Oral Answers to Questions

Debate between Andrew Griffiths and Stephen Kerr

Tuesday 12th June 2018 Commons Chamber

[Andrew Griffiths]

The hon. Lady will know that the retail sector is particularly impacted on by changes in consumer behaviour. More people are shopping online, and that is a challenge for the sector. There is no silver bullet, but through the retail sector we are sitting alongside industry and trying to understand the challenges it faces, such as on business rates and how we adapt to ensure that we not only help the sector to make that transition, but protect the jobs of the 3 million people employed in the sector.

[Stephen Kerr (Stirling) (Con)]

When will the Government respond to the joint report on Carillion by the Business, Energy and Industrial Strategy Committee and the Work and Pensions Committee?

[Andrew Griffiths]

I thank my hon. Friend for his question and thank the Select Committees for their work on Carillion. They did a truly remarkable job in holding the directors of Carillion to account and uncovering exactly what went on with the Carillion collapse. I think the report was issued on 16 May, and the Government have 60 days in which to respond, but I can assure him that we are doing all we can to meet the challenge.

Office for Product Safety and Standards

Debate between Andrew Griffiths and Stephen Kerr

Wednesday 9th May 2018 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)]

It is a pleasure to serve under your chairmanship, as always, Sir David, with your vast experience of this place. I congratulate the hon. Member for Swansea East (Carolyn Harris) on securing this important debate, and I am grateful to hon. Members from both sides of the House for their thoughtful input. The hon. Lady is a true champion for her constituency, as I know from my work on the Parental Bereavement (Leave and Pay) Bill. She has made a huge contribution to the lives of people across our country, and I commend her not only for the work that she does, but for the way in which she does it.

Let me be clear that there is no doubt about the Government’s commitment to maintaining the highest level of consumer protection. I have a wide and varied brief. As the Minister responsible for small business, consumers and corporate responsibility, I cover postal issues, competition policy and retail. I lose track of the number of things that should be on my business card, but it would not fit in my pocket if it had everything on. I reassure the Chamber that consumer protection is of the utmost importance, however, and if anything keeps me awake at night, it is ensuring that this country has a product safety regime that keeps us all safe. The Government’s commitment led to the first ever national technical expertise to support local authority trading standards teams in their vital work of enforcing product safety.

There were some questions about the announcement in relation to the Office for Product Safety and Standards. I put my hands up; it was my first week as a Minister. I thought it was better to get the information into the public arena and for people to be aware of it. If there are suggestions that I should have come to the House or done it differently, I take them on board. We are always learning.

I announced the establishment of the Office for Product Safety and Standards on 21 January. That announcement responded to the central recommendation made by the working group on product recalls and safety. That group was set up by the Government to advise on the practical steps that could be taken to enhance the UK’s approach to product safety. It identified a need for a national technical and scientific resource to support decision making in local authorities and in the businesses they regulate. We will deliver that national capability through the Office for Product Safety and Standards. I have high ambitions for what the office will be able to achieve, and I am determined that the capability will be established quickly.

Since establishing the office, we have taken steps to deliver improvements, which I will say more about shortly, but it might be helpful to remind hon. Members where the responsibilities within the product safety regime lie, so we are clear about exactly where we should expect the office to deliver improvements. It has not been set up to do what others are already doing or should be doing.

Businesses are legally responsible for ensuring that the products they place on the market are safe, and for taking effective action to address any issues that arise once those products are in circulation. The Office for Product Safety and Standards does not take those responsibilities away from businesses, nor does it lessen them in any way. It gives us the scope to better enforce those requirements more consistently across the country.

Day-to-day enforcement of product safety is led by local authorities, which have teams of officers on the ground across the country, as we have heard. In that role, they provide vital services, such as being a point of contact, giving advice to consumers and businesses, and leading on investigations into potential non-compliance. I pay tribute to the work that trading standards officers do across the country. The establishment of the office does not move, alter or reduce that role. Local authorities remain front and centre in the delivery of effective protections.

The office will provide additional support for those local teams, who will be able to draw on the national testing facilities, leading scientific advice and technical expertise to help them to deal with the complexity of the issues they encounter. We have heard about the challenges in relation to resource, but this is a new, additional resource of additional expertise to help and support those trading standards officers across the country.

To clarify, the new office will have a budget for new product safety activities of an additional £12 million a year. As I said earlier, the budget for the first year in operation, 2018-19, is about £25 million, which includes £9 million of additional funding. In the following year, that £9 million will increase to £12 million. Those are substantial amounts of resources. The office will employ about 290 people, of whom 180 will be existing staff and 110 will be new posts. I hope that reassures right hon. and hon. Members.

[Stephen Kerr]

Will the new office that the Minister is describing in great detail have the power to hold to the fire the feet of big organisations, such as Whirlpool, in favour of consumers?

[Andrew Griffiths]

I absolutely reassure my hon. Friend. I think he won the prize for the best pun today when he talked about the spin cycle of those large companies. I noticed it, if nobody else did, and laughed internally. Clearly, the office has to have the teeth and the capabilities to hold those businesses to account. I reassure him that it will.

Sainsbury and Asda Merger

Debate between Andrew Griffiths and Stephen Kerr

Monday 30th April 2018 Commons Chamber

[Andrew Griffiths]

I knew that the UK was a country of shopkeepers, but I had not realised that so many Members had retail experience in our supermarkets; it is encouraging to have such a well-informed debate. The hon. Lady raises issues about the supply chain and distribution sector. Clearly, that is not within the scope of the CMA investigation. The Enterprise Act 2002 clearly sets out the role that the Government and Ministers can play in relation to takeovers and mergers, and it is important that we stick to those established rules. That is what we will be doing in this case.

[Stephen Kerr (Stirling) (Con)]

Following on from the Minister’s last comments, it is right that concerns be raised about jobs and consumer choice, but will he confirm that producers will be able to provide evidence to the CMA on the potentially devastating effect of this concentration of market power through this market consolidation?

[Andrew Griffiths]

Not only can I confirm to my hon. Friend that producers’ voices will be heard in the CMA deliberation—this six-month detailed process that will consider all the aspects, vertical and horizontal, of the merger—but I positively urge him to go back to his constituency, engage with his dairy farmers and small suppliers, and make sure they contribute to it to guarantee that their voices are heard.

Corporate Governance and Insolvency

Debate between Andrew Griffiths and Stephen Kerr

Tuesday 20th March 2018 Commons Chamber

[Andrew Griffiths]

The hon. Lady asks two important questions. The Government have a role to play in this as a customer. We give billions of pounds of contracts and we have the power in our own hands to demand that the supply chain is treated properly. I can assure her that, in the very near future, we will be coming forward with a clearer set of principles and tools to ensure that the supply chain is treated properly and paid fairly, using the 30-day terms. That is what we expect of our suppliers. I agree with her point about apprentices. Unfortunately, we have to accept that there will always be businesses that go bust. That is one of the realities—[Interruption.] That is the way in which the business environment works. We are putting the employees at the heart of this consultation and at the heart of the decisions we make.

[Stephen Kerr (Stirling) (Con)]

I congratulate the Minister on his statement and on launching this much-needed consultation. As a member of the Select Committee that is inquiring into the collapse of Carillion, I should like to share with him the fact that one of the startling things we discovered was that the company could not even give the Insolvency Service the names of all the directors of all companies in the group. Does he agree that steps should be taken to improve governance and accountability in groups of companies with complex structures?

[Andrew Griffiths]

My hon. Friend has hit the nail well and truly on the head. I commend the work that his Select Committee has been doing in shining a light on the realities of the way in which Carillion operated. In the very early days of the Carillion collapse, when the Government were looking to protect those vital services that were being delivered and to protect the 18,500 people employed by the company, it became clear that it was a hellishly complicated business with a hellishly over-complicated structure. It is still proving a difficult job to untangle the web of the Carillion business structure. If it is difficult for the Insolvency Agency to do that, so many weeks on, how much more difficult must it have been to run the business? We need clear, accountable business structures in our businesses today.

Carillion: TUPE

Debate between Andrew Griffiths and Stephen Kerr

Wednesday 21st February 2018 Westminster Hall

[Andrew Griffiths]

That is the point the hon. Lady made in her speech. Let us be clear: Carillion is in insolvency, not in administration—there is a distinct difference in law. While the Government have stood behind Carillion to ensure that those public services continue to be delivered by the company during that smooth transition, in law, Carillion is in insolvency. I commend the hon. Lady on her Italian, but the point she makes is not relevant to the Carillion case, unfortunately. Later in my speech, I will explain why TUPE does not apply in this case.

The new company that I referred to, the GovCo from the Ministry of Justice, will ensure the delivery of, for example, prison facilities management previously provided by Carillion, including things such as cleaning, reactive maintenance, landscaping and planned repair building work. Those jobs have been taken in house to a GovCo. We have also seen positive signs regarding Carillion’s larger contracts.

As I said, a number of jobs have already been secured, but, as hon. Members will have seen, the media have recently reported on Serco’s and Brookfield’s interest in purchasing a number of contracts and transferring roughly 4,000 workers, although that is not yet confirmed. I understand that the official receiver and the special managers are working hard with customers to try to secure agreements, which will secure further jobs.

We also have to remember that some of these contracts are in the private sector and some are in the public sector. The Government were a customer of Carillion. We did not own Carillion. My hon. Friend the Member for Stirling (Stephen Kerr) rightly pointed out that we did not ride to the rescue and bail Carillion out. Our intention was to protect public services and, wherever possible, protect the jobs that relied on them.

The hon. Member for Barnsley East (Stephanie Peacock) has had to leave because of the Division, and I understand that. She mentioned in particular the issue of apprenticeships, which was also raised by other hon. Members. The Construction Industry Training Board, the CITB, has now conducted face-to-face discussions with all of the 1,400 Carillion apprentices and has so far found new employers for 725 of them. In addition, 180 of those were level 1 pre-apprenticeships, and those have been transferred to new training providers. The CITB is working to ensure that remaining apprentices are supported to find new employers and training providers. We are confident—the CITB is confident—that there will be opportunities and new apprenticeships for all of those apprentices who wish to continue with their studies.

As I said, we have had the question of whether TUPE should apply. While we welcome the protection of Carillion’s employees, and I fully understand the desire of the hon. Member for Wolverhampton South West to protect the terms and conditions of the staff that she represents, it might just help if I explain to hon. Members that there are over 300 companies in the Carillion group, of which around 200 are based in the UK. Currently, 27 companies are subject to compulsory liquidation proceedings in the UK. When these companies are responsible for employing Carillion’s 18,000 employees, it is simply a matter of law that some elements of TUPE do not apply. Protections for transferring employers is a well-established principle that, as we have heard today, derives from EU legislation dating back to the 1970s. However, there are good reasons why key TUPE provisions do not apply when a company goes into liquidation.

The reason why TUPE is not applied in various insolvency situations, including liquidation, is that it is considered an obstacle to rescuing the businesses and saving jobs. That has to be our priority, of course. We want to rescue and secure these jobs. A decision taken by policy makers and Governments of all colours not to apply TUPE provisions in these cases is well understood, as are the reasons behind it. As a result, regulation 8 of the TUPE regulations 2006, covers insolvency proceedings and provides that these provisions do not apply

“where the transferor is the subject of bankruptcy proceedings or…insolvency proceedings which have been instituted with a view to the liquidation of the assets of the transferor and are under the supervision of an insolvency practitioner.”

That is exactly the case that we see here with Carillion.

There are two good reasons why the Government do not want to apply TUPE. First, it would undermine the intention of rescuing jobs, as I said. Secondly, to apply TUPE specifically to the present liquidation scenario would require an emergency Act of Parliament, creating a special statutory scheme for those named companies, having retrospective effects. That would cut across fundamental principles at the heart of our democracy. I am sure that no colleagues in Westminster Hall today would wish to do that. The compulsory application of TUPE to Carillion companies is not, therefore, a matter that can simply be agreed between the liquidator and the unions. There is legal precedence here that we cannot simply ignore.

[Stephen Kerr]

My hon. Friend is giving the position as it is, which is what has brought us to this debate. However, is it not possible for the Government, in relation to the public sector contracts, to stipulate, as the customer, that certain aspects of the contract roll over to the new company, such as the voluntary TUPE that has been referred to? Could they not insist on that?

[Andrew Griffiths]

My hon. Friend makes a fair point. As we heard previously, the Secretary of State for the Cabinet Office has explicitly said that we wish to ensure that, wherever practical and possible, workers are not worse off. In fact, I can share with the House that the Secretary of State for Business, Energy and Industrial Strategy has had conversations with the special manager to implore him, wherever possible, to protect workers in that way.

However, as I said, we also have to be aware that a large proportion of these contracts are actually private sector. Of course, the legal requirements and stipulations on the special manager, in order to be able to fulfil his duties and protect the interest of the creditors, are paramount here. It would be inappropriate for Ministers or any politician to try to interfere with that. As a result of agreements that we have seen in the press and entered into over the past few weeks to purchase contracts held by Carillion, we have secured those 7,500 jobs.

The hon. Member for North West Durham (Laura Pidcock) mentioned that we are on record as saying that most employees who have transferred so far have done so on existing or similar terms. The official receiver has worked to do that. I know that she would like more details—she would like an exact percentage, but she will also understand that given Carillion’s size, complicated governance and business structure and the difficulties in relation to managing the smooth transfer of these contracts, we do not yet have those exact figures. However, I am sure they will be available to her as soon as we have them.

In her speech, the hon. Member for Wolverhampton South West raised the issue of support for employees. Understandably, this remains a very troubling time for employees and we will do everything we can to help those affected. Unless told otherwise, employees who are working will continue to be paid by Carillion during the liquidation. My hon. Friend the Member for Stirling used the phrase “justice”—he wanted there to be justice for Carillion workers. It is not their fault that they find themselves in this perilous situation. I can say to him that those employees transferring across will still be eligible for redundancy payments. So if he is looking for justice, he may find that those payments go some way to delivering that.

Through the special managers, the official receiver has contacted all employees to explain the action being taken by Government and where they can seek advice and support. For example, the special managers and the Pensions Advisory Service have set up dedicated telephone support services. The special managers have a process in place to inform employees being made redundant in a timely fashion, and to give information about their employment status.

There was some suggestion earlier about delays in people being given the required information to be able to claim redundancy. We are in close contact with the special managers, and while we cannot guarantee that everybody has had the information as quickly as we would hope, there is a great imperative in these very difficult times for workers to ensure that they get access to the money that they have a right to receive. So we are working incredibly hard to try to ensure that happens as a matter of urgency.

We are also ensuring that practical support is available from Jobcentre Plus’s rapid response service. Hon. Members might be interested to know that so far Jobcentre Plus reports that it has had 34 claims by Carillion staff and 65 claims by individuals made redundant by firms in the Carillion supply chain. So thus far we have seen a small number of people turning up at Jobcentre Plus and claiming benefits.

I think the reason for that, in reality, is that these workers are incredibly valuable. They are a skilled, trained workforce in a tight jobs market. We have seen today that we have record employment in this country—unemployment is at levels not seen for 40 years. That is a great economic success, but it means that as the jobs market tightens the workers who we are talking about are greatly in demand.