Relevant document: 15th Report from the Delegated Powers Committee (Northern Irish Legislative Consent Motion rejected)
My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Enterprise Bill, has consented to place her interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
My Lords, before the noble Baroness, Lady Neville-Rolfe, moves Amendment 1, will she, or the Chief Whip, explain in more detail what prerogatives and interests the Queen has put at the disposal of Parliament for the purposes of this Bill? The statement that has been made does not come with every Bill, but could the Queen have just bought some pubs, which formed part of the discussions we had on Clauses 32 and 33, or will the non-domestic rates be affected? It would be very helpful to the House if we knew what interests Her Majesty was putting at the disposal of the House, and whether they are her public interests or her private ones.
My Lords, the notice I read is a courtesy which Her Majesty extends to the House before we consider the Third Reading of a Bill. It is not normal to discuss in detail what the interests are. They arise from the fact that the Bill addresses the rating of property, and Her Majesty is the owner of such property. In that respect, she has placed her prerogative at the disposal of the House.
1: After Clause 23, insert the following new Clause—
“Additional time limit for actions for damages for late payment of insurance claims
After section 5 of the Limitation Act 1980 insert—“5A Additional time limit for actions for damages for late payment of insurance claims
(1) An action in respect of breach of the term implied into a contract of insurance by section 13A of the Insurance Act 2015 (late payment of claims) may not be brought after the expiration of one year from the date on which the insurer has paid all the sums referred to in subsection (1) of that section.
(2) Any payment which extinguishes an insurer’s liability to pay a sum referred to in section 13A of the Insurance Act 2015 is to be treated for the purposes of this section as payment of that sum.””
My Lords, Clauses 22 and 23 bring in reforms to address late payment in the insurance sector, which we believe to be overdue. The overarching policy objective of these provisions is to provide a strong incentive for insurers to pay on time. It is hoped that the provisions will speed up settlement of insurance claims generally, with day-to-day benefits for policyholders.
Amendment 1 affects the limitation period in which a policyholder must bring any claim for late payment of an insurance claim. It addresses concerns expressed on Report that the late payment provisions would force insurers to keep open their books and hold reserves in respect of possible late payment claims for an uncertain length of time, potentially impacting on policyholders through premiums. We have now had the opportunity to consider the policy arguments put forward by the noble Earl, Lord Kinnoull, and my noble friend Lord Flight, and to prepare the amendments needed to make a targeted change to the limitation period for late payment claims. The Government consider that these produce a better balance of policyholder and insurer interests. Due to the volume of claims which insurers deal with, and the capital requirements to which they are subject, insurers have a rather unique need for certainty in knowing when they have satisfied all their liabilities in respect of a certain claim.
The amendment adds a new provision to the Limitation Act 1980, which applies in England and Wales. It means that a policyholder must bring any late payment claim within one year of the insurer having paid all sums due in respect of the initial insurance claim. This may include sums paid under a binding settlement contract between the insurer and the policyholder, or paid as a result of a court award against the insurer. Until the underlying insurance claim has been paid, the usual limitation period of six years from the breach of contract would continue to apply.
It is reasonable to expect a policyholder to bring a claim for late payment within a year of receiving payment of the insurance claim, so the amendment does not prejudice them unduly. It also has the potential to protect the vast majority of policyholders, who will never need to bring a late payment claim, from any premium increases that may result as a consequence of insurers’ increased costs. Amendment 2 provides for the commencement of this amendment. I beg to move Amendment 1.
My Lords, I want to take a moment to say that we welcome this clause. We always thought it was important and I thank the Minister for facilitating the meeting that we had with her and officials, and with the Law Commission, which has given careful thought to this—as have we. In fact, we rather hope that the 12-month limit might even help get some of those payments made rapidly, so we are very happy with this amendment and give it our full support.
Amendment 1 agreed.
Clause 37: Commencement
2: Clause 37, page 54, line 38, leave out “and 23” and insert “to (Additional time limit for actions for damages for late payment of insurance claims)”
Amendment 2 agreed.
Clause 38: Extent
3: Clause 38, page 55, line 12, at end insert—
“( ) section 28 (UK Government Investments Limited);( ) section 30 (UK Green Investment Bank: transitional provision);”
My Lords, Clause 38 sets the territorial extent of the provisions in the Bill. This amendment makes minor and technical changes to the clause to make clear that the territorial extent of the clauses relating to UK Government Investments Ltd and the transitional provision in respect of the UK’s Green Investment Bank is UK-wide, and to ensure consistency in the drafting of the clause. The effect of the clause is unchanged.
I should clarify that although I mentioned on Report some possible amendments on pensions provision for Small Business Commissioner staff, on reflection, the Government consider that no amendments are needed at this point. I can also confirm that I have written to noble Lords on the issues raised on Report on which I promised further information, and have placed a copy of those letters in the House Library. I beg to move.
Amendment 3 agreed.
A privilege amendment was made.
My Lords, I put on record my thanks to all those who supported the rapid passage of the Bill through our House. I begin by thanking the Lord Speaker and all Deputy Speakers, as well as the clerks, the doorkeepers and our skilful reporters in Hansard. I thank the hard-working members of the Bill team, helped by our able apprentice, and the officials from the four departments and from the Law Commission who assisted our debates.
The Bill covers a lot of ground. We have jointly crossed a varied and complex landscape—some parts verdant and others rather rocky. Our travels have taken us from the Small Business Commissioner, via the Primary Authority and the Green Investment Bank, to the exit payment cap. Thanks to the noble Lord, Lord Whitty, we even ventured on to the cricket field, and although I was rather disappointed with the noble Lord’s assessment of my batting, I am holding on to the fact that he credited me with a strong defensive game.
I thank all noble Lords for their contributions. We have heard a range of expert voices from the opposition Benches. I am grateful particularly to the noble Lord, Lord Mendelsohn, and to the noble Lord, Lord Stevenson, who I am pleased to see looking so well again. I am grateful to the noble Baroness, Lady Hayter, as well as the noble Lords, Lord Stoneham and Lord Teverson, and the noble Baronesses, Lady Burt and Lady Sharp, as well as the noble Earl, Lord Lytton. I thank them all for their always constructive—and always challenging—approach and for working with me and my officials outside the Chamber. I thank the noble Lords, Lord Smith and Lord Curry, who gave us the invaluable benefit of their experience in chairing the Green Investment Bank and the Better Regulation Executive respectively. It is always good to have people who are engaged in matters contributing in the House.
Finally, I thank my noble friends Lord Younger, Lord Gardiner and Lord Sherbourne, who have so expertly assisted me at the Dispatch Box, as well as my many noble friends who have supported the Bill from the government Benches, especially my noble friends Lady Wheatcroft, Lord Hodgson, Lord Borwick, Lady Brady, Lady Harding, Lady Noakes, Lord Leigh, Lord Flight, Lord Cope and Lord Baker—a cornucopia of talent. I thank all your Lordships.
My Lords, I also place on record our thanks to all noble Lords for their contributions. The Bill that now passes to another place is certainly a better Bill than the one that arrived, which reflects the role of your Lordships’ House and the constructive discussions that we have had with the Government and others. On behalf of these Benches, I thank the Bill team for its hard work and its readiness to engage in detailed discussion. I thank in particular a member of the small business team, who made a welcome return to finally sort out a few issues that we had with pubs. Our Benches have been very ably supported by the quite outstanding Nicola Jayawickreme, and I put on record my thanks to her.
Our debates have certainly been wide ranging, covering many detailed issues. Of course on our Benches, my formidable noble friends Lord Stevenson and Lady Hayter have made quite outstanding contributions and taught me everything that I know. It has been exceptionally helpful to have many colleagues from outside add some quite outstanding contributions and raise issues which have helped our discussions—including my noble friends Lady Donaghy, Lord Snape, Lord Whitty and Lord Wills. I also pay tribute to the noble Lords, Lord Stoneham and Lord Teverson, and the noble Baroness, Lady Burt, on the Liberal Democrat Benches. We found a very good way of working with them and with the Government to improve the Bill in relation to a number of measures.
Across the House, the noble Earl, Lord Lindsay, has always been an expert on regulation; the noble Earl, Lord Lytton, made some outstanding contributions on non-domestic rates; the noble Lord, Lord Aberdare, raised retentions very ably; the noble Lord, Lord Low, dealt with public sector exit payments and matters relating to whistleblowing. Many other noble Lords contributed, too. I place on record my deep thanks to the noble Lord, Lord Hodgson, for at least agreeing with me once during the course of our discussions.
Finally, I pay tribute to and thank the noble Baroness, Lady Neville-Rolfe. It is always a pleasure to engage constructively with her. She is someone with whom you can always find at least some ground to work with, even when her hands are tied firmly behind her back by those in the Treasury and elsewhere. She is extremely inventive and courteous, and we thank her for the way in which she has handled this measure.
My Lords, I do not wish to detain the House, but I must join in the thanks to those on the Bill team for their patience, particularly on the Green Investment Bank, and all colleagues who have taken part on the Bill. I also join in thanking the Minister for her understanding, diligence, very good communications and patience throughout our proceedings.
I thank the noble Baroness for not putting something in the Bill. At one stage, the noble Lord, Lord Aberdare, and I supported an amendment concerning the issue of retention and the means of dealing with it. She told us that, if it were withdrawn, she would undertake to establish a review. The manner in which the review has been set up gives us great confidence that it will be conducted in a rigorous and fair way, and we look forward to it proceeding in due course. I thank the noble Baroness not for putting something in the Bill, but for giving us what I hope will be an adequate substitute as a means to address one of the most vexed issues of payment. It was not covered by the Bill, but will now be within sight of being properly and speedily remedied—many years too late, sadly, but now ready to be dealt with in an effective manner.
My Lords, my contribution to the Bill was restricted to its very end and the clauses relating to public sector exit payments and what are, I hope, the unintended consequences of protection for whistleblowers. Throughout the discussion of the clauses—and, indeed, of the Bill—the Minister demonstrated her characteristically firm grasp of the issues, constructive approach to the amendments and courteous and considered approach to your Lordships’ House. I am grateful to her and all her officials for the meetings and conversations that we have had on my amendments, and congratulate them on shepherding the Bill successfully to this stage.
Commanding, constructive, courteous and considerate the Minister may be, but I fear that she is not convinced by the arguments that I and others have put forward for the need to improve the legislation better to protect whistleblowers. I fear that the public and Ministers will come in time to regret that. It is common ground that the public interest is best served by creating an environment which encourages genuine whistleblowers to come forward—and to do so in a timely manner. Such whistleblowers often take considerable risks with their careers and livelihoods to come forward in that way. It is in the public interest to provide robust legal protection for those courageous individuals, and uncapped damages are an important part of such protection, because they reassure whistleblowers that they will not be bereft of adequate means to support themselves and their families if they make a disclosure in the public interest.
We did not table an amendment at this stage because we know that the Government believe that regulations will offer sufficient protection to whistleblowers—but that this should, in some way not yet clear, be restricted by the need to protect the public purse from claims made on it by those falsely claiming the protection of public interest disclosures. The Government’s approach appears to be that whistleblowers will not be able to breach the cap unless they can demonstrate that they have made disclosures genuinely in the public interest, and the Treasury will be the judge and jury of that.
How many of those considering making disclosures in the public interest will feel reassured that their ability to support their families will be protected by a judgment by the Treasury that they deserve more money? How many Secretaries of State would be reassured by a plea to trust the Treasury that it will be all right on the night, they need not worry about their department’s budget, because if the Treasury judges, in time, that their case is meritorious, they will, in the end, get the money they need? How many have been reassured by that prospect? Paying out as little money as it possibly can get away with is what the Treasury does, and relying on a judgment by the Treasury or any Minister after a whistleblower has already risked their career and livelihood to make a public interest disclosure is never going to be reassuring to someone taking such risks. Daniel Kahneman, the Nobel laureate, once said:
“To be useful, your beliefs should be constrained by the logic of probability”.
The probability in this case is that, in the foreseeable future, there will be terrible abuses of power and catastrophic cases of maladministration and corruption, just as there have always been in the past, and that these could all have been prevented or at least mitigated, as many could have been in the past. Hillsborough and the abuse of MPs’ expenses, as well as far too many cases of child abuse and failures in the NHS, for example, all bear witness to that.
The public need these courageous individuals to reveal wrongdoing by their employers, in the public interest, and the Government need to persuade them that they are going to be so protected. The Government could have taken the opportunity given by this Bill to provide better protection for such courageous whistleblowers. Instead, they have weakened it through the confusion we talked about in Committee and on Report about how the public sector exit payments cap will apply to whistleblowers. There needs to be greater clarity, and the burden of proof should be reversed so that it is clear that all public interest disclosures will merit breaching the cap on public sector exit payments, unless it can be shown that disclosures were not in the public interest.
The Minister and her officials have kindly agreed to meet me, my noble friend Lady Hayter and the noble Lord, Lord Low, whom I also regard as my noble friend, to discuss these issues. I hope that they can provide us with greater reassurance then. Otherwise, I fear that when the next scandal happens over a failure to protect the public—as, sadly, it is bound to do—and the resulting inquiry finds that inadequate protection for whistleblowers is part of the reason for that failure, as it probably will, we may all regret that we did not seize this opportunity to do more to protect whistleblowers.
Bill passed and sent to the Commons with amendments.