Economic Growth and Environmental Limits

Debate between Jim Shannon and Caroline Lucas

Wednesday 10th July 2019 Westminster Hall

[Caroline Lucas (Brighton, Pavilion) (Green)]

I beg to move,

That this House has considered economic growth and environmental limits.

It is a pleasure to serve with you in the Chair, Mr Hosie. I am grateful for the opportunity to debate economic growth and environmental limits. It is, of course, a huge subject, covering why and how our current economic model, which puts GDP growth above everything else, must change fundamentally, fast. I will focus on the environmental imperatives for that, especially the climate and biodiversity crises, and set out practical steps that I hope the Treasury will adopt.

It is crucial to note, however, before going into the environmental detail, that the Treasury’s obsession with GDP growth is also undermining social and economic progress for the vast majority of UK citizens. GDP is an incredibly poor metric for measuring wellbeing or social cohesion. For example, people becoming unhealthy can actually have a positive effect overall on GDP, as revenue from associated healthcare boosts growth. Similarly, the extraction of oil and gas pushes GDP up, while pushing us closer to the precipice of climate breakdown.

I, of course, acknowledge that Government Departments have goals other than economic output. The Office for National Statistics in particular is doing some important work on wellbeing statistics as part of their “Beyond GDP” programme. There is also the ONS/Department for Environment, Food and Rural Affairs project that seeks to incorporate UK natural capital into the UK environmental accounts by 2020. All of that is welcome, but it is all at the margins. The ONS website is unequivocal about the priority. It says quite clearly:

“Gross domestic product (GDP) growth is the main indicator of economic performance.”

GDP therefore still trumps everything, remaining the primary objective across Government, especially for the Treasury.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Lady on introducing the debate, and on her hard work in this House on the environment and climate change. Although I certainly like to check on GDP and other financial aims, does she agree that the measure of success cannot be GDP alone? It must equally be based on the happiness and health of our constituents.

[Caroline Lucas]

I thank the hon. Gentleman for his intervention and kind words. As he says, the purpose of Government should surely be to promote happiness and health, yet we have a perverse obsession with GDP growth, which can often go up even when happiness and health are going down. That obsession must end if we are to secure a safe space for humanity, and if we are to live within environmental limits, or planetary boundaries, to use an alternative term.

I will not be surprised if the Minister takes issue with me on that, arguing that the UK has embraced so-called green growth, perhaps citing the clean growth strategy. Leaving aside the fact that there is nothing clean or green about the Government’s support for rampant airport expansion, road building or fossil fuel subsidies, the essential point is that even so-called green growth rests on the assumption that economic growth can be decoupled from environmental harm fully and fast enough. I will make the case this afternoon that that is a false assumption.

Just yesterday, a new report from the European Environmental Bureau exploded the myth of absolute decoupling. The study looked at a range of factors—materials, energy, water, greenhouse gases and so on—and found that there is no empirical evidence for an absolute, permanent, global, substantial or sufficiently rapid decoupling of economic growth from environmental pressures, either now or in the future. In other words, it is time to move from efficiency to sufficiency. As the report concludes,

“Although decoupling is useful and necessary, and has occurred at certain times and places, ‘green growth’ cannot reduce resource use on anywhere near the scale required to deal with global environmental breakdown and to keep global warming below the target of 1.5°C”.

The transgression of environmental limits has dangerous consequences for all humanity. That was pushed into the spotlight by the UN global assessment of nature—the so-called Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. If ever there was a mouthful that was designed to make it hard to know what anyone was talking about, that is it; we should call it a report on nature.

Regardless, it found that 75% of all land and almost half of all marine and water ecosystems have been seriously altered by human activity. It found that 1 million animal and plant species are now threatened with extinction. That is a horrendous number—significantly greater than at any other time in human history—and poses a severe and direct threat to not only those species but human wellbeing in all regions of the world, especially those least responsible for the damage that is causing it.

The report identifies the growth of the global economy, and specifically the growth of material consumption in affluent nations, as one of the major driving forces behind those trends. It is unambiguous about the need to move away from endless consumption and GDP as a key measure of economic success, stating that we must steer

“away from the current limited paradigm of economic growth”

and

“shift beyond standard economic indicators such as gross domestic product”.

I am keen to emphasise that, although Greens have long been leading the political debate on the environmental and social case for ditching GDP growth as a measure of progress, that argument is finally moving into the mainstream. Cross-party collaboration is incredibly important too, and I am delighted that 20 MPs have signed my early-day motion on the report from the intergovernmental panel. My early-day motion calls on the Government to

“urgently show global leadership in developing and advocating alternatives to GDP and in the transition to economies that, rather than being divisive and degenerative by default, are distributive and regenerative by design.”

DMB Solutions: Liquidation

Debate between Jim Shannon and Caroline Lucas

Monday 5th March 2018 Commons Chamber

[Caroline Lucas]

I thank the hon. Gentleman for his intervention, and I agree entirely. It is a point to which I will return shortly. As he says, the company must have known six days before it chose to go into liquidation that it was about to do that. I would have thought that to seek tens of thousands of pounds just days before was criminal—I would have thought it was fraud—but we are having great difficulty prosecuting the case.

I want to share one last story from a constituent who told me:

“My partner and I started a project with DMB Solutions in May last year. The project – to rearrange rooms in the loft extension, and create an extension housing a large open plan family room downstairs – was intended to take four weeks and cost about £95,000. We did some research on the company and were unable to find anything concerning. We had seen several boards outside houses and were impressed by the website and by the promises of the design consultant. However, in early January this year, we found ourselves in the position of having an upstairs with no heating, water or Building Control approval, and a downstairs with holes in the ceilings, unattached electrical cables hanging through ceilings, damage to rooms which were outside the scope of works, and a water system which does not provide enough hot water for a bath. We had paid all the money in accordance with the staged payment plan we had signed, so we are £60,000 out of pocket, and our lovely home has been ruined. These events have rocked me to the core and I still cannot quite believe this awful thing has happened to us. In my opinion, DMB Solutions have acted incompetently, immorally and illegally. What I find so distressing is that various bodies and organisations that exist partly to protect the public in these situations seem to have been ineffectual, enabling the company and Directors to continue to operate.”

[Jim Shannon (Strangford) (DUP)]

Today it is DMB Solutions and Brighton Pavilion; tomorrow it will be another company in Edinburgh, Cardiff or Belfast—this is a problem across the whole United Kingdom. Does the hon. Lady agree that it is essential that subcontractors be able to continue with and be paid for work that has been started and that this be a priority for the liquidators, because sometimes small contractors are able to finish the job for a small price?

[Caroline Lucas]

The hon. Gentleman has drawn attention to a very important issue. It is not just individual householders who are suffering; many companies are also suffering, and the smaller ones may face bankruptcy as a result of not being paid by the other companies. The ripple effect of these actions extends very far, and of course it is by no means limited to one part of the country. This is happening in all the nations of the United Kingdom.

My constituent went on to say:

“I understand that Trading Standards and the Federation of Master Builders had been aware of complaints about this company for more than a year. I also understand that DMB Solutions owed…half a million pounds in taxes.

How can it be that they were still allowed to be operating, and taking money from new customers for work that it was likely they had no intention of completing satisfactorily? I am sure that had I personally owed a proportional amount of money in taxes, someone in authority would have been having a stern conversation with me about it.”

I think that my constituent was entirely right.

One of the striking features of the many cases brought to my attention is the fact that—as we heard from the hon. Member for Hove—the office of DMB Solutions was sending out invoices to customers for work yet to be undertaken, right up until a few days before the directors of the company called in the liquidators on 29 December. For example, Mandy Stewart, a teacher, contracted with DMB Solutions last summer to do a loft conversion at her home. Her partner’s daughter and granddaughter were moving in with them, and work began in mid-October. The project was never completed. Mandy was left with a partially finished and uninhabitable loft conversion, damage to her neighbour’s roof, and damage to her ceilings and light fittings because a tarpaulin had been badly fitted by DMB’s workers during wet and windy weather.

Having paid some £41,000 to DMB Solutions, Mandy is now faced with finding further funds to have the work completed. She also needs to pay for inspection by a structural surveyor to ensure that what has been done so far is safe, to engage building control representatives to sign off the work and to have scaffolding re-erected because the previous company took theirs down when they had not been paid by DMB Solutions.

Furthermore, on 21 December, Mandy received an invoice for almost £10,000 for the next stage of the project. It was not actually due until January, but the covering e-mail from DMB Solutions stated that it was being sent early because the DMB offices would be closed during the Christmas break. As by then Mandy had serious concerns about the work that had been done, she did not pay, but, as she says,

“it is extremely hard to believe that the DMB directors did not know that the company was insolvent on 21 December 2017, barely four working days before they called in the administrators.”

From the accounts that I have been given, it is clear that Mandy is far from alone in having been invoiced by DMB Solutions for a large sum of money, by email on or about 21 December, when the directors must have known that the company faced imminent insolvency. In fact, it is clear that the company was signing up new customers as late as mid-December. Charlotte Preston paid £11,000 to DMB Solutions for an extension to her home on 15 December, but no work was ever started. Even more disturbingly, it is clear that disgruntled customers of DMB Solutions were reporting serious concerns about the company to trading standards as far back as early 2016.

According to accounts filed with Companies House on 11 December, by the time the company went into liquidation on 2 January this year, it owed no less than £542,000 to HMRC in unpaid VAT. Indeed, it seems that it may have been trading unlawfully for a considerable time before its collapse. One member of the Facebook victim support group, Andrew Painton, first raised concerns with trading standards that DMB Solutions was trading fraudulently, rather than just incompetently, in March 2017, and has done so many times since then. In January this year, Andrew told me:

“To say that the performance of Trading Standards has been lamentable would, in my view, be over praising them. They could have done so much more to protect the customers who became victims of this company during the latter nine months of 2017.”

He continued:

“In the Autumn of 2017, a fellow member of the Facebook victim support group submitted a Freedom of Information request to Trading Standards, and this revealed the escalating number of complaints in recent years about DMB Solutions. This did galvanise Trading Standards into action…but it was too little too late.”

I recognise, of course, that Ministers are not responsible for the collapse of private sector businesses, but I hope that the Minister will be able to help this evening by providing clarity about what my constituents can do. Specifically, they want to know how to try to obtain financial recompense and how to ensure that the directors of DMB Solutions cannot simply walk away from their debts—both to their unfortunate customers and to the taxpayer—and start all over again by forming a new company. I can find no adequate Government guidance on either of those points. If there is no comfort under existing legal frameworks, perhaps the Minister can point me to the changes that would be required to company law, or any other laws, that would allow my constituents to be recompensed for their suffering.

Since December, the local trading standards office has been collecting evidence from those affected by the collapse of DMB Solutions. It has also advised them to make a complaint to the Action Fraud line, which reports to the National Fraud Intelligence Bureau, based in the City of London police service. Trading standards in Brighton also says that it plans to submit a report to the economic crime unit of Sussex police. However, the Action Fraud line appears to focus on cyber-crime, rather than incompetently run or even unlawfully run building companies, and the House of Commons Library has been emphatic in advising me that there is nothing that trading standards will now be able to do for those of my constituents who have lost out as a result of the collapse of DMB Solutions. The Library tells me that the appropriate body, at least in terms of seeking to get the directors of DMB Solutions disqualified from acting as company directors in future—something my constituents are understandably keen to see happen—is the Insolvency Service.

My office has consulted a local lawyer specialising in consumer rights, who similarly suggested that the Insolvency Service, not trading standards, is the appropriate body for my constituents to complain to about DMB Solutions. However, the Insolvency Service phone line no longer exists, and its website has a small amount of hard-to-find information on it, stating that it can carry out a confidential investigation or pass complaints on to another public body if they are serious enough, and that if it finds anything wrong and has enough evidence it might ask a court to close a company down or disqualify the company’s directors. It might also carry out a criminal investigation if it finds the company has committed an offence.

However, Andrew Painton of the Facebook victim support group tells me that he has twice complained to the Insolvency Service about DMB Solutions, but on each occasion received only a standard response saying that the service was not considering an investigation against the company. Moreover, the Insolvency Service advises that if a company has already gone into administration, into receivership or is being liquidated, complaints need to be directed to the official receiver or insolvency practitioner. I have emailed them myself, but to date have not had a response.

Trading standards—which appears to have done nothing when it had the chance to do so—is now acting as if it is responsible. It is doing so in concert with Action Fraud and the National Fraud Intelligence Bureau, which does not appear to me to have any obvious role in such a situation. My constituents are confused and they need clarity about who is responsible for ensuring enforcement of the law against the directors of DMB Solutions. In short, it is all about as clear as mud.

While I do not, of course, expect the Minister to accept any responsibility for the collapse of DMB Solutions, I do hope he will be able to set out, clearly and authoritatively, which public body or bodies are now responsible for gathering evidence from my constituents and considering what action needs to be taken against the directors of the company. I would also like to know whether the Minister agrees that the Department should do more to ensure that members of the public have access to reliable, accurate information when such problems arise. People need to know which body to turn to, and what they can expect that body to do, first, when they experience such shockingly poor service by a private sector business—as numerous customers of DMB Solutions clearly did for at least a year before the company collapsed—and, secondly, when, as in this case, a business goes into liquidation and the directors apparently disappear.

More particularly, on behalf of my constituents, I would like the Minister to answer the following questions. If the Insolvency Service is responsible, is it good enough to have a few sparse paragraphs of so-called guidance for members of the public hidden away on a corner of its website? I do not think it is. Could there not be a single, well signposted and advertised point of contact—a one-stop shop—for members of the public who fall victim to the poor business practices and eventual collapse of a limited company like DMB Solutions? Is there perhaps a role for the Citizens Advice consumer helpline here? Currently, the helpline appears to refer only to trading standards, but what if trading standards is not the appropriate enforcement body, as we have been told it is not in this case? Could the appropriate enforcement body, whichever it is, be facilitated and resourced to take a more proactive approach to ensuring that, in such a situation, directors of a failed company are disqualified from acting as directors in future if there are grounds for such disqualification?

I appreciate that there are a number of questions, but I greatly look forward to hearing the Minister’s response, not least because many families and individuals in my constituency are depending on it.