Employment Rights: Government Plans

Drew Hendry Excerpts

Monday 25th January 2021 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP) [V]]

Madam Deputy Speaker, a very happy Burns night to you, the staff and everyone else. Could I also welcome the Secretary of State to his place this evening?

Workers deserve our thanks, our respect and our appreciation. Scotland should not have to protect hard-fought workers’ rights from the Tories and their Brexit chaos. By reneging on their promise to protect EU-derived workers’ rights, the UK Government would again prove that it is impossible to trust anything the Tories say, especially on Brexit. The SNP is clear that it rejects any regression of workers’ protections. However, the Scottish Government’s ability to tackle unfair working practices and to fully protect workers’ rights remains limited. As employment law is reserved to Westminster, the UK Government must take action.

Madam Deputy Speaker,

“using threats of firing and rehiring is unacceptable as a negotiating tactic”.—[Official Report, 13 January 2021; Vol. 687, c. 293.]

These are not my words, but the words of the Prime Minister earlier this month, so why is nothing being done to stop this? While the SNP would support any legislation seeking to ban fire and rehire practices, the Bill of my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands)—the Employment (Dismissal and Re-employment) Bill—is available now to do just that, and the Tories and Labour could help us change the law within weeks by backing his Bill.

When my hon. Friend introduced his Bill in June 2020 to ban fire and rehire practices, he wrote to the current leader of the Labour party and the then Tory Business Secretary—incidentally, with nearly 100 MPs co-signing the letter—urging them both to back his Bill. Given that the Labour leader called on the UK Government to

“Introduce legislation to end fire and re-hire”—

adding:

“If you do that, you will have our full support”—

surely now Labour must get behind the Bill introduced by my hon. Friend. To quote Burns,

“A mind that is conscious of its integrity scorns to say more than it means to perform.”

To my hon. Friend’s great credit, he has in fact submitted two Bills to Parliament over recent months seeking to outlaw the practice, which have been backed by all major trade unions, including Unite, the British Airline Pilots Association and GMB Scotland. The current Bill extends workers’ rights currently under the Employment Rights Act 1996 to prevent employers from forcing workers to sign up to wage cuts and inferior conditions under threat of dismissal. The simple amendment he proposes to existing employment legislation would benefit millions of people overnight, supporting responsible employers, while making it clear to those with less scruples that these sorts of actions are not permitted in any country across the UK.

The SNP has called time and again for the UK Government either to get behind my hon. Friend’s employment Bill or to bring in their own legislation to give millions of workers at Centrica and elsewhere the same protections enjoyed across Europe. We should all be willing to put party differences aside and work together in the interests of workers. The UK Government have a duty to act swiftly and decisively to ban fire and rehire practices. Until this happens, more employers will be encouraged to follow suit. Companies such as British Airways, Tesco and Centrica are the tip of the iceberg, and workers across these isles face unprecedented attacks on their wages and conditions via despicable tactics such as fire and rehire.

As I have said, my hon. Friend has led the charge to ban fire and rehire tactics and ensure that workers are not the victims of bosses looking to cut costs. We will of course listen to the warm words today, but the fact is that the Tories and Labour could help us change the law within weeks by backing the Bill. Let them now commit to action to support that Bill.

Turning to other matters, I think we have all been shocked by the details of the UK Government’s shabby and heartless treatment of their own Driver and Vehicle Licensing Agency workforce that have emerged over the weekend. That sets a worrying precedent for the coming months and years in relation to workers’ rights.

We have heard from the Secretary of State tonight that he will not be following up the package of deregulatory measures following the UK’s exit from the EU. He said that he would not be ending the 48-hour week, and that he would not be tweaking the rules around rest breaks at work, overtime pay or other changes. But, of course, we have heard Tory Ministers make countless empty promises to protect EU-derived workers’ protections, and now that we have left the EU there are few who do not believe that they are going to renege on that promise.

Even if we believed that the Tories were intent on protecting workers’ rights—admittedly, that is a big ask—surely they would simply maintain those that were already enshrined in EU law, rather than ploughing ahead with a review and selecting what they want to discover. Despite initially dismissing the reports of watering down rights, the Tory Business Secretary confirmed last week that

“we wanted to look at a whole range of issues relating to our EU membership and examine what we wanted to keep.”

Of course, we can easily read that as the Government keeping the bare minimum that they can get away with.

With each day that passes, the damage being inflicted by the Tories’ Brexit deal on businesses and jobs becomes clearer; they have earned zero trust. As with fishing, they have shown that they will break any promise and sell out any group of workers, no matter the cost. As the STUC general secretary Roz Foyer said:

“We are alarmed, if unsurprised, by reports of early attempts to downgrade workers’ rights through amending the commitment to the EU Working Time Directive. We will vigorously oppose any attempt to dilute existing rights and are pleased that the Scottish Government, in line with its commitment to Fair Work, supports us in this.”

The SNP and the Scottish Government will continue to work in partnership with trade unions to challenge the UK Government to avoid a race to the bottom when it comes to pay and conditions. As I have said, people in Scotland can see that the Scottish Government’s ability to tackle unfair working practices and fully protect workers’ rights remains limited while employment law is reserved to Westminster, even though they are doing all they can to embed fair work practices across Scotland. In July 2020, Scotland’s Cabinet Secretary for Economy, Fair Work and Culture issued a refreshed joint statement with the STUC, the Convention of Scottish Local Authorities, the Scottish Council for Voluntary Organisations, the Institute of Directors and the Scottish Council for Development and Industry, outlining the sheer commitment to fair work practices in Scotland across the public, private and third sectors.

The Scottish Government also published their fair work action plan last year to drive forward the ambition for fair work to be the norm in workplaces across Scotland. Through their flagship fair work first policy, they are rewarding and encouraging employers to adopt fair work practices by attaching fair work criteria to grants and other funding, as well as to the contracts awarded by and across the public sector. This includes: asking employers to commit to paying the real living wage, not the pretendy one that we hear about in the Commons so often; no inappropriate use of zero-hours contracts; and the provision of channels for an effective voice, such as trade union recognition.

Fair work first criteria will be incorporated into the policies and practices of the Scottish National Investment Bank, and are embedded across the enterprise and skills agencies, including the new South of Scotland Enterprise agency. If an anti-worker ideology continues at Westminster, it is vital that powers over employment are devolved to Scotland to allow our Parliament to get on with the crucial job of supporting employment and helping businesses to thrive.

By breaking the promise to protect EU-derived workers’ rights, the UK Government will again be proving that it is impossible to trust anything that the Tories say, especially on Brexit. We in the SNP are clear that we reject any regression of workers’ protections. The Scottish Government now need the powers to tackle unfair working practices and to protect workers’ rights. Employment law should no longer be reserved to Westminster. In the meantime, fire and rehire is an abomination. The UK Government and Members of all parties must now support my hon. Friend’s simple but effective Bill to outlaw it.

Scotland has not voted for a Tory Government since 1955. Unlike other parties, the SNP wants to put workers’ rights, and all other powers to create a fairer Scotland, in Scotland’s hands—not in the hands of Tory Governments we never vote for. Twenty opinion polls in a row have shown that the people of Scotland back that proposition. They must, and will, have their democratic right to choose a better future with independence.

Oral Answers to Questions

Drew Hendry Excerpts

Tuesday 15th December 2020 Commons Chamber

[Paul Scully]

The Sewel convention envisages situations such as this, where the UK Parliament may need to legislate without consent. We regret the fact that the Scottish Parliament has chosen to do that, but the Bill is essential for protecting businesses and citizens across Scotland, and across the whole of the UK, as the transition period ends.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Since the Scottish Parliament was reconvened in 1999, Scottish productivity has rocketed by more than a third, way above the 24% for the UK as a whole. Our Parliament has been a gift to business, whether under Scottish National party or Labour and Liberal Governments. This Bill extends Westminster’s bony hand into the control of devolved spending across health, food safety, the environment and much more. Is it too late for a festive miracle, with a Tory Minister actually listening to the wise men and women across Scottish society, industry, organisations and law and in Scotland’s democratically elected Parliament and Government, and scrapping this assault on Scotland’s democracy and business productivity?

[Paul Scully]

Spending powers in the UK internal market are in addition to the spending that the Scottish Government already make. These are issues that have up to now been dealt with by the EU, and we will continue to work with the devolved Administrations throughout this process.

[Drew Hendry]

The Minister talks about spending powers. This Bill allows UK Ministers to control spending in the devolved areas of economic development, infrastructure, cultural activities, regional development, education, water, power, gas, telecoms, railways, health, housing and justice. Given the track record of the Tories, for Scotland this really is the nightmare before Christmas. Can he see why, after 16 opinion polls in a row, Scottish people do not want his rotten gifts but instead are looking to protect their Parliament and their rights through Scotland becoming a normal independent nation?

[Paul Scully]

I regret that the Scottish Government have not continued their discussions with the UK Government about an internal market Bill specifically, whereas they have continued them on the common frameworks. On the United Kingdom Internal Market Bill, we have made amendments in the other place that reflect conversations with the Welsh Senedd and Northern Ireland Assembly. I just wish the Scottish Government would come back with productive conversations so that we can push this through and give certainty for business.

Oral Answers to Questions

Drew Hendry Excerpts

Tuesday 10th November 2020 Commons Chamber

[Alok Sharma]

One feature of the pandemic has been that we have indeed reviewed the support and provided further support where it is needed. As I said, we have extended the self-employment income support scheme, which means an extra £7.3 billion of support for the self-employed through November to January. Of course, we all hope that a vaccine comes forward, but the support is there, as well as support in terms of grants for businesses that are required to be closed.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Secretary of State continues to duck the question. He has been told for about seven months of those excluded from support—the battered, bruised and brushed off. We are talking about the 3 million—the newly self-employed, the directors and the freelancers who have been given nothing. He is the Business Secretary, so is it that the Chancellor has ignored his calls for support or is it just that he simply does not care?

[Alok Sharma]

The hon. Gentleman knows me quite well and I think he will understand, at least in private, that I do very much care, as does every Member of this House. He talks about those who are not able to get access to this scheme, and, obviously, one issue relates to those who are paid in dividends. As he knows, Her Majesty’s Revenue and Customs has made the point that it is difficult to distinguish between income earned through an individual’s own company dividends and dividends that have been paid from holding shares in other companies. If the hon. Gentleman has suggestions as to how we might overcome this, I would be interested to work with him.

--- Later in debate ---

[Paul Scully]

I know how important Heathrow and the airlines sector is to the hon. Gentleman’s constituents, which is why we put so much support into that sector. I come back to the fact that we expect all employers to treat employees fairly and respectfully, no matter what job, what position and what community they live in.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The hon. Gentleman is a Minister in government. He has repeatedly called this unacceptable. A number of his colleagues have called out companies such as British Airways that have shamefully used fire and rehire tactics. The Chief Secretary to the Treasury called it

“a practice that all of us in the House would condemn.”—[Official Report, 13 October 2020; Vol. 682, c. 168.]

The Prime Minister said that he was looking at what we can do. People are fed up with this Government’s warm words and no intention of action, so let us hear it today: does the Minister support the aims of the Bill introduced by my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands), and will he support it?

[Paul Scully]

We will address and respond to the Bill when it comes before us. We have to reach the balance between protecting jobs and allowing employers who are in difficulty to have the necessary flexibility. We are one of the most flexible employment countries in the developed world, and we want to remain so, but we do want to make sure that businesses have their responsibilities and use those responsibilities wisely.

Coronavirus Business Interruption Loan Scheme

Drew Hendry Excerpts

Thursday 5th November 2020 Commons Chamber

[Owen Thompson]

As I say, every business took the decision about why they needed to take a covid loan or a bounce back loan. This is about ensuring that we protect the jobs and security for those businesses going forward, and making sure that our communities are protected.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

My hon. Friend has been making a powerful speech. Does he agree that when businesses across the nations of the UK have not needed public funds, they have returned the money, in their many millions? Would that not be exactly the same circumstances that he would be calling for here?

[Owen Thompson]

Absolutely; I completely agree with my hon. Friend. This is about ensuring the security and the future of thousands of businesses across these islands. It is a bold move—I accept that—but we are in a crisis and bold action is exactly what is needed.

--- Later in debate ---

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is always a great pleasure to follow the hon. Member for Bromley and Chislehurst (Sir Robert Neill) and to hear his pearls of wisdom on this particular subject. It is very difficult to disagree with anything that he said, and I hope that those on the Treasury Bench are listening. I congratulate my hon. Friend the Member for Midlothian (Owen Thompson) and my right hon. Friend the Member for Dwyfor Meirionnydd (Liz Saville Roberts) on securing this debate. It is really important that we get to this issue. For many members of the public, this is one of the drier subjects—around business support—but it is crucial to many businesses, so it is important to speak about the CBIL scheme.

Businesses across Scotland and their employees are working heroically at the moment to keep going through the pandemic. Typically, many are innovating, adapting and defying the odds to do that in the current circumstances, but others simply cannot adapt so quickly, not because they are not viable, but because this has hit them at the worst possible time—particularly, as we heard from various Members, those in the hospitality and tourism trade and the businesses associated with that. This has made it really difficult for them.

I am pleased that today the Chancellor has extended the 80% furlough scheme—after six months of asking, I have to say. Scottish National party Members have been asking for the Chancellor to do that time and again. Eventually this—I think it is the fourth iteration—has been put in place, and that does help, but many jobs have already been lost and businesses have already felt the pain in the meantime. It is crucial as decisions are made in the future that there is clear direction, clear rules and support around them so that businesses can survive. Of course, many are still excluded from any support, and I want to speak about them briefly later.

A lot of businesses have found themselves simply locked out of these loans, unable to access them because of the fact that the banks are not allowing customers, even those with really good credit ratings previously, to open new accounts in order to access them. Of course, the Chancellor has form on ignoring people who have been excluded for support and this is no different. Seven months into the pandemic, and as a result of the Government’s failure to listen and to act, many small businesses remain empty-handed. As we heard, the all-party group on fair business banking estimates that 250,000—a quarter of a million—small businesses are locked out of support simply because they were with the wrong bank, as it were. Of the 20 accredited lenders, almost all are not processing applications from non-customers, so extending the scheme without widening access to other lenders is wrong-headed, and the Government need to make it conditional that banks offer loans to non-customers. Failure to act just exacerbates the lockdown lock-out.

It is also unhelpful that non-bank lenders are blocked from accessing funding from the Bank of England and therefore cannot offer that to their customers. I have had call after call, email after email from constituents—I know I am not alone among MPs—who are absolutely desperate and increasingly bitter about being locked out of help. They can see that they are not being listened to and they must be listened to.

There are then those who did qualify. Their reward is that they can top up their loans and borrowing as part of the new rules meant to keep businesses afloat during England’s second lockdown. It is absolutely understandable that many of these bruised and battered business owners are nervous about taking on new debt at this time of great uncertainty. They have great justification for those feelings at the moment. They need a better safety net. They deserve to be able to protect their businesses that in any other time would not only be viable, but thriving.

There is a sensible move the Government could make, given that it is clear that many firms will be unable to repay: convert the loans to equity, or, even better, as we heard from my hon. Friend the Member for Midlothian, to grants. As he said, in May the OBR forecast a likely 10% default rate on those loans. By July, that had risen to 40%. Earlier, a report in May by the British Bankers’ Association, the body responsible for debt collection, was, as we have heard, predicting a 40% to 50% default. In September, the Department for Business, Energy and Industrial Strategy annual report went even further, revealing likely losses estimated at September 2020 to be in the range of 35% to 60%. Let us never forget that this is against the background of 3 million freelancers, newly self-employed, contractors on PAYE and company directors who have been abandoned, given no help whatever since the pandemic began. They continue to be ignored by this Government.

The Association of Accounting Technicians is calling for bounce back loans to be written off for SMEs, who took two-thirds—that is, £40 billion—of all bounce back loans. In addition to writing off SME debt, the Government should listen to TheCityUK on coronavirus business interruption loans. Its recapitalisation report suggests converting the debt to equity or contingent tax liability options for firms, so they can avoid being held back and adding to the UK debt crisis. In its report, TheCityUK estimates that UK businesses will have £100 billion of toxic debt—this is why writing off and doing something about this debt is so important—by March 2021, with £35 billion of that related to Government schemes. It makes absolutely no sense. It is dead weight. Writing off the debt could provide a much needed boost for the economies of all four nations. As their own former Tory Chancellor, George Osborne, agreed in evidence to the Treasury Committee, it would be an overall benefit to the taxpayer. With banks now actively working with debt collectors, the UK Government must provide urgent clarity that collections will not be necessary. Specialist debt collectors have no place in this system. It is akin to placing a noose around the necks of employers and wealth creators.

Urgency can be found in this Tory Government for business. They can do it when they want to. For example, they bypassed tendering processes to rush out contracts for over £1 billion to certain businesses, such as PA Consulting Services, Meller Designs, Hanbury Strategy, Public First, PPE Medpro and others. We have all seen this Government moving at pace. Of course, the common factor there is that they are all major donors to the Tory party.

The continued failure of the Government to listen to those affected is leading to job losses, frustration and squandered opportunity. While this affects businesses and jobs across the nations of the UK, the failure to empathise and to act is driving citizens of those nations to look to their future options. In Scotland, the path is clear. We need a different path to be a normal independent country that makes choices that are right and suitable for our people and businesses.

Oral Answers to Questions

Drew Hendry Excerpts

Tuesday 29th September 2020 Commons Chamber

[Paul Scully]

I have met nightclub representatives and people who run nightclubs. I have met with Sacha Lord and other people who work with the elected mayors. We have set up a nightclub taskforce to work with the Night Time Industries Association and other owners to try to work our way to a covid-19-secure nightclub, when we can start to open up the economy. Many nightclubs have actually repurposed to be able to open as bars and other areas of industry.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Minister says he understands, but it beggars belief that his Government still refuse to support businesses that were vibrant and viable. Workers, freelancers, creatives and the newly self-employed have been hung out to dry. Government sources now predict that all pubs, restaurants and bars will be ordered to close for two weeks initially. Without furlough and restricted by curfew, why is he creating another class of the excluded?

[Paul Scully]

I am not sure where the Government sources are coming from. As I say, lives are absolutely first in our priorities; we are trying to make sure that we can stop the transmission of this virus. We want to keep the economy open, which is why we have put measures in place so that, although they are hampered because they cannot trade fully, pubs, restaurants and other sectors can stay open at this time.

[Drew Hendry]

The Government will not provide grants to struggling firms, they are giving a pittance to the self-employed and they are replacing furlough with a scheme that excludes businesses closing on health grounds. They are incentivising the rest to cut staff, with 3 million already thrown to the wolves and more to come. Did the Minister demand that the Chancellor introduce an emergency Budget to save the excluded? If not, is it not the case that his role is simply not viable?

[Paul Scully]

The Government have put in £160 billion-worth of support, wrapping our arms around as much of the economy as we can. We have put off business rates for these businesses. We have extended the VAT cut for another few months for the hospitality sector in particular. We will continue to see what more we can do to keep our economy open.

Oral Answers to Questions

Drew Hendry Excerpts

Tuesday 21st July 2020 Commons Chamber

[Alok Sharma]

The furlough scheme will have been up and running for a full eight months, providing a huge amount of support for more than 9 million jobs. It is becoming more flexible and allowing people to return to work part time. The right hon. Gentleman will know that the Chancellor has also set out the job retention bonus which, if it is taken up by all employers, will represent a £9 billion boost for the economy. I say to him again that the key is to get the economy up and running and to get businesses trading.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

As we have heard, many businesses, sole traders, freelancers and others have been left without support throughout this health emergency. They are on their knees and they are still getting no support. How can they rebuild their trade when the Secretary of State’s Government will not help them? If his Government will not help them, why have they refused to allow simple adjustments to Scotland’s borrowing rules so that the Scottish Government can step in?

[Alok Sharma]

The hon. Gentleman talks about support in Scotland; like many colleagues in the House, I believe in the Union, and we must work together to support workers across the United Kingdom. More than 730,000 jobs have been protected in Scotland through the furlough scheme. The hon. Gentleman will know that, as a result of the additional moneys that the Chancellor announced at the summer statement, the total additional Barnett funding to Scotland since March is £4.6 billion.

[Drew Hendry]

Oh how the broad shoulders of the Union slump when asked a difficult question. The Institute for Fiscal Studies has exposed how the promised £800 million of consequentials for Scotland from the Chancellor’s job package is in fact only £21 million. Will the Secretary of State now do the right thing by Scotland’s businesses and urge the Chancellor to replace the missing £779 million—or has he also bought into the Prime Minister’s stated view that a pound spent in Croydon is of more value than a pound spent in Scotland?

[Alok Sharma]

The hon. Gentleman talks about supporting businesses in Scotland; perhaps he will come forward and give his support to the UK internal market White Paper that we have published.

Oral Answers to Questions

Drew Hendry Excerpts

Tuesday 16th June 2020 Commons Chamber

[Alok Sharma]

My hon. Friend raises an important point, and this is part of the Bill. While Companies House has extended the period for filing accounts, we will give businesses the maximum period available under the powers in the Corporate Insolvency and Governance Bill for filing their accounts, confirmation statements and event-driven updates. At a time when many companies are focused on surviving, that will be very welcome respite.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Mr Speaker, may I echo your sentiments on the tragic loss of Jo Cox?

Businesses facing insolvency will be under further pressure with the premature end to the furlough and self-employed schemes, and loan schemes are of little help, because they simply add to a pile of debt. Does the Secretary of State agree that the sectors hit hardest by covid-19 need long-term support to survive and rebuild, which means extending the furlough scheme and support loans being written off or converted to equity?

[Alok Sharma]

The level of support we have provided across the economy is incredibly favourable by any international comparison. The furlough scheme will be in place for a full eight months. That is precisely the support that we have been very keen to give to businesses.

[Drew Hendry]

Tourism is worth £10.5 billion to the Scottish economy, and before the pandemic it provided 8% of jobs. While some businesses will soon be able to reopen outside areas, vital public health rules and consumer sentiment will mean that most activity is subdued. Will the Secretary of State follow the Scottish Government by setting up a tourism taskforce and use his Government’s reserve powers to cut VAT for tourism and other sectors, to help firms that are at risk of insolvency?

[Alok Sharma]

As I am sure the hon. Gentleman will know, my right hon. Friend the Secretary of State for Digital, Culture, Media and Sport is working with the tourism sector, and there is regular dialogue with it. I recognise the concerns that he has raised about this sector, which is closed, but that is why we have provided particular support through a rates holiday for hospitality businesses.

Corporate Insolvency and Governance Bill

Drew Hendry Excerpts

2nd reading & 2nd reading: House of Commons
Wednesday 3rd June 2020 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I thank the Secretary of State for his customary and welcome thorough exposition of the Bill. I pass on my thanks, too, to the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam (Paul Scully) for his engagement. We have been working constructively to try to ensure that we are, as the Secretary of State said, supporting businesses with the measures we are taking. It is very important to remember that people and businesses should be the laser focus of the work we are doing throughout this crisis.

It is important to consider the Bill and support it through today in a constructive manner. That is what the SNP intends to do. The Bill, although in itself a welcome step in the current crisis, should not be seen in isolation. Some very good points were made by the right hon. Member for Doncaster North (Edward Miliband) and the hon. Member for Wimbledon (Stephen Hammond). Some interventions were also very telling.

        As I have said, this Bill should not be seen in isolation. I want to touch on the impact of the Finance Bill, current business conditions and, of course, business and public confidence in the steps that need to be taken. This Bill helps with some provisions and should allow firms to apply their best endeavours to continue to trade during this pandemic emergency. As I have said, we support the Bill and the amendments to make that as easy as possible for people. None the less, as I have alluded to, the problems for the Bill lie in three other areas. Another piece of legislation—the Finance Bill—actually undermines, not just risks, these provisions and sets the conditions that could push companies to the brink. Then there are the plans to grant HMRC preferential status in the insolvency procedures, and the measures to make directors personally liable for companies’ tax liabilities. Together, these represent a significant challenge to businesses across the nations of the UK in trying to access working capital finance. While noting that it is difficult to accurately model the policy’s impact on business lending, UK Finance estimates that the policy could hit lending by well over £1 billion per annum, and possibly—because the modelling is difficult—much more than that.

        As well as having a detrimental impact on business and economic growth, restricted lending will make it harder to rescue businesses, increasing the knock-on effect of insolvency on other businesses and people. Business investment returns to creditors and confidence in the UK corporate framework all stand to be damaged as a result. Although the tax abuse using the company insolvencies measure can be mitigated through accurate legislative drafting and detailed guidance from HMRC, the policy to grant HMRC preferential creditor status should be withdrawn entirely, as its introduction may prove a hammer blow to businesses at exactly the time that the Government profess to be seeking to level up and support them as they adapt to the impact of covid-19.

        The second area of difficulty involves the economic inequities left by the gaps for businesses and Government support schemes during the covid-19 crisis. If the changes for this Bill can be pushed through sensibly in record time, there is no reason why the same urgency cannot be applied to filling the gaps that people and businesses are experiencing. We have heard today that there are substantial problems that not only exist now, with people struggling and unable to access support, but that are looming larger because of the decisions that have been made— over quarantine, for example. As I said during the statement earlier, this is not about whether quarantine is a good or bad device; it is about the fact that it will impact disproportionately on businesses involved in tourism and hospitality. That has to be addressed as we go forward.

        The issues are very clear. Firms are already finding it difficult to access cash, not least because of the UK Government’s flawed coronavirus business interruption loan scheme. I say this with the understanding that the schemes had the best of intentions—to support businesses —but, as we have already heard, they are just not working for everyone. I will not repeat the details because we have heard about that in the Chamber today. There are also big holes in the job retention scheme and the support programme for the self-employed. All of those things are critical to supporting businesses, and all of those things undermine what we are trying to do with this Bill by working collectively to ensure that these measures are taken forward as effectively as possible.

        I agree entirely that the Treasury should extend its 100% bounce-back scheme. That guarantee should cover the entire CBIL scheme. The fact that only a tiny fraction of businesses have received support underlines the need for the UK Government to introduce grants, not just loans. The UK Government should review and relax the lending criteria and speed up the process so that businesses can get vital access to cash.

[Kevin Hollinrake]

I think it is a bit harsh to say that the schemes are not working at all. About £30 billion has been lent under both those schemes—about £9 billion under the CBILS and £21 billion under bounce-back loans. The CBILS issue seems to be that, although the forward-looking viability test has been removed, banks are still assessing whether businesses can afford to make the loan repayments over that period. If we remove the requirement for banks to do that, a lot more money would go out the door under the CBILS.

[Drew Hendry]

I agree and I am willing to concede that some people have indeed been helped. I said that the scheme was introduced with the best of intentions, but the fact is that there are far too many people running businesses who have tried to access this scheme but could not do so. We have heard examples, and I could give dozens more from people who have contacted me. I guarantee that just about everybody—if not everybody—in the Chamber has had similar contact from people who have been unable to access the scheme. The fact is that it is not working as it was intended to. It is not getting through to the people who really need it, notwithstanding those who have been able to access it.

My party, the Scottish National party, also backs calls by the Institute of Directors for the Government to use the scheme to provide firms with overdrafts during this crisis. For firms still unable to access finance, it is high time—indeed, it is overdue—for direct grants and/or equity investments to be offered instead.

The final problem is public and business confidence. We are at stage four in the covid crisis at the moment. There has been a relaxation of measures for people to get out and about and do things and for businesses to start up, but that confidence evaporates if we have to go back to the restrictions and businesses are not able to do that. That will pile on the pressure for the businesses that we are trying to assist today.

I was struck by what was said by the hon. Member for Wimbledon—I hope I get this right—about one of the problems being the protection of one thing at the expense of another. That is a really good comment, because overall confidence and compliance for people and businesses will face further threat. All measures that are introduced by a Government who are, unfortunately, defined by double standards are likely to run into difficulties. This UK Government, these measures and those on public health are all being undermined by the failure to deal with the Dominic Cummings saga. No matter how much the Prime Minister bloviates, this matter has not gone away. My inbox and, I am sure, those of many others, were still full this weekend of messages from people looking for that to be addressed. I know that it is not a party thing, because I have seen the tweets and messages from people representing constituencies and parties around the House—they have all had the same messages. This matter—the principle of different rules applying—has not gone away or failed to register. We might take the comment of the hon. Member for Wimbledon and say that the protection of one at the expense of all others applies here. Observance of the rules is critical to the success—[Interruption.]

[Stephen Hammond]

The hon. Gentleman has taken a bit of latitude with what I said. I was pointing out that this was beneficial, but that we needed to consider the interests of the other and therefore their protection. He is corrupting, or misusing, my words, shall I say.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I think we might be straying a bit further afield from what we are supposed to be debating this afternoon.

[Drew Hendry]

Thank you, Mr Deputy Speaker, but I did say that this was about the ability of businesses to continue to trade and this has a material impact on the Bill, because along with the Finance Bill, which it was entirely relevant to mention today, and the support for business, this can undermine the work that we are doing on this Bill. I will rein myself in now, but I think that that is a valid point. I hope—as you know, I greatly respect you, Mr Deputy Speaker—that you will understand and accept that point.



I have a lot more to say about that. This issue has not gone away, nor has it been dealt with—but it should be if the public are to have any confidence going forward.

Finally, returning to the Bill, getting this through today to protect people and allow them to trade out of difficulties is vital. We should accept that changes need to be made. I have set out a few, and we have seen the amendments. We should work collectively to make sure that the Bill is as good as possible to protect businesses.

Covid-19: Business

Drew Hendry Excerpts

Tuesday 12th May 2020 Commons Chamber

[Alok Sharma]

My hon. Friend is a strong voice for Keighley businesses. Of course this guidance applies to all businesses. The Federation of Small Businesses, which has been part of helping us to prepare the guidance, has welcomed it, particularly for small companies. My hon. Friend should continue the engagement he is doing with businesses, encourage them to look at the guidance and encourage them to get back to work.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP) [V]]

I thank the Secretary of State for advance sight of his statement. Given that the Prime Minister previously attacked what he called the “health and safety fetish” as “madness”, and in 2009 said public warnings were “for the extremely stupid”, the fact that this Government are stressing the need for health and safety must be welcomed. However, it is important to give the utmost clarity.

I know that is what the Secretary of State will like to think he has done, but his advice is addressed to UK employers. Will he acknowledge, in the spirit of clarity, that his advice is for England only? The advice in the other nations of the UK remains to stay at home, protect the NHS and save lives. Lives are at stake. We must have complete clarity. Shops in Scotland are not scheduled for phased reopening from 1 June. Will he make that clear? His five-point plan does not apply at this time in Scotland, Wales or Northern Ireland. Will he make that clear?

We welcome the measures announced today to transition the furlough scheme, because business and people would be harmed by a cold restart without protection. However, before any reductions in furlough or rates of support start, we first need to fill the gaps for those left behind: those who had a contract or letter of employment by 29 March but whose employers have not logged into Her Majesty’s Revenue and Customs, those agency workers who are not included, staff whose pay is combined with commission, and the forgotten but vital summer seasonal workers. Will the Secretary of State make the case for those workers, or are they still to be left behind?

Finally, the Secretary of State has made great play—I quote from his statement—of

“Building a consensus and confidence when moving forward”.

Will he take that message back to the Cabinet and the Prime Minister, and extend it to the leaders of the devolved nations? His Government have consistently updated Fleet Street before this House, and even before the First Ministers of the devolved nations.

[Alok Sharma]

I thank the hon. Gentleman for his questions and his remarks. First, he talked about the Health and Safety Executive. We are of course providing more support. It is able at this stage to progress with the funding and support it has from the Government, but we have provided an extra £14 million in case it needs it. The UK has a proud record as a world leader on health and safety in the workplace. If he compares our statistics with those in many other countries in Europe, for example, he will see that we have a very good record.

The hon. Gentleman asked who this guidance is for. This guidance is to help all employers in the United Kingdom—employers, employees and the self-employed. I also say to him—[Interruption.] He is shaking his head, but let me come to the point that he wants me to make. In terms of the 250 stakeholders we engaged with, 70% of those businesses operate across the UK. However, in the guidance, we make it very clear that public health is devolved in Northern Ireland, Scotland and Wales, and we talk about the guidance being considered alongside local public health and safety requirements and legislation.

My final point is about consensus. We have been driven, throughout this process, through consensus. I have had very good discussions with my counterparts in the devolved nations, and we will continue to do that. The Prime Minister has been doing that, and we will continue to do that as a Government. At the end of the day, we all have to come together to get out of this and get our economy to bounce back.

Oral Answers to Questions

Drew Hendry Excerpts

Monday 4th May 2020 Commons Chamber

[Alok Sharma]

As the right hon. Gentleman knows, we have provided support for the hospitality, leisure and retail sector. There is a 100% rates holiday for all businesses in that sector, and we are also making £25,000 grants available to them. Under the grant scheme—the £25,000 and £10,000 grants—as of last Monday, £7.5 billion had been paid out. I hope he will welcome that. On the wider measures he talks about, we keep everything under review, and I will look at anything that comes forward.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP) [V]]

I also welcome the right hon. Member for Doncaster North (Edward Miliband) to his new position on the Labour Front Bench.

A recent poll by the Scottish Chambers of Commerce has found that 48% of Scottish companies will run out of cash within three months, with 64% identifying shortcomings in Government support schemes. Does the Minister agree with Sir George Mathewson that, far from helping them to bounce back, these loan schemes will not even allow businesses to survive, and that the only option is to write off the debt and convert these loans urgently into more accessible grants?

[Alok Sharma]

I say to the hon. Gentleman, for whom I have enormous respect, that one has to look at the sum total of what the Government are putting forward. He will know that about 4 million people are being furloughed under the job retention scheme and that support is available through grant schemes, which I talked about in my response to the right hon. Member for Doncaster North (Edward Miliband). Of course it is important that we support businesses, and we will continue to do that.