Corporate Insolvency and Governance Bill

Lord Liddle Excerpts

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

[Lord Liddle (Lab)]

My Lords, I would like to make three points—briefly, I hope. The first is a point of process. It would be nice if the Minister acknowledged that this is clearly not a normal Committee stage. We are grouping different subjects in a way that we would not do normally, because of the urgency of the Bill. Given that we are moving to a critical economic situation, I accept that urgency, but this is not a normal way of proceeding. As the noble Viscount, Lord Trenchard, and the noble Lord, Lord Hodgson, have just said, the Government are trying to deal with the situation by mixing things that are required for the immediate economic urgency with longer-term reforms, and, at the same time, trying to deal with the uncertainties of what they will face by including lots of Henry VIII powers in the Bill.

This is a classic example of where effective post-legislative scrutiny is needed. We should have a committee to look at how the Bill is implemented, and to bring forward proposals for reform after six months, or a year, or whatever seems reasonable. My first point is that this is not satisfactory, and we need a process of post-legislative scrutiny.

Secondly, I am not an insolvency practitioner and I have never had to deal with anything insolvent. However, I am greatly interested in questions of industrial policy. Prior to the Labour Government coming to power in 1997, I read a lot of academic pieces about our bankruptcy and corporate insolvency provisions which suggested that our law was much tougher than that of the United States, and, as a result, was a barrier to the entrepreneurship that all sides of this House want to see flourish in this country. Indeed, the Labour Government went on to reform the bankruptcy and insolvency laws.

There is of course always a tension in this. The introduction of something equivalent to the US Chapter 11 has also led to abuses, and we have all seen instances of companies going insolvent, where, on the face of it, it looks as though their boards have behaved with a great deal of irresponsibility. It would be nice, therefore, to have a statement from the Government on what they think the responsibilities are to be of the monitor that is being introduced. In whose interests will the monitor be acting? What is the public interest in these legal reforms? This is not a matter for legislation, but rather for a major speech by Ministers, which would then be taken into account in subsequent interpretation of the legislation by the courts. As someone said, I am sure that there will be a lot of that.

On my final point, I have of course a lot of sympathy with my Labour colleagues who have pointed out that the trade unions, workers and employees have not had a fair deal in these matters in the past. I would like to see their rights strengthened in this legislation, but there has to be a balance. One of the most disastrous experiences of a crisis happened in the coal industry in 1926, when the union position of “Not a penny off the pay, not a minute on the day” led to a human tragedy of awful proportions in Britain. To save their company, the workers may be prepared to make sacrifices, but their position needs to be strengthened. Again, I would like from the Government a high-level political statement to say that they accept that our culture of capitalism has to change, that we have to move in a more partnership- driven direction, and that when dealing with the details of things such as insolvency law, we should try to reflect in legislation the need for a balanced set of rights and obligations.

I must apologise to the Minister: I have another engagement, which may mean that I will not hear his reply at the end of this discussion. I will, however, be coming back to the Committee as soon as I can.

[Lord Balfe (Con) [V]]

My Lords, I begin by endorsing what the noble Viscount, Lord Trenchard, said about the way we are conducting this. We are in a very unusual time, I accept, but I hope that as soon as possible we will get back to a normal House and a normal way of dealing with Committee stages—and with everything else, for that matter.

My second point is for the Minister, who of course comes from the north-east—not a traditional Conservative area, but one that has always had a strong Conservative vote. As we move forward, one thing we need to remember is that the last Labour Government was not exactly the best thing that trade unionism ever saw. They did basically nothing that the Conservatives wanted to repeal when they came in. I ask the Minister to remember that some of the great social legislation of Britain was actually passed by the much-reviled Neville Chamberlain when he was Minister for Local Government and Chancellor of the Exchequer in the 1920s and 1930s: such things as wage councils and some basic rights. The way Stanley Baldwin handled the aftermath of the General Strike contributed tremendously to the fact that the Conservative Party ran Britain for two-thirds of the last century and is well on the way to achieving that again. I make that point in beginning.

My next point is that insolvency is a sad necessity—in a capitalist economy companies go up and down—but it is as much a sad necessity for the workers as it is for the people who own the company, and we should never forget that. The workers in any industry do not go home at night thinking, “My company does not matter”; they are often devoted servants and they are as hard-hit by insolvency as anyone else. I ask the Minister to remember that, as we move forward into the 21st century, we may well need to rewrite the historic deal between the working people and the state in the same way that we did 100 years ago. As such, I will not endorse all these amendments, but I am particularly interested in Amendment 84 tabled by the noble Lord, Lord Hendy, and supported by the noble Lord, Lord Hain, on unpaid remuneration for workers.

One of the great tragedies and wrongs of recent events has been that workers—Thomas Cook is a good example—can put in a month’s work, suddenly their company goes bankrupt and they do not even get the three weeks’ wages for which they have just worked. I ask the Government not necessarily to accept Amendment 84 but to look at a way at least to prioritise the fact that if a company goes into insolvency, wages that are more or less immediately due to the workforce are paid—taken out of the present system, as I understand they are in Germany, and paid to the workers.

I also have sympathy with Amendment 27, in the name of my good noble friend Lady Altmann, which would prevent insolvency practitioners disposing of items that are pledged to a pension fund. If items are pledged, they are pledged and cannot just be taken back and sold off willy-nilly. I think the relationship between company pension funds and company assets needs to be looked at. Certainly, my noble friend’s amendment is well worthy of us having a look at to see what we can do.

I also point to something that will come up in a number of subsequent amendments, which is the need to protect pensions. Pensions are a worker’s deferred wages: it is not some bonus pot in the distance that they can have if they are lucky, but part of their remuneration. In a funny sort of way, one of the advantages of a defined contribution scheme is that at least it generally goes to the workers as it is earned, rather than being held on to by the company, but even that needs further looking at.

My final point is that I think we need to look at how the concerns of workers can be heard by the courts. Although I and many others often refer to trade unions, it is worth remembering that the trade union movement in the private sector is incredibly weak and we have to look well beyond trade unions at ways in which working people can be represented in insolvency situations. They should have some rights to be heard, and I believe that those who judge insolvencies should at least be prepared to, and be required to, listen to what they say and, in coming to their decisions, to make their reactions to their representations part of the response: in other words, workers have a right to be heard and to be responded to.

Having said these things, I welcome the legislation. There is never a right time for a Bill such as this. I have reservations about the Henry VIII powers, but I am prepared to see if this will work. Fundamentally, I think that the Minister, with his background, understand the concerns of working people, particularly working people from outside London, and I am sure that he will do his best to strengthen the Bill in the ways we are urging him to do.

Corporate Insolvency and Governance Bill

Lord Liddle Excerpts

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

[Lord Liddle (Lab) [V]]

My Lords, I commend the Government for their urgency in bringing forward this legislation. It is clear that, as a result of Covid, we face a potentially massive corporate crisis affecting companies large and small. Through the moratorium and the associated measures, the Bill provides a breathing space for a restructuring plan—so it is part of the solution, but not the whole solution. As the noble Earl just explained, we certainly do not want a repeat of the way some banks and creditors behaved in the aftermath of the 2009 financial crisis. They certainly did not act in either the interests of the companies or the public interest.

Many speakers have referred to corporate rescues and highlighted various bad business practices resulting from them. I have a lot of sympathy for that, but in our present situation it is absolutely essential that there is an effective corporate rescue mechanism that enables firms with a sustainable future to survive. That is why this legislation is so important.

The noble Lord, Lord Leigh of Hurley, thinks that this rescue mechanism can be financed by the private sector; I am sceptical. I think that the private sector will come in only if it thinks it can buy the assets cheaply and have total freedom, without constraints, to do what it wants with them. I think we will see a need for a massive conversion of debts that companies cannot afford to pay into public equity. The noble Lord, Lord Agnew of Oulton, acknowledged this at Question Time today.

We need a public debate now about how this rescue operation will be organised. There is a great lack of institutional capacity on the part of government to do it; it cannot just be done from the centre. My advice to the Government is to try to devolve the decision-making regionally and expand the role of the British Business Bank. However, none of this rescue will work if, first, HMRC sees its main priority as trying to secure the money it is owed—that would be one hand of the Government not being aware of what the other is doing —nor, secondly, if the Treasury tries to vet every single decision, which would just be hopeless.

Business, of course, has to face up to greater responsibilities, but I think that for small and medium-sized companies we should adopt a lighter touch. The key thing there, in my view, is that public policy should promote a culture of employee engagement. When it comes to the larger public corporations and rules about what dividends can be paid, how much executives can earn and how pensions are to be protected, all that will be inevitable in this process of rescue.

I have a final word for my Labour colleagues. We should not see this as an opportunity to impose heavy-handed regulation and public control on business; we should be trying to move to a reformed, sustainable capitalism. I agree with my noble friend Lord Adonis, who quoted Keynes’s remarks about the need for experimentation in public/private ownership: what we need is a new era of public/private ownership

Covid-19: Businesses and the Private Sector

Lord Liddle Excerpts

Thursday 21st May 2020 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I share with the noble Lord, Lord Dobbs, a belief that the country needs a vibrant private sector of both big companies and SMEs. However, the crisis requires us to rethink its moral purpose and relationship to the state. I associate myself with what the noble Lord, Lord Balfe, said on the first point.

Shareholder value had already been knocked off its ideological pedestal before the crisis, but what we now see are the green shoots of a new era of public-private partnership that we should support. On Covid vaccines, the Government are sponsoring research and innovation, but also trying to ensure that we manufacture the stuff in Britain. The Government should take a comprehensive look at nurturing domestic and pan-European supply chains for goods, from basic PPE to highly advanced telecoms equipment. There are pressing security concerns that have to be addressed—I do not want a new Cold War with China—but we have to be less naive and more robust.

Covid is creating the greatest economic crisis since World War II. The Government are offering generous loans to keep companies afloat, but many of these will not be repaid. The solution is to convert these loans into public equity. We must turn the British Business Bank into a German-style KfW and work out how this new relationship will work.

Finally, the Government are opening their doors again to the trade unions. Employers are seeing the positive role that workplace representatives can play in ensuring health and safety. We need to match a new era of public-private partnership with a new era of social partnership.

Weights and Measures Act 1985 (Definitions of “Metre” and “Kilogram”) (Amendment) Order 2020

Lord Liddle Excerpts

Wednesday 20th May 2020 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I join others in congratulating the noble Lord, Lord Callanan, on the clarity of his exposition at the start of the debate on this very complex matter. It is also nice to see him at the virtual Dispatch Box once again. To tell the truth, I am rather missing him from all the debates that we had together on Brexit. It is a shame, in a way, that he has gone to another department—certainly his successor does not appear to wish to engage the House on the issues of our future relationship with Europe in quite the same depth that he was so nobly and willingly keen to do—so it is a pleasure to be debating something with him again today.

This is essentially a very technical measure; I thought the noble Baroness, Lady Northover, put it very well in explaining its importance. However, in the past this business of weights and measures has of course been of no small amount of political significance. I would just like to make some comments on that.

We will all remember the great brouhaha of the early 2000s about the “Metric Martyrs”, the refusal of traders in some of our markets to go along with these standards. They were taken to court, and this was described by the Daily Mail as the EU’s “bureaucratic bullying”. I think it was described by many people who were opponents of the EU at the time as a classic example of the EU bullying its way into something that good Brits wanted to have nothing to do with. What makes the row about the Metric Martyrs quite poignant is that, of course, one of the people who were greatly involved in it was a man called Mr Steve Thoburn, a trader in Sunderland. It was a case involving Sunderland City Council that brought this issue to prominence, and of course Sunderland was the city that voted overwhelmingly for Brexit.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I remind the noble Lord of the speaking time limit.

[Lord Liddle]

Yes. I believe that the Government should now be acknowledging that this issue is nothing to do with EU sovereignty but was to do with international standards, and that it is desirable for Britain fully to follow international standards. I humbly suggest that the Minister, as a former North East MEP, writes to the Daily Mail, the Daily Telegraph and all those others—

[Baroness Bloomfield of Hinton Waldrist]

I suggest that the noble Lord draws his comments to a close.

[Lord Liddle]

Of course I will. I suggest that he writes to them and explains that the great brouhaha about EU bullying was so much nonsense.

[The Deputy Speaker (Lord Duncan of Springbank) (Con)]

My Lords, it may be worth remembering that the time recommended for each contribution is three minutes. On that basis, I now call the noble Lord, Lord Wei.

Draft National Policy Statement for Geological Disposal Infrastructure

Lord Liddle Excerpts

Thursday 6th September 2018 Grand Committee

[Lord Liddle (Lab)]

My Lords, it is a great pleasure to follow my noble friend Lord Judd, who speaks with great passion on this subject. I am also speaking in this debate as a native Cumbrian, and as a current member of Cumbria County Council—which, five years ago, ditched the previous attempt to locate this facility in Cumbria. I also have to declare a very personal interest. Where I live on the Solway plain was pencilled in on one of the maps produced in the last process as a possible site for this facility.

I may have one profound difference with my noble friend Lord Judd. I have always been a passionate supporter of nuclear power. I inherited this from my mother, who was a miner’s daughter. She was very much excited as a child by the opening of Calder Hall and the possibility that we might be able to generate all our electricity without lives being lost and health being damaged in the coal mines. I have stuck with that view of support for nuclear power throughout my life. But when this issue came to the fore in 2012-13, Cumbria County Council asked me to do a bit of bridging between it and DECC, when the noble Baroness, Lady Warsi, was the Minister. I tried my best to do that.

[Lord Henley]

It was my noble friend Lady Verma.

[Lord Liddle]

I am sorry, that is right. It was the noble Baroness, Lady Verma, who was the Minister. As a result of that involvement at the time, several things were brought home to me. It is clear that the problem of nuclear waste has to be addressed, but that the most urgent national problem we face is the one that my noble friend described at Sellafield. It is, I have to say, to the credit of the Government since 2010, and the coalition Government, that at a time of great austerity the amount of public money being spent on the clean-up of Sellafield has increased very considerably. As a result, it is hoped that progress is being made.

But, of course, with the clean-up, what is happening to that nuclear waste? First, it is basically being stored for decades to come, either above ground or just below ground, before there is any question of what happens to it then. Given that, dealing with the immediate problems at Sellafield is the most important priority. Secondly, what is always said about this is something that I think is true: we have not invested enough in research into how to deal with the problem of nuclear waste over the long run. I would have thought that, given the vast amounts of money we are spending at Sellafield—it is possible that I am getting the figures wrong, but it is something like £1.7 billion a year of public money; an enormous amount—alongside that we ought to be spending tens of millions on research into how to deal with the long-term problem of waste. Are we absolutely certain that if we invest during this interim period in a 10-year research programme, at the end of it we would still consider the only solution to be that of burying the waste in the ground? We might see advances in dealing with nuclear waste which would enable Britain to be at the forefront of nuclear clean-up activities.

Thirdly, there are very considerable geological questions as to whether burying the waste close to the Sellafield site in Cumbria is a sensible thing to do. It was said to me at the time that in fact the most suitable site is in the Thames valley under London because it has the best kind of geology to suit this development. We must not get ourselves into a situation where the only reason for locating the site in Cumbria is that part of the west Cumbria community would accept it because of the economic benefits.

Fourthly, on that point, I hope that the Government are not being cynical with west Cumbria about this. I know that for local authorities like Copeland, £1 million a year is a lot of money given that its budget is £8 million or £9 million—something like that, so that is the promise of a lot of money. However, the truth is that if we are to create a diversified economic base for this part of the world in the future, it has to be based on the Sellafield supply chain. If we are to build a Sellafield supply claim which is based locally and in Lancashire around Warrington and make that an internationally competitive cluster of activity that will bring great economic benefit in the future, the important thing we have to do with Cumbria is to invest in infrastructure and interconnectivity between the county and the rest of Britain and the rest of the world. That is the urgent priority for our part of the world.

What we cannot have is a situation where a terrible choice is forced on people between the future of the national park and our responsibilities to future generations—which my noble friend Lord Judd spoke of so eloquently, and which I support—and the economic future of the Sellafield area. This is a difficult subject. We have learned in the past few weeks that it seems that the Government are withdrawing their support for a new nuclear power station in Cumbria. This is the recommendation of the National Infrastructure Commission. This is a huge blow to jobs in the area. We also know that because of the huge investment at Sellafield the number of jobs there will decline over the next 10 years or so. There has been talk of 3,000 fewer jobs. There are huge economic pressures in west Cumbria. The Government must address them in a serious way. I hope that the new nuclear power station is not dead, but it would be wrong to try to bribe this local community into accepting something that is not right in the national interest for the sake of its economic future. That is my fear.

[Lord Judd]

My noble friend has emphasised the vital significance of geology. There are some who argue that, in a less-than-perfect geological setting, engineered geology would be possible. Does my noble friend agree that that is not a convincing comment because while geological possibilities are there for all to see and experience, alternatives have not yet been proved? I was interested to see that even Sweden has been questioning a copper engineering solution because there are fears that the copper corrodes quite fast.

[Lord Liddle]

I am no expert on these questions, but I am interested in what my noble friend has to say.

Higher Education and Research Bill

Lord Liddle Excerpts

Committee: 7th sitting (Hansard): House of Lords
Monday 30th January 2017 Lords Chamber

[Lord Storey (LD)]

My Lords, we have Amendment 477 in this group. As we have heard in great detail from the noble Lord, Lord Patel, the Bill currently provides that in appointing members of UKRI, the Secretary of State must,

“have regard to the desirability of the members including at least one person with relevant experience in relation to at least one of Wales, Scotland and Northern Ireland”.

We do not believe that this is good enough for UKRI to be properly representative of the whole of the UK. There should be a proper representative for each of Scotland, Wales and Northern Ireland, and Amendment 477 would ensure that there will be at least one person with experience of Scotland, one person with experience of Wales and one person with experience of Northern Ireland. Although the issue of gender balance is not in the amendment, I am sure the Minister would want to reflect on that—that seems to be the word of the day—and assure us that consideration will also be given to ensuring that there is a proper gender balance.

[Lord Liddle (Lab)]

My Lords, the amendments raise important issues. I would like to bring to them my own perspective as pro chancellor of Lancaster University, not speaking for the institution but talking about how it strikes me that these issues concern us, thinking about the strength of the university sector in the north of England.

The fundamental problem with UKRI—on the whole I support the idea of UKRI, I hasten to add—is that the research and innovation strategy concerns the whole of the UK but the HEFCE functions on research are purely for England and are to be exercised by Research England. My fear about a board that, like that of the BBC, had a governor for each of the nations would be that the interests of England in such a body might not be as strong as they should be, and, in particular, that Research England and its funding might over time be marginalised as a result of the emphasis on the UK.

The funding for Research England is absolutely crucial to institutions such as my own. We are a top research university but not part of the golden triangle. We are in the north of England and we are quite small. So, because of scale, the ability to land big grants from the research councils is limited. A lot of our research success comes from the ability to do well in the research assessment exercise and get QR funding. If there were any reduction in the total of QR funding, that would hurt universities such as my own quite considerably.

I am concerned about the tension—it is in the nature of the beast, really, and we have to find a way of resolving it—between Research England, its Englishness and the need for that to be protected on the one hand and, on the other, the need, which I fully support, for a coherent UK research and innovation strategy. I am not sure that the best way of achieving it is by having, as it were, a governor for each of the nations of the UK. Indeed, if that were the Government’s response to this question, I would come back and say, “Well, can we please have a north of England member of UKRI?”.

I know that this sounds sectional, but the truth is that one of the strategic objectives that the Government have just put forward, in the very good industrial strategy paper that Greg Clark has presented, is to try to prevent the ever-greater concentration of research funding within the golden triangle. If we are going to have an effective regional resurgence, which I think there is cross-party consensus that we need in this country, universities will be at the heart of it. We have to find a way of making sure that other parts of England, as well as Scotland, Wales and Northern Ireland, have the opportunity to benefit from this welcome increase in research and innovation funding. To be frank, the risk with UKRI is that it will be dominated by the great and good of the science world, who will continue to channel most of the money into the golden triangle. I hope that the Government will take action to make sure that this is prevented.

[Lord Judd (Lab)]

My Lords, as somebody involved in the governance of Newcastle and Lancaster universities, I must say that in Lancaster we regard ourselves as extremely fortunate to have as pro chancellor my noble friend Lord Liddle. I was present at the meeting on Saturday when he made a terrific contribution and people listened with real sincerity to what he said.

There is a lot of importance in the point that the noble Lord just made about the north of England. If there is to be a regeneration in the north of England, the universities will be crucial to this. It is therefore essential that we ensure that we stop talking about regeneration in general terms and start doing concrete, specific, identifiable things to support that regeneration. This area is one that will obviously be crucial.

What attracted me to this particular amendment is that, as someone who is both a Scot and an Englishman—my mother and my brother were both at Scottish universities—I am very conscious of the high-powered and distinguished contribution that has been made by universities in Scotland, Wales and Northern Ireland. It seems to me quite extraordinary that we should not as a matter of course say that that tradition and wealth of experience should be represented in the governing councils—as of right and as essential. That is very important.

If what I have been saying about regeneration in England is true, we are also these days discussing the need and importance of a greater sense of cohesive community in the devolved parts of the United Kingdom. We need to show that we are serious about this where it matters. The amendments help in that respect. It is very difficult to look at the Scottish universities, for example, and not see the whole story of the British industrial revolutions of the future. They have made profoundly important contributions, and continue to do so.

I do not know intimately, or so well, the story in Wales or Northern Ireland, except that I know that it is powerful. There is an area that is not central to our immediate considerations, but perhaps it should be. One of the things that I have always been struck by in Wales is that Aberystwyth was the first university in the United Kingdom to make the study of international relations and international affairs a recognised, serious degree and postgraduate subject. That has been terrifically important in our history.

I thank the noble Lord, Lord Patel, for introducing the amendment, and I hope that the Minister will take it very seriously.

Nissan: Sunderland

Lord Liddle Excerpts

Monday 31st October 2016 Lords Chamber

[Baroness Neville-Rolfe]

We have already said that it is a priority for our negotiations to support UK manufacturing and ensure that the ability to export to and from the EU is not adversely affected. We need to remain competitive. Our ambition is high. In relation to the customs union, we made it clear that we are seeking the best possible deal with the widest possible access and that we do not expect exports to the EU to be adversely affected.

Clearly, work on this continues, but your Lordships can be clear that our ambition cannot be denied. We are not giving a running commentary because, as the noble Baroness will know, in negotiations, you cannot reveal every detail as you go along. Talking about confidentiality, we have not published the correspondence with Nissan, which she was perhaps hinting at, for the very good reason that investors in the UK—I used to be in business—must be able to have confidential discussions with the Government on their plans and be sure that those will not be revealed to their competitors. That is the way you have to work in the modern competitive world.

[Lord Liddle (Lab)]

My Lords, perhaps I may press the Minister on the deliverability of what she is saying. If she had said, “Yes, we recognise that we’ve got to be fully in the single market”, or, “We’ve got to be in the customs union”, perhaps she would be able to say to us that she could deliver. Her refusal to say that effectively means that the Government are trying to negotiate a series of sectoral agreements without the wider obligations of single market membership. Does not she agree that this is an extremely hazardous process for the United Kingdom and that there is very little prospect of it being completed within the two years of the Brexit timetable? What will be the position in 2019 in those sectors if negotiations have not been completed? I strongly support Nissan, but does she agree that it will be much easier to get a sectoral deal in goods—where, overall, Britain has a trade deficit—than in services, where we have a huge surplus? If we are looking at our interests overall, how does what the Government are saying add up to an adequate pursuit of the national interest?

[Baroness Neville-Rolfe]

The noble Lord is right to express his concerns with passion. You can see that we have already made some important totemic advances. The Nissan statement is one and the other is the Chancellor’s statement about financing the Horizon 2020 investments, which we will ensure are guaranteed. We are working hard in a complex negotiation, moving forward with ambition and a determination to ensure that exports continue both ways. I perhaps have a more optimistic view of matters than the noble Lord does.