Strikes (Minimum Service Levels) Bill

Rushanara Ali Excerpts

Committee stage
Monday 30th January 2023 Commons Chamber

[Angela Rayner]

I absolutely agree with my right hon. Friend. That is exactly what this Government are walking into and I think it will exacerbate the situation. The Government have been exacerbating the situation not just by bringing forward this legislation—most of the public can see what they are trying to do—but through the tone with which they have carried out, or failed to carry out, negotiations to avert the industrial action we have seen. Nurses are taking industrial action for the first time ever. Rather than get round the table and sort the mess out that they have created after 13 years in government, the Government try to demonise those very workers. The public do not thank them for that.

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

Does my right hon. Friend agree that this legislation is a diversion from this Government’s incompetence? Last year, they practically cost the taxpayer £55 billion because of the economic mismanagement of their Government under the former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss). Instead of negotiating to protect people, the Government are blaming them for their own incompetence.

[Angela Rayner]

I absolutely agree with my hon. Friend. We cannot be divorced from the fact that members of the public have seen how this Government have conducted themselves—the sleaze and scandals, the outrageous waste of money, and crashing the economy, of course—while at the same telling the key workers who got us through the pandemic that they have to like it or lump it and suffer the consequences of the Government’s incompetent governance. It does gripe with the general public and they do not accept it.

Royal Mail and the Universal Service Obligation

Rushanara Ali Excerpts

Thursday 12th January 2023 Westminster Hall

[Several hon. Members rose—]

[Rushanara Ali (in the Chair)]

Order. It is busy, and we have a number of speakers. I will set an informal time limit of four minutes to get everybody in, but we may have to adjust that. You are already doing so, but please remember to bob up and down after each speaker, so that I can call you.

--- Later in debate ---

[Clive Efford (Eltham) (Lab)]

Ms Ali, after 26 years of being in the House, it is a great pleasure to speak in a debate with you in the Chair for the first time. I congratulate my hon. Friend the Member for Jarrow (Kate Osborne) on securing this important debate.

I will start by doing something I did not expect to do, which is to agree with the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), who gave an excellent speech, including his complimentary comments about the people who work in the postal service. What I find sad about the Government is that whenever they talk about public sector workers, they always talk about them as if they are the enemy, but when I talk to public sector workers, I hear that they are concerned about their conditions making it difficult for them to be able to provide the service they are providing. That is true of the postal workers, when I talk to them about their industrial action and defending the universal service obligation.

The situation we are in right now was predicted at the time of privatisation—incidentally, Royal Mail has been in private hands for 10 years, and here we are with this standard of service. What a disgrace! It was predicted that sooner or later, its management would want to cherry-pick the service. The more profitable bits would be hived off, and the universal service obligation would come under threat.

Post covid, many more people are working from home. I recently led a debate in this Chamber regarding my local train service, because the Government are saying, “We are cutting the local train service because more people are working from home.” Well, if more people are working from home, it follows that more people will be reliant on their post; they will want those important documents that cannot be emailed, which other Members have described, to come through the post. If the Government’s argument for cutting trains applies to the postal service as well, it will be more important to defend the universal service obligation, not less.

I have raised the issue of casualisation in the past. We had casual labour employed to deliver the local post a number of years ago, and we found undelivered bags of mail in the Quaggy river, which runs through my constituency. More importantly, the employers could not identify the workers they had employed to deliver those bags of mail. They had no identification—no way of following up who they were. Those people had rifled through the post, and what they did not have time to open they just dumped in the river—no come back, no follow-up. Is that the sort of casualisation that we want to see—people being hired to deliver the post for Royal Mail because they have a van? It is a service that people rely on and we should not be dumbing it down.

I have one or two questions for the Minister. Royal Mail announced record profits last May of £758 million. It paid out £567 million to shareholders and buy-back schemes. Within six months of International Distributions Services becoming Royal Mail’s parent company, it announced it was losing £1 million a day and was going to cut 10,000 workers. What questions did the Government ask of IDS when it announced it was losing £1 million a day so soon after it had made record profits of £758 million? Given that the losses were within just six months, surely that should have raised some alarm bells within the Government.

What attitude do the Government take to the dumbing down of the workforce, the introduction of the laws of the gig economy—rather than relying on the dedicated workforce that we have—and Royal Mail’s undermining of the workforce? IDS, the parent company, says it is making losses, but apparently boasts to potential investors—this was reported in The Telegraph—that it has a £1.7 million investment war chest to put into the company. How can it be saying one thing to one audience and another to the other?

I know the Minister will sympathise with my final point. Apparently, Mr Daniel Křetínský has links to the gas operator Gazprom. What assurances do we have that we are not supporting Putin’s illegal invasion of Ukraine by the back door? Is there a national security risk from his involvement with Royal Mail?

[Rushanara Ali (in the Chair)]

Order. Can the hon. Member tell the House whether he has informed the Member he mentioned that he would refer to him in this debate?

[Clive Efford]

I am not talking about a Member of the House. Daniel Křetínský is the owner of Vesa Equity Investment.

[Rushanara Ali (in the Chair)]

Fine; it is a similar name.

[Clive Efford]

Finally, will the Minister undertake to defend the universal service obligation and not dumb it down in any way?

Energy Price Cap: Residential Buildings with Communal Heating Systems

Rushanara Ali Excerpts

Wednesday 20th April 2022 Westminster Hall

[Dame Meg Hillier]

The hon. Gentleman is absolutely right. When I get to my asks of the Government, I shall be very clear, as the hon. Gentleman and the hon. Lady have highlighted, that the issue has been raised in the House before—indeed, it has been raised since 2018. I will get on to the timeline, and my question to the Government is this: we know about this, so why is it taking so long to resolve it?

The key issue is quite a simple definitional issue: the energy price cap sets a price limit on domestic supplies of electricity and gas, but not on domestic supplies of heat. So developments of the type that my hon. Friend the Member for Lewisham East (Janet Daby) referred to will often have wood-chip burners or an equivalent in the basement, or some other source of supply, and they provide heat to the home, but it is purchased for the building and then sold on to an individual. Ofgem, as we know, regulates the supply of gas and electricity but not, at present, the supply of heat. That means that while the supply of gas to a heat network is regulated, the supply of heat from the heat network to homes is not, because Ofgem classifies supplying heat to a heat network as a commercial arrangement, not domestic. But let us be clear: the end user of this is someone living in a home—a flat, an apartment—who benefits from the communal heating system, often arranged for good reason, sometimes in an attempt to provide green energy, but it has actually left individual residents, whether they are homeowners or tenants, in the lurch.

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

I want to cite an example. There are many such cases in my constituency. A junior doctor who wrote to me said that her heating price went up by a staggering 400% and every day she has to pay an additional £7 a day. She wrote to me in the winter, in December, because of this policy, and up to half a million people are affected. This is not a difficult thing for the Government to address—to make sure that the regulator can encompass heating in this form so that they are protected—so I hope the Minister will address it and will have some good news for us today.

[Dame Meg Hillier]

My hon. Friend highlights another important point, which has been mentioned by other hon. Members—that of course the individual, the resident, gets a bill that is directly related to their property, to their energy use, so it is very personal, yet that is seen as a commercial supply and clearly it is not; it is about someone living in their home.

One of my constituents, based in the East Wick and Sweetwater development, has their heat supplied via a heating network from East London Energy. From April, this month, East London Energy is increasing its usage fee by 103%, and other Londoners on heat networks are reported to see price increases of over 700% in the worst cases.

The National Housing Federation, which has a lot of these properties in a portfolio of housing associations generally but represents housing associations at a national level, says that around 150,000 of the people affected are housing association residents. These are people on lower income, of course, but we also know that there is a strong correlation particularly between new tenants of social housing and the ability of a household to pay.

Peabody, a large landlord in my constituency—obviously it is also a housing association—has 172 operational heat networks across its whole portfolio, and it says that in general the price of energy has increased by over 300% since April 2021. Peabody has managed to mitigate up to a point by buying multi-year deals from its supplier. However, that is not universal and clearly it does not always help, because it depends at what point in the market the energy is bought. There are 32 of Peabody’s operational heat networks that cover over 100 homes each, so these are quite large scale. Someone could live in a development next door to a person in another development; one could benefit from the energy price cap while the other, by accident of housing allocation, bought a property with a communal heat network, not realising what the consequences would be. We would not have predicted that the energy prices would have increased so much. Nevertheless, that is the problem now.

What has been happening? In 2018 the Competition and Markets Authority conducted a study that concluded that the market should be regulated. Here we are in 2022, with energy bills having gone up in April and going up again in October—considerably. In December of last year the Government, as part of their response to the heat network’s market framework consultation, published proposals to regulate the heat network sector. It is a welcome move but it has taken a long while to get there. I am sure that the Minister is aware how pressingly urgent that is for people, particularly those on low incomes who are crippled by the extra costs they are having to pay.

The Government tell us that they are committed to introducing legislation in this Parliament, so it would be helpful if the Minister could indicate when that might be—he will get my wholehearted support if it is in the Queen’s Speech. He might get a quick win; he can sell it to the business managers in Government as something that he can get through quickly with little opposition, if he does it well. The Government also intend to appoint Ofgem as the heat network’s regulator, and they have already highlighted that Citizens Advice could be the consumer advocacy body. A lot of pieces of the jigsaw are beginning to come together, but we need to know when it is going to happen.

I am not alone in asking for regulation: the Heat Trust has called for it to happen; the Business, Energy and Industrial Strategy Committee, as part of a recent report on decarbonising energy, called for heat networks to be regulated; and crucially, it is in Ofgem’s forward programme for 2022-23. It could stretch out for quite a long time to come, but that is not fast enough for those residents who are sorely affected.

The Government need to make faster progress. In the meantime, there are a couple of things they might consider. I would be interested to know whether the Minister has considered these things, given that the Government have professed their desire to support households and insulate them against energy bills. The National Housing Federation has called on the Government to provide targeted financial support for housing associations—the 150,000 residents I mentioned earlier—that covers the expected rise in energy bills. We have had a rise in April, but there is an expected rise coming in October as well. It would be for those who are not protected by the energy price cap, to create a level playing field for residents of the same landlord who often have very different energy bills. It could be a dedicated hardship fund; there is precedent for that during the covid pandemic, when local authorities managed similar funds. Although the Public Accounts Committee has not looked into it in full, those funds had quite good assurance procedures to ensure that the money was targeted. I think some has even been returned to the Treasury—not for energy, but for other hardship. There are also existing schemes that could be extended.

All individuals have a bill that comes, so there is an easy way of attaching the cost to the household to the household’s name. There must be a creative way that the Government could look at as a stopgap while the more detailed work is done. That also highlights the constant need, which I want to reiterate again, for insulating and retrofitting homes, because some of those heat networks are in quite old buildings and it is a real issue.

All of those solutions we would like to see instantly, of course, but my simple ask for the Minister today is that some of the most vulnerable customers need support right now. Someone like me can manage. It is the people who really cannot, and who are going to have to choose between eating and heating—the extra £7 per day highlighted by my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali)—that are the real concern. I hope the Minister can give us assurance not only that this is being looked at, but that we are going to get action sooner rather than later.

Economic Crime: Planned Government Bill

Rushanara Ali Excerpts

Wednesday 26th January 2022 Commons Chamber

[Paul Scully]

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

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

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

[Paul Scully]

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

Oral Answers to Questions

Rushanara Ali Excerpts

Tuesday 21st July 2020 Commons Chamber

[Amanda Solloway]

I give my assurance that one of the things we are addressing in the roadmap is ensuring that we become a science superpower. Within that, we are levelling up across the whole of the country. I am committed to making the workplace diverse and ensuring that we have a culture that embraces that throughout the whole of country. We will ensure that UK scientists are appreciated and rewarded.

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

What assessment he has made of the effect of winding down the coronavirus job retention scheme on employment levels.

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

The Government have provided unprecedented support to businesses and individuals. We are doubling the number of jobcentre work coaches, spending £32 million to recruit National Careers Service careers advisers and creating hundreds of thousands of new subsidised jobs for young people throughout the UK.

[Rushanara Ali]

I thank the Minister for her answer, but my question is about the job retention scheme and employment levels. Given that some employers will be paid to retain workers who are never going to be made redundant, some of the job retention bonus scheme will be a dead loss. Would it not be a more effective use of public money to use some of these funds to continue to pay the wages of workers hardest hit and to provide some support to some of the 3 million households that have been excluded throughout this crisis from any help from this Government?

[Amanda Solloway]

We are giving a whole range of support to everybody, as the hon. Member will know, through a lot of schemes. In fact, 9.4 million jobs have been supported through the coronavirus job retention scheme. As the scheme winds down, we will be making it more flexible so that people can return to work part time. We are also offering £1,000 to employers for each furloughed employee who is kept on until the end of January 2021.

Draft Employment Rights (Amendment) (EU Exit) Regulations 2019 Draft Employment Rights (Amendment) (Northern Ireland) (EU Exit) Regulations 2019 Draft Employment Rights (Amendment) (EU Exit) (No. 2) Regulations 2018 Draft Employment Rights (Amendment) (Northern Ireland) (EU Exit) (No. 2) Regulations 2018

Rushanara Ali Excerpts

Wednesday 13th February 2019 General Committees

[Kelly Tolhurst]

The statutory instruments that were laid subject to the negative procedure, which was changed by that Committee, relate particularly to Northern Ireland. They were upgraded to be debated, so we have the opportunity to debate all four sets of regulations in Committee today.

Although I hope that the regulations will not need to come into effect, because I hope that we can reach an agreement, in the event of no deal it will be vital that they are enacted. Failure to pass these largely technical regulations would result in uncertainty about workers’ rights and employers’ obligations, which could lead to disruption for business and citizens and an increased risk of litigation, which is in no one’s interest.

Against that background, I will explain one set of provisions about which hon. Members may have concerns. The Employment Rights (Amendment) (EU Exit) Regulations 2019 make changes to the rules on European works councils. Businesses and trade unions in the UK value the opportunity for employee engagement and consultation that the councils provide, and the Government recognise and encourage those benefits. However, withdrawing from the EU without a deal will mean that the UK is no longer covered by EU rules on European works councils.

In that scenario, it would be for the EU to give UK workers the right to be represented on the councils. It is an unavoidable and unfortunate truth that there is no way for the UK unilaterally to ensure that workers in this country retain that right without a deal. There is also no way to replicate the European works council system only in the UK, as their purpose is to enable cross-border engagement. That requires the same rules in all countries, which requires a withdrawal agreement.

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

The assertion that the UK cannot make those provisions is incorrect. In relation to financial services, for instance, the UK is unilaterally making provisions on payment services and hoping that EU member states will do the same. Is the Minister aware that what she is saying is incoherent and inconsistent with what is happening in other policy areas?

Is the Minister not concerned that we are, yet again, in Committee considering statutory instruments without impact assessments, which does not allow adequate scrutiny? I have raised the issue several times. Can she give an assurance that the next time she or her colleagues come before such a Committee, they will provide an impact assessment?

[Kelly Tolhurst]

All the regulations have had de minimis statements applied. Obviously, they have been cleared through the better regulation framework, because if the impact exceeded the de minimis threshold, full impact assessments would have been made. All regulations or SIs that we bring to the House will be looked at by the Department in a deep way to assess the impact.

The hon. Lady’s first point was on other regulations that may be passing through the House at the moment and that are not directly related to the draft instruments. It is clear that we are retaining EU law. The changes we are considering are mostly technical, apart from the changes to the particular area I am referring to at the moment. Rightly, we want to see co-operation and agreement in the future where it is necessary and achievable. That is why the Government are determined to deliver a deal, so that we can have those reciprocal agreements with other member states.

--- Later in debate ---

[Ms Eagle]

Thank you, Mr Evans, and I am more than happy to abide by the obvious correctness of your ruling. I will merely say in passing that the issue is about taking away workers’ employment rights and making them harder to access and easier to exploit, which suggests that the hon. Member for Basildon and Billericay takes a very different view from Labour Members of what represents a good productive workforce. A proper look at the evidence indicates as much.

[Rushanara Ali]

Does my hon. Friend agree that the hon. Member for Basildon and Billericay and a number of his colleagues seem to act in an evidence-free zone, even when the facts speak for themselves regarding the Government’s legislative changes to employment rights and reducing people’s rights? They opposed the national minimum wage when Labour introduced it and a whole series of improved labour standards regulations. Just because he says it, albeit in a well-mannered way, does not make it true. He should face up to the facts, which are that his Government have undermined labour standards. This is another attempt at a race to the bottom and labour market exploitation.

[The Chair]

Order. I know the hon. Member for Wallasey is not going to be tempted too far down the road of responding to that intervention.

--- Later in debate ---

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

It is a pleasure to see you chairing our proceedings this afternoon, Mr Evans. The final comments from my right hon. Friend the Member for Exeter were the perfect introduction to my remarks, given that I am one of those prepared to give the Prime Minister the benefit of the doubt, although not a blank cheque. Like many colleagues—every Opposition Member, I suspect—I signed amendments to the 15 January resolution, requesting greater clarity and assurances on workers’ rights as part of the Government’s deal, which they are trying to conclude and persuade Parliament to accept.

I heard what the Minister said about workers’ rights. We have heard that from the Prime Minister before. I do accept that in this country we enjoy rights above EU norms and that we are not entirely dependent on the EU for bringing forward workers’ rights. However, as every Opposition Member who spoke has clearly articulated, we need to see real evidence that the Government mean what they say on workers’ rights. Until we see that, there will continue to be a great degree of cynicism and scepticism that the Government actually mean it.

The discussions now taking place with trade unions are very welcome, but they are two years too late. Engagement with Labour Front Benchers is two years too late. Having said that, we are running out of time and the Government have the opportunity to demonstrate that they mean what they say.

[Rushanara Ali]

I am grateful to my hon. Friend and neighbouring MP for giving way. Does he agree that many of those enhanced rights were enacted by the last Labour Government, of which he was a part? Some changes, such as articles 13 and 14, enhancing rights against religious discrimination in the workplace, were incorporated by that Labour Government from EU legislation. This Government have shown much less willingness to enhance rights, and the risks remain that they will continue to run down our rights, as has been evidenced in this debate.

[Jim Fitzpatrick]

My hon. Friend demonstrates the degree of concern that the Opposition have about workers’ rights. I was not going to mention it but I am proud to say that, when I was employment Minister, I had the privilege of signing into legislation a number of rights that were not dependent on the EU. My right hon. Friend the Member for Exeter and my hon. Friend the Member for Wallasey were also in positions that enabled them to take legislation through the House that improved standards in this country.

As my right hon. Friend the Member for Exeter said, the Minister is highly regarded in this place, so I say this with no disrespect. Our vote against these SIs demonstrates that the Government need to do more before they get support from as many Labour MPs as they need to get their deal through. Some of us on the Opposition Benches want that commitment and those assurances, so that we can vote without the fears outlined by my right hon. Friend.

--- Later in debate ---

[Kelly Tolhurst]

I am proud that this Government look at and deal with the issues that arise, and then look for ways of resolving them, which is exactly what we are doing with our “Good Work Plan” and the SIs that have already been laid. I understand the concerns of Opposition Members, but I am pleased to be extremely clear in saying that we are committed to maintaining workers’ rights and to going as far as we can. We talked about European Union committees and the work currently going on. We are still involved in those negotiations, are feeding into those negotiations and are helping the EU to formulate recommendations. The legislation that we are bringing forward will ensure that they are protected and will continue to be protected.

[Rushanara Ali]

Will the Minister give way?

[Kelly Tolhurst]

I would like to finish my points and then get on to answering some of the questions I have been asked.

I was pleased that my hon. Friend the Member for Basildon and Billericay made his contribution. He was absolutely right, as was my hon. Friend the Member for Beckenham. I thank them for making their points. The accusations that the Opposition have levelled at our party and our Government this afternoon characterise a party that I did not join and I am not part of; they illustrate something that I do not think is the reality. I am the Minister responsible, and it is not what I think, so there we go. [Interruption.]

Draft Business Contract Terms (Assignment of Receivables) Regulations 2018

Rushanara Ali Excerpts

Monday 10th September 2018 General Committees

[Kelly Tolhurst]

I am grateful for the Committee’s consideration of the regulations, and to the hon. Gentleman for his contribution to this important debate. I will touch on a number of the elements he rightly brought up.

The hon. Gentleman is absolutely correct that there are two types of benefit to invoice financing: a factoring element and a discounting element. He is also right that it is one tool within the overall finance packages from which businesses are able to draw. The measures before us will aid the growth of invoice financing so that where suppliers want to enter into a contract agreement with invoice financing, nullifying the term allows them to do so. However, invoice financing on its own does not solve the problems with accessing finance. It is one tool—the regulations try to widen the scope for businesses to access it, but there are two different elements.

It is true that many small businesses have applied for finance with banks, but many have not. They decided that they would rather stunt their growth than borrow because of the fears around long-term borrowing. We know, however, that they will often be willing to improve their cash flow, which enables them to grow and invest. Without the ability to access invoice financing, many small businesses would not be able to take up the contracts that they want to, which enable them to grow.

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

The Minister will be aware that there is a shortfall in lending to SMEs of £35 billion relative to the pre-crisis period. She referred to just under £1 billion that would be made available through this policy, which is welcome, but is a drop in the ocean compared to the bigger challenges facing SMEs. SMEs have created 2 million jobs since 2010 and power our economy. With the uncertainty of Brexit, life will get worse for SMEs. Will she say something about the broader picture of what the Government will do to address the pre-crisis gap of £35 billion? That is the bigger question that the Government need to address. Lots of work had been done to address the lending issues facing small businesses, but as she knows from her impact assessment, it has not happened to the extent that it needs to.

[Kelly Tolhurst]

The Government are looking at many different ways to increase small businesses’ access to finance. Having run a small business, I know how crucial that is. While this statutory instrument represents just under £1 billion of net present benefits, it is a gain. Because we are making this decision, this element of finance will be available to more SMEs, which can only help. It will also aid the ability of new invoice financers to come into the marketplace, which we welcome, because that brings more jobs and more receipts into the Exchequer.

I have covered the cash-flow issue. Many businesses will not now take an overdraft. Instead they can take out finance invoice and manage their business needs as a small business. It is difficult for small business owners to get access even to what we might regard as small sums, so many suppliers will use this as an ongoing tool. Factoring may suggest that a company has been in financial difficulties. That factoring can now take place on a private and confidential basis, so that customers are not aware of that financing on their faced invoices.

The hon. Member for Sefton Central mentioned the small business commissioner, whom I was pleased to meet for the first time last week. He is doing wonderful work with small businesses in the battle against late payments to ensure that they can receive some of the moneys they are owed. The hon. Gentleman is right to mention the prompt payment code, particularly in relation to Carillion. However, he will know that we are looking to consult widely on late payments. Since I have been in my post I have been particularly concerned about that, so I have been looking at it personally. I look forward to launching that, so that we can assess it and, as a Government, take forward more measures to help small businesses.

We all agree that businesses should be able to access the finance they need, choosing whatever options are most suitable for them. The Government are committed to ensuring that businesses can secure the finance they need to invest and grow. It is not about favouring one type of finance over another. Invoice finance will not be the right choice for every business, but that should be a decision made by individual entrepreneurs, not made for them through onerous terms imposed by their customers. The regulations ensure that restrictive terms will no longer apply to SMEs while protecting freedom of contract for large enterprises. That change will allow thousands of small businesses to access invoice finance for the first time and will reduce the cost for existing and new clients alike. I commend the regulations to the Committee.

Question put and agreed to.

draft Electricity Supplier Obligations (amendment and excluded electricity) (amendment) regulations 2017

Rushanara Ali Excerpts

Monday 16th October 2017 General Committees

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

I want to reiterate the point about the £3,100 per year cost to businesses. I know that there has been an impact assessment, but what assessment has the Department made to establish how much pressure that would put on those businesses? I reiterate the need to support them.

There is a reference in the impact assessment to voluntary organisations and charities. Will the Minister clarify what would be the impact on them? Are they expected to make the payment or would there be any exemptions for them? I may have misunderstood but I would like some clarification on that point.

--- Later in debate ---

[Margot James]

Eligible energy intensive industries can also be small and medium-sized businesses. Very few of the vast array of companies across the country are exempt. The cost of the exemption will be amortised across many million businesses, so the average increase will be small, and the average company can bear that. I will write to the hon. Gentleman with any further information that we have that demonstrates the assessment that we have made of those companies.

I mentioned that we have developed a package of measures to support businesses to improve their energy efficiency. That aims to improve energy usage by at least 20% by 2030. We have also launched an independent review of the cost of energy, which I am sure the shadow Minister is familiar with. That review is led by Professor Dieter Helm and is all about helping companies to reduce their energy usage, which will be good for the environment and for company costs.

[Rushanara Ali]

Has the Department requested feedback from the businesses that will bear the £3,100 per annum cost as part of the impact assessment?

If so, what was their response? On the costs being passed on to charities, to which paragraph 10 in the impact assessment refers, will the Minister explain which charities are affected? What is their size and scale? Are they small, large or medium-sized? What will be the annual cost to charities? Public sector organisations are under a lot of pressure as a result of cuts to funding. Will the Minister update the Committee on whether an impact assessment has been carried out and what feedback has come back from those organisations about the cost burden of the policy? Once again, I support the thrust of the proposal, but we need answers to those questions.

[Margot James]

I am happy to write to the hon. Lady with more details of the assessment that has been carried out and about the size of the charities that have been scrutinised.

The exemption is a key component of our programme to reduce electricity costs for energy intensive industries. It will help to prevent putting those industries at a significant competitive disadvantage. The increase in industrial electricity costs due to funding the CfD can reduce the UK’s attractiveness as an investment location, and increases the risk that companies will invest and move elsewhere.

[Margot James]

I will ask my colleagues to write to the hon. Gentleman with more information. I would not like to mislead the House, and I do not have the information at my fingertips.

[Rushanara Ali]

I am concerned that if the Minister writes to us as she proposes, we will not have an opportunity to amend the regulations, and she will not have the opportunity to take into account the cost to charities. She will be aware that many charities are having to shut down—I know that, because I chair one which, like others, has faced real challenges staying afloat, but has successfully done so. If she is suggesting that those costs should be borne by not-for-profit organisations without support from the Government, that concerns me. Will she assure us that the Government will find a way to mitigate those costs and will find resources to help those charities so they do not have to bear the costs of companies, if the costs are transferred?

[Margot James]

The Government provide advice to charities, voluntary organisations and businesses to help them improve energy efficiency and lower their costs. We are also revitalising the green deal, which they can access to improve energy efficiency. The cost to charities, like the cost to businesses, will be very small—0.2% of their total bill.

[Rushanara Ali]

It is not acceptable to expect a charity to bear the cost, even if it is 0.2%, without any assurance from the Government. Why are we cross-subsidising from the private sector to the not-for-profit sector? The Minister’s answer is not satisfactory. Will she assure the Committee that charities will not have to bear the cost of the Government’s decision to cross-subsidise by getting them to pay for the changes that they are making to help companies?

[Margot James]

I cannot add anything to what I have already said in response to the hon. Lady. I will ask for further clarification on the matter, but at the moment I can only repeat what I have said: it is a very, very small increase, because it is amortised across so many electricity users—not-for-profit organisations and companies. The exemption scheme allows for real-time changes in energy use to be taken into account, and provides greater certainty. We recognise that the exemption will redistribute the cost of funding to other electricity consumers, but we have taken steps to reduce costs on consumer bills, and they are now lower than they might otherwise be. The proposed measures update and improve the regulations, and they bring them into line with the terms of our state aid approval, allowing us to commence the scheme.

Question put.