Covid-19: Hospitality Industry

Paul Scully Excerpts

Wednesday 24th March 2021 Commons Chamber

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

I congratulate my hon. Friend the Member for North Devon (Selaine Saxby) on securing today’s debate. She has given me another stopping place in her constituency for us to have a drink in when we are eventually able to do so, the Bell Inn in Chittlehampton, and we will have to go to the Nartnapa Thai kitchen in Lynton to have a good meal there as well. This debate is important because the hospitality sector is so important. As we have heard, it is important for its contribution to the economy, for local high streets and communities, for the millions of local jobs that it creates, and for the health and wellbeing of us all. This debate has highlighted just how important the sector is, and I hope it will go some way to restoring public confidence and kickstarting the recovery as we see the road map to recovery.

We have heard of those local examples, including my hon. Friend the Member for Burton (Kate Griffiths) talking about Carling’s “support your local” campaign. We have heard about restaurants such as Bartellas, and about cafés such as Coffee Cups, Catch 22 and the Pilot House in Ynys Môn. We heard about Mulligans Sports Bar supporting its local area in Scunthorpe. We know that nationally the hospitality sector is a big deal, employing about 1.3 million people across 162,000 businesses, but arguably it is even more important at the local level, providing that cornerstone of our high streets, securing local jobs and opportunities for local suppliers, supporting the events that attract visitors to towns and cities up and down the country, and providing space for family and friends to come together. In short, hospitality is the lifeblood of our communities, our society and our heritage.

Since the start of the pandemic, I have worked closely with the sector to understand the issues involved so that I can best represent its interests in Government. That engagement has helped to shape the business support package and ensured that as many hospitality businesses as possible had access to some form of support. Clearly, it would not have been possible to have a separate scheme for every sector and every industry, or to compensate every company for every pound lost as a result of the pandemic. The Government support package is designed to ensure that as many businesses as possible—from the large chains to the sole traders—qualify for some level of business support, with the aim of saving as many otherwise healthy businesses and jobs as possible.

That package included job retention measures, support for the self-employed, access to grants and loans, VAT cuts, business rates relief and the moratorium on commercial rent evictions. In addition, we have provided local authorities with £2 billion of funding to support those businesses that do not qualify for the local restriction support grants and the restart grants, including breweries; freelance and mobile businesses, which take in caterers, events, hair and beauty, and wedding-related businesses; tourism businesses, including group travel and tour operators, B&Bs, and events industry suppliers. I urge local authorities to use the discretionary additional restrictions grant funding generously to support those businesses and others that have not had other forms of support. After all, they could, as we have heard, play a critical role in attracting visitors to the city and town centres, as well as to their local areas, over the summer and beyond.

Equally, local authorities should have the guidance for restart grants to help them plan ahead and get the grants out quickly, so that businesses are in the best place to reopen at step 2 of the road map. None the less, no business support package can ever match the benefits of operating in an open marketplace. While the new restart grants and the additional restrictions grants are important to the reopening and recovery of hospitality businesses, local authorities also have a part to play in helping businesses to reopen safely, by making it easy for them to maximise outside seating, tables and street stores to serve food and drinks. That will not just help hospitality businesses to reopen in a way that provides extra capacity and therefore revenue, helping them to manage down accrued debts, but provide the sector with longer-term resilience.

I encourage local authorities to make use of the welcome back fund announced on Saturday 20 March and the additional restrictions grant funding to run publicity campaigns and to prepare for events such as street markets, festivals and all those sorts of things to help support local businesses. Campaigns and safe events will be vital in encouraging the return of shoppers to our town and city centres. At the same time, we need to make sure that we embed confidence by supporting local pubs, cafés and restaurants.

The hon. Member for Manchester Central (Lucy Powell) raised the issue of those that had missed out on support, which I have already addressed, but a number of Members mentioned small brewers and the relief fund. The Chancellor has launched a technical consultation, which closes on 4 April, and I encourage all brewers and people interested in that sector to make sure that they have their say. Beer duty has been frozen for the second year in a row, saving drinkers £7.3 billion. The Government will set out details of the next stages of the review in due course.

We also heard from the hon. Member for North Antrim (Ian Paisley). I have been working with Colin Neill from Hospitality Ulster on the hospitality sector in Northern Ireland, and I am grateful for his feedback. I say to the hon. Gentleman that it is about time that we renewed the karaoke session that we had a few years ago in his constituency.

Finally, a number of Members, including my hon. Friends the Members for Loughborough (Jane Hunt), for Cheadle (Mary Robinson) and for Tiverton and Honiton (Neil Parish), raised the issue of weddings. I value the fact that I was able to work with the weddings taskforce, which was brought together by the sector itself, involving a disparate number of businesses and voices focused on producing concentrated and collaborative work. We do need to do more to make sure that we can give them the certainty that they need as we get to step 2, and I will redouble my efforts to make sure that we can get that done.

In conclusion, the road map that the Prime Minister announced provides a gradual and cautious step-by-step—not stop-and-start—plan to reopen the economy. That, in tandem with the progress of the vaccination programme—bear in mind that at some points on Saturday, we were achieving something like 27 jabs a second—means that we are hopeful of keeping to our schedule.

Despite the progress over the last few months, we cannot pretend that the way forward is easy or that difficult choices do not lie ahead. For the sake of people across the country and for the NHS, we must remain cautious. We must remember hands, face and space. Ventilation and fresh air will also be hugely important as we seek to reopen. That is why the road map starts with outdoor opening before we come indoors. The events research programme, which is looking at how we can have covid-secure events including larger weddings, will report back in May.

We remain cautiously optimistic. I look forward to returning to the hospitality sector, as I think we all do in this House.

Draft Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021

Paul Scully Excerpts

Tuesday 23rd March 2021 General Committees

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

I beg to move,

That this House has considered the draft Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021.

It is a pleasure to serve under your chairmanship, Ms Bardell, to debate the regulations, which were laid before the House on 24 February 2021.

As we strive to rebuild the economy after the challenges that it has suffered as a result of the covid-19 pandemic, it is vital that we have a strong and robust insolvency regime to provide confidence to businesses, creditors and investors alike. That is why last year the Government made certain changes to the insolvency regime in the Corporate Insolvency and Governance Act 2020. The changes included reviving a power previously introduced by the Small Business, Enterprise and Employment Act 2015 to regulate sales to connected persons in administration. The power is intended to strengthen the regulatory framework and provide greater reassurance to creditors in respect of what are commonly called “pre-pack sales”.

A pre-pack sale is where a company is in financial difficulties and an arrangement is made for the sale of all or part of the company’s business prior to its entering administration. The sale is then completed on the same day or immediately after the appointment of an administrator. Pre-pack sales are an invaluable part of the UK insolvency framework, allowing viable businesses to be rescued while preserving value and saving jobs. However, the nature of the sale, the speed with which it is carried out and the fact that such sales are often to a person previously connected with the insolvent company, such as a director or relative of the director, has led to criticism and concerns that such sales might not always be in the best interests of creditors.

A number of industry measures were introduced in 2015 to try to ensure greater transparency of pre-pack sales. These included strengthening the professional standards for dealing with a pre-pack sale and the opportunity for a connected purchaser to seek an independent opinion on a transaction on a voluntary basis. A Government review of the measures concluded that they had not gone far enough in restoring creditor confidence. Consequently, the Government have determined that it is necessary to strengthen the legislative framework.

Draft regulations were published in October 2020 for stakeholder consultation, following which we have made certain changes to take account of the feedback received. The regulations provide that an administrator will not be able to make a substantial disposal of an insolvent company’s assets to a connected person within eight weeks of the company entering administration unless creditor approval has been obtained, or the connected purchaser has obtained an independent report from an individual—an evaluator—qualified to do so.

The regulations define what is meant by a substantial disposal. It includes where the disposal takes place through a series of transactions to prevent parties from side-stepping the requirements by parcelling the disposal into a number of smaller transactions. In addition, the regulations make provision about who may act as an evaluator and what their report must cover.

The regulations also impose responsibilities on the administrator, who must review the report and be satisfied that the evaluator has sufficient knowledge and experience. The report must state whether the evaluator is satisfied or not that the disposal is reasonable. An administrator can still proceed with a sale where the report states that the evaluator is not satisfied that the disposal is reasonable, but where this is the case, they must provide a statement to creditors setting out their reasons.

As I mentioned earlier, the regulations were published in draft for consultation, and following comments from stakeholders they have been amended. In particular, we have strengthened the requirements for an evaluator, and they must now also be covered by professional indemnity insurance to carry out the role. We envisage that those acting as evaluators are likely to be accountants, surveyors, lawyers with corporate business experience, and also insolvency practitioners. However, depending on the nature and specialism of the business for sale, individuals in other fields may be suitable to act, provided they meet the relevant requirements in the regulations.

A key concern from stakeholders was the risk of shopping around and commissioning multiple reports to obtain a favourable opinion. For that reason, the regulations require that each report must include details of all previous reports. If a connected person refuses to disclose a previous report, or the evaluator believes they are concealing one, the evaluator must record that in their report. If any previous report includes a statement that the person providing it was not satisfied that the disposal was reasonable, the administrator can still proceed, but they must provide a statement to creditors of their reasons for doing so.

The regulations allow the continued use of pre-pack sales as a viable form of rescue, but at the same time will provide enhanced scrutiny of connected sales, giving greater reassurance to creditors that the sale is appropriate. They will improve and strengthen the reputation of the UK’s renowned insolvency and rescue framework, and will contribute to restoring economic confidence. I commend the regulations to the Committee.

--- Later in debate ---

[Paul Scully]

I thank the hon. Member for Manchester Central for her constructive response. I will address the issues she raised.

On the definition of connected parties, any changes would require primary legislation and could not be done through regulations. We will monitor what happens and reflect on any changes as we go forward.

In terms of identifying the evaluator, we did not want to introduce unnecessary burdens at this stage. However, we wanted to make sure that the guarantee requirement, whereby the evaluator effectively needed professional indemnity for this charge, would mean that, in the vast majority of cases, if not all, the evaluator would be someone who was regulated by dint of having to have that insurance.

Clearly, pre-pack sales can be contentious, which has been reflected in some of the previous comments on and considerations of the measures. As I said in my opening remarks, when used correctly, pre-packs can be a valuable rescue tool, which is specifically relevant in this particular climate. The powers under which the regulations are made in the Small Business, Enterprise and Employment Act 2015 are sufficiently wide to potentially permit regulations to be made to ban pre-pack sales to connected persons completely, but it was clear from the Government review of the 2015 measures that stakeholders believe that the opportunity to pre-pack a business and to be able to sell it should be preserved, but that there needs to be a stronger regulatory framework. The regulations strike that balance.

Subject to parliamentary approval of the regulations, we will monitor their implementation to see how they operate in practice, in particular to see whether they meet the objective of improving transparency for creditors and whether they dispel the perceived controversy surrounding pre-pack sales. If the evidence demonstrates that problems persist, the Government will consider whether further changes are necessary, including whether pre-pack sales to connected persons should be banned altogether. Similarly, if time proves that the regulations are impeding legitimate rescue attempts, we will consider whether there needs to be an adjustment to the provisions.

It is imperative now more than ever that we have a range of different tools within our insolvency and restructuring framework that allow companies the flexibility to choose the mechanism that will best help their particular circumstances. At the same time, there needs to be confidence that those affected by the insolvency of a company are treated fairly in order to encourage investment and entrepreneurship. I believe the regulations meet that challenge by retaining and strengthening the legislative framework for pre-pack sales to connected persons. I commend the regulations to the Committee.

Question put and agreed to.

Post Office: Horizon Historical Shortfall Scheme

Paul Scully Excerpts

Thursday 18th March 2021 Written Statements

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

Problems with the Post Office’s Horizon IT system have affected the lives and livelihoods of many postmasters.

Over the years, the Horizon accounting system recorded shortfalls in cash in branches. The Post Office at the time thought that some of these were caused by postmasters, and this led to dismissals, recovery of losses by Post Office Ltd and, in some instances, criminal prosecutions.

A group of 555 of these postmasters, led by former postmaster Alan Bates, brought a group litigation claim against the Post Office in 2016. It is clear from the findings of Mr Justice Fraser, just how wrong the Post Office was in its relationship with postmasters and that there were clear failings with the Horizon system.

The Government pay tribute to those postmasters and colleagues across the House who continue to shine a spotlight on such an important issue.

The Post Office reached a full and final settlement with claimants in the group litigation in December 2019 and apologised for its past failings. That settlement was an important step towards addressing the wrongs of the past, but it was only the start of a long journey for the Post Office to repair and strengthen the relationship with postmasters.

As part of the settlement the Post Office agreed to set up the historical shortfall scheme. The scheme was open to current and former postmasters who did not participate in the group litigation claim against the Post Office and did not have a criminal conviction, but who may have experienced and repaid Horizon shortfalls. It is therefore an important step in making sure that all those who were affected have the opportunity to seek resolution.

The scheme closed in August 2020 and received over 2,400 applications. This number was higher than the Post Office had anticipated when the scheme was established. All of these applications of course need to be properly assessed.

The Post Office is committed to the successful delivery and timely completion of the historical shortfall scheme. However, the cost of the scheme is beyond what the business can afford.

The Government will therefore provide sufficient financial support to the Post Office to ensure that the scheme can proceed, based on current expectations of the likely cost. The Secretary of State for Business, Energy and Industrial Strategy is providing this support in his capacity as sole shareholder in the Post Office.

There are two reasons this is being done.

First, we must ensure that those postmasters who have applied to this scheme are able to seek redress. By supporting the scheme, we will make it possible for these postmasters to be fairly compensated.

Secondly, we must protect the post office network. As we have seen through the pandemic, it provides essential services to citizens across the country.

Without this support the Post Office would be unable to deliver fully the historical shortfall scheme and it would be unable to continue to operate its network as we know it today. This is a critical intervention that benefits current and former postmasters and the millions of customers that rely on their local post office branch.

The final cost of delivering the historical shortfall scheme will be determined over the coming months, including through the work of an independent panel. This support will ensure that postmasters are appropriately compensated, however we will not spend more of taxpayers’ money than is necessary to ensure the scheme meets its objectives.

The Post Office is rightly contributing what it can from its own resources to the delivery of the scheme.

While it is important that the scheme remains independent of Government it is also important that this shareholder support delivers value for money. The Government are confident that the controls in place in the design of the historical shortfall scheme will make sure this is the case.

The Post Office will make the first offers to applicants shortly. However, given the number of applications it will take time to work through all the claims that the Post Office has received. The Government would therefore like to thank postmasters in advance for their patience and reassure them that their claims will be properly handled.

The Horizon dispute has affected the lives of too many people and supporting the scheme operated by the Post Office will help them right the wrongs of the past.

We must also ensure that a situation like this can never be allowed to occur again. That is why this Government have asked Sir Wyn Williams to lead the Post Office Horizon IT inquiry.

Sir Wyn’s inquiry will work to fully understand what happened, gather available evidence and ensure lessons have been learnt so that this cannot occur again. It will also look specifically at whether the historical shortfall scheme is being properly delivered. The Government look forward to receiving Sir Wyn’s report in the summer.

[HCWS853]

Draft Corporate Insolvency and Governance Act 2020 (Coronavirus) (Change of Expiry Date) Regulations 2021

Paul Scully Excerpts

Thursday 11th March 2021 General Committees

[The Chair]

Before we begin, I remind Members to sit in only the designated places, that Mr Speaker requires that everyone wears a mask when in Committee, and that Hansard colleagues would be most grateful if Members could send their speaking notes to [e-mail], and not send hard copies.

[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 Corporate Insolvency and Governance Act 2020 (Coronavirus) (Change of Expiry Date) Regulations 2021.

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

The regulations were laid before the House on 11 February. We have a road map ahead of us that gives us some light at the end of the tunnel. That is thanks to so many people, including those working in the NHS, and we must always be grateful for the work that they do and conscious of the pressure that they remain under. However, we know that the future is still far from certain for many businesses.

The Corporate Insolvency and Governance Act 2020 contained regulatory easements designed to allow viable businesses the best opportunity to survive the pandemic, as well as new procedures that allow them breathing space to restructure or, if that is not possible, seek the most appropriate form of insolvency proceedings. It contained a general power for the Secretary of State to make temporary amendments or modifications to the effect of specified insolvency and governance legislation through regulations—a wide power, but with significant conditions imposed so that it can be used only for specific purposes relating to the pandemic, and only under certain circumstances. The regulations made under this power are subject to the made affirmative resolution procedure, so they become effective upon laying, but are still subject to debate and approval by both Houses. That allows us to react quickly to deal with urgent issues.

When we drafted and debated the legislation, the future was uncertain. We just did not know the impact that the pandemic was going to have on the administrative and regulatory framework, and for how long, so we had to be able to react quickly to challenges and prevent businesses from having to close just because of the pandemic, with the impact on jobs and livelihoods that that would entail. However, the pandemic has clearly continued for much longer than was anticipated. At the moment, the general power to make temporary amendments will expire at the end of April. That date was set in the expectation that normal trading conditions would return by the autumn of last year, but sadly, as we are all too aware, that did not happen.

These efforts use the power contained in section 24(3) of the Corporate Insolvency and Governance Act to substitute the expiry date of the general power for a date that is a year later. It will mean that the Secretary of State is able to use the general power until 29 April 2022. Although section 24(3) allows for extension of the period in which the general power may be used on more than one occasion, this is limited by the provision in section 24(4) that prohibits the power lasting beyond 24 June 2022—two years from the day on which the Corporate Insolvency and Governance Act was passed. Having an expiry date for the power was an important restrictive provision. The power may be used only for purposes directly related to the impact of the pandemic on the business and insolvency regime, so if there is no impact the power should expire.

We will continue to do what we need to do to support businesses through this period. We are hoping, and aiming, for the economy to return to pre-covid levels by the middle of next year, but in the meantime, supporting viable businesses and jobs must be our priority. As such, we need to be in a position where we can continue to temporarily adapt to allow as many viable businesses, jobs and livelihoods to survive the pandemic as possible, and to deal properly and fairly with insolvencies that might be an unfortunate consequence of the pandemic. It is quite possible that the power will be pivotal in providing the flexibility we need to deal with any extraordinary pressures on the regulatory regimes.

No new powers are introduced by the regulations; they merely extend the period in which the power may be used. There are no specific plans to use the general power again at present, but this may quickly change depending on the situation. I hope the Committee agrees that the power represents a vital tool for the Government in being able to respond to the challenges of covid-19 and that it should be extended for a further year. I commend the regulations to the Committee.

--- Later in debate ---

[Paul Scully]

I thank the hon. Lady for her contribution. Mr Efford, having a photo of your vaccination will obviously help the take-up across London, but entering into the proceedings of the Official Report is forever.

I am glad that we have a consensus that we need to go further in order to protect our economy over the coming few months. To answer the hon. Lady’s question, we have already looked at statutory demands and winding-up orders, as effected on the rent for a number of businesses, and we are obviously extending that for another three months. We will take into account what needs to be done, and we will try to consolidate it as best we can, so that we can be flexible but also make sure that we do not have to come back and forth to give businesses certainty. Frankly, it is not about our time; it is about those businesses needing the time and certainty to be able to plan.

We will be able to do that, but it is vital to have these measures to prevent unnecessary insolvency proceedings for viable businesses, and to allow the insolvency regime to cope with any significant impact on case numbers. I thank hon. Members again, and I hope the Committee approves the SI.

Question put and agreed to.

Draft Financial Reporting Council (Miscellaneous Provisions) Order 2021

Paul Scully Excerpts

Wednesday 10th March 2021 General Committees

[The Chair]

Before we begin, I remind Members about social distancing. Spaces available to Members are clearly marked—that will not be a problem today. I also remind Members that Mr Speaker has stated that masks should be worn in Committee, obviously when you are not speaking. Hansard colleagues will be grateful if you could send any speaking notes to [e-mail].

[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 Financial Reporting Council (Miscellaneous Provisions) Order 2021.

It is a pleasure to serve under your chairmanship, Sir Charles. The order was laid before the House on 8 April. It aims to ensure that the Financial Reporting Council, the public body that regulates auditors, accountants and actuaries, follows the same rules as other regulators on access to information, how it exercises its regulatory functions and promoting equality.

The order serves three purposes. First, it designates the Financial Reporting Council a public authority for the purposes of the Freedom of Information Act in respect of specific public functions. Secondly, it ensures that all the FRC’s regulatory functions are subject to the regulators’ code, which sets good practice for regulators. Thirdly, it will add the FRC to the list of public authorities subject to the public sector equality duty.

I should stress that the FRC is already partially subject to those duties, and otherwise voluntarily adheres to those rules at the moment. However, it is more effective, more transparent and more consistent to apply those duties and rules in law comprehensively, as the draft instrument does.

Following the collapse of BHS and Carillion in particular, it has been a priority of the Government to understand and address shortcomings in the UK audit environment, including the role of the FRC as regulator. That is why, in April 2018, the Government commissioned Sir John Kingman to conduct an independent review of the FRC, which reported on 18 December 2018.

The FRC review identified the need for a new, strengthened regulator. It emphasised the need for the regulator to be held to the standards and obligations expected of all public sector bodies and to be more transparent, and recommended that it should be subject to the Freedom of Information Act and the regulators’ code. Those findings were supported by the Government and welcomed at the time by the Business, Energy and Industrial Strategy Committee.

The FRC, under new leadership, has already taken significant steps to strengthen its capabilities and to begin building the additional capacity needed to deliver on the ambitious mandate set by the FRC review.

The order builds on the progress in implementing the review’s recommendations on the FRC’s internal workings, which include full compliance with the “Managing Public Money” handbook, streamlining governance structures and enhancing stakeholder engagement. Those measures represent another step forward on the path to transforming the FRC into a new, strengthened regulator.

Let me deal with the application of the FOI Act to the FRC. At the moment, only some of the FRC’s statutory functions are subject to the FOI Act. The FRC has since voluntarily adopted compliance with its provisions. The order will designate the FRC a public authority for the purposes of the FOI Act, so that all its public functions are covered by the Act. The FRC was consulted on the application of the Act to its public functions and was supportive of that. Since the FRC is a public body, it is right and proper that the order applies the FOI Act to its public functions, helping to underpin public confidence and trust in the regulator.

I turn to the regulators’ code measure. The FRC already applies the code to some of its regulatory functions. The order will now apply the regulators’ code to all the FRC’s regulatory functions, save those that it has delegated to the relevant professional bodies.

The code encourages trust, open dialogue and accountability between the regulator and those that it regulates. Application of the code by legislation will make the FRC more accountable, in line with other regulators. It will encourage greater transparency in the way regulation is delivered and enable the FRC to target its resources better.

The Government have worked closely with the FRC and the relevant professional bodies and consulted them on this matter. All the consulted parties supported the application of the code to the FRC.

The third measure is the public sector equality duty. It will add the FRC to the list of public bodies that are formally subject to the duty. Currently, the FRC is only subject to the duty with respect to its public functions.

Those subject to the equality duty must eliminate unlawful discrimination, harassment and victimisation and other conduct prohibited by or under the Equality Act 2010. They must advance equality of opportunity between people who share a protected characteristic and those who do not. They must also foster good relations between people who share a protected characteristic and those who do not.

The FRC sets the UK corporate governance code, which the UK’s largest companies are required to apply on a “comply or explain” basis. The code promotes diversity reporting. It is therefore only fair that the FRC itself is subject to the highest public duty with respect to equality considerations in its role.

In March 2019, in publishing an initial response to the FRC review, the Government committed to replace the FRC with a new independent statutory regulator with stronger powers. The new regulator, the Audit, Reporting and Governance Authority, will be a regulator with teeth, backed by legislation, funded by a mandatory levy on industry, with stronger enforcement powers.

The Government will legislate to create the new regulator when parliamentary time allows, but the measures in the draft instrument do not need to wait and should not wait. They will ensure that the FRC’s position is consistent with those of other public bodies and make it more transparent and more accountable to the businesses and professions that it regulates.

I hope that the Committee agrees that the three measures in the instrument will improve the UK’s audit, accounting and corporate reporting regulator by making it more accountable and transparent.

I commend the order to the Committee.

--- Later in debate ---

[Paul Scully]

I appreciate the hon. Member’s comments and constructive contribution to the debate. We do not want to delay the FRC’s replacement in any way, but the new regulator will require primary legislation and, as I said, the Government intend to introduce it when parliamentary time allows.

In the meantime, the Government are committed to putting in place the right degree of transparency and oversight of the regulator. The order, which applies to the current regulator, is an important step in achieving that. Yes, the FRC has voluntarily covered a lot of what is in the measures, but we want to ensure its good standing until we get to the point of setting up its replacement. Reliable audit and corporate reporting are vital to well-functioning markets, business investment and growth. An effective regulator is essential to help the UK economy realise those benefits.

The measures will help ensure that the UK maintains and advances its status as a place of the highest standards in audit and corporate reporting. The Government are committed to acting on the findings of Sir John Kingman’s independent review of the FRC. The measures are steps towards that goal.

I thank hon. Members again for their valuable time and contributions to the debate. I hope that the Committee will approve the SI.

Question put and agreed to.

Covid-19: Workplace Protection

Paul Scully Excerpts

Tuesday 9th March 2021 Commons Chamber

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

I congratulate the hon. Member for Ellesmere Port and Neston (Justin Madders) on securing a debate on this important topic. I echo his thanks to you, Madam Deputy Speaker, Mr Speaker and the staff of the House, who have allowed us to continue our business to the best of our abilities. I add my condolences to all the friends and families of the people who have lost their lives and suffered throughout this pandemic.

There is no doubt that the pandemic is one of the greatest challenges that the UK has faced, and as Minister for Small Business, Consumers and Labour Markets, I see daily the difficult choices that individuals and businesses have had to make as we manage the threat to public health. One of my priorities has been to support businesses in making their workplaces covid-secure to ensure that they are able to operate as safely as possible, to keep our economy going and to protect workers and customers.

Before I speak in greater depth about the practical steps we have taken, I would like to pay tribute to the businesses we have worked with to make workplace protection a reality. As we have heard, a number of businesses have remained open for the duration of the pandemic, providing us with the essential goods and infrastructure that we need in the short and longer term. I am hugely grateful to them and their incredible staff. The hon. Gentleman is absolutely right when he says that safe workplaces and safe staff make a productive workforce. Those businesses have made significant efforts over the past year.

I recognise that many sectors have not been permitted to operate as usual, including, as we have heard, hospitality, personal care, tourism and the performing arts. I commend their perseverance and adaptability in transforming into covid-secure businesses at such speed. Not all those sectors fall under my Department, but I am acutely aware that they continue to face significant pressure, and some businesses have been unable to reopen at all. The road map provides a route out of the current lockdown in England, but I recognise the tremendous difficulties that businesses have been experiencing and continue to endure in the face of the pandemic. We will continue to do all we can to support the British people and businesses through this moment of crisis.

As announced last week in the Budget, and as we heard earlier today, the Budget continues to provide unprecedented levels of support for the economy, protecting jobs and livelihoods across the whole of the UK. The Chancellor announced an additional £65 billion of further measures to support the economy in 2021-22. That will take the total support for the economy to £407 billion—the largest peacetime support package on record.

Following the Prime Minister’s announcement of the nationwide lockdown measures almost a year ago, the Government have worked tirelessly to develop clear guidance on how to work safely across a range of workplace settings. We consulted numerous businesses, industry leaders, trade unions and local and central Government organisations to develop the covid-secure guidance. We did that in close collaboration with Public Health England and the Health and Safety Executive to reflect the latest expert advice at each stage of the Government’s response to the pandemic. The guidance gives practical considerations for how to adapt a workplace to make it covid-secure, including simple but vital measures such as completing a workplace risk assessment that factors in covid-19, cleaning more often—both hands and surfaces—maintaining social distancing and putting in place mitigations where social distancing is not possible.

The guidance also raises other practical considerations, such as considering ventilation in line with HSE guidance—something that will continue to be very important—adapting a workplace layout to facilitate social distancing, and reducing the need for face-to-face meetings, including working from home where possible. It also reminds businesses of the need to support NHS Test and Trace, and to comply with face covering and self-isolation rules and others.

[Justin Madders]

The Minister is talking about risk assessments. Will he look at the concern that I have raised about court staff, and the Ministry of Justice and the Courts and Tribunals Service not agreeing on the process for a risk assessment in their working environment?

[Paul Scully]

I noted the examples that the hon. Gentleman gave of the DVLA and the court system, and I will certainly reflect on those and take them back.

The key thing is that the guidance also reminds employers of their duty to consider those with protected characteristics, as the hon. Gentleman says—those shielding or those with other vulnerabilities—and take particular care to factor their needs into workplace risk assessments. Every organisation is different and employers must translate the guidance into specific actions to take, depending on the nature of their organisation, such as its size and type and how it is organised, operated and managed. The duty is on employers to ensure that the risk assessment for their business addresses the risk of covid-19 to anyone affected by the business. The Health and Safety Executive, local authorities and health and safety representatives within businesses—and, of course, trade unions—ensure that support is available to help businesses to implement the right control measures. So we urge businesses to continue to keep their risk assessments up to date and maintain dialogue with their workers over the measures put in place for their safety. As we have heard, it is not always the case, but we must make sure that we press that home to all businesses.

The guidance does remain robust in the light of the new virus strains, although that is continuously reviewed as new data emerges. To continue to protect the most vulnerable in our society, businesses should continue to follow the guidance, even if employees have received a negative test result or have been vaccinated.

Following the publication of the road map, at this key point in the UK’s response to the coronavirus pandemic, the Government have taken the opportunity to build on the collective input and insights shared by businesses, unions and representative organisations. Almost a year from its initial publication, the message we hear most frequently is that continuity is key for businesses, and that the guidance is embedded and well understood. That does not mean that there is nothing left to learn about how well the guidance has been working in practice, and we have consulted widely to consider any improvements that we can make ahead of the reopening. The Government will provide further advice on how businesses can improve fresh air flow in indoor workplaces and introduce regular testing, as set out in the road map. User feedback is good and levels of compliance are high, but we must not be complacent. The covid-secure guidelines are underpinned by the health and safety legislation as regards the need to conduct a risk assessment, as well as certain requirements set out in new regulations brought forward by the House under the public health legislative framework. Enforcing authorities have been given the powers they need to enforce covid rules where necessary, for the purposes of controlling the spread of infection. Those powers are robust and proportionate, ranging from issuing fixed penalty notices to closing down a business in extremis. We continue to work closely with businesses and across Government to ensure that we maintain these high levels of compliance. If someone has a concern about the measures in a workplace, they should consult their health and safety representatives in the first instance.

[Justin Madders]

I am grateful to the Minister for giving way again. In terms of the enforcement powers that are at the disposal of inspectors, is the Minister able to say how many improvement notices or fixed penalty notices have been issued?

[Paul Scully]

I cannot give the hon. Gentleman the answer at the moment, but I will find that out for him.

We have given more resource to the Health and Safety Executive to ensure that it can do its job to the best of its ability. We do look to people to come forward with evidence, and that includes not just employees but trade unions and other representatives as well. We make sure that we encourage all businesses, especially if they are considering reopening after a period of closure, to take the time to review and refresh their risk assessments in line with the latest advice.

Although there is much cause for hope and optimism with the vaccine roll-out, we must be mindful not to prematurely relax the social distancing and other safety measures that have been put in place to protect workers and the most vulnerable in society. As set out in the road map, covid-secure guidance will remain applicable throughout steps 1 to 3. At step 4, subject to review, we hope to relax legal limits on social contact and open the remaining closed settings, including clubs and large events, and including weddings. But the Government have been clear that some safety measures must still be required from summer onwards.

To cover a couple of areas that we have talked about, I have been working with the retail sector, including USDAW, to help as regards the violence shown to retail staff, who have done amazing work during the pandemic.

Fire and rehire, which the hon. Gentleman mentioned, has been raised a number of times in this place. It is important that, yes, we retain our flexible employment practice, but it should not be used as a bullyboy tactic by large companies against their workers. He said correctly that any reasonable, sensible and forward-thinking employer would understand that treating their employees well gets the best out of them, makes it a productive business, and, ultimately, gets the best for the shareholder in the long term. We have charged ACAS with looking at the evidence to see how systematically the practice is being used. It has reported back, and I will be examining what it says.

On self-isolation, we have put in £110 million of funding for the test and trace support payment. A further £20 million per month will go to local authorities from March 2021. That will ensure that local authorities can continue to make payments and support people on low incomes to stay at home and self-isolate when required.

On zero-hour contracts, we must get the balance right to make sure that people who work on such contracts enjoy the flexibility of such work—the vast majority of students and young parents involved in such contracts do appreciate that flexibility. We have banned exclusive contracts, and we want to make sure that, in having that flexibility, people are not being exploited. I look forward to the Employment Bill coming forward so that we can look further at a number of issues around the gig economy, including making sure that our flexible working is a fair way of working. I can confirm that we will continue to work with all sectors of the economy as we forge a successful, long-term recovery from this pandemic. I remain grateful to businesses for everything that they currently do, and will do in the future, to help us to build back better.

Question put and agreed to.

Covid-19: Industrial Development Act 1982

Paul Scully Excerpts

Tuesday 9th 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. Members to bring to their attention spend under the Industrial Development Act 1982. In addition to the obligation to report on spend under the Industrial Development Act annually, the Coronavirus Act 2020 created a new quarterly reporting requirement for spend which has been designated as coronavirus-related under the Coronavirus Act. This statement fulfils that purpose.

The statement also includes a report of the movement in contingent liability during the quarter. Hon. Members will wish to note that measures such as local authority grants, the coronavirus job retention scheme and self-employed income support scheme, and tax measures such as the suspension of business rates are not provided under the Industrial Development Act 1982 and hence are not included below.

This report covers the third quarter of 2020, from 1 July to 30 September 2020, in accordance with the Coronavirus Act. The written ministerial statement covering the second quarter of 2020 was published on 18 January 2021.

Spend under the Coronavirus Act 2020

Under the Coronavirus Act 2020, there is a requirement to lay before Parliament details of the amount of assistance designated as coronavirus-related provided in each relevant quarter. In the period from 1 July to 30 September 2020, the following expenditures were incurred:

Draft National Minimum Wage (Amendment) regulations 2021

Paul Scully Excerpts

Wednesday 3rd March 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 National Minimum Wage (Amendment) Regulations 2021.

It is a pleasure to serve under your chairmanship, Sir David.

The purpose of the regulations is to raise the national living wage and national minimum wage rates on 1 April 2021. The economic impact of coronavirus has been significant—the UK economy contracted by 9.9% in 2020. This recession has clearly been more severe than previous ones. However, effects on the labour markets have so far been muted. The latest Office for National Statistics headline estimate of the unemployment rate was 5.1% from October to December 2020, lower than forecasted, or than following the 2008 recession. That is partly due to Government intervention, including the coronavirus job retention scheme, which allowed workers to retain some form of attachment to a job. I am pleased that earlier today, the Chancellor announced that this scheme would continue until September, with some changes in the final months. That will bring businesses and workers much needed certainty.

The regulations will increase the minimum wage rates. We estimate this will give around 2 million workers a pay rise. I am delighted to say that we accepted all the recommendations made by the Low Pay Commission in 2020. The independent LPC brings together business and worker stakeholder views, supported by research and analysis, to provide their advice. I would like to state my gratitude for their work.

Low-paid workers have supported the country through these challenging times. The Government recognise that many businesses are also struggling during this crisis. The LPC sought to balance those needs against the wider economic conditions in its recommendations. Owing to this, the 2021 increase to minimum wage rates is smaller than previous years. We have concluded that these rates will give low-paid workers, who have contributed throughout this pandemic, a real-terms pay rise, recognising their contributions, without presenting a significant risk to employment prospects. Business stakeholders supported cautious increases to minimum wages. The regulations increase the national living wage by 19p to £8.91, and we are lowering the age threshold for the national living wage to 23. As a result, 23 and 24-year-olds will get a 71p increase. We are also increasing the rates for younger workers, apprenticeships and the accommodation offset.

This year, we are also making another change to minimum wage regulations to do with the records employers must keep to ensure compliance with the minimum wage. Currently, the records must be held for three years. We are extending that period to six years. This will align the time period for which an employer must retain records with the period of liability under the National Minimum Wage Act 1998, which is six years. I thank the hon. Member for Liverpool, Wavertree (Paula Barker), who introduced a private Member’s Bill on this issue; our discussions on that helped to formulate the change. Making that change will ultimately enable underpaid workers to receive the money they are owed as soon as possible.

Last year, we announced a target for the national living wage to reach two thirds of median earnings by 2024. The national living wage is also to apply to those aged 21 and over by 2024. Earlier today, as part of the Budget, we published the Government’s remit to the LPC for 2021. In this, we reaffirmed our commitment to those targets, recognising decisions continue to be dependent on economic conditions. We asked the LPC to provide its recommendations for rates to apply from 2022 this autumn.

The regulations ensure that the lowest paid workers are fairly rewarded for their valuable contribution to the economy during this crisis. I commend them to the Committee.

--- Later in debate ---

[Paul Scully]

I thank the hon. Member for Bradford East for his contribution to the debate, and I thank other colleagues for being here in a collegiate spirt to look at this important issue. The national minimum wage and national living wage make a real difference to millions of workers in this country, particularly during the current crisis. I am glad that he talked about apprenticeships, which are incredibly important to our recovery, as well about the prospects of young people, who have been particularly badly hit by this pandemic. I hope he welcomes the doubling of the apprenticeship payments to £3,000 for all new hires of any age, which was announced earlier by my right hon. Friend the Chancellor of the Exchequer, and the flexi apprenticeship scheme as well.

The hon. Member for Bradford East talked about the changes to the rates for younger people. Traditionally, we have looked at young people having more vulnerability in the employment market, but the LPC’s advice noted that, generally, employment transfers of workers aged 23 and 24 tended to be similar to those of workers aged 25 and over. That is why we have decided to cautiously expand the full rate to younger people.

Clearly, there is agreement that the lowest-paid workers in this country, who have contributed so much during this pandemic, deserve an above-inflation pay rise to protect their standards of living, which the regulations will provide. The policy of the national minimum wage was first announced in 2015, and workers will now be accumulatively £4,030 better off over each year compared with that point—a 33% increase. For the first time, the national minimum wage increases will benefit workers aged 23 and 24. We know that most businesses support increases in the minimum wage rates, and I am glad that we can bring businesses clarity by approving the regulations. I am also pleased that we are making changes to the record-keeping requirements for employers. That will improve our enforcement of the national minimum wage and ensure that underpaid workers receive the money that they are owed.

We committed to raise the national living wage to 60% of median earnings back in 2016. We reached that target with the increases in 2020. Although this year’s increases are more modest than in recent years, we remain committed to the target for the national living wage to reach two thirds of median earnings by 2024, provided that economic conditions allow. We will monitor the labour market closely and carefully over the coming months, to make the best decisions to support low-paid workers and their employers.

Again, I would like to thank the LPC for the substantial evidence gathering that it performs, and for providing well-reasoned recommendations. It reached a consensus agreement on its recommendations to the Government, and those increases balance the ambitions of the Government’s long-term target against current economic conditions. We look forward to receiving the LPC’s recommendations for 2022 later this year. I commend the regulations to the Committee.

Question put and agreed to.

Uber: Supreme Court Ruling

Paul Scully Excerpts

Wednesday 24th February 2021 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call Minister Paul Scully, who has three minutes.

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

I want to begin by making it absolutely clear that everyone deserves to be treated fairly at work and rewarded for their contribution to the economy with both fair pay and fair working conditions. This means that employers must take their responsibilities seriously, not simply opt out of them. If there is a dispute between the individual and an employer, as seen in the recent case involving Uber, the courts consider each case on an individual basis. The courts are independent and the Government do not intervene. As such, with the Supreme Court being the final stage of the appeal, its judgment is final and Uber will need to take action to align with the judgment.

The Government recognise concerns about employment status being unclear in some cases, and we are committed to making it easier for individuals and businesses to understand which rights and tax obligations apply to them. We have made good progress in bringing forward measures that add flexibility for workers while ensuring the protection of employment rights. For example, we have legislated to extend the right to a written statement of core terms of employment to all workers, making access to a written statement a day one right and extending the contents of a written statement. We have also banned the use of exclusivity contracts and zero-hours contracts to give workers more flexibility. This means an employer cannot stop an individual on a zero-hours contract from looking for, or accepting work from, another employer. We will continue to explore options for employment status that protect rights while also maintaining flexibility in the labour market. This Government have a proud history of protecting and enhancing workers’ rights, and we are committed to making the UK the best place in the world to work.

[Andy McDonald [V]]

Last Friday’s Supreme Court ruling on Uber was a landmark victory for working people, and testament to the hard work of the GMB union, the App Drivers and Couriers Union and the drivers who brought the action. It rejected Uber’s bogus claim that its drivers are self-employed, ruling instead that they are workers and therefore entitled to basic rights that they have so far been denied, such at the national minimum wage and holiday pay. The ruling has far-reaching consequences for tens of thousands of Uber drivers as well as all gig economy workers.

Yet Uber is attempting to dodge the Supreme Court’s ruling, just as it attempts to dodge its responsibilities to its drivers, by trying to interpret the ruling so that it applies to only a tiny minority of its workforce. If Uber ignores the ruling, tens of thousands of workers will be cheated out of their rights, forcing low-paid and precarious workers to spend time and money that they can ill afford in order to litigate to recover withheld wages, in cases that they will likely win but will take years to conclude. The Government should not abandon working people to fight for their rights in the courts, so will the Minister take this opportunity to make it clear that the judgment applies to all Uber drivers, and that the company cannot continue to cheat its drivers out of their basic rights?

Even before the pandemic, one in 10 working adults—around 5 million—were found to be working in the gig economy, in fragile and insecure work, and with one-sided flexibility. It is bad for those workers, bad for the economy and, as we have seen from the pandemic, a disaster for public health. Will the Minister confirm that the principles of the judgment in the Uber case must apply not only to all Uber drivers, but to all those on similar arrangements across the country?

Let me say again that the Government cannot abrogate their responsibility by telling workers to fight for their basic protection through an employment tribunal system that barely functions following a decade of neglect. Working people need a Government who will stand behind them, so will the Minister commit now to legislate to end bogus self-employment and provide security to all gig economy workers?

[Paul Scully]

As I have said, the Government are clear that everybody deserves to be treated fairly at work and rewarded for their contribution to the economy. The judgment has been laid down and there are no further avenues for appeal, so Uber must respond accordingly. The hon. Gentleman talked about clarifying employment status and rights. We are committed to continuing to look at workers’ rights, and to ensure that we consider carefully and in the round all the questions about the various workers’ rights, while keeping flexibility in our employment market.

[Sir Edward Leigh (Gainsborough) (Con)]

May I urge the Government not to take an Uber free market approach in these matters, and to recall that the Conservative party has a long history of defending workers from ruthless entrepreneurs? For instance, in the 19th century, Disraeli resisted attempts by the then Liberal Government to prevent workers from picketing when on strike. Can the Minister be absolutely robust today and say, following the question from the hon. Member for Middlesbrough (Andy McDonald), that we believe this is a landmark judgment and that Uber must now accept that its hard-working drivers, many of whom have come from abroad and deserve protection, are employed and deserve all the rights of fully employed people?

[Paul Scully]

My right hon. Friend talks about Uber in isolation, but clearly any number of other operators in the gig economy will be looking at the judgment, and it is important that they respond accordingly. The Government will also respond accordingly, because we always recognise the valuable contribution made by those working in the gig economy, and people do value the flexibility it offers, but we must also ensure that those workers are adequately protected.

[Stephen Flynn (Aberdeen South) (SNP) [V]]

I commend the shadow Minister, the hon. Member for Middlesbrough (Andy McDonald), for securing this urgent question. In towns and cities across Scotland, the rise of the gig economy has been clear for all to see. Despite the flexibility that it offers some workers, it is nowhere near giving them the same rights and protections as others—there is no maternity leave, no holidays and no sick leave. This ruling by the Supreme Court should rightly change that, and I say “should” because, ultimately, employment law remains in the grip of the Tories at Westminster, rather than in the hands of Scotland’s Parliament.

We are all worried about a bonfire of workers’ rights in this post-Brexit world. We have all seen the Government refuse to support the Bill put forward by my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) to end the appalling practice of fire and rehire. I heard the Minister’s warm words, but this is an easy opportunity for him to take a small step in the right direction when it comes to workers’ rights. Will he confirm that his Government fully back the Supreme Court ruling and that they will make no attempt through legislation to overturn, undermine or circumvent it?

[Paul Scully]

The Supreme Court ruling is final. We recognise the concerns about employment status and the potential for exploitation. We want to make it easier for individuals and businesses to understand what rights and tax obligations apply to them, and we are currently considering options to improve clarity around employment status. I have previously talked about the fact that ACAS was charged with considering fire and rehire and gathering evidence, and it has done so. It reported back to BEIS, and we will consider what it found.

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

This is a landmark ruling by the Supreme Court, but many people will be concerned that companies such as Uber should not be left to interpret what it means, because otherwise we will see a disparity between the different companies employing workers in the gig economy—for example, a deliverer for Just Eat is an employee, but one for Deliveroo is not. Will my hon. Friend give serious consideration to the Government legislating to create a level playing field and to stop these abuses?

[Paul Scully]

As I have said, we will look at employment conditions and ensure that employees can understand their status and tax payment conditions. There is a complication, in that the companies my hon. Friend mentioned each have different contracts, so it is important that we have something that looks at all those things in the round.

[Mike Amesbury (Weaver Vale) (Lab) [V]]

Does the Minister agree with the GMB union, which fought this legal battle for four years, that now is the time for Uber to face up to its legal and moral responsibilities, pay decent wages and give decent holidays to its employees? It truly is time to legislate, legislate, legislate, rather than look again.

[Paul Scully]

Uber has to respond to the Supreme Court’s judgment, which is final. We have talked about the fact that the gig economy offers individuals flexibility and provides opportunities for those who may not be able to work in more conventional ways, but we must make sure that they are protected and that we have a balance between flexibility and protecting employment rights.

[Paul Bristow (Peterborough) (Con) [V]]

Does my hon. Friend agree that the UK has often led the way on workers’ rights internationally? What plans does he have to ensure that that continues?

[Paul Scully]

My hon. Friend is absolutely right in terms of what we have done on workers’ rights. We have talked about the fact that in no way will we be diluting workers’ rights. We want to make sure that employers, workers and the self-employed understand exactly what their status means and their tax protections, but we have a number of rights that stand up incredibly well in comparison with the EU and other countries around the world.

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

The Court ruling has confirmed that taxis are a form of public transport, but they are the only ones to not receive coronavirus-specific funding. Will the Government urgently launch a sector-specific support package for taxis set at the same pro rata level as funding for the bus sector and applied retrospectively?

[Paul Scully]

Some taxi drivers will be able to access the self-employed income status and other protections, and discretionary grants are available, but any further support will be outlined in the Budget next Wednesday.

[David Johnston (Wantage) (Con) [V]]

I welcome the Supreme Court judgment. Companies such as Uber can provide well-regarded flexibility, but they can also have staff retention problems globally. Does my hon. Friend agree that companies such as Uber should look at this judgment and, rather than try to find ways around it, look at what they can change that will, among other things, likely help them keep their people for longer?

[Paul Scully]

My hon. Friend raises a really good point. It is important that no employer seeks to wriggle out of its responsibilities, and retention is a sensible approach for any responsible employer.

[Wes Streeting (Ilford North) (Lab)]

I know that these issues are close to your heart, Madam Deputy Speaker, as a constituency neighbour of mine, so it is good to see you in the Chair.

Does not the Minister understand that these issues cannot just be left to the courts and that, in this David versus Goliath battle with big multinational companies that are exploiting workers, avoiding tax and flouting safety rules, people need to see the Government on their side? With that in mind, will the Government finally legislate to give gig economy workers the protection they deserve? Further to the question from my hon. Friend the Member for Coventry South (Zarah Sultana), is not it finally time to give taxi drivers and private hire drivers the support they desperately need as a result of the impact that the pandemic has had on the pound in their pockets?

[Paul Scully]

On the coronavirus support, as I have said, any further support beyond the self-employment income schemes, the grant schemes and the discretionary grant schemes will be outlined in the Budget by the Chancellor. However, the Government have already taken a number of commitments through, including extending the right for a written statement of core terms of employment for all workers; quadrupling the maximum fine for employers who treat their workers badly; and closing a loophole that sees agency workers employed on cheaper rates than permanent workers. There are a number of areas—I will not go on, Madam Deputy Speaker—where we have progressed, but there is plenty more to do.

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

Does the Minister agree that encouraging people to be in an employment situation rather than a self-employment one wherever possible is the right thing to do? Will he work with the Treasury to finally amend the tax system so we do not give a perverse incentive for people to pretend that their staff are self-employed when they are really employed, so that people are in the right legal situation and two people doing the same job have the same legal and tax position?

[Paul Scully]

My hon. Friend raises a really important point, but it is a complex issue, and there is complexity to the background as well, so it is only right that we take the time to consider how best to achieve a change that works for everybody. We will certainly bring proposals forward in due course.

[Janet Daby (Lewisham East) (Lab) [V]]

The Government have previously pledged that they will bring forward an employment Bill to make the UK

“the best place in the world to work.”

If that is true, can the Minister tell us why we are yet to see a Bill—or has it been kicked down the road indefinitely?

[Paul Scully]

No, it has not been kicked down the road. We are clear that any reforms we bring forward will be required to consider the needs of our labour market today. That is why we are continuing to work with stakeholders to understand the needs and challenges of modern workplaces, to ensure that our vision of the labour market is fit for purpose. We will bring forward the employment Bill in due course.

[Theresa Villiers (Chipping Barnet) (Con)]

Does the Minister agree that Uber should pay its drivers more because that is good for those drivers but it is also good for the licensed taxi drivers who feel that they have been subjected to competition from Uber in recent years that is aggressive, unfair and predatory?

[Paul Scully]

My right hon. Friend knows that I am also Minister for London, so I take a keen interest in these important issues. The people who drive black cabs —that premium product—do amazing work throughout; they are icons of London. However, we must get the balance right between having a free market and making sure that the flexibility of the labour market is not impeded by any encroachment on workers’ rights and what is due to them.

[Sarah Olney (Richmond Park) (LD) [V]]

These contract conditions have been a feature of our economy for some time, which means that many thousands of workers have been illegally treated by companies such as Uber for years. Can the Minister tell me what the Government will be doing to ensure that those people are transferred to legal employment contracts and compensated for lost rights and benefits?

--- Later in debate ---

[Paul Scully]

As I say, it is now for Uber to respond to that judgment. It is there, and it is final: it was a Supreme Court judgment, so there is no further right of appeal for Uber. It must adhere to its legal responsibilities.

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

Flexible contracts can work well for some employees, but they must not be used by firms to avoid their responsibilities. Does my hon. Friend agree that all workers should have the right to request a more predictable contract, so that the balance of power does not lie exclusively with the employer?

[Paul Scully]

As I said, we have extended the right to a written statement of core terms of employment to all workers, to make sure they understand the conditions they have and their status. We need to do more work in that area, which I am looking forward to doing, as we speak to people to make sure our labour market is fit for purpose.

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

It is a disgrace that people have had to fight court battles over four years to get basic employment rights, and the Minister must recognise that the only reason they have had to do so is that the Government have sat on their hands for too long. Will the Government finally recognise that the trade-off between flexibility and security is an illusion, and legislate so that everyone who is in work can get the basic protections they should be entitled to in a civilised society?

[Paul Scully]

The gig economy offers individuals flexibility, and countless surveys have shown that the majority of people do like that flexibility—especially younger people and women. However, there is always more we can do to make sure that people understand exactly what they are signing up to, and they definitely must not be exploited.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Having been to Dudley South, we now go to Dudley North.

[Marco Longhi (Dudley North) (Con) [V]]

The many unsung heroes of the pandemic include bus drivers, delivery drivers and taxi drivers, with many of the latter often taking medical staff and patients to hospital and back. While the employment status of Uber drivers is a matter for the courts to determine, will my hon. Friend take this opportunity to thank them—and, indeed, all taxi drivers in Dudley North and beyond—for their efforts during these difficult times and for the risks they take?

[Paul Scully]

I thank my hon. Friend, and join him in taking this opportunity to thank all the transport workers and taxi drivers—whether they are black cab drivers, private hire drivers, or indeed Uber drivers—who have been taking people around throughout all of this. I speak to them on a regular basis when, on occasion, I have required a cab to come back from work, and they are in a difficult position. I am wishing them well as we start to reopen the economy.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP) [V]]

My colleague and hon. Friend the Member for Glasgow South West (Chris Stephens) introduced a Bill to give gig economy workers the rights they have just won in court. This was ignored, as has been my Bill banning the Dickensian practice of fire and rehire, which both the Minister and the Prime Minister have termed unacceptable. Can the Minister tell us when he will report to the House on ACAS’s work on fire and rehire? Does he not agree that the phrases “levelling up” and “one-nation Government” ring hollow when the Government keep blocking SNP-sponsored protections for workers?

[Paul Scully]

We will respond to the fire and rehire Bill when it actually comes through the parliamentary process, but ACAS has completed its work and shared its insights with officials at the Department for Business, Energy and Industrial Strategy. It conducted an independent, impartial fact-finding exercise with stakeholders, making sure there was confidentiality so that we could have frank and honest discussions. We will communicate our response to those findings in due course.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con) [V]]

Following on from the previous question, I know that my hon. Friend shares the concerns felt across the House about the fire and rehire tactics some companies have pursued. While our flexible labour market is something to be cherished, does he agree that employers have a responsibility to do right by their workers, especially now?

[Paul Scully]

My hon. Friend is absolutely right. It is sensible business to do right by employees, as well as the moral thing to do.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op) [V]]

I draw attention to my entry in the Register of Members’ Financial Interests about my membership of the GMB, which drove this historic victory, along with others. I work closely with drivers in my constituency, many of whom are GMB and Unite members, and I want to praise the Welsh Labour Government for the support that they have given drivers in grants, support and free personal protective equipment during the covid crisis.

However, many of the drivers tell me that although most taxi and private hire drivers charge on average £2.20 to £2.40 a mile, Uber pays only £1.10 to £1.25 a mile. Many drivers are getting into serious debt or even bankruptcy. What will the Minister do to ensure that drivers of Uber and beyond get a fair day’s pay from a fair day’s work?

[Paul Scully]

We will make sure, first, that Uber complies with this judgment. Secondly, we also want to ensure that all employees—all workers—exactly know their rights and status, so that they can look at a number of the other taxi and hire firms available, should they so require.

[Selaine Saxby (North Devon) (Con) [V]]

Ministers have been honest with the country that the Government cannot save every job as we emerge from the pandemic. We must ensure, however, that support is available for those who do find themselves out of work, so will the Minister confirm that the Government will prioritise making support and resources available to jobseekers as well as the provision of retraining for those who need it? How can we ensure that this is effective in very rural areas such as North Devon?

[Paul Scully]

My hon. Friend is absolutely right. We talk a lot about reopening the economy, but the recovery of the economy is so important. That is why, although we have protected jobs, livelihoods and businesses, we must make sure that people coming back into work can flourish and have a course of self-development. That is why there are now a number of schemes available in Jobcentre Plus that are being rolled out to improve skills.

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

My hon. Friend will know that the private transport market is a market, and clearly the position of the iconic black taxi cabs in London and the rest of the private hire market have to be considered appropriately. I warmly welcome the decision on safeguarding Uber drivers’ rights, but will he look at doing a wholesale review of the market to ensure that Uber is not advantaged in it in an unfair manner that discriminates against black taxi drivers and the rest of the private hire market?

[Paul Scully]

My hon. Friend is absolutely right to make sure that we continue to look at the number of private hire licences compared with black cab licences in London to ensure that there is no unfair advantage, but, ultimately, there is a market there, as he rightly says.

[Peter Grant (Glenrothes) (SNP) [V]]

We can judge this Government’s sincerity and their claims to care about workers’ rights by the fact that the Secretary of State is on record as saying that British workers are among the worst idlers in the world; of course, her own treatment of her staff would have got her sacked from almost any other job.

Given that in just over two months the Scottish people will, for the sixth time in succession, elect a Scottish Government who care about the rights of workers, is it not time that employment legislation was delegated to the Scottish Parliament and the Scottish Government so that, at the very least, the workers of Scotland can get the government that they vote for?

[Paul Scully]

I am afraid that the question just goes to show that the hon. Member is more interested in votes than jobs and workers’ rights. That is why the employment rights Bill will come before this House in due course.

[Jacob Young (Redcar) (Con)]

In Teesside, one of the myths that the Labour party is spreading about our freeport policy is on workers’ rights. Our Teesside freeport bid will create 18,000 new jobs over the next five years. Will the Minister confirm that, if our freeport bid is successful, there will be no downgrades in workers’ rights?

[Paul Scully]

My hon. Friend is a real champion for the Teesside freeport, and he is absolutely right. We have talked a lot here about Uber and drivers, but our drive to ensure that we can have great workers’ rights in this country extends to all manner of employment, including the freeport that he describes and which I hope he gets.

[Mary Kelly Foy (City of Durham) (Lab) [V]]

With taxi drivers facing mounting debt and, tragically, recent reports of at least five suicides in the sector, including three mentioning financial worries in their suicide notes, does the Minister agree that drivers and operators need urgent access to extra financial support—including small business grants of £10,000, in line with other small businesses?

[Paul Scully]

There is support for some drivers, although I appreciate that some people fall between the cracks. There is the self-employment scheme for some, discretionary grants are available, and each local authority has had to come up with a policy for how they used that money, which could include drivers. Any further support will be subject to the Chancellor’s announcement in the Budget next Wednesday.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I will now suspend the House so that arrangements can be made for the next item of business.

Coronavirus: Supporting Businesses and Individuals

Paul Scully Excerpts

Tuesday 23rd February 2021 Commons Chamber

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

We have heard from the Labour party that, rather than look at the public finances as a whole, as the Chancellor is about to do in a week’s time in his considered response to the road map, they would act ad hoc. This Government believe that we should indeed look at the economy as a whole and at the businesses that need that support.

We resolved to protect people’s jobs and livelihoods, and to support businesses and public services across the UK through the challenge of covid-19, and that is what we have done, with immediate support on a scale unmatched in recent history. To date, the Government have spent £280 billion more than that, providing certainty over the course of this pandemic, even as measures to prevent further spread of the virus have changed.

Yesterday, the Prime Minister announced our road map out of the current lockdown in England. Businesses have called for clarity and a road map to lead the country out of restrictions, and the Government have responded. The design of the road map has been informed by the latest scientific evidence. It seeks a balance between our key social and economic priorities while preserving the health and safety of the country. Every step to ease restrictions will be taken at the same time across England, in a national approach. The road map is yet another example of the support that this Government have provided, giving businesses and individuals up and down the country the clarity to plan ahead and manage everything from staff to supplies. In next week’s Budget, the Chancellor will set out the next phase in our economic support package to reflect the steps set out in the Prime Minister’s road map, including further detail on economic support to protect jobs and livelihoods across the UK. As the Prime Minister and the Chancellor have said previously, this Government are committed to doing whatever it takes to support our country throughout the covid pandemic, and that support will continue.

We have introduced an unprecedented package of support for businesses that have been severely affected by restrictions. Businesses that are legally required to close may be eligible for grants of up to £4,500 per six weeks of closure. The closed business lockdown payment has provided critical support to closed businesses during this difficult spring period, with additional grants of up to £9,000. Just for the period of national lockdown, the support for closed businesses will amount to more than £6 billion. Discretionary support has been made available to support those businesses that have not been mandated to close, but that have had their trade adversely affected by the restrictions.

[Christian Wakeford (Bury South) (Con)]

The hon. Member for Houghton and Sunderland South (Bridget Phillipson) talked about the excluded. Does my hon. Friend agree that the discretionary grant is a fine example of how we can get funding to those who have fallen through the gaps? Does he also agree that councils should be urged to consider all businesses, including those that are home-based?

[Paul Scully]

The discretionary grant is there to show flexibility. Local authorities have been charged to come up with their own plans to reflect their own local economies and their own needs in order to capture as many people and businesses as possible.

In January, the Chancellor announced that a further £500 million of discretionary funding was being made available to local authorities. That is in addition to £1.1 billion already allocated back in November 2020. That business grant scheme has continued to provide business with vital funding during both the national and local restrictions.

[Jim Shannon]

One way the Government could help the self-employed is to provide some help with low tax returns for 2019-20 to be included in the SEISS claims. Would the Government, or the Minister, consider that as a possible option to help those self-employed people who are under real pressure?

[Paul Scully]

I have met representatives from ExcludedUK. We continue to talk to them, we continue to flex and we continue to work out what more we can do to help the economy and to help jobs and livelihoods. The Chancellor will set out his position next week.

In addition to the grant schemes, businesses have received £70 billion in loan guarantees as of 24 January. That has provided a lifeline to more than 1.5 million businesses across the nations and regions of the UK. We have extended the application deadline to apply for those loans to the end of March 2021.

Last year, we changed the bounce back loan scheme rules to allow those businesses that had originally borrowed less than their maximum to top up their existing loans. We also announced the pay as you grow measures, which give all businesses that borrowed under the bounce back loans the option to repay their loan over a period of up to 10 years and to access an additional six months repayment holiday as well as interest-only repayment periods.

On 8 February, we announced that these measures will be made more generous, removing the requirement to make six payments before accessing the six months repayment holiday. Businesses can use these options either individually or in combination with each other, and lenders have begun contacting borrowers to let them know how they can access the pay as you grow measures. These flexible repayment options will give businesses the time that they need to recover from the pandemic and the confidence to build back better.

The Chancellor has also announced our intention to allow lenders to extend the repayment for coronavirus business interruption loans where this is needed to a maximum of 10 years, and we have announced that more support will be available beyond March through a successor loan scheme, more details of which will be announced in due course.

From the outset of this pandemic, we have acted decisively to protect jobs and people’s livelihoods. The coronavirus job retention scheme, the first intervention of its kind in UK history, delivers country-wide support to protect millions of British workers. It has already helped 1.2 million employers across the UK furlough 9.9 million jobs. That scheme has been extended until the end of April 2021 for all parts of the UK, but the Chancellor has always been clear that the Government will keep the situation under review, adapting their approach as the context evolves. The Government will set out the next phase of the plan to tackle the virus and to protect jobs at the Budget next week.

A healthy hospitality sector is critical for the UK economy. It not only accounts for 2.4 million jobs and generates more than £59 billion of economic benefit, but underpins other economic sectors, including tourism and, indeed, our high streets. It is also an important part of our society, supporting social cohesion, cultural integration and mental health. It is a gathering place for communities, and we must continue to support it. The pandemic has hit the hospitality sector hard. I have worked extremely closely with the sector since March 2020 to understand the issues as far as possible so that we can strike the right balance between restrictions and business support.

Not only have the Government provided over £280 billion to support businesses, including hospitality, but we have provided support for commercial rents and deregulated to allow the better use of public spaces for outdoor hospitality. We will continue to keep all that support under review. I want the sector to open up. I want businesses to start to recover and thrive, but it must be done safely, led by the data, as the Prime Minister outlined yesterday.

The retail sector is vital not only to the UK economy, but to the communities that it serves, and I am grateful for the continued efforts of those retail staff who have kept this crucial service going throughout. I recognise that the pandemic has impacted on the sector in different ways and brought significant challenges, but while we have seen a welcome boost in the food sector and online sales, we have also witnessed a more challenging outlook for those not permitted to open, and I appreciate that it has been a really uncertain time for many retail staff. Regrettably, we have seen the closure of some well-known household retail brands, with resulting job losses, impacting on young people and women in particular.

The Government have acted to support as many businesses and employees as possible with that economic package worth over £280 billion, and those measures are carefully designed to complement one another to ensure that we protect jobs and livelihoods. However, as I said, we cannot save every business or job and the support can in no way fully compensate businesses for the loss of trade as a result of the restrictions. Retailers, pubs and hotels have been able to benefit from 100% business rates relief, worth about £10 billion in total, and we have frozen the business rates multiplier for 2021-22, saving businesses in England £575 million over the next five years.

I know that many businesses are eager for an extension to the rates relief beyond the current financial year. The next round of covid-19 support measures will be set out in the Budget next week, but the Prime Minister has written to local authorities in the meantime advising them to delay issuing business rates bills until after the Budget, which, hopefully is good news for businesses.

I know that businesses may be disappointed by the decision to delay publication of the final report into the fundamental review of business rates until the autumn, but an interim report will be published on 23 March, and the final report will be published once there is more clarity on the long-term state of the economy and public finances. I encourage the sector to continue engaging with Government on these important issues.

Supporting people back into employment is also a key priority. Our plan for jobs includes a series of measures to protect, support and create jobs, and we are helping those who have lost jobs in the pandemic back into employment through our job entry targeted support programme. A £2 billion kickstart scheme has also been launched to create opportunities for young people, and we are taking action to help the high street to evolve. In September 2020, we brought forward over £80 million-worth of investment to support immediate improvements in 101 towns selected for deals to build back better in the wake of covid-19.

On 26 December 2020, the Secretary of State for Housing, Communities and Local Government confirmed £255 million for 15 areas for the future high streets fund, with a further 57 areas receiving provisional funding offers totalling up to £576 million. We are also launching a £4 billion levelling-up fund, investing in local infrastructure that has a visible impact on people and their communities and supporting economic recovery. We will publish a prospectus for that fund soon.

To date, we have provided the largest package of emergency support in post-war history. As highlighted by the Office for Budget Responsibility and the Bank of England, without the action taken by the Government, the outlook could be so much worse. The co-ordinated approach of the UK’s authorities has also been praised internationally by the International Monetary Fund as one of the best examples of co-ordinated action globally that has helped to mitigate the damage, holding down unemployment and insolvencies. Given the current climate, it is right that we focus on supporting individuals and businesses through the pandemic. In the past, the Government have ensured that businesses and people have that certainty by extending the furlough and business grants. The announcements at the Budget will reflect the steps set out in the Prime Minister’s road map, ensuring that the next phase of our economic support package continues to deliver tailored support for individuals and businesses.

What businesses want now is that road map. They want to able to give a safe and warm welcome back to their customers, clients and people using their services, but in the meantime, as the Chancellor will set out next week, we will continue to work with businesses and individuals to protect jobs and livelihoods as we see the light at the end of the tunnel in this pandemic.