Arcadia and Debenhams: Business Support and Job Retention

Lord Sikka Excerpts

Thursday 3rd December 2020 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, it is right that all businesses make a contribution to maintaining the roads, buses and emptying bins—all things on which their customers rely—but the noble Lord asks a good question about the difficulties of following a green agenda and discouraging car use for out-of-town shopping centres. We need the whole system to be fair, which is why we will deliver a fundamental review of the whole business rates system. This will build on the changes we are making, which are worth over £23 billion to businesses over the next five years, and will take nearly half of all businesses in England out of paying any business rates at all. We have committed to small businesses by increasing the retail discount to 50% and, due to Covid-19, we have gone further and increased it to 100%.

[Lord Sikka (Lab) [V]]

My Lords, if Arcadia and Debenhams had worker-elected directors, they would have enriched the corporate governance at both companies. At Arcadia, they would have sought early resolution of the pension scheme deficit, and at Debenhams, they would have expressed concern about the overload of debt market equity owners. Their insights would have resulted in better outcomes for all concerned. Will the Government now follow many other European countries and legislate to create worker-elected directors for all large companies?

[Baroness Bloomfield of Hinton Waldrist (Con)]

I cannot comment on the Government’s intentions or otherwise to create worker-directed representation on company boards, but the audit trail of Arcadia is quite clear. The auditor’s report was clear that there was a material uncertainty about the group’s ability to continue as a going concern. It also failed to publish its 2019 accounts this August. Late filing of accounts attracts an automatic penalty fine and is an alert. As to whether there need to be specific investigations of directors, the administrators have a duty to report within three months of the insolvency on the conduct of the company’s current and former directors.