Corporate Insolvency and Governance Bill

Sarah Olney Excerpts

Consideration of Lords amendments & Ping Pong & Ping Pong: House of Commons
Thursday 25th June 2020 Commons Chamber

Finally, while the Secretary of State and the Minister should be working to champion these sectors, which are vital to so many, will the Minister also take the practical step of supporting the SNP amendment to the Finance Bill that would stop HMRC’s planned vulture powers? Two policies in part 4 of the Finance Bill could damage business lending even more. Preferential status represents a significant challenge to the UK’s business community and access to working capital finance. Preventing tax avoidance, evasion and phoenixism is vital, of course, but that measure is not the way to do it, so will the Minister indicate his support for our amendment to the Finance Bill?

[Sarah Olney (Richmond Park) (LD)]

It is pleasure to be here on behalf of the Liberal Democrats. Along with other Opposition parties, we support the Lords amendments.

I have taken the opportunity of the easing of some of the lockdown restrictions to get out and about in my constituency and speak to some of our local business owners who are beginning to reopen on the high street. It is quite a positive picture. Many of them have implemented diverse ways of selling to their customers and diversified their offering. They have got through the difficult stage of the lockdown and they are optimistic about the future, but I am conscious that that is not necessarily representative of all sectors and all parts of the country. The economic disaster that we are expecting as a result of the lockdown is really only just beginning to play out. In every news bulletin, we see more redundancies —Swissport yesterday, Royal Mail today—and we know that this is just the start. Therefore, it is incumbent on us all to be shrewd about the legislation that we need to pass to meet this challenge.

It is important that we strike a balance in the Bill between enabling the release of capital from companies that are going to fail, so that it can flow to new ventures with better prospects and secure future employment, and shoring up existing companies and jobs that will be viable once they can trade profitably again. For that reason, we welcome the moratorium provisions. We particularly welcome Lords amendments 67 to 71, which define the priority status of creditors and limit the powers of banks to take precedence in calling in their debt. That allows the moratorium to be more effective, as companies can then prioritise employees and other creditors.

I think that will be increasingly important not just once the immediate crisis has passed but in the coming years. TheCityUK estimates that there will be £100 billion of unsustainable lending in quarter 1 of 2021. That really does need to focus the mind, in respect of not only the Bill but future Government policy. The moratorium provisions will play a part in ensuring ongoing stability next year, but they would have been undermined if banks could not be restrained from taking their cut first, as the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) mentioned.

When businesses can function again after the crisis, it will be important above all to be able to protect jobs. We welcome the amendments that strengthen the protection of pension schemes in particular, but I echo what the shadow Minister, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), said: it is disappointing that the Bill does not go further. We do, though, recognise the importance of speed. For that reason, we also welcome the amendments that extend the temporary provision to 30 September. We believe that to be a prudent decision.

I wish to take this opportunity to echo other Members’ calls for measures for the theatre industry in particular. I have three theatres in my constituency and the industry is an important part of Richmond Park’s society and culture. I emphasise the fact we are trying not only to meet the challenge of the coronavirus crisis but, for the first time in 40 years, to become an independent trading nation. We should focus on the fact that globally we have a massive competitive advantage with our theatrical industry. Our entire performing arts and cultural sector is something in which we are world beating. If we want to start to export the things that are greatest about Britain, we really must support the sector urgently.

As other Members have highlighted, our theatre sector is facing a crisis and needs an urgent bail-out. Not only it is so important for all the jobs and all the future income that it can bring—not just to individual communities but to the nation as a whole—but it is a seedbed for our film and TV industries, which are also world beating and will be looking to get back on their feet as soon as they are able. I particularly single out theatres for help because we have one in every community—even in the highlands of Scotland, as the hon. Member for Inverness, Nairn, Badenoch and Strathspey pointed out—and they have a critical role in the community at this time. Not only can they shore up employment in local areas, but they can play a vital role in helping children to reconnect with the education on which they have missed out over the past three months. I hope the Minister agrees that that is of absolutely first priority across Government at this time.

Our theatres have large spaces in which social distancing can be practised. They are experienced in education—the Orange Tree theatre in my constituency certainly has a very well-developed education programme—and can provide all kinds of programmes over the summer, particularly to help out young people who may have been unable to access online learning and perhaps do not engage well with traditional forms of learning. We have a fantastic opportunity to reconnect those young people with new ways of learning to stimulate their creativity.

Above all, when the lockdown is over—when we can communicate face to face with each other again—I want everybody to have the opportunity to experience a live performance, because we have all spent too long staring at our unresponsive laptop screens. We want live theatre, live music and visual arts. We want to reconnect face to face again. If we do not have a thriving theatre in every community, it will be much harder to deliver that. For the sake of the theatre industry and the benefits it can bring, not only in actual income but in projecting the United Kingdom to the world, which is more important now than it ever has been, I urge the Minister to make representations to the Government as a matter of absolute urgency to support the theatre industry.

Corporate Insolvency and Governance Bill

Sarah Olney Excerpts

Committee stage & 3rd reading & 3rd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Wednesday 3rd June 2020 Commons Chamber

[The Chairman of Ways and Means (Dame Eleanor Laing)]

I thank the hon. Gentleman for his point of order. I can well understand his consternation. The behaviour of hon. Members when they are outside this building is, of course, not a matter for the Chair, but what is a matter for the Chair and for Mr Speaker is the safety of Members of this House, of people who work here, and of the many, many people who have continued to work here, through a sense of duty, during these last difficult weeks. It will be obvious to the Committee and to anyone watching our proceedings that Mr Speaker has gone to a great deal of effort to make sure that Members and staff working here are protected. Social distancing rules, as one can see by looking at the Benches and the way in which this entire building is now set out, have been very rigorously developed to make sure that everyone who works in this building, who is here to do their duty, is protected and will not put other people, including their constituents and their families, at any risk.

If any Member of this House is openly flouting the rules that we have asked every citizen of the United Kingdom to observe to keep the virus under control, and to protect the vulnerable and to protect the NHS, then that Member is putting not only himself or herself at risk, but everyone else at risk as well. I hope that the hon. Gentleman’s observations will prove not to have been accurate. I am not suggesting that he would say that they were, but I cannot make any comment until I know the facts for certain. I hope that the facts are not as he has stated them, but if it transpires that the facts are as he has stated them, then it should be incumbent upon anyone coming into this building, if they know that they have put themselves at risk of contracting or passing on the virus, to act responsibly. I thank the hon. Gentleman for his point of order.

We will resume the Committee stage. I was hoping I would have some sort of indication that someone might wish to speak. I call Sarah Olney.

[Sarah Olney (Richmond Park) (LD)]

Thank you, Dame Eleanor. I was not expecting to be next, but I willingly take my place. I state my intention not to press my amendments, but I would just like to say a few words on why I tabled them.

We are in an emergency situation. The response to coronavirus has been first and foremost a public health response, but the necessary measures taken to contain the spread of this appalling virus, supported by all the hon. Members of my party, have now resulted in an economic crisis. While we look forward to a point where the public health emergency has passed at least sufficiently to allow some semblance of a normal life, the economic crisis is likely to have longer and more far-reaching effects. In my constituency, as in those of every parliamentary colleague I am sure, the most immediate impacts are being felt by our small businesses and the self-employed. If we are to plot the most effective path out of this crisis, it is to our small and growing businesses that we should allocate the most care and attention. Apart from the important role that they play in supporting our communities and providing jobs, the new businesses that will emerge from the current shutdown will be offering the innovative goods and services necessary for a new way of life that we may have to get used to. Our recovery—both physical and economic—depends on the next generation of entrepreneurs, and it should be the first priority of the Secretary of State to identify and support them.

The Liberal Democrats support the temporary measures in the Bill. They are sensible measures that should carry successful businesses through the current crisis until such time as they can thrive again on their own terms. We support them, however, only as temporary measures designed to respond to the specific challenges posed by the current crisis. We oppose the bundling into the legislation of permanent changes to our insolvency and corporate governance processes. Permanent changes should be subject to a greater level of scrutiny and debate. My amendment 14 sought to put all the proposed changes on a temporary footing, able to be renewed, but also allowing the proposed permanent measures to be reintroduced to the House at such time as we may be able to consider and debate them properly.

Introducing the proposals as temporary measures would also allow their effect to be properly analysed. Our particular concern is for the ipso facto clause, which can be triggered if an insolvency effectively ends a contract to supply. This will require key suppliers to continue to supply struggling companies, despite the risk that they may not get paid. This transfers the risk from the struggling company to the supplier, which, whether in an economic crisis or not, is unacceptable. In times when cash flow is limited, it is not sufficient protection for a supplier to get in the queue with other creditors in the event of one of its customers falling into administration. Suppliers should retain the right to choose to withdraw their services if they perceive that their resources will face a lower risk return elsewhere. To compel them to continue their supply would be unethical.

I am particularly concerned that such a change would have a disproportionate impact on smaller businesses, especially those that only have the capacity to service a handful of clients, and would be unduly disadvantaged by being required to supply goods and services without the certainty of being paid. I accept that there is a balance to be struck between the needs of customers and suppliers, and that during these difficult times supply chains are critical and need to be supported, but we need to take time to consider the long-term risks of introducing such a change to our insolvency procedures, and the introduction of emergency legislation is not that time.

The acid test of any new legislation at this time should be whether its provisions stimulate and support economic activity. There will be, regrettably, some businesses that will not survive the shutdown. For the sake of those who lose their jobs and livelihoods, it is imperative that capital and investment can be quickly diverted towards those endeavours that can thrive and provide new employment and economic activity. The increase in the scope of exclusions to the ipso facto clause will have precisely the reverse effect, injecting precious working capital into companies that cannot create economic value from it. Now more than ever is not the time to restrict our small business activity in such a way. I urge the Government to adopt the Liberal Democrat proposal that all the provisions of this Bill be time-limited and that we consider the permanent provisions more fully at a later date, when we would have greater insight into the impact of their introduction on our business environment.

[Lucy Powell]

We are happy to withdraw our amendment on the basis that the Minister undertakes to address the concerns of the trade unions leadership—concerns which they have raised with us about the loss of rights that may result from the Bill—in his meeting with them tomorrow. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 1 to 47 agreed to.

Schedules 1 to 3 agreed to.

Schedule 4

Moratoriums in Great Britain: temporary provision

Amendment made: 15, page 144, line 14, at end insert—

“Part 5

Entities other than companies

91 Regulations under section 14(1) of the Limited Liability Partnership Act 2000 may make provision applying or incorporating provision made by or under this Schedule, with such modifications as appear appropriate, in relation to a limited liability partnership registered in Great Britain.

92 An order or regulations under section 118(1)(a), (3B) or (3C) of the Cooperative and Community Benefit Societies Act 2014 may provide for provision made by or under this Schedule to apply (with or without modifications) in relation to registered societies (or to registered societies of the kind mentioned there).”—(Paul Scully.)

This amendment ensures that powers to apply Part A1 of the Insolvency Act 1986 to certain entities can also be used to apply Schedule 4 to the Bill.

Schedule 4, as amended, agreed to.

Schedules 5 and 6 agreed to.

Schedule 7

Moratoriums in Northern Ireland: further amendments

Amendment made: 16, page 165, line 4, leave out “2 to 8” and insert

“2 to 5, 7 and 8”.—(Paul Scully.)

This amendment removes the repeal of paragraph 6 of Schedule 1 to the Insolvency (NI) Order 2002, as the amendment made by that paragraph remains relevant for certain limited purposes.

Schedule 7, as amended, agreed to.

Schedule 8

Moratoriums in Northern Ireland: temporary provision

Amendment made: 17, page 178, line 14, at end insert—

“Part 5

Entities other than companies

55 Regulations under section 14(1) of the Limited Liability Partnership Act 2000 may make provision applying or incorporating provision made by or under this Schedule, with such modifications as appear appropriate, in relation to a limited liability partnership registered in Northern Ireland.

56 An order under Article 10(2) of the Insolvency (Northern Ireland) Order 2005 may provide for provision made by or under this Schedule to apply (with or without modification) in relation to—

(a) a registered society within the meaning of the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969, or

(b) a credit union within the meaning of the Credit Unions (Northern Ireland) Order 1985.”—(Paul Scully.)

This amendment ensures that powers to apply Part 1A of the Insolvency (Northern Ireland) Order 1989 to certain entities can also be used to apply Schedule 8 to the Bill.

Schedule 8, as amended, agreed to.

Schedule 9

Arrangements and reconstructions for companies in financial difficulty

Amendments made: 18, page 180, line 17, leave out “and 901I (special cases)” and insert “(moratorium debts, etc)”.

This amendment is consequential on amendment 21.

Amendment 19, page 181, line 44, leave out from “etc),” to end of line 1 on page 182.

This amendment is consequential on amendment 21.

Amendment 20, page 183, line 34, after “as” insert “including”.

This amendment makes a minor drafting correction.

Amendment 21, page 184, leave out lines 7 to 30.

This amendment removes enhanced protection for creditors with interests in aircraft equipment, which will make it easier for airline companies to make use of the new restructuring process provided for by Part 26A of the Companies Act 2006.

Amendment 22, page 194, line 40, leave out “and 899B (special cases)” and insert “(moratorium debts, etc)”.

This amendment is consequential on amendment 25.

Amendment 23, page 194, line 44, leave out from “etc),” to end of line 45.

This amendment is consequential on amendment 25.

Amendment 24, page 195, line 24, after “as” insert “including”.

This amendment makes a minor drafting correction.

Amendment 25, page 195, leave out from end of line 42 to beginning of line 21 on page 196.—(Paul Scully.)

This amendment removes enhanced protection for creditors with interests in aircraft equipment, which will make it easier for airline companies to make use of the existing restructuring process provided for by Part 26 of the Companies Act 2006.

Schedule 9, as amended, agreed to.

Schedules 10 to 14 agreed to.

The Deputy Speaker resumed the Chair.

Bill, as amended, reported.

Bill, as amended in the Committee, considered.

Bill read the Third time and passed.

Lifting the Lockdown: Workplace Safety

Sarah Olney Excerpts

Wednesday 6th May 2020 Commons Chamber

[Paul Scully]

I am grateful to my hon. Friend for that question. She is absolutely right, and that is why we have consulted as widely as possible. We will continue to do so, because we need to ensure that all these guidelines give confidence to people in every type of workplace, in every part of the UK. It is also important to reiterate that many companies are still operating. We need to ensure that our economy stays open and working, so that we can bounce back as quickly possible, and those companies are already offering best practice for that.

[Sarah Olney (Richmond Park) (LD) [V]]

I have been speaking to lots of businesses over the past few days and they are all obviously very keen to get back to work as soon as possible, but their big concern is not only the safety of their staff but what liability the business would have to bear if one of those members of staff got sick despite their best efforts to ensure their safety. I would really like to hear what the Minister has to say to give businesses reassurance on that point.

[Paul Scully]

In the first instance, what I would say to the hon. Lady is that as well as employers working on that guidance and ensuring that they are offering a safe place, employees and workers need to know that they have the right and the opportunity to approach the Health and Safety Executive and local authorities to make sure that existing legislation and guidance are being followed.

Assisted Dying Law

Sarah Olney Excerpts

Thursday 23rd January 2020 Westminster Hall

[Christine Jardine]

I take the hon. Lady’s point. That is the purpose of this debate. It is intended to get the ball rolling, look for the evidence, find out what people are afraid of, and consider the safeguards we need and how the law can be improved. We are not going to do that overnight. We certainly are not going to do it today, and I will not suggest any changes today, other than to say that we should look for the evidence and at what people want from the law.

Since this debate was publicised, I have been contacted—I am sure we all have—by a number of constituents. In some cases, they called for caution; in others, they expressed their opposition. However, in very many more, they expressed support. One in particular that I found moving came from a woman who was a palliative care nurse for more than 20 years, and who during that time witnessed numerous examples of the current assisted dying law failing dying people. One example she gave was of a gentleman with motor neurone disease who had a particularly undignified final few months of life. He was cared for at home at first before moving into a hospice, where he clearly expressed the wish that he wanted help to die. The staff had to explain to him and go over the reasons why they could not do that; it simply was not possible.

This gentleman’s motor neurone disease had affected him in such a way that his legs were still working, but he was not able to use the top half of his body. One day, he tried to throw himself down the stairs as a way of ending his life. Despite him fully admitting that he was trying to end his life, some of the staff understandably claimed that he had probably fallen, and that it was an accident. Perhaps they did not want to admit or acknowledge what he had tried to do, because of the position in which the law put everyone, but that gentleman did not get to express his distress about the way he would die or have it addressed as he wanted. I understand he lived for another two months or so before he died in a hospice. I am grateful to my constituent for sharing that story because it highlights the invidious position in which the current law puts everyone.

[Sarah Olney (Richmond Park) (LD)]

Does my hon. Friend agree with me that that story highlights a key issue that we are all wrestling with: the capacity to consent? My hon. Friend has made the point clearly that this has to be a choice, and that safeguards must be in place to ensure a person has the capacity to make that choice.

[Christine Jardine]

My hon. Friend makes an excellent point. Capacity is important. As I have already said, it is not for me to say what the law should be; I simply ask that we address it, and that we take such points into account. I ask that we look at mental capability to make the decision, at when the decision might be made and at safeguards.