Oral Answers to Questions
Lucy Powell Excerpts(3 years, 9 months ago)
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Mr Speaker
I thank the Minister, on behalf of my office, for his kind words.
Lucy Powell (Manchester Central) (Lab/Co-op) [V]
Thank you, Mr Speaker, for facilitating these virtual questions for the past few weeks, and long may they continue.
Although yesterday’s announcement was welcome, the Minister and I both know that nearly all the projects have been a long time in coming—from well before the current coronavirus crisis—so, in that sense, the funds announced yesterday were already priced in by the sector. In order to protect the aerospace jobs of today, as others have asked, which are highly skilled and in areas of the country that can ill afford to lose them, we really do need further urgent action today. Will the Minister say more than he has so far, which has been warm words but not much real action, to reassure those working in aerospace that their jobs will be protected in the coming months and years?
The Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2020
Lucy Powell Excerpts(3 years, 10 months ago)
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Lucy Powell (Manchester Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Paisley. We noted during this morning’s statutory instrument Committee that many Members had made use of their local enterprises over the past few days to get their hair done. I note that some have not yet done so, although I think the Minister was the first in the queue on Saturday—[Laughter.] He got his hair coiffed to its usual high standard.
The Opposition support these measures. It is important to protect critical public health and crisis mitigation infrastructure from aggressive takeovers. Many usually successful businesses of all sizes that are supporting our communities to tackle the effects of covid-19 are suffering from short-term impacts on their profitability and share prices, and might therefore be more vulnerable to takeovers than would otherwise be the case. We support the addition to section 58 of the Enterprise Act of a capability to combat and mitigate the effects of public health emergencies as a new public interest consideration, placing it alongside the existing provisions for interventions on the grounds of “national security”, “media plurality” and
“the stability of the UK financial system”.
As the Minister has said, the Labour Government used an order similar to the one we are considering today to add the stability of the UK financial system to that list back in 2008, following the financial crisis. There is no doubt that that provision will also play an important role in the months and years ahead.
I appreciate that swift action is required in these times, and the Government have moved quickly to act in this instance. However, the Labour Government did manage to conduct an impact assessment and lay it before the House alongside the 2008 order, so I ask the Minister to consider doing something similar in quite short order, or maybe conduct a formal review of the changes at some point so that we can understand their long-term impacts. That said, we are happy to support the order today.
Oral Answers to Questions
Lucy Powell Excerpts(3 years, 10 months ago)
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Lucy Powell (Manchester Central) (Lab/Co-op) [V]
May I, too, put on the record my remembrance of my good friend Jo Cox?
Pubs, cafés, hairdressers and restaurants are the lifeblood of our high streets. Business-critical guidance about their reopening in just two and a half weeks’ time was due yesterday but is nowhere to be seen. Instead, they got another review, making a bad situation much worse. When will they get that guidance? With either 1-metre or 2-metre distancing, most of those businesses still will not be viable, so will the Government finally recognise that vital business support schemes need to follow the public health measures before we see large-scale job losses and the decimation of our high streets?
Paul Scully
As you will see from my hairstyle, Mr Speaker, I am desperately awaiting the opening of hairdressers and barbers too. It is key that we get this right, though. The economic impetus from the hospitality sector in particular is made apparent to me every single day that I speak to its representatives; indeed, I will be speaking to a lot of them later this afternoon. We have to make sure we get that right, with the confidence of customers coming back. The Government’s first priority is to save lives and to work with the scientific guidance. At the moment, when people go out to shop at the businesses that are open today, 2 metres is still the rule, but we will get further guidance as soon as we practicably can.
Corporate Insolvency and Governance Bill
Lucy Powell ExcerptsWednesday 3rd June 2020
(3 years, 11 months ago)
Commons ChamberRead Full debate Corporate Insolvency and Governance Act 2020 View all Corporate Insolvency and Governance Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 3 June 2020 - (3 Jun 2020)
Richard Fuller
After my hon. Friend’s comments about association football, of which I have absolutely no understanding at all, I will bow to his better judgment on this topic too, but generally I am not really in favour of the Government having skin in the commercial game. When they get active in the economy, they tend to blunder around and probably, with the best of intentions, make things worse. I am not saying that they should not have their role; certainly, right now, many people will want the Government to have a role. Many Members have rightly looked at the measures the Government have put in place to support business and praised them.
Of course, people need not just take our word for that. Ask people around the world which country’s Government have responded best to the economic consequences of the virus and they will say that the United Kingdom Government are No. 1, with Japan, America and Germany in the United Kingdom’s wake. That is a tremendous credit to Ministers, but I would not like to encourage them to make that participation any longer than it needs to be.
On the guidance for going concern judgments, the Department will have spoken with auditors about how they are approaching their going concern judgments this audit season. Does the Bill have any impact on those judgments? Does the Department already think that it might need to bring forward any other measures based on the independent judgments of those auditors?
I raise that because in the 2007 crisis, there was a feeling that the rating agencies had been captured by their corporate clients and were giving ratings that perhaps did not reflect the true underlying status of businesses. We are fortunate in this country already to have embarked on reforms of accounting and on the separation of accounting and other activities to limit that risk, but I just caution that we ought be aware of that in a year’s time when we look at those going concern judgments. We would not like those to come back on our accounting firms, which are doing the best they can.
In Committee, the Minister would be wise to give a few more details about the role of the monitor—my hon. Friend the Member for Huntingdon (Mr Djanogly) raised that issue—and what role the Department will have in monitoring the monitors. Is any change expected to that?
One other concern I have is that facilitating businesses to continue trading at a time when the economy as a whole may be recovering and uncertain has a hint about it of creating some form of zombie businesses, where people are compelled to provide supply, as is required under the Bill, but there is the increasing sense that those businesses are not going to make it. I may be expressing a concern based on widespread use of the insolvency practice, which may not come to fruition—let us hope that for many people it does not—but I wonder what the Government’s thoughts are about the risk of businesses existing in name but not actually being able to create a long-term future for themselves or their employees.
I mentioned the Opposition’s amendment 1, on the voice of employees on obtaining a moratorium. If that were tweaked, it would be an interesting issue for the Government to consider. I also mentioned in an intervention the powers of the small business commissioner. The Secretary of State was right to say, “Hold on a minute; that’s something that we will come back to,” particularly as we are going through this in one day. It is probably not something that we would want to put through so fast. Similarly the calls by the Leader of the Opposition—[Interruption.] I did it again. I am so sorry. It is so hard to forget that time.
Richard Fuller
Perhaps the current Leader of the Opposition would take offence at what the shadow Minister has said. I am not sure, although if we are ranking Leaders of the Opposition, I would say that as long as they are Labour, that is fine by me.
Notwithstanding the shadow Secretary of State’s position, he raised the issue of reform of corporate governance. It is an interesting topic, and the RSA Group did an interesting review of it last year, but again I would say to the Opposition that this is probably not the time for bringing that forward.
The protection of pension schemes is an issue that the Government ought to consider quite seriously. I have had personal experience of that, and I would not like those dependent on a pension fund to find themselves somehow further at risk as a result of these issues.
I started by mentioning the position 72 days ago and some of the consequences for businesses in the interim. I wanted to be absolutely clear that every single politician has been part of causing that, and, to the extent to which the Opposition continue to be supportive of the Government, as they have been in this debate, and the Government continue to be open with the Opposition, that is the spirit that the country would expect. For those businesses that have fallen because of the crisis or are likely to fail, I would like to say that, as a Member of Parliament, I am sorry. I am sorry for all that has happened to your businesses. I am sorry for the consequences. In the case of one particular constituent—who I will not name in full, but her first name is Peta—let me say that I have worked tirelessly to find ways in which Government programmes can support what you have done and will continue to do so. However, the best thing that we can do is to restore the British economy, get the Bill passed to ensure protection for the businesses that will fall on hard times and get the economy moving again.
Lucy Powell (Manchester Central) (Lab/Co-op)
It is a pleasure to be on the Front Bench and at the Dispatch Box again as the shadow Business Minister, although I would have much preferred to make this speech safely and socially distanced in sunny Manchester—no offence.
I reiterate the thanks of my colleague, my right hon. Friend the Member for Doncaster North (Edward Miliband), to the Minister, the Secretary of State and their teams for all the engagement we have had on the Bill. Our objective, as the Opposition, is to be constructive, and to ensure that businesses get the support they need now and in the long term, to keep the number of insolvencies in the coming weeks and months as low as possible. As my right hon. Friend said, we support the overarching objectives of the Bill. However, we hope the Government can give us some reassurances in Committee. Many others today have voiced similar concerns.
I thank many colleagues from across the House for their speeches in this interesting debate. Obviously, the highlight was the maiden speech of the hon. Member for Heywood and Middleton (Chris Clarkson), who was a bit nervous about coming last out of his intake; but as a fellow Mancunian, I reiterate that the best was definitely saved till last.
Although we back the Bill today, we are clear that it should be the last resort for many businesses. There is much more for the Government to do now to support businesses so that, as my hon. Friend the Member for Bristol North West (Darren Jones) eloquently put it, the measures debated today are not necessary. Every previously viable business that needs to call on these insolvency changes because of our decision to shut down the economy for public health measures, is a business that has been failed. Ministers have recognised the huge scale of the situation, with the unprecedented support they have established to retain jobs and support businesses. That has been the right thing to do and we have supported it. However, as we enter the end of the lockdown phase, the challenges ahead are becoming clearer. More must now be done to rescue more businesses, and ensure that the recovery is as short and strong as possible. We must stop a second, and possibly a third or fourth wave of insolvencies arising from unmanageable debts and creditors. Any business that goes bust as a result of public health measures will lengthen and deepen the recession and leave long-lasting scars on unemployment levels and the wider economy.
Labour Members firmly believe that the cost of not doing all we can now to save businesses will be far higher than the cost of action today. Ultimately, the taxpayer will pay for the cost of failure, through lost tax revenues and higher unemployment over many years, not months. The Government need to renew their support package over the coming period, as it is now clear that the easing of lockdown will be longer and more complicated than was predicted at the start of this crisis. That is why we suggest that the temporary measures in the Bill should be extended today, rather than waiting until later.
Preventing insolvencies today, in and of itself, will not stave off insolvencies tomorrow, if the Government do not take a long view and ensure that businesses do not face a cliff edge. A second wave of support and sector-specific action is also required. Critically, if the recovery is based on unmanageable debt, it will be no recovery at all. In the immediate rescue phase, businesses and business organisations are asking for more discretionary grant funding to support the hardest hit businesses that have so far missed out, more flexibility with the furlough scheme, simplification of the CBIL scheme, and many other measures that have been mentioned today. Those include more clarity and joined up working on business critical issues such as quarantine measures, safety in the workplace, childcare, and shielded employees. The Government must not fall into complacency and think that their actions so far have been sufficient, because a second wave of support is urgently needed.
We have heard from a number of colleagues, notably my hon. Friends the Members for Aberavon (Stephen Kinnock) and for Cardiff South and Penarth (Stephen Doughty), and the hon. Members for Folkestone and Hythe (Damian Collins), and for Strangeford (Jim Shannon)—
Lucy Powell
Sorry. Strangford. It’s just that the Member of Parliament reminds me of that—no, I’m only joking.
The economic emergency we are in is affecting different sectors of the economy in different ways, some particularly and devastatingly harshly. This will be a sectoral recession, and the Government response must reflect that. We have raised with Ministers the serious issues facing our manufacturers, car manufacturing, steel makers, the aerospace and defence industry, aviation and tourism, the hospitality industry, and other areas such as football. The crisis is also affecting supply chains in those sectors, and we have already seen job losses at premier British companies such as Rolls-Royce and McLaren. There have been layoffs in the airline industry, despite the furlough scheme, and despite warnings from many industry bodies about the failure to provide adequate support and liquidity to business now. Will the Government step up with the more urgent response that is needed for those sectors, which so many Members have asked for today?
Project Birch has potential, but talking must quickly be followed by action. The promise of jam tomorrow will not pay the bills today. The feedback I get from businesses, especially some of our most important and largest employers, is about how slow the discussions with Government are, compared with the urgency of the cashflow problems. For example, our world-leading aerospace, aviation, tourism and travel sectors now face what could be a final blow from the confusion and mixed messaging about quarantine measures.
As the former Prime Minister Gordon Brown said, and as the hon. Member for Hitchin and Harpenden (Bim Afolami) has warned, the scale of the debt that companies are taking on to survive this crisis is huge. We will see a debt-laden recovery, with demand unlikely to return to normal quickly for many. Coupled with that debt, the recovery is likely to be weak, deepening its economic impact, and with insolvency spread over the months ahead.
Once companies have to start paying back loans, further insolvencies are likely to follow, with recovery choked by high levels of unemployment, and low levels of confidence. Are the Government exploring with business organisations and the finance sector ways to mitigate the month-13 problem of Government backed loans with a more long-term solution, as was suggested earlier?
Finally, we need to do more to increase and generate demand through a green recovery plan, as the hon. Member for North Antrim (Ian Paisley) described, and to address the youth unemployment crisis. The Government must seize the opportunity to bring forward pipeline projects to put British businesses at the forefront of the green and digital revolution.
Turning to some of the specific measures in the Bill, we support both the permanent changes to insolvency law and the temporary changes to insolvency law and corporate governance, but with some caveats. A balance must be struck between allowing businesses to survive through the crisis and not removing essential protections for creditors, pension funds and employees. The trade unions and others here today have raised some serious concerns about this, with good reason, and I will say more on that in Committee.
We believe that there must be no revision of the directors’ duty of care to their employees and suppliers. The Bill must ensure that SMEs and smaller suppliers are protected when larger companies go into administration. As the hon. Member for Dudley South (Mike Wood) and others have said, the temporary measures need to be extended today.
The Bill is a big missed opportunity to address corporate governance accountability, as the hon. Member for Huntingdon (Mr Djanogly) outlined. The collapse of Carillion was a national scandal. Yet again, corporate greed and very shaky indebted finances led to the taxpayer paying the price of directors’ failures. While those directors and shareholders reaped all the gains during the good times, the collapse of Thomas Cook more recently exposed these failings further, with the taxpayer once again footing the bill for failure. We had a conversation earlier about equity stakes, but the taxpayer in effect does have an equity stake in many businesses—but only in paying for the costs of failure, not in reaping any of the rewards of success. Ministers consulted on changes to insolvency law after these collapses, and some of these changes are in the Bill, but, inexplicably, other important ones are missing.
Over the coming months, as the recession takes hold and complex financial arrangements are pushed further towards breaking point by the new loans that these companies have, we are no doubt going to see the collapse of more household names and large corporates. Why have the Government not taken this opportunity, which we stand ready to support, to bring forward the long-awaited reforms on tackling bad corporate governance and protecting creditors, employees and, ultimately, the taxpayer? We also think it is a missed opportunity to have given the small business commissioner more powers and teeth, as the hon. Member for North East Bedfordshire (Richard Fuller) seemed to agree.
This is a speedy process for this Bill. It is a very large Bill, and we are expediting its passage through both Houses very speedily, so we are relying on Ministers to take on board some of the concerns raised today in the spirit of us working together. We will come back to some of these missed opportunities in Committee, but, to close, I urge the Minister to press his colleagues, including the Chancellor, to do more now to protect companies from insolvency. This Bill provides a small and important safety net and breathing space, but much more needs to be done and more quickly to prevent businesses from needing that breathing space in the first place. I hope that the Government will heed the warnings of business and provide further support so that the recession to come does not leave deep and lasting damage to our economy and employment.
Oral Answers to Questions
Lucy Powell Excerpts(4 years, 6 months ago)
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Lucy Powell (Manchester Central) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
The independent Oakervee review will advise the Government on High Speed 2, including potential business benefits and how it should proceed. The hon. Lady will understand that I would not want to prejudice those findings.
Lucy Powell
I thank the Minister for that reply, but six regional heads of the CBI say that High Speed 2 should be built in full and the Northern Powerhouse Partnership recently published its excellent independent review saying the same, arguing that only HS2 can really rebalance our economy. Will the Secretary of State, as the business representative at the Cabinet table, advocate for business in the north?
Nadhim Zahawi
The hon. Lady mentions the CBI. Both the Mayor of Greater Manchester, Andy Burnham, and the Mayor of Birmingham, Andy Street, who sits on the panel conducting the review, have said it is important that we kick the tyres on value for money, but it is also important to make such representations to ensure that the committee gets a full view of the business benefits of HS2.
Oral Answers to Questions
Lucy Powell Excerpts(4 years, 11 months ago)
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Chris Skidmore
There are a number of pilots on community buildings that we will be taking forward but, specifically, the smart export guarantee ensures that providers with up to 5 MW of production of solar electricity can export back to the grid. If we consider Blackfriars railway station—there is about 5 MW there—we can see the opportunity for community halls and community infrastructures to sell their energy back to the grid.
Lucy Powell (Manchester Central) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)
The industrial strategy is driving the northern powerhouse across the north of England. Our Northern Powerhouse Investment Fund, which recently celebrated its second anniversary, has invested directly in northern businesses: £104 million, supporting 410 small and medium-sized enterprises.
Lucy Powell
I thank the Minister for his answer. I would also like to see Ministers throw their weight behind the Power Up The North campaign but, given that the current Prime Minister banned all mention of the northern powerhouse when she took office and that most of the candidates to succeed her are southern MPs, and one is a former Mayor of London, is there not a real risk that the northern powerhouse agenda will fall off a cliff with a new Tory Prime Minister?
Jake Berry
I fully support the Power Up The North campaign. Modesty precludes me from saying that its proposal that the northern powerhouse Minister be a full Cabinet position should be considered by all future leaders of the Conservative party. I hope that, when the hon. Lady goes back to her constituency, she will channel “Monty Python’s Life of Brian” and say that, apart from the £7 billion devolution deal, the £38 million contribution towards a Graphene centre, a £10 million relief road, a £15 million international screen school, the £5 million Pankhurst Centre and a £243 million transport fund for people in Greater Manchester and her constituency—what has the northern powerhouse ever done for us?
Oral Answers to Questions
Lucy Powell Excerpts(5 years ago)
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Greg Clark
I am aware of the advice from the committee, which we will consider carefully. My hon. Friend will know that the energy company obligation has been reformed to concentrate on fuel poverty, but we are grateful for the committee’s advice and we will respond shortly.
Lucy Powell (Manchester Central) (Lab/Co-op)
Greg Clark
Across the country, it is crucial that we invest in infrastructure. If we want to compete with other nations across the world, we need to make sure that our businesses and our people can count on fast connections, and that includes between our great cities.
Oral Answers to Questions
Lucy Powell Excerpts(5 years, 6 months ago)
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Richard Harrington
As the hon. Gentleman may know, I like to give Christmas presents wherever possible. I have met the chief constable and representatives, and I have written to the Treasury. I cannot imagine what Santa will bring, but we are doing our best in the Department to resolve this issue.
Lucy Powell (Manchester Central) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst)
I am proud that BEIS supports all its employees with comprehensive family-friendly policies. More widely, employees are entitled to a suite of family rights and protections, and we are looking to go further. We are considering requiring employers to assess whether a job can be done flexibly and to make that clear when advertising. We will also consult on a proposal to require large employers to publish their parental leave and pay policies.
Lucy Powell
I have just come from the Education Committee, where we heard from Pepper the robot, who could perhaps help us all give better answers to questions.
Does the Minister agree that one of the keys to unlocking the gender pay gap and family-friendly working practices is to raise the esteem in which part-time workers are held, so that they have the same pay, career progression and investment in training as other employees, and that perhaps if more fathers worked part time, we might raise that esteem further?
Kelly Tolhurst
The hon. Lady raises an important point. Part-time workers are a valuable part of our economy, and it is right that they be held in the same esteem as full-time workers. With our policies and announcements on flexible working, I hope that the Government can strengthen this and deliver what she seeks.
Oral Answers to Questions
Lucy Powell Excerpts(5 years, 11 months ago)
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Mr Speaker
Order. The hon. Gentleman does not need to keep banging on about Galileo from a sedentary position. We want to hear the views of the hon. Lady, but we have heard the hon. Gentleman chuntering and we may hear him on his feet in due course.
Lucy Powell
When looking at investment in science and innovation across the UK, will the Government do what has not been done in recent years, and make sure that the north gets its fair share?
Mr Gyimah
The hon. Lady mentions the Strength in Places fund—it is actually a big part of our industrial strategy—which is designed to ensure that research and development does not just benefit the so-called golden triangle, but benefits all parts of the UK in terms of jobs and growth.
The Minister for Universities, Science, Research and Innovation (Mr Sam Gyimah)
The Festival of Engineering is particularly important for students because we want to encourage and inspire people to take engineering subjects and follow engineering careers. A lot of activity is planned and I will be delighted to share this with my hon. Friend.
Lucy Powell (Manchester Central) (Lab/Co-op)
Greg Clark
We are getting on with major infrastructure investments that would be good for the whole United Kingdom and that the previous Government did not take.
Points of Order
Lucy Powell Excerpts(6 years, 2 months ago)
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Mr Speaker
I am aware of the summary of the report, but I have not read the report. Again, this is not a point of order; it is a matter of debate. If the Minister wants to engage with this, he can briefly respond, but he is not obliged to do so—[Interruption.] It appears he does not wish to. What I would say to the shadow Secretary of State is that she has made her own point in her own way. As I said to somebody yesterday, she has done so with her usual force and alacrity. It is on the record and we are grateful to her.
Lucy Powell (Manchester Central) (Lab/Co-op)
On a point of order, Mr Speaker. I respect what you have just clarified, but what recourse does the House have regarding the former Universities Minister? I feel that he misled this House in his statement on 8 January, and the report by the commissioner has now clearly set out that it was a misleading statement. What recourse do we have regarding that Minister, who is not here today to answer?
Mr Speaker
I entirely understand what the hon. Lady is saying, but it is not right to accuse somebody of misleading the House, particularly when the Minister involved is not here. I think she probably wants to insert the word “inadvertently”—I think that would be safe.