Strikes (Minimum Service Levels) Bill

Richard Fuller Excerpts

Committee stage
Monday 30th January 2023 Commons Chamber

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

My right hon. Friend is right, in response to the comment from the right hon. Member for Hayes and Harlington (John McDonnell) about strange alliances, that it is the constitutional issues that raise the most significant concerns among Government Members.

In addition to those two reports from the House of Lords, we have the pending review from the Hansard Society on secondary legislation, with its preliminary findings due, I think, on 6 or 7 February. Does my right hon. Friend agree that the Bill may be measured against its preliminary recommendations to see how well it fits, given the constitutional issues that he has mentioned?

[Mr Rees-Mogg]

The Bill is, as I said, a particularly extreme example of bad practice with the least possible excuse for it. There are many Bills where we can find some reason why it had to be done in such a way. I sat on Committees looking at Henry VIII powers and trying to stop them, and I often found that, actually, they were needed because that was the only way of doing things. I make no apology for the Energy Prices Act 2022. That was emergency legislation, and it contained lots of powers because energy prices had got so high that something had to be done straight away to save people from financial distress. That was a reasonable balance between the Executive and the legislature, but this Bill is not urgent legislation.

My fear is that, by writing poor legislation, we invite the courts to intervene more. I do not like the fact that, over recent decades, the courts have intervened more in our legislative processes. That undermines the democratic remit that we have to make the laws. However, if that is handed over to secondary legislation, of course the courts will intervene because the level of scrutiny of secondary legislation is so much lower and there is little other protection. So if we take away scrutiny from this House, where else will it go? Then we get judicial review, and then the Executive finds that it cannot carry out its plans for government, so it becomes self-defeating.

Employment (Allocation of Tips) Bill

Richard Fuller Excerpts

3rd reading
Friday 20th January 2023 Commons Chamber

[David Johnston]

I am grateful to my hon. Friend for his intervention. I was concerned that he was going to ask how much I leave in tips. Obviously, I am a very generous tipper.

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

I am intrigued by my hon. Friend’s use of the word “generous.” In percentage terms, what does he consider to be a generous tip?

[David Johnston]

I am even more grateful to my hon. Friend for asking that question. I am probably not quite as generous as they are in the US, where a 25% or 30% tip is now sometimes recommended on the bill. I would always err on the side of giving a good tip, even for average service, and an even better tip for exceptional service.

--- Later in debate ---

[Simon Baynes (Clwyd South) (Con)]

It is a pleasure to follow my hon. Friend the Member for Sedgefield (Paul Howell), and I, too, pay tribute to my fellow Welsh Conservative Member of Parliament, my hon. Friend the Member for Ynys Môn (Virginia Crosbie), and to my hon. Friend the Member for Watford (Dean Russell). As was mentioned during the previous debate, a huge amount of work goes into private Members’ Bills, but I know that both my colleagues are extremely hard-working and intelligent people, so it is no surprise to me that they produced this Bill in a timely fashion and in very good shape.

I grew up in the hospitality industry. My father ran Lake Vyrnwy hotel in Wales, which is only a few miles south of my constituency. Along with my brothers, I used to work for my father in the holidays, and I have just been trying to cast my mind back to the wage that we were paid. I think—and this is a measure of how old I am—that it was 20p an hour, which in those days was actually a very good rate for a teenager.

[Richard Fuller]

Was that old or new money?

[Simon Baynes]

Just in new money! It was 20p, not 20d.

That is why the hospitality industry is always of huge interest to me, not only in my life in general but, in particular, in my capacity as Member of Parliament for Clwyd South. My hon. Friend the Member for Wantage (David Johnston) said that this was not just about the hospitality industry, and I fully appreciate that, but hospitality is the key sector when we come to consider the Bill.

Clwyd South—like Ynys Môn—is an area full of tourism and hospitality businesses. Indeed, at exactly this time a week ago I was visiting Tyn Dwr Hall hotel, a wedding venue in my constituency just outside Llangollen, and talking to Tracey Owen, who runs the business and whose family own it. One of the points that came up in that discussion—and this, too, has been touched on by other Members today—was the vital importance of bringing young people into the hospitality industry. As I remember from my experience many years ago, hospitality is a wonderful training ground for young people, enabling them to learn a skill and also to learn some discipline in terms of turning up for work on time, doing a job properly and so on. Many hospitality businesses, of which Tyn Dwr Hall is a good example, go out of their way to bring in young people such as sixth-formers to do holiday work and learn a skill.

There are many other such businesses in my constituency, such as Iscoyd Park, another wedding venue; the Sun Trevor, a very popular pub; the Hand Hotel in Chirk, and, also in Chirk, Caffi Wylfa, a social enterprise-run café; The Hand at Llanarmon; The Boat at Erbistock; the Corn Mill in Llangollen; Gales Wine Bar, famously often frequented by a former Prime Minister, my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson), when he was the parliamentary candidate for Clwyd South back in 1997; and the Three Eagles, the Chainbridge hotel and the Wild Pheasant, all in Llangollen. There are many more I could mention, and it is probably invidious to pick out some and not speak of all, but those are just a few that spring to mind: they are businesses that I have visited and know well.

When I visited the Wild Pheasant, the staff made that point about recruiting young people into the industry. When Brexit brought changes to the employment market, it offered opportunities to people who might not previously have gone out to work at a young age in quite the way they are now, and also turbocharged those businesses to get out there, bring people in, train them up, and give them a good job. I think that that is an important background to the debate, because, as has been mentioned by many Members, it is the younger people who are often serving in hospitality businesses and are therefore the focus of the Bill.

Like my hon. Friend the Member for Wantage, I was pretty astonished that there are currently no laws directly concerning the distribution of tips as between employers and their workers. Tips and gratuities paid directly to the employer are presently the legal property of the employer, as are all service charges. It is worth repeating that, because it is pretty extraordinary. It makes the Bill all the more important.

Retention of tips is a very complicated issue. Like other hon. Members present, I would not say that there is a particular problem in my constituency, but my elder daughter has been working in hospitality in various places in London, having studied international hospitality management at university, and she says that the problem is rife in restaurants and so on. There is an idea that this is a limited problem, but that is probably not the case, which is another reason why the Bill is so important. The National Minimum Wage Regulations 1999 (Amendment) Regulations 2009 included a provision stating that tips could no longer be used to make up the national minimum wage, but they did not address the wider issue of unfair retention and distribution.

I strongly support the purpose of the Bill, which is

“to create a legal obligation on employers across sectors to allocate all tips, gratuities and service charges”

in the way that has been described. Another key point is how tips are distributed: the Bill intends

“to increase fairness for employers who already allocate all tips to workers by ensuring that all employers follow the same rules and by preventing a return to further unfair tipping practices in the future.”

Yes, we can hand tips to employees, but if we do not make distribution among employees fair, we will still not have fully solved the problem. Employers will therefore be required

“to have regard to a statutory code of practice…when complying with their obligation to allocate tips fairly.”

That is vital.

I note two other points from experts in the industry. Michael Kill, CEO of the Night Time Industries Association, has said:

“At a time when the hospitality industry is dealing with record vacancy levels, attracting people into work in hospitality businesses is already difficult enough. Taking tips off staff at a time when the cost of living is going up…the potential external economic pressures on our staff need to be considered.”

That is a fundamental point.

Kate Nicholls, chief executive of the industry body UKHospitality, is known to many Members of this House. She does a fantastic job as an ambassador for the hospitality industry. I pay tribute to her: during the covid pandemic, she did more than perhaps any other representative of the hospitality industry to bring its concerns to the Government, with fruitful results. She has urged the Government to work closely with businesses and employees to make the system work for all as venues face mounting costs:

“For hospitality businesses…customers tipping with a card incurs bank charges for the business, and many also employ external partners to ensure tips are fairly distributed among staff”.

That is an important balancing point that we need to consider.

As somebody who was born and bred in the hotel business, I have nothing but support for this tremendous Bill. I commend it to the House.

--- Later in debate ---

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

As is often the case on days such as this, one prepares an extensive speech only to then be given guidance that one should be brief. I shall therefore seek to rattle through a number of points relatively quickly and try to be as helpful as I can to the Minister.

I am interested in the explanatory notes. As you probably know, Mr Deputy Speaker, we had a public consultation in 2013, another consultation in 2016 and another response to the consultation in 2021, and now we are in 2023. Good Lord, eight years! Why has it taken so long? A number of colleagues have noted that there is no law on this issue, but paragraph 15 of the explanatory notes state:

“In terms of legal ownership: tips and gratuities which are paid directly to the employer…are presently the legal property of the employer.”

It goes on to say:

“Tips and gratuities which are paid in cash directly to a worker are the legal property of the worker”.

A number of MPs have mentioned the transition from cash to card. I am interested in the Minister’s view of the implications in terms of legal ownership and whether this Bill is of particular assistance.

I am interested that the impact assessment refers to the possibility for complaints to be made to the employment tribunal as a result of this legislation. Have the Minister or his team made an assessment of the likely impact? I would guess it is limited and perfunctory, but we know that employment tribunals are under a lot of pressure to get through pieces of work, so it would be helpful to dot the i’s and cross the t’s.

I am also interested in table 12, on page 26 of the impact assessment, which looks at the summary of costs by business size and provides central estimates. There is no greater champion in this House for small businesses than the Minister, so he will have noted the distribution of costs among micro, small, medium and large businesses as a result of complying with this measure. Rather than showing a nice, graduated increase in costs whereby the largest businesses take on the largest costs, the table shows that quite a lot of the cost falls on the very smallest businesses. I am interested in hearing the Minister’s thoughts on that.

I thank my hon. Friends the Members for Watford (Dean Russell) and for Ynys Môn (Virginia Crosbie) for proposing and supporting this Bill. I will end with some questions to the Minister directly about his approach to tips, on which he may wish to advise the House while speaking with his hand on the Dispatch Box. First, does the Minister tip or not? Secondly, how much does the Minister routinely tip? If someone else offers to pay for the meal, does the Minister offer to pay the tip?

[David Johnston]

Is my hon. Friend speaking from personal experience of the Minister?

[Richard Fuller]

Sadly, the Minister has never bought me a free lunch, but that is no disparagement of his character.

Does the Minister pay a tip if it is automatically applied to the bill? The other points are a little frivolous, but this is a serious point: if the automatic charge is a service charge, does the Minister pay a tip in addition? That is important because there is a lot of confusion about whether a service charge is a tip. I do not think it is, and I still do not know whether it is covered by this Bill. Has the Minister ever crossed out a service charge on a bill and not paid it? Does the Minister ever dare not to pay a tip? He might choose to give the Government’s response on all those matters rather than a personal one, but I wanted to get those questions on the record. In the interests of time, I will end my comments there.

[Fleur Anderson (Putney) (Lab)]

I congratulate the hon. Member for Ynys Môn (Virginia Crosbie) and the hon. Member for Watford (Dean Russell) on all their work on this Bill. It will make such a difference to so many people across the country, and I declare an interest, because it will make a difference for two of my older children who are working in and out of the hospitality industry and are very interested in the progress of the Bill.

The Bill is righting a wrong of many decades. When I was a waitress in a hotel, I had to drive home at the end of my shift. I was the most junior member of staff, and all the other staff lived in the hotel and would drink the tips at the end of every night, so I would not get any of those tips. I was not able to ask my employer for a written copy of the policy on tips, and I was not able to find out what my share of the tips would be. I have felt for quite a long time that that was an injustice, and I am glad that the Bill will right the many injustices that are happening on a daily basis across the country.

I support rewarding customer service and transparency and confidence for businesses, customers and employees alike. This is fairer for businesses that do the right thing. It is fairer for people who tip and expect it to go to the worker; as many Members have said, lots of things are not clear about that at the moment, and I hope it will be much clearer in future. It is also fairer for the employee, who will get the money that has been given by customers for the work they have done. Labour supports the Bill, and I am pleased to see that the Government are behind it as well. It also has the support of unions—especially the GMB, which has been campaigning on this for a long time—and UKHospitality.

Like other Members, I am surprised that there is no law on tips at the moment. However, as I said in the previous debate, this measure should have been in a comprehensive employment Bill, which has been promised time and again by Government. It is disgraceful that all this time, hospitality workers and workers in the beauty industry have been cheated out of their money. It is clear that some hospitality workers are not getting their tips, with companies instead using them to subsidise other workers’ wages, to pay for accidents such as unpaid customer bills or to pay for so-called administration costs that are very opaque. In 2015, evidence was found that two thirds of employers in hospitality were making deductions from staff tips, in some cases of 10%. With the pandemic and more people paying by card not cash, there are well-founded concerns that workers not receiving tips in full is becoming standard practice, so this law is very timely.

The Government have repeatedly promised to tackle this issue but failed to do so until now. They published a call for evidence in 2013, which showed broad support for action on fair tipping. They then promised this measure at the Conservative party conference in 2018 and in the 2019 Conservative party manifesto, and they committed to include it in the employment Bill in December 2019, but that was dropped from the last two Queen’s Speeches. In the meantime, the latest figures suggest that staff may have lost over £1 billion of tips while waiting for this legislation over the last five years.

Frontline workers in pubs, bars, cafés, restaurants, hairdressers and beauty salons are often the lowest paid. With the Tories’ cost of living crisis worsening by the week, every penny counts, and we desperately need this legislation. In 2020, members of Unite the union at the Ivy tried to lodge a collective grievance against their employer on a number of issues, including withholding tips, but with no formally legally backed process to take the complaint forward, this was dismissed.

I thank my hon. Friend the Member for Reading East (Matt Rodda) for his speech highlighting how important the Bill will be for so many of his constituents, especially for the hospitality sector and for students, and I agree with him. I am proud that it was a Labour Government who, in 2009, first intervened in this issue to make it illegal for tips to contribute to the national minimum wage, just as I am proud that, some years earlier, it was the Labour Government who introduced the national minimum wage itself.

[Richard Fuller]

The hon. Lady is right to congratulate the previous Labour Government on introducing the national minimum wage. Does she also agree that it is good news that the Low Pay Commission report has produced details showing that between 2019 and 2022, young people had the largest increase in wages? It was a 25% increase for 16 and 17-year-olds, compared with 11% for those over 23. Does she agree that that is very good news indeed?

[Fleur Anderson]

An increase in the national minimum wage is very good news. I remain proud that it was the Labour Government who first brought that in and did not drag their feet for years and years over it.

Back then, too many bad bosses were using tips, which should be a voluntary extra to top up basic pay, as has been underlined by so many Members today. Once again, Labour has been ahead of the curve on this issue. The shadow Secretary of State for the future of work, my good colleague and right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), committed last year to stamp out unfair tipping practices, including through many of the provisions included in this Bill; to ensure that all tips, gratuities and service charge payments are allocated to workers in full without deductions; and to ensure that a written policy is produced to make it clear to staff how all tips are allocated, and for those tips to be paid in full at the end of the month following the payment.

Labour will ensure that tips are allocated fairly through a tronc, which is genuinely independent of the business, and we will announce proposals to allow exploited workers to lodge any workplace grievances collectively—a right denied to many hospitality workers seeking the return of deducted tips. A Labour Government will deliver for working people, ending unjust deductions and ensuring that workers themselves decide how tips are distributed.

In conclusion, I have a few questions for the Minister. First, we have before us another Bill on workers’ rights, following the passage of the previous Bill on workers’ rights. If the Government are to introduce an employment Bill effectively through supporting piecemeal private Members’ Bill such as this, which parts of the original employment Bill are they going to drop?

Secondly, many workers end up on the end of already illegal practices while at work. Without stronger enforcement of standards, there is a real risk of Bills such as this failing to meet their potential. I thank the Minister for his earlier response about the consultation on a single enforcement body. Does he believe that such a body for workers’ rights would help to enhance people’s ability to get justice against unscrupulous employers?

Thirdly, measures to strengthen the rights of hospitality workers are welcome, but ONS statistics from May last year show that nearly 25% of workers in the food and accommodation sectors are on zero-hours contracts. Hospitality workers desperately need security and flexibility, so will the Minister commit today to banning these one-sided, unfair zero-hours contracts?

I close by congratulating the hon. Member for Ynys Môn on getting this Bill so far. It will have a massive impact. It has our support and I wish her the very best in the remaining stages.

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

First, like the shadow Minister, let me declare my interest. I have two young daughters who work in the hospitality sector and who may benefit from this legislation. Happily, I am pleased to say that the Bill will also benefit around 1 million other people to the tune of £200 million per annum.

I thank my hon. Friend the Member for Ynys Môn (Virginia Crosbie)—I hope I have pronounced her constituency correctly because we have had some problems with pronunciation this morning—for her very hard work in bringing the Bill forward to Third Reading. The Bill is about fairness, transparency and, again, our efforts to make this society a fairer one. I am pleased that she has taken on the sponsorship of the Bill. Obviously, I thank the previous sponsor, my hon. Friend the Member for Watford (Dean Russell), for his work on such an important piece of legislation and for his campaigning on this issue. This is not just about his work in taking the Bill forward, because he has been amazing in campaigning on this. I thank my predecessors —not just him, but my hon. Friends the Members for Sutton and Cheam (Paul Scully) and for Loughborough (Jane Hunt).

It has been brilliant to hear the support in the House for these measures, and I will briefly reiterate why the Government are supporting the Bill. A few years ago, stories were highlighted in the news about bosses wrongfully pocketing tips intended for their workers. Both the Government and the public were appalled by that; money left by customers who wanted to recognise the hard work and excellence of staff was in some cases simply treated as part of the revenue of the business. That is why my Department took action to understand the scale of the problem and launched consultations, as has been mentioned. We were then able to publish a full impact assessment to support the Bill. The Government believe that tips should go to the staff who earn them, rather than the business, and that businesses that withhold tips from staff are wrongfully benefiting from money intended for hard-working staff.

The Bill prevent therefore employers from making deductions when distributing tips, apart from those required or permitted by existing legislation, such as under tax law. That will ensure that all money left by customers is passed to workers in full, as intended. The Bill also establishes a requirement to allocate tips fairly between workers at a place of business. That protects vulnerable workers and prevents exploitation. As we have mentioned, a voluntary code of practice on tipping was published in 2009. Our evidence shows that voluntary guidance alone was not enough to stamp out bad practice. Therefore, this Bill goes a step further and requires employers to give consideration to a statutory code of practice when considering how tips should be distributed. The code will continue to be developed by the Government, in partnership with key stakeholders, and will be subject to a full consultation period before the final version is brought to this House for approval.

Let me address some specific points made by hon. Members in this debate. The hon. Member for Reading East (Matt Rodda) talked about the benefits to lower-income workers and to towns with lots of hospitality workers, such as Reading, and indeed places in Thirsk and Malton and many other constituencies represented here today. My hon. Friend the Member for Watford talked about snollygosters. I do not know whether that piece from Quentin Letts referenced my hon. Friend personally, but being mentioned in one of his articles is always a badge of honour, regardless of whether the comments are derogatory. My hon. Friend also said that this measure is about fairness and clarity, and the simple question when one is handing over a tip: “Do you get this?” He said this should not be about topping up salaries. I say that it should be about driving up service, as these tips are paid to people who do a good job. Let me answer the question put by my hon. Friend the Member for North East Bedfordshire (Richard Fuller) on my tipping policy shortly.

There are some burdens on businesses as a result of this measure, particularly on record keeping. We should bear that in mind when we legislate, but, on balance, I think this Bill is fair. My hon. Friend the Member for Cheadle (Mary Robinson) talked about fairness and about how most employers do the right thing but some do not. She also talked about the confusion regarding making cash or card payments, and what happens to such payments. This is not just about hospitality, as this applies to other industries, such as the beauty industry. I should point out that this Bill does not cover every sector; requirements in here about record keeping and the like, and the passing on of tips, apply only to businesses that receive tips on a more than exceptional or occasional basis. So this does not cover every instance; it applies just where tips are routinely paid.

My hon. Friend the Member for Wantage (David Johnston) talked about not just hospitality, but the key element of access to cash, on which the Government are undertaking another stream of work.

My hon. Friend the Member for North Devon (Selaine Saxby) talked about the fantastic hospitality venues that are essential to the economy in her area—as, indeed, they are to the economy in mine. She is a huge advocate for business. Many of us on the Government side of the House are for business because we are from business. I know that she is, and I welcome that.

My hon. Friend the Member for Sedgefield (Paul Howell) talked about his local hospitality venues. I have visited a number of them, not least Sedgefield racecourse on occasion, which is always a treat. He talked about how this change will be overseen and gave the example of sole traders. This legislation will be employment law and will apply only to people who are employees. The code of practice will go into that in more detail.

My hon. Friend the Member for Clwyd South (Simon Baynes) was born and bred in the hospitality sector and so speaks with real authority. He used the words that I probably mention more than any other in my role as Minister for business: “fair” and “level playing field”. That is absolutely right, and that is what we seek to achieve. He also talked about the representations from Michael Kill from the Night Time Industries Association and how this change is important to attract workers into the sector, and about the great work of Kate Nicholls for the hospitality sector.

My hon. Friend the Member for Leigh (James Grundy) talked about this being a token of thanks. That is absolutely right, because that is what drives service.

My hon. Friend the Member for North East Bedfordshire, as always, challenged us in a number of areas. He mentioned the number of consultations we have held, and basically told us to get on with it. That is what we are doing today, of course: getting this legislation through and putting it into effect as quickly as possible. He talked about whether employment tribunals will have the capacity to deal with these issues. Work is under way across Government to expand capacity within employment tribunals. He talked about cash and cards, and what goes to whom. As he said, cash is by right the property of the employee, unless the employment contract says that it is not. The Bill will clarify that, in any circumstance, whether there is a service charge or not—that is also covered—this money will go to the employees. That is a critical part of this legislation.

[Richard Fuller]

It would be helpful if the Minister confirmed that, as of this Bill passing, when people see a service charge on a bill, they can say that it is covered, that it counts as a tip and that it will go to the employees rather than to other uses within the firm.

[Kevin Hollinrake]

That is correct.

My hon. Friend also talked about my personal tipping. Do I tip? Yes. By standard, if there is no service charge, I would usually tip 10%, or sometimes more, based on performance. Sometimes I will tip nothing, if I do not feel that the service has been at that level. Do I tip if I do not pay for the meal? I normally pay for the meal as well actually, but I have offered to on occasion. I think that covers all his questions, but if he has any more, we can deal with them by separate means.

To respond to the shadow Minister, I again refer to my earlier comments about an employment Bill. The key thing is that we are getting on with key legislation that we think is important. It is not just this legislation; there are other pieces of legislation addressing flexible working, carer’s leave and other issues. She talked about enforcement, which is hugely important. Legislation without implementation is pointless. One of the most effective parts of our regulatory system in the UK, in my view, is employment tribunals. There is no pan-employment regulator in the UK, which, when we think about it, is quite a surprise—there are some in some sectors. There are 30 million people employed in this country, and employment tribunals do a fantastic job, at a fraction of the cost of other regulators. It is ex-post regulation, and I think a more effective means of doing that is through employment tribunals, which are principally a mechanism for enforcement.

The hon. Member talked about zero-hours contracts. A very small proportion of people in this country are on zero-hours contracts—2% to 3%. Many of them are on a zero-hours contract for good reasons and want to be on one, but she raised an important point. This is something we are looking at and determined to tackle. There are some abuses of the system, and we are keen to bring forward new regulations to make sure we tackle that area.

In conclusion, bringing forward the new rules will protect more than 2 million workers from bad bosses and give them an avenue to seek remedies. Businesses will be assured they are not being undercut by companies where bosses keep tips for themselves and consumers will have increased confidence that their tips go to the workers they are intended for. The new rules are backed by Government evidence and analysis. The Government are therefore pleased to reiterate their support for this private Member’s Bill. It has been wonderful to see the support for it in the House during today’s debate.

If I may, I would like to list the civil servants involved, and there are a number of them: Flora Strange, Lucy Allatt, Yasna Reynolds, Mary Smeeth, Tony Gordon, Joe Giles, Simi Bhamra, Bex Lowe, Richard Lewis, Abigail Bridger, Rachel Senior—I can see the Whip moving closer to me; oh no, it’s not, it is the next Minister. I will conclude very shortly!—Anthony Morris, Cora Sweet, Nadine Othman, Laura Matthews, Clara Thiel, Patrick Day and Harry Ravi. Finally, I very much look forward to working with my hon. Friend the Member for Ynys Môn and stakeholders to support the passage of these measures as the Bill moves to the House of Lords. I commend the Bill to the House.

Neonatal Care (Leave and Pay) Bill

Richard Fuller Excerpts

3rd reading
Friday 20th January 2023 Commons Chamber

[Stuart C. McDonald]

I am grateful to my hon. Friend for her support and her intervention, which I fully agree with.

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

It is commonplace to congratulate Members for the passage of their Bill, but the hon. Gentleman will have sincere support from all sides, and I support his Bill. I hope he will allow me to probe a little, as I was not on the Bill Committee. He is talking about the benefits to employees and to families. Obviously, there is a burden on companies that will have to pay for those benefits. Could he advise the House of whether there was a discussion in Committee about those burdens? What is his understanding of what the additional burdens on companies may be?

[Stuart C. McDonald]

I am grateful for the hon. Gentleman’s support. He asks a perfectly fair question that I will come to in a little more detail later on. In essence, the provisions for businesses will be the same as for other existing rights. There will be reimbursement of 103% for small businesses, and up to 93% percent for larger businesses. For those businesses who already follow good practice, there will be a benefit because they will be reimbursed for what they are already doing. At the same time, feedback from employers shows that they benefit because they have a better relationship with employees, and the return to work is much smoother and more successful. I thank the hon. Gentleman for his question.

I will continue to describe the main provisions of the Bill. For parents who meet continuity of service and minimum earnings tests, the expectation is that neonatal pay will be paid during the leave at the statutory rate, which is just shy of £160, or 90% of the employee’s average wages—whichever is lower. Hopefully, that will be uprated in line with increases to statutory payments—something that we will monitor closely. That mirrors existing family leave and pay provisions such as paternity, shared parental and adoption and maternity after the first six weeks. The process for reimbursing employers will also mirror existing schemes.

There will be flexibility about when the leave is taken. The likelihood is that many fathers who have only two weeks of paternity leave will want to take their neonatal leave immediately thereafter, while their child is still in neonatal care. The situation for mothers is a little different, because once maternity leave commences, a mother cannot stop that maternity leave to take neonatal care leave, otherwise she will lose her remaining maternity leave. Neonatal care leave is therefore to be flexible in order that mothers can add it to the end of their maternity leave and any other forms of parental leave they might be entitled to. With that in mind, the Bill provides for the window of time within which neonatal care leave can be taken to be set out in regulations. However, the window will be six to eight weeks following the child’s birth, which ensures that mothers and fathers have sufficient time to take their neonatal care leave alongside other leave rights that they might be entitled to, rather than losing out on any other such entitlements.

Finally, I want to explain the amendments that were made in Committee. First, clause 2 was amended to remove the power to amend primary legislation via secondary legislation—a so-called Henry VIII power. That was originally included to ensure that the Bill, on becoming law, worked effectively alongside other legislation that is going through Parliament. Upon further assessment and examination, it seems that this power is not required, and the clause now only empowers amendments to secondary legislation. Given that I spend an awful lot of my time as an Opposition MP shouting about excessive and inappropriate use of Henry VIII powers, it is pleasing to have been able to take at least one of them out of this Bill.

Secondly, and perhaps more significantly, part 2 of the schedule to the Bill was amended by changing the definition of “relevant week” in proposed new section 171ZZ16 of the Social Security Contributions and Benefits Act 1992. The definition of “relevant week” is important because it fixes a point at which it is assessed whether a person is entitled to neonatal care pay. The Bill, on introduction, defined the relevant week as the one immediately prior to the week in which neonatal care started, which is similar to the drafting of equivalent provisions for parental bereavement pay. However, if a parent was already receiving statutory pay—for example, maternity pay—in the relevant week before their child enters neonatal care, their income could end up being lower than usual, negatively impacting their ability to qualify for neonatal care pay.

For those employees who are eligible for other parental pay entitlements such as maternity, paternity or adoption pay, the amendment made in Committee changes the definition of “relevant week” for neonatal care pay, to align it with the definition of “relevant week” in these existing entitlements. Amending the Bill in this way ensures that parents who are already low earners and perhaps only just above the earnings threshold do not miss out on the entitlement to statutory neonatal care pay simply because they are already receiving another type of family-related pay when their minimum earnings for neonatal care pay are assessed. Where an employee would not qualify for any of the other statutory parental pay, the relevant week will continue to be defined as the week immediately before the week in which neonatal care starts.

[Richard Fuller]

I was not in Committee, so I want to ask a particular question, and I am going to sound very smart. In subsection (2)(a) of proposed new section 171ZZ16, “Entitlement”, of part 12ZE of the 1992 Act, there is reference to

“a child who is receiving, or has received, neonatal care”.

The hon. Gentleman has been very clear on the Henry VIII powers and how the entitlement to this pay is aligned with other funding that is provided, but what is the definition of “neonatal care” in practice? It will be defined in regulations, but in practice, is it limited to parents of children who have been in neonatal intensive care units and other hospital facilities, or is there a broader definition?

[Stuart C. McDonald]

The definition in the Bill encompasses neonatal care up to the 28th day of the new baby’s life. Further thought has to be given to whether we limit that to care on a neonatal ward or whether we go further than that, and I hope that we do, because there will, for example, be families who have babies at home but are regularly required to be at hospital appointments or have regular interventions and people visiting to provide care and treatment. We have to think about how we define it in a way that makes it clear but does not exclude people simply because they are not physically in a hospital 24 hours a day. That is a fair point, and further work needs to be done before we come to a final conclusion on exactly how this should look.

In concluding, I want to reiterate that what we are debating here is the traumatic and stressful experiences faced by families with wee ones in neonatal care, and at the heart of this proposed legislation are vulnerable babies who need us to do more to help their parents at a crucial time. We need to ensure as far as we can that those parents have the time and resources to focus on their babies, without the additional burden of worries about money and time off work. There are tens of thousands of families each year counting on us to get this done and get it right, and I ask Members across the House to give this Bill their support.

--- Later in debate ---

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

This is a good measure proposed by a good and thoughtful Member of Parliament, with whom I have worked in the past on other topics. I know him to be a man of considerable integrity and compassion. It is a delight to support him today. I will not, as other colleagues have struggled to, name the three parts of his constituency. [Laughter.] Okay, I will have a go: Cumbernauld, Kilsyth and Kirkintilloch East. [Hon. Members: “Hear, hear!”] Thank you.

We have heard a number of powerful speeches in which Members have talked of their own and their constituents’ experience of neonatal care. I hope it does not upset the House if I take a slightly different angle because, in all such measures, we have to recognise that there is always a surplus of wants and needs of varying degrees of validity—this being one that has high validity—but all of which come with a cost to society. It might be a cost to the taxpayer that makes it harder for us to fund other public services, or it might be a cost to businesses that makes it harder for them to increase employment, increase growth or achieve profitability. This Bill is a good example of balance. As my hon. Friend the Member for Watford (Dean Russell) pointed out, there are aspects of the Bill that will enhance value for businesses by strengthening the ability of families to go back to work after a period that may have been very traumatic and testing for them, but I decided to go to that trusty steed for parliamentarians, the impact assessment.

I do not know whether other Members read impact assessments, but I am seeing many nods around the Chamber, so I hope I am not repeating what they already know. Impact assessments are a valuable tool for us as legislators: they are an essential element of our ability to understand some of the costs and benefits of legislation, and not just financial costs and benefits. Let me gently suggest to my hon. Friend the Minister—I can say it to this Minister, because I know he already agrees with me—that in recent years Governments have got into the habit of not carrying out impact assessments as regularly as they should, which is a concern for us as Members of Parliament. The Minister will be aware of the House of Lords report “Losing Impact”, which demonstrated that decline. A gentle nudge, as part of the Bill, would reinforce the value of these assessments.

Let me now draw the House back to the point made by my hon. Friend the Member for Clwyd South (Simon Baynes) about the costs. The reason the Bill is a demonstration of the good balance between a public policy and the burdens on society—and, in this case, on business—is the widespread impact that it will have. I think my hon. Friend said that one in seven births in the UK would be covered in some way by this definition of neonatal care. That applies both to premature babies, where I think the proportion is approximately two thirds—40,000 out of 60,000—and to at-term babies, where the proportion is about 10%, or about 60,000. The Bill will therefore have an effect on quite a large section of our population.

Interestingly, owing to the subtlety of the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, the Bill recognises that money is not the answer here. There are so many emotions going on, so many feelings and sentiments, but the Bill’s value lies in its recognition that a bit of help at the margins from society can help families at a particular time of need. We are coming together as a society and saying, “We are a better society if we demonstrate our recognition that people are going through a crucial period that can create an enormous amount of stress and pain for certain families, and certainly a tremendous amount of anxiety.” As others have mentioned, people may then feel that they can return to work more rapidly.

It does concern me, however, that it will cost HMRC £5 million to make a one-off change to its IT systems, and I should be grateful if the Minister could provide a detailed assessment of where that £5 million will go. I know he is not responsible for HMRC—that responsibility rests with the Treasury—but, as he is the Minister responsible for what we are discussing, he may wish to understand why that cost is of such great significance. The other costs are ongoing costs to businesses, but there is a separate issue for businesses which relates not just to their financial costs but to their legal liability.

This is a right that will extend to businesses of all sizes, from the very large multinationals all the way down to businesses that may have only one or two employers. Could the Minister clarify whether the right in this instance is only a right on application by the individual concerned to their employer, which I think it is? If so, what has been the assessment of legal risk and liability for an employer should an employee first not claim that right, and then claim it subsequently? There is quite a long period during which an employee can claim the right, and, with the best will in the world, some small businesses do not keep records or information and may miss something. Is there something here on the legal risk? It is really just about dotting the i’s and crossing the t’s, but I draw it to the Minister’s attention because the impact assessment says that

“this leave entitlement will create a minimum standard for an issue which is difficult to navigate for employers and employees.”

A bit of clarification on that point would therefore be helpful.

The impact assessment asks:

“Does implementation go beyond minimum EU requirements?”

Hon. Members—certainly those on the Government side—will not be surprised that the answer given is “yes”. Given that people chose to take back control, and given the strong support for understanding what is in the vital and particular interests of the United Kingdom, the Government are taking the implementation of this measure beyond minimum EU requirements. I am sure that we are all pleased about that.

Earlier, I raised with the Bill’s promoter proposed new part 12ZE and proposed new section 171ZZ16(2)(a), which relates to the definition of neonatal care. I think that he and I agree that regulations may define that, and he made a good point about how neonatal care should not necessarily relate only to time in a neonatal care unit. I think that regulations permit the broader aspect, but it would be helpful for the Minister to clarify that.

My contribution has come from a different angle from other colleagues. Perhaps it has been a passionless, emotionless contribution—[Hon. Members: “Never!”]—uncharacteristically. Nevertheless, when we in this House pass measures, it is important that we bear this in mind, as we are doing today. I think we are all agreed that this measure passes the test of balance, particularly in relation to the Exchequer. I will come back with a different view on a later Bill, but, in closing, I congratulate the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East on this Bill.

--- Later in debate ---

[Kevin Hollinrake]

I do apologise, Mr Deputy Speaker. Several Members referred to the matter in this debate, so I felt I needed to address it, but under your instructions I will move on. Other Government measures, of course, include increasing the national living wage to £10.42, which we shall do very shortly—so we have a number of measures to strengthen workers’ rights rather than reducing them.

As the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East explained, an estimated 100,000 babies in the UK are admitted to neonatal care every year following birth, for a range of medical reasons. As my hon. Friend the Member for Cheadle (Mary Robinson) said, tens of thousands of children are in neonatal care for a week or longer, so the issue clearly affects many, many parents. In 2018, our study identified that 37,400 children were in neonatal care for more than a week after birth, so it is clearly a hugely important issue.

The United Kingdom has generous entitlements and protections designed to support employed parents to balance their family and work commitments and maintain their place in the labour market while raising their children. However, for parents who are in the worrying position of having their newborn admitted to neonatal care, it is clear that the current leave and pay entitlements do not provide adequate support. The Government consulted on the issue, and in March 2020 we committed to introducing a new entitlement to neonatal leave and pay. We are therefore pleased to support the Bill, which will bring that policy into effect.

As the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East set out, the Bill will provide a statutory leave entitlement that protects employees against any detriment. Many considerate employers provide that anyway, but the Bill will ensure that the minority who perhaps do not must do so in future. The Bill gives a day one right to leave to anyone with a child in neonatal care for seven full days of continuous care. It is a right to pay based upon continuity of service.

I will touch on some points made by Members, but I first thank my hon. Friend the Member for Thornbury and Yate (Luke Hall) for his work on this Bill. The issue was first introduced to the House in an Adjournment debate, which was responded to by my hon. Friend the Member for Sutton and Cheam. I know the hon. Member for Pontypridd has campaigned long and hard on this issue, as has the hon. Member for Glasgow East (David Linden), who chairs the all-party parliamentary group on premature and sick babies. We should pay tribute to all those people.

Many Members in this debate and previous debates have spoken about their personal experiences very movingly. I am the father of four children; our first child was in neonatal care, as he was very jaundiced when he was born. That is a massive worry for any parent. It is not just about the jaundice, as there can be other health implications including deafness. For the first child it is even more worrying. All those contributions resonated with me and, I am sure, others in the House.

The hon. Member for Cheadle rightly thanked the charity Bliss and other charities that support families through their difficult time. The hon. Member for Pontypridd also thanked the charity Bliss. She is vice-chair of the all-party parliamentary group on premature and sick babies. I thank her for her work on that. She directed the House’s attention to her personal experience of this issue, as her son was born prematurely. I am grateful that her husband’s employer was flexible.

My hon. Friend the Member for Watford showed huge empathy, as always, for parents who go through that experience. He has much experience with the issue, having been the Minister in the Bill Committee at one point. He emphasised the impact that having a premature or poorly baby has on parents’ mental health. This Bill will massively help ease anxiety. The shadow Minister, the hon. Member for Putney, and the hon. Member for Pontypridd asked how long it has taken to introduce the Bill to the House. Legislation is never that speedy—only in emergency times, perhaps. This legislation was a 2019 manifesto commitment, and in 2020 we conducted a consultation. Clearly, there have been other issues that we have had to deal with over recent years, but we are keen to expedite this legislation and we are pleased to see it passing through its final stages in the House.

The shadow Minister also asked about a single enforcement body. We have this matter under review, but she can see that a tremendous amount of work is happening on other legislation that we are keen to bring forward. I am happy to have a conversation with the hon. Lady at any time about other measures that she would like us to implement. My hon. Friend the Member for North Devon (Selaine Saxby) emphasised how the Bill will benefit fathers and non-birthing partners, as they will have leave to spend time with their child in hospital. She spoke of the benefits to businesses, as they will be able to reclaim the money via HMRC and have less financial burden.

My hon. Friend the Member for North East Bedfordshire (Richard Fuller) raised interesting points, as always. I was pleased to hear him talking about the potential impact on business. It is right that we consider that. We ask businesses to do more and more for employees, quite rightly. Nevertheless, we should always consider the impact. He talked about the impact assessment, which states that the financial impact on business is estimated at around £22 million per annum. That is an insignificant amount, and it is right to consider that, but on balance is the right thing to do.

My hon. Friend questioned why it costs £5 million for HMRC to set up the entitlement. That is a good question. As he said, I do not look after HMRC directly, but I am told that they need to update their IT systems and support employers and payroll providers to do the same. This is a sizeable project that is primarily a matter for HMRC and the Treasury, so he may want to ask a Treasury Minister. He also asked about the assessment of legal risk if employers do not claim at the time but claim later. The regulations will specify how long an employee has to claim entitlements to leave and pay, but the Bill specifies that it cannot be less than 68 weeks after the birth of the child. When it comes to pay, there is a power in the Bill that could require someone to still be employed by the same employer when the claim for pay starts. We acknowledge the point that my hon. Friend makes and it will be considered carefully when the regulations are drafted.

[Richard Fuller]

The Minister has just alerted me to a question, although I do not expect him to have the answer to it right now: there may be a change of employment situation for the individual between the moment they had their child and when they make their claim. Can he ensure that the regulations are flexible enough for the right claim to be made at the right time in the right way? More broadly, where there are statutory rights that individuals should claim, it should be easy for them to do it automatically. I do not know whether other hon. Members have the HMRC app—[Interruption.] No? They should get it; it is a really good idea. We should be moving to the principle that these are automatic things that individuals can control without having to go through a paper process. That is better for the individual, results in a higher proportion of claims and reduces the burdens on business, as well as ensuring they are more likely to be legally compliant.

[Kevin Hollinrake]

I am grateful to my hon. Friend for his comments and I agree we should make the process as easy as possible to ease the burden on businesses. That is certainly something we will look at within the regulations.

We will also look at the definition of neonatal in the regulations, but hospital and outreach care and, tragically—as hon. Members have said—perhaps palliative care would be the key areas. The hon. Member for East Dunbartonshire (Amy Callaghan) told the moving story of her friend Kirsty, whose daughter needed neonatal care. My hon. Friend the Member for Ynys Môn shared her own experiences of a child who spent time in neonatal care.

My hon. Friend the Member for Wantage (David Johnston) mentioned bags of sugar—I think bags of sugar are 2.2 lb each—and spoke about the other measures the Government are taking to improve workers’ rights. My hon. Friend the Member for Clwyd South (Simon Baynes) also paid tribute to the Bliss charity’s campaigning on this issue. My hon. Friend the Member for Sedgefield (Paul Howell), even without notes, spoke about the charity Leo’s, named after a baby who tragically died.

Without further ado, the Government are supporting this Bill in line with our ongoing commitment to support workers and build a high-skilled, high-productivity, high-wage economy. It is good to see support in the House from across the political spectrum for this important measure, as is clear from this debate.

In conclusion, I thank civil servants who worked on the Bill: Rosie Edmonds, Tolu Odeleye, Roxana Bakharia, Abi Bridger, Bryan Halka, Jayne McCann and Cora Sweet, who is in the officials’ box today. I look forward to continuing to work with the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East to support the passage of these measures.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 17th January 2023 Commons Chamber

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

I am afraid the Government are testing the patience of park home owners in my constituency. I have previously asked the Minister whether he can confirm that payments will be made directly to park home owners, rather than park home operators. Can he confirm that point, and that payments will be made as a block sum? Or will they be paid monthly, as per the standard programme?

[Graham Stuart]

I have spoken on a number of occasions with my hon. Friend, and with colleagues on both sides of the House, about making sure these residents are not forgotten. We have worked hard to make sure we have a system that can stand up and deliver. We give the funding to local authorities and, as soon as they have gone through the process and made the necessary verifications for the payment to go out, a single payment will be paid directly into the bank accounts of the people concerned.

Action on Climate Change and Decarbonisation

Richard Fuller Excerpts

Tuesday 5th July 2022 Commons Chamber

[Philip Dunne]

The hon. Lady makes a very important point, and she made a strong contribution to our Committee’s report on the inquiry into the energy efficiency of existing homes. I will comment on that in my remarks, but I broadly agree with her.

It is right that the Government do what they can to align their spending priorities to support all those who are being squeezed, but as the CCC reminded us last week, we are also in a future of living crisis. Large-scale changes in climactic conditions are undeniable, and they have the potential to make parts of the globe uninhabitable, provoking a crisis of barely imaginable severity. So it is entirely appropriate, in Net Zero Week, that the House consider in a little more detail the spending that the lead Department on net zero is proposing in the current financial year to tackle climate change and to address decarbonisation of the economy.

In October 2021, just before the COP26 conference in Glasgow, the Government produced their net zero strategy. This is an ambitious document, ranging widely across all areas of Government. It presents the first wide-ranging plan across Government to build on the initial 10-point plan for the green industrial revolution, which the Prime Minister presented in November 2020. It demonstrates that the Government are in the business of climate mitigation and climate adaptation for the long term. I would argue that there is broad consensus across the parties in the House that this has to be the direction of travel. It also reflects the broad scientific consensus that the planet is under threat from climate change as never before in recorded history, and that our behaviour must change in certain ways if we are to be able to avoid the worst effects. However, my concern is that the Government’s strategy seems, in too many areas, to defer substantive action and to leave real expenditure to a future date—and, dare I say it, possibly to a future electoral cycle. The warning from the Committee on Climate Change last week surely demands that more immediate action is taken to achieve the Government’s priorities and net-zero ambition.

My Committee had an interesting exchange last week with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs. He disagreed with the thrust of the CCC’s conclusions, which he thought did not make sufficient allowance for the potential contribution of technology to mitigation of the climate crisis. That is a perfectly reasonable debating point. Indeed, our Committee has looked at a number of technologies that can play their part in achieving our net-zero ambition. However, I say gently to those on the Treasury Bench, that waiting for the right technology to turn up is not a strategy.

The Committee has been looking at potential solutions to help decarbonise the economy, from tidal power to offshore wind—there is significant emphasis on that in the Government’s strategy—and heat pumps, where there is ambition, but currently a significant gap in delivery. As the Secretary of State for Business, Energy and Industrial Strategy, and the Minister for Energy, Clean Growth and Climate Change will know—we wrote to them about this—the current state of development of negative emissions technologies does not promise a “silver bullet” from carbon capture and storage plants, which by 2050 will snatch carbon from the air and allow us all to go on as before. It is simply not there yet.

The Chancellor’s spending review last autumn gave a breakdown of the Government’s expected expenditure on net-zero measures in each year to 2024-25. In total, the Government plan to spend £25.6 billion on net-zero measures over that period, with £5.5 billion to be spent in the current financial year—subject, of course, to the House’s approval of these spending plans tomorrow. There are concerns about how effective that spending will be, and the Public Accounts Committee has recently been critical about the overall funding of the net-zero transition. The House is right to be concerned about the value for money of such approaches, and I commend the National Audit Office for its detailed and expert analysis of the Government’s plans.

The excellent briefing on the Department’s estimate, produced by the House of Commons Library for this debate, indicates that £21.8 billion—20% of the Department’s budget for this year—is dedicated to reducing UK greenhouse gas emissions to net zero. I do not include in that figure the £11.6 billion for the reduction in energy bills announced as part of the Government’s measures to address the cost of living crisis. Although the Government list that as a measure contributing to the net-zero target, I do not think that short-term energy bill reductions should be treated as a net-zero measure, unless somehow they are linked to fossil fuel reduction measures more directly.

I will focus the remainder of my brief remarks on the points that my Committee made last session in its report on the energy efficiency of existing homes, to which the hon. Member for Brighton, Pavilion (Caroline Lucas) referred. It seems that this is the area where greatest progress can be made towards the net-zero target, and in the shortest time. It was also the area that many witnesses before the Committee identified as a missing component from the recent energy security strategy.

I was pleased that late last month Ministers laid before Parliament the draft legislation needed to implement the fourth energy company obligation scheme. That hugely successful scheme has driven energy efficiency improvements in a great many domestic properties. Such improvements will reduce consumer bills. They will also reduce energy consumption, and thereby emissions from power generation. In the nine years of the scheme’s operation to date, it has supported cavity wall insulation in over 1 million properties. That is impressive, but there are still some 19 million homes that need upgrading to energy performance certificate band C. The cost estimate on which our Committee received evidence averaged £18,000 per property. Our Committee, I am afraid, found that the Government estimate for decarbonising Britain’s housing stock by 2050, at some £65 billion overall, was highly likely to be a significant underestimate. Welcome though the ECO is—last month, the chair of E.ON told the Committee about industry support for the scheme—it represents only a small fraction of what is genuinely necessary to achieve domestic energy efficiency. Will the Minister be in a position to elaborate further on the Department’s plans to drive energy efficiency in existing homes? It is not immediately apparent in the spending plans that the House is examining.

It is unlikely that the average householder will be able to afford a one-off payment of about £20,000 to upgrade their property without some incentive from the centre. I do not want to hark back to the green homes grant voucher scheme, but I hope that the Government have learned the lessons from its introduction. It was a well-meaning scheme that could have kick-started energy efficiency improvement, but it was strangled by red tape and ultimately abandoned in less than a year, having reached only a fraction of the homes that it was expected to improve.

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

I wonder whether my right hon. Friend might address community-led schemes, which were the other thing that the hon. Member for Brighton, Pavilion (Caroline Lucas) mentioned. Is not one reason why costs are so high because the Government’s strategy is focused on individuals making a decision about their house, rather than being a more comprehensive approach that could achieve better economies of scale, certainly in service delivery?

[Philip Dunne]

The Government have been focusing on social housing, which is typically owned in relatively large unit blocks together in a street or an estate. In many cases, such schemes are community energy schemes. For example, I have seen geothermal being introduced across an entire estate in my constituency. The Committee is looking at the prospects for geothermal to provide community-based schemes. There is a big role for that to play, but it is a part of the whole that will not be suitable for every area or every housing type.

The Government are taking steps, but I see them as overly cautious. However, I strongly welcomed the Chancellor’s announcement in the spring statement that removed VAT on energy efficiency measures for domestic homes. I expect that Ministers will be measuring its impact in the expectation that it will be a pathfinder to extensively rolling out similar support—for example, on batteries for domestic energy storage, which, as I understand it, are currently excluded from the scheme.

It is clear that the current energy cost crisis is leading to soaring public interest in energy efficiency measures to cut bills. For a Government willing to invest wisely, that represents a real opportunity for substantial returns not just to the Exchequer, but to the householder through cut bills and to the planet in reducing emissions. I do not expect the public sector to pick up the bill for energy efficiency improvements, but, with the right support, the private sector can be properly incentivised to take the lead.

In closing, I will raise one further issue concerning the Government’s approach to energy efficiency and the funding of measures to improve it. I would like Ministers to undertake a thorough review of the impediments to introducing innovative schemes that encourage home improvements. Just last week, I was alerted to how an innovative domestic solar panel installer’s business model is being constrained by provisions in the Consumer Credit Act 1974 designed to protect both consumers and suppliers from theft or loan default on portable consumer goods, such as cars. It seems problematic that those provisions should also apply to home insulation schemes, which are not portable—or, if they are, they are very expensive to move—and therefore are not a good asset on which to lend subject to those provisions. I strongly ask Ministers to examine such issues with some urgency. It may well be appropriate to do so when the UK Infrastructure Bank Bill comes to this House, to ensure that the bank is not similarly hobbled in making investments in energy efficiency projects. Thanks to the Department, those are one of its core remits.

--- Later in debate ---

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

Thank you, Mr Deputy Speaker. I intend to speak for less than 10 minutes, if that is helpful. I start by thanking the Environmental Audit Committee for securing the debate and for sharing with the Business, Energy and Industrial Strategy Committee, which I chair, the load of scrutinising net zero delivery across Government. I thank the Backbench Business Committee for granting this time on the Order Paper, and I thank the Clerks who support the work of our Select Committees day to day; without them, we would not be able to scrutinise the Government as effectively as we do. I welcome back to the shadow Front Bench my constituency neighbour, my hon. Friend the Member for Bristol East (Kerry McCarthy), in her new role as the shadow Minister for climate change. I look forward to her summing up later.

My focus today is primarily on delivery, because effective delivery ensures value for taxpayers’ money. The Conservative party generally believes that sending policy signals through targets or departmental strategies will be enough to ensure that the market does the heavy lifting as we transition to net zero by 2050. On this subject, it is wrong. Ministers will no doubt point to a long list of targets, strategy documents, incentives—for example, contracts for difference—and research funding allocations, all of which are admirable and welcome. But as the Climate Change Committee concluded last week in its annual report to Parliament, Ministers must think much more about the role of the state in ensuring the delivery of their net zero ambitions, be that from Whitehall or through partnerships of local authorities—and always, in my view, in partnership with the private sector and local communities.

Unfortunately, the Department for Business, Energy and Industrial Strategy is not very good at that. According to the National Audit Office’s review of the delivery of major projects in the Department, 11 of the 15 major projects were deemed to have significant issues that required management attention, or major risks that put the successful delivery of the project in doubt or, at worst, caused it to be deemed unachievable. They include amber warnings for the smart metering implementation programme, costing £20 billion; the social housing decarbonisation fund, costing £4.6 billion; the public sector decarbonisation scheme, costing £1.1 billion; the local authority delivery of the green homes grant, costing £500 million; the heat networks investment project, costing £376 million; and the home upgrade grant for energy efficiency and low-carbon heating work in low-income, off-gas grid homes. There were significant worries about each and every one of those major projects, and, of course, there was a big red warning against the now defunct green homes grant. In fact, the only major programme to receive a green rating from the National Audit Office was the geological disposal facility programme, costing some £12.7 billion, for the long-term management of radioactive waste. For that, I suppose we should be grateful.

In short, there is a delivery problem in Government at a time when the state needs to get more involved in delivery. That is why the Climate Change Committee has called for stronger coordination and delivery, not just in BEIS but through Downing Street and the Cabinet Office, and for contingency planning to be urgently put in place if the current strategies are not delivered as intended. From BEIS, we must see more detailed delivery plans and technology road maps for the delivery of net zero electricity by 2035—something my Committee has started to look at in a new major inquiry—as well for hydrogen production, carbon capture and storage, and industrial decarbonisation.

The No. 1 priority for the Department in relation to our net zero target requirement is, of course, the energy efficiency of our buildings. Buildings account for 20% of emissions in the UK, and the targets the Government have set themselves are very significant in terms of carbon emissions reductions by the mid-2020s. The Government will not hit their net zero target without insulating our buildings and reducing our need for energy, and they will not insulate our buildings without being more directly involved in delivery. This should be a national programme, street by street in every community, co-ordinated nationally in partnership with local councils. That will, of course, cost a lot of money, and public funds should be targeted at households that need it, whether they are on low incomes or require more expensive works to be done because of the nature of their homes.

The current plan from the Government is, unfortunately, to move the same amount of money around again, instead of properly funding a national insulation programme. The money allocated to the failed green homes grant was partly reallocated to the public sector decarbonisation scheme and to the gas boiler replacement voucher scheme. According to the Secretary of State’s evidence to my Committee last week, that is being re-reallocated back to a general energy efficiency programme to be announced in due course.

[Richard Fuller]

I hope the hon. Gentleman will indulge me if I take him back to the street-by-street proposal, which three hon. Members have mentioned. What if an individual does not want that change to their house? What will the public policy be? Will we force people to make the change or will we allow free riders? I wonder what his answers are to those intriguing questions.

[Darren Jones]

There are two points to make. On consumer awareness generally, although there is very significant support for action on climate change, polling shows that most consumers do not realise that that means replacing their gas boiler and insulating their homes. Part of the net zero strategy for Government should be to try to engage with homeowners, tenants and the public about the work that needs to be done, but they have failed to introduce any effective engagement programme with the public. The concern is that when people do not want to do the work, that will cause a lot of anger among the public, and that will undermine our ability to reach net zero.

The use of public funds is also very important, because the disposable income of an average household, once we take away rent or housing costs, is around £9,000 a year. As we have heard, however, we are asking people to spend £10,000 to £20,000 on their home. How on earth can we ask a family with an annual disposable income of £9,000 to spend £20,000, when there is no support from the state or councils and when the banks are not even offering low-cost energy-efficiency financial products to help people who want to make these investments? That is why the Government need to be more involved in thinking about delivery. I suggest having incentives and behaviours that nudge people in the right direction, so that the vast majority of people feel able to do what they want to do and support the national effort to tackle climate change.

--- Later in debate ---

[Chris Skidmore (Kingswood) (Con)]

I thank the Backbench Business Committee for agreeing to the debate. Hon. Members across the parties have signed up to it, including a large number of Select Committee Chairs and chairs of all-party parliamentary groups. I speak as chair of the all-party group on the environment.

Our debate comes at an opportune moment: this is Net Zero Week, and last week was the third anniversary of my signing net zero by 2050 into law as Energy Minister. The UK was the first G7 country to do so. If I had been told at the time that by COP26 in Glasgow, 90% of the world’s surface would have signed up to a net zero target, I simply would not have believed it—but I probably would not have believed that we would have a global pandemic, that Afghanistan would cede to the Taliban or that Russia would invade Ukraine.

Given all the strong headwinds, the day-to-day political events and the crises of the past three years, it is worth reflecting on the longevity of the net zero target and on what needs to be done. We need to be resilient and sustainable to achieve our greatest challenge: a green industrial revolution, with a move from petrochemicals towards a new materials economy. The challenge is massive, but the UK has shown international leadership in signing up to net zero. We were able to pass it in this Chamber because of the Climate Change Act 2008, which was enacted by the then Labour Government with the Conservative party in opposition demonstrating cross-party support for upping the target.

We need to be in a place where our financial commitments are shadowing the commitments to net zero that all political parties have made. We do not have a financial mechanism in place as we do for our carbon budgets, so I think we need to be more innovative in how we look at our budgets. Today we are discussing estimates and the budgetary cycles for our net zero commitments; I will come on to the details in a moment. Until we move to a longer-term cross-party funding solution, however, I think we will struggle, because we will be endlessly discussing the detail rather than the broader strategic approach needed to deliver energy efficiency.

Before I go into the costs in pounds and pence—the billions of pounds that are being spent—I want to make sure that we do not fall into the trap of thinking of net zero as a sunk cost. Actually, every pound spent is an investment. Net zero is a net benefit to our economy, so when we talk about the money invested by the Government, let us not fall into the trap of thinking that somehow it is going down the drain.

[Richard Fuller]

I hate to pick my right hon. Friend up on this point, because he is much more knowledgeable than I am, but how can net zero be a net benefit to the economy unless achieving net zero comes with economic benefits? What would those benefits be?

[Chris Skidmore]

The economic benefit of net zero is a wholesale transformation in our industries, our manufacturing processes and the way we think about our world. The same debates would have been had over the introduction of the car, the introduction of electricity or the introduction of gas boilers to replace log burners in every house. Going through those wholesale transformations has led not only to new jobs, but to growth.

If there was one mistake in signing up to net zero, it was using the term “net zero”. We should have called it net zero growth, because it is not about eco-warriors or extremists committing themselves to decarbonisation; it is a pathway that shows us doubling our energy use by 2050. Committing to net zero is a manageable path that will ensure that our economy continues to grow.

[Richard Fuller]

I do not want to deflect my right hon. Friend too far from the debate, but let me just pin this down. The automobile added to growth because it got people from A to B quicker than a horse and cart. The move to net zero essentially means taking certain off-balance sheet, off-profit and loss statement costs and putting them on the balance sheet or on the P&L. It will therefore act as a brake on growth unless the United Kingdom can expand our revenue opportunities, do things at a lower overall cost or shift behaviour patterns so that we can do things more efficiently. That is the piece that is missing from what has so far been said by my right hon. Friend and by the Committee on Climate Change. Those things are there, but should we not be honest with the public that without them, net zero harms growth rather than enhancing it?

[Chris Skidmore]

My hon. Friend is entirely right about one aspect of this. He mentioned efficiency and productivity. Obviously the UK faces a huge productivity challenge. We are speaking in Parliament and discussing the importance of politicians to making this energy transition, but it is already happening even without us. Private companies across the UK, and indeed the world, are saying that they would want to go to net zero even if there were not a climate crisis, because they recognise the opportunities for productivity, for disruption, for achieving better efficiencies, and for thinking differently. That is what makes net zero so important: the wholesale transformation, into the 21st century, which recognises that we cannot be dependent on unsustainable fossil fuels that will ultimately run out.

The Russian war against Ukraine has demonstrated that we cannot be held hostage by petrostates for the future. We must do something about that, and I think current messaging means that far more people support net zero. This is the year when climate change and net zero went mainstream. I think that all politicians, particularly certain politicians on my side of the Chamber, are at risk of not being on the public side of the argument. They need to understand that this has to happen, not just for the sake of the climate, but for the benefit of our economy.

--- Later in debate ---

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

It is a pleasure to follow my hon. friend and neighbour, the Member for Hitchin and Harpenden (Bim Afolami).

When Parliament agreed in June 2019 to achieve net zero by 2050, it was probably the most expensive, uncosted piece of legislation that has ever been passed by this country. It was a “Star Trek” piece of legislation, asking the country to boldly go where no one had gone before. These estimates start to frame how much the costs will be—costs for taxpayers, costs for individuals, and costs for business. As we look at those things, we need to be pragmatic and not dogmatic about achieving net zero. Too often we talk about the great opportunities of achieving net zero without really being honest about whether they are opportunities or just a shifting of resources, which, when it comes down to economics, has no net benefit at all.

As I was saying earlier, the contribution of net zero to this country’s growth is highly questionable. Essentially, we are taking a cost, which we ignored in the past, and saying that we now need to take it into account and eliminate it as a cost in our production. Growth does not arise from that. Growth arises when we can do the same thing for a lower cost—through productivity improvements. Growth can arise when we increase the revenues, particularly for our own country. That could be achieved through import substitution, or it could be achieved through the creation of new green technologies that we can export to other countries. However, it is not guaranteed just because we have passed a piece of legislation that says, “Let’s all achieve net zero by 2015.” It can be achieved by changing the ways that we do things into ways that are more productive. Finally, it can be achieved by reducing the costs of uncertainty, the most obvious of which when it comes to energy is hedging.

None of those things is guaranteed. As has been said, children and schools are enthusiastic about this, but that is because they are taught about net zero and because, quite naturally, young people have an interest in all things natural, such as the environment, diversity and the planet. Ultimately, though, the costs are what will matter in terms of whether and how we can achieve that ideological and scientifically justifiable goal.

From my point of view, the most important thing for us as a country is that we need to work with the pace of innovation and be cautious about trying to exceed the costs of innovation. That is because when we try to move more quickly for a policy goal, ahead of the way that innovation is enabling us to get there, it means additional cost burdens on households and on taxpayers.

In the estimates, it will be interesting to hear from the Minister about the extent to which he appreciates those goals and the extent to which the Government are trying to increase the pace of innovation. I am talking not just about providing subsidies and support for people to change the way they do things, but about the way the Government are providing incentives for innovation to move at a faster pace.

[Chris Skidmore]

The Government also need to set a number of targets for the production of hydrogen and for the capture of carbon dioxide as part of their 2030 plans and the net zero strategy Build Back Better. Talking to HyNet North West, it is clear that it believes that it can go further, and it wants to call on the Government to double its opportunities to capture carbon dioxide. It wants to increase the current allocation of hydrogen from 1 GW to 2 GW. It would also like to see a doubling of the megatonnes of carbon dioxide captured per annum.

Does my hon. Friend believe that the Government should give HyNet, which says that it has the companies ready to go, the opportunity to double the amount of hydrogen and double the amount of carbon dioxide that it can capture now, because it believes that it can do it? I agree with my hon. Friend that we should follow the innovation.

[Richard Fuller]

I appreciate my hon. Friend’s example of innovation, which could assist.

I wish to focus now on the particular issue of decarbonising home heating. We heard from my right hon. Friend the Member for Ludlow (Philip Dunne) in his opening speech that that is essentially a £20,000 cost for a household when it is combined with insulation. He quite rightly made the point that that is beyond almost every household. I think the hon. Member for Bristol North West (Darren Jones), the Chair of the Select Committee, also noted that it is beyond the expectation of the ability of households to pay for it.

We also know that the economies of scale when it comes to technologies for decarbonising home heat are challenging, because the technology is already established and therefore the production economies of scale are likely to be less than in other areas, and because a large part of the costs are in the service delivery, which is people. People efficiencies are harder to capture than production efficiencies.

Not only is the up-front cost high for everyone, but it means that, without Government action and direction, we would end up with certain households doing it that might not necessarily be those that make most sense for achieving our goal. I say this as a Conservative who believes in free choice, but if we want to achieve that goal, we have to own up to the fact that relying on individual choices by individual households to achieve the decarbonisation of home heating will mean that the overall cost to society of achieving that goal will be substantially greater than going through a process that has at least a very significant part of a community-based initiative.

Again, my right hon. Friend the Member for Ludlow was right to point to the issue of social housing. I am eager to see us move forward; we have a Bill coming and I think there is an opportunity to look at neighbourhood plans, which are about planning for our local communities. Maybe there is an opportunity there to put forward some of the suggestions for community decarbonisation of home heating. I hope that hon. Members who are interested in that will let me know, because I am thinking of tabling an amendment that would make that part of the way that we ask local communities, through the planning process, to start thinking about how they achieve the decarbonising of home heat on a community basis.

I must also urge the Government to come forward and say how they will harness patient capital to solve the economic equation of decarbonising home heat. The equation is that there is a big up-front cost and then the benefits accrue slowly each year, ideally through lower heating bills and certainly through less exposure to the volatility of carbon-based fuels. What are the Government going to do to structure a programme that can attract patient capital to do that? That is the sort of financial profile that pension funds invest in all the time.

Neighbourhood plans, a community-led approach and attracting patient capital into those community programmes seem to me to be one way in the estimates to try to get an approach to net zero, if I may coin a rather cheap phrase, at net profit to the British economy. Achieving net zero at net profit is a way to get a pragmatic answer to the idealistic but uncosted goals that this Parliament put in train in 2019.

[Mr Deputy Speaker (Mr Nigel Evans)]

We now come to the winding-up speeches. I call John Mc Nally.

Energy Security Strategy

Richard Fuller Excerpts

Tuesday 19th April 2022 Commons Chamber

[Kwasi Kwarteng]

I engage with Front-Bench and Back-Bench colleagues all the time and they have lots of brilliant ideas. I do not recognise the hon. Lady’s characterisation of the strategy; I think it does deliver on security, it does deliver on longer-term affordability and it does deliver on the sustainable net zero targets that many in this House agree with.

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

One of the hurdles that families face when they look at putting in a heat pump or investing in home insulation is that they cannot afford the up-front costs to get the long-term gains. The enterprise investment scheme has been extremely successful in encouraging investment in entrepreneurship, which has a somewhat similar cash-flow profile, so will my right hon. Friend have a word with the Chancellor about whether we can implement a net zero enterprise investment scheme to marshal private capital to help with the social objective of achieving net zero?

[Kwasi Kwarteng]

We have a number of such schemes in existence and have trialled a number of others. We are always iterating the way in which we attract private capital to meet net zero; that is what we have been doing for the past three years, since net zero was passed into legislation.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 29th March 2022 Commons Chamber

[Lee Rowley]

I would be very happy to speak to the Department and come back to the hon. Gentleman on that.

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

Investment is attracted to areas that have agile, pro-growth regulatory environments. In this country, we delegate a lot of the implementation of regulation to agencies, but the oversight and assessment of regulatory agency performance is weak. Will the Minister look at ways in which we can improve how we regulate the regulators?

[Lee Rowley]

My hon. Friend highlights an important point about getting the balance right between regulation, and ensuring that the output and productivity of these industries works. I would be happy to talk to him more if that is helpful.

Russian Oil Import Ban

Richard Fuller Excerpts

Wednesday 9th March 2022 Commons Chamber

[Kwasi Kwarteng]

I am happy to speak to colleagues in the Scottish Government about these issues. The hon. Member should remember that while we are banning the import, it is a phasing out. We could have gone down the US route and had a 45-day grace period, but that would have been too disruptive to the supply chain. I would be happy to talk to him and his Scottish Government colleagues about how we can manage the process, and that is exactly why in the statement I also announced the formation of a taskforce to deal with that transition.

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

In regard to the UK’s Russian oil ban, I am convinced of the moral case, although I am sceptical about the efficacy of such a ban in the long term. I welcome my right hon. Friend’s commitment to keeping all options open, but he will be aware that moving faster on the transition to green puts greater costs on households from technology risk. Will he therefore look again at options on insulating homes and Government support for home insulation as part of the package?

Corporate Transparency and Economic Crime

Richard Fuller Excerpts

Monday 28th February 2022 Commons Chamber

[Kwasi Kwarteng]

As I noted, observed and made very clear, we have a spending review settlement of £63 million for Companies House, which is a considerable uplift on previous budgets. There is a commitment to make sure we have the resources to police this new regime.

We speak to colleagues in the devolved Administrations all the time, and I am even happy to discuss these issues with the right hon. Gentleman, should he be so minded.

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

I welcome my right hon. Friend’s statement, because clamping down on illicit international flows of capital is a good thing. Another good thing is open, legitimate global capital markets, where the City of London excels, supporting entrepreneurs in our country. Can my right hon. Friend assure me that, in bringing forward his legislation and the White Paper, he will pay due regard to the positive aspects of international capital, as well as clamping down on the illegal ones?

[Kwasi Kwarteng]

Absolutely. I am not embarrassed at all in agreeing with my hon. Friend that London is a hub of international capital, which is one of the great strengths and glories of our economy. I will do all I can, as I am sure he will appreciate, to make sure we protect that precious heritage.

Economic Crime: Planned Government Bill

Richard Fuller Excerpts

Wednesday 26th January 2022 Commons Chamber

[Paul Scully]

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

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

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

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

[Paul Scully]

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