Artificial Intelligence: Intellectual Property Rights

Sarah Olney Excerpts

Wednesday 1st February 2023 Westminster Hall

[Mr Laurence Robertson (in the Chair)]

The debate can technically run until 6.04 pm.

[Sarah Olney (Richmond Park) (LD)]

I beg to move,

That this House has considered the potential impact of artificial intelligence on intellectual property rights for creative workers.

It is a pleasure to serve under your chairmanship, Mr Robertson. I am delighted to have secured a debate on such an important and dynamic topic.

The rapid rise of artificial intelligence seemingly knows no bounds. Each week, a new AI tool is launched that drives further change across business, science, the arts and everyday life. When I applied for the debate, no one had heard of ChatGPT, but now it is writing speeches for the Chancellor. AI can undoubtedly bring significant advancements across a variety of fields, from aiding medical diagnoses to predicting environmental disasters. AI is transformative. It goes further and faster than humanly possible. Quite rightly, it has been identified as one of the UK’s key growth industries, and it is vital that Government policy supports digital innovation to position the UK as a world leader in this field.

But just as AI brings many benefits, it also carries significant risk. AI is rapidly permeating the creative sector, creating visual art, prose, music and film at a pace and cost that humans are unable to match. For creatives, the risk of AI-generated material flooding the market gives rise to significant regulatory and ethical challenges, but these can be overcome, or at least mitigated, with well thought out and considered policy that balances the legitimate concerns of creatives with the need to foster digital innovation. I am therefore pleased to bring this debate to Parliament to discuss those challenges on the record and to give a voice to the millions of creative workers across the UK whose careers will be impacted by AI.

We have all seen how quickly AI can redefine industry norms. We must start exploring how we balance our digital and creative future. What is the outlook for our musicians, journalists, visual artists, publishers and performers in an increasingly computer-powered world? With the help of the Chamber Engagement Team, I conducted a survey of over 200 creative workers to hear how AI was impacting their work. Many said that their work, which they own the copyright for, had been used without their consent by AI companies. One respondent, Richard, noted that, in recent weeks, almost 600 of his copyrighted images had been scraped off the internet to train AI platforms, for which he has not received a single penny. Another survey respondent, Henry, said:

“Why should an AI company be able to blatantly copy and capture the ‘essence’ of how I compose music and monetise it, for free?”

This bypassing of copyright has resulted in creatives feeling that AI is undermining their skills and devaluing the creative process, as well as having a detrimental impact on their income.

The respondents to my survey are not alone. A significant volume of active legal battles regarding AI and intellectual property is currently going through the courts. Intellectual property rights and copyright laws are fundamental to the success of the UK’s world-leading creative industries. They not only protect the integrity of original work, but provide a revenue stream to ensure that creatives can make a living from their work. Copyright therefore has both an economic and a moral importance for creatives. But rather than looking to ensure current protections are upheld and enforced, last June, the Intellectual Property Office published proposals for an all-out exception to copyright for text and data mining in order to promote AI, with no opt-out for rights holders.

Under these proposals, companies across the world would be able to use UK creatives’ material to produce clean, new material that they could sell and even obtain copyright for without having to gain permission from the creator or pay for a licence. This would see a huge transfer of value from individual creatives to tech companies and strip creatives of the opportunity to refuse or grant permission for the use of their work by AI companies, placing thousands of jobs within the creative sector under threat.

These proposals to dramatically widen the text and data mining exception have been met with staunch resistance from the creative community, which has emphasised not only their economic harm but the damage that the erosion of intellectual property rights will do to industry as a whole by stunting future creativity. UK Music has referred to the text and data mining exception as “music laundering”. Equity, the trade union, has said that the proposal

“could be a huge assault on the property rights of performers.”

The Publishers Content Forum has said that the proposals would disincentivise further investment in high quality data. The Design and Artists Copyright Society, which represents visual artists, has warned that

“this change will have far-reaching detrimental consequences”.

It has urged the Government to

“look again at how the policy objectives”

of supporting AI-driven technologies

“can be better met without undermining creators’ rights.”

After hearing evidence from some of those groups and many others, the Lords Communications and Digital Committee found that the IPO’s text and data mining proposals were “misguided” and advised that they be dropped “immediately”. I was therefore encouraged yesterday to hear the Minister of State, Department for Digital, Culture, Media and Sport, the hon. Member for Hornchurch and Upminster (Julia Lopez), tell the Digital, Culture, Media and Sport Committee that she was “pretty confident” that the text and data mining exception would not be going ahead as proposed last summer.

As the Intellectual Property Office falls within the remit of the Minister responding to the debate, I am hopeful that he will confirm that the Government will not proceed with the all-out exception to copyright. That news would be welcomed across the creative sector, but a number of questions remain to be answered. Why were the proposals ever signed off? Who asked for them? What issue were they trying to solve? On what basis was it deemed necessary to adopt such a broadbrush approach? What evidence is there that the copyright exception will benefit the UK economy in general and the promotion of AI specifically?

If the proposals are indeed not proceeding as originally intended, how will the Government ensure that stakeholders are thoroughly consulted on alternative proposals to avoid a repeat of last summer? How will Parliament be consulted to ensure that the correct balance between promoting our creative sector and developing AI can be achieved? Both sectors are strategically important to the UK.

Many of the creative workers who responded to my survey expressed a clear desire for robust enforcement of current copyright protections, with any form of open access text and data mining arrangement offered on an opt-in basis for creatives. One respondent, Ian, said:

“If musicians and composers wish to sell their rights to software companies to train their systems then that is their right, but the default should be that it is illegal to use any music without permission, and it must be enforced robustly.”

There does not seem to be a shortage of free data online. Google has this week revealed a new AI tool that is able to generate music from a short textual description using only work that is not protected by copyright. Other survey respondents advocated stricter rules relating to copyright infringement and tougher legislation to improve copyright protection of individuals and companies.

What is the solution? How do we balance the legitimate concerns of rights holders with the need to foster an environment that stimulates innovation in AI? The answer cannot simply be plucked out of thin air. It needs to be worked out in detail after careful discussion between Government, officials and stakeholders from across the full breadth of the creative sector.

The creative industry, like all sectors, will have to adapt to accommodate AI, but the industry is capable of and already making progress with that. Creatives have largely accepted that AI-generated content will have its place in the market, and they are already using AI to enhance their work by driving efficiencies and extending their reach to new markets. It also gives rise to a number of new licensing opportunities to generate value for creatives. However, a solid regulatory framework is essential to protect their rights and ensure that they can take part in value creation and retain control over their work.

My team and I have spoken to a number of bodies across the creative sector, whom I thank for sharing their insights. It is clear that the passion that drives our creative industries is still well and truly alive. That is not to say that the creative industries will not face challenges from technological advancements. AI can operate faster and more efficiently than humans, but it will never be able to draw on the lived experience of humans.

The arts bind us together as a society. They create a collective identity and a shared cultural experience. The connection drawn between reader and author, listener and songwriter, and artist and viewer cannot be replaced by a robot. The value, beauty and joy of the arts is that they reflect the human experience. How sterile and lonely our lives would be if human life were only to be captured on servers and in pixels. How deprived we would be if algorithms served us up only what they thought we wanted to hear and see and we no longer had the opportunity to encounter something completely different.

We must also remember that creators are individuals who often dedicate their lives to their craft. History teaches us that as manual workers are replaced by machines, skills atrophy as demand for them falls. People work hard to develop a skill because they hope to earn a living from it. If the economy no longer demands skills in the creative sector, they will start to decline.

Amy, a composer who responded to my survey, said:

“We train for many years, often at our own expense, to develop and hone our skills in order to share our music. Yet with every week that goes by, we see our music being devalued at every turn. We should be embracing musicians, composers and artists, not trampling over them with the click of a button.”

If creative industries no longer present a viable career option, we risk deterring future entrants to the sector and depriving future generations of creative skills. Another survey respondent, Oliver, noted:

“AI threatens having a creative industry that continues to breed and create new ideas.”

We must embrace, rather than resist, AI developments. Unleashing innovation in AI is central to economic growth, but that objective cannot be pursued at the expense of creatives. We cannot let AI replace the human creators who have built our world-leading creative industry, nor can AI content be produced off the backs of hard-working creatives without their consent. I urge the Minister to confirm that the Government will not proceed with the text and data mining exception proposed last summer, and I would welcome his assurance that all relevant stakeholders will be properly consulted in the development of alternative proposals to balance the needs of our creative and digital economy.

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

It is pleasure to serve under your chairmanship, Mr Robertson. I do not wish to speak for a long time. I congratulate the hon. Member for Richmond Park (Sarah Olney) on her excellent opening speech. She made some powerful and important points.

Last year, I was briefly the Minister for tech and the digital economy, and this issue came within my remit. It sits between the Department for Digital, Culture, Media and Sport and the Minister’s Department, the Department for Business, Energy and Industrial Strategy. I was surprised then, and I am surprised now, by the result of the Government’s consultation. The recommendation that was made is the most extreme of the options considered. It is unsurprising when we read the responses that, on the whole, rights holders complained that the general exemption was a bad thing, and researchers and developers who wanted to do it thought it was a good thing. However, the Government’s response seems to completely dismiss the concerns raised by rights holders and entirely favour the people who wish to exploit this data for their own benefit.

It is quite clear that people are seeking to extract value from data that other people have created in order to create products and tools from which they themselves will benefit commercially. There are already lawsuits in the music industry between musicians who claim someone else has listened to and copied their work and sought to benefit from it commercially. For example, someone could take the back catalogue of every track ever written by the Beatles to learn the techniques and methods. From that, they could create new music composed in the same style, as if the group was at its peak of writing and recording today. They would do so without the consent of the rights holders of that content, and they would make money out of it for themselves.

We can easily see how that kind of passing off could occur at scale, without any licence or exemption, or any benefit for the original creators. We should be concerned about the impact that will have on the creative economy. Many experts believe we are already very close to the day when AI will be capable of creating a new No. 1 download track or even a hit movie.

[Sarah Olney]

The example of the Beatles is an excellent one that we can all relate to. However, the Beatles have already generated a great deal of wealth from that back catalogue. Does the hon. Gentleman not think it would be a greater threat to new and emerging artists, who perhaps have not yet achieved the reach of the Beatles, that their copyright could be breached and their music replicated before they have even had a chance to establish themselves as an artist and as the correct owner of that work?

[Damian Collins]

The hon. Lady is completely right. It has an impact on new artists in two ways. First, they are competing against AI-generated generic music from legendary artists. Secondly, the technology could be used to spot new and emerging artists who may be gaining in reputation and popularity, to quickly copy their style and techniques by analysing the data and text from their works, and creating new works from that. It opens the door to the machines really taking control of the creative process, to the detriment of original artists.

The important point of principle is that when people have created works, they should have the say on how those works are exploited. It is detrimental for another organisation that sees value in that work to take it, mine it, create something from it and claim it as its own. It would be rather like saying, when radio launched, “Well, we don’t really think that we should pay artists any money for playing their music on the radio because the radio creates a new audience for their work; more people are likely to buy records as a consequence, and charging for music would inhibit the growth of radio and radio stations, which have a huge benefit to the country.”

As technology has developed, we have decided to recognise that, with technological advances, we must reward the creators as well. Their work is exploited through those technologies to entertain and engage people, and it has a value too. If we deny them access to that value, we will restrict their work and the future work that will come from it.

I think that it is very important that there is at least an opt-in or an opt-out. The Intellectual Property Office cites other jurisdictions in the world where exemptions exist. In its preamble, it cites the EU as one of them, but what it does not say is that there are pretty fundamental differences between the way that it works in the EU and the proposals for the UK. The IPO has also taken the most extreme option of having very general exemptions.

It is very important to think about the remit of AI, because we can already see how important AI will be to shaping people’s experiences of content. Probably the best live example of AI at work today is in the way that people play video games—the way that they are designed around the user as they play them—or the way that content is recommended to people on social media platforms. That is AI-driven recommendation tools learning from the things that people like and engage with—how long they look at things and what they listen to—and pushing new content at them based on that.

When we think about metaverse and virtual-reality experiences, that will all be based on machine learning and data mining to create new experiences for people. If people doing that mining can benefit from the creativity of others to create those experiences and create those new images, and can do so without any recourse or compensation to the original creators, then that is a big power shift in the creative economy, away from creators to people who drive systems—away from the artist to the data broker and data miner.

As we see the central role that AI will play in shaping people’s experiences in the future, it would be a big mistake, at this point, to completely cut out the creatives and see their data and content exploited by somebody else without any compensation at all. I look forward to hearing what the Minister has to say. This is an urgent issue that requires a new think.

--- Later in debate ---

[Sarah Olney]

Thank you for your excellent chairing of the debate, Mr Robertson, which it is a pleasure to wind up. I am delighted to hear that the Minister has committed, as far as he is able, to withdrawing the current proposals, and that he will consult widely with all parts of our creative industry before putting forward any further proposals. I am sure everyone in this room looks forward to hearing what those are.

This debate has, perhaps, been a reflection of why our creative sector is such a stronghold of the British economy. We have been debating this cutting-edge technology in the ancient surroundings of Westminster Hall. That really points out the context and the source of so much of the uniqueness in British creativity, across all parts of the UK.

I am particularly grateful to the hon. Member for Folkestone and Hythe (Damian Collins) for bringing his expertise and experience in this area, which really contributed excellently to the debate. I am also grateful to the hon. Member for Ochil and South Perthshire (John Nicolson) for his contribution. I found it rather chilling, actually, that the phrase that sprung out at me was “software and other tools”—presumably those other tools are paintbrushes and musical instruments. It highlights that we cannot allow our human input and skills to be swallowed up by AI and, as the hon. Member for Ochil and South Perthshire said, the very derivative nature of what we will be served up as a result.

I thank not only all Members who participated in the debate, but all the industry sector groups who spoke to me and my team about the issues they are experiencing, and particularly the artists, musicians and performers who responded to the survey. It has been incredibly useful to really understand this issue. I am particularly grateful to Megan Harding, in my office, who brought all this together and helped me with the debate.

Question put and agreed to.

Resolved,

That this House has considered the potential impact of artificial intelligence on intellectual property rights for creative workers.

Retained EU Law (Revocation and Reform) Bill

Sarah Olney Excerpts

Report stage
Wednesday 18th January 2023 Commons Chamber

[Mr Davis]

I am sorry, but two wrongs do not make a right. The reason why I did not like the European Union was precisely what my right hon. Friend has just described. We had things almost de facto imposed on us. We went down an SI-type route to do things that I thought were important enough to justify discussion on the Floor of the House. The depletion of debate on the Floor of the House, mostly in the years before he came into the House, was one reason I was a Brexiteer.

We have approached this issue in a different way in other respects. Let us imagine that we are talking about 4,000 pieces of law, regulations or whatever. In truth, probably 90% of that may be clunky and may not work very well, but there is one thing in the Bill that I approve of, which is dealing with the superiority of European law—taking those priorities out of it. That is sensible. Once we have dealt with that, things will broadly work and will not justify a rush at this exercise. Let me explain very briefly what I think the consequences of that will be. I said that it is not democratic, but it will also be inefficient and possibly incompetent. I give the House, as a demonstration of this, what we did on 3 March 2020. You may remember, Mr Deputy Speaker, that that was the day that we gave the Government all sorts of powers under the emergency Coronavirus Act 2020. If we look, we can see how many errors were made in governing the country over the next six months, until we corrected that Act. If we do not bring a Minister to that Dispatch Box to justify what they are doing, the quality of the decision goes down, and that is dangerous when we are talking about measures as important as these.

The right approach is the one that we have actually taken in some areas. For example, we are rewriting the General Data Protection Regulation under a digital Bill. We are rewriting Solvency II and other financial measures under primary legislation, and the same is true for some procurement work. We should be doing similar things with some other software elements and biomedical rules. That is the way to do it: pick off the 10% or the 5% that really matter—that make 100% of the difference—and do that properly, on the Floor of the House, and not by remote control on a ministerial diktat in an SI Committee upstairs.

[Sarah Olney (Richmond Park) (LD)]

It is a pleasure to follow the right hon. Member for Haltemprice and Howden (Mr Davis) in this debate. I rise to speak to amendment 36, tabled in my name and the names of right hon. and hon. Members from across the House, and to pay tribute to the hon. Member for Walthamstow (Stella Creasy) for her hard work in drafting and tabling it.

Britain’s Industrial Future

Sarah Olney Excerpts

Tuesday 15th November 2022 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

The UK economy is simply not working for British people today and is not fit to face the challenges of tomorrow. After years of slow growth, low investment and declining productivity, the Government’s only plan for the economy is to hike taxes and cut public services. We have now lost count of the number of Conservative Chancellors who have pledged to kick-start the economy, but none of their grand ideas lasts long enough to have any tangible or long-lasting benefit. The latest iteration, the growth plan, barely survived a month but still managed to crash the economy. Meanwhile, the Government have allowed existing industries to fall into decline while failing to support the development of future technologies and to seize the opportunities of a green transition.

We are failing to keep up with our international partners: the UK is the only country in the G7 to have an economy that is smaller now than before the pandemic. Our trading position is weaker and industries across the board are facing chronic labour and skills shortages, but the Conservative Government simply have no plan. The Liberal Democrats believe that we need an innovation-led economy with a new ambitious industrial strategy that really works for everyone—one that provides well-paid jobs and opportunities at work; ensures that business serves the common good; and sustains strong communities and thriving places. None of that can be achieved without a proper plan that tackles the issues at the heart of poor economic performance.

Chronic workforce and skills shortages are a major barrier to economic growth. Time and again, workforce constraints are at the top of the list of concerns when I speak to businesses, from local high street firms to large City corporations. Without a skilled and active workforce, an economic plan is not worth the paper it is written on. We need to empower our workforce with the skills and protections that they need to support economic growth. The Liberal Democrats would invest in skills and support lifelong opportunities for retraining to allow workers to adjust to the fast-moving economy of the 21st century. We would also implement a national skills strategy for key sectors to help match skills and people.

We cannot pretend that Brexit has played no part in exacerbating current workforce shortages; thousands of vacancies across our healthcare, manufacturing and hospitality sectors could be filled by foreign nationals, but our current visa system is not fit for purpose. Potential workers face a frustratingly long and costly application process that turns many away. The Liberal Democrats propose to scrap the arbitrary salary thresholds in the current visa system to meet workforce demands in the short term. That would bring in vital labour to support British industry and sustain our economy. Yesterday, hundreds of businesses from the hospitality sector took to Parliament Square to demand action from the Government after warning that one third face closure in the coming year.

Any plan for our economy must focus on reducing barriers to trade, which is vital for economic growth. The Government have long promised to slash red tape and open UK businesses to international markets, but since Brexit, small and medium-sized enterprises that export to the EU have faced an onslaught of red tape and many have simply given up trying.

The Conservative’s flagship trade deal, the free trade agreement with Australia, will contribute just 0.08% to GDP, which is hardly a panacea to our trading woes. Yesterday, the former Environment Secretary, the right hon. Member for Camborne and Redruth (George Eustice), admitted that the deal is woefully inadequate. In his words,

“the best clause…is that final clause”,—[Official Report, 14 November 2022; Vol. 722, c. 425.]

because it allows the UK Government to terminate or renegotiate the deal in the first six months. The UK gave away far too much for far too little in return and caused irreparable damage to British farming—and for what? Saving face and meeting an arbitrary deadline of concluding negotiations before a G7 meeting is just another example of the Conservatives’ short-sighted and reckless approach to the economy.

The Government seem intent on making it increasingly difficult to trade with our largest trading partner of more than 450 million people across the EU. The Liberal Democrats would focus on rebuilding our trading relationship with our European neighbours to unlock the potential of British business.

Net zero could bring a wealth of economic benefits to the UK. We have a real opportunity to be a leader in green technology, but the Conservative Government are showing a complete lack of ambition. The Liberal Democrats would implement a bold green agenda to deliver on our climate commitments while supporting businesses to adapt and thrive. From new targets for zero carbon flight to new industrial strategies for hydrogen and power cabling, our plan proposes a major restructuring of the UK’s economic model. Meanwhile, the Government’s previous 10-point plan for a green industrial revolution has seemingly been kicked into the long grass, along with a whole host of manifesto commitments.

I urge the Minister to act on the concerns raised here today, and to implement a new industrial strategy that is aligned to our net zero goals. Only with a real plan for our economy can the UK turn its fortunes around and really unlock our potential for growth.

Professional Qualifications Bill [Lords]

Sarah Olney Excerpts

Report stage
Monday 14th March 2022 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

I do not intend to detain the House for long, but it is a pleasure to rise to speak in support of Plaid Cymru’s new clause 5, which would require the Secretary of State or the Lord Chancellor to obtain the consent of the devolved Governments when acting in areas of devolved competence. Although I will not be seeking to divide the House on that, I hope that the new clause, alongside the repeated interventions of the devolved nations, will encourage the Government to reconsider their approach.

In its current form, the Bill represents an example of the Government legislating in devolved matters without having first secured the consent of Wales’s Parliament or, indeed, consent from any of the devolved nations. It betrays a blatant disregard for the constitutional framework of the UK, and further obscures the regulatory regime for workers, businesses and professional qualification providers.

Hon. Members should not mistake these concerns as mere trivial matters; they speak to the growing chasm of distrust between the Governments of the British Isles. Indeed, just last week, the Welsh Labour Education Minister accused the UK Government of acting in a manner that breaches the Sewel convention. Let us consider, for a moment, the implications of that statement: a Government Minister from one nation is accusing the Government of another of tearing up the constitutional convention that has been so instrumental in ensuring good governance and positive intergovernmental collaboration across our isles. That is what this Government and this Prime Minister are doing to the UK and that is why this Bill needs to be amended to respect the devolution settlement.

As I said, I will not be pushing our new clause to a vote tonight, but we will be supporting amendment 3 if it is put to a Division. I hope that Opposition Members as well as Government Members will acknowledge the seriousness of these constitutional concerns and accept the amendment as a first step towards government by consent, rather than imposition.

[Sarah Olney (Richmond Park) (LD)]

I rise to speak to amendment 3, which stands in the name of my hon. Friend the Member for North East Fife (Wendy Chamberlain). I am sorry to say that she is ill with covid, so I am here in her place.

The Bill allows UK Government Ministers to legislate on areas that would normally be under the authority of devolved Administrations. As it stands, there is no protection in place to allow the Scottish or Welsh Governments to revoke or amend these measures if needed. The entire reason we have devolved powers is to allow Ministers to make bespoke decisions that better reflect the needs of the local people and local economies.

The Minister’s statement that the purpose of the Bill is to ensure qualified professionals within the UK can work anywhere within the four nations clearly undermines the devolution settlement. We saw that with the United Kingdom Internal Market Act 2020 and we see it again here. Without the appropriate safeguards, the Bill further erodes both the powers we have in place in Scotland and in Wales, and the trust between our Governments. On many issues, the UK has subsumed EU law into UK law with a view to gradual divergence over time. We are concerned that this Bill takes a clean slate approach and may put the UK at a disadvantage when trying to fill vacancies at a time of acute shortages in some sectors. The Bill provides inadequate detail regarding its full intentions and scope, leaving provision open to interpretation. The Government must commit to ensuring the highest standards of professional qualifications are maintained and are not bartered away as part of any trade agreement.

Clause 7 would mandate the Secretary of State to set up an assistance centre for people looking to enter a qualified profession in the UK or people with UK qualifications looking to practise overseas. Regulators would be required to provide information to the assistance centre to allow it to carry out its functions. We welcome the provisions relating to a centre to provide advice on and assistance with entry requirements for those seeking to practise a profession in the UK, or those with UK qualifications seeking to practise overseas. The obligation to make arrangements for the assistance centre lies with the Secretary of State. Amendment 3, which we will be pressing to a vote, would require the Secretary of State to ensure that there are representatives for each of the devolved nations on the centre’s board.

The Law Society of Scotland has urged the Government to seek the consent of the devolved Administrations when setting up the assistance centre. We therefore think it imperative—this reflects the acknowledgement of the role of the devolved Administrations in earlier clauses in the Bill—for them to be consulted on the arrangements for its creation, and to be represented on its board.

[Owen Thompson (Midlothian) (SNP)]

Thank you for calling me, Mr Deputy Speaker—rather more swiftly than I expected.

It seems as though, week in week out, Members on this side of the Chamber in particular are shouting into the wind. Whatever legislation is put before us, we suggest amendments in good faith, only to have to rinse and repeat our previous arguments when the legislation returns to us with none of our proposed changes taken into account. We are therefore used to this Government doing hee-haw, but in this case they have actually made the Bill worse than it was before, disrespecting the devolved Governments and undermining the constitution over something that should not have been controversial.

The Scottish National party fully welcomes the principles behind the Bill, which will facilitate cross-border recognition and regulation of professional qualifications. Building an integrated system of transfer of professionals from abroad is particularly significant to smaller countries such as Scotland which seek to attract the skills and expertise of their neighbours. For example, the world-leading Scottish food and drink industry, and indeed that of the whole UK, has traditionally relied heavily on the services of vets qualified in the EU. Those vets were then able to bring their skills to Scotland under the terms of the EU’s rules on mutual recognition of professional qualifications. We are all for the idea of recognising consistency in qualifications; it is not controversial. However, the Government have managed to make it controversial: in fact, they have managed to create a constitutional stooshie out of thin air.

When I last spoke on the Bill, I raised concerns about its impact on devolution. The whole Bill obviously applies to Scotland, although certain professions and qualifications are reserved to this place.

Economic Crime (Transparency and Enforcement) Bill

Sarah Olney Excerpts

Committee stage
Monday 7th March 2022 Commons Chamber

[Layla Moran]

I rise to speak to the amendments in my name: new clause 5 and, in particular, amendment 4, which is supported by the cross-party group that has been trying to get our ducks in a row. The Bill is welcome and timely. It is long overdue and we are all trying to pull in the same direction, but it is a bit of a Swiss cheese Bill. Much in the Bill is good, but there are a lot of loopholes, which we are seeking to close.

I will single out new clause 29 in the name of the right hon. Member for Haltemprice and Howden (Mr Davis) and the amendments relating to clause 31 that were tabled by the hon. Member for Rhondda (Chris Bryant). I heard what the Minister said about “Economic Crime Bill 2”. It sounds like the promise of the good sequel after the film—it is coming and it will be even bigger and better, with bigger stars than the first one—but we all know how sometimes part 2 can be a flop. I sincerely hope that part 2 will come sooner. I remember when the Minister was on his feet claiming that this Bill would wait until the next Session, and here we are debating it now. I welcome that. I wonder whether we might want to try to do that with part 2 and part 3 and get the sequels out as quickly as possible because each one will be pretty meaty and need time.

New clause 5 asks the Government to release the names of those who in the last year have been lobbying the Government against these measures. That is important because it helps on the SLAPPs amendments, which I wholly support. These people need to now be named and shamed. It is not enough to name the oligarchs; we need to name the PR companies and the lawyers—those who seek to water down or create loopholes in this legislation. I tabled a parliamentary question to the Foreign, Commonwealth and Development Office—it was passed to the Home Office—asking it to provide and publish the names of those who had been doing that. The answer was:

“The information requested could not be obtained without disproportionate cost.”

Forget about the cost—do the Government have the list? If they do, those people deserve to be named and shamed, like in the speech by the hon. Member for Isle of Wight (Bob Seely) the other day. I hope that “Economic Crime Bill 2” will have all the necessary powers to clamp down on that activity.

Amendment 4, like amendment 26, looks small. It is very small; it just deletes a line in clause 18. It relates to the bit of the Bill that talks about exemptions. There are three ways in which an individual can become exempt if the Secretary of State wants them to be. Two of them are reasonable. They are

“in the interests of national security”

and

“for the purposes of preventing or detecting serious crime.”

Absolutely fine. Some people think we should just get rid of them all, but I can live with those. However, the third, in clause 18(1)(b), says that the Government can exempt an individual if satisfied that it is necessary to do so

“in the interests of the economic wellbeing of the United Kingdom”.

These are high net worth individuals. Many of them own companies that potentially employ thousands of people in this country. I do not understand why the Government want to give themselves that headache. Why do they want these enabling lawyers to look at clause 18(1)(b) and say, “I’m going to lobby Government to exempt me under 18(1)(b)”?

It is not just a loophole. People keep talking about horses bolting after the gates have been closed. This is hitching a coach to the horse, putting the oligarchs in it with their lawyers and allowing them to drive their way through the Bill. It makes no sense at sall.

[Sarah Olney (Richmond Park) (LD)]

My hon. Friend is making an excellent speech. On the point about horses bolting, I want to mention my new clause 13 on freeports. That issue has come up a number of times in the past few weeks. We have been talking about the National Insurance Contributions Bill, which is the enabling Bill for freeports. It is really important that we include the list of companies that are in freeports; I made that point in the debate on that Bill last week. Currently, someone can hide the fact that they are using a freeport, and there is so much concern that this is an open invitation for money laundering in the UK. While we are still discussing this Bill, before it is passed and before this particular horse has bolted, will the Minister reconsider supporting the amendment that the Lib Dems tabled in the Lords to that particular piece of legislation—

[The Chairman of Ways and Means (Dame Eleanor Laing)]

Order. That was a very long intervention and it was too confusing. Was the hon. Lady speaking about something completely different from that which the hon. Member for Oxford West and Abingdon (Layla Moran) was discussing?

[Sarah Olney]

I was talking about my new clause 13—

[The Chairman]

It is not the hon. Lady’s new clause; it is down as the Liberal Democrats’ new clause. Is it the official Liberal Democrat—

[Sarah Olney]

I beg your pardon, Dame Eleanor. The new clause is in my name, but I apologise for taking too long on my intervention.

[The Chairman]

We have to be careful not to allow things to be confused at Committee stage. Everyone gets their turn.

Oil and Gas Producers: Windfall Tax

Sarah Olney Excerpts

Tuesday 1st February 2022 Commons Chamber

[Lee Rowley]

I am very glad that the hon. Gentleman raises that point. I am not sure whether he was present at the end of the last debate, but it was made clear from this Dispatch Box that that is not the case in the slightest. This Government will continue to pursue the recovery of as much of that money as possible. The Labour party can keep repeating the point if it wants, but it would not be fair, accurate or real to do so.

To come back to the Opposition motion, if it is not all about the money, the motivation has to be different. If that is the case, the Labour party should just be clear. The right hon. Member for Doncaster North knows that policy actions have consequences and decisions have reactions. He has put forward a specific proposal for a windfall tax, so he should be held to account for it.

The implications of a windfall tax structured in such a way would have to fall somewhere: on consumers, on investors or on the activity itself. I assume that the Labour party does not propose to go after consumers or to reject the idea of oil and gas as a commodity, so ultimately it will have to be the investors who shoulder the burden. If so, the right hon. Gentleman should be clear that he is expecting less of a return for pension funds and therefore for pensioners and the many hundreds of thousands of people out there who are reliant on the performance of the stock market to ensure that they can be supported in old age.

Perhaps the proposal is just a blunt tool to reduce production in general. If so, the right hon. Gentleman should just say so. That certainly seems to be the inference to draw from his statements today, and from his questions over recent weeks to other Government Front Benchers. It does not sound as if he is simply looking for a source of money to fund others; it does not sound as if he is seeking to maximise economic return; it sounds as if he is deliberately trying to penalise activity on the UK continental shelf and, if possible, to reduce it. If that is the case, he should say so out loud, because then will we know.

[Sarah Olney (Richmond Park) (LD)]

Will the Minister give way?

[Lee Rowley]

I will make progress.

The Labour party’s position is to immediately and artificially retard the amount of oil and gas that we produce domestically through penalty taxation, not necessarily because a windfall is needed, for aims that should or should not be laudable, but because reducing production is the ultimate objective. If the Labour party wants to reject the notion that getting to net zero requires a transition period, let it be clear about that. Let it highlight the fantastical world that Labour Members live in, shorn of the reality that we are on a journey over a generation.

Moreover, the Labour party should be clear that its objective over the long term—no doubt as it comes back for more and more money—is to reduce our energy security. Taxing out of existence the oil and gas industry, which we need to conclude the transition, will make us more dependent on other countries whose actions may have caused some of the things that the Labour motion seeks to deal with—greater foreign imports and fewer jobs in north-east Scotland and in supply chains all the way through constituencies such as mine, North East Derbyshire, or the shadow Secretary of State’s constituency of Doncaster North. The Labour party has no clear plan for energy to ensure in a measured and balanced way that we move from hydrocarbons to renewables and tread more lightly on the earth. That is what the Labour party is about these days: extinction, not transition.

We are used on Opposition day debates like this, on motions that do not add up, and this one has it in spades—incoherent, confused and unclear. Perhaps some of the hon. Members who are about to speak might be able to clear up the ultimate objective in the way that the right hon. Member for Doncaster North failed to do. For a party that talks so much about good government, Labour has demonstrated this afternoon that it is only interested in good headlines.

--- Later in debate ---

[Sarah Olney (Richmond Park) (LD)]

It is a real pleasure to participate in this debate, particularly because we have heard so much from the Tories about this being the issue that their constituents would like us to talk about instead of cakes and parties. It is great to see so many of them here to discuss it! [Laughter.]

The Liberal Democrats support Labour in its call for a one-off windfall tax. I regret that the Minister would not allow me to intervene earlier, because I wanted to ask him what exactly is his understanding of a windfall tax, as he did not seem to be very clear on that point. We are clear that the profits being made by the oil and gas sector over the past few months are related to the market price of gas going up way beyond typical levels, and that that is very much as a result of increased demand. We expect it to be very much a medium-term rise that will not last very long. That is why we support the calls for this one-off, targeted tax in order to lessen the burden on those who will feel the impact. We have heard many great contributions, particularly from the Labour Benches, about the impact on ordinary people who will have to pay. It is quite right that we try to equalise that impact. We are proposing not only to double the warm home discount payments from £150 to £300 but to extend it to all those on universal credit and pension credit, and to double the winter fuel allowance to give up to £600 a year to 11.3 million elderly pensioners to help them with their heating bills.

There is no doubt—I think there has been some unanimity on this—that we are where we are with oil and gas, but we really need to move towards renewable forms of energy, with a long-term plan in order to make that happen. The Government keep talking about their plans for net zero but we do not see those plans. We do not know what the Government are planning to do to move us from our dependence on oil and gas towards our net zero future. I commend the hon. Member for Aberdeen South (Stephen Flynn) for everything he said about the impact on his community. I think he agrees with us and with many other Members that we need a plan for that transition.

[David Duguid]

On the UK Government’s plans for transition, may I politely refer the hon. Member, just as a starting point, to the North sea transition deal, the Prime Minister’s 10-point plan for a green industrial revolution, and the energy White Paper?

--- Later in debate ---

[Sarah Olney]

I have read the Prime Minister’s 10-point plan for a green industrial revolution, and it gives no detail as to how we are actually going to transition from a dependence on oil and gas towards net zero.

One thing we could be doing much more is reducing the demand for domestic electricity and gas. We have seen that come down over the past 10 years, but we could do much more if we could commit to a programme of proper insulation of homes. Since the dismal failure of the green homes grant, we have not seen enough action from the Government on how we are going to do that. We are not seeing action on standards for buildings to make them net zero in future. There is so much more that the Government could be doing to insulate our homes properly, particularly for the poorest.

The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) talked about business and the importance of the oil and gas industry, but he needs to remember—I am addressing an empty seat, since he is no longer in his place—that there are many other energy-intensive businesses across the UK that are facing a double whammy this April. They face not only increased energy costs—and they already find themselves uncompetitive compared with EU businesses on energy costs, which tend to be higher in this country than they are abroad—but the planned increase in national insurance, which will hit employers as much as it will hit employees. We have been calling for the Government to scrap that planned tax rise. It is the wrong tax rise at the wrong time.

The Government need to look at the cost of living crisis in the round. They need to look at energy costs, tax rises, and at all the other costs being imposed on British consumers. One Member—I am afraid I forget which—made the point that the more people have to pay for basics, the less they have in their pockets for discretionary spending on our local high streets, and to help our economy grow. The Government need a much better plan for the cost of living crisis, and we are seeing woefully little of that.

Advanced Research and Invention Agency Bill

Sarah Olney Excerpts

Consideration of Lords amendments
Monday 31st January 2022 Commons Chamber

[Stephen Flynn]

In the greatest traditions of this House, I intend to be brief, which I am sure will be to everyone’s pleasure.

The biggest issue before us is, of course, Lords amendment 1. I listened closely to what the Minister had to say, but I remain to be convinced. He has paid deference to the clause, which says, if I recall correctly, that ARIA “must have regard to”, while the amendment simply seeks to ensure that ARIA “must”. That is a strong difference to which the Minister should give cognisance, particularly given that, in effect, we could be talking about the crown jewels. We are all hopeful that ARIA will be an impressive institution that will reap rewards for all of us right across the four nations of this United Kingdom—while we remain within it, of course. I find it a little contemptuous that the Government do not want to be on that side of the argument.

The topic of equity has been raised. There are some very famous examples. For instance, though this is slightly different, the US Government provided a significant amount of money in a loan to Tesla. That money was subsequently paid back a number of years ago, prior to Tesla becoming one of the world’s wealthiest companies and, indeed, to Elon Musk becoming one of the world’s wealthiest men. There should be a lesson in that for the Government, and it is one that they should heed.

From what I have heard, the Minister seems to be in broad agreement. He thinks that what is in place will allow this to happen in any case. I hope that over the course of the remaining debate, to which I am sure there will be an extensive number of contributions, he may be swayed to agree to Lords amendment 1.

[Sarah Olney (Richmond Park) (LD)]

I, too, will keep my comments brief. The Liberal Democrats have been supportive of this Bill from the start, since its Second Reading. We very much welcome the opportunity and, indeed, the new vehicle to get funding into science and technology in this country.

I join the hon. Members for Aberdeen South (Stephen Flynn) and for Newcastle upon Tyne Central (Chi Onwurah), however, in saying that the absolute priority must be to ensure that that investment stays in this country and benefits the people, including the investors, those who may benefit from employment and, indeed, every single one of us who seeks to benefit from the new innovation for which this money may well pay. A couple of weeks ago I visited my former employers at the National Physical Laboratory in Teddington, where I saw for myself the incredible work that is taking place on battery technology and hydrogen technology. There is so much potential for the future, but this country has traditionally been really bad at converting that incredible R&D skill into entrepreneurism and innovation and at building sustainable businesses. That is why I think it is so important that we support the Lords amendment, and it is certainly why we will vote against the Government’s motion.

Question put, That this House disagrees with Lords amendment 1.

Reducing Costs for Businesses

Sarah Olney Excerpts

Tuesday 11th January 2022 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

This pandemic is not yet over. The costs and risk of the continuing high rate of infections are being borne by the individuals forced into self-isolation, by the businesses that saw revenues fall off a cliff over the crucial Christmas period and by the frontline workers who are scrambling to deliver high-quality healthcare and education in the face of record infection rates. The Government have abdicated all responsibility for bearing those costs and risks and have gone missing when they should have provided leadership, as the Prime Minister demonstrated again earlier—although I am sure the hospitality industry, and particularly those in the business of supplying cheese and wine, appreciated his continued generous support during the lockdown.

Thanks to our vaccination programme, we are in a position to make plans again. The difference that makes is that entrepreneurs and investors can start to identify opportunities, employees and young people can invest in training and skills, and consumers can save up or borrow for new purchases. But the Government seem intent on putting barriers in the way of new opportunities. I think most particularly of the new customs checks that were implemented on our borders over the new year, which will make it more difficult and more expensive to import goods from the EU. They will increase prices in the short term while making a greater number of trades unviable in the medium term, thereby decreasing the choice and quality of goods available and denying opportunities to future entrepreneurs. The Office for Budget Responsibility estimates that the impact of Brexit will be a 4% hit to GDP in the long term, but our only new trade deal to date—with Australia—is projected to add only 0.02% to our GDP. That will not come near to addressing the gap. The Government’s deliberate policy is to pursue barriers to trade and a decline in GDP.

In the past few months, it has been striking how every employer I have spoken to in every sector has talked about a shortage of staff being their barrier to growth. That has been exacerbated by high levels of infection in every part of the country—and that is before businesses have had to absorb the increased energy costs that were debated at length in the preceding debate and the Government’s plans to increase national insurance contributions. The NI increases will not only reduce the amount of money people have available in their pockets to spend in the economy but increase the cost of employment for businesses, thereby reducing the number of new staff they can afford to take on. That will limit growth and opportunities for businesses and their employees alike.

It is clear that the Government must get a grip on their support for businesses as we emerge from the pandemic. We cannot deliver economic growth when we are reducing opportunities for trade, increasing costs and limiting employment. We must support the retail and hospitality sectors to recover from the pandemic. We should maintain the current 12.5% VAT level for the hospitality sector and continue the 100% business rates relief so that important town-centre businesses have the chance to re-establish themselves.

We must urgently focus on the needs of young people and deliver a strategy to get them into work. We owe our growing generation that much for the sacrifices they made to keep the older generation safe. We need a relaunched kickstart scheme and new apprenticeships.

Were the Government ambitious, they would set out a long-term strategy for the transition to a green economy and to ensure that opportunities for economic growth were being nurtured in every part of the country. Were they competent, they would put in place clear plans for how to achieve such a strategy, thereby enhancing investor confidence and encouraging training in the new skills we need.

Subsidy Control Bill

Sarah Olney Excerpts

3rd reading
Monday 13th December 2021 Commons Chamber

This is yet another power grab that undermines not only devolution but the levelling-up project the Government are allegedly so keen to promote. It simply is not good enough, and it speaks to an unconstructive disdain for the rights and responsibilities of the devolved nations from the Government. The Bill is an assault on devolution, wilfully ignorant of the needs of the national economies of the UK or the role of public bodies in advancing them, and has been prepared by an out-of-touch Government that is overly centralised. It is a mistake that we are set to make again in the Professional Qualifications Bill. As such, my party will not support the Bill before us and I urge Members across the House to oppose it in favour of a more co-operative and informed subsidy regime.

[Sarah Olney (Richmond Park) (LD)]

It is a pleasure to contribute to this very thoughtful debate. I do not share the enthusiasm of the hon. Member for Weston-super-Mare (John Penrose) for Brexit as a whole; nevertheless, I support his comment that if this is to be one of the benefits of leaving the European Union, it is important that we get it right, especially since all the other benefits seem disappointingly slow to materialise.

I support many of the hon. Gentleman’s comments about transparency: it is important that the information is made available. He is right that it will improve the efficiency of subsidies if we can see who is getting them and understand where they are being applied. I valued the intervention from the hon. Member for Thirsk and Malton (Kevin Hollinrake) about what has happened in the United States, and that is an important point to consider. It is important to think about the effectiveness and efficiency of subsidies, and the use of taxpayers’ money.

This will be a new subsidy regime for the UK. The more information that is available to the widest number of people, the more we will be able to see as a country—not just the Government—what is and is not an effective subsidy. We will be able to see what has worked, what has played a role in driving investment to underdeveloped regions and what has helped to build new sectors of the economy. It is so important that that information is available. More particularly, I support the moves of the hon. Member for Weston-super-Mare to move the threshold to £500, because, where subsidies can distort markets, it will have a disproportionate impact on smaller businesses. That is why moving the threshold in the way that he proposes is so important.

[John Penrose]

May I back the hon. Lady up by saying that it is about not just smaller businesses, but local economic effects? Something that may, on a large scale, be distortive for the entire national economy may be distortive at a much smaller level for a particular city region or a particular town. I hope that she agrees with that point as well.

[Sarah Olney]

I absolutely do, which is why it is so important to get this level of oversight at the much smaller threshold that the hon. Gentleman is proposing. Potentially, within the gap between the £500 that he is proposing and the £500,000 that the Government are proposing, there will be a great deal of market-distorting subsidy, and it will be up to competitors who have been disadvantaged to challenge or to bring their own court cases against those subsidies. If they do not have knowledge about how they are personally being disadvantaged, what can they possibly do about it? That is why that point is so important.

My new clause 2 is about climate change. I welcome the comments made by the hon. Member for Aberdeen North (Kirsty Blackman) about the importance of this matter in her excellent opening speech. There are the seven principles against which the subsidies will be assessed, and also the nine energy and environmental principles. What I am disappointed about is that they do not add up to a broader commitment to using public money to fight climate change. I can only amplify what the hon. Lady said about it being our key public challenge at this time, covid notwithstanding.

The Liberal Democrats would have welcomed the opportunity to put the transition to net zero at the heart of the UK’s subsidy regime, and for the Government to have used every tool at their disposal to make the transition as swiftly and painlessly as possible, and we can see how public subsidies can help to achieve that.

New clause 2 provides for an annual report to Parliament detailing the climate change impacts of subsidies granted that year. This would have been an important mechanism for reviewing the extent to which subsidies are being used to stimulate or to de-risk investment in the green economy. We look to the private sector to drive much of the innovation that we need to see and to create the consumer markets for our net zero future, but the Government must do all they can to encourage the private sector to prioritise reducing emissions alongside creating economic value.

Public subsidies are an important part of the levers available, and taxpayers need to see that they are being used effectively. Let us take, for example, the nine environmental and energy principles. In the past few months, we have seen a tremendous concern about our energy sector, and it is easy to imagine a scenario where subsidies are being granted to improve energy resilience and energy supply. Such goals might make sense in the short term as they are in line with the principles, but when we are making short-term decisions about subsidy use, it is really important that we step back and look at the longer-term impact of some of those decisions. We need to take the opportunity every year to make sure that, regardless of the short-term decisions that sometimes need to be made, we are nevertheless continuing along the path towards net zero—the challenge that the Government have set for themselves. To have that separate net zero/climate change consideration of the total use of all of our subsidies would be an important check for the Government to make sure that they are progressing towards net zero in the way that they should

In short, this Bill would have been much improved by enabling greater scrutiny of the subsidies granted. I regret that the Government are not doing more to enable that.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is a pleasure to follow some powerful speeches on Report tonight. I share the frustration of the hon. Member for Aberdeen North (Kirsty Blackman) that we could well have moved forward with some of the issues we debated in Committee with some amendments brought forward by the Government. Some of the robust debate we had in Committee led to looking at how we could address those issues more quickly. I acknowledge the contributions from the hon. Members for Weston-super-Mare (John Penrose) and for Thirsk and Malton (Kevin Hollinrake). I will be talking about their amendments later in my speech, but we have discussed at length transparency and the ways in which we need to reform this regime in order for it to be the most effective it can be. I wish to make a brief remark about new clause 1 before carrying on further. I hear the concerns raised by the hon. Members for Aberdeen North and for Edinburgh North and Leith (Deidre Brock), and the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts), because they are important, particularly in relation to legacy subsidies in agriculture, as well as future subsidies. The Minister will need to make sure that he can respond clearly to the concerns that have been raised, and we will certainly be listening closely on that.

It is a pleasure to speak to our amendments—new clause 3, on post-award referrals, and amendments 15 to 27. I will also speak in support of similar and, in some cases, identical amendments to those tabled by Labour in Committee, which I was pleased to see have been influential in colleagues’ consideration of the Bill. I refer in particular to amendments 1 to 8, which were tabled by the hon. Members for Weston-super-Mare and for Thirsk and Malton, and amendments 10 and 12, which were tabled by the hon. Member for Aberdeen North. There are only slight differences from our position in Committee, and I am sure that today’s debate will also help consideration of the Bill in the other place. Amendments 13 and 14 are similar to amendments 2 and 7, and are consistent with our significant concerns on transparency and accountability, which we raised in Committee. New clause 2, tabled by the hon. Member for Richmond Park (Sarah Olney), is also consistent with the position on net zero leadership that we set out on Second Reading and in Committee. We are not actively supporting two amendments—we are more neutral on them: amendment 11, which has similar intentions and principles but is slightly weaker than our amendment 16 and which runs the risk of being unclear for local authorities to implement; and amendment 9, where we understand the intention to broaden what the Competition and Markets Authority reports on. However, arguably it would not have the information on all subsidies, as most would not be notified to it, so this provision could be impractical and create a significant burden. However, in Committee we also provided suggestions on how the CMA’s annual report could be strengthened and what areas it could report on. We had a considerable debate on that, including in respect of the CMA reporting on where it had identified non-compliance with the principles and examining the geographical spread of subsidies that had been notified to it.

Labour recognises the need for this legislation, which establishes the framework for the UK’s post-Brexit subsidy control regime. It indeed allows for quicker subsidies to be granted to businesses, which we support. We recognise that a system of subsidy control is important to ensure that public funds are made available to businesses, but with appropriate safeguards in place. Where we departed from the Scottish National party in Committee is that we also believe that the Bill is necessary to protect the UK’s internal market. We are speaking to our amendments today on two main strategic areas: the purpose of subsidies; and the way in which the new regime will operate. I will deal first with the purpose and the use of subsidies. Subsidies and their controls should be an integral part of a strong, long-term industrial strategy, promoting growth and supporting industry, jobs and prosperity across the country. We want to see our foundation industries such as steel supported, and we want to see a plan for how we can buy, make and sell more in Britain.

Commercial Rent (Coronavirus) Bill

Sarah Olney Excerpts

2nd reading
Wednesday 24th November 2021 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

The Liberal Democrats welcome the Bill and we hope it will be passed swiftly in order to protect struggling businesses. I have spoken to many businesses in my community that have really struggled with rent bills over the past 20 months. This is been a significant issue for many. As the Minister said, many landlords and tenants have been able to come to terms and make arrangements for how rent payments will be made, but a number have not been able to do so. I am thinking in particular of Don Fernando’s restaurant in Richmond High Street, a legendary Spanish restaurant right by the railway station that has been there 30 years. It was unable to make such an arrangement and it is still getting rent demands from its landlord, which is registered in Jersey, unfortunately. This is a significant issue for the restaurant. Only the stay of execution allowed by the moratorium on evictions has enabled it to carry on trading. It is still open and I was there a few weeks ago. It is doing well, but it has significant concerns about its rent debts, so on its behalf I very much welcome the steps that the Business Department is taking.

Of course, this affects not only tenants. I have spoken to landlords as well, including small landlords and landlords of single units. In some cases, where they are letting those units out to large multiples, some of those retail chains are just turning round to those landlords and saying, “We are not paying.” Up to now, there has been no mechanism to enter into a negotiation on this. It is very much the weaker party in these transactions that has to suffer the consequences, and on that basis I am really glad that this arbitration mechanism is being brought in. It will give a voice to both sides, particularly where there are no other mechanisms to resolve the issue.

My only slight grumble is that we could perhaps have passed this Bill sooner. The moratorium has been extended several times, which has been welcome, but bringing this Bill to Parliament more promptly would perhaps have allayed some fears and got the process going sooner for certain tenant-landlord relationships. But better late than never, as they say. It is here now and we certainly plan to support it. I hope that we will use this opportunity, even though we want to pass the Bill swiftly, to scrutinise it a bit further. One of the important points we want to raise is how arbitrators can effectively assess whether a business would have been viable. That is an important point, and we need to see more discussion about it. In the context of the pandemic, many businesses had to close because of Government instructions, but consumer behaviour has also changed radically as a result of the pandemic. As we look back over the past 20 months, I do not know how easy it will be to say which businesses would have been viable if their rent arrears had not built up to such an extent.

There are lots of great businesses in my constituency that came through the pandemic because they changed their way of working, including developing their online offering and doing home deliveries. We see right across our business sector, particularly in our small businesses, that entrepreneurs will always respond to challenges. Many businesses now look quite different from how they looked before, which is an example of how it is difficult to say what would or would not have been viable. Many business owners or their family members have suffered coronavirus infections, and they suffered untold disruption in their personal life that will have affected their ability to run their businesses. Again, how can we judge what would have been viable? How would things have been different? That is a difficult question to answer.

I welcome this further support to help businesses through what we might call the after-effects of lockdown.

[Mr Perkins]

The hon. Lady raises an important point. From what the Minister said, it sounds like a business will be eligible if the amount it owes in rent is the difference between going bust or not. Many businesses might have major rent payments that take them right to the brink, going through all their savings; other businesses might have debts that are slightly more than their rent, but the support would make a huge difference. I fear we may end up with a huge number of businesses being shut out of this important redress, so I urge her and other colleagues to scrutinise this point in Committee.

[Sarah Olney]

That is exactly right, and it is the point I am trying to make. Every context and every business is different. The business owners will have faced different challenges, and the environment in which they trade will have faced different challenges. The hon. Gentleman has already spoken about hospitality businesses facing significant challenges, and it is difficult to see how we can have one set of guidance that covers the viability of every kind of business of every size and every sector.

[Janet Daby]

In that same vein, small businesses, and even large businesses, have seen a surge in energy costs and product costs. Does the hon. Lady agree that there is increasing financial pressure on businesses?

[Sarah Olney]

I absolutely agree. We see a maelstrom of different pressures on businesses at the moment, and many of my retail businesses are experiencing difficulty in getting stock for a number of different reasons, many of which will be familiar to Members. There are increased energy costs, and we are still facing quite an uncertain Christmas.

Hospitality businesses across the country are keen to open their doors to Christmas parties, but there is still a lot of uncertainty about the public health situation, which will prevent many of them from being able to make the revenue they would expect. That will obviously have an impact on their ability to pay their debts. As the hon. Member for Brentford and Isleworth (Ruth Cadbury) said, it is not just their rent debts; they have VAT bills, rates bills and loans to repay. There are so many different debts mounting up as a result of lockdown, and there is still a great deal of uncertainty, coming from a number of different sources, on whether businesses can count on the revenue to service all those debts. There are a lot of pressures facing businesses.

[Matt Rodda]

Does the hon. Lady agree that the Government need to get on top of the supply-chain issues, particularly in our ongoing relationship with the European Union, the issues in Northern Ireland and the cross-channel issues? These could potentially have a serious impact on businesses and families this Christmas. It is high time the Government got on with developing a positive relationship with our neighbours.

[Sarah Olney]

I entirely agree. I would now normally be at the Public Accounts Committee, which is currently looking at the readiness of UK ports for Brexit, how well our port and logistics sectors are dealing with Brexit and how well the Government have prepared them. The picture is mixed, but there is no doubt that there is more disruption to come, because we have not yet implemented all the checks that will be required in due course. Some will come in on 1 January, and there will be others in July 2022. It is fair to say that we are still not through this huge period of uncertainty, and there is a great deal more still to come.

I welcome this Bill, but I would like to see the Government do more to help our retail, hospitality and personal services sectors, and all the other sectors that make up our high-street economy, because of all the positive impacts a thriving high street has on our local communities. I want to see the Government go a bit further to support businesses on our high street.

I am keen for the Government to consider scrapping the upward-only rent review clause that is often in new leases. Richmond High Street, in particular, is suffering from this clause. We now have very high rents for all our retail units, which is a private sector matter but we are finding that it creates a barrier to entry for new retail, hospitality and other businesses that might want to take up a town centre lease.

Leases are based on old-fashioned ways of doing business, and we often find that landlords put an upward-only rent review clause in leases. When the lease terms are renewed, the clause means that a firmly established business that has generated a great deal of business as a result of its location will find that its landlord puts up the rent to such an extent that the business cannot service it with its revenue. I am keen that leases and rent payments should reflect underlying market conditions, which would help a huge amount. More needs to be done. We talk about leasehold reform a lot in this place, but I also want to see it for commercial rents. I would welcome the scrapping of upward-only rent reviews.

I echo the hon. Members for Chesterfield (Mr Perkins), for Reading East (Matt Rodda) and for Brentford and Isleworth (Ruth Cadbury), who mentioned the business rates review, which is urgent because we want to help businesses to have better control of some of the costs of doing business. There is no doubt that business rates are a key part of that, and we are keen to see a review as soon as possible. A review has been promised for many years, and business rates are a fundamental part of the business costs that are continuing to be a deterrent to new entrepreneurs.

We very much support the Bill, which is the right thing to do. We want to support our town centre businesses, and there is more that could be done, particularly on rent and rates. We are keen to support the Bill, but we need to scrutinise the arbitration clauses a little further.