and environmental benefits. We committed in the energy White Paper to legislate for this market framework by the end of this Parliament, and we are working closely with industry and consumer groups to ensure that the regulation delivers positive outcomes for consumers.

I conclude by once more congratulating my hon. Friend on being such a champion for his area, on securing this debate and on raising some really important issues for the residents of New Mill Quarter and beyond.

Question put and agreed to.

Economic Crime: Planned Government Bill

Paul Scully Excerpts

Wednesday 26th January 2022 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy to make a statement on the Government’s plans to bring forward an economic crime Bill.

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

I thank my hon. Friend for his question, but, as I am sure he will appreciate, I am not going to speculate about the content of any future Queen’s Speech, which is the correct moment for the Government to be setting out their legislative agenda for the next parliamentary Session.

However, I can confirm that the Government remain committed to tackling economic crime, which is why my colleagues in the Home Office and the Treasury take the lead on this. In recent years we have taken a number of actions, including creating the new National Economic Crime Centre to co-ordinate the law enforcement response to economic crime and establishing the Office for Professional Body Anti-Money Laundering Supervision to improve oversight of anti-money laundering compliance in the legal and accountancy sectors. We delivered the Criminal Finances Act 2017, which introduced new powers including unexplained wealth orders and account freezing orders. We are determined to go further to crack down on dirty money to protect our security and our prosperity. With the publication of the fraud strategy and second economic crime plan this year, we will further level up the response to crack down on crimes of this type.

My Department is playing its part. The Department for Business, Energy and Industrial Strategy announced plans to reform Companies House in September 2020. In 2021 we consulted on more detailed aspects of the reforms, and we will respond to the consultation soon. Investment in new capabilities at Companies House is already under way, with £20 million being invested in this financial year and a further £63 million announced in the spending review. The draft Registration of Overseas Entities Bill has undergone pre-legislative scrutiny. We are amending the Bill in line with the Committee’s recommendations, and in line with comments that the Prime Minister made to the House just yesterday. We will introduce the Bill and the broader reforms of Companies House when parliamentary time allows.

[Kevin Hollinrake]

I am grateful to the Minister for his response. As he knows, economic crime costs the people of this country £100 billion per annum, according to the National Crime Agency. The Government have committed themselves repeatedly to legislation to give our agencies the tools that they need to tackle this problem, and it was therefore concerning to hear from my noble Friend Lord Agnew—who recently resigned from his role as Minister responsible for countering fraud—that a decision had been made to drop the economic crime Bill from the legislation that is due in the next parliamentary Session.

This is not a notional white-collar offence; it affects real people in very tangible ways. Terrorists and drug dealers depend on it to launder and legitimise their money through UK banks, companies and properties. Up to 50% of moneys flowing through Russian laundromats, often used for tax avoidance, for stolen public funds and to launder moneys derived from organised crime, flow through UK shell companies. UK corporate structures were involved in arms deals which breached sanctions in Sudan. HSBC and NatWest have been fined hundreds of millions of pounds for allowing criminals and Mexican drug cartels to launder their money through accounts held at their banks. An estimated £5 billion or so of taxpayers’ money, in the form of bounce back loans, has been taken fraudulently because some banks have not applied the most basic of checks. Criminals, despots and terrorists involved in people trafficking, illegal immigration, drug dealing, extortion, kleptocracy, the impoverishment of nations, and fraud—including what is taken directly from the public purse, to the tune of £30 billion per annum—are all facilitated by some of the lax rules that we have in this country.

The Government have promised to tackle this issue—as my hon. Friend the Minister has said—by means of Companies House reform; to fund regulation by applying a small surcharge to the current cost of establishing a company in the UK so that we can close down those shell companies and trusts; and to introduce a register of overseas entities to reveal the real beneficial owners of UK property, and a corporate offence of failing to prevent economic crime so that, for example, banks can be properly held to account for granting those fraudulent bounce back loans.

All this, plus more resources for our agencies and new whistleblower protections, will boost this country’s reputation, tackle crime, and help to reduce our tax burden. Every Minister I have spoken to wants us to do this. The Treasury Committee wants us to do it, all our crime agencies want us to do it, and campaigners want us to do it. I urge the Government to introduce the legislation as soon as possible.

[Paul Scully]

Let me first acknowledge my hon. Friend’s work on Companies House reform, on whistleblowing, and on general economic crime. He really has a handle on this issue, and his thoughts are always well received.

My hon. Friend is right to say that economic crimes are a significant cost to the economy. It should also be borne in mind that there are victims at the end of these crimes, and that they experience significant distress. We also recognise the national security implications of allowing dirty money from overseas into our financial system. We acknowledge the need for action on economic crime, and the Government have acted. My colleagues in the Home Office and the Treasury have begun reforms to the suspicious activity reporting regime, created the National Economic Crime Centre to co-ordinate the law enforcement response, and reviewed our money laundering regulations and supervisory regime. That review will produce a report by June 2022. We are legislating for the economic crime levy in the current Finance (No. 2) Bill. We are committed to building a framework that will deter such crimes from happening and to providing a framework that will ensure that those who commit such crimes can be held to account.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I thank the hon. Member for Thirsk and Malton (Kevin Hollinrake) for his urgent question today.

At the beginning of the pandemic, there was widespread recognition of the urgent need to get money out to support businesses as soon as possible, but what made Lord Agnew’s resignation statement this week so alarming was his criticism of how the Government are handling cases of fraud now we know about them, and the news that the Government may no longer be intending to bring forward an economic crime Bill.

Lord Agnew described the performance of the Department for Business, Energy and Industrial Strategy as “nothing less than woeful”, and added that it has

“been assisted by the Treasury, which appears to have no knowledge of, or little interest in, the consequences of fraud to our economy or society.”—[Official Report, House of Lords, 24 January 2022; Vol. 818, c. 20.]

To be honest, it is one of the few times in this Parliament that the two Departments have been consistent with each other. These are very serious allegations for a serving Minister to make, and I am worried by what the Minister has just had to say about the economic crime Bill, so let me ask him however about the Government’s intentions in his area and whether its commitments still apply.

First, is it still Government policy to legislate for a register of beneficial ownership of property in the UK, so that we can find out who really owns property in this country? Secondly, will the Government still legislate to prevent abuses of Scottish limited partnerships? Thirdly, will the Government still legislate to prevent the shortcomings in the unexplained wealth order regime highlighted by the recent case in the High Court of NCA v. Baker and others? Fourthly, will the Government still reform Companies House? If the register of British companies was more rigorously checked and policed, there would not have been as many fraudulent companies as there were to engage in fraud when the crisis began. Finally, can the Minister confirm that his Department’s latest estimate of the value of fraudulent bounce back loans is £4.9 billion, and that it is the Department’s intention to write off £4.3 billion of that?

This sorry episode reveals a Government far too casual with wasting taxpayers’ money, but there is also an aspect to economic crime that relates to the probity and integrity of our financial and political systems. I hope the Minister can provide me, and the House, with some much needed reassurance today.

[Paul Scully]

I thank the hon. Gentleman for his comments. Our appetite for tackling economic crime remains undiminished, as it does with Companies House reform, which has been well trailed and well considered. We will continue to work in this area, but I cannot pre-empt what Her Majesty will say in the Queen’s Speech.

In terms of the bounce back loans, the Economic Secretary to the Treasury, my hon. Friend the Member for Salisbury (John Glen), made it clear in the House that HMRC did not produce the figure of £4.3 billion, and the money has not been written off. The figure was an inference by journalists, who subtracted £1.5 billion—the estimate of the amount to be recovered by taxpayer protection—from the £5.8 billion that was estimated as error and fraud in 2020-21. It was publicised before Christmas. Our Department continues to work with our fraud measures with partners in Government, the British Business Bank and all the partner banks who issued this money in the first place.

[John Penrose (Weston-super-Mare) (Con)]

I appreciate that the Minister cannot be tempted to comment on what might or might not be in the Queen’s Speech, but based on what Lord Agnew said, if it were to be true, I please urge the Minister to consider that it will be about as popular as a cup of cold sick with anyone out there who is concerned about the fight against corruption or the fight for transparency. The well of excuses after three or four years of promising this piece of legislation or its related pieces has now run dry. This legislation is essential for the credibility of this country and this Government, particularly when we have a crisis in Ukraine and all sorts of Russian oligarchs waiting to move money into this country if they can, and when there are fundamental questions, as we heard in Prime Minister’s questions, about Westminster today. It is essential that we do not back away from this central piece of legislation, which is a touchstone issue for many stakeholders out there.

[Paul Scully]

I appreciate my hon. Friend’s work in tackling corruption and encouraging further transparency, which we have had several conversations about. We remain undiminished in our approach to tackling economic crime, for the reasons that he has given, and to Companies House reform, too. We will work with the Home Office and the Treasury to make sure we can get these measures in place as soon as possible.

[Alison Thewliss (Glasgow Central) (SNP)]

“Lamentable”, “woeful”, “arrogance, indolence and ignorance” were just some of the words that Lord Agnew used to describe the Government’s action on economic crime. In resigning at the Dispatch Box in the Lords, he has shown a lot more courage than anybody on the Front Bench in this place.

Some £4.3 billion was lost in the covid schemes and as-yet-unknown sums were lost in Government-backed loan schemes to crooks and fraudsters, while some in this country got no support. For example, it was deemed too difficult to redress support for parents in the self-employment income support scheme. Lord Agnew also said that it was a foolish decision to kill off the economic crime Bill, and given the evidence that I have heard at the Treasury Committee during our inquiry on it, I wholeheartedly agree.

Many cases of economic crime could be halted if the Government tightened up Companies House, because reform is well overdue. They have huge volumes of evidence on that. There is no verification, it costs only a tiny sum to set up a company and the information on the Companies House register is—politely—utter guff. If the Minister looks at Graham Barrow’s account on Twitter, he will see some of the absolute nonsense that is entered on to the Companies House register and somehow accepted. All that has led to an open door through which crooks and fraudsters have been allowed to waltz off with public money and Government-backed loans. UK corporate structures, such as Scottish limited partnerships, allow that to happen—and have done for years.

When, on what date, will we see an economic crime Bill? When, on what date, will we see the registration of overseas entities Bill, for which I sat on the Joint Committee years ago and on which the Government have failed to act? Why are the Government so unconcerned that the UK is deemed Londongrad and notorious for the laundering of dirty money? Who benefits from that—is it Tory donors and their pals?

[Paul Scully]

I think the last comment is beneath the debate. The hon. Lady talks about Companies House reform. Clearly, a lot of work is already happening in Companies House and it supports law enforcement on hundreds of cases each month. We want to get the balance right to ensure that new entrepreneurs can set up businesses through Companies House easily and affordably. There is much more reform to be done, however, which is why our appetite remains undiminished. She talked about Lord Agnew, who I thank for his work on this area. I worked closely with him to put measures in place to tackle fraud in bounce back loans and other areas of Government. He was a great servant of the Government and I regret the fact that he has gone.

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

May I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) on raising the matter? I point out to the Minister that, over the last 10 years, the Government have made a lot of progress on this area but many hon. Members have put a lot of time and effort into working across the House to try to advance what is an important British agenda, not least at the G8 under David Cameron’s leadership. Companies House remains a good library, but it does not have investigatory powers, and it is there that we want progress to be made. Will he agree to meet me, my hon. Friend the Member for Thirsk and Malton and others who are concerned about progress in that area, together with those who run Companies House, to see whether we can make some progress?

[Paul Scully]

My right hon. Friend raises some interesting and important points. I will ask the relevant Minister, likely Lord Callanan from the other place, to meet him, but I am happy to meet him either way.

[Chris Bryant (Rhondda) (Lab)]

I am sorry—the Minister is a nice chap—but we have been calling for this Bill for ages and ages. Time after time, Ministers come back to the House to say, “Yes, there’s going to be a public register of beneficial ownership,” but it still has not happened. They say they will do it in the overseas territories, but it still has not happened. They say that they will stop giving out golden visas to Russians with dodgy money coming into the UK, but it still has not happened. We in this country are a soft touch. If we want to send a strong message to Russia, particularly at the moment, we have to move swiftly and not say, “Oh, I can’t possibly comment on what legislation we might be thinking of in the future.”

[Paul Scully]

I thank the hon. Gentleman for that—it was a shame he did not stop at his first sentence, but it was very kind of him. I appreciate all of those measures that he wants to put in place and, as I say, we remain undiminished on that. In the meantime, we have sanctions to tackle corruption from other countries. We already have very robust procedures in place, but we know we need to go further. That is why these measures will come, but I cannot pre-empt Her Majesty.

[Sir Robert Buckland (South Swindon) (Con)]

I associate myself with the remarks of praise for my noble Friend Lord Agnew, an outstanding Minister who asked searching questions of government at all times. It was a pleasure to work with him. May I press my hon. Friend about the work the Law Commission is undertaking on corporate criminal liability. It is due to present options early this year and I urge him, first, to use all expedition to get on with the job of legislating on economic crime and, secondly, to incorporate what I hope will be sensible recommendations from the Law Commission so that we can get corporate criminal liability in this country right? At the moment, the law is just not working and action is needed.

[Paul Scully]

I thank my right hon. and learned Friend for his work in this area as well. Because there has been no consensus, it is important that the Law Commission looks at this matter, because we are dealing with a very technical crime and if we are going to get the answers to it right, we have to get this right first time. We will, absolutely, consider that report in its fullest when it comes to us.

[Layla Moran (Oxford West and Abingdon) (LD)]

First, I congratulate the hon. Member for Thirsk and Malton (Kevin Hollinrake) on securing this urgent question and thank him for backing my Bill, which would have brought in that register of beneficial interests. When I mentioned this to the Prime Minister just this week, he pointed to the Leader of the House and said it would be introduced as soon as possible, but now look what has happened: the vehicle we would have used to do that is gone. So I ask the Minister: how can he say that he is taking this seriously, given that this Government say one thing and do the complete opposite, do they not?

[Paul Scully]

I am afraid the hon. Lady is pre-empting the Queen’s Speech—Her Majesty will present this. There has been nothing pulled at all; Her Majesty will set out the Government’s programme in due course.

[Mary Robinson (Cheadle) (Con)]

I congratulate my hon. Friend the Member for Thirsk and Malton on securing this important urgent question. The National Crime Agency, using figures supplied by the national fraud indicator, estimates that up to £190 billion is lost to fraud, with £140 billion of that coming in the private sector and £40 billion coming in the public sector. That is a huge amount, which could be best invested in our economies. Does the Minister agree that we need to reward and protect whistleblowers who are at the forefront of this? We are talking about the informed insiders who bring these issues to light; more than 40% of this crime is uncovered by whistleblowers. Does he agree that the current legislation, the Public Interest Disclosure Act 1998, is not fit for purpose and needs to be looked at again, and that we need an office of the whistleblower, which would bring together all of these areas?

[Paul Scully]

I congratulate my hon. Friend and thank her for the work she does in this area. We have had a number of conversations and we will always look to see what more we can do to strengthen the whistleblowing framework in legislation. We do not necessarily agree on the end result, but, again, it is a complicated area that we do want to get right, for the reasons she set out. I will continue to work with her and with my hon. Friend the Member for Thirsk and Malton.

[Dame Angela Eagle (Wallasey) (Lab)]

While the Minister wrings his hands, London has become the jurisdiction of choice for dirty money. The levels of fraud are soaring upwards in the wrong direction. We have waited years and years for the open register of beneficial ownership of companies and it has not appeared, and we have waited years and years for corporate liability reform. How much longer do we have to wait? How much worse are this Government going to let fraud and money laundering get before they get off their collective backside and do something?

[Paul Scully]

What I am not going to do is pre-empt Her Majesty.

[Matt Hancock (West Suffolk) (Con)]

May I associate myself with the remarks praising Lord Agnew, who has done great service in government? Will the Minister ensure that, at the same time as he develops this policy, we ensure that the UK is also home to new innovations such as fintech and the extraordinary growth of cryptocurrencies? Those innovations have the potential to disrupt finance just as social media has disrupted communications and online shopping has changed retail. Post Brexit, the UK has the chance to be the home of fintech, which not only can be an economic driver, but can help to cut fraud and financial crime because of the transparency it brings. Will he make sure that we get this right and that new legislation is fit for the future, so that Britain can be the home of this revolution?

[Paul Scully]

My right hon. Friend is absolutely right. We have to get the legislation right, not only because we want to tackle economic crime, but because we do not want to stifle innovation and the investment in this country that makes us the highest receiver of foreign direct investment in Europe and one of the highest across the world. This is a great place to do business, to set up, grow and scale up.

[Sammy Wilson (East Antrim) (DUP)]

The whole House would love to believe the Minister’s words, as would Northern Ireland, where paramilitary money has been turned into a vast empire, especially along the border, and economic crime is rife. The evidence is not great, though, given the casual writing off of £4.3 billion-worth of bounce back loans; the fact that Companies House is in such chaos that people can avoid paying debts by going bankrupt one day and starting a company the next; the fact that in the middle of the Ukraine crisis we have threatened sanctions on Russia yet we are not taking action on the dirty money from Russia, which flows into London and props up the Putin regime; and the fact that the former fraud Minister said this week that the Treasury has little interest in or little knowledge of fraud. The evidence is not great for the assurances that the Government are serious about tackling fraud.

[Paul Scully]

As I said, the £4.3 billion figure cited is an inference by journalists; that money has not been written off by this Government. We are working with partners to ensure that we tackle the fraud that is clearly in the system, having given the money out at a crucial stage in the pandemic to enable businesses to survive. On the phoenix companies that the right hon. Gentleman talked about, that is exactly why we introduced the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021, which tackles such directors, but there is clearly more that we need to do, and we will do it when parliamentary time allows.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) and endorse everything he asked for. I know the Minister cannot anticipate the Queen’s Speech, but may I ask him to read the debate the House had on lawfare last Thursday, to which the Under-Secretary of State for Justice, our hon. Friend the Member for South Suffolk (James Cartlidge), responded? Right now in our courts, in cases that are being investigated, litigants are outgunning the Serious Fraud Office. Oligarchs are basically waging lawfare in judicial review against our regulators and preventing these cases from being prosecuted properly. Will the Minister speak to our hon. Friend the Under-Secretary of State for Justice and make sure that any future legislation takes into account the threat of lawfare?

[Paul Scully]

I agree that the lawfare debate was incredibly interesting and enlightening. We will make sure that we work together across Government to take all those matters into consideration when drawing up future legislation.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The former Minister Lord Agnew said that fraud in government is rampant—it is estimated to be approximately £30 billion a year—with a complete lack of focus on the cost to society or indeed the taxpayer, yet what we have heard so far from the Minister today is complacency. We need action now, because criminal fraud and money laundering are financing organised crime, drug trafficking, prostitution and much of society’s ills. The Minister needs to step up and get on with the job, legislate and go after the fraudsters who have stolen taxpayers’ money.

[Paul Scully]

The hon. Lady is right about tackling fraudsters. That is why our determination to introduce legislation in this area is undiminished. At the other end of the scale but still adding up to a lot of money, universal credit, as well as being more responsive to claimants, was itself an anti-fraud measure. One of Lord Agnew’s great qualities was his attention to detail—to the small acts that had big implications but were often missed. We will bring that learning to bear across government.

[Chris Evans (Islwyn) (Lab/Co-op)]

The Department uses the National Investigation Service for frauds worth more than £100,000. The National Audit Office has reported that the service received 2,100 intelligence reports last year, but only 50 were investigated. The NAO has identified that as a lack of capacity, so rather than waiting for the Queen’s Speech, why does the Minister not speak to the Chancellor and ask for some extra funding for the service to pursue those frauds?

[Paul Scully]

We have invested in a number of schemes, including an investment in the National Investigation Service to boost its capacity to investigate cases of serious fraud, especially within the bounce back loan scheme. It received £5 million in the 2020 spending review and made recoveries worth £3.1 million in 2021-22, exceeding its targets. It has investigations into bounce back loan frauds and other areas, and we will continue to work with it.

[Mark Pawsey (Rugby) (Con)]

I know that the Minister will agree that my constituents have the right to expect that victims of economic crime will get the same redress as for other crimes, including where the victims are taxpayers. He will also welcome the many comments that I have had from businesses in my constituency about the speed of the support that was made available to prevent failures. In respect of Government-backed loans during the pandemic, does he think it would be helpful for the British Business Bank to be required to release performance data on the lenders to provide transparency on banks’ activities at the time?

[Paul Scully]

I thank my hon. Friend for all his work throughout the pandemic. In his position as a member of the Business, Energy and Industrial Strategy Committee, he has been asking probing questions. With the British Business Bank, we have tried to get the balance right between the transparency required to tackle the issue and the speed at which we can act, so that we are not consuming too much of its resources. It is early days in terms of fraud and recovery, but yes, data will become available.

[Mr Ben Bradshaw (Exeter) (Lab)]

How can the Minister reassure us when one of the reasons for the Government’s reluctance to act was highlighted in the Intelligence and Security Committee’s report on Russian interference in our democracy as the large amounts of Russian and other dirty money that flow into Conservative party coffers?

[Paul Scully]

I come back to this point: there is no reluctance to act. What I cannot do is pre-empt Her Majesty. Our appetite, as I say, remains undiminished. It is just a shame that the right hon. Gentleman hides behind Intelligence and Security Committee papers to throw political accusations when what we are trying to do is make sure that the taxpayers of this country get value for money and are not losing money, that the number of victims of economic crime is reduced and that they get their recoveries. Let us not make it a party political issue.

[Damian Collins (Folkestone and Hythe) (Con)]

Does my hon. Friend agree with the recommendation of the Joint Committee on the Draft Online Safety Bill that online platforms such as Facebook should not be allowed to profit from the advertising of known frauds and scams? As part of the online safety regime, they should be required to proactively block and withdraw advertising that promotes known frauds and scams.

[Paul Scully]

We are really aware of the issues and we appreciate the comments in that report. As that Bill progresses, we will consider them with all due process.

[Stephen Timms (East Ham) (Lab)]

The introduction of universal credit has led to a big increase in fraud. The current growth of economic crime and corruption poses an existential threat to financial services—one of our biggest and most successful business sectors—and therefore to the UK economy as a whole. Does the Minister accept that effectively tackling this scourge urgently requires an economic crime Bill?

[Paul Scully]

I dispute the right hon. Gentleman’s comments about universal credit, but yes, tackling economic crime requires legislation. That is why we remain undiminished in our appetite to push this forward.

[Richard Fuller (North East Bedfordshire) (Con)]

My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) has very eloquently described the reason for and priority of bringing forward new legislation, but that opens the door to questions about the effectiveness of, and the force with which, existing legislation will be brought to bear on the key issue that Lord Agnew raised: fraud within the BBLS and CBILS during covid. We know from Lord Agnew that there were issues with fraudsters because of processes in the British Business Bank that were not up to scratch. We know from Lord Agnew that there were some banks—maybe two out of seven—where fraud was a priority.

The Minister has a choice to make. Will he come down on the fraudsters with a slap on the wrist or with a mighty hammer? I know which I would choose. What is he going to do?

[Paul Scully]

I suspect that we have the same choice, frankly, with that mighty hammer. But what we have to do first is make sure that we have those processes in place. The British Business Bank obviously had to scale up very quickly in the pandemic, but we are working with it and the banks, which are our first port of call in this, as it is a delegated scheme. We want to make sure that the worst-performing banks scale up to the best-performing banks in tackling this, and we will continue to work on that endeavour.

[Andy Slaughter (Hammersmith) (Lab)]

The lawfare debate, which the Minister described as “interesting”, identified how money launderers use UK courts to cover up unlawful activity, so the term that he has used is a slight underestimate. The Minister responding to that debate said:

“the Government are poised to act.”—[Official Report, 20 January 2022; Vol. 707, c. 603.]

Given that they have abandoned their economic crime Bill, given that the Attorney General is investigating malpractice at the Serious Fraud Office, which she is supposed to supervise, and given that too much oligarch money flows into the Tory party, how poised are they?

[Paul Scully]

Very.

[Nigel Mills (Amber Valley) (Con)]

May I ask the Minister just how bad the level of economic crime has to be before the Government bring the Bill forward? Can he also set out to the House how well worked our legislation is? Many of the proposals have been promised for years and years. I think he will find that there is quite a lot of support across the House to bring those measures forward piecemeal. We still have three months of this Session, so why wait for the Queen? Let us bring some forward and get on with them.

--- Later in debate ---

[Paul Scully]

I agree with my hon. Friend that we want to get this right. It is a technical and complex issue, and we will continue to work with people who are experts and knowledgeable in this field to make sure that we can get that legislation totally in place so that we can push it through in good time.

[Peter Grant (Glenrothes) (SNP)]

The Minister will be aware, and certainly his Treasury colleagues are aware, of the activities of Patrick McCreesh and Philip Nunn, of Blackmore Bond notoriety. Nearly five years after their dodgy and probably illegal sales tactics were first brought to the attention of regulators, those two are still allowed to continue in operation at the helm of a veritable spider’s web of companies, collecting scores of yellow cards, and some red cards, for breaches of statutory obligations. They are subject to no personal sanction, other than the occasional closure of one of the companies that they wanted to close down anyway. How much longer are we supposed to be satisfied with a regulator that, in one case, accepted the registration of a 10-year-old as a company officer? When are we going to have a regulator with teeth to drag dodgy directors out from hiding behind company nameplates in order for them to be held personally responsible, in a way that correctly reflects the fortunes that they have made and the financial misery they have inflicted on their victims?

[Paul Scully]

I know the hon. Gentleman has used that example on a number of occasions. It is a particularly pertinent example but, as I say, Companies House reform is foremost among our priorities and it will come as soon as parliamentary time allows.

[Simon Fell (Barrow and Furness) (Con)]

I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) on securing the urgent question.

From migrant boats to county lines, the golden thread that runs between them is illicit money flows. Although the national cyber-security strategy and the economic crime plan, and the measures in them, are welcome, what we really need is a Bill to bring this forward. May I urge my hon. Friend to use his good offices to make that case, in order to deal with not only some of the big issues but the low-level frauds that are affecting so many of our constituents? Let us not forget that it is the No. 1 crime in this country at the moment.

[Paul Scully]

I thank my hon. Friend for his work in this area and those comments. He is absolutely right: the theme in this is economic crime—county lines and those kinds of things. That is why the Business Department, the Treasury and the Home Office are working together to get this right and to tackle all of that in the round.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

Fraud is a traumatic experience, which makes reports that victims are having their details collated and sold on the dark web as part of a so-called “suckers list” extremely worrying. What can be done to protect victims from being targeted a second time, and will the Minister ensure that this is a particular focus of the Government’s work moving forward?

[Paul Scully]

First, we need to do lots of work on awareness of scams and those kinds of areas, which fall into my direct remit. Action Fraud is taking more and more of a position here to support victims and—the hon. Gentleman rightly referred to this—to tackle the immediacy after the event and to make sure that it cannot happen again.

[Mike Wood (Dudley South) (Con)]

Cyber-criminals prey on vulnerable people in all our communities. Yesterday’s launch of the very first cyber security strategy was an important step forward, but will my hon. Friend the Minister continue to work with Ministers on further measures that will strengthen the UK’s resistance to cyber-fraud?

[Paul Scully]

I thank my hon. Friend for welcoming the Government’s cyber strategy. He is absolutely right to highlight the importance of this area, which the Government are tackling. We will continue to do more as time allows and as we get more and more information. The legislation needs to be right for the 21st century. It needs to keep up with the areas—cyber, the dark web and so on—that criminals are using.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his answers so far, but after the recent resignation of Lord Agnew following a lack of consideration for an economic crime Bill, there have been many calls for that decision to be reconsidered or reviewed. The Bill was set to protect and better manage the UK’s economic prosperity. May I gently remind the Minister of the £26 million robbery of the Northern Bank in Northern Ireland by the IRA? Experts state that moneys have been laundered through legitimate businesses. Alongside that, there is the £396 million of fuel duty that has been lost to the Chancellor. Through an economic crime Bill, we can address the issues relating to the IRA’s illegal and murderous activities. Will the Minister confirm to the House that every action will be taken to ensure the Bill is introduced as soon as possible to take on those who live off the backs of others?

[Paul Scully]

I thank the hon. Member, as ever. He raises the really good point that not all economic crime is international. There is a lot of home-grown economic crime and he cites just one of a number of crimes happening in Northern Ireland and across the UK. Yes, we will ensure that we bring forward measures to this place to be scrutinised and pushed through as soon as possible.

[Philip Dunne (Ludlow) (Con)]

Fraudsters, criminals and bad people take advantage of measures introduced in response to crises, whether financial or otherwise. This is an incredibly complex area. Every Member will have had constituents who have lost out one way or another through fraud over the years, so I hope the Minister will take the sentiments from across the House—I think every party in the House has spoken today—expressing concern about this issue and the delay that has come about. May I urge him to take two things into account? He says he is learning lessons. Will he learn the lessons from the response to the financial crisis, when our banks introduced measures that led to the virtual confiscation of, for example, more than 16,000 customers from the Global Restructuring Group within RBS? And can he please learn lessons to try to ensure proper corporate behaviour by lenders? Secondly, he mentions Action Fraud. The threshold for Action Fraud to investigate, or urge the police to investigate in various forces, is incredibly high. As a consequence, while we all urge our constituents to make contact with Action Fraud, invariably nothing follows.

[Paul Scully]

My right hon. Friend is absolutely right. We recognise those constraints, which is why we are looking at replacing Action Fraud with a new organisation based with City of London police to try to tackle the areas he raises. We will also learn the lessons. He is absolutely right. We want to get the balance right, so that we are confiscating the right amount of money from the right people—the criminals.

Draft Trade Union (Levy Payable to the Certification Officer) Regulations 2022 Draft Trade Union (Power of the Certification Officer to impose Financial Penalties) Regulations 2022

Paul Scully Excerpts

Tuesday 25th January 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 Trade Union (Levy Payable to the Certification Officer) Regulations 2022.

[The Chair]

With this it will be convenient to consider the draft Trade Union (Power of the Certification Officer to Impose Financial Penalties) Regulations 2022.

The Minister will speak to both statutory instruments. At the end of the debate I will put the Question on the first motion and then ask the Minister to move the second motion formally.

[Paul Scully]

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

The purpose of the regulations is to enact the reforms made by the Trade Union Act 2016 to the powers of the certification officer—the regulator of trade unions and employers’ associations. The regulations were commented on by the Secondary Legislation Scrutiny Committee in the Lords in its 25th report, on grounds of policy interest. Before I explain the content of the regulations, it is important that I provide Members with some context to the reforms.

Unions play an important role in effective industrial relations. They also play a significant role in our workplaces and in wider society. There is therefore a legitimate public interest in trade unions running their affairs according to what is required of them. It is necessary that they have a responsive and diligent regulator. It is vital that we all have confidence that those affairs are conducted properly. The provisions in the 2016 Act are about proportionate and effective regulation. We are bringing the current powers of the certification officer up to date with the situation that we accept as completely normal in other sectors.

The 2016 Act brings in three reforms to the role of the certification officer. The first enhances the CO’s investigatory powers. Those reforms were implemented in commencement regulations made in December 2021, and they will commence in April. As they are not the subject of the regulations before us, I will only briefly explain the Government’s intentions.

The current system largely relies on union members bringing complaints to the CO—for example, on the conduct of elections. The 2016 Act gives the CO the same powers to investigate all breaches that she currently holds for financial matters and the register of members. That will enable her to act without having to rely on a complaint from a member. That is a wholly reasonable power for a regulator.

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

There are at least two Members present who served on the Trade Union Bill. Can the Minister remind us who can make a complaint to the certification officer?

[Paul Scully]

I will come back to that in my closing remarks. The CO will be able to take up her own views on a matter when there is a breach. It is a wholly reasonable power for a regulator and works on the basis of similar regulators.

[John Spellar (Warley) (Lab)]

I declare an interest as a 50-year member of Unite and its previous unions. How will unions protect against vexatious complaints from individuals who have a political axe to grind, whether from the extreme right or the Conservative party, as opposed to dealing with the members, who are supposed to be the people most concerned?

[Paul Scully]

This is not a political move. This is not politicising the regulator at all. The regulations are simply designed to bring the regulator in line with other regulators.

[Apsana Begum (Poplar and Limehouse) (Lab)]

The Minister may say that, but the regulations are effectively a tax on trade unions. Does he recognise that other bodies do not pay a similar tax? Broadcasters do not pay tax for Ofcom, and data processors do not pay tax for the Information Commissioner. Why does he feel that the regulations bring the trade unions in line with other sectors?

[Paul Scully]

I am glad the hon. Lady has brought the focus to the regulations rather than the wider scope of the 2016 Act, which was discussed in Committee and during the passage of previous regulations. On finances, the work of the certification officer at the moment is funded through fines and other fees but the regulations will wrap them up in a levy, which will be proportionate and affordable, because we responded to the consultation and made some changes accordingly.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Does my hon. Friend agree that it is quite common for industry to pay for its regulator? For example, the Financial Conduct Authority is funded directly by the banks, as are other financial schemes. That is quite a common way of funding such activities.

--- Later in debate ---

[Paul Scully]

My hon. Friend is absolutely right. The regulations in no way attack; they are simply designed to fund the work of the regulator. Most regulators get their costs paid for by the people they regulate. That is eminently reasonable.

The regulations we are considering today bring into effect the second and third reforms set down in the 2016 Act, relating to financial penalties and the levy. We consulted separately on both reforms in 2017 and we conducted a further engagement exercise on the levy last year. The majority of respondents to both consultations and the further engagement exercise were trade unions. I know that they are concerned about the measures, as we have heard, but we have listened to their concerns and I will explain the measures in the regulations.

[Chris Stephens]

The Minister is being very generous in giving way. On the consultation in 2017, we should note that there have been two general elections since then, so why are the Government proceeding now?

[Paul Scully]

Because we have proceeded as quickly as we can, given the circumstances of parliamentary time. We wanted to make sure that, in response to the consultation, we could reflect the views of the trade unions by making some changes to the regulations. I will outline them in a second, but I repeat that this is the right time to be making the changes.

Under the financial penalties regulations, the certification officer’s enforcement powers are strengthened by allowing her to impose such penalties against organisations that breach their statutory obligations. The maximum amount of penalty will vary by the type of obligation breached and will be banded into three groups to take account of the severity of the obligation breached. That approach found support during the consultation.

The most important statutory obligations required of trade unions relate to political funding, the proper conduct of union elections and personnel propriety considerations. Those obligations are serious matters and I believe that the maximum penalty of £20,000 should be made available to the certification officer. That is in line with the penalties imposed by other bodies, such as the Electoral Commission.

For other failures of statutory governance requirements, a lower level of maximum penalty, £10,000, is appropriate, and that includes the requirement to keep the membership register up to date. Where breaches do not relate to failures of governance as a whole but to requirements to provide information, comply with investigatory requirements or breaches of internal union laws, the regulations limit such fines to a maximum of £5,000.

[John Spellar]

I apologise for taking the Minister back to the previous issue, but I have quickly scanned the explanatory notes. How will the levy be distributed between trade unions and employer associations? On what basis?

[Paul Scully]

I will talk about the distribution in a second.

The regulations also provide for a reduction in the maxima by 50%--bearing in mind that we are talking about the financial penalties—for unions whose membership is under 100,000. That means that no small or medium-sized unions will pay more than £10,000, £5,000 or £2,500, depending on the type of obligations breached. The Government took heed of consultation responses that charging interest would unduly penalise small unions, so we decided not to charge interest for the late payment of penalties.

The Trade Union (Levy Payable to the Certification Officer) Regulations 2022 provide for a levy on unions and employers’ associations to fund the certification officer’s work. It is no longer acceptable for the taxpayer to fund the regulation of these organisations. As my hon. Friend the Member for Thirsk and Malton said, a levy is one of the ways used to fund such regulators. The regulations establish a framework for the levy that is equitable, affordable, predictable and simple.

First, the time that the certification officer spends on each of the different categories of regulated organisations, which are non-federated trade unions, federated trade unions, non-federated employers’ associations and federated employers’ associations—

[Chris Stephens]

We know from the Trade Union Bill Committee that the net cost of the certification officer’s work was about £500,000. Can the Minister tell us what it is today?

[Paul Scully]

I will go through the structure in a little more detail shortly.

To make the levy equitable, the certification officer will be able to broadly apportion the levy between the different types of organisations according to how much time she spends on them.

Secondly, I know that many hon. Members and unions are concerned about the affordability of the levy. That is why the certification officer must exempt lower-income organisations from the levy entirely. No organisation will pay more than 2.5% of its annual income, as set out in its annual return to the certification officer.

Thirdly, it is important that a levy is predictable, so the Government will continue to fund the cost of any internal inspectors that the certification officer hires, as the use and cost of those can vary significantly. That was discussed during consideration of the Trade Union Act 2016. For the same reason, the Government will also fund the cost of any external legal advice that the certification officer may seek. That was not identified during consideration of the Act, but the Government believe that that approach will allow for a fairer levy.

Finally, the Government have taken steps to ensure that the levy is simple and transparent. The certification officer will need to aim to ensure that income from the levy matches expenditure over a three-year period, as well as explain how she calculated the amount of levy each organisation is charged. A number of the certification officer’s existing fees will be abolished and subsumed into the levy. That will be the subject of separate regulations, which will be made under the negative procedure, and we intend them to come into force at the same time as the levy.

[Imran Hussain (Bradford East) (Lab)]

Does the Minister accept that as the instrument stands there will be no cap on the amount of the levy and it could well run into millions of pounds?

--- Later in debate ---

[Paul Scully]

The amount of levy paid will be capped to 2.5% of the union’s income, and it is the certification officer’s work that is being paid for—

[Imran Hussain]

Sorry, perhaps the Minister did not understand the point I am making. Does he accept that there is no cap in the instrument on the overall levy that the certification officer can charge and it could well run into millions of pounds? It will be completely at the discretion of the certification officer.

[Paul Scully]

The certification officer’s work will be charged accordingly, and the levy will be distributed at a level that is capped for each union and employers’ association. It will be for the certification officer to demonstrate what she has been doing in that regard and how those costs are broken down.

In response to requests by trade unions during consultation, two fees will be preserved—the fee for listing as an organisation and the fee for a union to be granted a certificate of independence. The costs of dealing with those applications will not be recoverable under the levy.

I recognise that these are significant changes for the organisations involved, albeit that they are the clear and required implementation of the Trade Union Act 2016. That is why we announced the reforms in June 2021, to allow trade unions and employers’ associations time to prepare before they are implemented in April 2022. That also allowed the certification officer time to put the systems in place to determine and charge the levy.

[Craig Mackinlay (South Thanet) (Con)]

I declare that I am a member of the Institute of Chartered Accountants in England and Wales. That body does similar things to those that a union might do: it represents its members, makes representations to Government and ensures that the regulated activities that we undertake as members are properly monitored and controlled. There has never been any issue that the Government should somehow pick up the bill for those things—

[Craig Mackinlay]

Or the taxpayer, absolutely. So I am quite surprised that there is huffing and puffing over this. The Minister has made it clear that 2.5% is the maximum. Has he calculated whether, if that 2.5% maximum levy, which I doubt will apply in many cases, were applied across the income of all the trade unions that are registered, it would cover the true cost of the certification officer’s work, or would there still be a shortfall that taxpayers were expected to make up?

[Paul Scully]

My hon. Friend makes some good points. As I say, there are exceptional cases when the taxpayer will be paying, in terms of the consultants that the certification officer may pay and the legal advice that she may require, because that will give unions and employers’ associations the certainty that they need. That is part of the proportionate approach that we have taken. None the less, the distribution that I have here, which I can share with the hon. Member for Bradford East, who asked about it earlier, assumes an estimated total levy of £1.15 million for the next financial year, based on the work that the certification officer has been doing.

[Mark Garnier (Wyre Forest) (Con)]

I may have missed this, but can the Minister confirm that any fines that are levied go back into the income of the certification officer, so that they subsidise future levies from unions?

[Paul Scully]

I will respond to that in my concluding remarks so that I am accurate for my hon. Friend.

The two sets of regulations will modernise the role of the certification officer so that she can continue to function as an effective regulator of trade unions and employers’ associations. It is not about constraining the ability of the unions and employers’ associations to do their valuable work. The certification officer has always operated independently of Government and that will continue.

These reforms are about giving the certification officer the tools she needs to do the job as effectively as possible and ensure that the taxpayer no longer foots the whole bill, but that unions and employers’ associations that can afford—

[Jessica Morden (Newport East) (Lab)]

How is this proportionate, given that in her annual report for 2021 the certification officer stated that she investigated only 34 complaints—one complaint for every 200,000 union members—and no enforcement was taken?

[Paul Scully]

The certification officer has had a number of complaints. She has investigated some and dismissed some. Yes, only one enforcement was taken, but that is not the sole purpose of her job. She does not look at that single case; there is a lot of work that leads up to that. As I say, this is proportionate. If she is not doing that much work, then the levy will be cheaper because she will not have that much to do. The levy is to cover the cost of the work. The certification officer is not having holidays to the Bahamas and making a juicy profit out of this. The levy is just covering the cost of the regulator. That is what is proportionate about it and why it is appropriate for the regulator to do it, rather than the taxpayer.

[Jo Gideon (Stoke-on-Trent Central) (Con)]

On a point of order, Mr Davies. We have had five speakers from the Opposition and only one has declared an interest as being a member of a trade union. I thought it was necessary to declare an interest, especially in this debate, and I seek clarification on that.

--- Later in debate ---

[The Chair]

I am sure we are all grateful for that. If we could get back to the debate, I think we would all be very grateful.

[Paul Scully]

In my concluding remarks I will try to pick up any questions that I have not answered. I commend both statutory instruments to the Committee.

[The Chair]

I now call my constituency neighbour, Imran Hussain.

--- Later in debate ---

[Paul Scully]

I am grateful to the Committee for its consideration of both sets of regulations and for Members’ valuable contributions to the debate. As I said in opening the debate, unions play a really important role in industrial relations and have a significant impact on our economy. That is why it is imperative that the public have confidence that they are being regulated effectively and fairly, and these reforms ensure just that.

It is a shame that there was a job lot of questions, because I now have eight minutes to answer all of those. Actually, we have just been re-rehearsing the arguments that were made on the overall premise, which was agreed in relation to the Trade Union Act itself. I will answer some of the questions. Clearly, the employment Bill, as the hon. Member for Glasgow South West knows, is primary legislation. It will be announced, when it comes forward in parliamentary time, in the Queen’s Speech. This measure—what we are addressing today—is completing previous legislation and therefore does not have to go through the same process. The certification officer has received 62 complaints in the last few years. Not all of those had to be investigated, because they could be dismissed. Eight were upheld, and there was one enforcement notice. That is what comes through to—

[John Spellar]

rose—

[Chris Stephens]

rose—

[Paul Scully]

I will not give way, because unfortunately I now have so little time to respond that I need to plough on.

In terms of vexatious complaints by third parties, third parties will not have a right to make a formal complaint or have them investigated, but clearly the certification officer may consider their representations in deciding whether to launch an investigation. The certification officer, unlike with a complaint from a union member, will not be required to take action in response to a third party’s concern. She will have the decision to do so. And the certification officer can conclude that she will take no action. That is why I do not believe that the arguments about the far right are relevant in this case.

In terms of the net budget that we have heard about, the £700,000, and where that money is coming from, that is the net budget, as I said. That is the money given by ACAS after accommodation, IT and a lot of the other fixed costs. It does equate currently to about £1 million; £1.15 million—that is the estimate according to our figures—is given to the certification officer, based on those current accounts. The certification officer can only charge for expenses incurred over a three-year period. Clearly, there are tests that are required, as it is a public authority, to ensure that she has sight of them at a reasonable level.

The right hon. Member for Warley talked about how the levy is calculated and who will be paying. The total levy, which is clearly needed to pay the expenses for the financial year, will be worked out by the certification officer. Approximately 50% of her time and functions relate to all organisations. That is covered in the basic levy. Small organisations will be exempt when the basic levy exceeds 2.5% of their annual income. The remaining 50% of the certification officer’s time is taken up by regulations that apply to non-federated trade unions. That will be divided out in the additional levy. The total shortfall in the amount collected by the basic and additional levies due to organisations that are exempt from paying will be divided equally among all higher-income organisations. That will support the enhanced levy. There are 21 employer associations and 40 non-federated trade unions that will be totally exempt from the levy, and 59 non-federated unions will be at that top level of the basic, categorised additional and enhanced levy.

We have talked about whether this is compliant with the European convention on human rights. Trade unions, as I have said, play an important role in our workplace and society. It is perfectly reasonable for the Government to legislate to ensure that they act democratically, transparently and within the rule of law. We are satisfied that regulation by the state, as set out in the Trade Union Act 2016, is entirely consistent with the ILO conventions and the European convention on human rights. This is not an attack on trade unions. This is not politicisation. No aspect of the decisions of the certification officer is subject to any pressure from a Minister of the Crown, and that will not change at all. This measure is simply modernising it.

My hon. Friend the Member for Wyre Forest asked what happens to the fines. They go into the Treasury’s consolidated fund. They do not subsidise the certification officer, and neither will she be able to profit from them. That will keep things on a level playing field and she will fine people based only on what is in front of her. This provides no temptation, albeit as a public authority she should clearly not be going down that road anyway.

It has been said that a higher evidential standard should be applied to the higher fines. Clearly, the burden of proof standards are lower than those applied in criminal investigations, but this is a civil action, so they equate and are comparable to other civil payments.

Accusations have been made comparing the £1.15 million to the fraud that was talked about in the other place yesterday. No fraudulent claims for bounce back loans have been written off. In fact, nearly £2.2 billion-worth of potentially fraudulent claims for bounce back loans were stopped and recovered just last year.

We have also talked about valuing workers organising. Clearly, we on the Government side value workers organising. Indeed, we valued that in December 2019, especially when workers in Stoke organised to vote in droves for two fine Conservative Members.

[Jessica Morden]

Why is it that the Minister is introducing these statutory instruments today but has not responded to the e-balloting review?

--- Later in debate ---

[Paul Scully]

We are currently considering that review. In 2019, we were required by section 4 of the Trade Union Act 2016 to consult relevant organisations, including professionals from expert associations, to seek their advice and recommendations. We have done that and are now finalising our consideration of Sir Ken’s recommendations. We will issue our response later this year.

The Trade Union Act contains a significant safeguard that requires the certification officer to aim to ensure that the total amount levied over a three-year period does not exceed expenses. We continue to believe that that will ensure that the levy remains predictable. The reforms will bring the certification officer in line with the powers and funding arrangements of comparable regulators. It is not a tax; it is, as we have heard, a proportionate measure to bring it in line with other regulators and to ensure that the regulated organisations have a proportionate levy. Indeed, many of them, as I have outlined, will be exempted entirely. The certification officer has always gone about their duties in an independent and impartial way, and that will continue.

The Government believe that there is a strong public interest in appropriately regulated trade unions. These reforms are about modernising the certification officer, to ensure that she can continue to deliver her duties. I commend both sets of regulations to the Committee.

Question put.

Covid-19: Requirements for Employees to be Vaccinated

Paul Scully Excerpts

Monday 24th January 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, Mr Paisley. I congratulate the Petitions Committee on securing the debate, and the hon. Member for Linlithgow and East Falkirk (Martyn Day) on the way that he presented it on the Committee’s behalf. Clearly, this is an issue that can divide opinion, with people on both sides holding very strong views. I am grateful to everyone who contributed. As many Members will know, I sat on the Petitions Committee for a number of years. Now, as a Minister, I am sitting on the other side of the fence, accounting for the Government’s position, so I understand how invaluable the work of the Committee is.

As we all know, today’s debate was prompted by an online petition to prohibit employers from requiring staff to be vaccinated against covid-19. The hon. Member for Strangford (Jim Shannon) asked why I was present, and whether I was substituting. Although the petition referenced the public sector and the NHS, I am afraid that it is because of the wide-ranging wording of the petition that he has got me. However, I will clearly touch on many of the issues that have been raised, because the debate has been focused on the NHS, and understandably so. The petition has been signed by more than 190,000 people, which goes to show the strength of the issue.

There is concern among those who have signed the e-petition, and all MPs who have spoken, about the steps that the Government have taken to make vaccination a condition of deployment in certain settings. There is also concern more generally that some employers outside those sectors are seeking to mandate the covid-19 vaccines for their workforce. I will come to that, but the Government’s starting point, as I think all Members have said today, is that vaccines are our best defence against covid-19.

The overwhelming majority of us have taken the positive step of accepting the offer of vaccination. Some 79% of eligible adults in England have now had a booster, including over 91% of over-50s, who are more vulnerable to the virus. We are the most boosted large country in the world. Recent data from the UK Health Security Agency shows that around three months after those aged 65 and over receive their booster, their protection against hospitalisation remains around 90%. The vaccines work.

However, those vaccines do not just protect us and our loved ones against covid-19. It is because of the vaccines that we have one of the most open economies in the world, so if we are to maintain the collective protection that we have built up, we need everybody to choose responsibly and get vaccinated. That will ensure greater freedom for us all.

[Jim Shannon]

In my contribution, I referred to the fact that a year ago, we were clapping NHS workers across the whole of the United Kingdom. Everybody, including the Prime Minister and everyone in this room, did that. Does the Minister not understand—I say this very respectfully—the deep feeling of hurt that those people have? We clapped them, and now we are telling them that we no longer need them unless they do what they are told.

[Paul Scully]

I will come to the issue of NHS workers in a second, and show what we are doing regarding non-patient-facing NHS workers and the moves we are taking to help people get vaccinated.

[Paula Barker]

I am interested in what the Minister is saying, but he has just referred to an economic argument. Does he not agree that sacking up to 126,000 NHS staff would have a severely detrimental effect on our economy?

[Paul Scully]

My economic argument was not specifically about the NHS. It was about the fact that vaccines are the way out of this, to get back to a sense of normality—a new normal, whatever that normal is—and allow people to protect businesses, livelihoods and jobs around the country as best we can. Clearly, the best way to work with the NHS is to make sure we can work with those who are unvaccinated to get them vaccinated and, eventually, boosted.

[Rachael Maskell]

I want to come back to the response I had from the Under-Secretary of State for Health and Social Care, the hon. Member for Erewash, to a parliamentary question I tabled. It said that after 10 weeks the efficacy of the vaccine against omicron is depleted to between 40% and 50%. That clearly means that, first of all, the vaccine does not give us the protection that we would hope it would give; secondly, it does not give us protection against transmissibility. How can the Minister make the statement that the vaccine is the best way out of the virus when, in 10 weeks’ time, it clearly will not be?

[Paul Scully]

Preliminary evidence about the effectiveness of the vaccination against the omicron variant is still emerging, with data suggesting that vaccine effectiveness against symptomatic infection and hospitalisation both rise after a booster and, in the case of the latter, goes up to 88%.

For most people, whether to get vaccinated is a matter of personal choice, but there are some high-risk settings in which we believe it is proportionate to take further steps to protect the most vulnerable. Throughout the pandemic, the overriding concern for the Government, the NHS and the care sector has been to protect the workforce and patients. People working in health and care look after some of the most vulnerable in our society, and therefore carry a unique responsibility. Everybody working in health and social care with vulnerable people would accept a first responsibility to avoid preventable harm to the people they are caring for. That is why, following consultation, regulations were approved last year in the House that meant that from 11 November 2021, all people entering a care home needed to prove their covid-19 vaccination status, subject to certain exemptions. Following further consultations, my right hon. Friend the Secretary of State for Health and Social Care announced that anyone working in health or wider social care activities regulated by the Care Quality Commission would need to be vaccinated against covid-19. That includes NHS hospitals, independent hospitals, and GP and dental practices, regardless of whether a provider is public or private.

That policy has two key exemptions: for those who do not have face-to-face contact with patients, and for those who—as we have heard—have not had a vaccination because they are medically exempt. Uptake of the vaccine among staff working in those settings over the past few months has been promising. Since the Government consulted on the policy in September, the proportion of NHS trust healthcare workers vaccinated with a first dose has increased from 92% to 95%—an increase of nearly 100,000 people.

[Esther McVey]

I have heard it said that the mandation policy is some sort of nudging exercise, a way to get as many NHS workers vaccinated as possible, but it will not be implemented. If that is true—well, even if it is not true—as distasteful a method as that is, it does provide the Government with a get-out, so please will the Minister take back to the Government all the powerful points that he has heard today and get this policy reversed, because it is not too late?

[Paul Scully]

Clearly, the Department of Health and Social Care will be listening to everything my right hon. Friend says here and in the main Chamber, and indeed all the contributions that we have heard today. But in terms of the policy, the NHS will continue—I will go through this in a second—to encourage and support staff who have not been vaccinated to take up the offer of the first and second doses.

The science is really clear about the benefits of the vaccination. It protects those at most risk from the virus and it has saved thousands of lives so far. Every unvaccinated healthcare worker increases the risk to themselves, their colleagues and the vulnerable people in their care. It is our responsibility to ensure that we give NHS patients and staff the best possible protection.

We recognise the concern about impacts on workforce capacity and the ability to deliver health and care services, particularly over the challenging winter period. I want to reassure hon. Members that the Government, in collaboration with the NHS and the adult social care sector, are taking steps to mitigate that risk and to continue to encourage workers to take up the vaccine. For example, we put in place a 12-week grace period, allowing time for workforce planning and for colleagues who are not vaccinated to make the positive choice to protect the people whom they care for and themselves. The enforcement of vaccination as a condition of deployment in health settings will not commence until 1 April, to assist providers over the winter period and to help to minimise workforce pressures. And we have increased the number and diversity of opportunities to receive the vaccine to make getting it as easy as possible.

[Ben Bradley]

I feel for the Minister to some extent, because obviously he is not a Health Minister; I am sure that he will forgive me for raising this point none the less. He talks about the work that is going on—loads of work is going on—to try to encourage people to be vaccinated. Many still will not be.

In the course of the debate, I have had the figures sent over to me from my county council. We lost 500 care home staff in November. We are currently set to lose 3,000 staff in the wider home care sector on 1 April. That is a huge proportion, 10%, of our workforce within the county. It will have a huge impact on our ability to deliver services: there could be up to 300 people whom we can no longer care for. We will do as much as we can to mitigate that, but will my hon. Friend take back to the Health Minister just how much of an impact it will have on our ability to deliver care services?

[Paul Scully]

I thank my hon. Friend. He talks about the impact, and we understand the concerns about that. That is why, apart from the measures that I outlined a second ago about making it as easy as possible to have the vaccine and giving the grace period and the ability to flex within that, the NHS is planning further increases in engagement with targeted communities, where the uptake is lowest. That includes extensive work with ethnic minority communities and faith networks to encourage healthcare workers to receive the vaccine.

We have obviously had an analysis of the equalities implications. That was published in the equalities impact assessment, alongside the consultation response. We are obviously engaging with colleagues such as my hon. Friend to hear about real-world results and impacts and respond accordingly. But as the chief medical officer, Chris Whitty, has rightly said,

“people who are looking after other people who are very vulnerable do have a professional responsibility to get vaccinated”,

so we remain committed to bringing these measures in on 1 April.

Outside these specific settings—health and care—it is fair to say that there could be some other circumstances in which it may be lawful for an employer to require staff to be vaccinated. There is no general “Yes, it is lawful” or “No, it’s not lawful” answer to that question. It will depend on the facts and details of each case. There is a lot for an employer to consider.

For example, what is the current evidence on the consequences of covid-19 both for the individuals and for the organisation? What are the employer’s reasons for imposing a requirement to be vaccinated? Given the particular work being undertaken, are those reasonable? And what are the circumstances of the individual employee? Are there Equality Act 2010 considerations in play? An employer would need to weigh the answers to all those questions and more before being confident that it was lawful to require employees to be vaccinated.

I should be clear that there is a difference between how an employer might treat those who are already employed and those who are not. When it comes to those who are not already employed, there is more scope for an employer to establish a requirement to be vaccinated, subject to the employer satisfying themselves that they can pass relevant legal tests, such as on discrimination. The employer might make such a requirement a condition in the contract; it then becomes more a matter of whether to accept the contract. It would then be a matter of personal choice, just as a prospective employee might consider a requirement to work a number of late or early shifts, or weekends.

For those already in employment, the issue is really about what might happen if they refuse to be vaccinated. After all, an employer cannot physically force someone to have a vaccination. There is the issue of the consequences of refusing to be vaccinated. Could an employee be suspended without pay, refused access to certain shifts, roles or tasks, or disadvantaged in some other way? Could they fairly be dismissed? Those are the key concerns that people will have. I do not believe that it is appropriate to make vaccination a special case. Such cases should be treated in the same way as other instances where an employee feels that they have been treated unfairly at work.

Employment law provides an extensive framework to protect employees from unfair treatment, including unfair dismissal. That framework applies to refusing to be vaccinated just as much as it does to other circumstances. This framework, rather than imposing a blanket set of prescriptive terms and conditions about when a dismissal is fair, allows the facts of each case to be weighed and considered, so that what is fair and what is not can be properly established in the light of any evidence, the employer’s situation and the business circumstances. I strongly believe that the legal framework for employers around the country allows for the interrogation of all relevant facts, provides the right checks and balances, and ensures that employers can take action as a result of someone’s refusal to be vaccinated, where that is appropriate.

I conclude by acknowledging that there is a fine balance to be struck. On the one hand, we obviously want people to recognise the benefits of the vaccine, and as a matter of choice, we want to ensure that they have all the injections and boosters needed to minimise the impact of the pandemic on them, their friends and neighbours, the health service and the economy. On the other hand, we want to ensure that vulnerable people are properly protected and do not face unnecessary risks. The employment law framework and the steps that we are taking to make vaccination a condition of employment in certain settings strike the right balance.

Once again, I thank those who contributed to the debate. It has been a valuable discussion. I also thank all the workers in the NHS, who have kept us safe throughout this period, and who continue to do so, despite the winter pressures. We will always make sure that we work with those valued workers, who serve our public so well.

[Ian Paisley (in the Chair)]

Mr Day, would you like a minute or two to wind up? I would like to put the Question, though; I think that is important.

Taylor Review of Modern Working Practices

Paul Scully Excerpts

Wednesday 19th January 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 Slough (Mr Dhesi) on securing today’s important debate.

Despite what we have heard, the UK still has one of the best employment rights records in the world. We have one of the world’s highest minimum wages; it was increased on 1 April last year and will be increased again next year. The UK’s national living wage is one of the highest minimum wages in the world—larger than those in similar economies such as those of France, Germany and Japan. In the UK, we get over five weeks of annual leave, minimum, whereas the EU requires only four weeks. In the UK, people get a year of maternity leave; the EU minimum is just 14 weeks. The world of work is changing, and continues to do so.

[Andy McDonald]

How does our statutory sick pay compare with that of our European competitors?

--- Later in debate ---

[Paul Scully]

I will come to statutory sick pay in a second. We know that sick pay needs to be looked at, and we will look to do so. During the pandemic, rather than concentrating on a consultation on sick pay, we decided to look at welfare benefits to provide extra support. None the less, the hon. Gentleman is right. Sick pay needs to be worked on, and we will continue to do so.

Advances in technology, the emergence of new challenges and a rise in new business models means how, when and where people work is adapting. That is why, in October 2016, the Government commissioned Matthew Taylor to lead the independent review of modern working practices. The review considered a range of topics relating to the labour market of 2016. It played an important role in shaping our understanding of how the labour market worked and how employment legislation could be upgraded to take account of the rise in modern employment models and new forms of work.

As the Minister for Business and Labour Markets, understanding those trends in the economy is key to shaping my priorities for reform to the employment rights framework. Independent reviews such as the Taylor review played an important role in laying the groundwork for our ambitious programme to make the UK the best place to work and grow a business and ensure that the UK labour market continues to thrive in the future.

As I am sure the hon. Member for Slough will agree, the 2017 review was comprehensive and wide-ranging, as we have heard today, although it did not go far enough for some on the Opposition Benches. It included topics covering a broad spectrum of employment law and employment practice, including the enforcement of workers’ rights, labour market flexibility and support for vulnerable workers; looked at ways that we can improve our regulatory framework around employment rights to make sure that the support provided to businesses and workers was keeping pace with changes in the labour market and the economy; and considered the impact of labour market changes, and how best to ensure we can retain flexibility in the future, while equally ensuring workers have access to the rights and protections they deserve.

I am grateful to Matthew Taylor for his work in providing valuable evidence for shaping our ambitious programme to build a high-skilled, high-productivity, high-wage economy that delivers on our ambition to make the UK the best place in the world to work and grow a business.

[Ian Lavery]

The Minister is praising the Taylor review and its recommendations, so why have the Government only legislated for seven of the 53 recommendations since 2017?

[Paul Scully]

I will come to what we have done and what we intend to do in just a second. I highlight the words of my right hon. Friend the Member for Basingstoke (Mrs Miller): quite a lot has happened since. She is right to say that the Government have been busy and that parliamentary time has been precious, but the nature of work itself has significantly changed since that point.

The hon. Member for Aberdeen North (Kirsty Blackman) spoke about the right to request flexible working from day one. She is right to focus in on that. It is a key area, not just for the idea of flexible working, but for people who have caring and parental responsibilities and other pressures on their life outside work, so it can have a significant impact on other areas that we want to tackle. We have been able to take the opportunity throughout the pandemic to reflect on the changing nature of work, which will extend beyond the pandemic, as we move towards endemic covid and a sense of normality, and being able to reflect on what flexible working might look like at that stage, rather than what it did look like and what our ambitions were, back in 2016. We want to make sure that we can take the necessary steps for our labour market.

[Mick Whitley]

We tend to blame everything on the pandemic. Zero-hours contracts were here before the pandemic. All that has happened is massive exploitation of zero-hours contracts. The Government cannot turn a blind eye and turn round and say, “It’s the pandemic”, because it is not.

[Paul Scully]

Actually, what we are saying about flexible working is not about blaming the pandemic. Work has changed. The hon. Gentleman talks about zero-hours contracts—they have changed somewhat as well. The flexibility of the workforce—the people who have been feeding us, caring for us and moving us around—has really shone a light on that.

[Justin Madders]

I am grateful to the Minister for giving way; he is getting intervened on a lot this morning, which shows the level of interest. His comments on how work has changed during the pandemic are interesting. It is true that people have been working from home for years and years—it is just that there has been a lot more of it. What we want from the Minister is a date by which the rest of the recommendations will be implemented.

[Paul Scully]

I will come to that.

Another core part of the Taylor review was to find new ways of opening up the labour market, so that more people can enter it and then remain in work. That is exactly what our vision is: to continue to level up across the country and allow more individuals to participate in work than ever before.

That is why we committed in our manifesto to bring forward new rights for parents of babies who require neonatal care and new rights for carers’ leave for the 5 million people across the UK who provide unpaid care by looking after an elderly or disabled family member, relative or friend.

However, as the review itself notes, the themes it covers are complex and the regulatory framework is based on decades of case law. Its recommendations therefore cover a wide range of proposals, from relatively small changes that can be made immediately, such as the key facts page for agency workers, to recognising longer-term strategic shifts in the labour market, for example by establishing the single enforcement body. We have always made it clear that it is important to consult as widely as possible and to take time to consider how best to achieve the change that works for everyone in the labour market, including employers. But clearly we want employees to be in good work; that is at the heart of that process.

We have consulted on a number of proposals for reform and on themes raised in the review. Wherever possible, we have worked closely with stakeholders so that they have an opportunity to share their views. I am proud to say that we have continued to take decisive action since the publication of the review, in order to implement many important changes to the labour market.

Our record speaks for itself. We have closed the loophole whereby agency workers were employed on cheaper rates than permanent workers. We have quadrupled the maximum fine for employers who treat their workers badly. We gave all workers the right to receive a statement of their rights from day one. We have increased pay for around 2 million workers. We have introduced key information documents to ensure that those seeking temporary work have all the facts that they need up front. We also brought into force Jack’s law, a world-first piece of legislation that provides statutory leave for parents who suffer the devastating loss of a child.

Those actions have made a real difference to the lives of workers up and down this country. We have benefited from expert input from stakeholders, and great consideration was given to ensure that those actions work for employers and workers across all sectors in our economy. Those actions have also given individuals and employers the freedom to agree the terms and conditions that suit them best, while also enabling businesses to respond to changing market conditions.

The results speak for themselves. We have seen high employment rates, reaching a record high of 76.6% in February 2020, and workers enjoying real pay increases month after month. We have seen a wealth of job opportunities, which is a testament to the excellence of UK businesses’ ability to grow, innovate and create jobs. We have also increased participation across groups who had typically been under-represented in the labour market, with women and workers from ethnic minority backgrounds now making up a larger proportion of the workforce than ever before.

However, as I have said already, we need to take stock of how the pandemic has affected businesses and workers up and down the country before continuing to build on that record, because the past two years has seen a level of disruption to the economy that the Taylor review just could not have predicted. However, we have acted decisively to provide an unprecedented package of support to protect people’s livelihoods.

The coronavirus job retention scheme has helped 1.3 million employers across the UK to furlough 11.6 million jobs, as my right hon. Friend the Member for Basingstoke highlighted, and more than £27 billion has been spent on helping the self-employed through five self-employment income support scheme grants, supporting nearly 3 million self-employed individuals.

I absolutely take the point that we have not been able to protect every business and every job or livelihood. There are certainly people—including some who I have spoken to and heard from, and who I continue to listen to—who have not been able to be supported throughout the pandemic as they would have liked to have been.

However, as I have said, in April last year we again raised the national minimum wage and the national living wage, giving around 2 million people a pay rise. We have also lowered the age threshold for the national living wage to 23, ensuring that even more people have the security of a decent wage, and we plan to reduce it further to 21, in order to tackle the barrier that the hon. Member for Aberdeen North talked about, by 2024 to support younger workers.

We continue to adapt our employment framework to keep pace with the needs of today. We legislated so that parents benefiting from the job retention scheme do not lose out on statutory maternity pay or other forms of parental pay. That has meant that new parents could take time off to spend with their babies without losing out financially just because they had been furloughed.

We have enabled workers to carry over more annual leave during the pandemic and we conducted a review of how victims of domestic abuse can be supported in the workplace, setting out the impact that domestic abuse has on victims, the challenges that it raises for employers, and what best practice to deal with domestic abuse looks like. At every step of the pandemic, the Government’s aim has been to protect jobs and livelihoods and to support workers’ rights.

[Ian Lavery]

Will the Minister give way?

[Paul Scully]

I will not, just for a second.

As our economic recovery gathers momentum, I am determined to continue with our work to build back better from the pandemic, and to build the high-skilled, high-productive, high-wage economy that will deliver 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 while maintaining the UK’s excellent record on workers’ rights.

Future reforms will continue to open up the labour market so that more people can enter and remain in work, and will continue to protect those most in need, including those in low-paid work and the gig economies. Future reforms will take a smarter approach to the enforcement of employment law: we want to make it easier for good businesses to comply with their obligations, while ensuring a level playing field through effective enforcement against those who cut corners and exploit workers. Future reforms will also continue to support the UK’s dynamic labour market by increasing flexibility, creating the conditions for new jobs, and building on our wider record on the national living wage and national minimum wage.

A number of issues have been raised today, which I will address quickly. I have talked about sick pay; we still need to retain flexibility within the economy, so we will not place a blanket ban on zero-hours contracts. However, we have done a lot of work on exclusivity, and will do what we can about the issue of people not having predictable hours. We want to allow people to change to a predictable contract along the way in their employment, when that should be the case. Turning to employment status, we believe that the status that we have at the moment is the right way to go forward. However, we recognise that there are employments outside of that status, and want to make it easier for individuals and businesses to understand what rights and tax obligations apply to them. We are considering options to improve clarity around employment status.

Obviously, the end of this Session is coming up—in a couple of months’ time, I am guessing—and we will see when parliamentary time will allow us to bring forward employment measures to tackle all these issues and more, in a way that will address the Taylor review and the changing flexible work market that continues to develop beyond the pandemic. We must make sure that we continue to make this country the best place to be able to work. I thank the right hon. and hon. Members who have put forward constructive ideas today for how we can continue our record of establishing an employment framework that is fit for purpose and keeps place with the needs of modern workplaces.

Professional Qualifications Bill [ Lords ] (First sitting)

Paul Scully Excerpts

Committee stage
Tuesday 18th January 2022 Public Bill Committees

[The Chair]

Copies of written evidence that the Committee receives will be made available in the Committee Room and will be circulated to Members by email. We now begin line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room. It shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or a similar issue, as colleagues will know. Please note that decisions on amendments do not take place in the order that they are debated, but in the order they appear on the amendment paper. The selection and grouping list shows the order of debates. Decisions on each amendment are taken when we come to the clause to which the amendment relates. Decisions on new clauses will be taken once we have completed consideration of the existing clauses of the Bill. Members wishing to press a grouped amendment or new clause to a Division should indicate when speaking to it that they wish to do so.

Clause 1

Power to provide for individuals to be treated as having UK qualifications

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

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

It is a pleasure to serve under your chairmanship, Mr Pritchard. The Bill will replace the interim system for the recognition of professional qualifications that was put in place when the UK left the EU. That interim system can give preferential treatment to professionals within the European economic area and with Swiss qualifications. It has not been reciprocated by the EU, and will be superseded by our recent trade agreement with the EEA and European Free Trade Association states. It must therefore be revoked.

Clause 1 sets out the substance of a new recognition approach. It means that regulations can be made that require regulators to consider applications from individuals with professional qualifications and experience gained around the world. Regulators will determine whether an individual with overseas qualifications or experience has substantially the same knowledge and skills to substantially the same standard as demonstrated by the relevant UK qualification or experience. Equally, other relevant regulatory criteria must also be met—for example, regarding language proficiency or criminal record checks. The regulations would not alter the standards required to practise professions in the UK. No regulator would be pressured into accepting qualifications that did not reach UK standards. My officials have worked with all regulators affected by the Bill, and I am happy to report that the regulators support clause 1.

Where clause 1 is not exercised, regulators will be free to continue recognising qualifications from overseas in line with their existing powers and any reciprocal agreements in place. As a result of the condition in clause 2, there are only certain conditions under which a Secretary of State, the Lord Chancellor or a devolved Administration would be able to make regulations under clause 1. Action can be taken only where there is a clear public interest to do so—in this case, unmet demand for services. I hope that my explanation has provided further clarity on why the Government believe that that approach is necessary and proportionate. I assure the Committee that the regulators support the clause.

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to see you in the Chair, Mr Pritchard. Having a skilled workforce is essential for the economic success of our country, and the Bill will promote mutual recognition of professional qualifications, which will in turn increase the opportunities for many professionals from abroad to work here in Britain. We also need our high-class professional services professionals to have the opportunity to work abroad. The Bill matters both in addressing access here and in creating a potential for mutual recognition agreements for professionals to work abroad.

Whether it is for the billions that qualified professionals contribute to our economy—such as the £60 billion of gross added value that legal services are worth and the £5 billion in the export of legal services—or the societal contribution that nurses, doctors, veterinarians and others make to the fabric of our country, it matters greatly that we get the legislation right. Although the Bill has faced much scrutiny from colleagues in the Lords, there are areas where it could be amended to ensure that we in this House, as well as our colleagues in the devolved Administrations and the regulated professions, deliver the certainty that the Bill should provide to millions of professional workers.

We therefore encourage the Government to properly consult with the relevant regulators and professional bodies before making regulations, so that they can avoid the same shambolic approach that the Government took, for example, in the establishment of the Trade Remedies Authority, where the Secretary of State had to step in at the eleventh hour last year to prevent the disastrous removal of vital protections for our steel industry. Similarly, we encourage the Government to properly consult with the devolved Administrations, and provide appropriate reassurances to them that they will be appropriately consulted when regulations affect them, and that the Bill will not strip more powers from them when it comes into force. The relevance of the Trade Remedies Authority is that the Government opposed our amendment in Committee to then Trade Bill to include, among others, the devolved Administrations. Our amendments to today’s Bill would reassure the devolved Administrations that this legislation will not be another attempt by Westminster to seize responsibilities that were previously devolved.

We have also tabled new clauses to strengthen certain aspects of the Bill. Having qualified professionals here in the UK contributing to our economy and social fabric is vital. It is therefore galling to see yet more shortages of skills across the country—shortages that, we hear today, are in the tens of thousands for nurses and carers. We know about the shortage of vets. All of those are covered by the Bill, as are driving instructors, who of course link to lorry drivers, where we have a significant and sustained set of problems. That is why we seek an obligation for the Government to provide a report to the House about what they are doing to tackle the skills shortages facing the country. We also seek additional certainty for workers who already have their professional qualifications recognised in the UK.

Finally, we seek certainty that a number of regulators and regulated professionals are covered by the Bill. When the Bill was in the Lords, it was clear how little effort and thought went into it from Ministers. It was truly shambolic. In fact, it was so shambolic that the Government’s own Minister, Lord Grimstone, said that the deep errors had made him feel “uncomfortable” and that he had listened to the criticism

“with a certain lack of enjoyment.”—[Official Report, House of Lords, 22 June 2021; Vol. 813, c. 160.]

Conservative peer Baroness Noakes said that

“it has all the hallmarks of being a Bill conceived and executed by officials with little or no ministerial policy direction or oversight.”—[Official Report, House of Lords, 22 June 2021; Vol. 813, c. 149.]

I hope that today’s Minister is giving a little more political direction and oversight than his colleagues have previously. How does he feel about the Bill? Is he, as his colleagues were, uncomfortable with it? Is he certain that the wrinkles have been ironed out?

This is an important piece of legislation, which will affect people’s lives and livelihoods, and every effort must be made to deliver the system that those in scope need. Lord Grimstone had the decency to accept the shortcomings of the Bill and of the Government, and in collaboration with Labour made the necessary amendments to put the Bill into better shape. I hope that today’s Minister will address the remaining concerns with us as we debate the amendments before us.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Power conferred by section 1 exercisable only if necessary to meet demand

[Bill Esterson]

I beg to move amendment 2, in clause 2, page 3, line 2, at end insert—

“(2A) In determining whether the condition in subsection (2) is met, the appropriate national authority must have regard to the availability of professional services in the regulated profession by reference to such factors as appear to the authority to be relevant including, but not limited to—

(a) the extent of delays in accessing professional services,

(b) the level of charges for services,

(c) available workforce data, skills needs or workforce modelling forecasts,

(d) vacancy levels or recruitment difficulties,

(e) whether the profession is on the occupation shortage list, and

(f) the views of the relevant regulator and of professional representative bodies.”

This amendment requires additional information to be taken into account by the appropriate national authority when deciding what regulations are to be made in accordance with the powers conferred under clause 1.

The reluctance to consult on matters of great importance to people’s lives and livelihoods is a flaw and a hallmark of how the Government operate. The Bill does not provide any obligation to consult the relevant regulators and other professional representative bodies when determining to make recommendations that will no doubt affect them and their members. How can that be right?

The second report of the Lords Delegated Powers and Regulatory Reform Committee stated clearly that it was

“surprised and disappointed that neither the Memorandum nor the Explanatory Notes…explain why Ministers will have no duty to consult before making regulations.”

The Minister should explain why not. As Conservative Baroness Noakes said to other peers, that

“goes to the heart of this Bill. BEIS did not consult on this Bill or any policy proposals. All it did was issue a rather strange call for evidence, some of the replies to which were really rather thin, and it then worked out its own policy and put out a statement of policy at the same time that it published the Bill.”—[Official Report, House of Lords, 22 June 2021; Vol. 813, c. 167.]

Failure to consult the relevant experts will only lead to mistakes and time wasted in trying to rectify those mistakes.

Furthermore, while the Bill was in the Lords, the Minister in that place said:

“I fully agree that it is important for the relevant national authority to engage with a range of stakeholders before making regulations. Because of the complexity of these matters, it would be the height of foolishness not to do that.”—[Official Report, House of Lords, 9 June 2021; Vol. 812, c. 1500.]

Does the Minister agree with his colleague that it would be “the height of foolishness” not to consult with the appropriate stakeholders? If he does, does he accept the need for the amendment?

[Paul Scully]

I thank the hon. Member for his amendment, which would alter the unmet demand condition in subsection (2). The amendment would require the appropriate national authority to consider a specific set of factors to determine whether that unmet demand condition had been met.

I agree that the appropriate national authority should be transparent when determining whether the unmet demand condition is satisfied. I also recognise that considering a combination of the factors set out by the hon. Member in the amendment would make a sensible determination of unmet demand. That is why the Government committed to publish specific guidance to support appropriate national authorities in their determination of unmet demand. Factors in the amendment would of course be part of that guidance anyway.

The other place agreed that that was appropriate, because setting matters out in guidance, rather than on the face of the Bill, will give the appropriate national authority the freedom to tailor its unmet demand assessment to the needs and circumstances of each profession. I expect that appropriate national authorities will be clear in showing how they have reached their determination. Their approach must withstand scrutiny.

For example, a devolved Administration is best placed to determine the factors relevant to assess whether there is unmet demand for a profession in an area of devolved legislative competence. It is important that they are able to decide how best to make such determinations, and are not forced to work through a list of prescribed factors in the Bill. I therefore hope that the Committee will agree that setting the factors out in guidance is more appropriate.

The amendment also refers to the gathering of views of interested parties. I agree that that is clearly of the utmost importance. Therefore, clause 15 sets out a duty to consult with regulators when appropriate national authorities are using the powers under clause 1. That will provide an opportunity for regulators to express their view on unmet demand and on the content of any resultant negotiations. Given that the Bill already legislates for that, I do not see the need to repeat such an obligation in clause 2.

The proposed amendment also extends the consultation to give regard to the views of professional bodies. I am sure that appropriate national authorities, as a matter of good practice, will look to liaise with such bodies where appropriate. I hope the Committee is reassured that measures are in place to guide the application of the clause and provide transparency of how decisions will be made, as the hon. Member rightly suggests is required, as well as appropriate engagement with key parties. There is no need, therefore, to set that out further in the Bill. As such, I ask the hon. Member to withdraw the amendment.

[Bill Esterson]

I am grateful for the Minister’s response. I come back to the point that the Lords Delegated Powers and Regulatory Reform Committee made—that this part of the Bill does not contain the duty to consult. I take his point about it being later in the Bill, but the point is, if the Government are happy to put it in later on, why is it missing here? We have not really had an answer, so we will test the will of the Committee.

Question put, That the amendment be made.

--- Later in debate ---

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

[Paul Scully]

Clause 2 restricts the use of power for an appropriate national authority to make regulations under clause 1. It does so by limiting the use of power to a specific set of circumstances and introducing the condition that the appropriate national authority can make regulations only where to do so would address an unmet demand for the services provided by that profession, such as by preventing unreasonable delays and charges.

The clause provides reassurance that both the UK Government and the devolved Administrations can exercise the power in clause 1 only when there is clear public interest and when it is in their competence to do so. That means that action can be taken where necessary to meet the demand for services, ensuring recognition for appropriately qualified professionals in demand areas. It prevents regulations from being made under clause 1 where regulators already have sufficient existing recognition routes in place. In those circumstances, the condition in clause 2 would not be met. Clause 2 does not prevent regulators from using existing powers to create routes to recognition; it simply ensures that where there is pressing need, the regulations can be made.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clause 3

Implementation of international recognition agreements

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

[Paul Scully]

The UK is the second-largest exporter of services in the world. The clause is therefore needed to ensure that the UK can meet its international obligations, allowing appropriate national authorities to implement parts of international agreements relating to professional qualifications. Nothing implemented under the clause can force regulators to recognise applicants who are unfit to practise, or materially adversely affect the knowledge, skills and experience of the individuals practising a profession.

As many professions in the UK are already subject to existing legislative frameworks, including primary legislation, amendment may be required to reflect the terms of international agreements on professional qualifications and to be consistent with our international obligations. Existing powers may not provide for the full implementation of international agreements, which is why clause 3 is so important.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clause 4

Authorisation to enter into regulator recognition agreements

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

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Mr Pritchard. I will not detain the Committee for long, but I will speak briefly in support of the new clause in my name and that of my hon. Friend the Member for Sefton Central, who made some excellent comments.

I declare a slight interest as having a professional qualification myself—that of a chartered engineer. That qualification is not part of the list of qualifications that will be subject to the legislation, but professional qualifications are an important part of many sectors, such as engineering, in our economy and our public realm. They are a significant factor in the protection of service users. Think of the many professions that have such an impact on service users, from the legal profession to chartered engineering, medical professions and nursing. It is important that those professions are well regulated, and the Bill is important to all our constituents. Newcastle, for example, has many professionals who benefit from the recognition of their qualifications.

We want the UK to be the best place in the world to live and work. That means being able to attract those with professional qualifications. We must recognise the importance of the autonomy of the regulators, provided for by Labour amendments during the passage of the Bill, and the importance of appropriate guidance, for which the new clause seeks to provide, for professional qualification regulators, particularly when it comes to the impact of trade deals. Many of us in this House—I bow to my hon. Friend the Member for Sefton Central with his extensive experience, however—might find the intricacies of the many trade agreements somewhat difficult to master, so it is critical that the regulators of professional qualifications have the support and guidance that the new clause seeks.

I note, for example, that in the EU-UK trade agreement we have not achieved any reciprocity of professional qualification recognition, so we are in a worse position than we were before leaving the European Union. For many with professional qualifications in this country—lawyers, engineers—being able to work abroad is an important part of their training. I myself worked in France, the US and Nigeria for some time, bringing skills back to this country. Not having reciprocal agreements in many areas leaves us worse off with regard to, say, the European Union, where there is a system of automatic recognition of professional qualifications for seven sector professionals—nurses, midwives, doctors, dentists, pharmacists, architects and vets—and a general system that enables workers to have their professional qualifications recognised.

Given the challenges of negotiating a mutual recognition agreement, surely the Minister understands that many of the professional qualification regulators could benefit from the advice and guidance of his Department and, more broadly, of the Government, with all their experience. Therefore, in providing for an obligation on the Secretary of State to provide guidance to regulators concerning mutual recognition—specifically under the European Union-UK trade and co-operation agreement—and in supporting regulators, the new clause would protect all our constituents by ensuring the quality and professionalism of the services that they very much enjoy now and hope to continue to do so.

[Paul Scully]

I thank hon. Members for the new clause, which seeks to place the obligation on the Secretary of State to provide additional support, co-ordination and guidance to regulators on mutual recognition agreements under the trade and co-operation agreement. Noting the importance of regulatory recognition agreements in supporting professionals who are qualified in one jurisdiction to work in another, I will also explain the benefits of the clause standing part of the Bill.

On the new clause, the hon. Member for Sefton Central was right to acknowledge that, since the end of the transition period, the process by which UK-qualified professionals seek recognition in the EU has changed. Professionals are now subject to the relevant rules in EU member states.

The hon. Member for Newcastle upon Tyne Central talked about the negotiations and about mutual recognition and reciprocal arrangements. The UK proposed ambitious arrangements on professional qualification recognition during the negotiation of the TCA, but regrettably the EU did not engage with them at that point. Instead, we agreed provisions based on existing EU precedent. The TCA provides a mechanism for the UK and EU to discuss the potential for mutual recognition of professional qualifications, where that is in both parties’ interests to do so.

Regulator recognition agreements can make it easier for professionals to navigate that landscape, as we heard, and agreements can be reached independently between regulators or under the TCA. Article 158 of the TCA provides a framework for the UK and the EU to agree arrangements to facilitate recognition of professional qualifications. Using that process, regulators and professional bodies may develop joint recommendations for professional recognition arrangements to be adopted. Annex 24 to the TCA contains guidelines to help them to do so. My officials are holding discussions with their counterparts in the European Commission to clarify the detailed process for making the best use of this framework.

I turn to the support available for regulators. Last year, BEIS established a dedicated recognition arrangements team to provide the support, guidance and co-ordination to regulators of professional bodies that the hon. Members have asked for. There is considerable experience there. That team supports them to pursue recognition arrangements through the framework of the TCA and other trade deals, and on an independent, regulator-to-regulator basis.

[Bill Esterson]

I am grateful to the Minister for describing the dedicated support team that the Department has set up. Will he give us some examples of the advice it has been able to give already? How many inquiries has it had from regulators or professional bodies?

[Paul Scully]

I will happily write to the hon. Gentleman with that detail. I have not been directly involved in that advice. None the less, we are here to talk about the amendment. The debate for today is whether we put that experience and advice on the face the Bill or have the existing structure, whereby that team is already offering that advice, is available and is stepping up with its experience to do so. That team regularly engages with regulators of professional bodies. It has published technical guidance on gov.uk. It is obviously going to be hard to quantify how many people have read and used that information, but information on how to seek recognition arrangements inside and outside the TCA is there.

The Department has also provided limited, targeted financial support to regulators seeking to agree recognition arrangements for a pilot recognition arrangements grant programme. I hope the hon. Member is therefore assured that the Government share the priority highlighted by his amendment and have already instituted support for regulated and professional bodies to make the most of the provisions in the TCA.

Clause 4 is part of our support for regulators as they pursue recognition agreements, ensuring that all regulators can take full advantage of international opportunities and enter recognition agreements at their discretion. Some regulators believe that they can already do so with their overseas counterparts and seize those opportunities. For example, the Financial Reporting Council has entered into a memorandum of understanding with the Irish Auditing and Accounting Supervisory Authority. If they can already enter recognition agreements, no further action is needed, but many regulators are currently considering recognition arrangements for the first time, and not all regulators have clear powers to enter them. Clause 4 can help. The Government are committed to supporting regulator recognition to fit legal agreements with the EU and beyond, and have taken action with that aim.

[Bill Esterson]

I am grateful to the Minister for his answers, which I will come back to. I commend my hon. Friend the Member for Newcastle upon Tyne Central for what she said about the importance of different professions, including her own, as part of the UK’s economic success, exporting around the world, gaining experience and returning it to this country. It is clearly in all our interests that we have good trade in services and facilitate that by supporting our professional services to trade internationally. She gave some excellent examples from across the professions of exactly why that matters and why it is a concern that we are relying on a clause that has not seen after three years any mutual recognition agreements signed up to in the corresponding EU-Canada agreement. That is the reason for the amendment and why we are raising this concern.

I am given a degree of assurance by the Minister that the dedicated support team is in place. I just gently say to him that, as the Minister, he really should have anticipated my question and probably pre-empted it by giving us some examples. I hope he is not going to blame his officials, because he should have asked for that information before, so that he could give us examples of the team in operation and told us how many inquiries there had been.

--- Later in debate ---

[The Chair]

I remind the Committee that, as I set out in the preamble, the Question that is about to be put relates to clause 4, not to new clause 1. The debate on both has just taken place, but the decision on new clause 1, on which the shadow Minister has indicated his thinking, will come later.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

Revocation of general EU system of recognition of overseas qualifications

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

[Paul Scully]

To clarify for the record, the team has taken steps forward, because there is already advice and guidance on gov.uk and a pilot grant programme is working. As I said, I will write to the hon. Member for Sefton Central with the specifics that he asked for.

Clause 5 revokes the European Union (Recognition of Professional Qualifications) Regulations 2015, which implemented the EU’s general system to facilitate the recognition of professional qualifications from the EEA and Switzerland, as set out in the EU directive on the mutual recognition of professional qualifications. The regulations were retained temporarily to provide certainty to businesses and public services at the end of the transition period, but the time has come to change our approach now that the UK is an independent trading nation, free of the obligations of the EU single market.

Several such modifications will be made to various pieces of legislation, and the most practical means to make those changes is by taking the power to do so through regulations, rather than by attempting to amend various regulations through the Bill.

[Chi Onwurah]

The Minister spoke about revoking the European Union provisions. With regard to mutual recognition for qualifications, does he think that British professionals are in a better position now than they were before?

[Paul Scully]

Many regulators will continue to be able to make their own determination in those areas, but the Bill will create a wider framework. The Architects Registration Board and the General Dental Council, for example, will be able to take wider views as a result of the Bill.

The Government remain committed to international agreements, including the EU withdrawal agreement, the EEA EFTA separation agreement, and the Swiss citizens’ rights agreement, all of which the Bill upholds. We gave effect to those agreements in regulations in 2019 and 2020, and there are protections in place for existing recognition decisions, which the Bill upholds.

Clause 5 does not affect those agreements or professionals who have already had their qualifications recognised in the UK, who will continue to be able to practise, provided that they continue to meet any ongoing practice requirements. The clause simply ends the legacy of EU qualification recognition in UK law.

Question put and agreed to.         

Clause 5 accordingly ordered to stand part of the Bill.

Clause 6

Revocation of other retained EU recognition law

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

[Paul Scully]

Clause 6 complements clause 5 by providing a power for modifications to be made to other retained EU recognition law in order to cause it to cease having any effect. It enables the UK Government and the devolved Administrations to bring an end to the legislation for specific sectors that continue to implement EU qualification recognition law.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Clause 7

Assistance centre

[Paul Scully]

Clause 7 provides a statutory basis for the continued delivery of an assistance centre. It is an inquiry service that provides support to overseas professionals seeking to practise in the UK, as well as to UK professionals seeking to practise overseas.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.

Clause 8

Duty of regulator to publish information on requirements to practise

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

[Paul Scully]

Clause 8 is about increasing transparency by requiring regulators of professions in all parts of the UK to publish information on entry and practise requirements. Our evidence gathering found that the complex regulatory landscape is sometimes difficult for professionals to navigate, including in relation to transparency of information regarding entry into professions and application fees, so the clause requires regulators to make available the information about what qualifications or experience are needed, application processes, registration processes, how to continue to practise, ongoing training units and fees.

Question put and agreed to.

Clause 8 accordingly ordered to stand part of the Bill.

Clause 9

Duty of regulator to provide information to regulator in another part of UK

[Bill Esterson]

I beg to move amendment 3, in clause 9, page 8, line 12, at end insert—

“(6) Nothing in this section affects the establishment or operation of a common framework agreement relating to professional qualifications.

(7) A “common framework agreement” is any agreement between a Minister of the Crown and one or more devolved authorities as to how devolved or transferred matters previously governed by EU law are to be regulated.”

This amendment provides additional reassurances to devolved administrations that the Act does not affect the establishment or operation of common framework agreements which are devolved matters.

The amendment provides additional reassurances to devolved Administrations that the Bill will not affect the establishment or operation of common framework agreements, which are devolved matters—that is to say any agreement between a Minister and a devolved authority as to how devolved matters previously governed by EU law are to be regulated—relating to professional qualifications. It is important that when divesting powers to a devolved authority, we allow those powers to remain and do not seek to revoke them on a whim, buried in a Bill such as the one we are debating.

The position of the Labour Government in Wales is that assurances by Ministers in Westminster that they will not use powers granted to them without consultation with devolved Administrations is not good enough. If Ministers say they will do something, they should be prepared to put their commitments on the face of the Bill. Indeed, as the Welsh Government say, although the UK Government have stated that they do not intend to use the concurrent powers in the areas of devolved competence without the agreement of the relevant DAs, the provisions in the Bill do not reflect that, and the Secretary of State and Lord Chancellor would be able to exercise these powers in devolved areas without requiring any consent from Welsh Ministers. As representatives of the devolved Administrations are telling the Government, matters that were previously the preserve of the devolved Administrations, such as common framework agreements, should remain so.

[Paul Scully]

I thank the hon. Member for the amendment, which seeks to ensure that clause 9 does not affect the establishment or operation of a common framework. A framework for the regulation of professional qualifications is under development between the UK Government, the Scottish Government, the Welsh Senedd and the Northern Ireland Executive, to ensure a common approach on powers that have returned following our exit from the European Union and that intersect with devolved legislative competences. Those discussions are well advanced, and they are a testament to the collaborative and collegiate working between Administrations.

Although the amendment relates specifically to clause 9, let me reassure the Committee that we are committed to ensuring that the provisions in the Bill work alongside the common framework programme, and we will consider this as we develop the framework further. However, the common framework is a separate entity. The Bill does not constrain it in any way, and a reference to that effect on the face of the Bill is entirely unnecessary. I hope that reassures the hon. Member and that he will withdraw his amendment.

[Bill Esterson]

Well, that is not the view of the Welsh Government. [Interruption.] We could go into the support that the Welsh Government have given the UK Government recently on tests, but you might tell me to move on rather quickly, Mr Pritchard.

The point that the Welsh Government are making is that it is very important that confidence is retained and that there is no indication of the UK Government going into areas of devolved competence without agreement. The Bill is going through Parliament now. There is no indication of a final date on the wider negotiations and discussions that the Minister referred to. It would therefore be prudent to ensure that in areas such as the common framework, which the Government have committed to, they intend to follow such an approach. If so, they should have no concerns about the provision being in the Bill. On that basis, I would like to press the amendment to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Paul Scully]

Clause 9 ensures that regulators in one part of the UK share information with a regulator in another part of the UK. It places a duty on UK regulators, when requested, to provide information that they hold to another regulator. The information must relate to individuals who are entitled to practise the relevant profession in part of the UK.

In many cases, information sharing between regulators is already done on a voluntary basis. The clause will ensure that good practice continues across professions in the UK. It means that when an individual applies to practise a profession or moves between jurisdictions within the UK, the regulators have the necessary information to assess that individual’s entitlement to practise. It is limited to information held by the UK regulator about the individual and would not require a regulator to obtain information that it does not already hold. It makes sure that information sharing takes place if the practice does not already exist, and where it does exist, the clause ensures that it continues in the unlikely event that voluntary co-operation breaks down.

That approach supports co-operation between regulators across the UK to help protect consumers and public health. Information sharing can inform regulatory action, for example if there is evidence of malpractice, because regulators are best placed to determine whether they require further information about an individual to inform their decisions on entitlement to practise. The clause therefore provides flexibility to regulators on whether they want to ask a counterpart regulator in another part of the UK for that information.

I will also take this opportunity to reassure the hon. Members whose amendment has failed to gain approval in this place that commitments were made at the Dispatch Box in the other place that we would work with our counterparts in the DAs to complete the common framework. We will continue to work towards that. We have offered to revisit whether the Bill’s provisions should be referenced in the framework itself. With common frameworks, including regulated vocational qualifications, there has always been a shared sentiment between the UK nations that there should not be legislative underpinning; that they are more successful when entered into voluntarily, with the focus on collaboration, information sharing and good practice.

Question put and agreed to.

Clause 9 accordingly ordered to stand part of the Bill.

Clause 10

Duty of regulator to provide information to overseas regulator

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

[Paul Scully]

Clause 10 places a duty on UK regulators, when requested, to provide information to overseas regulators relating to individuals who are or have been entitled to practise the relevant profession in the UK, assisting professionals practising in the UK who are seeking to practise their profession abroad by ensuring that overseas regulators have the information to assess an individual’s entitlement to practise.

Question put and agreed to.

Clause 10 accordingly ordered to stand part of the Bill.

Clause 11

Amendments to the Architects Act 1997

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

[Paul Scully]

This clause relates to the recognition of internationally qualified architects in the UK and the administration of the system by the profession’s regulator, the Architects Registration Board. It is designed to facilitate a new system that will replace the interim recognitions system, which gives EU qualification holders an expedited route on to the UK register.

Question put and agreed to.

Clause 11 accordingly ordered to stand part of the Bill.

Clause 12

Crown application

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

[Paul Scully]

This clause ensures that regulators that are part of the Crown or act on its behalf are bound by the provisions in the Bill, and regulations made under it, in the same way as other regulators. That includes executive agencies of Government Departments, such as the Health and Safety Executive.

Question put and agreed to.

Clause 12 accordingly ordered to stand part of the Bill.

Clause 13

General provision about regulations

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

[Paul Scully]

The clause details the extent and limits of the powers to make regulation provided to appropriate national authorities in the Bill. It is a framework Bill. The clauses are essential to ensure that the Bill works in practice and can carry out its intended functions. It details new powers that can be used to make supplementary, incidental or saving provisions. It also sets out where the Bill does not allow powers to make regulations to modify legislation. That ensures that the use of the Bill stays within its remit.

Question put and agreed to.

Clause 13 accordingly ordered to stand part of the Bill.

Clause 14

Protection of regulator autonomy

[Bill Esterson]

I beg to move amendment 4, in clause 14, page 11, line 13, at end insert—

“(6) Subsections (7) to (9) apply where the Secretary of State makes regulations as the appropriate national authority under this Act which extend to the whole of England and Wales, Scotland and Northern Ireland.

(7) Before making such regulations, the Secretary of State must—

(a) consult such persons as the Secretary of State considers appropriate, and

(b) following that consultation, seek the consent of the Scottish Ministers, the Welsh Ministers and a Northern Ireland department.

(8) If consent to regulations is not given by a relevant authority set out in subsection (7)(b) within the period of one month beginning with the day on which consent is sought from that authority, the Secretary of State may make the regulations without that consent.

(9) If regulations are made in reliance on subsection (8), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the relevant authority.”

This amendment obliges the Secretary of State to consult the devolved administrations where regulations affect a regulator that covers the whole of the United Kingdom.

The amendment obliges the Secretary of State to consult the devolved Administrations where regulations affect a regulator that covers the whole of the United Kingdom, and we will be pushing it to a vote. The amendment is important because there are some regulators that operate on a devolved basis—the Law Society, for example, because of the different legal systems across the nations of the United Kingdom. Another example is the Institute of Chartered Accountants in England and Wales, which is separate from the Institute of Chartered Accountants of Scotland. Those are two regulators covering different areas of the country.

In those cases the relevant devolved Administration must be consulted before regulations that affect that nation are made. There are also regulators that govern the whole of the United Kingdom, such as the Civil Aviation Authority or the Royal College of Veterinary Surgeons. Just as the Government should consult the devolved Administrations when making regulations that affect the individual nation, so too should they consult the devolved Administrations when a regulation is made that affects the whole of the United Kingdom.

The amendment does not give the devolved Administrations the power to overrule the Secretary of State. Withholding consent does not mean new regulations will not be introduced. Instead, it allows those devolved Administrations to make their representations, and it gives them a statutory right to argue their case to the Secretary of State and try to change his or her mind. If the Secretary of State still believes their course of action is the correct one, despite representations from the appropriate devolved Administration, in their authority as Secretary of State they will, of course, still be empowered to make regulations.

The amendment adopts the formula that was adopted in the United Kingdom Internal Market Act 2020, so we are asking for the Government to follow their own lead.

--- Later in debate ---

[Bill Esterson]

The hon. Member is right, of course. We may not agree entirely, but we are trying to hold the Minister and the Government to consistency with their own measures through our amendment. That is the spirit in which it is intended, with the one-month period in the amendment in which consultation should take place. It is an attempt to improve on a wholly inadequate and unacceptable situation, putting in some degree of consultation. I accept the difference of opinion between us on the ideal, but that is what we are trying to do with the amendment. His colleagues could have tabled an amendment to go further, but they have not done so in this case. Our amendment is what we can vote on.

It might seem odd for the Government to be inconsistent—now I come to think of it, perhaps it is not odd at all—and, in a rational world, we might expect them to take the same approach that they obligated just over a year ago, applying that consistently across post-Brexit legislation. That seems like a good idea to me. I wonder what the Minister thinks.

[Paul Scully]

I thank the hon. Member for the amendment, which seeks to require the Government to consult with appropriate persons and to seek the consent of the devolved Administrations when making regulations that extend to the whole of the UK, even when legislating in a reserved area. As the Government have set out repeatedly, it is absolutely not the Government’s intention to make regulations in relation to matters on which the devolved Governments could legislate without seeking their view.

Lord Grimstone has put that assurance on the record many times in the other place, including in correspondence with ministerial counterparts in the devolved nations. We are therefore not convinced that the amendment is preferable to the Government’s own, more flexible proposals, which Ministers of all four nations are now discussing.

Working with the devolved Administrations is the way to make the Bill operate best for all our UK nations. That is why I and Lord Grimstone wrote to our ministerial counterparts in the devolved Administration ahead of Second Reading, offering to put a duty to consult with devolved Administrations in the Bill. Thus far, Ministers in the devolved Administrations have rejected our offer, but our discussions are ongoing.

I hope that we will be able to reach an outcome that maintains the policy integrity of the Bill while giving all four nations of the UK the assurances that they need about the operation of the powers.

[Bill Esterson]

I wonder whether the Minister will clear something up for me. If he gets an indication from the devolved Administrations, is it his intention to come back on Report with a Government amendment to put that duty to consult into the Bill?

[Paul Scully]

That is exactly why we continue to discuss ahead of further stages of the Bill. As I say, we offered an amendment to provide for the duty to consult and to publish the outcome of the consultation. That was rejected by the Scottish and Welsh Governments. A rationale for the inclusion of the current powers and the reasons why a consent mechanism would not be possible on the face of this Bill were shared with the Welsh Government on 22 September. However, we will continue to work with the Welsh and Scottish Governments and the Northern Ireland Executive on that basis, to try to do everything we can to secure an agreement.

[Stephen Flynn]

I take cognisance of what the Minister says, but the reality of the situation is that we have seen Bill after Bill introduced by the UK Government delving into devolved areas of competence. If the UK Government really had a respect agenda, they would try to solve those problems before such Bills came before the House—although the Bill has a number of other issues as well. How confident is he that he will be able to get agreement with the devolved nations in this regard?

[Paul Scully]

In terms of confidence, all I can say to the hon. Gentleman is that I will continue to try. I am keen that we do everything we can as a UK Government to stretch our arms out and to say, “We want to work with the Scottish and Welsh Governments and the Northern Ireland Executive to get the skills list.”

[Stephen Flynn]

I thank the Minister for giving way again; he is being very generous. Just for clarity, is he saying that he will try incredibly hard, but if the devolved Administrations are not happy, he will ultimately override them and force through his views?

[Paul Scully]

I think we have made it clear with the devolved Administrations that we want to get as many agreements as we can, but we need to press on with this legislation. However, that is not the same as closing down the conversation. It is important that we do everything we can to work with them.

This amendment has some similarities to the Government’s own position, in that it advocates consultation. However, as with some of the other proposals that we have discussed, the amendment is somewhat less flexible and therefore less satisfactory than the Government’s own approach.

For example, the amendment is limited to regulations that extend across all four nations. What if the Lord Chancellor wished to make regulations under the Bill, or the regulations extended to only two or three nations of the UK? The amendment would oblige the Government to seek the consent of the devolved Administrations even when legislating in the reserved area that I have talked about.

Hon. Members will be aware that the Bill now includes a duty to consult regulators, which extends to regulators in the devolved nations. In addition to the consultation that we would normally undertake with devolved Administrations, wherever appropriate we will engage directly with those closest to the issues before making regulations.

I will continue to engage, as I have said, with my counterparts in the devolved Administrations to persuade them of the merits of the Government’s approach. I do not believe that the amendment is preferable to the Government’s approach, so I ask the hon. Member to withdraw it.

[Bill Esterson]

We have had an interesting series of exchanges. The hon. Member for Aberdeen South made the point well that we see this approach in Bill after Bill; indeed, we see it in clause after clause in Bill after Bill. We have already seen it in more than one clause today.

We have hit the nail on the head with the amendment, because we are calling for consistency. In the absence of a formally agreed commitment to wider consultation, if it was good enough 13 months ago to provide for a one-month period of consultation, with the Secretary of State having the final say after listening to representations or if representations were not forthcoming, why is it not good enough today? On that basis, I will press the amendment to a vote.

Question put, That the amendment be made.

--- Later in debate ---

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

[Paul Scully]

Clause 14 protects regulators’ autonomy with regard to their ability to prevent individuals who are unfit to practise from doing so. The autonomy of regulators in determining those who can practise professions and maintain standards is paramount. The regulators are the experts and they are best placed to determine who should practise in their professions.

The Government added this clause during proceedings on the Bill in the House of Lords, recognising that enshrining this commitment provided important legislative reassurance and support to regulators to deliver their core function. Peers and regulators welcomed the addition of the clause and were content that it protects the regulator’s autonomy. It places two conditions on regulations made under clauses 1, 3 and 4, which are the clauses most relevant to regulator autonomy.

The first condition is that the regulations cannot remove the regulator’s ability to prevent unfit individuals from practising a profession, and the second is that the regulations cannot have a material adverse effect on the knowledge, skills or experience of individuals practising a regulated profession. The effect is that the regulations cannot lower the required standards for an individual to practise a profession in the UK or part of the UK.

Taken together, these two conditions make sure that regulators will retain the final say over who practises in their profession and that the standards of individuals practising professions are maintained.

Question put and agreed to.

Clause 14 accordingly ordered to stand part of the Bill.

Clause 15

Consultation with regulators

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

[Paul Scully]

Clause 15 places a duty on appropriate national authorities to consult regulators who are likely to be affected by, or are otherwise considered appropriate to consult on, regulations made under clauses 1, 3 and 4 of the Bill. They must do so before such regulations are made. The Government added the clause during proceedings on the Bill in the House of Lords, recognising that enshrining this commitment provided important legislative reassurance and support to regulators to deliver their core function. Peers and regulators welcomed the addition of this clause.

Question put and agreed to.

Clause 15 accordingly ordered to stand part of the Bill.

Clause 16

Authority by whom regulations may be made

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

[Paul Scully]

Clause 16 sets out who is an appropriate national authority for the purpose of this Bill. Appropriate national authorities may make regulations where specified for the purposes set out under this clause. In addition to the Secretary of State, the Lord Chancellor is also considered an appropriate national authority and may make regulations under the Bill.

Question put and agreed to.

Clause 16 accordingly ordered to stand part of the Bill.

Clause 17

Parliamentary procedure

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

[Paul Scully]

Clause 17 sets out the parliamentary procedure for how regulations under the Bill should be made, including the situations in which legislation must be subject to the affirmative resolution procedure or may be subject to the negative resolution procedure. The clause also sets out how this works for all nations of the UK.

Question put and agreed to.

Clause 17 accordingly ordered to stand part of the Bill.

Clause 18

Interpretation

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

[Paul Scully]

Clause 18 provides interpretation of the terms used in the Bill. It includes clear definition so that there is no ambiguity over the meaning of the Bill’s provisions and how they apply.

Question put and agreed to.

Clause 18 accordingly ordered to stand part of the Bill.

Clause 19

Extent

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

[Paul Scully]

Clause 19 details the territorial extent of the Bill. The regulation of some professions is devolved. The Bill respects the devolution settlement and the fact that professions have different regulators in different parts of the UK. It covers regulated professions and regulators across the United Kingdom and extends to England, Wales, Scotland and Northern Ireland.

Question put and agreed to.

Clause 19 accordingly ordered to stand part of the Bill.

Clause 20

Commencement

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

[Paul Scully]

Clause 20 sets out procedural detail for the commencement of the provisions of the Bill. It stipulates the timings at which, and conditions under which, the various sections and sub-sections will come into force.

Question put and agreed to.

Clause 20 accordingly ordered to stand part of the Bill.

Clause 21

Short title

Amendment proposed: 1, in clause 21, page 15, line 11, leave out subsection (2)—(Paul Scully.)

This amendment removes the privilege amendment inserted by the Lords.

[Bill Esterson]

This poses the question of why the Government are proposing this amendment. Perhaps the Minister will explain why they are removing the provision which says that nothing in the Act will impose any charges on the public or on public funds. Does he expect that the Act will, indeed, incur costs to the public purse, perhaps to the regulators or those professionals working in the regulated sector? Will he provide assurances around what costs they now expect?

[Paul Scully]

The House of Lords maintains the approach that when a Bill is introduced in the Lords, it does not involve taxation or public spending, deal with non-domestic rates or council tax, or otherwise infringe financial privileges. The House of Lords does that via the privilege amendment. There is no equivalent for Bills that start in the Commons. We believe that it is appropriate—this is a technical move—to remove that privilege.

Amendment 1 agreed to.

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

[Paul Scully]

Clause 21 gives the short title of the Bill for references to it in future papers or bodies of work. The short title is the Professional Qualifications Act 2021.

Question put and agreed to.

Clause 21, as amended, accordingly ordered to stand part of the Bill.

New Clause 2

Skills shortages reporting

“In relation to any regulated profession falling under the provisions of this Act, the Secretary of State must lay before Parliament an annual report detailing any workforce shortages, including what measures are being taken to resolve the shortages.”—(Bill Esterson.)

This new clause obliges the Secretary of State to produce an annual report setting out which sectors are facing skills shortages and what measures are being taken to resolve the shortages.

Brought up, and read the First time.

[Bill Esterson]

We have serious shortages of skilled workers, so the new clause obliges the Secretary of State to produce an annual report setting out which sectors are facing skills shortages and what measures are being taken to resolve those shortages.

As the Royal College of Nursing notes, we went into this pandemic with 50,000 nursing vacancies in the UK, and we are likely to have lost far more nurses throughout. The British Medical Association has estimated a shortage of around 49,000 doctors and doctors in training across primary and secondary care. The Royal College of Veterinary Surgeons has identified a shortfall of nearly 1,000 vets. Meanwhile, professional services firms in the UK have warned of a growing shortage of white-collar workers as companies fight for top talent amid a global economic recovery from the coronavirus crisis.

There are shortages across the economy. HGV drivers have been given an enormous amount of attention because of their impact on supply chains—including, at times, with fuel suppliers, but more commonly with food. We have all noticed that our favourite food has sometimes not been available on supermarket shelves. I talked to the manager of a store in my constituency on Friday. He said that that is week to week, and it is down to shortages, including of drivers.

The role of driving examiners is covered in this Bill; there is an interdependency between what is in the Bill and what is not. It is essential that the Bill gets that right so that our country has the skills it needs, today and in the future. By requiring the Secretary of State to produce an annual report setting out the areas in which we face skills shortages, we will be able to see some of the more obvious shortages in advance, giving the Government some chance of mitigating the problems before they become a crisis.

[Paul Scully]

I thank the hon. Member for his new clause, which introduces a reporting requirement to set out the professions facing workforce shortages and the measures that are being taken to resolve those shortages. I would like to make it clear from the outset—much as Lord Grimstone, my colleague in the other place, has done—that the Bill is not solely about addressing UK workforce shortages, but about ensuing that professional qualification recognition works for the UK.

Clause 1 allows appropriate national authorities to act where there is unmet demand, ensuring that regulations have the processes in place to assess overseas professionals who might help to alleviate that. That is not a replacement for the Government’s skills strategy. In this instance, the Bill is one part of a means to meet unmet demand or shortages. The Bill does not undercut, nor will it replace, the work that the Government are undertaking to support home-grown skills.

The Government already publish information on workforce shortages. For example, the shortage occupation list is a publicly available document comprising professions and occupations that experts at the Migration Advisory Committee deem to be in shortage. Given that workforce shortages are already documented in such a way, with expert input, and with the next shortage occupation list review taking place this year, there is no need for the Secretary of State to also publish a report on professions in shortage.

I turn to the request to report on the measures that are being taken to address workforce shortages. The Government have set out an ambitious reform programme in the “Skills for jobs” White Paper, focusing on giving people the skills that they need in a way that suits them. For example, the lifetime skills guarantee is already being delivered through a wide range of activities, from short, flexible, employer-led bootcamps to the skills accelerator, and by enabling providers to have more control over budgets and funding levels. As Members can see, the Government are already undertaking a great deal of work on both identifying workforce and skills shortages and developing approaches to tackling them. A requirement in the Bill for the Secretary of State to publish a report on workforce shortages would be unnecessary, and it would result in the duplication of work that was being undertaken elsewhere in the Government. I therefore ask that the amendment be withdrawn.

[Bill Esterson]

The Minister referred to skills development. When I meet businesses around the country, as he does, that is often the first item on the agenda. There is great concern about the shortage of technical skills, some of which are covered by the Bill and some not. Parity of esteem within that wider skills agenda is at the heart of what businesses are calling for. Any measure that can be taken to improve understanding, address shortages and find a long-term approach to developing skills—by training people in this country in technical and vocational areas, and by valuing technical learning and the development of skills as much as we do academia—is key.

Where we have shortages, it makes sense to have a systematic approach to addressing them. I read out the figures earlier for what things were like before the pandemic. They have become worse as a result of the pandemic, and they have been exacerbated by the gaping holes that the Government have left in the trade and co-operation agreement with the EU. The Government have belatedly acknowledged some of that, including by adding care workers to the shortage occupation list, which I asked about in a written question a few months ago. There is clear recognition of the need to address these skills shortages. The amendment would put in place a system for the professions covered by the Bill to put that the Government in the strongest possible place to identify and address the shortages. It seems to me that that would be a valuable tool, rather than the Government’s more fragmented approach—the Minister explained it very well—which is one reason why we have shortages. We will press the amendment to a vote.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Paul Scully]

I thank the hon. Gentleman for the amendment. It has been previously considered in the House of Lords, both in Committee and on Report; we turn to it once again. I can confirm that professionals who have already had their qualifications recognised in the UK will be able to continue to rely on those recognition decisions. The revocation of the EU-derived system for recognising qualifications will not impact on the ability of professionals with existing recognition decisions to continue practising in the UK. Nothing in the Bill, nor the regulations anticipated under it, will interfere with or reverse such decisions. Professionals with recognition decisions will need to meet any ongoing practice requirements, but that is for the relevant regulator to determine, so the Bill does not make commitments in those areas.

Regulations commenced in clause 5 will include saving and transitional periods, to ensure that professionals’ existing recognition decisions continue to be valid, and applications made before revocation comes into effect through the commencement regulations will continue to be assessed under the relevant EU-derived recognition laws. It is possible to make similar provisions in regulations under clause 6, so we believe that this matter is best dealt with through the saving provisions in the secondary legislation. That is consistent with the approach that the UK Government and devolved Administrations took when amending EU legislation on recognition of professional qualifications in order to prepare for leaving the EU in the first place. As I have assured the Committee, the Bill also respects the protections in place for existing recognition decisions that are born from the UK’s international agreements. I therefore ask that the amendment be withdrawn.

[Bill Esterson]

There was an interesting admission from the Minister that he thought that secondary legislation could achieve what we are aiming for with the amendment. My concern is that a significant part of our professional workforce have a recognition of their qualifications in the UK. Hearing his words, I doubt that they would feel particularly confident or certain of their future, because although he may have no intention to use the lack of confirmation in the Bill, one of his successors may take a rather different view. That is why professional workers and their employers want confidence. We all know the importance of confidence and certainty for our economy, let alone for the individuals who are subject to the amendment and on whom everybody relies, which is why we will press the amendment to a vote.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Bill Esterson]

I am grateful to my hon. Friend, who has explained very neatly with that example why the new clause is important. Due to the increased number of regulators in scope of the legislation, the Government also had to publish an updated impact assessment, with the total cost to regulators increasing by nearly £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 Back Benches. Baroness Noakes said that

“it has 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.]

My Labour colleague Baroness Hayter said of the list:

“I understand that it has taken BEIS a little time to get it right. I think we have had two updates of the list, with some regulators added and some gone. I see that the pig farmers have gone from the latest list and the aircraft engineers have also disappeared, as have analytical chemists. However, we have in their place chicken farmers, schoolteachers and waste managers—so it seems that the Government can turn flying pigs into chickens.”—[Official Report, House of Lords, 9 November 2021; Vol. 815, c. 1696.]

I thought that was a good line then, and I still think it is a good line today—and so do the Government!

How can regulators and regulated professionals know whether they have equivalence when the Ministers who are responsible for the Bill do not even know themselves? At Committee stage in the Lords, my Labour colleagues Baroness Hayter and Baroness Blake tabled amendments to encourage Ministers to remove any suggestion of doubt as to which professions were covered by the Bill by placing a list of such professions and their regulators in the Bill and giving Ministers the authority to amend that list as necessary. The Opposition realise that Ministers have subsequently published a full list on the gov.uk website. However, there is no duty on the Minister to regularly maintain and update that site. The new clause places an obligation on the Secretary of State and his Department to maintain the website and, as necessary, update it, giving professions and professionals the certainty they need.

[Paul Scully]

As I rise for the final time, I thank you for your chairmanship, Mr Pritchard. I thank the hon. Member for the new clause. The Government recognise the need for clarity on who meets the definitions in the Bill. It is for that reason that officials carried out a comprehensive exercise last year across Government, as well as with the devolved Administrations and with the regulators, to determine who the Bill applies to. That extensive engagement culminated in the list of regulators and professions affected by the Bill being published on gov.uk on 14 October 2021—officials are now maintaining that list. We spent a lot of time over that period saying that we were going to publish the list. We have had a series of webinars to which all regulators were invited, and we continue discussions.

The amendment seeks to commit the Government to maintain and publish a list of regulators. Although I understand the desire for transparency, I have reservations about enshrining a list in the Bill. A list of regulators alone does not provide clarity on which regulated professions are affected by the Bill. It might be that organisations that meet the definition of regulator for one or more regulated professions also have responsibilities and functions for professions that do not meet the definition. Listing the regulators would leave it open to interpretation whether it is all or just some of those professions that are affected. If it was some, it would be unclear which were affected.

For example, the Institute of Chartered Accountants in England and Wales regulates statutory audits and is a profession to which the Bill applies. It also regulates chartered accountants, a profession to which the Bill does not apply. The proposed amendment would not provide clarity in regard to which of the professions is a regulated profession in the Bill. As a result, publishing the list of regulators in such a way risks confusion. That is why the Government have committed instead 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. I hope hon. Members are assured that the Government are already delivering that action. It is on the record that the list of regulators and regulated professions will be maintained, so there is no need to further state it in the Bill. I hope the new clause can be withdrawn.

Finally, as well as thanking you, Mr Pritchard, I thank the officials, the Clerks, the Doorkeepers and the Whips, and indeed Opposition Members for the way that they have engaged in the process.

[Bill Esterson]

I am grateful to the Minister; I shall accept his assurances. And I thank you, Mr Pritchard. It is a shame that we will not get to see the other Chair in action; we have denied Ms Bardell her moment in the Chair.

I thank the officials, the Doorkeepers, and the Government Members who sat there quietly and dutifully maintaining their Trappist vows—with the exception of the hon. Member for Calder Valley, who had to be woken up earlier in the proceedings. I thank the Minister and Opposition Members for attending. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Question proposed, That the Chair do report the Bill, as amended, to the House.