Covid-19: Financial Support for High Street Retailers

Earl of Shrewsbury Excerpts

Tuesday 27th October 2020 Lords Chamber

[Lord Callanan (Con)]

As I set out earlier, we will be announcing a review of the business rates system shortly but we have a number of other elements in place, which I outlined in answering the first questioner, to support the high street during this difficult time.

[The Earl of Shrewsbury (Con)]

My Lords, does my noble friend agree that the serious demise of the high street was evident long before Covid hit, through a combination of the success of out-of-town shopping centres and the trend for shopping online? We really should have been thinking about things of this nature many years ago. Does he also agree that it is vital that we rethink the role the high street must play post-Covid, especially in rural towns, where it has always been a major part of the social structure of those communities?

[Lord Callanan (Con)]

I agree with my noble friend that the retail sector has been undergoing a period of transition that well predates the pandemic. High streets play a crucial part in our rural communities, and through the £3.6 billion Towns Fund and the High Street Task Force we are providing support to local businesses and high streets.

Emissions: Housing

Earl of Shrewsbury Excerpts

Monday 22nd June 2020 Lords Chamber

[Lord Callanan [V]]

We are taking action in a number of areas. We are spending something like £640 million a year under the ECO scheme to support fuel-poor and vulnerable households in precisely the sort of work that the noble Lord mentioned. We want to go further, and that is why we need the strategy to which I referred.

[The Earl of Shrewsbury (Con) [V]]

My Lords, in the case of grade 2 and grade 1 listed buildings, will planning authorities be advised to relax their rules to enable insulation work to be carried out?

[Lord Callanan [V]]

The noble Earl makes a very good point. We are committed to working with the planning authorities to help us in our aspiration for green growth and in bringing as many homes as possible to reach EPC band C strategy by 2035. As we develop those policies, we will need to consider the interaction with planning restrictions where that is appropriate.

Corporate Insolvency and Governance Bill

Earl of Shrewsbury Excerpts

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

[The Earl of Shrewsbury (Con) [V]]

My Lords, I declare an interest as a former deputy chairman of Britannia Building Society.

I broadly welcome the Bill, especially the proposed introduction of a moratorium on companies that find themselves in financial distress, which is intended to be a permanent measure. Temporary measures included in the Bill to alleviate pressure on and support for business through the current pandemic are, in my view, a vital move forward and are urgent. It is obvious that the fallout from the pandemic for the vast majority of businesses, especially SMEs—many of them family businesses—will be at the very least exceptionally serious. Many of these businesses are successful and profitable enterprises, but no one has any idea whatever what the financial future will hold as the world pulls through this dreadful time. Anything that the Government can do to alleviate the financial problems facing business must be welcomed. I congratulate the Chancellor on his supporting initiatives to date—albeit that the distribution of loans has been full of problems.

Although the temporary measures proposed in the Bill are vital and have been drafted as a matter of urgency, the measures intended to be permanent have been out for consultation since 2018. These measures, too, are most necessary but require further improvement for the legislation to be able to work efficiently and fairly. This has been flagged up by insolvency practitioners, and their expert advice should be heeded. Will my noble friend confirm that Parliament will have the opportunity to amend any shortcomings in this fast-track legislation in the future through an amendment Bill or through secondary legislation, should that be deemed necessary?

Serious lessons need to be learned from the banking debacle of 2008. Your Lordships will recall that one of the largest banking failures at the time was Royal Bank of Scotland. That bank had a division known as Global Restructuring Group that became infamous. The toxic fallout from that scandal continues today and is well documented. Does my noble friend agree that it is right and proper that financial institutions in this country should be expected, as a matter of law, to act in good faith in all their dealings with commercial borrowers? Profitable businesses that borrowed considerable sums experienced problems as a result of the property downturn. They were placed under the care—if, indeed, you can call it that—of GRG. Their assets were valued and borrowers were often offered a restructuring of the loan, sometimes at a greater figure than the revised valuation. In many cases, GRG declined and sold the assets to a part of RBS called West Register. I believe that, if they had been allowed to sensibly restructure, many of those affected businesses would be active and profitable today.

Given the widespread use by financial institutions of the threat of putting a company into administration as a means of gaining commercial leverage in negotiations with borrowers, will Her Majesty’s Government consider protections against such behaviour? What consideration are HMG giving, in the current changes to insolvency legislation or elsewhere, to introducing checks and balances such that financial institutions cannot appoint their chosen insolvency practitioners to run companies into insolvency and thereby control an administration or liquidation process?

In conclusion, I welcome this Bill and its intentions and proposals, but the Government should come forward with their own amendment to enshrine in law that lenders in commercial lending must comply with a duty of care to their borrowers so that, when times get tough, borrowers are treated fairly and properly and that scandals such as the GRG episode never happen again.