Kevin Hollinrake
MP for Thirsk and Malton · Conservative · United Kingdom
“That issue is one of the many things that the people who signed the petition are concerned about, Dr Huq. One of the big things that the Government promised, which I agree with them about, is the need to encourage faster growth in our economy. Of course that is right, but look at where that growth is.”
“The UK economy went through many challenges, of course, some of them caused by Brexit; the reality is that a change like that was bound to have a short-term effect—but only a short-term effect. The country grew faster than Germany and France during that period of time.”
“As I said before, governing is not easy; we had many challenges ourselves, and we did not get everything right, but what we did during that difficult period of time—those 14 years—was get 1.2 million more people employed in our economy. Unemployment was halved during our time in office.”
“Of course, many Government Members supported his leadership challenge. We are here now, looking forward to a general election coming down the track. We are ready for a general election when the Government are, because, unlike them, we have a strong leader—against their weak leader.”
“I was, absolutely. I thank my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) for his excellent opening speech. He made so many good points, not least about the level of support for this petition.”
“Members on the Government side of the House also feel betrayed and angry with their own leadership, for marching them up to the top of the hill and marching them back down again on many of these issues, but they do not feel as betrayed as the businesspeople in this country in particular.”
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“Q Would you therefore say that those kinds of worries are ill-founded and that that is not something that would prohibit an SMS organisation from innovating? Sarah Cardell: I do not think that there is anything in the Bill that prohibits innovation. The fundamental design, and certainly the way that we would intend to operate it, is entirely pro-innovation. We want to ensure that, as the designated companies continue to seek to develop and grow their businesses—of course they will want to, and that brings many benefits—that happens in a way that does not entrench their position, which is disadvantageous either to consumers or to competing businesses. That does not inhibit innovation, but it puts some guardrails around that innovation to ensure that the impact of that is beneficial and positive.”
“We and the CMA have produced a lot of evidence about how fake reviews are endemic on some sites. We have demonstrated the harm that they cause. It is clear what is needed. We know that we need to look at selling, buying and hosting. I do not see a risk to including such a provision on the face of the Bill. Then, in secondary legislation—”
“Q Rocio, on your point about including fake reviews on the face of the Bill, our intention is to legislate in this area. I do not know whether you have seen the evidence from Trustpilot, which was submitted as written evidence. It rightly points to the fact that most of the discussion around fake reviews thus far has been about products rather than services. Does not that illustrate that we need to consult properly about that to ensure that we get the legislation right? Isn’t there a risk that we could get it wrong by rushing to stick this on the face of the Bill? Rocio Concha: A provision on fake reviews in the Bill should apply to both products and services. There is evidence to show that fake reviews also harm services. I do not think that there is a major risk.”
“Q Even though there might be some things we have not thought about at this point in time. That would be a good example in terms of Trustpilot’s evidence. Rocio Concha: If there is something that needs to be improved, you can always do it with the Secretary of State’s power later. There is quite clear evidence to provide a clear steer on what is an unfair practice. Obviously, as with anything in schedule 18, you have that power to modify, to add to the practice as more evidence comes in. We will provide enough evidence to the Committee to show that it can be introduced on the face of the Bill.”
“One reason for the growth of the subscription economy is that it is a great way to provide services, but another is that it is such an easy way to make money by trapping people in. That is our firm belief and what our evidence shows. I just think a simple default would be much more effective than basically having the CMA chasing its tail and chasing firms. It would not be of any detriment to good firms who want to provide really solid subscriptions that people should want to stay in.”
“Q Sure, okay. Mr Upton, on subscription traps, do you not feel that the powers that the Bill affords the CMA on civil penalties will address some of the concerns you highlight of people trying to get around the rules, for example? Would that not be something it could act on when it sees gratuitous behaviour such as what you describe? Matthew Upton: I think it could, but we worry that it will not in reality. It is quite difficult to decide, for example, what constitutes easy and timely exit from a contract. You cannot necessarily measure it incredibly specifically, and I could imagine enforcement being really complicated. I could imagine firms dragging their feet, despite the way powers would speed up the ability of the CMA to act, as I say, because the incentive structure is so great.”
“The Bill is designed to only address the very biggest platforms in the first place, but also only to address the elements of their business where they have very strong market positions and entrenched market power. I think that way is the right way. As far as I know, Amazon would not be inhibited by the Bill from setting up those stores.”
“Q Thank you very much for your answers. Amazon has recently said the complete opposite of what you are saying. It has said that the Bill will stop it from innovating. It has started these new stores where you can go and shop and there are no staff—people just go in, take the stuff off the shelf and walk out. Amazon says that this Bill would have stopped it from taking forward that kind of innovation. What particular areas in the Bill is Amazon referring to? Do you recognise those as valid concerns? Professor Fletcher: Amazon would have to be more precise about what it thought in the Bill would stop that. I think the Bill has trod a very careful, innovation- focused line between stopping the biggest tech platforms from inhibiting innovation by third parties and facilitating them to innovate themselves.”
“I probably would have been more comfortable with a two or three-year period, because that is traditional for competition authorities and as far as they can look ahead in terms of crystal ball gazing. But I understand why it is there.”
“Q There is a forward-looking provision, is there not, for the CMA to look five years into the future and decide whether a company will have entrenched market power then? Is that what Amazon is referring to? Is that their concern, and would that be valid? Professor Fletcher: I think the concern is to ensure that it is entrenched market power that we are addressing. The CMA recognises, as do we, that these are intrusive measures and you do not want to do them unless you are trying to address entrenched market power. Professor Marsden: Personally, I agree that there is an aspect where the five-year period, which I find a bit too long, can be gamed by some of the potentially SMS—strategic market status—firms, but I understand why it is in there.”
“It basically gets a quantitative presumption, and that presumption is going to be relatively hard to shake. What we have done is much more evidence-based, bespoke and proportionate. Whenever you do that, it makes it slightly less administrable and slightly harder to actually make stick. Again, I think a very delicate balance has been trodden, and it is the right balance. I think all of us would agree on that, and on the fact that Brussels has made it easier for itself, but it is arguably then not proportionate nor sufficiently bespoke. It is a very delicate thing, but I think it is in the right place.”
“Q How would they game the system, Professor Marsden? What do you mean by that? Professor Marsden: They could game the system in the sense of one thing being done by just slowly walking backwards, for example—“We are introducing so many innovations and having so many thoughts and thanks from various small businesses.” They could drown the CMA with a range of evidence that actually does not go to the point, which is: who is being excluded, who is being locked out and what are we as consumers and citizens missing by relying only on three or four types of seed in the environment, as opposed to a whole globe of seeds? That is the metaphor I would like to use. Professor Fletcher: It is worth highlighting that if you compare the UK regulation with the equivalent in the EU, the EU has taken a less bespoke, less evidence-based approach.”
“Q Professor Furman, I saw your hand up. Do you have any comments? Professor Furman: Look at the tools that the Digital Markets Unit would have under these provisions; the conduct requirements, such as fair dealing and open choices, are not brand new inventions. They largely draw on existing roles under anti-trust measures. It is just that they would be more explicit and clearer up front, and enforced more quickly. To some degree, at least in terms of the conduct requirements, this is not about imposing some brand new set of rules; a lot of it is about taking existing things and ensuring that they can be enforced in a clear and transparent manner.”
“The question is about agility and responsiveness to detriment, which is exploding in the marketplace. We see it increasingly, particularly in digital markets, which evolve so quickly. That is our perspective.”
“Q Noyona, you mentioned that you felt that the CMA should not be the only enforcement body that oversees the legislation. Who else do you think has the experience and expertise to perform some of those significant obligations? Noyona Chundur: There is a heightened risk, Minister, if the new direct enforcement powers sit only with the CMA. Ultimately, the purpose of those powers is to be much more agile, flexible and responsive to consumer detriment in the market. Is there a heightened risk that enforcement will default to the CMA because perhaps it may deliver a solution that is much more agile and responsive and much more in keeping with the pace of detriment in the marketplace compared with a courts-based system? The sector regulators and trading standards could therefore have the same or similar powers.”
“Obviously you are looking for good responses, but it is almost impossible to avoid some undesirable effects. The way this Bill is set up, however, looks to minimise those adverse effects.”
“The reason, which again goes back to the targeted and tailored approach in the UK, is that when the CMA designates specific digital activities where there is substantial entrenched market power and indeed a position of strategic significance, that is not going to include peripheral areas. It is going to be focused on what some people call the core areas of market power of the large tech companies, because that is where the market power concerns are largest. There is significant freedom outside that. There are concerns about leveraging market power in the core markets into other markets, and it is appropriate for there to be an ability to address that through things like conduct requirements. However, you cannot introduce a new regulatory regime without some risk around how the incumbents—the regulated companies—are going to respond.”
“Q You may have heard my question earlier. Some of the firms that are likely to be designated as SMS might argue that this Bill will prevent them from innovating. Do you see any chance of that? Are there any areas within the Bill that make it likely that innovation will be inhibited? Professor Myers: I do not think it is that likely. It would be interesting to hear specific examples. As for the one that was commented on earlier, I did not quite see why this Bill would prevent that, as Professor Fletcher outlined. It may be that I have not heard the full set of reasons as to why it might prevent Amazon’s innovation in the very different area of retail outlets.”
“In this case, it is the Competition Appeal Tribunal. Compared with the High Court, these are specialists—both judges and lay members—with specialist knowledge and experience of dealing with both competition and regulatory cases. They have a greater appetite to get into the detail and merit issues, to the extent that that is compatible with the judicial review standard, than the High Court would. Having appeared in front of the Competition Appeal Tribunal under a judicial review standard, I can say, as I think Professor Fletcher did, that that is not a walk in the park for the regulator. You get a thorough testing, and what the Competition Appeal Tribunal is looking to identify is clear errors of either law or reasoning. I think that that is an appropriate way to strike a balance here.”
“Q I know you are an expert in ex ante regulation. Obviously the way in which people can appeal any intervention by the CMA or the DMU would be only by JR, rather than on the merits method. Is that the right standard? Professor Myers: Again, I think the Bill strikes quite a good balance with the judicial review approach. To bring in some practical experience from my days at Ofcom, I have had a role as an expert witness in quite a number of appeals of Ofcom decisions, in front of both the Competition Appeal Tribunal and the High Court. At the Competition Appeal Tribunal, those have been under different standards: there used to be a full-merits review, but recently that was changed to a judicial review. I think what matters, as well as the legal standard of review as laid out in this legislation, is the nature of the appeal body.”
“You can make sure that you do proper consultation and all that sort of thing, but we can understand why the Government would want to be able to add to it more quickly—obviously, primary legislation takes a while. In Europe, we certainly argued against Governments or the Commission being able to add to it willy-nilly. We were keen to keep it as something that had to be put in the directive originally. On balance, we would rather it was debated fully and that it amended legislation. Alternatively, you could decide to make changes once a year, say, rather than as you go along. That might be an alternative answer to the danger of a knee-jerk reaction.”
“Q Mr Wynn, you mentioned schedule 18 and not adding to the list without proper evidence. Is it your position then that we should not at this point in time add fake reviews to that list and that we should go through a proper process of consultation before we decide what to do about that? Graham Wynn: The view is, as I said, that we do not want to see what I call knee-jerk reactions to Daily Mail items that are politically sensitive or are political problems. The obvious answer is to say, “Let’s add it to schedule 18 as a banned practice.” It really is important that the schedule and what is in it is clear, clearly understood and that we do not add or subtract from it just on the basis of needing to get over a political problem, for example.”
“It needs a thorough examination, including the role of marketplaces, their general obligations and what is practical and proportionate. I would not add that to this Bill now, because it requires more of an assessment and consideration than would be possible.”
“Q On that very point, it is something that we are keen to tackle—and Mr Coyle is right to raise it, as he has done several times today. You have talked about an evidence-based approach to this. You will be aware that we will shortly launch the product safety review, which will tackle some of these issues, including the clarification of online marketplaces’ responsibilities in terms of ensuring the safety of products. Do you think that is the right place to deal with this, rather than the Bill? Graham Wynn: Yes. I think it needs to be done, but without committing us, we would expect it to be done in the context of a product safety review and how you are going to deal with product safety issues in the future.”
“What is good for a large majority of tech start-ups may not necessarily be good for big tech firms. It may be, but it is important to separate out the two.”
“We are seeing all the innovation that they are doing now, and I do not see anything in the Bill that will stop that. More broadly, there is quite a lot of evidence, not just in tech but in other sectors, that more competitive and less concentrated markets are better for innovation because challengers invest a lot of money in trying to take on the incumbents because they believe that they can replace them. The dominant firms have to defend themselves, and they invest more to protect themselves. The Bill will have that effect. Lastly, particularly since the whole debate around Microsoft and Activision, we have seen to an extent an attempt to conflate the interests of a small subset of dominant firms with the wider tech sector. That is often a mistake.”
“Q Thank you for your evidence. You probably heard my questions from earlier. We are very keen to ensure that innovation continues, not just in terms of the start-ups and scale-ups but with our big tech firms. Do you see anything in the Bill that will inhibit that? Max von Thun: Honestly, not really. If I look at what is in the legislation, focusing on the conduct requirements and the PCIs that the large firms will have to comply with, what I see is something that says, “You’re allowed to operate in the UK. You’re allowed to grow in the UK. You’re allowed to invest. You just have to play by the rules. You can’t use your dominance to unfairly exploit small businesses or prevent rivals from emerging.” It does not stop them investing lots of money in R&D or hiring top talent.”
“There is a wider range of situations for which we need these take-down powers when it comes to fair trading—scams and so on.”
“It is fundamentally important that it should come out quickly, so that we can address it and respond to the consultation. We can then look at that in the context of this Bill and others that it might impact on as well. We think that some things would be best placed in the product safety review—anything to do with legislation there—and would not appear here. But it is important that those provisions work hand in hand over a similar period, so that we can make sure that there are not any gaps. Consumers will then be better protected and businesses will have the clarity that they need, which is really important for them. David MacKenzie: I agree with everything John said, but if we leave all these issues to the product safety review, presumably that would apply only to unsafe products.”
“Q You make some important points that we seek to deal with in creating a fair and level playing field and protecting consumers at the same time. There is the whole point about whether an online marketplace is a distributor, retailer or whatever else. Do you think those questions are best resolved in this legislation or in the product safety review, which we have committed to do and brings in many other things that you have referenced already? John Herriman: That was another point that we wanted to make. This is not the only legislation that impacts on the landscape: the product safety review is fundamentally important in this space. The key point there is being clear on where those boundaries are. We will be contributing to the product safety review.”
“My concern and our organisational concern is that currently it is set out in the Bill too prescriptively, and there is a real danger that you end up in a situation where consumers are being bombarded by subscription notices and they become blind to them. I would put the analogy out there of the cookie banner, which I think they are hoping to get rid of through different legislation before the House at the moment. There is a danger that consumers are just blinded by the amount of information they are being presented with as stand-alone notices, with the frequency and nature in which they have been spelt out in legislation. While I do not fundamentally disagree with the Government’s policy intent, I do not think how it has been crafted in the Bill at the moment necessarily achieves that in the way we would need it to.”
“Q In your organisation’s written evidence, you took a different view from some of our earlier witnesses, who think we are not going far enough in terms of making it easy for people to exit a subscription only to opt back in. Yours said that actually we should make it slightly more difficult, for example, by taking away the cooling off periods and making the exit subscription slightly different in terms of allowing people to take advantage of other offers, which might confuse the process of unsubscribing. I am interested to hear your views on that. Owen Meredith: We broadly support the Government’s policy and intent as I understand it in terms of helping consumers to manage subscriptions, particularly subscriptions that they are not aware they are in or for services they are not using.”
“Q I get that, but if you are in a situation where you are subscribed to just one service and there is not a forest of different emails coming in saying your subscription is ending, the effects of your suggestions would make it more difficult for people to exit contracts. Owen Meredith: It would not make it more difficult for people to exit contracts; it would ensure that consumers still have access—”
“The cooling off period was— Owen Meredith: It would ensure that consumers still have access to the offers that would be available to them in the current system of processing. If you subscribe to a service that you are using and you wish to terminate it, there are multiple ways you can do that, either via online touchpoints for most of our subscribed services at the moment or via a call centre. If a call centre phoned you and said, “You’ve been using this service for 12 months. We can identify through data that you have been reading the content. Can we ask you what the reason for cancelling is and if we can retain you as a customer with the right promotion?”, I think that would be in the consumer’s interest.”
“Q But the removal of the cooling off period would make it more difficult for some people to exit a contract, wouldn’t it? Owen Meredith: The removal of the cooling off period for us is a concern around how that technically applies and whether consumers have had benefit that they are then seeking to be refunded for, despite having engaged with and received the benefit.”
“Only a few years ago, the Teesworks site was a burden to the taxpayer and a danger to the public, with a significant price tag merely to maintain its safety and security. We should not lose sight of the fact that investments in that site—public and private—are helping meet our net zero targets, while providing economic opportunity and a sense of prosperity for future generations. Question put.”
“Local and regional government working together with the private sector is an opportunity to provide the leadership and strategic direction needed to enable growth. Equally, this Government have been clear about the importance of accountability and scrutiny for areas with devolved powers. The English devolution accountability framework, published this March by the Department for Levelling Up, Housing and Communities, sets out the ways in which we expect mayoral combined authorities to make themselves accountable to both the public and Government. The forthcoming scrutiny protocol will set out how we expect such bodies to create a sustained culture of scrutiny. Once again, I thank Members for their important contributions today. We should be focused on ensuring the best outcomes for the Tees valley, so this is an important debate to have.”
“These are all points that were raised by the hon. Members for Sunderland Central, for Washington and Sunderland West (Mrs Hodgson) and for Stockton North (Alex Cunningham), as well as by the shadow Minister, the hon. Member for Nottingham North (Alex Norris), who described that position as eccentric despite the fact that it is the established process—a process that Labour actually established. It is important in this debate that we do not lose sight of the value of devolution in empowering our local communities. Mayoral development corporations are but one tool at the disposal of our elected Mayors to support renewal and regeneration where it is much needed—in places such as Redcar and Cleveland, Middlesbrough and Hartlepool, where the challenges of post-industrial deprivation are significant but the opportunities are equally so.”
“But she was not right to say that the review relates only to general governance, because it clearly specifically refers to allegations that have been raised, and the inquiry needs to respond on those issues, including commercial arrangements. Members have raised the question of the prospective role of the National Audit Office. The Government considered carefully calls for an investigation to be led by the NAO. It is not, however, the NAO’s role to audit or examine individual local government bodies, and its powers would not normally be used for that purpose. It would not be appropriate to expand so significantly the role of the NAO by asking it to lead this inquiry. In confirming the review, the Government have been clear that we would welcome any action by the NAO to update its review of Government funding arrangements.”
“Richard Paver and Quentin Baker have been appointed to ensure the panel are fully equipped to consider the complex legal, financial and commercial matters the review is likely to cover. Richard Paver acts as the finance lead for an existing non-statutory intervention at Wirral Council. Quentin Baker is currently director of law and governance at Hertfordshire County Council and has 17 years of experience acting as statutory monitoring officer for several large local authorities. The shadow Secretary of State raised concerns about the extent of the review and I understand that, given the time that she had to study the announcement.”
“Friend the Member for North East Derbyshire (Lee Rowley) confirmed earlier in the debate, the Department for Levelling Up, Housing and Communities has also now published full details on the review, including the independent panel that will lead the review and the terms of reference. I can assure hon. Members that, in line with existing practice, the Government have appointed a panel composed of external, independent experts with extensive experience at senior levels. As the lead reviewer, Angie Ridgewell brings extensive experience of senior leadership in local government. She is the current chief executive at Lancashire County Council, having previously held senior roles across the public sector, including as director-general of two Departments.”
“Members for Wansbeck (Ian Lavery) and for Warwick and Leamington (Matt Western). They raised facts, but they made no direct allegations as the hon. Member for Middlesbrough did. Those allegations are an ongoing concern, shared by the Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove) and me. That is why my right hon. Friend has announced the independent review, which will address the accusations directly and robustly. As the Under-Secretary of State for Levelling Up, Housing and Communities, my hon.”
“The continued allegation of corruption poses a real risk to our shared ambitions to deliver jobs and economic growth in Teesside. My hon. Friend the Member for Hartlepool (Jill Mortimer) rightly stated that those concerns and allegations—unfounded at this point in time—deter investment in the region, a point also made by my right hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke). As he said in his final words, we have had enough of talking down the region. The hon. Member for Middlesbrough (Andy McDonald) said that people did not need to rely on his comments about the allegations being raised, citing newspapers that had raised them. But he must be aware that the Financial Times makes no allegations of wrongdoing, but merely quotes his comments made in this House. That is similar to the points made by the hon.”
“Our elected Mayors play an important part in championing their areas—convening communities, local leaders, businesses and investors to support levelling up in those places. As my right hon. Friend the Member for Scarborough and Whitby (Sir Robert Goodwill) and my hon. Friend the Member for Sedgefield (Paul Howell) highlighted, industry on Teesside was in decline prior to Mayor Houchen taking office. The project has the potential to deliver more than 40,000 jobs and billions of pounds of economic growth. The Mayor has understandably raised concerns about the allegations made, recognising the damaging effects they could have on investments and job creation across the Tees Valley. That was a point raised by the hon. Member for Sunderland Central (Julie Elliott).”
“In the case of the South Tees Development Corporation and Teesworks joint venture, it remains the case that the Government have seen no evidence of corruption, wrongdoing or illegality. Neither have the auditors of the STDC, nor have my hon. Friend the Member for Stockton South (Matt Vickers) or the hon. Member for West Lancashire (Ashley Dalton). However, the seriousness of the allegations, some of which have been made in the House and discussed today, could damage public trust, so it is right that they are investigated. It is important to recognise that the review that we have commissioned was called for not only by Members of this House but by the Tees Valley Mayor himself.”
“It is absolutely right that this place offers right hon. and hon. Members the opportunity to raise concerns about value for money or process, particularly when it comes to public money, so I am grateful for the contributions from both sides of the House, and in particular from so many fellow northern Members. Indeed, as a Back Bencher, I have on a number of occasions used the privilege that this House offers to raise concerns about other alleged wrongdoings, but I think it important that we consider our language, our tone and the content and context of the claims that are made. I think that it is wrong to exonerate someone without due process, as it is to condemn somebody without due process.”
“Open banking was a huge success in this country and has been emulated around the world. There are now 7 billion API calls every month for open banking, connecting one banking app with another, and there are other fintech solutions. Open finance provides the opportunity to completely liberate opportunities for SMEs to access finance. Rather than going to their own bank and asking for a loan, they can ask many different providers for that finance, which will increase choice and opportunity.”
“Inclusion is a priority of this Government, so I am pleased that in terms of all the start-up loans issued up until April 2023, 40% went to women, 20% went to people from a black, Asian or minority background and 32% went to people who were previously unemployed. Those are all disproportionately high numbers, which we should welcome. Within the space of access to finance, we are also undertaking the payment and cash flow review. We know that is an issue for SMEs and we want to make it easier for them to be paid, as that is another source of finance. We have improved our equity finance offering through schemes such as the regional angels programme, supported by the British Business Bank, and the enterprise investment scheme, the remit of which has been extended. We are looking at potential new opportunities on the back of open banking.”
“I am pleased that as of March 2022, the British Business Bank programme has supported over 96,000 small and medium-sized businesses nationally with over £12.2 billion of finance. The programme is designed to bring benefits to start-up businesses, businesses with high-growth potential looking to scale up and businesses looking to stay ahead in the market. I know my right hon. Friend the Member for Great Yarmouth has supported many initiatives in his time in this place, such as the important start-up loan scheme, which has delivered around £1 billion of finance to 100,000 companies. Those unsecured loans are vital to many people who cannot access finance to start a business. In his constituency, 95 loans have been provided, to a value of almost £800,000.”
“There are many more opportunities in that sector. In the Lowestoft and Great Yarmouth enterprise zone in his constituency, South Denes energy park and Beacon Park are boosting innovation and growth in the region. More recently, investment through the Great Yarmouth town deal and the future high street funds, building on previous support from the local growth fund, is helping the local area by supporting jobs and growth in that region. I will go into some specifics about the three areas of focus I referred to earlier. First, access to finance is one of the primary concerns for small businesses as they open their doors and grow. We work closely with the British Business Bank to improve access to finance.”