Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 20th December 2012 Commons Chamber

[The Minister for Universities and Science (Mr David Willetts)]

I agree with my hon. Friend about the importance of diversity, and that is why we have liberalised the rules on the size of institutions that can take the name “university”, as a result of which 10 more higher education institutions fulfilled that criterion, seven of which have already received approval from the Privy Council to become universities.

[Mr Chuka Umunna (Streatham) (Lab)]

This has been a sad week for British retail. Comet has closed its doors after 79 years of trading. I am sure that the whole House will want to convey our deepest sympathies to the 6,900 employees who have subsequently lost their jobs at the worst possible time of year. Given that in less than a year the owners appear to have lost the £50 million dowry they received to buy the business and left the taxpayer with a £49.4 million bill, will the Secretary of State commit to publishing the findings of the inquiry he has set up into this affair?

[Vince Cable]

The hon. Gentleman is absolutely right that the collapse of the Comet chain has caused great distress, not only through direct job losses but through the effect on the supply companies. There is also a large amount of unpaid credit—£230 million, I think—and not least the taxpayer stands to lose £50 million. He repeats some of the very serious allegations that are being made about the people involved in the company. I take the allegations very seriously and that is why I have asked my Department to conduct a thorough inquiry under the powers it has.

The hon. Gentleman asked about publication. As it happens, under the law I am not allowed to publish the report, but I will try to ensure that he and his Front Bench colleagues are properly briefed whenever information becomes available.

[Mr Umunna]

I am grateful for that reply. In the case of Comet, OpCapita has very serious questions to answer. Cases such as these are also raising questions about our insolvency regime in general, which—in spite of being one of the best in the world—needs to be improved. For example, the number of reports of directors being unfit to hold office has increased, but the percentage of directors being disqualified has fallen massively. The pre-pack procedure has been heavily criticised, and we could adopt elements of the US chapter 11 procedure here.

The Department has said that it is reviewing the overall insolvency framework to see whether it is fit for purpose. For the benefit of the House, will the Secretary of State outline who is to do that review? Will there be a call for evidence, and when may we expect to be told the results?

[Vince Cable]

The hon. Gentleman is absolutely right that this episode reveals wider possible failures in the system. There may well be better ways to handle insolvency—although it is fair to say that in general the British insolvency regime is regarded as one of the best internationally—and we should be open-minded about other approaches. The American chapter 11 system may well be better and I want to have a proper look at that. We are specifically going to have a look initially at a narrow issue concerning insolvency practitioners and their fees. The Insolvency Service is being looked at as part of the red tape challenge, which is examining the regulatory system and how it can be improved. I also want to review more broadly whether we can adopt better practices across the piece.