Audit and Corporate Governance

Debate between Lord McKenzie of Luton and Lord Callanan

Tuesday 23rd March 2021 Lords Chamber

[Lord Callanan (Con)]

The impact assessment, in fact, includes examples of quantifiable benefits that will be refined and developed in further iterations of the impact assessment. I agree that shareholders have a vital role in holding companies to account and the White Paper gives them important new tools to scrutinise audit and corporate reporting.

[Lord McKenzie of Luton (Lab) [V]]

My Lords, from what we have read in the Sunday papers, this is a timely topic for debate and reporting on a long line of corporate failures, going back to Polly Peck, BCCI, Barings, Northern Rock, RBS, Carillion, BHS and, doubtless, many more. Throughout that time the audit market for major companies has been dominated by a few private sector accounting firms—now reduced to four. There is an urgent need to address the quality and effectiveness of audit. I presume that the Government support the proposals for a new profession of corporate auditors. What discussions have taken place with the profession itself on those proposals?

[Lord Callanan (Con)]

Indeed, I have had extensive engagement with the profession, including the big four and a number of smaller companies, as we seek to progress the legislation.

Monarch Airlines

Debate between Lord McKenzie of Luton and Lord Callanan

Monday 9th October 2017 Lords Chamber

[Lord Callanan]

I am afraid I am not familiar with that case, but Ryanair will have to comply with the rules and regulations in the same way as everyone else, as I said in my previous answer. With regard to passengers who are leaving this country, I am afraid that in this case our responsibilities extend to getting those who are stranded abroad repatriated. People who have booked flights in advance with Monarch will need to look at their travel insurance or their credit or debit card companies to gain a refund. However, I am sure the noble Viscount will understand that it cannot be the Government’s responsibility to fly people out from this country. We took the view that our responsibility was to repatriate those who were stranded abroad at no cost to themselves. As I have said, we are working with credit and debit card companies to try to recover as much of that money as possible, but there is a limit to how much we can intervene in these matters.

[Lord McKenzie of Luton (Lab)]

My Lords, I start by declaring my interest as an advisory member of the board of London Luton Airport. These are difficult days locally, as the Minister has said. Monarch has been a proud Luton-based carrier for nearly 50 years and a good employer. It is one of two airlines that for many years helped to sustain the airport itself, together with Britannia Airways. If there is a silver lining, as has been explained, it is the vibrancy of the aviation sector, and London Luton Airport in particular, which is the fastest growing airport in the UK and the country’s fifth-biggest airport.

I welcome the action that the Government have taken and recognise that substantial costs have hit the public purse in the form of repatriation costs, redundancy payments and the pension scheme, involving the PPF. Is it right that when Greybull Capital purchased Monarch Airlines, it was on the basis that the PPF should take responsibility for a £600 million pension scheme obligation in return for a derisory stake in the business? Can the Minister also say something about Monarch Aircraft Engineering? He has said that it is not affected by this, which is good news so far because plenty of skills and skilled jobs are deployed in that company. However, can he say where this will leave the ownership of that entity?

[Lord Callanan]

The noble Lord has given me an opportunity to pay tribute to the five UK airports involved, considering that they were informed only a matter of hours before the administration took place. All five airports, including Luton, did an absolutely fantastic job in helping us by laying on staff to inform people who, sadly, were arriving on the Monday morning expecting to go away on holiday that the airline had gone into administration. Credit is due to all the airports. I am not aware of the precise circumstances of the bailout a year ago, but I understand that the information the noble Lord has is correct. The PPF took responsibility for the pension fund as part of that deal. I was not in post at the time and I do not know all the details, and it would be remiss of me to comment too much on them, but I will write to him.

[Lord McKenzie of Luton]

Could the Minister please deal with the point about Monarch Aircraft Engineering?

[Lord Callanan]

As I understand it, the engineering business is still trading normally and is not in administration. Clearly, a substantial part of its work was with Monarch, but the majority of it is with other airlines. As I say, I believe it is trading normally but if I have any updated information, I will be sure to let the noble Lord know.

Trade Union Bill

Debate between Lord McKenzie of Luton and Lord Callanan

Tuesday 23rd February 2016 Lords Chamber

[Lord Callanan]

I have seen the impact assessment, but I do not think that it is particularly specific about how much is spent. Once the regulations are published we will know how much is spent across the piece. It is a taxpayer subsidy. It may be justified; we do not know. There are some egregious examples of abuse of the facility, which I referred to in my speech at the start of the scrutiny of this legislation, which are well known and have been well publicised.

We spent the previous couple of hours talking about the campaigns that trade unions run and the tens of millions of pounds they spend campaigning against Israel or whatever. That is perfectly proper and it is their right to do that, but they cannot argue on the one hand that it is in their members’ interests to spend lots of money campaigning on these various issues, but on the other that they need a taxpayer subsidy to represent their members in the workspace because they do not have enough money left in their coffers to pay for this facility themselves.

[Lord McKenzie of Luton (Lab)]

My Lords, how would the noble Lord characterise the cost of health and safety reps and the work that they do to ensure the workplace is safe and that the employer’s legal obligation is supported by their efforts?