Paying Polluters: UN Report

Debate between Lord Sikka and Lord Callanan

Monday 22nd April 2024 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness is using the generality to refer to the specific. ISDS clauses are very useful in a whole range of different areas. I accept her point that there is some evidence of their misuse in the case of energy and climate change policies, and we will work with international partners to see how this can be mitigated. We are very careful to make sure that the ones to which we agree preserve our right to regulate. Other countries take their own decisions, of course.

[Lord Sikka (Lab)]

My Lords, many developing countries are handicapped by clauses in foreign direct investment agreements—sometimes called stabilisation clauses—that forbid the hearing of disputes in local courts. As a result, local courts’ lawyers are unable to develop the expertise or necessary institutional structure to combat corporate power. What steps are the Government taking to ban the inclusion of such clauses in FDI agreements, at least for UK companies?

Climate Change: Aims for COP 28

Debate between Lord Sikka and Lord Callanan

Tuesday 28th November 2023 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness is right that action on methane is important. It is one of the focuses for discussion that we will take forward. I have answered questions on flaring before in this House. She will remember that we are taking action to eliminate flaring completely by the end of the decade. It has reduced considerably in recent years, but clearly we need to go further.

[Lord Sikka (Lab)]

My Lords, the richest 1% are responsible for more carbon emissions than the poorest 66% combined. We all know that a well-established principle is that the polluter must pay. The Government now have a choice. They can levy wealth taxes on the ultra-rich, to reduce their capacity to pollute, or let the climate crisis deepen. Which of these options will the Government exercise, given that they are keen to set the intellectual agenda for COP 28?

[Lord Callanan (Con)]

The noble Lord never disappoints in terms of his advocacy for more taxes on—well, everyone, effectively. He might want to talk to his own Front Bench about some of these policies. The UK is very proud of our record on decarbonisation and we are very proud of our record on helping the poorest communities. We have committed £11.6 billion of expenditure on international climate finance by 2025-26, including £3 billion to protect, restore and sustainably manage nature, and tripling the UK fund for adaptation to £1.5 billion by 2025—so we can be proud of our record.

Electric Vehicle Battery Production

Debate between Lord Sikka and Lord Callanan

Monday 23rd January 2023 Lords Chamber

[Lord Callanan (Con)]

Like the noble Lord, I am familiar with the rules of origin provisions of the TCA. There was a lot of debate about this at the time, and we continue to keep an eye on it. Of course, there are discussions across government. One of the reasons for setting up the automotive transformation fund was to attempt to get more of these gigafactories into the UK, and we stand ready to talk to any other prospective investors to do that.

[Lord Sikka (Lab)]

My Lords, since 2016, UK car production has nearly halved. Honda has closed its factory in Swindon and BMW is moving production of its electric Mini from Oxford to China. We really need to make sure that we have good infrastructure, especially when it comes to electric batteries. With that in mind, would the Government consider bringing Britishvolt into public ownership? That is the only way to make sure we have a viable local player.

[Lord Callanan (Con)]

I note the noble Lord’s nostalgia for the great, successful British industries of the 1970s under public ownership, but I do not think that is a viable suggestion. Government has proved that it is not good at running businesses and industry—we should leave that to the private sector, with appropriate government support where required.

COP 27: Outcome

Debate between Lord Sikka and Lord Callanan

Tuesday 6th December 2022 Lords Chamber

[Lord Callanan (Con)]

As far as I am aware, the Prime Minister’s pledge has been kept. If that is not the case, I will certainly write to the noble Baroness.

[Lord Sikka (Lab)]

My Lords, can the Minister confirm that the UK’s share of the cost of reparations relating to damage from greenhouse emissions will be borne solely by the ultra-rich? Research shows that billionaires are responsible for a million times more greenhouse emissions than the average person.

[Lord Callanan (Con)]

If the noble Lord is referring to the UK’s taxation system, it is clear that those at the top end of the scale pay the largest amounts of taxation by far. If that translates through to our international climate commitments, where we are proud to be contributing something like £11 billion, then I suppose in a strange way the noble Lord gets his wish.

Government Departments: Communication with Industry and Commerce

Debate between Lord Sikka and Lord Callanan

Monday 14th November 2022 Lords Chamber

[Lord Callanan (Con)]

The noble Lord is wrong. There is consistent policy from the Government. In a whole range of areas of policy, life continues as it did. There are of course unique challenges facing us at the moment—the headwinds of Covid, the energy crisis, et cetera—but this Government have the solutions and will carry on implementing them.

[Lord Sikka (Lab)]

My Lords, businesses associated with the City of London gave us the last financial crash and have also routinely been involved with the mis-selling of numerous financial products. They have been involved in money laundering, tax abuses, frauds, forgery of customers’ signatures, and numerous predatory practices. Can the Minister explain when the Government will launch a public inquiry into the City’s predatory practices and clean up this industry?

[Lord Callanan (Con)]

The noble Lord is wrong, as he is on so many of these matters. Of course, proper regulation is important, and we will shortly be considering the economic crime Bill, to clamp down on many of those practices. The noble Lord forgets that the City of London is one of the most successful financial centres in the world. It contributes billions of pounds to the British economy. He is always calling for more public expenditure; if he kills the City of London, he will have even less to spend.

Economy: The Growth Plan 2022

Debate between Lord Sikka and Lord Callanan

Monday 10th October 2022 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, I begin by joining my noble friend Lady Neville-Rolfe in welcoming the noble Baroness, Lady Gohir, and congratulating her on her maiden speech, which I listened to with great interest, although I do not think she is in her place any longer. The noble Baroness, Lady Hayman, said that she is full of fire and passion, evidence that she will be an eloquent voice for women. She is no doubt delighted to discover that we are now on our third woman Conservative Prime Minister, and I am sure we are all looking forward to hearing her future contributions.

Today is clearly a day for our second city. I thank the right reverend Prelate the Bishop of Birmingham for the contribution he has made to this House over the years. He joked about my noble friend Lady Neville-Rolfe’s reference to his “mature” and “sensible” contributions, and then proved how right she had been to say it. The right reverend Prelate made many noteworthy points in the few minutes allotted to him, not least about the importance of the need for the devolution of power and influence. He asked about “wealth created for whom”, an important question which I am sure we will be debating for many weeks to come, sadly without his presence.

It is a privilege to close this debate on behalf of the Government and I thank noble Lords for their many contributions. We have heard about and debated the many steps the Government are taking to achieve economic growth: a series of bold initiatives which we believe will, together, reboot this country’s long-term prospects. It is an agenda which protects and reassures now in the form of our plans to cut energy bills at a time of global uncertainty for our people, and an agenda which lays the foundations for a future about which we all can and should feel optimistic. In her introduction, my noble friend Lady Neville-Rolfe rightly said that we need to do things differently and we need to do them better. This Government are making growth their guiding mission, which I am sure many of us agree it needs to be.

I shall address in turn the different aspects of the Government’s plans that were raised in the debate. I start with plans to reduce millions of energy bills, an issue raised by many speakers, including the noble Baroness, Lady Smith of Basildon, the noble Lords, Lord Fox and Lord Burns, my noble friends Lord Forsyth of Drumlean and Lord Lamont, and others. The Government had previously announced £37 billion of support, meaning 8 million of the most vulnerable households receiving £1,200 of support and others receiving £400. Last month, the Government built on that and announced the energy price guarantee to limit the energy bills of typical households to £2,500 a year for the next two years—that is an average, of course. In turn, another benefit of that is significantly reducing the rate of inflation.

As many noble Lords observed, there are no cost-free options. The Government must now intervene to guard against the worst economic outcomes going forward, and that intervention will therefore initially be funded by the Exchequer.

The noble Lord, Lord Fox, asked about the case of fixed-rate contracts that were agreed before 1 April this year. I can confirm to him that the Government will be revising the cut-off date such that only contracts taken out before 1 December 2021 are excluded from the non-domestic energy scheme. This means that all fixed-rate contracts taken out when the wholesale prices were above the government-supported price will be eligible for relief under the scheme. I am sure that that will be welcomed by the whole House and in particular by the noble Lord; I thank him for asking the question which gave me the opportunity to say that.

The noble Baroness, Lady Brinton, argued that business energy bill support is needed for more than six months. I am also pleased to be able to tell her that after the initial six-month period we will provide further support for vulnerable sectors. We will publish a review of the energy bills support scheme after three months to assess effectiveness and how the scheme might be extended, further targeted or revised beyond the six-month period for vulnerable non-domestic customers. Continuing support to those deemed eligible would begin at the end of the initial six-month support scheme without any gap.

The right reverend Prelate the Bishop of Edmundsbury and Ipswich—he must have the longest title in the House—also raised the important subject of energy poverty. In addition to the extensive support I have just mentioned to support people who need additional help on top of the warm homes discount, the Government are also providing an extra £500 million of local support via the household support fund, which will be extended from this October to March 2023. The household support fund helps those in most need with payments towards the rising cost of food, energy and water bills.

The Government are also aware—again, this point was raised by many Members—that the energy price guarantee will leave those households currently with unregulated energy sources, such as those living off the gas grid, with uncapped bills this winter. However, our objective is that all households, regardless of their heating source, will be no worse off than an equivalent domestic gas household under the energy price guarantee.

As the noble Baronesses, Lady Hayman and Lady Walmsley, and again, the right reverend Prelate the Bishop of Edmundsbury and Ipswich, noted, there is more at stake here, and there is a need for a more holistic approach. That is why the Government are investing more than £6.6 billion over this Parliament to improve energy efficiency and decarbonise heating. Despite the comments of some Members, we are making good, steady progress on this issue. In 2008, 9% of homes had an energy performance certificate of C or above, and that figure is now 46%. Meanwhile, the energy company obligation, or ECO, has been extended from 2022 to 2026, boosting its value from £640 million to £1 billion a year, which will help about 450,000 families with green measures such as insulation. I am sure that it did not escape the attention of Members that last week the Chancellor announced an additional £1 billion investment over three years in the ECO-plus energy efficiency scheme—something I am sure we will return to in this House when we bring the legislation forward to implement it.

The noble Baronesses, Lady Smith of Basildon and Lady Kramer, and the noble Lords, Lord Burns and Lord Razzall, and other noble Lords, all raised the issue of a windfall tax on energy companies. We already have a tax on energy companies. The energy profits levy was introduced on 26 May 2022. It is an additional 25% tax on UK oil and gas profits on top of the 40% headline rate of tax that they already pay, which takes the combined rate of tax on profits to 65%. I do not know how much further Labour and the Liberal Democrats want to increase that tax, but it already appears to be at a very high level.

[Lord Sikka (Lab)]

My Lords—

[Lord Callanan (Con)]

If the noble Lord will have patience, I will finish my paragraph and then he can intervene.

It applies to profits earned by companies from the production of oil and gas in the UK and on the UK continental shelf.

[Lord Sikka (Lab)]

My Lords, the net impact of the windfall tax the Minister referred to is only 2% of the earnings before interest, tax, depreciation and amortisation of BP’s profits and only 1.5% of Shell’s. It excludes profits made in the forecourts, from refineries and by trading, which is the biggest source of profits for oil and gas companies. Surely that tax was just a joke and a sop, because a large amount of it is then handed back through accelerated investment allowance.

[Lord Callanan (Con)]

I know that there has never been a tax that the noble Lord does not want to increase even further, but it is already a very high level of tax. I think I saw a figure of £170 billion mentioned by the Opposition. That is worldwide profits. The UK cannot tax profits made in other jurisdictions; we can tax those that are made in our country, that we have control of. I remind the noble Lord that we also want those companies to invest in renewables, as they are doing. There are many renewable projects—offshore wind projects, hydroelectric projects, et cetera—in which we need additional investment. So the calculation made by the Treasury, which I have never seen to be shy of raising taxes in the past when it could, is that, on the one hand, of course we want to secure a fair return for taxpayers, but we also want to make sure that the profits are there to enable the massive sums that we need to invest if we want to move to a green transition in future.

On the suggestion of the noble Lord, Lord Vaux of Harrowden, of a briefing on energy markets for interested Peers, I say to the noble Lord that, as he knows, this is a complicated subject. Exactly who is making the excess profits under which particular regime is a complicated issue. He will be pleased to hear that we will shortly be debating the legislation to implement the support policies I have mentioned, and I am sure that these matters will be raised further in the debate during the passage of that legislation. I look forward to discussing it further with him then.

The noble Lord, Lord Liddle, made the point that we need to get onshore wind moving—a matter I know is dear to the heart of the noble Baroness, Lady Hayman, and she will no doubt agree. The British Energy Security Strategy recognises the range of views on onshore wind across the country and, as I said before, we will be consulting on developing partnerships with a number of supportive communities that wish to host new onshore wind infrastructure, perhaps in return for guaranteed lower energy bills. The growth plan went further, with specific changes to accelerate delivery of infrastructure, including bringing onshore wind planning policy in line with other infrastructure policies to allow it to be deployed more easily in England. The noble Baroness, Lady Walmsley, has asked many times about that; I am sure she will be pleased to hear that.

The noble Baroness, Lady Fox of Buckley, meanwhile noted the need for green innovative growth. We have indeed established a Green Jobs Delivery Group, headed by Ministers and business leaders, to act as a central forum for driving forward action on green jobs and skills. Our plans for net zero and energy security are driving an unprecedented £100 billion-worth of private sector investment by 2030 into new British industries, supporting about 480,000 green jobs by the end of the decade. To return to my earlier point, many of the companies investing in the UK are those that the Opposition wish to tax to death.

The noble Lords, Lord Bilimoria, Lord Eatwell and Lord Fox, alongside my noble friends Lord Lamont, Lord Lilley and Lord Bridges of Headley, all commented on the Government’s plans regarding taxes. The plain truth is that the Prime Minister promised that this would be a tax-cutting Government and we are keeping that promise.

A number of noble Lords also raised the overall approach of the growth plan.

North Sea Gas

Debate between Lord Sikka and Lord Callanan

Wednesday 7th September 2022 Lords Chamber

[Lord Callanan (Con)]

To be honest, this Question was the first I have heard of this meeting. I do not know the answer. I do not even know if we have been invited to it, but I will find out.

[Lord Sikka (Lab)]

My Lords, the Rough gas storage facility was closed because the Government refused to subsidise the repairs, which means that the Government made the decision. I therefore have two questions for the Minister. First, was a cost-benefit analysis conducted from an energy security and public interest perspective? If so, will he now publish it?

[Lord Callanan (Con)]

Indeed, the reports written at the time were published. There was one report by Cambridge academics studying precisely this matter. It is easy to be wise after the event. If that facility had been retained, the cost would have gone on to gas bill payers—Peers in many parts of the House are criticising us for the high level of prices—and that would have been an additional cost. That was the decision taken at the time. The world looks very different now, so we have received proposals from Centrica, and we are closely examining them. These are important matters; we take the security of supply incredibly seriously; and we will look at it.

Low-Income Families: Energy Cost Support

Debate between Lord Sikka and Lord Callanan

Tuesday 6th September 2022 Lords Chamber

[Lord Callanan (Con)]

That is another good question, and the answer is complicated. The marginal rate of electricity is set because of the highest contributor to that, which is gas-fired generation at the moment. This is why we have launched the review of market arrangements, which is looking urgently at that exact situation. The noble Lord makes a powerful point.

[Lord Sikka (Lab)]

My Lords, I have spent the last few weeks visiting pawnbrokers across parts of London to see how the people at the bottom of the pile are managing. They are pawning vacuum cleaners, microwave ovens, radios, televisions, bicycles and DIY tools. One lady even pawned a toaster so that she could get £5 to buy a birthday card and a present for her friend. That is the level of abject poverty we have at the bottom. Can the Minister invite the Prime Minister on my behalf to accompany me to visit the pawnbrokers and see for herself what has happened to the people under this Government?

[Lord Callanan (Con)]

I am not sure that pawnbrokers have necessarily arisen just under this Government. However, I totally accept the general point the noble Lord is making: there are many people—actually, on all income levels—who are suffering because of this crisis, which we all know was caused ultimately by Putin’s invasion of Ukraine. This is a difficult problem, and there are no simple and easy answers. All the potential solutions are very expensive and need to be looked at closely, and I am sure that the PM will do that.

Energy: Prices and Supply

Debate between Lord Sikka and Lord Callanan

Thursday 14th July 2022 Lords Chamber

[Lord Callanan (Con)]

Ofgem does look very closely at connection cost standard charges and direct fuel costs. Funding the transition from a big node-type power supply to lots of more diverse, renewable sources of energy requires considerable investment in our transmission system. In order to expand the use of electric cars, heat pumps et cetera, we must reinforce the electricity supply system, which of course needs to be paid for.

[Lord Sikka (Lab)]

My Lords, currently the Government tax people heavily, especially the poorest. They then hand back a few pounds to the people, helping with energy bills—and it is promptly handed over to the energy companies. In this circuit, there is no check whatsoever on curbing inflation, energy prices or corporate profiteering. Why are the Government neglecting these three things?

[Lord Callanan (Con)]

I am afraid that I simply do not agree with the noble Lord. A number of aspects of his question were wrong. The Government are not handing money over to energy companies: the money is going directly to consumers—more than £37 billion of expenditure. The noble Lord might think that that is a few pounds, but I think it is a considerable sum of money. Clearly, energy prices are likely to go up again in the autumn, and that is something we will need to return to.

Strikes: Cover by Agency Workers

Debate between Lord Sikka and Lord Callanan

Tuesday 5th July 2022 Lords Chamber

[Lord Callanan (Con)]

As I said, this applies in all sectors of the economy. Agencies already supply a considerable number of personnel in the fields that the noble Baroness mentioned.

[Lord Sikka (Lab)]

My Lords, even the Prime Minister condemned P&O’s violation of employment laws, and now the Government are going ahead with implementing those despicable practices in UK law. Could the Minister tell us what other bad practices they are ready to implement?

[Lord Callanan (Con)]

I answered that question earlier. This is an entirely different situation from the P&O dispute, as it was at the time. We were committed to taking action to prevent abuses such as that, and we are still committed to that. This is an entirely different situation.

Trades Union Congress: Levelling Up

Debate between Lord Sikka and Lord Callanan

Wednesday 29th June 2022 Lords Chamber

[Lord Callanan (Con)]

Because the responsibility for sitting down belongs to the employers—in this case, Network Rail and the train operating companies—and the trade unions. My understanding from listening to Network Rail is that it has set out a very positive agenda. At the end of the day, the taxpayer supported the railways to the tune of £16 billion over the last few years: that is £160,000 for every rail employee in this country. The taxpayer has been very generous; it is about time the unions reciprocated.

[Lord Sikka (Lab)]

My Lords, last week the Chancellor met with oil and gas company directors to hear their concerns about energy policy. With that in mind, will the Minister explain why the Transport Secretary has not met the RMT? Which law prevents him doing so?

Fuel Poverty

Debate between Lord Sikka and Lord Callanan

Monday 13th June 2022 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness says that this is not enough, but of course, we also need many of those companies to continue to invest both in North Sea production and in renewable production. If we are going to move to the totally renewable power system that I am sure the noble Baroness wants to see, as I do, we need tens of billions of pounds of investment, often from the same companies; you cannot spend the same pot of money twice. We are spending £6.6 billon this year on home efficiency measures, and there is a huge amount of work going on behind the scenes on retrofitting and home insulation measures, and through ECO, the local authority delivery scheme and the home upgrade grant. So, a lot of work is going on in this space.

[Lord Sikka (Lab)]

My Lords, the cost of producing oil and gas has not changed substantially, but the selling price has. The refiners’ profits from petrol are up by 366%, and from diesel by 648%. May I urge the Minister to commission an inquiry into profiteering, and to introduce price controls to protect people from it?

Gazprom Energy

Debate between Lord Sikka and Lord Callanan

Thursday 24th March 2022 Lords Chamber

[Lord Callanan (Con)]

I was glad to debate the noble Baroness’s Bill last week. We are not ruling out onshore wind—it can make an important contribution. There are local planning considerations that are important to bear in mind. Many people object to fracking because of the imposition on local communities, and in many respects the same objections and arguments should apply to onshore wind as well. We need to take the public with us on this and ensure that there is public support for these turbines.

[Lord Sikka (Lab)]

My Lords, between 24 February and 3 March, 28 new companies and one new limited liability partnership were registered at Companies House for which the person with significant control claims to be a Russian national. What steps have the Government taken to ensure that these companies are not used for sanctions-busting, and will they take steps to put them into compulsory winding up?

[Lord Callanan (Con)]

I am not sure what point the noble Lord is trying to make here. We are not pursuing a war on the Russian people; many Russian individuals are just as opposed to this war as we are. We have a constantly evolving round of sanctions—the Foreign Secretary announced another 65 sanctioning proposals this morning—and some 1,000 individuals and businesses have been sanctioned. However, we have to be careful to differentiate between Russian state entities, those linked to Putin, and perfectly legitimate Russian individuals.

Economic Crime (Transparency and Enforcement) Bill

Debate between Lord Sikka and Lord Callanan

Committee stage
Monday 14th March 2022 Lords Chamber

[Lord Sikka (Lab)]

I refer the Minister to an entity called Business Bank Italy Ltd. It was owned by a convicted Mafia person from Italy, who registered this bank here and it had a website inviting wealth management. At Companies House, there was absolutely no declaration of any criminal convictions. Previously, the same person registered as secretary and director of another company, where the same person provided information in Italian. When it was translated into English, it read, “My name is the Chicken Thief, my occupation is a fraudster”, and the address was “Street of 40 Thieves, town of Ali Baba in Italy.” There is no information on whether there was any criminal conviction or anything else. The Minister just said that there are robust checks at Companies House. Where are these robust checks? I could pick out that example. Companies House did not carry any out; neither did any government department. As he knows, I have been filing a lot of Written Questions of late drawing Ministers’ attention to all kinds of strange goings-on in companies. It seems to me that, by rejecting the idea that somebody has to provide their former names and a record of criminal convictions and sanctions, the Government are opening the door for these people to misbehave.

[Lord Callanan (Con)]

We are not opening the door. I assume that the companies the noble Lord is referring to are existing UK-registered companies; I know he has asked me a number of Written Questions about companies registered on the UK database, and I totally accept his point. He is pointing out an issue we are well aware of: that the existing UK companies register is a dumb register. The registrar is obliged under existing law to accept the information tabled to her. The noble Lord has raised a number of examples and tabled Written Questions to me about some patently ridiculous information that has been supplied. I get regular correspondence from noble Lords and from constituency Members of Parliament where false information is given and false companies registered at people’s addresses, unknown to them, and they then receive correspondence.

The difficulty at the moment is that the registrar does not have the legal power to query the information registered to her. If the noble Lord will be patient and wait for economic crime Bill part 2, which is coming, he will find that it will deal with this precise point. It will give the registrar the ability to query that information and provide that people must give identity details, passport information, et cetera, when they register. This is a massive change to the operation of Companies House—the biggest change for something like 170 years to the register database. It will give the registrar the power to query that information and people will have to provide evidence of their identity, addresses, et cetera. The noble Lord is right—there are a number of ridiculous examples—but we will deal with that. I am aware of it, and it will be in the next Bill.

In addition, information regarding designated persons who are listed on the UK sanctions list is already published for free via GOV.UK by colleagues in the Office of Financial Sanctions Implementation.

Finally, the verification mechanisms of the register, which will be provided for under Clause 16, will ensure as far as possible that the information provided is highly accurate. This register will provide vital information and in turn give enforcement agencies even greater information to take actions and carry out their own investigations. Therefore, on balance and taking into account the reasoning we have set out, we are unable to accept these amendments.

However, I am in agreement with the noble Lord on the particular importance of ensuring that there is clear information for users of the register about whether individuals identified as beneficial owners of the overseas entities are subject to UK sanctions. It is in the public interest for users of the register of overseas entities to be able easily to see whether a registrable beneficial owner is a designated person listed on the UK sanctions list.

The Government have therefore tabled their own Amendments 7, 9 and 11, which would mean that the required information about a registrable beneficial owner will include information about whether they are designated by virtue of the Sanctions and Anti-Money Laundering Act 2018. These three amendments would require overseas entities to confirm whether any of their registrable beneficial owners are designated persons listed on the UK sanctions list. It would be an offence not to do so. This information would be displayed publicly on the register. This will ensure that this information is then more easily accessible to the average user of the register. That fulfils a requirement raised by a number of noble Lords, and by Members of the other place when they debated this legislation. I hope that the noble Lord, Lord Sikka, will appreciate that these three amendments will deliver a good deal, if perhaps not all, of the intention of his amendments and those proposed in the other place.

I move on to Amendments 18, 19 and 20, also tabled by the noble Lord, Lord Sikka, which relate to the level of shareholding that would define a “beneficial owner”. His amendments seek to remove the 25% level altogether, to capture any person who holds any shares in the overseas entity in scope.

The 25% threshold contained in the Bill is in line with global norms with regards to beneficial ownership. The Financial Action Task Force, which sets global anti-money laundering and counterterrorist financing standards, has found that this threshold is acceptable as an example of how to determine beneficial ownership. As a result, 25%—or more than 25%—is used in many jurisdictions, such as in the US and in the European Union’s recent anti-money laundering directives. The 25% threshold also follows the UK’s PSC—person with significant control—regime, which similarly requires beneficial ownership information of UK-registered companies. When the PSC regime was in development—

--- Later in debate ---

[Lord Callanan (Con)]

My Lords, I start this grouping by speaking to the government amendments, which I have tabled. They are Amendments 33, 75 and 76; 35, 36 and 37; 63 and 77; 65, 66, 69, 70 and 72; 68 and 71; and 73 and 81. I hope that everybody is taking careful note, because there will be a check later.

These are technical amendments relating to land registration in Scotland, tidying up some of the drafting in the Bill. If it would be of assistance to noble Lords, I am happy to speak in more detail on any of these, but meanwhile, in the interests of time, I will move on to the more substantive government amendments in this group.

Amendments 73 and 74 make small but important technical changes to the Bill to ensure that Schedule 4 operates effectively in line with the land registration law of Scotland. These amendments add to existing provisions when an application must be rejected by Registers of Scotland because of the implications for who will be shown in the Land Register of Scotland as the owner of a plot of land. These amendments ensure consistency and clarity in setting out the circumstances in which a prescriptive claim application might result in a prescriptive claimant being provisionally entered as the owner of a plot in Scotland.

I am mindful that several noble Lords and Baronesses, including the noble Baroness, Lady Chapman of Darlington, and the noble Lords, Lord Fox and Lord Sikka, have tabled amendments to shorten the transition period proposed. To inform that debate, I thought it might be helpful to set out several government amendments that we hope will help to ease concerns about the length of the transition period for registering retrospective property ownership and the perceived risk of people moving illicit assets in the meantime—a concern that has been raised with me by several noble Lords.

Amendment 86 requires overseas entities when registering, who have disposed of certain land between 28 February 2022—the date that the Bill was published—and the date of their application to register, to submit a statement with their application setting out details of what has been sold and the beneficial ownership of the entity immediately before that transfer of title. The land in scope is that which otherwise would be caught by the transition period: that is, land that was registered after 1 January 1999 in England and Wales and after 8 December 2014 in Scotland. The noble Baroness, Lady Jones, now knows why we have selected those dates.

This is an anti-avoidance measure. It would mean that any overseas entity disposing of any of their property in the period from 28 February and the date of their application to register on the register of overseas entities must provide information about the entity’s beneficial ownership immediately before the disposal. They must provide that information by the end of the transition period. This will mean that law enforcement will therefore have access to a record of the beneficial ownership to aid the enforcement of historic cases, and the seller would no longer be able to avoid being under a legal duty to provide beneficial ownership information by disposing of a property in advance of registering—something that I know was a significant concern for many noble Lords. This new disclosure requirement should significantly strengthen law enforcement’s abilities to investigate and prosecute both buyer and seller, and all involved in the transaction, should the criminal law have been broken.

Crucially, it addresses the concerns that have been raised with me in both Houses that corrupt people must not be allowed to sell up and escape the transparency that the register will bring. It is my submission that this measure will be more effective than any further reduction in the transition period, which risks opening up the provisions of the register to legal challenge, something that would no doubt be exploited by those wishing to avoid it.

Amendments 55, 60, 64, 79 and 82 align the transitional periods under Schedules 3 and 4 with the period in the new clause inserted by Amendment 86.

Amendment 87 supplements Amendment 86 by making it an offence for certain overseas entities who do not apply for registration during the transitional period, and every officer in default, to fail to provide information equivalent to that required by Amendment 86. That means information about relevant dispositions in land made on or after 28 February 2022 and the end of the transitional period. In the case of continued contravention, an offence is also committed by every officer of the overseas entity who did not commit an offence in relation to the initial contravention. A person guilty of an offence is liable on summary conviction to a fine and a daily default fine of up to £2,500 a day in England and Wales.

Amendment 88 makes further supplementary provisions, including a power to make regulations in connection with the new clause inserted by Amendment 86.

Amendment 59 reflects the revised transitional period of six months. It requires the Chief Land Registrar to act as soon as reasonably practicable, and in any event before the end of the transitional period, to enter a restriction in relation to an estate in land owned by an overseas entity that became the registered proprietor of that estate following an application made before commencement of the Bill.

Amendments 66, 69, 70 and 72 are technical amendments relating to land registration in Scotland. In the interests of time, I propose to move on to other substantive amendments, but am more than happy to speak on these amendments in more detail if required. I beg to move.

[Lord Sikka (Lab)]

My Lords, I apologise; I am not sure if it is my turn or someone else’s. I have four amendments in this group. I have listened carefully to what the Minister has said about Amendment 86. The real problem is that you can have an overseas entity that can be used to buy a property in the UK. When that property is sold, money is laundered, but before the six-month period is over the overseas entity is liquidated so there is no information of any kind to file. By giving anyone more than 14 days—this is a theme referred to earlier by the noble Lords, Lord Cromwell and Lord Vaux—the Government are inviting these kinds of cat-and-mouse games.

I recommend that no one should have more than 14 days. After all, that is what we give at the moment to UK companies to file information about persons with significant interest as per Part 21A of the Companies Act 2006, which says that the PSC’s details must first be recorded in the company’s internal register within 14 days of the change and Companies House must be notified within a further 14 days, which is the maximum permitted. So why are overseas entities to be given a longer period? We seem to be creating an opportunity here, a window, for these entities to misbehave, and at the end no declaration of any kind can be made. Fourteen days is not too demanding in the era of electronic filing. We must close all opportunities for anyone to circumvent the filing requirements and thereby get away with basically laundering their proceeds.

My second two amendments are Amendments 58 and 67, which, as has been referred to, are about the amnesty that is built into the Bill. The Bill grants amnesty from disclosures to those who acquired property in Scotland before 8 December 2014 and before 1 January 1999 in England and Wales. That is completely contrary to the Bill’s claim of adding transparency and providing no hiding place for dirty money. The amnesty will mean that large swathes of UK property are owned by overseas companies without any public knowledge of their true owners; people will simply not know who owns them.

I shall give some examples of Scottish property that is owned by anonymous offshore companies purchased before 8 December 2014 where people do not know who the true owners are: Strathfillan Forest, owned by Thar Enterprises in Jersey, registered at the Land Register in June 1999; Ardfin Estate, on the Isle of Jura, owned by Ardfin Lodge Ltd, again in Jersey, registered in November 2010; Glenogle Estate, owned by Glenogle Estate Ltd in the Isle of Man, registered in May 1999; most of Charlotte Square in Edinburgh, owned by Fordell Estates Ltd in the British Virgin Islands, registered in the Land Registry in 2010; Glenborrodale deer forest, owned by Luna Ltd in the Bahamas, registered at the Land Register in July 2000; and the Pitmain Estate, owned by Ranita Management SA in Panama. Even if these properties are acquired with clean money, people have a right to know who their neighbours are and who owns a large part of their locality. Are these people actually socially responsible? The Government are legally creating an amnesty, and that is really unacceptable.

This opacity is not just an issue in Scotland: it is an issue for the whole of the UK. Close to 250,000 residential properties in the UK are registered to individuals based overseas. UK property worth more than £170 billion is estimated to be held overseas, much of it anonymously. Last October, the Pandora papers leak revealed that Heads of Government, oligarchs, business tycoons, ruling families and Middle-Eastern monarchs were among the anonymous owners of at least £4 billion of property, held through offshore shell companies. When did they acquire that? We do not quite know: it might well have been before the dates specified in the Bill.

Cost of Living

Debate between Lord Sikka and Lord Callanan

Thursday 3rd February 2022 Grand Committee

[Lord Sikka (Lab)]

My Lords, I thank the noble Lord, Lord Whitty, for this timely debate. It is a pleasure to follow the noble Baroness, Lady Bennett of Manor Castle.

People are facing a twin threat of rising prices and shrinking incomes. The announcement of the new energy cap comes on the day when, as some have mentioned, Shell has announced that its profits have risen from $4.8 billion to $19.3 billion. It is so awash with money that it is paying an extra $8.5 billion to its shareholders in the shape of a share buyback. In the last decade, oil and gas companies have paid £200 billion in dividends while the regulators have been twiddling their thumbs and doing absolutely nothing. Over the last decade, the big six energy companies have paid £23 billion in dividends, which is 82% of their pre-tax profits and six times the amount of money that they pay in corporation tax. The sad truth is that the UK, unlike Ireland, cannot even produce its own electricity—it has to import it. It does not even have enough storage facilities for gas; thanks to the Government, they have been run down. Our gas storage facilities are equivalent to only 2% of our annual demand compared to—

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

Ireland does not generate its own gas—it gets it from us.

[Lord Sikka (Lab)]

Other countries are better at handling it, if you like. Let us look at Norway. Norway collects about $21.35 for each barrel of oil extracted from the North Sea because it kept a large part of it under public control. The UK gets only 8% of that: $1.72 per barrel—those are the figures for 2019. Why? Because of this obsession with light-touch regulation and privatisation being good, while people are basically struggling. It is shameful that as a nation we are not even able to generate our own electricity—enough to meet our needs.

Today’s announcement by the Government does not really help that much: £693 or £700 extra. Perhaps the Minister will be able to tell us how much additional VAT will be generated as a result of this hike in the energy price and exactly where it will go. The Government should have listened to the Labour Party and its call for a 5% cut in VAT. The imposition of that 5% is highly regressive: the poorest suffer the most. The Chancellor said today that he did not really want to reduce it because that helps the rich. That is interesting: the Government have been handing all kinds of tax cuts to the rich and he never complained, but now he says that this would help the rich. Of course, the Government could claw back the equivalent amount from the rich by, for example, increasing the highest rate of income tax from 45% to 50%. That option is always available, but not exactly exercised.

The 2% electricity discount is also highly deceptive. It is not a discount at all. If I go to a supermarket and it is selling something on a discount, that does not mean that I have to repay that amount over the next five years, which is what people are being forced to do here. They will have to repay about £40 over the next five years. The £150 council tax rebate does nothing for the poor or those living in rented accommodation. It would also be helpful to know who is paying the cost of that. Will central Government be bearing the cost of that £150 discount, or will it lead to a further cut in local authority budgets as they are forced to bear this cost? Even if this £150 gift, as some people are calling it, is accepted by some, what happens to the other £350 of the cost of energy that people will have to bear?

The Government need to rethink their entire economic policy. They need to help the poorest. They have already cut universal credit by £1,040 from 4.4 million people. They are offering only a 3.1% increase in the state pension, while the CPI is likely to be double that rate. The increase in minimum wage is 6.6%, while RPI is already at 7.5%, so that does not really do anything. Winter fuel payments have not changed since 2011. The Government need to offer an immediate increase in the state pension of £500, double the winter fuel allowance and increase universal credit and the minimum wage at least in line with RPI to give people a cushion.

Although we have talked about energy prices, we have not said much about what is happening to retail prices. Just in the past six weeks, the price of 18 essential, staple items has gone up by more than 8%, and supermarkets, now owned by private equity, are basically lapping it up. Morrisons has increased its price of those 18 items by 15.3% in the past six weeks and Asda by 13.6%. Why are the Government letting private equity rip and increase the cost of living?

Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) (No. 2) Regulations 2021

Debate between Lord Sikka and Lord Callanan

Tuesday 9th November 2021 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the regulations were laid before the House on the 28 September 2021.

Following the emergence of Covid-19, the Government quickly implemented the Corporate Insolvency and Governance Act 2020, which introduced a set of permanent and temporary measures aimed at helping companies through the shock effects of the pandemic. In addition, many businesses have also benefited from an exceptional economic package of support from the Government in excess of £400 billion through the furlough and self-employed income support schemes, and through various grants and loans, and business rates and VAT relief.

Since their introduction last year, these measures have proved invaluable in protecting many businesses that were unable to trade from unnecessary insolvency due to the restrictions imposed in the national lockdown periods to deal with the pandemic. Most of the temporary insolvency measures, including the relaxation of wrongful trading, lapsed at the end of June this year, but the restrictions on company winding-up petitions were extended for a further three months until the end of September.

Without doubt, the pandemic has presented a huge challenge for us all, but we have listened and taken action to protect businesses whose very existence has been threatened by the lockdown restrictions that were necessary to keep us all safe. However, we recognise that these measures, and in particular the restrictions on the use of company winding-up petitions, are a severe restriction on creditors’ rights to enforce recovery of their debts and as such should not remain in place for longer than is necessary.

Now that we are back to full trading following the successful completion of the Government’s four-step roadmap out of lockdown on 19 July, all businesses are able to fully reopen without restriction. The signs are indicative of a strong economic bounce-back and the time is right to begin to restore the insolvency regime to its normal operation by returning some creditor rights.

We must bear in mind, however, that many businesses, particularly those sectors that were most affected by the lockdown restrictions for over a year, such as retail and hospitality, have been severely impacted and their solvency will be endangered by accrued debts and low cash reserves before they have been given a chance to trade back to profitability and financial health. As such, it is crucial that we do not pull the rug completely at this pivotal moment and instead allow the previous measures to end in a controlled way that provides affected businesses with a further period of protections.

These regulations therefore introduce a new kind of temporary restriction on winding up companies that is less of an impediment to creditors and tapers the version that has been in place since last year. The instrument replaces the previous high bar for winding-up petitions on the grounds of inability to pay debts, which required that petitioners satisfy a court that the debts were not Covid-19 related, with new targeted criteria for creditors which seek to encourage dialogue with their debtors prior to pursuing a winding up.

The new and temporary criteria for petitioning creditors, which came into force on 1 October 2021 for a period of six months, are: first, a requirement for creditors to demonstrate that they have sought to negotiate repayment of a debt before seeking to wind a company up; secondly, that the debt owed must be at least £10,000; and, thirdly, that a company winding-up petition cannot be brought in respect of a commercial rent as described by the provisions in the Coronavirus Act 2020.

On the first of those criteria—a new requirement for creditors to demonstrate that they have sought to negotiate the repayment of a debt—before presenting a winding-up petition a creditor must send a notice to the company giving it 21 days to respond with proposals for paying the debt. Creditors will then be required to confirm to the court that they have sent the notice, whether they have received any proposals from the company and, if so, state why they are not satisfactory. A creditor is not obliged to agree to the proposals put forward by the company. However, the court will be able to draw on its existing discretion to refuse to make a winding-up order where it appears that a creditor is attempting to abuse the winding-up process.

I am aware that, throughout the pandemic, many creditors and debtors have continued to work closely to find solutions together. I know that many businesses have come to agreements, and I thank them for their efforts in what are challenging circumstances for both sides. This measure reinforces the Government’s message that creditors and debtors should collaborate to find solutions to address arrears that have accrued as a result of the pandemic.

The second of the temporary criteria is that to present a company winding-up petition the debt owed must be at least £10,000. Ordinarily, there is no minimum amount that must be owed before a winding-up petition can be brought, although, when it is based on a statutory demand, the debt owed must be at least £750. A temporary increase in the minimum debt level to £10,000 will prevent petitions for relatively small debts that would otherwise be presented. In particular, this is likely to reduce the number of petitions presented against SMEs, which tend to have smaller debts and less cash reserves, making them most in need of additional support. The £10,000 limit also aligns with the current £10,000 limit for issuing proceedings in the small claims court and is easily identifiable as a measure to prevent winding-up petitions being presented for small debts and to allow businesses to focus on recovery.

The final element of the criteria is that a company winding-up petition cannot be presented in respect of commercial rent. The Committee will be aware that, during the summer, the Department for Levelling Up, Housing and Communities announced an extension of the moratorium on the forfeiture of commercial tenancies until 25 March 2022. This is to allow time for the implementation through primary legislation—the Commercial Rent (Coronavirus) Bill, which is being introduced to Parliament today—of a rent arbitration scheme to help industry deal with commercial rental debts that have accrued to a significant level during the national restrictions periods. Subject to parliamentary passage, it will come into force next year.

The restrictions on the commercial rent arrears recovery scheme have also been extended to 25 March 2022. This carve-out in relation to winding up is necessary in order not to destabilise the proposed rent arbitration scheme before it is introduced, and again reinforces the Government’s message that, wherever possible, creditors and their debtors should work together to find a way to come to amicable agreements on rent debt accrued during the periods of national lockdown. We recognise that this could cause continuing uncertainty for commercial landlords who themselves may be under pressure as a result of the pandemic. However, the rent arbitration scheme will deliver certainty to both the landlord and the tenant when an agreement to pay lockdown rent arrears has been unachievable. Furthermore, while rent debts accrued during lockdown are ring-fenced for the purpose of the arbitration scheme, all commercial rent owed after 19 July 2021 should be paid in full as and when it falls due.

In conclusion, these new targeted criteria demonstrate that the Government have listened and taken into account the concerns raised repeatedly about the potential cliff-edge scenario leading to a sharp increase in insolvencies when government regulatory and fiscal support end. The new targeted criteria reinforce the importance of striking a balance between the rights of creditors and the further protections needed by businesses most affected by the pandemic. I cannot stress enough that discussion is crucial between creditors and their debtors, as the best way to recovery will be the one where they work together. I ask them please to continue to negotiate and find solutions together, wherever possible. That would be my message to both sides. With that, I commend these regulations to the Committee.

[Lord Sikka (Lab)]

My Lords, this is the latest instalment of long-running legislation, which may well come to an end fairly soon. None the less, there are a number of issues, and I should be grateful for clarification.

A recurring issue has been the relative absence of any cliff-edge arrangements to prevent a high number of business and personal bankruptcies. With the relaxation of the insolvency constraints from 1 October, the number of bankruptcies has already begun to accelerate and may well get worse. Further problems will come when businesses need to repay their Covid loans and, inevitably, their cash flows will be squeezed. The Government made a fundamental mistake in not taking an equity stake in large businesses; if they had done so, those businesses would not have to repay the loans and interest and their cash flows would have been preserved for productive use and investment in productive assets.

As far as I can make out, the statutory instrument does not amend the sections of the Insolvency Act 1986 that deal with the disposition of property between the presentation of a winding-up petition and the date of the winding-up order. This suggests to me that banks are perhaps already able to freeze the accounts of their clients, which might actually force some into bankruptcy. Perhaps the Minister could clarify whether that is the case.

The Minister also referred in passing to the 16 January 2021 announcement in a press release entitled Eviction Protection Extended for Businesses Most in Need, in which the Government promised that they would legislate to ring-fence Covid-related rent arrears that had been accrued as a result of trading restrictions placed on businesses, and introduce a system of binding arbitration for landlords and tenants who cannot come to a negotiated settlement on payment. Could the Minister say when this legislation will be enacted? I might have missed something; I am not aware that it has been enacted.

Non-UK Residents: Property Ownership Register

Debate between Lord Sikka and Lord Callanan

Tuesday 2nd November 2021 Lords Chamber

[Lord Callanan (Con)]

My noble friend is correct about our intention for the registration of overseas entities, and an 18-month transitional regime is planned once the register has been implemented. This will give overseas entities time to either dispose of their holdings or identify and register their beneficial owners. The regime will disincentivise anyone seeking to do business with a non-compliant overseas entity.

[Lord Sikka (Lab)]

My Lords, Companies House does not make any checks on the authenticity of company directors. Does the Minister know how many persons of significant control have used fake names and addresses, and therefore control property in the UK under the same fake identities? If not, why not?

[Lord Callanan (Con)]

Of course there are always some people who present fake identities, and Companies House will take action where that is identified. We are reforming Companies House, as the noble Lord knows. I mentioned the amount of money that we are putting into that. We want to try to tighten up the regime and make sure that people are registered legitimately. London and the UK are open to doing business and we take pride in being an open and accessible economy, but there is no place for illicit money flows, and we will take action to prevent it.

Private Equity Takeovers

Debate between Lord Sikka and Lord Callanan

Thursday 21st October 2021 Lords Chamber

[Lord Sikka]

To ask Her Majesty’s Government what assessment they have made of the takeover of United Kingdom companies by private equity firms; and in particular, their effect on the economy.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the UK’s merger regime recognises that investors play a major and positive role in the UK economy and that many UK sectors have benefited substantially from takeovers and mergers. On the few occasions that private equity-funded acquisitions have raised concerns, the Government have always carefully monitored developments and taken action when there were clear public interest grounds.

[Lord Sikka (Lab)]

My Lords, the typical business model of private equity includes high leverage, financial engineering, tax abuse, pension dumping, job losses and asset stripping. This trail of destruction includes Silentnight, Bernard Matthews, Debenhams, Maplin, Cath Kidston, Toys “R” Us, Four Seasons and much more. When will the Government commission an independent inquiry into the impact of private equity’s destructive practices on all stakeholders?

[Lord Callanan (Con)]

The UK’s merger regime, which I remind the noble Lord was put in place by the last Labour Government, recognises that overseas investors play a major and positive role in the UK economy, and that many UK sectors have benefited substantially from takeovers and mergers. Such transactions can help to boost UK jobs, increase management efficiency and support businesses to grow on the world stage. We benefit from being an open and accessible economy.

UK Property Ownership: Overseas Jurisdictions

Debate between Lord Sikka and Lord Callanan

Wednesday 13th October 2021 Lords Chamber

[Lord Callanan (Con)]

I think these are two completely separate issues that the noble Lord is confusing. As I said, it remains a priority for the Government. We have already published a draft Bill, we have carried out pre-legislative scrutiny on the matter and we will legislate as soon as parliamentary time allows.

[Lord Sikka (Lab)]

My Lords, the UK itself is a barrier to transparency. Any crook from anywhere in the world can form a company here without any checks on the authenticity of directors, and can conceal illicit financial flows. The Government have had 11 years to reform Companies House but have failed to do so. Can the Minister explain why reform of Companies House has not received greater priority?

[Lord Callanan (Con)]

We are already investing £20 million in the reform of Companies House to provide many of the services the noble Lord refers to, but many of the reforms also require primary legislation and we will legislate when we can. The noble Lord is not correct in his basic assertion: the UK’s anti-money laundering regime was reviewed by the Financial Action Task Force and the UK achieved the best rating of any country assessed so far in the round of evaluations.

Human Rights Due Diligence

Debate between Lord Sikka and Lord Callanan

Tuesday 20th July 2021 Lords Chamber

[Lord Callanan (Con)]

As the noble Lord will be aware, we have just finished a consultation on the audit reform proposals, which include extending audit to some non-financial matters such as climate change. Of course, we will be very happy to consider all other proposals.

[Lord Sikka (Lab) [V]]

My Lords, in an earlier reply, the Minister said that he is considering enforcement issues. Given that the UK has no central enforcer of company law or regulator of corporations, and that auditors, just mentioned by him, have absolutely no expertise in human rights, how will the Government monitor compliance with and enforcement of any proposed legislation?

[Lord Callanan (Con)]

We are considering the issue of enforcement in the audit reform consultation that I mentioned in my previous answer. We are extending the powers of the FRC, creating a new audit reform regulator in ARGA and we will be issuing our response to the audit reform consultation later in the year.

Employment Rights

Debate between Lord Sikka and Lord Callanan

Thursday 10th June 2021 Lords Chamber

[Lord Callanan (Con)]

As I said earlier, of course we will provide the appropriate funding in the spending review. I do not know where the noble Baroness has got her figures from, but we have more than doubled the budget for minimum wage enforcement and compliance. It is now more than £27 million annually, up from £13.2 million in 2015-16. More than 400 HMRC staff are involved in the enforcement of the minimum wage. In 2021, HMRC concluded more than 2,700 minimum wage investigations and returned more than £16.7 million in arrears to more than 155,000 workers.

[Lord Sikka (Lab) [V]]

My Lords, in 2020, 347,000 workers did not receive the statutory minimum wage. That has been a persistent problem. The financial penalties have not had the desired effect and clearly need to be strengthened. Will the Minister introduce legislation stating that the penalty for each violation should be not less than the total remuneration of the directors of the offending business? If not, why not?

[Lord Callanan (Con)]

This builds on my answer to the previous question. Since 2015, the Government have ordered employers to repay more than £100 million to a million workers. Over the course of 2020-21, HMRC’s Promote team facilitated nearly 800,000 employers and workers to seek further information on the minimum wage. So there is considerable enforcement going on in this space, and I just do not recognise the picture painted by the noble Lord and the previous speaker.

Greensill Capital

Debate between Lord Sikka and Lord Callanan

Wednesday 14th April 2021 Lords Chamber

[Lord Callanan (Con)]

I just do not agree with the fundamental point the noble Baroness makes. Of course it is important that all decisions taken by Ministers and civil servants are taken independently, but I return to my original point that it is a good thing that people have experience of the private sector—and that people in the private sector have experience in the public sector. There should not just be two distinct career paths which never meet. As long as the appropriate propriety and transparency are followed, it is a good thing.

[Lord Sikka (Lab) [V]]

My Lords, early last year three of Greensill’s major clients—NMC Health, BrightHouse and Agritrade—collapsed. This provided a reminder of the precariousness of its business model. We know that Greensill was not subject to capital adequacy tests by the FCA or the PRA, so how did the Government perform due diligence checks before approving it as a lender? Can the Minister give a firm commitment to publish all documents relating to Greensill’s designation as a lender?

[Lord Callanan (Con)]

I remind the noble Lord of the answers I gave to earlier questions. These decisions were taken not by the Government but by the British Business Bank, and there were also other non-bank lenders accredited under CLBILS. These were loans which the Government put in place in emergency conditions to save viable businesses. The whole object was to try to preserve jobs and employment in the economy. I am sorry if the Opposition do not think that is a good thing, but I think it is good that jobs are being preserved.

Audit and Corporate Governance

Debate between Lord Sikka and Lord Callanan

Tuesday 23rd March 2021 Lords Chamber

[Lord Callanan (Con)]

I know that my noble friend is passionate about not imposing new burdens on companies. I share her desire, but we think that the current regime could be improved. There will be a 16-week consultation period, so we will take the time to get these proposals right, but I think that some worthwhile improvements could be made without damaging competitiveness.

[Lord Sikka (Lab) [V]]

My Lords, I have two points. First, in the absence of a central enforcer of company law, improvement in corporate governance is unlikely. Secondly, in the absence of tougher auditor liability and accountability, there are not sufficient pressure points to secure improvements in audit quality. When will the Government realise that their appeasement of big corporations and accounting firms is actually a recipe for more scandals?

[Lord Callanan (Con)]

We are not appeasing the big accountancy firms; many of them do not like some of our proposals. These are worthwhile reforms that will improve the market and help to bring about the state of affairs that the noble Lord refers to.

Retail Sector: Unemployment

Debate between Lord Sikka and Lord Callanan

Wednesday 27th January 2021 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness is correct, sadly. We recognise that many of those losing their jobs in this sector are likely to be younger, low-skilled female workers, hence the importance of higher universal credit payments, the Kickstart programme and JETS, and, from January 2021, the Job Finding Support service. We have temporarily increased universal credit by around £1,000 a year and are doubling the number of work coaches to 27,000 in 2021.

[Lord Sikka (Lab) [V]]

The loss of 200,000 retail jobs is terrible news for many, especially young people. Does the Minister agree that the Government need to take immediate, practical steps to help, such as reducing the rate of VAT on sales from bricks-and-mortar shops and lowering the state pension age to enable many to retire and vacate jobs for younger people?

[Lord Callanan (Con)]

The noble Lord will understand that I cannot give commitments on VAT and tax changes. They are rightly a matter for the Chancellor. We need to do all we can to assist the sector in these difficult times. I have outlined some of the measures we are taking to support retail. We will continue to do that and will keep all future policies under review to see what we can do to help.

Covid-19: Small Businesses

Debate between Lord Sikka and Lord Callanan

Wednesday 13th January 2021 Lords Chamber

[Lord Callanan (Con)]

I agree with my noble friend that, as soon as we possibly can, we need to lift these restrictions to get the economy moving again, but we are indeed facing a public health emergency at the moment, as he has said.

[Lord Sikka (Lab) [V]]

My Lords, SMEs are also destroyed by unfair insolvency laws, which enable secured creditors to walk away with most of the proceeds from the sale of a bankrupt business’s assets, leaving next to nothing for unsecured creditors, including SMEs. The Carillion bankruptcy affected nearly 30,000 SMEs. Will the Government consider legislating so that SMEs have a higher priority in corporate bankruptcies?

[Lord Callanan (Con)]

The noble Lord makes an important point, and, of course, we constantly review all these numbers. We last looked at the insolvency provisions in recent legislation, and it is always difficult to get the balance between different creditors right when there are insufficient funds available.