Covid-19: Businesses and the Private Sector

Baroness Garden of Frognal Excerpts

Thursday 21st May 2020 Lords Chamber

[Lord Campbell of Pittenweem (LD)]

My Lords, we shall not succeed unless we have the most effective partnership that we can between public and private, any more than we will not succeed if we do not accept the advice of the noble Lord, Lord Heseltine, expressed last night in an interview on Channel 4, that it is essential to utilise local initiative, knowledge and experience.

What I want to know is what forward thinking is taking place in the Government. There was a lot of wartime language at one stage, in the early days of our understanding of this virus. It is worth remembering that the Butler education reforms were conceived in the course of the Second World War, as indeed were the Beveridge proposals for social security. We certainly need equivalent foresight now.

There are two particular responsibilities which seem to me necessary for the Government. The first is education —to some extent I am echoing some of the sentiments just offered by the noble Baroness, Lady Falkner of Margravine. Once and for all we should put vocational education upon a par with higher education.

It is also necessary for the Government to embark on a serious programme of retraining. Those Rolls-Royce employees who are going to lose their jobs have a skills base that would easily allow them to be retrained for other similarly skilled opportunities. How shall we pay for this? I do not believe that the wholesale raising of taxes makes sense, as it will depress both demand and initiative; nor is cutting public expenditure possible. There can be no return to austerity; indeed, we may need to increase public expenditure.

The solution is obvious. Interest rates have never been more favourable. The Government should—

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

We seem to have lost Lord Campbell. I will move on to Lady McIntosh of Pickering.

--- Later in debate ---

[Baroness Ritchie of Downpatrick (Non-Afl)]

My Lords, I thank the noble Lord, Lord Dobbs, for initiating this debate. I will bring a perspective from Northern Ireland. As far back as 26 March, 100 private sector companies diversified, showing skill and expertise to help in the Covid pandemic. They made scrubs, ventilators and PPE equipment because of the paucity of those items. Many restaurants and coffee shops provided much-needed meals to those who were shielding or who could not provide for themselves because of the inequalities that had arisen.

The Government provided finance through the furlough scheme and the self-employed scheme, but we have to look to the future. It is quite clear that there were many problems with our existing economy. We now have two shocks—the first was Brexit—and I hope Northern Ireland businesses will not face many barriers as they try to face what happens in terms of the Irish Sea and what was announced yesterday. It is important that there is unfettered access.

The second issue is that we have to look at the level of redundancy that will ensue whenever the furlough scheme ends. As the Ulster Bank survey last week showed, we are facing a vice-like grip on our economy—a major contraction of around 10%. What plans do the Government have, along with the devolved institutions, to bring forward regional and national strategies to build our business confidence, a business strategy and an economic strategy in the post-pandemic era? That is very important, and I would like to hear the Minister’s views on it.

[The Deputy Speaker]

I call the noble Earl, Lord Shrewsbury. Do we have him? I do not see him. I call the noble Lord, Lord Hussain.

--- Later in debate ---

[Lord Wei (Con)]

My Lords, declaring my interests as in the Lords register, especially in tech, I join other speakers in praising the contribution of the private sector, which by and large has really stepped up to play a role in helping tackle this crisis that is bigger than just making money for shareholders. It has supported us so much as a nation, and we need to look out for business and employees in the coming economic crisis.

I have three questions for the Minister, bearing in mind the time. First, in future can the private sector be engaged through the furlough scheme and a modified industrial strategy, taking Covid into account, to transition to a more resilient world, so that businesses are never again caught out because they operate only in a physical way? We have heard many examples—pubs becoming supermarkets, et cetera. This would help us all help those who will be unemployed move into the new jobs of the future. Rather than everyone being paid to stay at home and not work, perhaps we should start paying people a little to start imagining what the future could look like.

Secondly, could more be done to build trusted hubs online? For example, I think of the excellent work of Frontline.live, set up within weeks recently to facilitate requests for PPE and suppliers that can provide it. Rather than relying purely on government procurement technology, we could look at things such as leisure technologies and blockchain to find ways to eliminate fraud, increase transparency and ensure that supplies are delivered to spec faster and less bureaucratically, using different trusted platforms that need to be built. In this context, I think particularly about the many low-margin businesses in this country in food production or other areas that right now are struggling to raise finance, operate or pay off invoices. Could there be ways in which we could help support more resilient supply chains in low-margin industries, especially post Brexit, and create the ability for them still to have the funding they need to keep our critical services and goods and products flowing, even in crises such as this?

My final question relates more to health. There have been some signs in parts of the NHS and Public Health England of a slightly anti-private sector attitude, which may have contributed to some of the challenges we have had in securing PPE and in supply chains around testing labs and so on. Could more be done to enable the NHS and, especially, Public Health England and other public bodies to have greater awareness of the potential to work with business, so that together we can solve future problems and crises more effectively and rapidly?

[The Deputy Speaker]

My Lords, we now come to two speakers who are out of order on the main list. We will first hear from the noble Lord, Lord Tyrie, and then from the noble Earl, Lord Shrewsbury, who we hope will have regained his signal. Then we shall have the Front-Benchers winding up. I call the noble Lord, Lord Tyrie.

[Lord Tyrie (Non-Afl)]

I declare an interest as chairman of the CMA. I will say a few words about what the CMA is doing to try to assist in this crisis. In a nutshell, the CMA has three jobs during the crisis. First, it needs to ensure that competition law does not get in the way of necessary co-operation between firms in the crisis, especially to ensure the maintenance of essential medical and food supplies. I am pleased that the Government have acted on CMA advice to exclude a number of agreements between firms on competition law that would otherwise have been prohibited.

The second thing we can do is to act rapidly and robustly against the small minority of traders that may have been exploiting consumers’ vulnerability. The CMA’s statutory base contains no provisions for emergency action of that type but we have a taskforce for exactly that job. We have sent over 250 letters to firms asking for an explanation of their conduct. To address price gouging, deterrence is essential in the long term, and even in the next few months, as are time-limited emergency powers, like those introduced in many other countries, especially where they have been put in place as part of the emergency. Something like that in the UK would boost deterrence further. We have offered the Government advice on this.

The third point, and the most important in the long term, is the contribution that the CMA can make to post-crisis reconstruction. The starting point will not be good. Big recessions usually weaken competition, as market concentration rises. Legislation is going to be needed and, as a number of noble Lords have pointed out, to play a full role we will need a stronger legislative base.

[The Deputy Speaker]

Do we have the Earl of Shrewsbury? I think he still does not have a signal, by the look of it. I call the noble Lord, Lord Fox.