Corporate Governance and Insolvency

Desmond Swayne Excerpts

Tuesday 20th March 2018 Commons Chamber

[Andrew Griffiths]

A little like a machine gun, those questions came thick and fast, and I thank the hon. Lady for them, but I am somewhat surprised. When Carillion went into insolvency the hon. Lady and her partner the hon. Member for Salford and Eccles (Rebecca Long Bailey) demanded that we learn the lessons from the Carillion failure. Today, just a few weeks later, we have come forward with proposals to prevent something similar from happening, yet she criticises us for a failure. Her colleague the hon. Member for Salford and Eccles criticised us in Labour’s press release today for yet another consultation, and then said that Labour has

“launched our own review into corporate governance”.

The Government’s measures will make a massive difference to prospects and the way in which our companies are regulated, to ensure a more robust and accountable regime within the boardroom. The hon. Lady fails to mention the fact that yesterday the Department for Work and Pensions brought forward a White Paper that introduces a huge number of extra regulations and gives powers to the Pensions Regulator to impose punitive fines, civil fines, criminal sanctions, and director disqualification. The hon. Lady asks what we have been doing during our time in office: we brought in pay ratio reporting, a new register of companies for significant shareholder opposition, and we have strengthened the voice of the employees and representatives in the boardroom.

The hon. Lady talks about Interserve. It would be inappropriate for me to give a case-by-case running commentary on the financial probity of private businesses, particularly as that could impact on their share price. I am sure somebody of the hon. Lady’s experience will understand that.

The hon. Lady talks about project bank accounts. As she will be well aware, in January, the Government consultation on project bank accounts closed, and we will be making our proposals in the coming weeks. She talks about payment in the public sector, and I can inform her that the special manager in relation to PwC has already agreed that companies providing services to Carillion will be paid within 30 days, and that is a requirement for all contractors who accept Government contracts. We will make further proposals about how we can improve that and make it robust.

The hon. Lady talks about disqualification. Directors can be disqualified for up to 15 years, and that prevents them from acting as a director, and taking part directly or indirectly. Anyone contravening a disqualification is committing a criminal offence, so these are real punitive powers.

The hon. Lady talked about dividends. There is nothing wrong with healthy companies paying dividends. In fact many of our pension schemes rely on the profits paid from dividends. The hon. Lady talks about dividends as if they are a dirty word, but in a healthy business they are something to be applauded.

The House can be reassured that this is just the next step in a robust, detailed, full review of our corporate governance regime to make sure that we protect the taxpayer, the pensioners and the workers in all those companies who do such a good job.

[Sir Desmond Swayne (New Forest West) (Con)]

What is the Minister’s ambition for when his excellent proposals will be implemented?