Local Government Ombudsman (Amendment) Bill (Money)
Debate between Clive Betts and Nigel Evans(13 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Deputy Speaker (Mr Nigel Evans)
Order. We are not here to discuss the Bill. We are just discussing the money resolution, which is rather narrow.
Mr Betts
Yes. I made my point about the ombudsman, because there are concerns about the delay to the service itself. Candidates have been waiting for nine months, and that is not an acceptable way of proceeding—I wanted to put that on the record.
I understand your strictures, Mr Deputy Speaker, about the money resolution and not discussing the Bill. However, I return to what the Minister said about not envisaging the measure costing anything to local authorities. There is potential for costs and the spending of extra money precisely because of the way in which the Bill is drafted and how it deals with the extension of powers relating to health and safety. It creates a relationship between the ombudsman and the local authority that is different from the relationship in any other matter that an ombudsman considers. On any other matter, the ombudsman can produce a report that an authority is bound to consider and tell the ombudsman what action it will take, but in this instance there is no requirement for the authority to act in line with the ombudsman’s recommendations.
As drafted, the Bill includes a clear right of redress for the ombudsman against local authorities, including the ability to compel them to pay compensation to event organisers for events that are unreasonably banned or restricted. That is where money comes in. The power that is granted in respect of that issue is different from the power in other issues with which the ombudsman deals. The power to spend the money does not rest with the local authority—it effectively rests with the ombudsman—so we are almost giving a blank cheque or an undetermined ability for the ombudsman to decide in any case how much the local authority should pay in compensation, with the cost to local council tax payers determined by an unelected official, rather than elected councillors.
That is a fundamental issue of public expenditure that the Bill, as drafted, opens up. The Minister may discuss amendments, but the promoter has said that the Bill has not been amended yet. As drafted, that is precisely what it would do, and I have serious concerns about it. The Minister cannot say that under the Bill as drafted there are no spending commitments, but he can say that there are potential spending commitments, which will be determined by unelected people. The counter-argument might be that, as the measure applies only to events that have been unreasonably banned there is a right for judicial review—in which case, why do we need the Bill? However, there is the potential for money to be spent.
Sheffield Forgemasters
Debate between Clive Betts and Nigel Evans(14 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Clive Betts (Sheffield South East) (Lab)
Thank you, Mr Deputy Speaker—[Interruption.]
Mr Deputy Speaker (Mr Nigel Evans)
Order. Would Members who are leaving the Chamber do so quietly?
Mr Betts
Normally when a Member speaks in an Adjournment debate at this time of night, they stand in the Chamber in splendid isolation. It is obviously pleasing to see so many right hon. and hon. Friends here tonight, particularly four other Sheffield MPs, my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), and my hon. Friends the Members for Penistone and Stocksbridge (Angela Smith), for Sheffield, Heeley (Meg Munn) and for Sheffield Central (Paul Blomfield). It is also pleasing to see my right hon. Friend the Member for Rotherham (Mr MacShane) and many other colleagues.
This issue affects not merely Sheffield—it has touched a nerve across the nation—but forging and forgemasters are very important in the history of Sheffield. As a child growing up in the city, the pounding of the drop forges down in the Don valley, which is now part of my constituency, was like the very heart of the city beating.
However, this debate is not only about the history of industry in Sheffield, but about its future. In 2005, when the company was part of the Aitchison group, there were major financial difficulties. Eventually, the company was saved by a management buy-out led by chief executive Graham Honeyman, who by putting his own money in saved the firm, its workers’ jobs, debts to suppliers and, with the help of the pension protection fund, the workers’ pensions. Despite initial problems with cash flow and rising energy prices, the company became profitable and increased in size to 700 employees, taking on 70 new apprentices. The company has full order books and 80% of its work is for export, and it has a turnover of £100 million. All the company’s profits to date have been reinvested.
Two or three years ago, the company saw a major opportunity in the nuclear industry. With £150 million of investment, it could buy a 15,000 tonne forging press. However, as that was larger than the company’s total annual turnover, it needed additional help. It went to my friend, the previous Member for Sheffield Central, Richard Caborn, who deserves a great deal of credit for the help he gave at that time.
That package would have created 400 jobs. The Government were approached and over a two-year period, very detailed negotiations were held. Eventually, an £80 million loan was agreed as part of a package involving private investment, including support from Westinghouse, loans and equity release. There was a full appraisal by Department for Business, Innovation and Skills officials and Treasury officials. It was confirmed in parliamentary answers that the independent Industrial Advisory Board gave its assessment, and that Deloitte and Allen & Overy looked at market opportunities and additionality, and at cost-benefit and commercial considerations. After all that, it was concluded that a loan of £80 million was the right way to go as part of an overall package. The loan was also part of an industrial strategy with a nuclear research centre and the Advanced Manufacturing Park. I do not think that France and Germany would have such a dilemma about what to do about investing in such a company.
After the election, we were told that there would be a review. Funnily enough, most of the reviews that took place actually approved schemes that were in train, so let us examine what the review of the Forgemasters loan amounted to. There was no new cost-benefit analysis and no new external advice was sought. Indeed, the Government did not get back to the original advisers. There was no contact with Forgemasters. The first time the company learned anything of the review was when the chief executive got a phone call from a Minister, who said, “Your loan has been withdrawn.” That is no way to carry out a review. The kindest thing I can say is that it was a virtual review; the worst thing I could say is that it was an absolute sham.
Since then, various reasons have been given for the refusal of the loan, including that the directors would not dilute shares. The Deputy Prime Minister and the Prime Minister said that, but the former has had to write to the chief executive to apologise for making inaccurate statements, although he did not apologise today in the House.
Private funding was involved via an element of equity release, but the company would not continue with extra equity release to the point at which control passed back to an absentee owner—the very sort of owner that nearly bankrupted the company in 2005 when the workers and management had to save it.
It was said that commercial options were available. Indeed, the Lib Dem leader of Sheffield city council, Councillor Paul Scriven, said that the commercial markets would provide the money. Will the Minister confirm that at a meeting with Forgemasters and his officials the other day, it was agreed that there were no straightforward commercial options without the loan?
We have been told that there is no money, and that this is unaffordable, but we are talking about an £80 million loan, not a grant. It would have been repaid with interest, making a repayment of £110 million, plus additional money from equity warrants if the investment had been successful, plus the tax revenue from those employed by Sheffield Forgemasters and by companies in the supply chain such as Davie Malcolm, Siemens and Rolls-Royce. This loan would actually have made a profit for the Treasury. The Business Secretary almost admitted as much to the Select Committee the other day.
We were also told that the loan had been a pre-election bribe to buy up a few votes at the general election, but the negotiations had been going on for between 18 and 24 months before the election. So what was the real reason for this decision?