Arms Export Licences: Israel

Rushanara Ali Excerpts

Tuesday 12th December 2023 Westminster Hall

[Greg Hands]

I thank my hon. Friend for his intervention. Of course, we have set out in the criteria for the licences what the UK Government policy and approach would be. If he has information in that regard, I am sure he will share that with the Foreign Secretary, the Secretary of State for Defence and us at DBT, and we would be happy to have a look at it. We take our obligations in this space exceptionally seriously. As I have shown before, we have acted to change policy in relation to changing circumstances on the ground.

I will move forward to deal with some of the points raised in the debate. I should add that the Foreign, Commonwealth and Development Office advises DBT on the situation in-country and the risks posed with respect to the UK’s export control responsibility.

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

Will the Minister give way?

[Greg Hands]

No; I will respond to the points already raised.

DBT then decides whether to amend, suspend or revoke any relevant licence, or to refuse new applications for licences. The private Member’s Bill proposed by the hon. Member for Coventry South, if I have understood it correctly, seeks to do exactly that, but it can already happen. I would also say in response to the point raised by the hon. Lady that the Foreign Secretary announced the doubling of aid from £30 million to £60 million, which is a tripling overall. My hon. Friend the Member for Bassetlaw (Brendan Clarke-Smith) made a strong defence of Israel’s right to self-defence and our wider co-operation with Israel. He and the hon. Member for Strangford (Jim Shannon) asked me to restate our commitment to Israel, which I do.

The right hon. Member for Hayes and Harlington (John McDonnell) had some praise for Lord Cameron. We have all performed some gymnastics over the years, but it was good to hear that praise from him. I have not personally seen the letter that he referred to, but our officials in the ECJU and the relevant Ministers engage with those groups all the time. In answer to the suggestion made by him and the hon. Member for Bedford (Mohammad Yasin), we continue to monitor the situation in Israel and the Occupied Palestinian Territories very closely, and will take any action that we consider appropriate.

Draft United Kingdom Internal Market Act 2020 (Services Exclusions) Regulations 2023

Rushanara Ali Excerpts

Wednesday 25th October 2023 General Committees

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

It is a pleasure to serve under your chairmanship, Ms Elliott. I want to start by thanking officials for their hard work in trying to create the best possible outcomes from a difficult starting point. Members will be aware of the tortuous route that has led to this moment. On Second Reading, my hon. Friend the Member for Manchester Central (Lucy Powell) called it the “infernal market Bill”, and I am sure she spoke for a lot of people in doing so. However, we are where we are.

Two principles should guide us, and the Minister has referred to them. One is that we must support the various trades and businesses specified in the statutory instrument, from audio-visual to medical and healthcare services and legal and notarial services. This panoply of service-based businesses is essential to the functioning of UK plc. Each, in a way, helps the country to tick over, and they are essential to the growth and prosperity that we desperately need in our economy and have been lacking for too long. The UK internal market is crucial to ensuring equality of opportunity, preventing discrimination and ensuring certainty for business and mutual recognition, no matter where businesses or services are located in the United Kingdom.

Even where some of the trades listed in part 1 of schedule 2 to the UKIM Act might require close regulation and transparency—for example, debt collection and gambling services—those businesses have a right to operate under the law, with proper regard for ethical considerations, and they need to be covered by the wider framework without friction in terms of their operation. We wish to see all the services listed in part 1 free from unnecessary barriers to trade within the United Kingdom.

The second principle is that we support devolution within the framework of the United Kingdom. It was the last Labour Government who accelerated the devolution settlement, which has served us well for over two decades. Devolution is a process, not an event, as the late, much missed Donald Dewar dubbed it, but it must never be a process that leads to the break-up of the United Kingdom. The UK remains stronger for its unity between Scotland, Wales, England and Northern Ireland, and nothing should endanger that. We do not support anything that creates unnecessary barriers to trade within the United Kingdom. As such, we will not oppose the Government on this matter, but we will keep a close eye on the real-world consequences for businesses in the coming months and years.

The Minister said that there has been some dialogue with the devolved Governments but there are outstanding issues. I urge the Government to seek consent from all the devolved authorities, to ensure that we maintain unity and fluidity throughout the UK internal market and that there is proper co-operation and dialogue between our Government and the devolved authorities.

Economic Crime and Corporate Transparency Bill

Rushanara Ali Excerpts

Consideration of Lords message
Wednesday 25th October 2023 Commons Chamber

[Kevin Hollinrake]

The hon. Gentleman raises a very important issue relating to the concerns about de-banking that we have across the economy. The Economic Secretary to the Treasury, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith) is looking at it, as is the Treasury. In future, it is our intention to ensure that when banks close accounts they give a valid reason why, rather than closing them summarily. He is absolutely right to raise the point and I am very happy to engage with him on it, because it affects businesses as well as community groups.

To conclude, I encourage everyone to agree with the Government’s position on these two areas. It is vital that we achieve Royal Assent without delay, so we can proceed to implement the important reforms in the Bill as quickly as possible.

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

It is an honour to speak on the Bill again. I was hoping that we could conclude the proceedings on the Bill as soon as possible and it is disappointing that the Government are yet to make further compromises. The Bill is welcome in principle, but it should not have taken the war on Ukraine to prompt the Government into action. I am grateful to my right hon. Friends the Members for Barking (Dame Margaret Hodge) and for Birmingham, Hodge Hill (Liam Byrne), and to Members across the House for working together to improve the Bill.

Economic crime poses a threat to our country’s national security, our institutions, our economy, and causes serious harm to our citizens and wider society. Conservative estimates place the cost of economic crime at £290 million a year, according to the National Crime Agency, and the failure to stop criminals benefiting from the proceeds of their crime can fund further criminality. That can include offences such as funding organised crime groups, terrorist activity, drug dealing and people trafficking—this is a very serious issue.

Economic crime, as the Minister knows, has many victims. For too long, the Government have turned a blind eye to corrupt and dirty money, allowing Russian illicit finance to flood into Britain. That lets Putin’s cronies stash ill-gotten gains and even recycle the proceeds of crime into luxury properties. That is well documented and has been highlighted by many Members across the House, as well as in Select Committees. According to analysis by Transparency International, properties to the tune of £6.7 billion have been bought through suspicious wealth. Of those, almost a quarter in value were

“bought by Russians accused of corruption or links to the Kremlin.”

Most are held via secretive offshore companies. That drives up property prices for ordinary people in our country. More than two-thirds of English and Welsh properties held by foreign shell companies do not report their true owners. Research by the London School of Economics and Warwick University shows that the Register of Overseas Entities is not fully effective. For 71% of such properties, essential information about their beneficial owners remains missing or publicly inaccessible, despite the register. That means we still cannot know whether sanctioned individuals, money launderers or other corrupt individuals are benefiting from those properties.

We must not sustain economic growth off the back of dirty money. The Government have already delayed the Bill and these actions for too long. In that time, money has been lost, economic crime has become ingrained and the UK economy has once again lost out. Given that the nature and necessity of the Bill has already been discussed at length, I will focus on addressing the two amendments.

During the passage of the Bill, helpful alterations have been made to ensure that it is robust. The Lords amendments before us today seek to address two omissions. We are very disappointed that the Government are not willing to compromise and not willing to heed the wise and expert input of the Lords. That is deeply disappointing, because a great deal could be achieved if the Minister and his Government took note, including from hon. and learned Members on their own side.

[Kevin Hollinrake]

rose—

[Rushanara Ali]

If the Minister is brief, rather than talking the Bill out like he did last time, I will give way.

[Kevin Hollinrake]

I will be very brief. On the question of compromise, the hon. Lady will have noticed that there was no “failure to prevent” offence when the legislation was first tabled, nor was there an identification doctrine. There has been significant compromise on the Government side. Our preference, clearly, is to move forward in that spirit of compromise. We have achieved a great deal with the Bill, which has moved from under 300 pages to 400 pages. I do not think it is right to say that the Government have not compromised.

--- Later in debate ---

[Rushanara Ali]

When the Minister was a Back Bencher, he was a powerful advocate on the very issues we are discussing today. It is a shame he has been muzzled, but I appreciate that he is in a difficult position. I hope we can have some comprise, but clearly he has not managed to persuade senior members of his Government. I ask the Government to once again carefully consider these amendments, so that we can best tackle the problem of fraud and economic crime.

The Minister highlighted all the problems with the amendments, but I want to talk about their strengths. The noble Lord Garnier’s amendment on “failure to prevent” fraud, which exempts small and micro-enterprises, highlights that the criminal law should be uniform and apply to all in a similar way. This is not just a small insignificant amendment, but a change that would significantly alter law enforcement. For context, fraud is the most common crime in the UK, accounting for 41% of all crimes. Introducing a “failure to prevent” offence would help to deter companies from engaging in or facilitating fraud. To fully change corporate behaviour, we must ensure that the offence applies to all companies, regardless of size.

As has been stated on many occasions, since the “failure to prevent” bribery covers all companies, there is no reason why this measure should not also cover businesses of all sizes. It simply creates more discrepancies and confusion for businesses. The size of a business should not determine who is exempt. The Government have touted this exemption as a protection for small businesses against unnecessary red tape, but in reality this carve out deprives small and medium-size enterprises of the defence of having put in place reasonable anti-fraud procedures. Smaller companies will instead be covered only by the fraud offence itself, when large companies would be caught by the lighter “failure to prevent” fraud offence. The introduction of a new “failure to prevent” offence should apply to all, and the corresponding defence of putting in place reasonable defence procedures should be available to all. In effect, through this carve out, the Government are creating an uneven playing field that is biased against smaller companies. The Bill currently leaves large gaps for economic crime to not only persist but flourish, which I know is not the intention of the Minister. The amendment would have gone a long way to addressing those issues. I ask him once again to carefully consider the amendment, rather than reject it.

I want to turn to the amendment from the noble Lord Faulks, on cost protections in civil recovery cases. The amendment gives more discretion to court judges to alter the allocation of legal costs to ensure that extortionate legal fees are not a hindrance to justice. The spirit of the amendment is that it will help to prevent criminals benefiting from the proceeds of crimes, here or around the world. When it comes to cases where enforcement agencies are trying to prosecute high-level, large-scale economic crime, cost orders remain a serious barrier. I know that first-hand from evidence we received when I served on the Treasury Committee, where we conducted two inquiries on these issues. Our enforcement agencies need strong backing if they are to take on fraud, money laundering and other types of economic crime on the largest scale. Right now, the Government should be on the side of our agencies, rather than tying their hands behind their backs. The amendment would ensure that criminals, cronies and kleptocrats are not given cover by leaving the back door open for them to spend their way out of justice. That cannot be right. It would ensure that the size of their bank accounts and assets does not give them a guaranteed get out of jail free card just because they can afford to meet any expenses required to support their case. The Minister knows that this is a problem; he has heard evidence of it. He knows that it is a serious issue that needs to be addressed.

It has been disappointing to observe the Government’s lack of willingness to protect our law enforcement. It seems reasonable that a court could have discretion on how to allocate costs, especially when we know of previous cases, one of which resulted in a family’s seeking costs amounting to a staggering £1.5 million. That represents 40% of the National Crime Agency’s annual budget between 2015 and 2018.

The Bill is almost over the line, and I acknowledge that there have been some improvements, but we could do a great deal more. We have welcomed the Bill and we welcome the Lords amendments, so we are disappointed that the Government continue to fail to support them. We would be in a much better place if there were a compromise. The “failure to prevent” offence is a case in point. For years we have been calling for a replication of the successes of the Bribery Act 2010. Sadly, our capital city has been nicknamed “Londongrad”, and is now considered to be a capital where money laundering and fraud are rife. That means that we must do more to tackle these issues, but the Bill provides only part of the solution. The present circumstances require much more radical action than the timidity that we have witnessed both today and in the last Session.

It is saddening that the Government have missed such an important opportunity. We will continue to hold their feet to the fire, but given the lack of compromise, it will be for the next Government—the next Labour Government, I hope—to pick up the pieces and toughen up our response in order to end the corrosive impact of dirty money in our country.

[Several hon. Members rose—]

Oral Answers to Questions

Rushanara Ali Excerpts

Thursday 14th September 2023 Commons Chamber

[Mr Speaker]

I welcome the shadow Minister to her new position.

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

Thank you, Mr Speaker. Business investment is lower in the UK than in any other G7 country and we rank 27th out of 30 OECD countries, ahead of only Poland, Luxembourg and Greece. More than half a trillion pounds-worth of under-investment by Government and business has left our economy trapped in a growth doom loop. What is the Secretary of State doing to undo this damage?

[Kemi Badenoch]

What the hon. Lady did not say is that business investment is increasing at a faster rate than in other countries. She is right that investment has been lower here, but that is why the Chancellor brought in policies such as full expensing to tackle this issue. She also did not mention the fact that we are the top destination for investment across financial services and many other areas. The UK is actually doing very well when it comes to inward investment, and we will continue to create policies that ensure we stay at the top of the pack.

Economic Crime and Corporate Transparency Bill

Rushanara Ali Excerpts

Consideration of Lords message
Wednesday 13th September 2023 Commons Chamber

In conclusion, I encourage this House to agree with the Government’s position on the outstanding Lords amendments. It is vital that we achieve Royal Assent without delay, so that we can proceed to implement the important reforms in the Bill as quickly as possible.

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

It is a great honour to speak for the Opposition on behalf of myself and my hon. Friend the Member for Aberavon (Stephen Kinnock). I pay tribute to my predecessor, my hon. Friend the Member for Feltham and Heston (Seema Malhotra). I am also grateful to my right hon. Friends the Members for Barking (Dame Margaret Hodge) and for Birmingham, Hodge Hill (Liam Byrne), my hon. Friend the Member for Rhondda (Sir Chris Bryant) and many others across the House who have played such an important role in getting the Bill to this point.

By the Government’s own definition:

“Economic crime refers to a broad category of activity involving money, finance or assets, the purpose of which is to unlawfully obtain a profit or advantage for the perpetrator or cause loss to others.”

It poses a threat to our country’s national security, our institutions and our economy, and causes serious harm to our citizens and society. Failure to act allows criminals to benefit from the proceeds of their crimes and to fund further criminality. In the most extreme cases, we have seen the funding of organised crime groups, terrorist activity, drug dealing and people trafficking.

Economic crime has many victims. For too long, the Government have turned a blind eye to corruption and dirty money, allowing Russian illicit finance to flood into our country and let Putin’s cronies stash ill-gotten gains and even recycle the proceeds of crime into luxury properties across our cities. More than two thirds of English and Welsh properties held by foreign shell companies do not report their true owners. Research by the London School of Economics and Warwick University shows that the register of overseas entities is not fully effective. For 71% of those properties, essential information about their beneficial owners remains missing or publicly inaccessible, despite the register of overseas entities. It is not enough, and we need more action.

After the Grenfell Tower fire disaster, which claimed 72 lives, we have learned more about freeholders hiding behind offshore trusts and labyrinthine company structures to make it impossible for leaseholders to uncover who is responsible for replacing dangerous flammable cladding. Hundreds of thousands of people across the country are living in fear of Grenfell-style fires in unsafe blocks, while some owners hide abroad under company structures that help them to dodge paying for replacement cladding by setting up companies and trusts in overseas territories, lacking transparency. Our Government and our citizens must be able to access information about who owns what, and where responsibility lies.

This legislation is long overdue. As far back as 2018, the then Security Minister, the right hon. Member for Wyre and Preston North (Mr Wallace), was reported to have said that the BBC hit series “McMafia” was

“very close to the truth”

and condemned the

“impunity with which some of these people operate and the brutality of it”.

He promised new powers to crack down on gangsters, criminals and corrupt members of the global elite, with the full force of Government to be used against them. While some steps have been taken, it took Russia’s invasion of Ukraine for the Government to step up and introduce further legislation. The Government have delayed legislation for too long, and in that time money has been lost, economic crime has persisted, and the UK economy has once again lost out. Shamefully, our city—our capital—has taken on the reputation of cleaning up much of the world’s dirty money.

The illegal Russian invasion of Ukraine has merely highlighted a shameful situation that campaigners have long decried. For years the UK has been awash with cash from kleptocrats and oppressive regimes. Transparency International UK has highlighted that £6.7 billion worth of property has been bought with the use of suspicious wealth. I recently visited Ukraine, where I witnessed the terrible impact of the Russian aggression on the civilian population, who are constantly living in fear of airstrikes. It is sickening to think that the people who are responsible for these atrocities today could be enjoying luxury apartments and houses in Belgravia and Mayfair, just a stone’s throw from this House. However, it is not just the Kremlin; as The Times has reported, more than £200 million-worth of UK property is owned by the children of notorious rulers and their henchmen from failed states and autocracies around the world. The cost of economic crime is as much as £350 billion.

There is much to do. Law enforcement must be backed up; we must have the transparency that justice demands, and send a clear signal that there cannot be dark corners where kleptocrats can stash their money. The Bill is a starting point, not an end point. We will be holding the Government’s feet to the fire to ensure that this legislation makes an actual difference. Crucially, tackling economic crime requires support for key institutions such as the National Crime Agency, His Majesty’s Revenue and the Customs Crown Prosecution Service. It is not enough just to introduce legislation; we need enforcement, and we need these institutions to be properly resourced and supported.

We have had the FinCEN files, the Panama papers and the Paradise papers, as well as numerous inquiries by Select Committees—including the Treasury Committee, on which I served for a number of years—but we have seen only incremental change, which is very frustrating for many Members on both sides of the House. Further action is needed to ensure transparency in respect of the ownership of UK property by overseas companies, and on compensation for victims of economic crime. There remain huge gaps. However, we welcome the changes that the Government have made in relation to strategic lawsuits against public participation, which have been worked on by a number of Members.

We support Lords amendments 151B and 151C, and welcome Lord Garnier’s focus on the failure to prevent fraud in non-micro entities. We also support Lords amendment 161B, tabled by Lord Faulks. As he has explained, subsection (2) should state that the court should not normally make an order

“that any costs of proceedings relating to a case to which this section applies”,

and so on. My right hon. Friend the Member for Barking has tabled an amendment to that Lords amendment, which has been accepted, and we accept the Lords amendment on that basis.

This Bill is almost over the line. It has been improved since Ministers first embarked on it. However, there is much more to be done. We hope we can ensure that enforcement takes place once it is on the statute book, so that dirty money can be exposed, illegal assets can be seized, and action is taken against those who are guilty of economic crime. We must not have further delay in pushing for transparency and action in tackling economic crime.

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

This is an important Bill and there is much good in it, but I am afraid that a number of areas require further attention. Now is not the time for discursive speeches, but I regret to say that notwithstanding the good in the Bill, the Government have fallen into error in relation to the two Lords amendments that they seek to reverse.

Let me say first that while a measure to deal with “failure to prevent” offences is a good idea, this measure is too widely drawn. The Minister made a point about the burden of costs on small businesses, but the definition of a medium-sized business is significant: the risk is less to do with the size of a business than with where it does its business, and also its corporate structures. One of the important things we have learned from the United States is that “failure to prevent” offences are not simply about prosecuting, important though that is, but also about changing corporate behaviour. I did not hear a word about that in the Minister’s speech, and I think it might be better to reflect on it again.

Lord Garnier tabled an amendment to compromise on micro-entities; perhaps we should think again about a third tier, consisting of medium-sized as opposed to small entities. That would not be unreasonable, given that many medium-sized entities do significant work abroad where there is some risk, and given that the costs are tax-deductible from profit. I urge the Government to think again, because having done so much good in the Bill, it will be a shame if we weaken its enforcement by widening the net too much.

As for the cost caps, when the Minister said that no prosecutions had been brought yet, he did not add that that was because of their chilling effect. People will not risk bringing prosecutions if their budgets are going to be eroded after the event by costs being awarded against them. Only yesterday, in the House of Commons, I had the pleasure of meeting Bill Browder, who has set out very clearly why that has been the case for a number of years. The Serious Fraud Office tried to bring a prosecution a few years ago and got its fingers burned, and there have been few prosecutions since then. This is about behaviours rather than outcomes.

I have to say—with apologies to the Minister, whom I like and respect—that the Government have taken an unduly restrictive and literalist approach to these matters. It would be far better to find compromises—to think again, go back to the Lords, and see whether there is somewhere between Lord Garnier’s position and that of the Government. Perhaps that third tier of the medium-sized entity is a way around this. The Government are committed to a review of cost caps in 12 months’ time, but, as my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) said the last time this came up, what is there to review? The evidence is there: cost caps are chilling. As the Minister will see if he reads the evidence given to the Cambridge economic crime summit—at which I had the pleasure of speaking last week—it is overwhelmingly clear that not a single one of the experts could understand the Government’s position on this, so I ask them please to think again about it as well.

Non-disclosure Agreements in the Workplace

Rushanara Ali Excerpts

Tuesday 5th September 2023 Westminster Hall

[Several hon. Members rose—]

[Rushanara Ali (in the Chair)]

Order. I suggest that Members stick to a time limit of roughly six minutes so that everyone can speak.

--- Later in debate ---

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

It is a pleasure to see you in the Chair, Ms Ali. I congratulate the right hon. Member for Basingstoke (Dame Maria Miller) on calling this debate; it is an area that she has worked in for a considerable period of time and she articulated very clearly what the problems are and why they need tackling.

There have been a lot of excellent contributions today. My hon. Friend the Member for York Central (Rachael Maskell) brought her vast experience of employee representation to the fore. She talked about having open cultures in the workplace, which is a good way of looking at how this all needs to change. The hon. Member for Oxford West and Abingdon (Layla Moran) made an excellent speech; she made the important point that when someone signs these NDAs, they are not for a month or a year, but for life. As I will go on to explain, that does cause people difficulties later.

The hon. Member for Stoke-on-Trent Central (Jo Gideon) described NDAs as being weaponised, which I thought was a good description. She also said that employment tribunals never tackle the underlying cause of discrimination in the workplace. Of course, tribunals can make recommendations to employers, but we are getting a body of evidence that this is not an effective tool, and that perhaps an enforcement body is needed to look at those issues. My hon. Friend the Member for Birmingham, Yardley (Jess Phillips) brought all of her experience to the fore and gave a truly fantastic speech. She was right to say that this issue is fundamentally about power and its imbalance, which I will come to in my speech.

I do not dispute that there is a need for some non-disclosure agreements. There are sometimes appropriate situations, where they are needed, but I think we all agree that they are far more prevalent than they need to be and are being abused to cover up other issues. In the absence of any data on the numbers of agreements in operation, we are reliant on the legal profession and campaigning groups to give us an idea of what is happening.

Evidence collected by the Women and Equalities Committee and a recent study conducted by the Solicitors Regulation Authority found that there is widespread use of NDAs in the workplace, with little regard given to their appropriateness. In 2019, the Committee said:

“Confidentiality and non-derogatory clauses have become commonly used in agreements reached between employers and employees when settling or closing employment complaints or employment tribunal cases about discrimination or harassment. Indeed, they are commonplace when settling any type of employment dispute.”

The Solicitors Regulation Authority said that

“firms often told us that NDAs are included as standard without consideration of the purpose for including such a clause. For example, a firm commented they were used even ‘when not strictly necessary, where everyone knew the ongoing issue.’”

As a former practising lawyer who has handled thousands of those settlement agreements, I can confirm that NDAs are standard and the attitude of most employers, when challenged on the inclusion of them, is that they are a standard clause and the agreement is presented on a take-it-or-leave-it basis—whether the NDA is necessary or not. The reason they continue is the imbalance in power in the employment relationship. The SRA found that only six of 25 solicitors it interviewed reported even questioning the need for a confidentiality clause. The fact that those drafting them give no particular weight to them is a trend. It is in direct contradiction to the advice given by ACAS, which says that they should only be used where necessary and not as a matter of course.

There are many workers bound by completely unnecessary NDAs at the moment, and when an important industry regulator, such as the Solicitors Regulation Authority, suggests there is a wholesale misuse of a contractual term—one that, as we have heard, can have a profoundly negative impact on workers—there is a good argument to say that the Government need to intervene. It is a good example of where there needs to be more intervention. I echo the question raised by my hon. Friend the Member for York Central, and ask the Minister what work will be done to understand the extent and misuse of these agreements.

It is easy to see why the agreements are so prevalent. The Employment Lawyers Association said clearly that employers are the driving force behind NDAs, as they enable settlement without admission of liability. The employers’ reasoning is simple: why settle publicly when they can wait for a tribunal that might get them off the hook or award a lower amount? That speaks to a wider, more problematic imbalance of power between employers and employees that is endemic in the labour market. In many ways, the proliferation in use of NDAs is both a symptom of, and a tool used to perpetuate, the imbalance of power in the workplace. The Solicitors Regulation Authority—which, let’s be honest, is not at the vanguard of left-wing workers’ rights—described the imbalance of power in the workplace as “fundamental”.

A witness before the Women and Equalities Committee —I think this evidence is very powerful—said:

“There is this very well-founded fear amongst women that, if they talk about having had problems at work, even if their problem is not of their own making, they will be labelled as a troublemaker and they will find difficulties getting new employment.”

Those comments, although made in the context of harassment, could equally apply to a trade union representative or, as the hon. Member for Cheadle (Mary Robinson) said, to a whistleblower or, indeed, to anyone who challenges poor practice in the workplace. That power imbalance affects everyone, across the board.

One of the most troubling findings in the Select Committee report was the culture that NDAs perpetuate in some workplaces. This means that dangerous cultures and management failures continue. In relation to the individual, NDAs starve alleged victims of any form of justice, either through internal processes or through tribunals. For the employees who remain, the alleged perpetrator can be left untouched, presenting a danger to the rest of the workforce.

The Committee concluded:

“We are particularly concerned that some employers are using NDAs to avoid investigating unlawful discrimination…and holding perpetrators to account.”

Let us not forget that employers have a duty of care to all their employees and should be looking to tackle these instances, whether or not the person involved is a “rainmaker”—that was another concerning part of the evidence. The Committee report referred to rainmakers being given a degree of latitude when it came to behavioural standards. Those individuals are worth more to the business, which continues to use NDAs to avoid holding them to account. That sends out a clear message that the safety of employees can be ignored if the accused is valuable enough to the company. One worker told the Committee:

“I was told the abuser was indispensable and I was not.”

I think we can all agree that that is completely unacceptable and should not be happening in any workplace in this country.

According to the Solicitors Regulation Authority, NDAs should not impede or deter someone from co-operating with a criminal investigation, reporting an offence to the police or reporting a breach to a regulator, or prevent proper disclosure about the agreement or circumstances surrounding it to professional advisers, including medical professionals and counsellors, or the making of a disclosure under the Public Interest Disclosure Act. However, although there were no cases of solicitors drafting these agreements to deliberately prevent that, the SRA’s recent investigation found

“a number of common trends or practices which inadvertently might contribute to this happening.”

This leaves signatories feeling uncertain as to whom they can speak to or what they are allowed to say. When combined with the threat of clawback or penalty clauses, many will, unsurprisingly, self-censor to prevent them from losing their settlement. It also brings with it a weight to be carried—a significant burden over the long term.

Clearly, questions must be asked of the response to this situation. What I and other hon. Members have described today is not a recent problem that has emerged from nowhere. The implications of the use of NDAs in the workplace have been known for some time, yet we have seen very little action taken. There was a flurry of interest and promises were made back in 2019, but more than four years later the only changes have been updated ACAS guidance and a warning notice sent out by the Solicitors Regulation Authority, both of which are non-binding and appear to have done little to mitigate the problems.

The Legal Services Board offered a damning indictment in a call for evidence earlier this year. It said that

“notwithstanding the usefulness of the standards and guidance summarised above, the evidence of continuing misuse of NDAs suggests that clearer and more effective expectations for the professional conduct of legal professionals may be required.”

This is rather galling given that the Government promised to

“crack down on misuse of non-disclosure agreements”

all those years ago. Legislation was supposed to be in place to compel employers to write the limitations of the confidentiality clause in plain English, extend legislation to ensure that individuals signing NDAs get independent legal advice, and introduce enforcement measures to deal with NDAs that are not compliant and make them void. The updated ACAS guidance has included these elements, but that is not the same as enforceable legislation. As the right hon. Member for Basingstoke said, if it is right for the higher education sector, it is right for everywhere else as well. I feel that this area has fallen victim to the Government’s inertia on employment rights. As the Minister will have heard today, there is a great deal of willingness to see that changed.

[Rushanara Ali (in the Chair)]

I would be grateful, Minister, if you could leave a little bit of time at the end for Dame Maria Miller to respond to the debate.