Post Office Court of Appeal Judgment

Paul Scully Excerpts

Tuesday 27th April 2021 Commons Chamber

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

On Friday 23 April, the Court of Appeal handed down its judgment to quash the convictions of 39 postmasters. This is a landmark judgment, and I know that colleagues on both sides of the House will join me in welcoming the court’s decision to quash those convictions. I will turn to what more needs to be done to address the wrongs of the past and to ensure that injustices such as this do not happen again, but I will begin by setting out the context to the judgment.

Over the years, the Horizon accounting system recorded shortfalls in cash in post office branches. The Post Office at the time thought that they were caused by postmasters, and that led to dismissals, recovery of losses and, in some instances, criminal prosecutions. A group of 555 of those postmasters, led by former postmaster Alan Bates, brought a group litigation claim against the Post Office in 2016. In late 2019, after a lengthy period of litigation, the Post Office reached a full and final settlement with claimants in that group.

It is clear from the findings of the presiding judge, Mr Justice Fraser, that there were real problems with the Horizon IT system and failings in the way that the Post Office dealt with postmasters who encountered problems or raised complaints in relation to Horizon. The findings of Mr Justice Fraser led the Criminal Cases Review Commission to refer the convictions of 51 postmasters for appeal: eight to the Crown court and 43 cases to the Court of Appeal. The Crown court quashed the convictions of six postmasters back in December 2020, and 42 further appeals were heard in the Court of Appeal in late March.

The Court of Appeal was asked in late March to decide whether the convictions of those postmasters were safe based on two grounds of appeal, namely whether the prosecutions were an abuse of process either because of the postmaster being unable to receive a fair trial or because of its being an affront to the public conscience for the postmaster to be tried. On Friday, the Court of Appeal announced its judgment. The Court decided to quash the convictions of 39 postmasters. The Court of Appeal also concluded that the failures of investigation and disclosure were so egregious as to make the prosecution of any of the Horizon cases an affront to the conscience of the court. In the remaining three cases, the convictions were found to be safe.

In response to the Court of Appeal judgment, the Post Office has apologised for serious failings in historical prosecutions. Tim Parker, the Post Office chair, has said that the Post Office is

“extremely sorry for the impact on the lives of these postmasters and their families that was caused by historical failings.”

The Government recognise the gravity of the court’s judgment in those cases and the hugely negative impact that the convictions have had on individual postmasters and their families, as has been highlighted on a number of occasions in this place. The journey to get to last Friday’s Court of Appeal judgment has unquestionably been a long and difficult one for affected postmasters and their families, and the Government pay tribute to them for their courage and tenacity in pursuing their fight for justice. The Government also pay tribute to colleagues across the House who have campaigned tirelessly on their behalf.

However, while the Court of Appeal decision represents the culmination of years of efforts by those postmasters, it is not the end of the road. The Post Office is already contacting other postmasters with historical criminal convictions between 1999 and 2015 to notify them of the outcome of those appeals and provide information in respect of how they could also appeal. The Post Office’s chief executive officer, Nick Read, is also leading a programme of improvements to overhaul the culture, practices and operating procedures throughout every part of its business. The Government continue to closely monitor delivery of those improvements. The changes are critical to ensure that similar events to these can never happen again.

Last week, the Post Office announced the appointment of two serving postmasters, Saf Ismail and Elliot Jacobs, as non-executive directors to the Post Office board. I wholeheartedly welcome those appointments. Their presence on the Post Office board will ensure that postmasters have a strong voice at the very highest level in the organisation. As part of the 2019 settlement, the Post Office also committed to launch a scheme to compensate postmasters who did not have criminal convictions who had suffered shortfalls because of Horizon, and who were not party to the 2019 settlement. The Post Office established the historical shortfall scheme in response.

Applications to that scheme were much higher than anticipated. Consequently, in March 2021, the Government announced that it would provide sufficient financial support to the Post Office to ensure that the scheme could proceed, based on current expectations of the likely cost. Payments under the scheme have now begun, and the Government will continue to work with the Post Office to see that the scheme delivers on all of its objectives, and that appropriate compensation is paid to all eligible postmasters in a timely manner.

While those are positive steps in the right direction, the Government are clear that there is still more to do. Postmasters whose convictions were quashed last week will also now be turning to the question of appropriate compensation, which I know will again be of great interest to the House. The judgment last week will require careful consideration by all involved. The Government want to see all postmasters whose convictions have been overturned fairly compensated as quickly as possible, and we will work with the Post Office towards that goal. I commit to keep the House informed on this matter going forward.

Finally, it is essential that we determine what went wrong at the Post Office during this period to make sure a situation like this can never happen again. To ensure the right lessons have been learned and to establish what must change, the Government launched an independent inquiry led by ex-High Court judge Sir Wyn Williams in September last year. The inquiry has made swift progress already, having heard from a number of affected postmasters and a call for evidence has recently closed. The inquiry is now planning public hearings. The Horizon dispute has been long-running. For the benefit of everyone involved, it is important that the inquiry reaches its conclusions swiftly. I look forward to receiving Sir Wyn’s report later this summer. As the Prime Minister said, lessons should and will be learned to ensure that this never happens again.

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

I thank the Minister for advance sight of his statement.

This is the largest legal miscarriage of justice in our history: 900 false prosecutions, each one its own story of persecution, fear, despair, careers ruined, families destroyed, reputations smashed, lives lost, and innocent people bankrupted and imprisoned. I want to congratulate each and every postmaster and their families who withstood this onslaught of false accusations and fought back. I want to congratulate the Justice for Subpostmasters Alliance and the Communication Workers Union who campaigned to get at the truth for over a decade. I want to congratulate hon. and right hon. Members across this House who fought for justice for their constituents.

I wish I could congratulate the Minister and the Government, but I cannot. I am pleased to see the Minister here making today’s statement, but the Government have consistently failed to stand with the postmasters in their quest for justice: investigations delayed, claims denied and not one word of explanation or apology as to why the Government let it take so long to clear these innocent victims.

Now, to add insult to injury, the Government are failing to deliver the proper statutory public inquiry that postmasters, their families and the British public deserve. Let us be clear: Friday’s judgment vindicates the postmasters, but to deliver justice we need a statutory inquiry with genuine subpoena and witness compulsion powers, and a specific remit to consider compensation claims. We have the greatest respect for Sir Wyn Williams, but his inquiry has no real powers and key questions about compensation, the criminal prosecutions of postmasters, and the responsibility of civil servants and Government, are outside its remit. As such, the inquiry is toothless and may even lead to a whitewash. Postmasters have been clear that they will fail to recognise and participate in such an inquiry. How can the Minister stand there with the wreck of hundreds and hundreds of lives before him, and say that this scandal does not warrant a statutory inquiry?

The sad truth is that this horrific miscarriage of justice did not happen overnight. For a decade now, we have known that there were serious problems with the Horizon system, but the Post Office denied all wrongdoing, pursuing the victims and imposing huge lawyers’ fees on the claimants. Even after the High Court ruling vindicated postmasters in 2019, the Government refused to act. Given the long litany of Government failure, there are a number of urgent questions for the Minister. The Government are the Post Office’s only shareholder, yet time and time again the Post Office was allowed to abuse its power over postmasters. That was the finding of the court. Will the Minister acknowledge the Government’s failure of oversight and due diligence with regard to public money? Will he apologise to the victims and their families today?

The postmasters were criminalised for a culture that assumed technology is infallible and workers dishonest. How will the Minister change that and what are the implications for algorithmic management? The faulty software was provided by Fujitsu. What steps are the Government taking to hold it to account? Will ongoing Government contracts with Fujitsu be reviewed? Paula Vennells led the Post Office during this time and was honoured with a CBE. Is it right that she continues to be so honoured? The Minister referred to what he described as a full and final settlement for some postmasters with the Post Office. Their compensation was largely taken in lawyers’ fees. Does the Minister agree that they should be considered for appropriate compensation? Finally, does the Minister agree that actions should have consequences, and that it is therefore essential that there is a thorough criminal investigation into any potential wrongdoing?

In recent weeks, we have heard about the special access and power that millionaires and billionaires have with the Government, Ministers and the Prime Minister personally. Compare and contrast that with how the postmasters have been treated. They did not have the Prime Minister’s personal phone number. They did not have a former Prime Minister lobbying for them. They were not millionaires looking for tax breaks. They were ordinary working people. This speaks to a broader question of whose voice the Government hear and whose justice they deliver. On behalf of the working people who have had their lives ruined, I urge the Minister to apologise, own the Government’s mistakes and commit to a real public inquiry so that justice, for far too long delayed, can finally be delivered.

[Paul Scully]

The hon. Lady makes some important points about the length of time and the egregious nature of the situation that the former postmasters have had to suffer. She talks about the time it takes to get justice, and that is one of the core reasons why we set up the inquiry under Sir Wyn Williams. The average length of a statutory inquiry under the Inquiries Act 2005 is nearly three and a half years, which is a long time. We want to get answers now for the postmasters so that we are able to answer questions about who knew what, who did what and at what point, and learn lessons.

The hon. Lady asked about the Government’s role in this. The Department for Business, Energy and Industrial Strategy is working well with Sir Wyn Williams, and we are participating fully in the inquiry, as are the Post Office and Fujitsu. Sir Wyn Williams clearly feels that he is getting the support, answers and participation that he needs from the relevant organisations. If that changes, clearly we can review that.

The hon. Lady talks about Fujitsu. As well as the inquiry, there are ongoing investigations with the police into wider aspects of the case. She talks about Paula Vennells. People will talk about Paula Vennells’ positions and awards—there is an independent forfeiture committee to consider awards—but I am particularly pleased that, having stepped back from her other roles, she has committed to participate fully in this inquiry. It is to be welcomed that the former chief executive of the Post Office is doing that.

Finally, the hon. Lady talks about the Prime Minister not being on speed dial, or however she described it, for the group of litigants and the other postmasters. I can confirm that the Prime Minister is incredibly interested in and exercised about the situation, as we all are. He wants to make sure we work with the sub-postmasters to get them the justice they want and compensation for the prosecutions, through discussion and dialogue and by working with them and the Post Office in the first instance.

[Sir Peter Bottomley (Worthing West) (Con)]

Knowing who did what will matter, but it is clear why it happened. In 1999, the Government withdrew from the contract and it became one of the worst private finance initiatives ever.

To know what happened, people should pay attention to the investigative journalists and what Lord Arbuthnot said. Computerworld in 2015, Computer Weekly in 2009 and Private Eye in 2015 laid out what the problems were. Second Sight, in its report, showed 12,000 communications failures a year between the terminals and the centre. There was a suggestion that some of the machines’ recordings of tax disc income, cash machines and other things were not coming through. I want to know whether Ministers and senior people in business, whether suppliers or customers, will pay attention not to glossy reviews saying how good things are, but to investigative journalists who say how bad things might be for the innocent. Until those innocent people, who were forced to plead guilty when they were not, are reimbursed the money they had not taken, we cannot sit quietly here in this House.

[Paul Scully]

I thank the Father of the House for his comments. There is no sense that this inquiry is glossy in any sense. Sir Wyn will get the technical support that he needs to understand exactly the points that my hon. Friend makes, including the testimony in the court cases. In the call for evidence, there is an opportunity to listen to the magazines that he referred to, including Computer Weekly, and other journalists who have covered this.

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

I thank the Minister for advance sight of his statement. He will hear from both sides of the House, and we are all going to be beating the same drum, but I do not apologise for repetition in this important statement.

The Minister stated that the chair of Post Office Ltd has apologised, but I note with regret that there is no direct apology from this Government. Yet again, this Government are acting as though the Post Office has absolutely nothing to do with them. I remind the Minister that the Government are the single shareholder in Post Office Ltd and civil servants sit on the board, and therefore the Government must apologise—in fact, the Prime Minister should apologise.

The Court of Appeal’s decision shows that there has been a devastating failure by Post Office Ltd during Paula Vennells’ leadership. She should be stripped of any titles and any additional compensation received as a result of her inexplicable decision to continue legal proceedings in spite of what was known about Horizon at the time. However, I agree with the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) that it is much more important that a statutory, judge-led inquiry is launched, so that all who failed sub-postmasters are held to account. That would be meaningful progress in the pursuit of justice, rather than a token gesture. Sir Wyn Williams will do his best and will bring forward many things that need to be looked at, but we need a statutory inquiry. Will the Minister agree to that?

Horizon has united Members across the Chamber. Will the Minister therefore agree to meet the all-party parliamentary group on post offices, which I chair, to discuss in detail and agree a way forward that will ensure justice for sub-postmasters?

Finally, sub-postmasters deserve to be fully compensated for having their lives devastated by Horizon and the injustices that followed, without detriment to the current post office network. The Justice for Subpostmasters Alliance needs to be compensated. It has not been properly compensated yet, as its legal costs swallowed up any compensation that it received at the time. Will the Minister agree to cover the legal costs of the 555 sub-postmasters involved in civil action against Post Office Ltd and all costs accrued by Post Office Ltd in payment of compensation?

[Paul Scully]

The Department is indeed the single shareholder in the Post Office. This has been going on for so long that we have gone through various models of ownership of the Post Office and various names of the Department, but throughout, we have worked with Post Office management, who have reported back about how Horizon was believed to have been working. We will continue to make sure that these questions come out of the independent inquiry, led by Sir Wyn Williams.

In terms of a statutory inquiry, I have covered some of these areas, but it is important to make sure that we are driven by the outcomes for the sub-postmasters, although we differ in some ways on the process to get there. I will happily discuss this further with the APPG.

On compensation, the group litigants have had that money in the final settlement. It is incredibly frustrating and difficult for them that they have been pushed from both sides, with the extremely high costs of their litigation and the drive from the Post Office, but we will continue to work with the Post Office to make sure that postmasters have adequate justice and see their compensation discussed in full.

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

Unfortunately, in part due to the serial failure to act by successive Ministers, I and the right hon. Member for North Durham (Mr Jones), and others, have been forced to campaign for sub-postmasters, including my constituents Mr and Mrs Rudkin, for the past 10 years. Given the huge miscarriage of justice now fully exposed, including the 10-year attempted cover-up by the Post Office, will the Minister concede that only a full public inquiry and independent compensation panel for victims will now suffice finally to lance this boil?

[Paul Scully]

As I said, an independent inquiry is looking into the actions of the Post Office and the responsibility of the Government within that, and everybody is participating fully. To ensure that we “lance the boil”, the Post Office has launched a historic shortfall scheme, which has started to make payments, and those whose convictions were rightly quashed last Friday will be considering compensation. We will ensure that the Post Office addresses that in quick order.

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

I was present in the Court of Appeal on Friday for their lordships’ judgement and the formal exoneration of those innocent former sub-postmasters. Millions of pounds of taxpayers’ money has been wasted on pursuing unnecessary and unjust prosecutions. When will the Government order Post Office Ltd to call off its lawyers, who have been instructed to search desperately for a defence to the indefensible?

[Paul Scully]

The hon. Gentleman has represented his constituent, Janet Skinner, as both a constituency MP and a former solicitor, so he has a lot of experience of this. We will work to ensure that the Post Office does not defend anything that is indefensible, and that we get answers. That is exactly what Sir Wyn is there to do, and he will produce his report by summer so that we get answers this year.

[Lucy Allan (Telford) (Con) [V]]

The Minister is a decent, able man who I know will do his best to put right these terrible wrongs. Some 555 sub-postmasters showed tremendous courage and dignity in the group litigation against the Post Office, which concluded in 2019. Will the Minister ask his officials whether his Department authorised the Post Office to use millions of pounds of taxpayers’ money to fight the sub-postmasters in that litigation, waging a war of attrition on them, purely to disguise the Horizon failings? Will he ask whether his predecessor, the Minister responsible for post offices in 2018-19, was aware of that, and if not, why not?

[Paul Scully]

The litigation was taken on entirely by Post Office Ltd, and my hon. Friend does not need me to ask those questions, as they are exactly the kinds of questions that Sir Wyn Williams will be asking throughout his independent inquiry, which will report back in summer this year.

[Christine Jardine (Edinburgh West) (LD) [V]]

I appreciate the Minister’s comments about the inquiry and compensation, but will he assure me that the Government will commit to seeing former sub-postmasters as individuals, and to treating each case with importance for all those who have faced more than a decade of accusations and had their life burdened with legal difficulties due to the Post Office’s mismanagement? Many have lost their homes and been refused insurance. Will they each be treated individually and not simply as one overarching scandal?

[Paul Scully]

The hon. Lady makes a crucial point: each and every single one of these people, whether they were prosecuted or “just” suffered a shortfall, is a human being. I see the anger on social media and the tears in some of the interviews following the quashing of the convictions; we cannot fail to realise that these people have suffered so tragically and terribly over so long a period. The Government and I will absolutely treat everybody as individuals. This has come at human cost.

[Jerome Mayhew (Broadland) (Con)]

The group litigation of 2019 performed an enormous public service by bringing this miscarriage of justice to light, but although successful, those involved paid an enormous price for that public service, because most of their compensation was diverted away into legal fees, leaving just £15,000 per victim. That is grossly unfair. The Minister has referred a couple of times to the full and final settlement that has been reached for them, and it is true that that is the contractual position, but it is open to the Government to look behind the contractual position and actively compensate these people in full. Is that something that the Minister will consider?

[Paul Scully]

Before we look at wider compensation, I want first to understand and make sure that we can learn the lessons and find out exactly what happened and when. This happened over a 20-year period and we need to unwind those 20 years, but we want to do that as quickly as possible so that we can get a timely response and justice for those people, rather than waiting for the three, four or five years that a statutory inquiry might take.

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

The Minister said that this was a landmark judgment; I just wonder what it is going to take for the Government actually to take action. People’s lives were ruined. People went to prison. People took their own lives. Surely the way forward now is, first, for the Government to put in place a compensation for all those who lost something. The hon. Member for Broadland (Jerome Mayhew) just made a good point: it was the Government and the Post Office that spent £100 million of taxpayers’ money basically to bankrupt people so that they had to settle.

What is actually needed is a judicial inquiry, because the toothless inquiry that the Minister has set up will not have any powers to force people to give evidence. Without that, we are not going to get to the truth, because the guilty people need to be exposed. I know that the Minister has said he is trying but, alas, I have dealt with numerous Ministers over the past 10 years and I think his name is going to be added to the board of useless Ministers we have seen dealing with this issue over the past few years. We need action now, Minister, not more words.

[Paul Scully]

The right hon. Gentleman talks about unpicking something that happened over 20 years and describes a landmark judgment, then expects it to be dealt with within three days. That belies the complexity and depth of the situation. The decisions on Post Office Ltd’s litigation strategy were taken by the Post Office. The Government were not party to the litigation; they monitored the situation and challenged the approach taken by the Post Office.

The right hon. Gentleman also talks about the fact that the non-statutory inquiry led by Sir Wyn Williams cannot compel people to give evidence, but at the moment everybody is participating in that inquiry. If that changes, obviously our view will change.

[Jacob Young (Redcar) (Con)]

I welcome this decision and thank and congratulate the postmasters who led the campaign to right this wrong. What more can be done to prevent a similar miscarriage of justice from occurring in future? Will the Minister join me in thanking the postal workers in Redcar and Cleveland for their hard work throughout the pandemic?

[Paul Scully]

My hon. Friend works tirelessly for his constituents in Redcar and Cleveland. It is right that he highlights the future prospects of the Post Office and its role and social value moving forward. That is why we need to get the answers now, so that we can not only give the former sub-postmasters justice but draw a line to prove and demonstrate that lessons have been learned and that this can never happen again.

[Zarah Sultana (Coventry South) (Lab) [V]]

The wrongful conviction of the sub-postmasters is one of the biggest miscarriages of justice in British legal history. Post Office bosses aggressively prosecuted workers in spite of full knowledge that the Horizon data system was unreliable and that many convictions were unsafe. People’s lives were ruined, with some tragically passing away before their names were cleared. To get the answers that workers deserve and hold to account those who were responsible for this injustice, will the Government heed the Communication Workers Union’s call for a proper public inquiry into what happened, put it on a statutory footing and give it the necessary powers to compel witnesses and require them to give evidence under oath?

[Paul Scully]

I refer the hon. Lady to the answer I gave a moment ago.

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

The Post Office wholly failed in its duties and obligations as a private prosecutor. It did so to such a degree that it constituted a gross abuse of that role. In consequence, the Justice Committee carried out an inquiry into the role of private prosecutors within our system. Many behave responsibly and properly but, to learn lessons, will the Minister take away our report from October, sit down with ministerial colleagues from the Law Officers Department and the Ministry of Justice and look at further recommendations—for example, a binding code of conduct for prosecutors, including disclosure obligations; a register of prosecutors; notification to all defendants who are subject to a private prosecution that they have the right to a review by the independent Crown Prosecution Service; and extending the role of the inspectorate of prosecutors to large-scale Crown prosecutors? Those helpful measures could prevent such a disgraceful injustice from ever happening again.

[Paul Scully]

I thank my hon. Friend for his work in this area. There are clearly wider lessons to be learned from this, as well as the direct lessons about who knew what in the Post Office. It is about justice and how private prosecutions work, although there has not been a private prosecution in this area for a few years now. We also heard stories about people pleading guilty to lesser charges to try to avoid prison. That is not justice as we see it. There are clearly wider lessons to be learned that I am sure the Government will look at.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Following on from that point, the reality is that the Post Office remains the only body in the UK to run its own prosecutions and it starts from an assumption of guilt when it comes to disputes. Here, for Horizon, it acted as judge, jury and executioner, operated at standards way below the CPS and blocked the forensic account in Second Sight’s Horizon review. When is the Post Office going to be stripped of these prosecution powers? When will a fair dispute resolution process be put in place?

[Paul Scully]

As I said earlier, there have been no private prosecutions in this area for a number of years, but clearly there are lessons that need to be learned. That will be addressed in the inquiry.

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

My hon. Friend is a very good Minister and the Government have, of course, inherited this problem, but, as a House, we have to recognise that this is a grotesque breach of the human rights and civil liberties of up to 555 litigants—our fellow citizens. It is right up there with the acts that we quite rightly complain about in some foreign countries. There may well be inadequate Post Office management, but a Government permanent secretary is the accounting officer and the Government urgently need to do the right thing. In respect of the inquiry that is already commissioned, will the Minister ensure that the evidence, advice and words of Lord Arbuthnot from the other place, who has consistently championed this issue and has been proven right, are loudly heard?

[Paul Scully]

I should have congratulated earlier Lord Arbuthnot on the work he has done in this area. I know Sir Wyn Williams will note my right hon. Friend’s words, to make sure that Lord Arbuthnot’s words, deeds and campaign are heard within the inquiry, because there are many pertinent points that need to be included in the considerations.

[Kate Osborne (Jarrow) (Lab)]

Earlier this year, I asked the Minister about the 555 sub-postmasters who took the Post Office to court and won the original litigation. Many of them, such as my constituent, Christopher Head, were left with nothing after court costs. How can the Minister possibly not agree with me and the current CEO of the Post Office that if proper justice is to be served for every single victim of this scandal, they must have their claim validated under the historical shortfall scheme, to prevent two tiers of justice? It seems to me that it is only this Minister and this Government who believe that that is okay.

[Paul Scully]

I pay tribute to the hon. Lady for her work. Christopher Head, one of the youngest sub-postmasters involved in this situation, has been through years of distress, so I can understand that anger. We will continue to work with the Post Office and with all parties to make sure that we not only get justice, but provide that reassurance that we are listening and that we are addressing the cause of all people affected by this scandal.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

The Horizon scandal, as we know, has destroyed the lives of many people, including that of my constituent, Janet Skinner. The behaviour of the Post Office is best summed up by what the Right Reverend James Jones said in the Hillsborough inquiry about the

“patronising disposition of unaccountable power”,

the denials and the cover-up. To get to the truth, I hope the Minister will reconsider the need for a full statutory public inquiry with the powers to compel evidence and witnesses. This short, quick inquiry that the Minister has referred to without these powers will surely fail.

[Paul Scully]

I thank the right hon. Lady for her question and ask her to forgive me for ascribing Janet Skinner to be the constituent of the hon. Member for Kingston upon Hull East (Karl Turner). None the less, I know that her voice has been heard via many Members in this House. On the non-statutory inquiry, at this stage, Sir Wyn Williams is getting full support from each of the parties that he is investigating. If that changes, our advice will change, too. At the moment, things are working well, and he is getting the co-operation that is required.

[Laura Farris (Newbury) (Con)]

The sub-postmasters suffered a grave miscarriage of justice, but the circumstances that gave rise to it—defective technology twinned with a recalcitrant and inflexible employer—could easily happen again, particularly as technology and artificial intelligence are being rolled out in workplaces across the country. Does my hon. Friend think that there is a place in the forthcoming employment Bill for new provisions to protect against this?

[Paul Scully]

My hon. Friend raises some interesting points, and we certainly need to reflect on the wider implications of the situation. Clearly, the independent inquiry is addressing the direct implications on those sub-postmasters and as they affect Post Office Ltd moving forward, but there are also other implications that the Government need to consider.

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

Convicted, jailed, persecuted, taken their own lives, made bankrupt, reputational damage and mental and physical anguish for years, yet still no one at all at the Post Office or Fujitsu has been held to account for this horrendous injustice. There are also those in Government who became acutely aware of this scandal, yet remained completely passive in their duties on the board of the Post Office. Is it the Post Office, Fujitsu, or some Government Members that the Minister is protecting by resisting a statutory public inquiry?

[Paul Scully]

No, indeed. We want to make sure that we can get these answers quickly for sub-postmasters who have already waited up to 20 years for a sense of justice. As I have said, statutory inquiries can take more than three years to get these answers. I want a report on my desk this summer to report back to postmasters, and Sir Wyn is getting the co-operation that he needs to get answers.

[Joy Morrissey (Beaconsfield) (Con)]

Does my hon. Friend agree that postmasters provide the backbone of the Post Office and will he join me in thanking Jay Patel, the Patel family and Jaspal Singh who provide vital services to communities across Beaconsfield, Hedgerley and Burnham? Will he continue to fight for justice and compensation for those who have been exonerated and take on board the excellent suggestion of my hon. Friend the Member for Newbury (Laura Farris) of looking at how we prevent these type of scandals from happening in the future?

[Paul Scully]

I thank my hon. Friend for her question. I know that she is a champion for community services in her area. That is what the Post Office does—not only is it a business, but it adds social value, as Jay Patel and his family continue to do. That is why we need to get answers. That is why we need to get justice. It is to give existing and future postmasters the confidence that they can work in a great organisation that is offering that social value and supporting their communities.

[Alison Thewliss (Glasgow Central) (SNP) [V]]

Hundreds of postmasters running their local community businesses have had their lives and livelihoods turned upside down, and their reputations and their finances trashed. Will the Minister assure me, further to the question asked by my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows), that full legal costs will be included in the compensation package to postmasters?

--- Later in debate ---

[Paul Scully]

We are working with the Post Office in order for it to come forward with thoughts and plans for the compensation scheme. We will make sure that we are leaning into that to ensure that everybody is adequately compensated moving forward.

[Jason McCartney (Colne Valley) (Con) [V]]

I have constituents who are among the hundreds of victims of this appalling scandal. One has been telling me this morning that she could not even be in London last week to hear the outcome of this judgment because she could not afford the cost of travel. What mechanism is going to be in place to compensate these victims swiftly and fairly?

[Paul Scully]

My hon. Friend is right to champion this. The Post Office, first, needs to engage with all the appellants to make sure that they are compensated fairly. It is that fair compensation that we as a Government will be pushing for to make sure that the Post Office acts quickly.

[Sammy Wilson (East Antrim) (DUP) [V]]

For over a decade now, hundreds of postmasters have lived with the ruination of their reputations, the loss of their businesses and homes, criminal convictions, in some cases imprisonment, and untold mental misery. In contrast, those who lied about the failures of the Horizon system, covered up its defects and withheld information from the courts have been rewarded with public honours, promotion and lucrative Government contracts. The postmasters who refused to give into the institutional power of the Post Office, which used its financial might to silence them, deserve to be congratulated. But more than that, Minister, they deserve full and fair compensation and an inquiry that will properly hold to account those who the judge said were responsible for appalling

“failures of investigation and disclosure”,

which had made the prosecution of these honest people

“an affront to the conscience of the court.”

The real test will be: is that what the Minister will give them?

[Paul Scully]

This inquiry is getting the co-operation of all those people participating and involved. If that changes, clearly, our advice and view will change, because I agree with the right hon. Gentleman that it is so important that we make sure that nobody can hide from this, so that we do get those answers and that those postmasters get justice.

[Virginia Crosbie (Ynys Môn) (Con)]

Margery Lorraine Williams and Noel Thomas, both from my Ynys Môn constituency, were among those who had their lives turned upside down by this appalling miscarriage of justice. Does the Minister agree that postmasters such as Ian Ashworth, who runs the post office in the Chocolate Box, next to my office in Holyhead, provide vital services to our communities across the UK? Does he further commit that the UK Government will act to ensure that this can never happen again?

[Paul Scully]

My hon. Friend is right. We have the likes of Ian Ashworth across the country offering social value. People will be interested and want to act as postmasters only if they are confident that they have the backing of the Post Office that something like this—as happened to Noel Thomas and Margery Lorraine Williams—can never happen again. We need to get those answers and, through this inquiry, we need to ensure that this can never happen again, as my hon. Friend said.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

Once again, the likes of me are here questioning a Government Minister and demanding justice for those devastated by the Post Office Horizon scandal, but the Government have dithered and delayed for years over providing a full statutory inquiry, thereby prolonging the agony of the victims, who are still waiting for an inquiry wherein the judge can compel evidence. Rather than the toothless inquiry set up by the Government, why is the Minister not committing to providing the victims with the proper statutory inquiry that they rightly deserve?

[Paul Scully]

Because the evidence is coming forward. There is no point in compelling something that is already coming forward. Having said that, if that changes, our advice and our thoughts will change, but at the moment, everybody is participating in the inquiry. Sir Wyn Williams is happy and content that he is getting the information and co-operation that he requires to get answers.

[John Redwood (Wokingham) (Con) [V]]

Will the Minister understand that there has to be compensation, and urgently, and this compensation has to cover not just the Horizon losses but the legal costs and the loss of business and income that people suffered from the damage to their reputation?

Many MPs, including myself, told past Ministers that this was an accounting scandal—it was not a sudden outbreak of mass criminal activity by good public servants. They deserve better, and this Government must now apologise by making sure they get proper compensation.

[Paul Scully]

Indeed, it is important that the Post Office engages with all the appellants who have had their convictions quashed. As we are getting those answers, we will work to ensure that we can get fair compensation.

[Mick Whitley (Birkenhead) (Lab) [V]]

This gross miscarriage of justice has taken a terrible toll not only on the wrongly convicted sub-postmasters who have endured so much suffering and struggled for so long to see justice, but on the local communities that rely on post offices as precious community resources. In the wake of this scandal, can the Minister tell us what steps the Government are taking to ensure that every community has easy access to a post office?

[Paul Scully]

There are universal access provisions for the Post Office. Although, yes, we are giving them a network waiver because of the effect of covid at the moment, we will make sure that we are up to 11,500 post offices across the country, with access criteria to ensure that the most vulnerable are closest to a post office and have those services that add such social value to their communities.

[Greg Smith (Buckingham) (Con)]

Postmasters are coming under increasing pressure and workload as many banks turn their backs on the high streets, not least in the towns of Winslow, Princes Risborough and Buckingham in my constituency. Given that increased pressure and increased workload, will my hon. Friend recommit to holding the Post Office fully to account—not just to give justice to those affected by the Horizon debacle, but to fully support postmasters and win back trust?

[Paul Scully]

Winslow, Princes Risborough and Buckingham are just like many villages and towns across the country, where banks are starting to reduce their branch numbers. I have talked about social value; it is important that the Post Office fills that gap, and provides access to cash and services for the most vulnerable. That is why we need to get the answers to ensure that sub-postmasters coming forward have the confidence and really want to come and work for a forward-looking organisation, not one that has had such an egregious recent past.

[Chris Elmore (Ogmore) (Lab)]

I pay tribute to my constituent, Mr John Bowman, who lost his home as well as his business, like the constituents of so many other Members across the House. One of the things that hurt him most, which he has talked about to me extensively, is the way in which the Post Office behaved; it simply looked to the criminal proceedings of those sub-postmasters, who, in the end, we now know had done nothing wrong. Will the Minister confirm that the current inquiry is expressly forbidden from looking at the Post Office’s prosecutorial function? Given this, will the Minister reconsider setting up a fully judicial inquiry into the scandal so that postmasters such as Mr Bowman get the justice they actually deserve?

[Paul Scully]

What I can confirm is that the inquiry will look into the Post Office’s approach and the “who did what” in its approach to the sub-postmasters, because clearly that heavy-handed approach early doors did lead to prosecutions. As I have said, there are wider considerations for the legal process, including private prosecutions, and we will need to learn from this.

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

I have used this quote already in the Chamber today; Warren Buffett often says:

“What we learn from history is that people don’t learn from history.”

When we finally discovered the 10-year cover-up of a fraud at Lloyds, we inexplicably let Lloyds run its own compensation scheme, which three years later was determined to be not fair or reasonable, and we had to do it all again. Will my hon. Friend at least put in place independent oversight of this compensation scheme to ensure that all those who have suffered get fair, reasonable and consistent compensation, whether they have been through litigation or not?

[Paul Scully]

My hon. Friend has been consistent in his campaigning in this area, and what I can say is that we will be ensuring that the Post Office provides fair, consistent and speedy compensation within the structures, as will be outlined over the next few weeks and months.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the Minister for his statement. We will have a three-minute suspension to prepare for the next business.

National Security and Investment Bill

Paul Scully Excerpts

Consideration of Lords amendments
Monday 26th April 2021 Commons Chamber

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

I beg to move, That this House agrees with Lords amendment 1.

[Madam Deputy Speaker (Dame Rosie Winterton)]

With this it will be convenient to consider:

Lords amendments 2 to 10.

Lords amendment 11, and Government motion to disagree.

Lords amendments 12 to 14.

Lords amendment 15, and Government motion to disagree.

[Paul Scully]

I am delighted that the Bill has returned to this House from the other place and I am delighted to be able to speak to it briefly today following the excellent handover from the Minister for Covid Vaccine Deployment, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), who is successfully jabbing the nation as we speak. As we are at a late hour, I will not take up too much of the House’s time. I will just quickly summarise some of the changes to the Bill.

Lords amendments 1 to 10 and 12 to 14 were all tabled by my colleague in the other place, Lord Callanan. Lords amendments 1, 5, 8, 9 and 10 are what the Office of the Parliamentary Counsel would call minor and technical. Lords amendments 12, 13 and 14 pertain to the annual report as provided for by clause 61, and they reflect the decision to include additional reporting requirements that will provide further value for parliamentarians, businesses and investors. Lords amendments 2, 3, 4, 6 and 7 were made to the Bill in the spirit of a shared recognition that the requirements of the mandatory notification regime must be no more than necessary and proportionate for the protection of our national security, and that businesses and investments are not unduly burdened or stifled.

I wholeheartedly agree with the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who said on Report that we need

“robust powers to guard our national security and…change that backs our best small businesses and our capacity for innovation. Both of these goals are possible; indeed, they are mutually reinforcing.”—[Official Report, 20 January 2021; Vol. 687, c. 1000.]

That is why we have reflected carefully during the passage of the Bill on the 15% starting threshold for the mandatory regime. Lords amendment 2 removes acquisitions between 15% and 25% from constituting notifiable acquisitions under the mandatory regime. The House will recall, though, that the Bill provides the power for the Secretary of State to call in acquisitions of control across the economy. That power remains in place. Provisions in the Bill also ensure that the Secretary of State can amend the scope of the mandatory regime through secondary legislation, which could include the introduction of a 15% threshold if deemed appropriate, although we do not currently anticipate doing so.

I will turn to Amendments 11 and 15—

[Sir John Hayes (South Holland and The Deepings) (Con)]

On those amendments, my hon. Friend will know that there are profound and continuing concerns about scrutiny associated with the provisions and powers that the Bill provides. He will furthermore know that the Intelligence and Security Committee, of which I am a member, performs an important role in scrutinising all such security matters. He will know that there is a memorandum of understanding that underpins that between the Government and the ISC. Will he be quite clear that there is no attempt to dilute, to obscure or to escape from the provisions of that memorandum, which says that the ISC can inquire into security matters across the whole of Government?

[Paul Scully]

I always value the contribution from my right hon. Friend who, as a former Security Minister and a member of the ISC, is very wise and experienced in these matters. I can confirm that the memorandum of understanding absolutely pertains and that the ISC can continue its great work to scrutinise the work of the security services, which will include where the security services’ work supports the work of the Investment Security Unit. It is also important to remember, as we consider these amendments, that we value the work of the ISC, and of the Business, Energy and Industrial Strategy Committee and the Science and Technology Committee, which I will speak about as well.

[Sir John Hayes]

To be absolutely clear, that memorandum is, by definition, flexible. The Government have acknowledged that by history, by example and so on. That flexibility should allow the ISC to scrutinise the additional powers in this Bill, and I gather from what the Minister says that he is comfortable with that principle and that the ISC will continue to perform its role in that way. On that basis, I will support the Government tonight in any Division that might ensue.

[Paul Scully]

I am grateful for my right hon. Friend’s enlightening words about his intention. I can indeed confirm that the memorandum of understanding is flexible. The ISC does good work and continues to do so, and I look forward to working with him.

[Greg Clark (Tunbridge Wells) (Con)]

My hon. Friend is giving helpful clarification. The Secretary of State wrote to the Chair of the Business, Energy and Industrial Strategy Committee and copied in the Chair of the ISC and me as Chair of the Science and Technology Committee. Will the Minister confirm that he is prepared to commit in a memorandum of understanding to the Chairs of those Committees being able to see, on Privy Council terms, information that might not be otherwise in the public domain?

[Paul Scully]

We have got to the nub of the matter quickly. I can indeed confirm that. In the letter the Secretary of State sent to the Chair of the BEIS Committee, copying in my right hon. Friend the Chair of the Science and Technology Committee, he spoke about the fact that the BEIS Committee is able to access the material it needs to scrutinise the work of the ISU, including for example details of some of the risks that the ISU has identified under the NSI regime and the measures taken to address them. As part of that, the Secretary of State confirmed that the Department can provide the Chair of the BEIS Committee with confidential briefings on Privy Council terms, and that he would be happy to set those out in more detail in either a memorandum of understanding or further exchange of letters. The Secretary of State went on to say that he would encourage the STC to provide scrutiny of the work of the ISU where the work of the unit falls within the specific remit of that Committee. He also welcomed the Intelligence and Security Committee’s continued scrutiny of the work of the security services, which will include where the security services’ work supports the work of the ISU.

[Dr Julian Lewis (New Forest East) (Con)]

I hate to be slightly disobliging, but it is a fact, is it not, that the staffs of these Select Committees do not have the clearance necessary to see or handle top secret material, and showing a top secret document to the Chair of a Committee on his or her own, briefly in very limited circumstances, does not amount—as I will explain shortly—to effective scrutiny?

[Paul Scully]

I look forward to hearing my right hon. Friend’s explanation.

I believe that the Bill as amended by the other place through amendments 11 and 15 would require the Secretary of State to provide a confidential annexe, to be provided to the ISC. I am advised by my noble Friends Lord Callanan and Lord Grimstone that there is considerable strength of feeling in the other place about ensuring that the operation of the regime receives appropriate parliamentary scrutiny, and I welcome the passionate and expert debate that this question has already received. It has been proposed that the ISC is better placed than the BEIS Committee to scrutinise the Investment and Security Unit, despite the Secretary of State for BEIS having responsibility for the unit. The implication of the amendments is that the Select Committee responsible for holding the Secretary of State to account across their responsibilities is insufficient in that regard. It is also suggested that the ISC would have inadequate access to information to carry out its duties.

In essence, the amendments would require sensitive details to be provided to the ISC regarding the Secretary of State’s decision on final notifications given and final orders made, varied or revoked, but the ISC is already able to request such information as soon as is appropriate from the security services where it forms part of its long-established scrutiny responsibilities under the Justice and Security Act 2013 and, as I hope I have made clear, its accompanying memorandum of understanding. In addition, the Bill provides that the Secretary of State must publish details of each final order made, varied or revoked, and clause 61 already requires the annual report to include the number of final orders made, together with a number of other details. Indeed, that clause was amended in the other place to include further such information in the annual report.

We do not disagree that further information may be required for appropriate parliamentary scrutiny. Where that is the case, the Government will follow existing procedures for reporting back to Parliament, but that should be done primarily through responding to the BEIS Committee as it goes about its work of ably scrutinising the work of the Department. We will ensure that the BEIS Committee is able to access the material it needs.

It is of course right that the ISC continues its excellent scrutiny of the work of the security services. The work of the security services on investment security in support of the ISU clearly falls within the remit of the ISC. That does not require any statutory change to be made. As I said, the memorandum of understanding pertains to the continuing work of the ISC, and I look forward to working with colleagues on that Committee. As such, and with the BEIS Committee having appropriate assurance that it will be provided with the information necessary, there is no need for these changes made to the Bill by the other place to stand.

In summary, with the exception of amendments 11 and 15, I believe that this House is today presented with an improved set of measures to safeguard our national security. The ISC will not have its powers—existing powers —diluted through the discussion of the memorandum of understanding, as we have already said. Therefore, I commend the amendments, with the exception of amendments 11 and 15, to the House.

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

Let me start by welcoming the Minister to the National Security and Investment Bill, and I would like to wish his predecessor well in his work on the vaccine roll-out. I would also like to thank colleagues in the other place who have worked so hard to improve this Bill, and the Members of both Houses who scrutinised its important provisions.

Labour is the party of national security, and has long called for a new regime to deal with evolving national security threats in corporate transactions. A robust takeover regime is also essential if we want firms in our key sectors to grow and provide good jobs here in the UK. So we support this Bill, which allows the Government to intervene when mergers and acquisitions could threaten national security. Unfortunately, the Bill in its original form lacked certain provisions, and particularly the oversight necessary to ensure it was successful in protecting our national security and national interest. So we have sought to improve the Bill along the way, and we are pleased that the Government have adopted some of our suggestions.

Members across party lines raised concerns over the capacity and capability of the new Investment Security Unit to deliver on the Bill’s ambition. We are pleased that the Government have acted on this, and Lords amendments 12 to 14 to clause 61 are based on Labour’s original amendment 31 during the House of Commons Committee stage, and a later amendment tabled by Labour at Lords Committee. Reporting the aggregate time taken for decisions will help to ensure that the new regime works more efficiently for small and medium-sized enterprises, and I was pleased to hear the Minister quoting my remarks to that effect.

We are also pleased to see that the Government have taken steps to address concerns regarding the 15% threshold for a notifiable acquisition. This follows Labour’s probing amendment 16 during Lords Committee stage and Cross-Bench concern. The Wellcome Trust labelled the 15% threshold as a

“regulatory burden for those that may not be able to afford it”.

With Lords amendment 3, the Secretary of State will still be able to call in acquisitions across the economy at or below 25%—and, if necessary, below 15%—where they reasonably suspect that material influence has been or will be acquired. But this amendment will bring the notifiable acquisition threshold in line with our allies in France, Australia and Canada. We are pleased the Government have listened to Labour and made a change that will be beneficial to small and medium-sized enterprises.

It is also welcome to see that the Government have now committed to issue public guidance, which Labour called for with our amendment 17 at the Commons Committee stage. This is good news for transparency. Our approach has been to ensure that our small and medium-sized enterprises have clarity, and that those investing in the UK understand what the rules are and how they will work. The publication of guidance will boost confidence in the new regime for national security screening.

But we are here today because of Lords amendments 11 and 15, and to vote on the Government motion to disagree. Labour believes that the Intelligence and Security Committee scrutiny is essential to provide the robust and sensitive oversight and accountability that matters of national security require. The Bill gives significant new powers to BEIS, a Department traditional lacking in national security experience. The BEIS Committee does not have the security clearance necessary to provide scrutiny, and the confidential briefings to the Chair described by the Minister will not change that.

--- Later in debate ---

[Darren Jones (Bristol North West) (Lab) [V]]

I will focus my remarks on Lords amendments 11 to 15 to clause 61, which, as we have heard, have arrived from the other place on the basis that the BEIS Committee, which I chair, does not have the access to the intelligence information that it would need in order to adequately scrutinise the Investment Security Unit in the BEIS Department. Let me start by thanking their lordships for their highly informed debate on this issue and their hard work in drafting these amendments.

It is a matter of fact that the Intelligence and Security Committee has a level of security clearance and powers to demand classified information that no other Committee of this House has, including my own. I was therefore surprised to learn that the Government were not going to update the memorandum of understanding with the ISC to extend its remit specifically to include the Investment Security Unit. That is why their lordships have sent us these amendments, which I have no issue with. On that basis, I commend the Chair of the ISC for his eloquent speech this evening. However, the Government have made it clear to my Committee and to the House that they have no intention of supporting the amendments, and nor will they be extending the memorandum of understanding in respect of the ISC.

The Secretary of State did agree with me in Committee that the Bill extends the powers of the Government to intervene in the market and that adequate scrutiny of that function is therefore important. On that basis, my Committee has received a letter from the Secretary of State, which we will formally report to the House tomorrow morning, setting out three key points. First, my Committee will be guaranteed appropriate levels of information and briefing to understand why Ministers have acted in the way they have—this is noting the points made by the ISC Chair this evening. On that basis, my Committee and the Department will enter into a new MOU to reflect this. Secondly, the Secretary of State will brief me, as Chair of the Committee, on Privy Counsellor terms, as required. Thirdly, the Science and Technology Committee, which also has standing in this area, will be recognised as sharing the scrutiny responsibility, alongside the BEIS Committee, in addition to the work of the ISC. I welcome the comments made by the Chair of the Science and Technology Committee in this evening’s debate.

My Committee has discussed this issue and wants to ensure effective scrutiny of the wide-ranging and important powers in the Bill. Given that the Government are unwilling to support their lordships’ amendments this evening, and therefore having the main scrutiny responsibility resting with the BEIS Committee, the agreement to enter into a new MOU with my Committee, and to ensure the Chair’s briefing on Privy Counsellor terms, is the next best available option. The BEIS Committee will continue to serve the House in holding the Department to account, and we will of course make it known if we are unable to do that effectively. I therefore look forward to hearing the Minister, when he sums up the debate on the Floor of the House this evening, reconfirming the commitments made by the Secretary of State and promptly agreeing the MOU in due course.

[Paul Scully]

I very much appreciate the spirit and detail with which this issue has been covered in the Chamber today and the consideration that has come from the other place. I am glad that we have been able to bring forward a number of amendments to improve the Bill, ensuring that we can keep the certainty for business and are responsive to the needs of business, while clearly keeping that central focus on national security. It is so important that we keep the flexibility in the definition of “national security”, in order to future-proof the Bill, while none the less making sure that businesses and potential investors in this country know exactly the competitive regime we have here.

That goes to the point made by my hon. Friend the Member for Gravesham (Adam Holloway) about PsiQuantum. Quantum computing is an exciting technology. The Bill tackles national security, but we must also ensure that the UK is a competitive, good home for technologies such as quantum computing, not least by making sure that we can unleash innovation, and make the UK the science superpower that is the envy of the world, with people wanting to come to build quantum technology units here in the UK, through our use of research and development and by ensuring that we are competitive in all our offerings, while being able to protect businesses for our national security.

I appreciate the kind words of the shadow Minister, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), and indeed those of the hon. Member for Aberdeen South (Stephen Flynn) when he talked about my coming to this place. Indeed, not only did I follow my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) in leading on this Bill, but I stole his flag for my office, for fear of missing out otherwise when I am on my Zoom calls, because that does symbolise the vaccination process and the fact that the Union has come together—the UK has come together—in an amazing programme.

I am really keen to tackle two more points. The hon. Member for Richmond Park (Sarah Olney) talked about flexibility versus scrutiny, which I have already talked about. She mentioned that she did not want other countries or other businesses to undermine the UK economy. Clearly, we do not have to go that far to have people undermining the UK economy; we have only to go to the Liberal Democrats for that. It is important that we do not allow that speculation—the sort of muckraking we heard from that contribution—to detract from what is a really important Bill for the UK national security regime, and from that optimism and confidence that is needed for attracting investment within this country.

I understand the concerns of my right hon. Friend the Member for New Forest East (Dr Lewis), but I reiterate the fact that it is for the BEIS Committee to oversee the work of the Department. The Committee is particularly well placed to consider how effectively and efficiently the regime interacts with business communities and investors.

[Mr Steve Baker]

I thought my right hon. Friend the Chair of the ISC really made an open and shut case, and I hope that he will not mind my saying so. If the Minister will not amend the memorandum of understanding, will he be really clear why he will not do so, because my right hon. Friend made an open and shut case that he should?

[Paul Scully]

I appreciate my hon. Friend’s intervention, and I will come back to that. Let me first develop the point about scrutiny. Clearly, the BEIS Committee has business expertise and is able to determine whether the regime is effective in scrutinising relevant acquisitions of control. I do question some of the narrative that I have heard that suggests that the BEIS Committee is not well placed to scrutinise the NSI regime. Furthermore, there are no restrictions on the ISC requesting further information from the unit or the Secretary of State where it falls under the remit of that Committee. There is no barrier to the BEIS Committee handling top secret material or other sensitive material subject to the agreement between the Department and the Chair of the Committee on appropriate handling.

As part of its role, the BEIS Committee can request information that may include sensitive material from the Secretary of State for Business, Energy and Industrial Strategy, including on the Investment Security Unit’s use of information provided by the intelligence and security agencies. The Select Committee already provides scrutiny over a number of sensitive areas, and there are mechanisms in place for it to scrutinise top secret information of this kind on a case-by-case basis.

As the Secretary of State for Business, Energy and Industrial Strategy explained in front of the BEIS Committee last week, and indeed in his letter to the Chairman of the BEIS Committee, which was copied to my right hon. Friend the Member for Tunbridge Wells (Greg Clark), Chair of the Science and Technology Committee, there are three Committees that should act in collaboration. The BEIS Committee provides the primary work of scrutinising matters within BEIS competence, but two important additional Committees—the Science and Technology Committee and, indeed, the ISC—were acting in an auxiliary capacity, making sure that the essential cross-cutting nature of the Investment Security Unit benefits from the rigour of those Committees, with expertise in each area that the unit covers.

The Government therefore do not believe that we need to update the existing memorandum of understanding, because it is flexible and it does still pertain. As I have said, there is no dilution of the ISC’s work in this. The current arrangements are sufficient to ensure that we can have the correct scrutiny of this.

[Dr Lewis]

I appreciate that I have tried the patience of the House, but on that one point let me say that the MOU is flexible in the sense that we can add new organisations to it. The flexibility is not being used by the Government because they are refusing to add this new unit to the MOU, so the flexibility is rendered nugatory.

[Paul Scully]

As I say, the direction from the Secretary of State in his letter to the Chairs of the Business, Energy and Industrial Strategy Committee and the Science and Technology Committee was clear in terms of his expectations of how this should work. The Business, Energy and Industrial Strategy Committee should be the prime Committee to scrutinise BEIS competence, but similarly the Science and Technology Committee and the Intelligence and Security Committee should absolutely be there to look at places within their competence to ensure wider scrutiny.

As I said, we have listened to Parliament. We have tabled a number of amendments to increase the amount of information included in the annual report and the various threshold. We have responded.

Lords amendment 1 agreed to.

Lords amendments 2 to 10 agreed to.

Clause 61

Annual Report

Motion made, and Question proposed, That this House disagrees with Lords amendment 11.—(Paul Scully.)

Post Office Court of Appeal Judgment

Paul Scully Excerpts

Monday 26th April 2021 Written Statements

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

This House is well aware of the issues with the Post Office Horizon IT System and the hugely negative impact it has had on the lives of affected postmasters. The Government welcomes the Court of Appeal’s decision last Friday, 23 April, to quash the convictions of 39 postmasters. This is in addition to six convictions quashed by the Crown Court in December 2020.

The Court’s decision is also another important step towards bringing resolution for these postmasters. The impact this ordeal has had on affected postmasters, their lives and livelihoods cannot be overstated. The Government will come back with a fuller oral statement tomorrow, 27 April, to update the House in more detail on these cases, owing to the scale of the miscarriage of justice we have seen here.

[HCWS940]

Carbon Monoxide: Safety, Testing and Awareness

Paul Scully Excerpts

Wednesday 21st April 2021 Commons Chamber

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

I congratulate the hon. Member for Barnsley East (Stephanie Peacock) on securing today’s important debate on carbon monoxide and on the way she has spoken about this hugely important issue. The safety of the public is clearly a key priority for any Government, and the prevention of carbon monoxide poisoning features in the work of a number of different Government Departments and agencies. It is a multifaceted issue, which the Government recognise needs a coherent, joined-up approach, so I am pleased to be able to discuss this issue today.

While the trend for carbon monoxide poisoning is downwards, we clearly cannot be complacent, for the reasons that we have heard, whether it is the death of Katie, the death of Gary Maher or the life-changing paralysis of Sheree Maher. There was a campaign that was followed by Gary and Sheree’s mother Molly for many years. We need to make sure that we are very much on top of this issue. Twenty deaths a year by accidental carbon monoxide poisoning is 20 too many. These are human beings. We must remember them and we must act for them.

The Government and their agencies continue to take action to raise awareness about the risks. Every death caused by carbon monoxide poisoning is a tragedy, and those who survive severe carbon monoxide poisoning can feel the effects for many years, as we have heard. I formally thank the all-party parliamentary group on carbon monoxide for its tireless promotion of gas safety and its ongoing endeavours to increase awareness with Government, businesses and individuals. While carbon monoxide itself may be invisible, the importance of the issue must remain distinctly visible.

This debate gives us an opportunity to consider the importance of the topic and the levers to drive change, and it gives me an opportunity to highlight the latest steps that the Government are taking before I come back to awareness and education. It provides an opportunity to raise awareness with the public about the action they can take to protect themselves, but it also provides an important nudge and reminder to each of us here as individuals to ensure that we are taking the appropriate actions in our own homes to protect those who we love from this silent killer.

I want to take a few moments to talk about the protections already in place and what the Government are doing to protect the public. Reflecting the cross-cutting nature of the issue, the Government have in place a cross-Whitehall group under the chairmanship of the Health and Safety Executive. That group brings together the teams, agencies and Departments that have an interest in carbon monoxide and, more importantly, that have those levers to drive up safety and awareness in relation to the relevant sources of carbon monoxide—the appliances themselves, their installation and maintenance—and that have obligations to householders and tenants.

By coincidence, the group’s most recent meeting was earlier today, during which the group discussed issues, including recent Government activity to address accidental carbon monoxide poisoning and engagement with industry to drive up safety from the design stage of appliances onwards. The group provides regular updates on activity across Government to address the risks of carbon monoxide. It publishes an annual report that is available on the HSE website.

I must also mention the important work of the all-party parliamentary carbon monoxide group, to which we have had a few references. This group provides vital discussion and promotes ways of tackling carbon monoxide poisoning in the UK. Its membership has recently increased, showing the importance that my hon. Friends and Members from all parts of the House place on this important issue.

Turning to the protections already in place, there is robust legislation in effect to ensure that gas appliances placed on the market and placed in homes are safe. The essential safety requirements for gas appliances and fittings are governed in Great Britain by regulation 2016/426, which relates to appliances burning gaseous fuels, and in Northern Ireland by regulation EU 2016/426. The law requires that these products are designed and built so as to operate safely and present no danger, including in relation to carbon monoxide. They must be accompanied by instructions for use and servicing that are intended for the user and bear appropriate warning notices. The instructions for use and servicing intended for the user must contain all the information required for safe use and must in particular draw the user’s attention to any restrictions on use.

Enforcement authorities have a range of powers to take swift and robust action where a safety issue is identified with a product. In 2018, the Government took action to provide enforcement powers to the Office for Product Safety and Standards, as well as existing enforcement authorities, to maximise the opportunity to take action where necessary, but safe design is only one element in ensuring that the risks from carbon monoxide are minimised. Boilers, cookers, heating systems and appliances should be installed and regularly serviced, as we have heard, by a reputable registered engineer. Anyone carrying out work on the installations and appliances in a home must be registered with the relevant association, such as the gas safe register for gas appliances, the heating equipment testing and approval scheme for solid fuel appliances, or with the Oil Firing Technical Association for oil appliances. Where the appliance requires a flue or chimney, those should be swept regularly by a qualified sweep. These actions can provide reassurance and minimise the risk of carbon monoxide in our homes, but due to the odourless, colourless nature of carbon monoxide, fitting a detector provides an effective warning that the poisonous gas may be present.

Building regulations in England require the provision of carbon monoxide alarms when solid fuel appliances are installed. When alarms are required, they should comply with the relevant British standard and be powered to operate for the working life of the alarm. The housing regulations require carbon monoxide alarms when homes that have a solid fuel appliance are privately rented. As we have heard, the Government have recently consulted on proposals to extend the building and housing regulations to require the provision of carbon monoxide alarms to oil and gas heating installations and to social housing. My colleagues at the Ministry of Housing, Communities and Local Government will be publishing their report and response in due course.

There will and can be a risk of exposure to carbon monoxide in environments away from the home, where gas appliances or solid fuel appliances can be found—for example, in caravans, boats and mobile homes—so it is important that owners, whether the places are for their own use or are hired out, take appropriate action to minimise the risk of carbon monoxide to those staying in them. I reiterate that carbon monoxide alarms are a useful additional precaution, but they are not a substitute for proper installation, maintenance and the safety checks of combustion appliances.

[Sir Peter Bottomley]

The House will be grateful for the positive way in which the Minister is responding, although dates for when that Ministry will respond would be better. Can we remind the House that less than one part in 50 of carbon monoxide in the air can be fatal, and that alarms are not alternatives to maintenance and detection, but additional?

[Paul Scully]

Indeed, and the Father of the House is, in his usual wise way, right to highlight the fact that not only is this a silent killer, but that it does not take much to have a drastic effect. Clearly, the Ministry of Housing, Communities and Local Government will have heard his request to chivvy along that response and his request to meet, and I will make sure that the conversations that we can usefully have with Members of the House, and there are many, come through to the right Ministry so that they can have the best effect. I will reflect on that and return to it.

Raising awareness about the dangers of carbon monoxide and the actions to be taken to minimise the risk is absolutely key and that is why this debate is so important. The Government’s message is also very clear. We say to householders: use a properly trained, competent and gas safe-registered engineer to undertake work in your home and have all fuel appliances serviced on a regular basis. It is also good sense to have a carbon monoxide alarm fitted in your home as an additional precautionary measure. We say to landlords: ensure that you know the legal and moral obligations on you towards the safety of your tenants from the risk of carbon monoxide poisoning. The hon. Member for Warrington North (Charlotte Nichols) was absolutely right when she talked about the fact that we need to make sure that we are calling out disreputable landlords on that and that tenants need to clearly know their rights in this as well. And we say to those tenants: ensure that your landlord has undertaken the necessary steps to protect you from carbon monoxide.

The Government regularly review their messaging and information to ensure that it is clear and up to date. For example, there is a need to be vigilant in looking out for the signs of carbon monoxide poisoning at the moment during the coronavirus pandemic, as we have heard, because the symptoms of chronic CO poisoning may be confused with some of the signs commonly associated with flu-like illnesses such as covid-19. These include headaches, sickness, tiredness and shortage of breath. Similarly, one of the solutions for carbon monoxide poisoning, as the hon. Member for Barnsley East said, is fresh air, which is also shared with the covid-19 response.

[Stephanie Peacock]

Will the Minister respond to my point on the NHS website? Perhaps he could take it up with the Department of Health and Social Care, so that we can raise awareness of the similarities between these two illnesses.

[Paul Scully]

I will happily take that away and reflect on it with the Department of Health and Social Care.

We are all spending significantly longer periods at home at the moment, although it is less, thankfully, now that we are in stage 2 of the road map as we take further steps along it out of lockdown. None the less, it is hugely important that we address this. I am pleased to say that we are approaching the warmer summer months, when switching on the heating may not be so much of a consideration, but in the recent cold snap, many of us have been tempted to switch the heating back on for a few days and maybe have our windows closed to keep out the cold.

I am sure it is no coincidence that Gas Safety Week is in September and Carbon Monoxide Awareness Week is in November, when the heating comes back on and we do all we can to avoid chilly draughts, potentially reducing crucial ventilation. Indeed, Gas Safety Week celebrated its 10th anniversary last year, and Carbon Monoxide Awareness Week is coming of age this year. These provide a useful reminder and help to raise awareness at a key point in the year, giving a timely reminder to ensure that appliances are serviced and checked. That does not mean that there are not risks at other times of the year. The development of a fault in an appliance is not restricted to a certain week or month, and the risks of using certain products such as barbecues in poorly ventilated or covered areas may be more prevalent as we head into the summer.

I was struck by the experiences that we heard from the hon. Member for Barnsley East of people who have been personally affected by carbon monoxide through not just deaths but the long-term effects. Members have heard from their constituents about tragic events that have possibly even led to close calls, which are no less terrifying for those going through that terrible experience. There are actions that we should all take as individuals to reduce the risk of exposure to carbon monoxide. Raising awareness and spreading the word through initiatives such as Gas Safety Week and Carbon Monoxide Awareness Week is also an important element of ensuring the safety of the public from the invisible threat of carbon monoxide.

The Government continue to keep this issue under close review and take steps as appropriate to increase safety and protect the public, but this is a welcome and timely debate and a reminder to Government and to all of us that we must continue to work to reduce and eliminate these deaths and the effects of carbon monoxide poisoning.

Question put and agreed to.

Contingencies Fund Advance: Covid-19 Support Packages

Paul Scully Excerpts

Tuesday 20th April 2021 Written Statements

[The Minister for London (Paul Scully)]

I hereby give notice of the Department for Business, Energy and Industrial Strategy having drawn an advance from the Contingencies Fund totalling £1,579,925,000 to enable expenditure on covid-19 support packages for business to be spent ahead of the passage of the Supply and Appropriation Act in March 2021.



The funding is required for the local restrictions support grant (LRSG) (closed) addendum scheme, which provides grants of up to £3,000 per month to businesses which are legally required to close due to covid-19 restrictions.



Parliamentary approval for additional resources of £1,579,925,000 will be sought in a supplementary estimate for the Department for Business, Energy and Industrial Strategy. Pending that approval, urgent expenditure estimated at £1,579,925,000 has been met by repayable cash advances from the Contingencies Fund.



The cash advance will be repaid upon receiving Royal Assent on the Supply and Appropriation Act.

[HCWS924]

DRAFT INTERNATIONAL ACCOUNTING STANDARDS (DELEGATION OF FUNCTIONS) (EU EXIT) REGULATIONS 2021

Paul Scully Excerpts

Thursday 15th April 2021 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 International Accounting Standards (Delegation of Functions) (EU Exit) Regulations 2021.

It is a pleasure to serve under your chairmanship, Mrs Miller. The regulations, laid before the House on 1 February 2021, follow on from the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019—the principal regulations—which aimed to address failures of retained EU law to operate effectively in the field of accounts and reports from UK corporate bodies.

International financial reporting standards are a set of international accounting standards used in more than 125 countries across the world, including Australia, Canada and in the EU. Their widespread use provides consistent and comparable financial reporting that facilitates transparency, accountability and investment across borders. In 2005, the UK mandated the use of IFRS as endorsed and adopted by the EU for all publicly traded companies when preparing their consolidated accounts. The UK is the largest single user of the standards: we estimate that 15,000 UK companies use them, including those that do so voluntarily.

In preparation for our departure from the EU, the principal regulations transferred all existing EU-adopted IFRS into UK law to form UK-adopted international accounting standards. They also provided the Secretary of State with the power to adopt new IFRS for use in the UK after the transition period. That action meant that the UK was able to adopt crucial amendments to IFRS immediately after the transition period, including those relating to the ongoing interest rate benchmark reform. Despite the framework being only a few days old, the UK adopted the amendments ahead of the EU.

That was, however, intended only as a temporary solution. The regulations delegate the power to adopt IFRS for use in the UK from the Secretary of State to the UK Endorsement Board. The board will provide the specialist expertise and dedicated resource to undertake two key functions: to make the final decision on whether all new standards, amendments and interpretations should be adopted for use in the UK; and to influence the development of IFRS by the International Accounting Standards Board.

I will quickly explain how the endorsement board will undertake those functions. To adopt a standard, the board will need to be satisfied that the standard meets the statutory criteria. The criteria are: its application is likely to be conducive to the UK’s long-term public good; the standard meets the criteria of understandability, relevance and comparability; and its application would not be contrary to the principle that accounts provide a true and fair view. The board’s activities will be undertaken in line with the four guiding principles of accountability, independence, transparency and thought leadership.

The board will be required to consult publicly before taking a decision and will be independent in that technical decision making. In addition, the board will have a significant role in influencing the development of new standards, which will be delivered through proactive engagement with the IASB at all stages of the development of a standard, together with building and maintaining the UK’s international reputation as a world leader in accounting excellence. In that way, the endorsement board will work to ensure that IFRS remain suitable for use in the UK.

The UK Endorsement Board is comprised of a group of experts with backgrounds and experience across different sectors with a strong interest in the quality of financial reporting in the UK. The board will be led by Pauline Wallace, who was appointed as interim chair in September 2020. Pauline has been instrumental in completing the establishment of the board, and I extend my thanks to her for her tireless work in bringing the board to this point of readiness. The remaining 10 members of the board were appointed following an open and transparent recruitment process. They comprise representatives from preparers of accounts, investors, academics and members of accounting firms. The board is an independent, unincorporated association with its operations facilitated by a subsidiary of the Financial Reporting Council.

The FRC will provide support in the areas of human resources, finance and IT equipment under the terms of a service level agreement. That will ensure that the board will have the necessary resources to undertake its functions without compromising the independence of its technical decision making. I am grateful to the FRC for its support for the project. The endorsement board will be funded by the FRC’s levy on preparers of accounts and audit firms, which means that the cost of the board will be borne by those who benefit most from the use of IFRS. Ongoing costs are expected to amount to about £2.9 million annually.

I have already set out that the endorsement board will be independent in its decision making. However, that does not mean that it is beyond active oversight and public scrutiny. The endorsement board will be required to report to the Secretary of State on the carrying out of its statutory functions on at least an annual basis. This report will be laid in Parliament. Meetings will be held in public, discussion papers will be published, and the board must publish decisions reached within 10 working days. The inaugural board meeting took place on 26 March, and is available to view on the board’s website. The board will also report to the FRC on its governance and due process in a publicly available document.

In conclusion, Mrs Miller, I hope that the Committee will recognise that the instrument is in the UK’s long-term interest, and agree that now is the time for the UK Endorsement Board to be given the functions envisaged by the principal regulations. I commend this instrument to the Committee.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I ought to indicate immediately that we do not intend to oppose this regulation. Indeed, we see the need to ensure that the international standards, which have now been put in place across the world, are properly placed into a UK context, particularly given the UK withdrawal from the EU. There is also a context in terms of an independent body that can bring those standards forward and into the mainstream of UK accounting life, in good order, with confidence behind it so that the UK can be seen to be playing its part in the international structure that is now the norm for those accounting standards.

However, I have a couple of questions for the Minister about the process by which this has been set up. I thank him for going substantially beyond the explanatory notes in his introductory comments this morning; he has fleshed out one or two things that I wanted to focus on.

My concerns are that the SI itself, by way of a preamble declaration, states that:

“It appears to the Secretary of State that—

(a) the UK Endorsement Board is able and willing to exercise the functions transferred by regulation 2 of these Regulations, and

(b) that body has arrangements in place”,

and so on. I suppose the Secretary of State would say that, since it was the Secretary of State who very recently indeed created the UK Endorsement Board, as the Minister has set out. It is difficult to see how the Secretary of State could know that this brand new board is indeed

“able and willing to exercise the functions”,

as it has no track record and it has not undertaken any significant activities.

The only activity of the UK Endorsement Board so far has been to bring itself into being, and that has been done by a rather curious route. First, the chairman was appointed—by the Secretary of State, I assume—and the chairman then essentially constructed her own board. That is not absolutely normal practice: the board usually elects the chairman, rather than the chairman electing the board, but perhaps that is a part of the process of bringing these things into being.

Then we have the question of the independence and accountability of the board; I wonder to whom exactly the board is accountable. It is barely accountable to Parliament. One could say that it is perhaps rather more accountable to the accountancy profession, as most of the members of the board who have been appointed are accountants. The potential danger for the board is that, in a circular way, it reflects its own view of the profession on the profession itself. I would like reassurance from the Minister that that, in his view, will not happen as a result of the work of the endorsement board as it goes forward.

The other matter, as far as independence is concerned—I always look for it when such things happen—is how the board is funded. Has it got independent pay and rations, and can it guarantee the funding that the Minister elucidated was £2 million or so?

[Paul Scully]

It is £2.9 million.

--- Later in debate ---

[Paul Scully]

I am grateful for the insightful contributions to the debate.

We have discussed the fact that 15,000 UK companies apply the IFRS. That is why it is important that we get consistency of reporting and enhanced transparency for investors, which obviously brings benefit to UK capital markets.

I will cover some of the very pertinent questions that the hon. Gentleman raised. As for the UK Endorsement Board itself and its make-up, we appointed Pauline Wallace without a public appointment process. That was necessary to facilitate the establishment of the endorsement board in time for it to consider IFRS 17, the major new insurance standard. That met the exceptional circumstances, referred to in the board’s terms of reference, in which an interim appointment can be made. However, we will advertise for a permanent chair later this year, following the public appointments process, which is important.

The future UK Endorsement Board chair and members will be appointed following an open and transparent recruitment process, to demonstrate the independence and robustness of the board in the way that has been described. The chairman will be appointed by the Secretary of State and the board members will be appointed by the chair, upon the approval of the Secretary of State.

As for how the board will be shown to be in the public interest, clearly this goes right to the heart of how and why the board is established. The statutory instrument transfers the responsibilities under the principal regulations to the UK Endorsement Board, but that includes the requirement that the standard must be in the long-term public good. That means that public interest will be absolutely at the heart of the endorsement board’s activities, which is underpinned by the terms of reference.

Regarding funding, I talked about the fact that it will come indirectly from a levy on the people who most benefit from these standards—the £2.9 million that is expected from 2021 to 2022. It will be funded from the Financial Reporting Council levy, which puts the cost directly on those who benefit most from the IFRS. That spending represents value for money, because it allows the UK to influence directly the international standard setters and ensure that the development of the standards takes into consideration any UK public good issues before being finalised.

We worked closely with the FRC during the development of the UK Endorsement Board and we are confident that it has the capacity to perform its oversight role. However, it was important that the creation of the endorsement board was not delayed while we were waiting for ARGA to be formed in the first place. When ARGA is functioning, it will take over the FRC’s responsibilities in relation to the oversight of the UK Endorsement Board’s governance and due process. We recognise that that transition needs to be smooth, to give certainty to businesses that these standards will be maintained and that the levy is maintained to fund the board satisfactorily.

Clearly, there is an ambitious remit, but I am confident that the endorsement board will meet the challenges and make a valuable contribution to financial reporting, both in the UK and further afield. We set high standards for bodies with decision-making powers, and in the endorsement board the Government have recognised the need to balance independent decision making with accountability and transparency, to ensure that we can give the certainty that the hon. Member for Southampton, Test is rightly seeking. Members of this Committee and all other parliamentarians will have the opportunity to scrutinise on an annual basis how the board carries out its functions, which are delegated by this SI.

I thank hon. Members again for their valuable contribution and for giving their time to this debate. The UK Endorsement Board is now ready, and I hope the Committee will approve this SI.

Question put and agreed to.

English Language Sector

Paul Scully Excerpts

Thursday 15th April 2021 Commons Chamber

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

I congratulate my right hon. Friend the Member for Bournemouth West (Conor Burns) on securing today’s important debate and want to start by noting that the Government have introduced an unprecedented package of support for businesses, including grants for those businesses that are required to close or that are severely affected by restrictions put in place to tackle covid-19 and save lives. With the new restart grant scheme available from April the Government will have allocated a total of £25 billion solely on business grants in the £352 billion total package. To put that in context, that is about two or three times greater than the NHS budget for a normal year.

The Government continue to work closely with local authorities to make sure that grant funding can get to the businesses that need it as soon as is practicable, but, as my right hon. Friend said, there are clearly businesses that we need to continue to work with to see what can be done to support them, because we want to ensure that every business, no matter what area they are trading or working in, that has the reach of language schools and the soft power that my hon. Friend the Member for Totnes (Anthony Mangnall) talked about, can continue to flourish, and indeed attract new businesses to open within that space. I pay tribute to local authority staff, who have been working hard over the course of the pandemic to get these schemes in place and money out to businesses, under extreme pressure of illness to themselves, as well as covering the additional work that local authorities have had to take up.

However, the business grants programme forms only part of the massive support package put in place throughout the course of the pandemic. Since March 2020, in addition to £20 billion in grants, we have provided £10 billion in business rates holidays and £73 billion in loans and guarantees, supporting every sector of the economy.

I recognise the long-standing support of my right hon. Friend the Member for Bournemouth West for the English language schools sector. I forget how many days ago it was, but as he noted he first raised this issue in his maiden speech, in an Adjournment debate, unusually in this place. There are many such businesses in his constituency and he is doing exactly what a constituency MP should do: standing up for businesses in his constituency and the people who benefit from them. My right hon. Friend mentioned that the sketch writer Quentin Letts described me as a “second-string punch-bag”, and it occurs to me that people can only start to pick up such idioms by coming to language schools in this country, otherwise they might be sitting scratching their heads while reading the international press.

Throughout this pandemic we have taken difficult decisions on whether and when to require some businesses to close by law, and they were not taken lightly. We recognise that many businesses have made huge sacrifices in recent months. Where closures have been required, they have been in business units where significant numbers of people are likely to come into contact: retail, hospitality, leisure, personal care, hotels and some others. But, as my right hon. Friend noted, English language schools were not mandated to close in the regulations, as it was believed that these types of businesses, along with other education providers, could access online markets, but he has eloquently outlined their ongoing situation and the pressures they face. Only those businesses that were mandated to close in the regulations were eligible for mandatory scheme support such as the local restrictions support grant (closed) and variations thereof, which includes the scheme that covered the national lockdown period from 5 January onwards.

The restart grant scheme, which launched on 1 April this year and goes hand in hand with the Prime Minister’s road map, supports businesses in the non-essential retail, hospitality, accommodation, leisure, personal care and gym sectors, to enable them to reopen to customers and get those sectors back to as close to normal as possible. Unfortunately, English language schools again find themselves not eligible, as they do not meet the sector definitions set out for the restart grant scheme.

However, a number of business sectors—English language schools among them—have clearly been severely affected by the restrictions, even though they have not been required to close; some home-based businesses and businesses outside the business rates system find themselves in the same position. That is why we have made substantial grant support available for local authorities to develop local discretionary schemes—that is, the additional restrictions grant.

Under the scheme, more than £2 billion has been allocated to local authorities since November 2020. Local authorities have the discretion to use the funding to support businesses as they see fit. The scheme is open to all businesses from all sectors that were severely impacted by restrictions, including English language schools. Crucially, it is for local authorities, which know their local economies better than we in central Government do, to make sure that the discretionary support that they put in place is proportionate and tailored to the local circumstances.

I am personally speaking to local authorities to press them to get funding out of the door as quickly as is practicable. The Chancellor gave an extra £425 million in additional restrictions grant money to local authorities, but only if they had used up their original allocation. I call on local authorities to use that extra allocation either to give more money to the businesses covered by their local policies or, as my right hon. Friend is rightly asking for, to look into expanding their local policies to encompass businesses that continue to fall between the cracks.

I hope that the sector is also making use of the remainder of the Government business support offer, including the job support scheme, which my right hon. Friend the Chancellor has confirmed will run until June 2021, and the various loan and finance-guarantee schemes that have been in place throughout the pandemic. The position for English language schools is that although they have not been required by law to close, their trade has been affected by the restrictions. I encourage the sector to explore, with the relevant local authorities, whether English language schools are eligible for a covid-19 business grant from the additional restriction grant scheme, at the local authorities’ discretion.

As my right hon. Friend will be aware, the Chancellor announced at the Budget the continuation of several business-support measures to provide a platform as the economy reopens. I am hopeful that, taken in the round, the package of support that we have put in place for businesses—the grants, loans, furloughs and others measures—is substantial and offers support both for those businesses required to close and those that have been open but have had their trade affected.

I know that my right hon. Friend will continue to be a strong advocate for the sector and look forward to continuing this conversation. I am happy to take him up on his offer to meet to converse and see what more we can do to support businesses—not just English language schools but other businesses, too—in his constituency with not only reopening but recovery and beyond. I am grateful to him for bringing this matter to the House and being such a strong champion for the sector and for the businesses in his constituency.

Question put and agreed to.

Greensill Capital

Paul Scully Excerpts

Tuesday 13th April 2021 Commons Chamber

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on the process by which Greensill Capital was approved as a lender for the coronavirus large business interruption loan scheme.

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

Greensill Capital (UK) Ltd was approved by the British Business Bank for the coronavirus business interruption loan scheme and the coronavirus large business interruption loan scheme last year in accordance with the bank’s published guidance on accreditation. All decisions taken by the bank were made independently and in accordance with the bank’s usual procedure.

The criteria by which the decisions were made were based on those used in the existing enterprise finance guarantee scheme, dating back from 2009, and were set out in the CLBILS request for proposals, which was a publicly available document. These criteria included minimum requirements such as the ability to demonstrate a track record of lending to larger enterprises, provision of evidence-based forecasts, the ability to demonstrate sufficient capital available to meet the lending forecasts, a viable business model, robust operations and systems, that the proposed lending will not have unreasonable lender-levied fees and interest, and that the lender has all the necessary regulations, licences, authorisations and permissions to operate the scheme. All accredited lenders are subject to regular audit by the bank to ensure their compliance with scheme rules.

Following analysis of loan data as part of its standard due diligence, the bank opened an investigation into Greensill Capital’s compliance with the terms of the scheme in October 2020 and informed the Government of this on 9 October. That investigation is continuing and the Government’s obligations as guarantor under the CLBILS guarantee are suspended on a precautionary basis. It would not be appropriate to comment further on the investigation at this time.

[Anneliese Dodds]

I start by paying tribute to the Duke of Edinburgh, who was an extraordinary public servant. My thoughts today are with the Queen and the rest of the royal family as we all mourn his passing. They are also with the friends and family of Cheryl Gillan, and I would like to associate myself with the very moving tributes that we quite rightly heard a few moments ago.

I welcome the Minister’s presence, but it was the Chancellor who needed to come to the House today; the Chancellor who told David Cameron that he would “push” his team to amend emergency loan schemes to suit Cameron’s new employer; the Chancellor whose officials met with Greensill 10 times; the Chancellor who took the credit for Government business loan schemes when they were in the headlines and, indeed, who personally announced those schemes. Yet the Chancellor is frit to put his name to those loan schemes today. He has just spent £600,000 on communications. I would have thought that that would extend to communicating with Parliament. In the Chancellor’s absence, let me ask: what was the alternative that the Chancellor pushed his team to explore after David Cameron texted him? What discussions did the Government have with the British Business Bank about Greensill’s access to CLBILS after it had already been rejected for the covid corporate financing facility? Were the criteria for CLBILS amended so that Greensill could access the scheme? Why was Greensill the only supply chain finance firm accredited for CLBILS, and what due diligence was done?

Hundreds of millions of pounds of public money were put at risk by giving Greensill access to this scheme. With Greensill’s collapse, thousands of jobs—in Rotherham, Hartlepool and right across the country—have been put at risk. Those workers and taxpayers across the country deserve answers. The Chancellor said that he would “level with” the public. Why is he running scared of levelling with them on the Greensill scandal?

[Paul Scully]

I associate myself with the hon. Member’s words about the Duke of Edinburgh and, of course, our colleague Cheryl Gillan, both of whom will be sorely missed.

The Chancellor wrote to the hon. Member last week with a comprehensive response to her questions regarding engagement between Greensill and HM Treasury. The Prime Minister has asked Nigel Boardman to conduct a review to look into the decisions taken around the development and use of supply chain finance and the associated schemes in Government—especially the role of Lex Greensill and Greensill Capital—and to set out any findings as necessary. The Government recognise the interest in the matter. It is right that we now let that review happen.

In the interests of transparency, the Chancellor has provided all the messages that were sent from him to David Cameron on this matter; they relate exclusively to Greensill’s proposals for the covid corporate financing facility. The Chancellor is right to push officials, as we all have, to explore all ways of capital getting to businesses—large and small. That is what all Members of this House were asking and demanding the Government to do at that particular point. It is important to remember that the Chancellor rejected the idea that he should rewrite the CCFF to include any banks.

The reason the Chancellor is not here is that the question is about the CLBILS. I suggest to the hon. Lady that she asks her question in a different forum or that she asks a different question, because the coronavirus large business interruption loan scheme, to which this question pertains, is administered by the British Business Bank. The Secretary of State for Business, Energy and Industrial Strategy is the sole shareholder in the bank. As such, the responsibility for the delivery of the scheme sits with BEIS. The accreditation process for any of the covid loan schemes is run independently by the British Business Bank; neither BEIS nor HM Treasury had a role or were involved in the CLBILS accreditation decision for Greensill.

There were two other non-bank lenders accredited under the CLBILS, with over 75 accredited for the CBILS. It was an important feature of the covid loan schemes that there was a diversity of lenders to ensure a broad range of choice for borrowers, enabling them to access the finance they needed to survive and recover from the pandemic. Greensill was not accredited to provide supply chain finance through the CLBILS. It was only accredited to provide invoice finance, term loans and revolving credit facilities.

[Felicity Buchan (Kensington) (Con)]

Will my hon. Friend confirm that in all dealings with Greensill, the Department for Business, Energy and Industrial Strategy, the Chancellor, his Ministers and his officials always followed all appropriate codes of conduct?

[Paul Scully]

Indeed; all the decisions were taken independently, and that included rejecting Greensill from being able to access the higher level of loan facility, the only request for which came from the shadow Secretary of State for Defence, the right hon. Member for Wentworth and Dearne (John Healey).

[Alison Thewliss (Glasgow Central) (SNP) [V]]

I express my condolences, on behalf of the Scottish National party, to the family and friends of Cheryl Gillan and Shirley Williams. I also wish my constituents, and everyone celebrating, Ramadan Mubarak and a happy and peaceful Vaisakhi.

This scandal further exposes the depth of cronyism at the heart of this UK Tory Government—and it is not new, because back in November the National Audit Office expressed concerns about a VIP list of suppliers, with those on the list 10 times more likely to get a contract than those who were not. The Financial Times reports today that £19 billion of covid contracts were awarded without rival bids.

There remain serious questions about the role of Greensill while Mr Cameron was Prime Minister and about who exactly is being afforded similar influence in the UK Government today. It is absolutely galling that some have hoovered up so much Government support while millions who do not happen to have ministerial phone numbers get absolutely nothing at all.

Will the Prime Minister, the Chancellor and Secretary of State for Health and Social Care come before the House to explain their actions? How can we have confidence in the inquiry that has been announced when, from the Home Secretary’s bullying to the race equality report, this UK Government have such a woeful record on marking their own homework?

[Paul Scully]

A number of the issues the hon. Lady raised were slightly wide of the mark in respect of this urgent question. The review will do its work and Nigel Boardman has had assurance from all parties that they will co-operate and offer any information required. He is due to report back at the end of June.

[Jacob Young (Redcar) (Con)]

The furlough scheme, the self-employment income support scheme and the coronavirus business interruption loan scheme have been lifelines for many thousands of my constituents in Redcar and Cleveland, and across Teesside almost 500 businesses have benefited from CBILs worth well over £100 million. Will the Minister confirm that all those businesses have gone through the appropriate checks to be approved and that HMRC will take action against any fraudulent abuse of the scheme?

[Paul Scully]

My hon. Friend is absolutely right: any business applying for any of the Government schemes—I have talked about the accreditation required to deliver those schemes—has to go through a robust procedure. HMRC and other organisations will indeed make sure that we are hot on fraud, because this is taxpayers’ money that we are talking about. That is why, in the instance that this question is about, it is important to remember that the Chancellor rejected the suggestion that was put forward. The process is doing its job.

[Sarah Olney (Richmond Park) (LD)]

When an urgent question of a similar nature came before the House just before the recess, I asked the Secretary of State for Business, Energy and Industrial Strategy whether a list of all the organisations that have received loans—whether they were under the bounce back loan scheme, CBILS or any of the other schemes—would be made available, because the Minister has said previously that that will be done “in due course”. When I asked the Secretary of State on that occasion, he said to me that he will “try to see” what can be done to put that list of businesses in the public domain. I hope the Minister agrees that many of these questions are arising because of a lack of transparency in the way that some of the support has been awarded. Will he tell me how the Secretary of State is getting on with publishing that list?

[Paul Scully]

As the hon. Lady will know, at the time of delivery we were trying to deliver money to businesses as quickly as possible. The fact that businesses have accessed support—especially the larger loans under CLBILS—will appear in their accounts, and will obviously be reported to the European Union should that be required for state aid purposes.

[Nigel Mills (Amber Valley) (Con) [V]]

I remind the Minister that one of David Cameron’s last big acts as Prime Minister was to hold a large anti-corruption summit in London, with some hard-hitting findings. Will the Government recommit to delivering on all the promises made in the subsequent anti-corruption strategy? Will the Minister confirm that if any changes need to be made as a result of the inquiry that is just starting, they will be brought to Parliament as soon as they possibly can be?

[Paul Scully]

I admire my hon. Friend’s work on anti-corruption. It is important to keep raising the issue, but it is also important to keep a sense of perspective and to tackle actual corruption rather than speculate on other issues for political purposes. As I say, it is important to remember that in these circumstances the process has worked well: it was right to push for as much capital as possible to flow to small and large businesses, but it is important to remember that the Chancellor did reject the suggestion put forward by Greensill.

[Navendu Mishra (Stockport) (Lab) [V]]

I would like to wish all celebrating the Hindu new year a happy Navratri and the Sikh community a happy Vaisakhi today.

The Bank of England is rightly independent of the Government. Can the Minister confirm whether or not Bank of England officials were requested by the Treasury to make amendments to its covid corporate financing facility to suit Greensill Capital after the former Prime Minister had texted the Chancellor?

[Paul Scully]

As I have said, the Chancellor rejected any notion that the CCFF scheme should be rewritten.

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

If we can put to one side the blatant political opportunism here, there is a scandal behind this. Greensill failed because it overextended itself to GFG Alliance. That was signed off by Grant Thornton, GFG’s auditors, effectively on a business model that included borrowing hundreds of millions of pounds based on the security of a very insecure, possibly non-existent order book. Will my hon. Friend bring forward his intended reforms to the audit regulatory system and make sure that Grant Thornton’s role in this is properly investigated?

[Paul Scully]

My hon. Friend will appreciate the audit reforms that we are consulting on. It is absolutely right that the markets work when they are transparent and open, which is why we are determined to make sure that, in the light of recent failures, we get these audit reforms through, and I look forward to his contribution to that debate.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

It is incredibly sad and disappointing that, throughout this pandemic, we have seen too little transparency from Government about every aspect of how taxpayers’ money is being spent. The Government keep saying to the House, “Well, it was terribly difficult in those first two months.” We are now a year on, and we are still uncovering more. Is the Minister really satisfied that a six-week inquiry, dragged out as an announcement by the Prime Minister yesterday, is enough to shine sunlight on the millions of taxpayers’ money that has been given to organisations such as Greensill, backed by Government and therefore a loss to the taxpayer when things go wrong? Is six weeks enough, and will he commit to far more transparency, including, if necessary, calling witnesses before this House?

[Paul Scully]

The hon. Lady talks about two different things. There is a review into supply chain finance and the request from Greensill Capital, but there is also the wider view of how taxpayers’ money was spent when the Government were working about as close to real time as they will ever get to do. Business owners will understand the huge difference between the speed at which business and Government work. We will review how taxpayers’ money has been spent, but we will also make sure that, as my hon. Friend the Member for Redcar (Jacob Young) said, we chase people who have used Government grants and support inappropriately.

[John Howell (Henley) (Con) [V]]

Is it not true that the accreditation process that was used allowed a wide diversity of lenders to become accredited under the scheme in order to give more choice to borrowers, and that focus on the choices available to borrowers was crucial?

[Paul Scully]

My hon. Friend is absolutely right. The Chancellor and a number of Ministers reflected the view of the House that we wanted to push to make sure we had that diversity of finance and capital available to businesses of all different types. We should be proud of the support that has been given out, which has allowed companies to get through this incredibly difficult time, and it remains a difficult time.

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

In responding to this story, David Cameron said that “important lessons” must be learned—I should certainly think so, given these shady back-door lobbying efforts with Cabinet Ministers. My question is simple: if serving Ministers are found to have breached or been in breach of the ministerial code, will they resign?

[Paul Scully]

The review will look to see exactly what happened in this situation. Nigel Boardman will do his work, which will report back at the end of June, and all the parties involved have committed to make sure that all the information is available.

[Bob Blackman (Harrow East) (Con) [V]]

Clearly, at the beginning, when the pandemic first struck, it was vital that we as a Government moved very swiftly to ensure the protection of small and medium-sized enterprises. Does my hon. Friend agree that it was right that the Treasury listened and gave consideration to all the potential options to support businesses to survive the pandemic given the extraordinary and unprecedented challenges facing UK SMEs last spring?

[Paul Scully]

My hon. Friend is absolutely right. The scheme that we are being asked about today for large businesses protects many jobs in those companies, but it is right that we also looked at a diversity of lenders and of approaches to cover small businesses, as they do not always have the resilience and capacity of those larger businesses to survive and respond in these tough times.

[Steve McCabe (Birmingham, Selly Oak) (Lab) [V]]

I assumed that “whatever it takes” meant making sure that people got the help and the support that they needed, not deploying Treasury officials to try to mangle the rules in order to protect David Cameron’s shares. Just how many people and how many hours did the Chancellor devote to Mr Cameron’s concerns as opposed to those 3 million excluded self-employed people whom this Government have abandoned?

[Paul Scully]

The Chancellor and other Ministers have spent many, many hours speaking to lenders and to businesses of all sizes to make sure that we can best reflect on and flex the support that is given to them. The system worked when the Chancellor was asked to change the scheme inappropriately, because, rather than having the banks involved in the CCFF, it was a Government-backed scheme with the Bank of England. That is why he rejected that approach, which meant that the procedure went well.

[Mike Wood (Dudley South) (Con) [V]]

Businesses in Dudley South want support to go to the businesses that need it as quickly and effectively as possible rather than just falling back on how things have always been done when the times are far from ordinary. Can my hon. Friend assure them that, while processes will be transparent and due diligence will be done with taxpayers’ money, his Department will continue to look at all the options to make sure that the necessary support is getting to where it is needed rather than just going with traditional processes of distributing funds?

[Paul Scully]

My hon. Friend is absolutely right. What the Chancellor, the Secretary of State for Business, Energy and Industrial Strategy and other Ministers have done throughout is to make sure that, rather than just reacting to events, we can flex and respond as best we can by speaking to businesses large and small and by speaking to stakeholders to try to smooth out those cliff edges of support. As we get to that road map, as we start to reopen and recover our economy, it is as important as ever to make sure that we have that flexibility within our support.

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

It is apparent in the text messages sent in April 2020 between the Chancellor and David Cameron, now published by the Treasury, that the Chancellor pushed the team to explore an alternative with the bank regarding cheap loans for Greensill. Will the Minister explain what those alternative arrangements were and why Greensill was deemed such an important recipient of public funds, even after the Bank of England refused to authorise Greensill’s entry into the covid corporate financing facility scheme?

[Paul Scully]

The Bank of England refused Greensill’s entry because there were no banks in the scheme. It was a way for the Government and the Bank of England to get money to businesses and of underwriting it rather than its being a separate loan scheme. That is why Greensill was accredited for CLBILS. The only other request to expand Greensill’s reach came from the shadow Front-Bench team, who asked for it to receive the higher level—up to £200 million.

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

The Chancellor now washes his hands of the covid public lending schemes that he set up. It is laughable given the fanfare and fuss he made of their launch. I almost feel sorry for the Minister. He has been sent here to defend the actions of senior Ministers who are not even in his Department. Given that the Chancellor is the person who we know received lobbying texts from David Cameron, can the Minister tell the House what he thinks the Chancellor is afraid of?

[Paul Scully]

The Chancellor has delivered £356 billion-worth of support, I think it is currently, to businesses. He has flexed at every opportunity across Government in devising and designing loan schemes, which are overseen by the British Business Bank, which is overseen, as the single shareholder, by the Secretary of State for BEIS. That is what we should be proud of. The Chancellor is not afraid of anything here. The question is about the coronavirus large business interruption loan scheme, which is administered by BEIS, and that is why I am here to answer it.

[Stella Creasy (Walthamstow) (Lab/Co-op) [V]]

I understand and share my colleagues’ concerns about lobbying, but, like other corporate financial scandals such as Enron, we need to follow the money. We know that it was the German Greensill Bank that made the loans to Sanjeev Gupta and also supported the use of the private jets on which our former Prime Minister made many journeys, and that the bank is now under criminal investigation as many thousands of German people face bankruptcy. What conversations has the Minister had with the German prosecutors about the CLBILS loan scheme, and will they be invited to give evidence to the inquiry?

--- Later in debate ---

[Paul Scully]

As I said in my opening statement, the bank opened an investigation into Greensill Capital’s compliance with the terms of the scheme in October 2020 and informed the Government of that on 9 October. That is continuing. The obligations as guarantor of the CLBILS scheme are suspended on a precautionary basis, but it would not be appropriate for me to comment on further investigations at this time as it is ongoing.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

As if the billions of pounds of crony covid contracts was not bad enough for hard-working Brits to stomach, we now have a former Tory Prime Minister sending private text messages to the Chancellor and other Treasury Ministers lobbying for Government loans for a firm in which he himself is a shareholder and that is now insolvent; we have him going for a private drink with his financier friend Lex Greensill and the Health Secretary; and we have a Chancellor who messaged back to say that he would “push” his team to find a solution, and now has neither the courtesy nor the courage to come to this House to be held accountable for his actions. Does the Minister agree that this just stinks—downright stinks—not just because we are talking about former and current Tory Ministers all in it together, but because it is not merely the Chancellor’s money that has been put at risk but the British taxpayers’ hard-earned money that is at stake?

[Paul Scully]

May I respectfully suggest to the hon. Gentleman, through the Speaker, that if he wants the Chancellor to come to answer a question, he might ask a question that relates to the Treasury rather than one that comes under the British Business Bank, which is a responsibility of BEIS? As for the Chancellor, as I say, the system has worked. The hon. Gentleman may be touting his Opposition day debate tomorrow about wider things, but the Chancellor asked his officials to push for wider capital flows to be able to go through larger and smaller businesses, as we all wanted, and he rejected Greensill’s ask to try to change the CCFF scheme to involve banks including Greensill. That process worked.

[Ben Lake (Ceredigion) (PC)]

From a former Prime Minister texting Ministers in pursuit of his own financial interests to concerns over Russian state access to the other place, it is little wonder that questions have arisen as to the integrity of decision making in the UK. I acknowledge the Government’s commitment to investigate the Greensill debacle, but will they go further by implementing the Intelligence and Security Committee’s recommendations regarding undue influence in decision making, particularly in the practice of Lords for boards, to safeguard the transparency of our democratic decision making?

[Paul Scully]

The review specifically looks at supply chain finance and the discussions with Greensill. As I say, Nigel Boardman will do his work and report back at the end of June.

[Mr Toby Perkins (Chesterfield) (Lab)]

I have written to Ministers on behalf of businesses in Chesterfield—many other MPs have written too—and have waited months for a reply while a business was on the brink, yet Greensill gets 10 meetings in three months with Treasury officials, and the junior Minister has the audacity to stand there and say that this is a system working well. When David Cameron was the Prime Minister, he said corporate lobbying was

“money buying power, power fishing for money and a cosy club at the top making decisions in their own interest.”

He could not describe this grubby, shabby Government any better, could he?

[Paul Scully]

Treasury Ministers, like other Ministers, have had a number of meetings with lenders of all sorts, because as we heard earlier it is so important to have a diversity of lenders involved to create an understanding of their model and what support they can give. The accreditation itself was determined independently by the British Business Bank.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The inquiry announced by the Prime Minister seems to focus on the actions of David Cameron, but it is quite clear that the bigger consideration is the actions of Government Ministers and how they interacted to get Greensill what it wanted. It goes along with Government business as usual: crony appointments to the House of Lords and crony appointments to external bodies and regulators. Tory peer Baroness Harding was appointed to roll out the failed track and trace system. Then we have all the dodgy PPE contract awards. Surely it is not a short inquiry that is needed, but a public inquiry into the entire actions and dealings of this Government.

[Paul Scully]

The review goes beyond the actions of one man in this matter, but it is important to remember that the Chancellor in particular rejected what Greensill actually wanted, so there is no case in that regard, because that was rejected out of hand.

[Feryal Clark (Enfield North) (Lab) [V]]

The public deserve answers. This is not the Prime Minister’s money, the Chancellor’s money or the Conservative party’s money; it is public money. Can the Minister explain why Greensill Capital met Treasury officials 10 times last summer, as my hon. Friend the Member for Chesterfield (Mr Perkins) said, when the most meetings any other coronavirus business interruption loan scheme lender secured with the Treasury was two? The vast majority of lenders did not even have any meetings with his Department.

[Paul Scully]

Lenders and businesses have had many, many meetings across Government without favour, to make sure that we can get that information to ensure a diversity of lenders and that we could flex. The various loan schemes were added to and amended along the way to make sure that we could take the temperature of exactly how that lending was or was not working.

[John Cryer (Leyton and Wanstead) (Lab)]

I would like to associate myself first with the comments made earlier about Cheryl Gillan from all sides of the House.

Many Members will remember that seven years ago, when David Cameron was putting his lobbying Bill through this place, he point blank refused to adopt any new clauses or amendments that would bring greater transparency to the corporate lobbying industry. I wonder why he did that. All these years later, is it not time to put that right and introduce greater transparency—not to stop corporate lobbying, which is a perfectly legitimate business to engage in, but to introduce greater accountability—so that we and the public know who is being lobbied and by whom?

[Paul Scully]

I started off by talking about how the market works when there is transparency and openness, and lobbying comes within that. We should always review what is and is not there. The lobbying register should be working, and we need to make sure that that continues to work, but we always should be able to review lobbying activities to make sure that they are, as the hon. Gentleman says, transparent.

[Jon Trickett (Hemsworth) (Lab)]

Is the central fact not that there was communication between a former Prime Minister and Ministers about his private interests? Will the Minister confirm that that is a breach of the long-standing British value that high office is not a grubby route through to great riches in the afterlife? Will he indicate that he could take immediate action while we wait for this inquiry, which sounds like a whitewash to me, to remove the impression that powerful wealth dominates public institutions? He could stop the revolving door between Ministers and the private sector. He could stop immediately all forms of lobbying within Westminster and Whitehall. Finally, he could stop the process of outsourcing to Tory chums.

[Paul Scully]

What I can do is explain the difference between an output and an outcome. An output means that any number of meetings, any number of requests— unless you block the number, any Minister will receive those texts. An outcome is what actually happens as a result, and I was absolutely clear that the Chancellor rejected what was put forward by Greensill and rejected what was put forward by David Cameron.

[Owen Thompson (Midlothian) (SNP)]

This process is just another example of where covid contracts are becoming a genuine source of public concern. The allegations are further undermining public confidence and cultivating among the public a feeling of suspicion about all the activities of this Government. How do the Government propose to rebuild public trust in the wake of the emergence of yet another scandal?

[Paul Scully]

Having been in opposition at a local level, I know what causes speculation and mistrust among the public, and it is that chipping away, the politicisation of some of these issues. But the Chancellor has been particularly robust in his actions and his outcomes here. There is a review; Nigel Boardman will do his work. People have committed to be open and transparent with him, and the review will report back at the end of June, and will show results for the public to see.

[Dame Angela Eagle (Wallasey) (Lab) [V]]

Was the British Business Bank approached by senior civil servants or Ministers about Greensill’s having access to the coronavirus large business interruption loan scheme? Did Greensill exceed its authority and lend more than it was authorised to lend—£400 million to the Gupta group alone, all of which has now been lost?

--- Later in debate ---

[Paul Scully]

I am not aware of any communication between Ministers and the British Business Bank about the accreditation of Greensill, which was made independently of Government. There is an ongoing investigation into Greensill, so it would be inappropriate for me to comment at this time.

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

Five years ago this week, the former Member for Bolsover was asked to leave the Chamber for using unparliamentary language towards David Cameron regarding his personal finances. Does the Minister now agree that he was, and indeed remains, dodgy?

[Paul Scully]

No.

[Rachael Maskell (York Central) (Lab/Co-op) [V]]

When businesses continue to collapse and charities fold in our constituencies because they have not received a penny of support, it now appears that not everything that the former Prime Minister did was for the record, as exchanges took place to procure hundreds of millions of pounds out of the Treasury for a company that he was profiting from. The very loopholes that Labour tried to close in his lobbying legislation left sufficient room for that corruption. So will the Minister stop hiding the detail and now publish a timeline of every meeting, call, text message and conversation between the former Prime Minister and Members of this current Conservative Government and their officials—publish them before this House, so that we can understand the extent of his lobbying?

[Paul Scully]

The Chancellor has published his text messages and there is a review that, rather than hiding, will go into the detail. As I said, all the parties involved have pledged their commitment to comply with that investigation, which will report back at the end of June.

[Wes Streeting (Ilford North) (Lab)]

The simple fact is that, again and again, Members from all parts of the House pleaded with the Chancellor to meet us to hear the plight of millions of people who were excluded from any Government support, and the Chancellor would never find the time for such a meeting; but a few texts from dodgy Dave, and Greensill has got 10 meetings and a ream of correspondence with senior Treasury officials—the type of access that most businesses in this country could only dream of. So I ask the Minister why it was that, in correspondence between Greensill and a senior Treasury official, they put in words:

“Whilst not using this precise phrasing, we have crafted a formulation both in substance and form which provides an even stronger political position.”

Why is a private company advising Treasury officials about political positioning; and does not this show that, despite his protestations, it is ludicrous that the Business Minister is here, not the Chancellor? If the Chancellor had nothing to fear, he would have nothing to hide and he would be here to answer the questions.

[Paul Scully]

I am afraid that in Government we have to deal with details, and that includes asking the right question in the first place. If a question is asked about a BEIS responsibility, I think it is fair and reasonable that a BEIS Minister should come here and answer it. However, I come back to the point that the hon. Gentleman can come up with all he likes about process, but what businesses want are outcomes, and that means capital flowing through those businesses. The outcome in this situation was that the Chancellor rejected such a proposal, but the detail that the hon. Gentleman talks about will be investigated by Nigel Boardman, and that review will be published by the end of June.

[Stephen Flynn (Aberdeen South) (SNP)]

Just three weeks ago, I asked Ministers to back an independent investigation into the actions of crony Cameron. At that time, they refused to answer, so I welcome the U-turn that has again taken place. However, the public expect and want total accountability and transparency, so will the Minister back a wider review into the dishing out of covid contracts to Tory donors and friends?

[Paul Scully]

I am not sure I recognise the name that the hon. Gentleman calls the former Prime Minister, which I think is inappropriate. There is a review, which is investigating as we speak. With regard to covid, as I say, there are a number of things that we will look at when we are past this pandemic. We will look back at what has happened and at the support that the Government have given—the many hundreds of millions of pounds that the Government have given to small and large businesses.

[Mr Speaker]

I am suspending the House for three minutes to enable the necessary arrangements to be made for the next business.

Law Commission’s Review of the Land Registration Act 2002: Government Response

Paul Scully Excerpts

Thursday 25th March 2021 Written Statements

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

My right hon. Friend the Parliamentary Under-Secretary of State for Climate Change and Corporate Responsibility (Lord Callanan) has today made the following statement:

I am grateful to the Law Commission for its review of the Land Registration Act 2002 which it published on 24 July 2018. The Government have today published their full response to the review recommendations.

HM Land Registry is committed to becoming the world’s leading land registry for speed, simplicity and an open approach to data. The land registration regime provides essential trust and confidence to the property and lending markets. It does so by providing efficient access to secure and accurate information needed to transact land and use it as security for borrowing. The regime is underpinned by a state-backed guarantee of title. It is important the regime is examined, from time to time, to ensure that it is working effectively.

The Law Commission made 53 recommendations, most of which are quite technical in nature and narrowly focused. That should give us confidence that the land registration system is generally working well.

The full response sets out the Government’s conclusions in respect of each of the recommendations.

Once again, I thank the Law Commission for the diligence that has gone into its work examining the land registration regime, and for the clarity of its conclusions expressed in its report.

[HCWS888]

Recovery Loan Scheme: Departmental Contingent Liability Notification

Paul Scully Excerpts

Thursday 25th March 2021 Written Statements

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

I am tabling this statement for the benefit of hon. and right hon. Members to bring to their attention the details of the recovery loan scheme (RLS) announced by the Chancellor of the Exchequer on 3 March 2021.

RLS will be facilitated by the Government-owned British Business Bank and delivered through its delivery partners. Lenders will offer facilities of up to £10 million to support businesses that are affected by the coronavirus outbreak. There will be no limit on the number and aggregate value of loans that can be made under the scheme.

The scheme is based on the British Business Bank’s existing coronavirus business interruption loan scheme (CBILS) but is open to all businesses regardless of turnover.

The key parameters of the scheme are as follows:

The percentage of the remaining balance of each loan that is guaranteed by the Government is 80%.

The maximum facility size will be £10 million per business, and the minimum facility size will be £25,001 for loans and overdrafts and £1,000 for asset and invoice finance.

Businesses will be required to meet the costs of interest payments and any fees from the outset.

Businesses who have made use of the current coronavirus loan schemes will be able to access the new scheme.

The lender must establish that the borrower has a viable business proposition assessed according to its normal commercial lending criteria. This may, but is not required to, be determined without regard to any concerns over the borrower’s short-to-medium term business performance due to the uncertainty and impact of coronavirus.

The scheme launches on 6 April and is open until 31 December, subject to review. The Government will be subject to an equivalent contingent liability as for CBILS. The maximum contingent liability for assumed initial lending of £12 billion (our central estimate) is £9.6 billion.

I will be laying a departmental minute today containing a description of the liability undertaken.

[HCWS903]