EU Coronavirus Vaccine Programme

Baroness Falkner of Margravine Excerpts

Monday 13th July 2020 Lords Chamber

[Lord Callanan]

We are having a number of discussions with the EU on a whole range of initiatives. As I said, we decided not to take part in this scheme for specific reasons, but we do not rule out any future collaboration or co-operation with the EU.

[Baroness Falkner of Margravine (Non-Afl) [V]]

My Lords, in this decision, the United Kingdom has made the right call, given that, like the UK, Germany, France, the Netherlands and Italy have moved to make their own provision prior to the European Commission initiating action. Given that we pay into the multiannual financial framework until the end of 2020, why were we not permitted to be part of the governance and negotiation? Is that likely to happen if there are future projects? If so, it would be understandable if we went our own way.

[Lord Callanan]

Other EU member states would have been able to take part in the governance of the scheme; we would not. Even though the main development is funded from the EU budget, any individual procurement or orders would come from national budgets. Crucially, we would not have been able to negotiate in parallel with other companies with which we already have a good working relationship.

OneWeb

Baroness Falkner of Margravine Excerpts

Wednesday 8th July 2020 Lords Chamber

[Lord Callanan]

As I have said, given commercial considerations, I am unable to provide further detail on ongoing discussions, but we will be discussing the future funding of the business, and the merits of bringing in additional shareholders, with our partners in due course.

[Baroness Falkner of Margravine (Non-Afl) [V]]

My Lords, I welcome the Government’s stake in OneWeb. It will help deliver high-speed broadband in the UK and the rest of the world. On the issue of risk, does the Minister agree that anyone setting up frontier firms knows that there is no gain without risk?

Turning to the golden share, the Minister said that national security was the consideration. What about a company’s record on theft of intellectual property, abuse of the workforce through modern slavery and other anti-competitive practices? Will they also be taken into account?

[Lord Callanan]

We will use our golden share to full advantage for the British taxpayer. We will take all those considerations into account, but primarily national security.

Competition and Markets Authority

Baroness Falkner of Margravine Excerpts

Thursday 25th June 2020 Lords Chamber

[Baroness Falkner of Margravine (Non-Afl) [V]]

My Lords, following on from the noble Lord, Lord Randall, does the Minister accept that on consumer welfare it is difficult for us to have confidence in his reassurances? When the Government announced this digital markets taskforce a few months ago, they said that

“any future interventions must strike the right balance between promoting competition and innovation on the one hand and avoiding disproportionate burdens on business on the other”.

There was no mention of consumer welfare interests. It is difficult to see how we will make progress on that front, which is what most people worry about when they think of digital market abuse.

[Lord Callanan]

Consumers are best served by free and open competition, appropriately regulated, between businesses. The welfare of consumers is always at the forefront of our thoughts on this.

Post Office: Horizon Accounting System

Baroness Falkner of Margravine Excerpts

Thursday 18th June 2020 Lords Chamber

[Lord Callanan]

I pay tribute yet again to the work that my noble friend has done in both Houses on this important issue, along with other noble Lords and MPs. The findings outlined throughout the Horizon judgment already provided an extensive insight into what went wrong at the Post Office, including an independent judicial view of all the facts that all sides were looking for. However, the Government now accept that more needs to be done. We want to be fully assured that, through the independent review, there is a public summary of the failings that occurred at the Post Office, drawing on the judgments from the Horizon case and listening to those who have been most affected without repeating the extensive findings already entered into by Mr Justice Fraser. The Post Office has committed to co-operating fully with the review and we, as Ministers, will hold it to that. The review will have sufficient strength and breadth to deliver in a timely manner, and I assure my noble friend that the chair of the review will be fully independent of both the Post Office and the Government.

[Baroness Falkner of Margravine (Non-Afl) [V]]

My Lords, I, too, pay tribute to the noble Lord, Lord Arbuthnot, but I think that the Minister is playing with semantics to the extent that he talks about how the review will be independent. Does he recognise that people want responsibility to fall where it should, whether on this Government, the previous Government, the Post Office, Fujitsu or anyone else? Does he not think that 20 years is long enough for the victims to have waited for this review? Will he please get on with it and deliver a proper, independent review to address these issues?

[Lord Callanan]

I can say only that I agree completely with the noble Baroness. We need to get on with it and get to the bottom of these things as quickly as possible, and that is what we are endeavouring to do.

Corporate Insolvency and Governance Bill

Baroness Falkner of Margravine Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 16th June 2020 Lords Chamber

[The Deputy Chairman of Committees (Lord Bates) (Con)]

I have received a request to speak after the Minister from the noble Baroness, Lady Falkner of Margravine. After the noble Baroness, we will hear a response from the Minister.

[Baroness Falkner of Margravine (Non-Afl)]

My Lords, for clarity, I did not request to speak after the Minister; it was due to an inadvertent error that I ended up not being on the list to speak when I should have spoken. In fact, as I am speaking after the Minister, I will use the opportunity to make one or two general observations about this process that conform to what the noble Lord, Lord Hodgson of Astley Abbotts, and the noble Viscount, Lord Trenchard, have said.

This is the second Bill in which I am involved in legislative scrutiny. The first one was when we had a virtual House, and with this one we have a hybrid House. I can only concur with everything that has been said about how a hybrid House cannot work for any kind of complex or contentious piece of legislation.

These are pieces of legislation with implications that, as several noble Lords have said, go beyond the immediate health and economic emergencies. They should not be passed by this House unless and until we have the capacity to undertake proper scrutiny. Normally, my only excuse for speaking at this point would be if the Minister had said something on which I needed further clarification; I would then have spoken before he had sat down.

The idea that one is still continuing to speak to amendments in this manner is regrettable, but there is a broader point, also raised by the noble Lords, Lord Liddle and Lord Adonis: this is complex legislation, we do not know when we will revert to normal procedures, and a vaccine may not be found. I hope that this situation does not continue for very long, but it could continue for some time. In that case, do the usual channels deal with the legislation that is pertinent to the health and economic emergency that we face in this House through these proceedings, as a necessity, and therefore, park legislation that has very long-term implications for all kinds of governance in this country, until this is over? I do not blame the Government. They are trying their best to deal with an emergency facing the country. However, I wonder whether there is some level of complicity—I use that word with care—in the usual channels, that they so comfortably settle into these extraordinary arrangements. If people were truly aware of what was happening, of how we are passing legislation and how we are conducting scrutiny, even in terms of Oral Questions, they would be quite astonished.

Turning to the Bill, I am not going to use the notes that I would have used for this speech, but there are one or two things it is important to put on the record. I declare an interest as set out in the register, concerning the Bank of England, and that I am speaking in a personal capacity on this Bill. I have already spoken about the inappropriateness of doing this in this manner in Committee, but I also want to say a word or two about fast-track legislation. I sat on the Constitution Committee when it did a report on when and how Governments should use fast-track legislation. In all candour, and with the highest regard for the Minister, there are measures in this Bill that are simply inappropriate for fast-tracking through the Chamber in this way. These longer term and permanent changes should not be discussed today.

In light of that, I completely support Amendment 37 in the names of the noble Baronesses, Lady Bowles of Berkhamsted and Lady Altmann, for the Secretary of State to conduct a review of the provisions for a moratorium, and to lay a report before Parliament. They indicate that the review should be done in 18 months, which is a fair timescale.

I also support Amendments 2, 4, 8, 28 and 42, in the names of the noble Lords, Lord Stevenson, Lord Palmer, Lord Fox and Lord Hodgson, the noble and learned Lord, Lord Hope, the noble Baronesses, Lady Bowles and Lady Altmann, concerning all aspects of the independence of the monitor. The danger of the Bill not making clear the separation and independence of the monitor is a perception that there was a closeness between the directors of the company and a lack of transparency for creditors. I support those amendments essentially to assist the monitor, those insolvency practitioners. I hear what the Minister says about their own regulatory framework and the onus upon them to behave in an upright manner, but as he noted in his closing remarks, there are enough safeguards built into the regulation of insolvency practitioners whereby these amendments are otiose. I argue that by having them in this Bill—which is subject to review if Amendment 37 passes on Report—if they were entirely redundant, we could do away with them in 18 months. The Secretary of State could then lay before us the report that says that these amendments are redundant. I argue that this helps the monitor at this point, and on that basis, I intend to support them on Report.

[Lord Callanan]

I thank the noble Baroness. I am sure she understands that her comments about the hybrid House are not a matter for me. I have responsibilities in a number of areas, but the operation of this House is not one of them, so I will allow her to take those up with those Members who are responsible. I am merely a servant and am prepared to operate in whatever way the House sees fit.

Addressing the noble Baroness’s points about the Bill, it is important to recognise that permanent provisions have not been developed just in the short time since Covid-19. Some of the temporary provisions have, but the permanent provisions were the subject of a considerable period of consultation and engagement dating back to 2015. The process included the then Government’s review of the corporate insolvency framework, a public consultation in 2016 and an extensive period of engagement since then with a wide range of stakeholders. Additionally, the Bill includes regulation-making powers to enable changes to be made as and where necessary, so there has been extensive consultation. The intention to legislate in this area was announced in 2018, but this crisis has made it imperative. The Bill offers important new flexibilities and rescue opportunities that may help many businesses to continue trading during this crisis, which I hope the whole House would agree is the ultimate objective

Corporate Insolvency and Governance Bill

Baroness Falkner of Margravine Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 9th June 2020 Lords Chamber

[Baroness Falkner of Margravine (Non-Afl)]

My Lords, it is a huge relief to be back here in the flesh. I give an enormous vote of thanks to all those who have made it possible. I apologise to the Minister for being unable to attend his briefing session on the Bill yesterday. I am afraid that the invitation, which came late on a Friday afternoon, somehow got missed in the flow of traffic to my inbox. If I had known that it was taking place, I would very much have liked to attend.

My remarks on the Bill will be rather limited. I declare an interest as a member of the Bank of England’s enforcement decision-making committee, which is part of the PRA structure. I will thus keep my remarks to the general questions that arise in the course of the Bill. Having said that, I welcome the Bill. It is urgently needed to provide the breathing space and flexibility for firms in the current circumstances. My main concerns are with the intent versus the wording in the Bill, and perhaps the Minister can reassure me as the Bill progresses. Let me give an example from Clauses 18 and 19, which give the Secretary of State powers to amend legislation. The use of the word “procedure” in those clauses is ambiguous and appears to give

“considerable discretion to the Government”.

They are the words of the Law Society, which has provided a briefing on this Bill, for which I am very grateful.

These clauses relate to the power to amend and make changes to insolvency or governance legislation through statutory instruments, which extend to both primary and secondary legislation and are indeed very broad. I understand the need for speed, but the nature of these decisions will depend on a number of unknowable factors. If the idea is to give protection to businesses that would be viable but for the effect of the pandemic, as the Explanatory Notes put it, that raises questions about viability and determining it, and the confidence that stakeholders can have in assessing that viability. Then there is the issue of temporary changes to the overall insolvency regime and how long they might last, as well as the method of their review.

Turning to the moratorium and the rule and powers of the monitor, while necessary at a time of economic stress, there is the risk that the moratorium might be overemployed by firms as a shield from creditor obligations. The results of the question about how many companies might seek this route makes me fear that there are inadequate safeguards in place to prevent them exploiting it. The Law Society’s suggestion is that there should be a simple test with clear qualifying criteria for firms employing this avenue to buy time. Have the Government had conversations with the Law Society about its concerns?

There is no maximum period for the moratorium, nor any limit to the number of extensions. My concern is that the ability of directors to seek extensions from the court, and the Bill’s lack of a maximum number of extensions, may constrain creditor rights, as many other noble Lords have put it. Is there not a real possibility that the directors of a company start in the hope that the business is saleable, but do not quite get that their financial position might be worsening? Does the relative unpredictability of the outcomes that this power allows not disadvantage creditors, particularly those small creditors that so many noble Lords have spoken about?

Should there not be an overall time limit for extensions by the court without creditor consent? There also seem to be insufficient safeguards regarding the appointment of the monitor or additional monitors, or indeed, their duties. Other than professional qualifications, there are no statutory requirements for the monitor to be independent of the directors of the company who make their appointment. When directors decide on a replacement or additional appointment, they do not have to explain to the court why a replacement is being made.

On the face of it, the rules of the court are too limited, but the role of the monitor is potentially too cosy in terms of relations with the directors, and the provisions of creditor rights are too weak. There is much in the Bill to commend but, given the haste with which it has been fast-tracked, much to worry about in terms of the exploitation of well-meaning legislation that may prove to have been inadequately thought through.

Covid-19: Businesses and the Private Sector

Baroness Falkner of Margravine Excerpts

Thursday 21st May 2020 Lords Chamber

[Baroness Falkner of Margravine (Non-Afl)]

My Lords, we recognise that the health of the private sector will be the key to reducing unemployment, which is projected to peak at around 9%. I want to speak about the impact on the young, in particular those who do not seek the university route to build up their qualifications, but instead look to workplace training such as apprenticeships as the route to employability. We know that Covid-19 has already had a great impact on apprenticeship schemes around the country. According to reports, Covid has forced around 60% of employers to suspend on-the-job learning, to make recruits redundant or, less alarmingly, to furlough them. Apprenticeship schemes at 40% of companies have been suspended due to the lockdown, while in a survey of their current plans, over 30% of employers said that they would either hire fewer apprentices or none at all. This has been exacerbated by the fact that private apprenticeship training providers are going out of business or have already done so, and are therefore unable to provide the training.

It appears that the problem lies with the Department for Education, which is refusing to comply with Cabinet Office guidelines and to continue paying private apprenticeship providers during the lockdown. This matters, as 70% of apprenticeships in England are run by private companies. The inconsistency of the Department for Education is evident, in that it is providing support to FE colleges, as it should, but cannot see the logic of treating apprenticeship training providers in the same way.

For many young people from the most disadvantaged backgrounds, an apprenticeship is one of the few routes into longer-term, sustainable employment, particularly in the technologically advanced sectors. We also know that the disproportionate impact of youth unemployment will hit already disadvantaged northern towns, so it is perverse that, while the Government wish to level up the economy in those areas, departmental silos are preventing that. Will the Minister please ask the Department for Education to redress this anomaly before greater damage is done? Importantly, will he indicate to providers that the problem will be addressed, so that those who are making decisions today know the Government’s intentions before they take irreversible decisions?

Oil: Changes in Global Markets

Baroness Falkner of Margravine Excerpts

Thursday 21st May 2020 Lords Chamber

[Lord Callanan]

As my noble friend has implied, there are of course advantages and disadvantages. Around 11% to 13% of our domestic oil demand and around 47% of domestic gas demand are currently met through domestic hydrocarbon reduction. Any significant impact on oil production and prices would lead to an increased reliance on imports and therefore a loss of revenues from the North Sea. Of course, there are benefits as well—certainly regarding motoring costs and so on.

[Baroness Falkner of Margravine (Non-Afl)]

My Lords, the Minister will recognise that there is a perverse logic in that low oil prices reduce incentives for companies to move to cleaner technology. Will he consider the case for a higher carbon tax price or a tax as part of the future carbon pricing system to counter the slump in the oil markets and to retain pressure for green growth?

[Lord Callanan]

Of course, the UK already levies two carbon prices on fossil fuels, both through the European Emissions Trading Scheme and with a separate carbon price support mechanism. Over the summer of 2019 we consulted on options for long-term carbon pricing and we intend to publish a reply shortly.

Covid-19: Business

Baroness Falkner of Margravine Excerpts

Wednesday 13th May 2020 Lords Chamber

[Lord Callanan]

The noble Lord makes a very good point. I can tell him that earlier today we announced five new ministerial-led task forces that have been set up to develop plans for how and when currently closed sectors can reopen safely following the publication of the UK’s road map. This includes a DCMS-led task force considering some of the sectors he refers to: recreation and leisure, including tourism; culture; heritage; libraries and entertainment. As part of this scientific-led approach, each task force will work across government and engage with key stakeholders to ensure that the guidelines are developed and that those sectors can reopen as quickly as possible.

[Baroness Falkner of Margravine (Non-Afl)]

Does the Minister accept that, in the social distancing measures they have given for business, the 2-metres distance is not necessarily a measure that is recommended by the World Health Organization? The WHO recommends only 1 metre, and other countries have differing metrics—1 metre, 1.5 metres and so on. Does he accept that it is fairly onerous for businesses, some of which just do not have the capacity to keep that kind of distance? Will the Government review it as practice evolves and as the rate of R starts coming down?

[Lord Callanan]

Of course, we are always reviewing these measures and acting on scientific advice. I think we all have to accept that that scientific advice will evolve as the knowledge of the virus increases. The noble Baroness, as she usually does, makes an important point: these are things that we keep under constant review, so that we can get the country back to work as quickly as possible.

Economic Environment: Growth and Jobs

Baroness Falkner of Margravine Excerpts

Thursday 11th July 2019 Lords Chamber

[Baroness O’Cathain (Con)]

My Lords, I was delighted to see my noble friend Lady Neville-Rolfe’s name on the Order Paper. I knew that I would learn so much from her, as I did for many years when we were both at Tesco—although she was working hard and I was only on the board.

I was looking forward to the debate; I certainly have not been disappointed. Of course, we need to be aware that not everything is as we want it to be; in certain areas of taxation, it takes an awful lot of time to find out the right way to go. I am the daughter of a Revenue commissioner, so I should know something about it; it is probably the worst thing I deal with in business. Above all, we need to pull together on this particularly tricky aspect of our business and political lives.

I fear that we work in a rarefied atmosphere and are very much out of touch with certain groups of people in diverse areas. We tend to think the legislation we produce is flawless. We certainly need to do an awful lot more post-legislative scrutiny, and I hope that will happen in the next few months.

We have had an excellent debate, and the only thing I add to all that has been said is that we need to have much more confidence in ourselves. We are reading awful headlines in every newspaper, even those we think we can rely on—including the Financial Times.

[Baroness Falkner of Margravine (LD)]

Given the House’s keenness to hear the important things that the noble Baroness, Lady O’Cathain, is saying, I wonder whether she might actually address the House. It is very hard to pick up her voice when she is looking backwards.

[Baroness O'Cathain]

I am really very sorry and contrite. The fact is that I tend to face that way; do not forget that there are quite a lot of Members behind me too.

Right, where was I? I was saying that we needed to be confident. I recommend that people really take a grip of the terrific opportunity we have now, with great education and universities, huge investment in R&D and—I hear on Radio 4—apparently new medical developments every week. The people who can help us drive this are those graduating now. There should be some way of garnering together these people—the 18, 19 and 20 year-olds—and saying, “Be here; here is the best place to be. Give us the benefit of your investigations and studies”.

I do not want to say much else. I finish with a saying from Warren Buffett: “When everyone is buying, I am selling”. I am buying Britain at the moment.