Covid-19: Hospitality Industry
Lucy Powell Excerpts(3 years, 1 month ago)
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Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I thank the hon. Member for North Devon (Selaine Saxby) for securing the debate. First, I want to mention a business in the town of Tain in my constituency called Platform 1864, which is a restaurant and pub run by a man called Graham Rooney. Graham Rooney started some years ago with absolutely nothing—not two beans to rub together—and he built the business up. He is a damn good chef. Then the pandemic hit, and we thought, “What’s going to happen to poor Graham?” It was exactly as the hon. Member for Scunthorpe (Holly Mumby-Croft) said: he went into the takeaway business. People go online, order their scoff, and then he delivers it. My mouth waters when I think of his roast beef and Yorkshire pud, and my wife loves his prawn paella. He has traded his way out of the situation.
Jamie Stone
There is nothing like a free advert in the House of Commons—whether I will get a free takeaway, I rather doubt; we shall see.
My constituency depends on the tourism industry, and the tourism industry depends on the hospitality industry. We have been in terror of any one of these businesses shutting down forever, because if that were to happen, it would impoverish the tourism product that we offer to visitors. The visitors would then say, “It’s not so much fun coming,” and they will not come, and we could end up in a downward spiral. Keeping these businesses going is utterly crucial.
I will conclude by mentioning another business, this time in the north of my constituency: Mackays Hotel in Wick. It is a great and famous old hotel, and it is owned by a man called Murray Lamont. He has been very wise in the way he has conducted himself. I would ring him up every so often during the pandemic to ask, “How’s it going, Murray?” He is a brave man; he would say, “We’re going to get through this.” I so admire the spirit of people like Graham Rooney and Murray Lamont.
Murray has four things that he wants me to mention in the Chamber. First, let us not shut off the reduced VAT rate too soon, because it is a life saver; I give thanks to the Government where it is due. Secondly, clarity on rules about reopening and travel would be invaluable. Where the Scottish Government are saying one thing and the UK Government are saying another—and sometimes we wonder whether it is done to deliberately contradict the UK Government—that is not helpful. Thirdly, a package for capital investment would be helpful. Finally, we need to get back into training, because too many people are leaving the profession, and the profession will be denuded if it cannot offer the standard of cooking, service and so on. Let us hope we get through this pandemic, which we surely will, and let us hope we have a vibrant hospitality business to hit the ground running when the time comes.
Lucy Powell (Manchester Central) (Lab/Co-op)
I thank my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) and the hon. Member for North Devon (Selaine Saxby) for securing this debate.
In the interests of fairness, I wish to put on record the very vibrant, trendy fashionable nature of Manchester city centre, with its wide hospitality, cultural and night-time economy. I think I have in my constituency the most pubs and bars out of any Member in this House. I say that just in the interests of fairness, of course. I also put on record my admiration for and pride in our hospitality sector and supply chain and the difficult role that it has played in keeping us all safe this year.
The Government have a moral duty, as well as an economic imperative, to ensure that as many shuttered businesses as possible are able to reopen viably. We supported lockdown and the “whatever it takes” mantra, but we have seen economic support increasingly diverge from public health measures. This is wrong. There is also a huge economic cost in seeing successful businesses going to the wall through no fault of their own, with lost taxes, scarring unemployment and lower growth. In the end, we all pay more for not supporting businesses than we do for doing so.
The initial package of schemes—furlough, grants, loans, deferrals and so on—was welcome, but as time has gone on it has become increasingly clear that those schemes were okay for three months but not designed for the 12 to 18 months of lockdowns and lost trade that we have seen. The gaps at the start have become ever larger, and the debts, overheads and deferrals have mounted, leaving the sectors that are most in distress, such as hospitality, on the brink, facing huge uncertainty on rocky foundations.
It is clear from the Office for Budget Responsibility figures published with the Budget that there is a lack of ambition about the longer-term recovery, with low growth now seemingly accepted by the Government. The Chancellor is betting the farm on consumer spending doing all the heavy lifting. He is taking a big gamble that saving spending alone will drive the recovery. There are only so many haircuts and meals out that people can have in a short space of time, and for many, cuts to family budgets will take money out of local economies anyway. It is as if the Government cannot wait to get off the pitch. Having done the bare minimum to provide a safety net, the aftermath is not of their concern. This is the wrong choice for our economy.
The announcements in the Budget do not mean that the job is done. We saw that in the reaction to the Chancellor’s photo opportunity with a certain celebrity chef, which became his very own kitchen nightmare. There is still huge uncertainty. There is still a looming bombshell facing firms. There are still many hospitality businesses on the brink of going bust, and big gaps in the support for those in the supply chain and those who have been excluded from the start are getting bigger.
Let us take the gaps in support. Businesses could have just about survived them for three months, but are totally desperate after a year and counting. The wedding sector; the events industry; the night-time economy, including taxi drivers and security staff; supply-chain businesses; freelancers; and company directors, including festival organisers and small traders—all have been abandoned. The additional restrictions grant has been too little, too late, caught up in red tape with complicated guidance creating a postcode lottery.
Debt is another issue that is pushing businesses to the edge and threatening the recovery. Companies have taken the loans, deferrals and moratoriums, but as trade slowly restarts and the debts are called in, businesses will go bust. This is an issue for the larger chains as well.
There are also many measures that Ministers have got wrong, making a bad situation worse. Business interruption insurance claims have been the bane of many businesses’ lives, with insurers failing to pay out—if a pandemic is not “business interruption”, what is? The news today that the Government are not prepared to help with insuring large events and festivals is a hammer blow to this summer’s recovery. The Chancellor’s job retention bonus, which businesses were relying on, has now been dumped. With the curfew, the substantial meal rule, and businesses open one day and closed the next, poor decisions have exacerbated the economic woes of the sector. Ministers should learn from these mistakes, but it is clear that they have not. Just yesterday, I was contacted by William Lees-Jones, a Manchester brewer, who rightly complained that there will only be a week’s notice before pubs’ outdoor opening is confirmed, with this being announced on a bank holiday. Hospitality businesses just think the Government do not get their sector.
Although the road map is welcome, it is not a road map for all, and for most is still way too uncertain to plan around: to buy stock, brew beer, bring back staff or book a wedding. The visitor economy is a big part of the hospitality ecosystem—tourism, conferences, events, sports, culture and weddings; for them, the road map still leads to a brick wall. The hospitality industry is vital to the recovery. It drove growth after the global financial crisis and, with the right help, it could do so again. As things stand, the industry will not be able to be the work-horse of job opportunities that it once was, especially for the young. We need a real plan to support hospitality to thrive, with the overhaul of business rates that is long overdue; real action on debts, with loans paid back on an income-contingent basis, as Labour proposes; a proper job support scheme to reduce unemployment and drive growth; powers and resources to reignite our towns, city centres and high streets through a hospitality and high street fightback fund; an extension of al fresco dining measures; more sector support, especially for the wet-led pubs; the freeing up of group businesses and chains from state aid rules when it comes to cash grants; and public health guidance which makes operating viable and is fair to all parts.
Hospitality businesses were the first to feel this crisis and will likely be the last out of it. Firms have seen four winters in a year, and no golden quarter. Every previously viable business that goes bust will lengthen and deepen the long tail of recovery. That is not just the Labour view, but the view of the International Monetary Fund, the Bank of England and the OECD. We have to support businesses today, tomorrow and through the recovery. The truth of the Budget was a Chancellor failing to do enough to stop insolvencies and to support long-term growth—that was the verdict of the OBR. Now, “whatever it takes” must mean just that, otherwise we will see a repeat of the mistakes of the last decade of low growth and stagnant living standards. We cannot afford to go back to business as usual.
Draft Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021
Lucy Powell Excerpts(3 years, 1 month ago)
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Lucy Powell (Manchester Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Ms Bardell.
We have supported, and have indeed called for, many of the changes that have been brought through the Corporate Insolvency and Governance Act 1986 and the subsequent extensions. Pre-pack administration sales are a useful tool for quickly rescuing businesses in financial difficulties, and are vital in these current times, but such sales must always be balanced against the need to protect the veracity of the restructuring process and the interests of creditors.
In recent years, there has been criticism of and considerable attention paid to pre-pack sales, which occur before the creditors are given an opportunity to vote on the administrator’s proposals to sell a company’s business or assets. The speed with which the pre-pack sale takes place helps to preserve the value of the business and the jobs, but concerns centre on the lack of transparency for creditors and the fact that, in many cases, businesses or assets are purchased by the same owners or other persons connected with the insolvent company.
The regulations will require that where a person intends to acquire a business or asset from a company in administration within the first eight weeks and that person is connected to the insolvent company, they must seek an independent opinion on that purchase, unless the creditors have already agreed the sale—a principle that we very much support. However, some have raised concerns that this statutory instrument appears to be an attempt by the Government to control the pre-pack sales process without an understanding of what they are necessarily trying to achieve.
Some of the concerns centre around the identity of the evaluator and the qualifications requirements for that evaluator. I note that the Minister mentioned that point, but there is no requirement in the regulations for the evaluator to hold any professional qualifications, so perhaps he could say a bit more about that.
On connected persons, several people wanted a carve-out to be included in the definition of connected persons in the regulations for secured lenders. That has not been included. Will the Minister explain why not?
On the responsibility for the report, stakeholders argued that it should be the administrator and not the connected person who must obtain the qualifying reports. However, that recommendation was not included. That relates to the issue of “opinion” shopping that the Minister mentioned. I note that steps have been taken on that issue, but some concerns still remain.
To conclude, some concerns have been addressed and some have not been addressed fully, so perhaps the Minister could reassure us on those points. However, we are happy to support the regulations today.
Draft Corporate Insolvency and Governance Act 2020 (Coronavirus) (Change of Expiry Date) Regulations 2021
Lucy Powell Excerpts(3 years, 1 month ago)
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Lucy Powell (Manchester Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship for the first time, Mr Efford.
As we repeatedly said about the business support measures in the Corporate Insolvency and Governance Act 2020, we support the change that the Government are making. We have called many times for the ending of the provisions to be delayed, and we have called consistently on the Government to give themselves a bit more wriggle room. I repeat those calls today.
It is clear that even though the vaccination programme is going great guns—I know the Chair is having his jab later today—businesses are still in distress and the lockdown and business disruption will continue past the original date in the provisions. As I have said previously, a system of business support that was set up for three months has not really been adequate for the 12 to 18 months that this crisis is going on for. In truth, we do not yet know whether all the restrictions will be lifted after 21 June, when social restrictions are due to be lifted. The explanatory notes for the change state that
“the future impact of the pandemic on business and the insolvency regime remains uncertain.”
As such, it is only sensible to maintain the option of further extending the measures in the Act in this way. Indeed, the economy is in dire straits. Although the covid support measures that the Government have put in place have given businesses a stay of execution, we are concerned that we could still see a wave of insolvencies as support is withdrawn and the safety net dissolves.
A number of measures in the Bill are due to expire at the end of March, including the temporary suspension of the use of statutory demands and winding-up petitions, and the flexibility for companies to hold annual general meetings. The temporary removal from directors of the threat of personal liability for wrongful trading is due to expire on 30 April this year. Can the Minister tell me whether the measures will now be extended, as they should be? Will he ensure that businesses will have a smooth landing out of this crisis? I met the big five business organisations this morning, and this issue was raised with me. The Institute of Directors was extremely concerned that the provisions should be extended beyond their expiry in March and April this year.
I expect to see the Minister again soon, when the Government lay further statutory instruments to extend the provisions. As I have before, I advise him to go longer than he thinks will be needed, and then we can have fewer SIs.
Draft Financial Reporting Council (Miscellaneous Provisions) Order 2021
Lucy Powell Excerpts(3 years, 1 month ago)
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Lucy Powell (Manchester Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship for the first time, Sir Charles, and to be back in Parliament with my SI buddy, the Minister. We seem to do a double act on these things.
As hon. Members know, the Financial Reporting Council is an independent regulator responsible for regulating auditors, accountants, and actuaries and setting the UK’s corporate governance and stewardship code. However, as Sir John Kingman’s review in December 2018 made clear, it was an institution that “leaked and creaked” and required fundamental reform. As the Minister said, its days are now numbered, and it is to be replaced by a new Audit, Reporting and Governance Authority, but it appears that the Government are dithering on this, given that Ministers have promised us year after year that audit reform will be introduced. We now hear that it will happen in early 2021, although that looks questionable too. Does the Minister know when we can expect audit reform for sure and the replacement of the FRC with the new authority? Will it mean more than just changing the letterhead?
The order imposes specific duties on the FRC related to freedom of information, the regulators’ code and the public sector equality duty. The role of the FRC has developed over time, and in 2017 the then Department for Business, Energy and Industrial Strategy concluded that the FRC’s work should comply with all the relevant public body guidelines. In 2018, the Government commissioned an independent review, which recommended that the regulator should be subject to the FOI Act.
A couple of years ago, the FRC voluntarily adopted compliance with the codes, so this statutory instrument will not fundamentally change the FRC’s approach. Although it is welcome that compliance is to be put on a statutory footing, I wonder why it is happening now, when we are about to disband the organisation and replace it with a new one. Why could not we have passed the SI, which is fairly straightforward, two or three years ago?
We support the changes, but we wonder why they are being made now and when we can expect the proposals for the new Audit, Reporting and Governance Authority to come forward.
Unsafe Cladding: Protecting Tenants and Leaseholders
Lucy Powell Excerpts(3 years, 3 months ago)
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Lucy Powell (Manchester Central) (Lab/Co-op) [V]
I have spoken a number of times in Parliament about these issues, because Manchester Central has one of the highest numbers of private blocks that are now deemed to be dangerous. I thank the Manchester Cladiators—a fantastic committed group of residents who have been working tirelessly to raise these issues locally and nationally.
The toll—both financial and mental—facing those living in a building now deemed dangerous is heart-breaking, devastating, and simply wrong. It is a national scandal, and as we have heard, it is absolutely no fault of leaseholders. It has also created a completely broken housing market for millions more people. At a time when we are being asked to stay safe at home, living in a dangerous building has particular resonance, not to mention the added uncertainty faced by those on furlough, by the many key workers living in those flats, or by disabled residents such as Georgie Hulme in Hulme Life Buildings, who are anxiously worrying about how they might escape.
Although it is not the Government’s fault that we got here in this way, their response has been inadequate, slow, and unresponsive. The ACM building fund is too small and narrow in scope for nearly all affected buildings in my constituency, including those under 18 metres, such as Hulme Life Buildings, which is unable to apply, despite its residents facing bills of £115,000 each. Buildings with non-ACM cladding or with wooden balconies or walkways, such as Albion Works and St George’s Island, are unable to apply. Buildings where the cladding’s exterior façade is brick effect, such as at Leftbank, and those where work has already begun, such as the skyline buildings, are also out of scope. For those buildings that do meet the tight criteria, the process is too slow and decisions are not forthcoming.
Taken together, all those issues, as well as the lack of accountability for leaseholders in the system, is leading to a broken market. Too many players have stepped away from taking responsibility for building safety, leaving millions of residents in homes that are uninsurable, unsellable, uncertifiable, and with negative equity. The fund needs urgent reform so that more buildings are eligible, and we need a comprehensive taskforce to look at the whole range of issues such as insurance, mortgage lenders, liability and so on. We must fix this broken market and stop a whole generation of homeowners losing everything they have.
Hospitality Industry: Government Support
Lucy Powell Excerpts(3 years, 3 months ago)
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Lucy Powell (Manchester Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate and thank my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) for securing the debate and for her excellent opening speech. I fully support her comments about remote participation in Westminster Hall.
I thank the instigators of the petition and the 200,000-plus people who signed it. That is an impressive number, but it is unsurprising, given that hospitality is the hardest-hit sector, as well as associated activities such as weddings, events and live entertainment. At the heart of the petition is the fact that people are looking for leadership, which is why they want a specific Minister. They want leadership, focus and understanding. I mean no disrespect to the Minister, with whom I share a lot of these occasions, but what we have had is bits—piecemeal, sticking-plaster support offers—alongside stop-start restrictions that have sometimes felt particularly pernicious for the sector and that have often lacked evidence.
The petition reflects the idea that the Government do not get hospitality in all its forms. As we have heard, hospitality includes lots of different businesses, but at the heart of it are people who have put their life’s work, livelihoods and love into creating businesses that bring people together. Often they have used personal assets to guarantee those businesses.
We have heard that hospitality is a huge part of our economy. It was the third biggest employer before covid, generating billions in turnover and tax. Such businesses make up the heart and soul of our town centres, city centres, high streets and communities. They are a key part of the ecosystem and they bring people and places together. We saw that recently in the BBC documentary that Tom Kerridge, one of the supporters of the petition, presented—it was an excellent programme. There is a wider ecosystem, too, from the supply chain that we have heard about to taxi drivers and security, as well as hotels, events and weddings. Hospitality is a huge, interlinked and diverse sector, and it employs many young people, those from black and minority ethnic backgrounds, and women. It was growing before, and it will grow again.
We welcomed the support that the hospitality sector had at the start of the pandemic. It was the right thing to do then, and it is right now that that support continues. Then, however, cash grant support was worth more. The other packages brought in at the time were designed for a much shorter period of time—loans, deferrals, moratoriums and so on. They are now not fit for purpose after nearly a year and growing of closures and lost trade. That is the key issue, which I think other Members have raised: what was initially designed for three months is now not appropriate for the 12 to 18 months that we are talking about.
Supporting businesses is the right thing to do economically. The Government said they would put their arm around the shoulder of the sector, but that must be maintained. Every previously viable business that goes bust will lengthen and deepen the long tail of recovery. That is not just the Labour view, but the view of the International Monetary Fund, the Bank of England and the OECD. We cannot cut our way out of a crisis. Lots of focus early on was rightly on the furlough scheme to protect jobs, but leading businesses now warn that without further support, those jobs will no longer be able to be furloughed as businesses go bust. A survey out today says 250,000 businesses, many of them in hospitality and associated areas, will fold this year. That is a devastating warning.
Supporting businesses is also the right thing to do morally, because they have closed to keep us safe. It is only right that the Government should step in to support them and keep them going. With light at the end of the tunnel, it is now even more important that there is a proper long-term plan to help businesses survive to that point and then thrive beyond it. I am sorry to say that despite some of the early actions taken, no such plan is forthcoming. We have the sticking-plaster approach to economic support, and there is no plan or route map for reopening. Contrast that with the approach of other countries, such as Germany and elsewhere. Speak to any business and it will say that cash flow is the major issue now. Action simply cannot wait until the Budget, because many businesses will be bust by then.
The furlough extension is welcome, but contributions are now stretching balance sheets. Businesses have taken the loans, deferrals and holidays, and they have not paid the rent, yet it is still not enough. The stop-start nature of the lockdowns has damaged business confidence and liquidity, and we have heard about the costs of restocking and losing stock along the way. Businesses were expecting the job retention bonus, but they had it taken away at the last minute, despite it being priced in. That was all before hospitality lost its golden months of the pre-Christmas trade, so it is no surprise that some of the latest business surveys show that more than half of hospitality businesses have less than three months of cash reserves. Only one in five hospitality businesses has enough to survive until March.
Just this week, we heard of Mitchells and Butlers, one of the oldest and biggest players in the sector, seeking to refinance. It is losing £40 million a month just to stay closed. I do not like to say so, but it feels a little like Ministers are asleep at the wheel. I am sure the Minister will tell us about the billions of pounds that have been spent, but unless the Government set out a long-term plan and a comprehensive framework to see businesses through to the spring, there will be waves of insolvencies and job losses. As somebody asked earlier, that prompts questions about the billions that have already been spent. What was it for if, at the critical juncture, the rug is pulled, and jobs and businesses are lost anyway?
We have to be honest about the announcements that have been made this week. The £9,000 is not available to most businesses; five out of six will get a lot less than that. Even when taken together with the local restrictions grant, it is still a lot less than what was received last time around. It does not even cover businesses in the supply chain, who are again waiting to see whether discretionary grants will come to them; for many, they will not.
What about the medium-sized businesses—the hotels, the chains, the breweries and others? As somebody said earlier, £9,000 is frankly a drop in the beer glass. There is no mention of the excluded, many of whom are associated with this sector. What was an outrage for these people for three months is now economically and mentally fatal for many after nearly 12 months. We called on the Government to begin by using the £2 billion repaid by supermarkets to provide proper support to businesses and the excluded, but they have yet to do so.
I am afraid that a huge amount of business uncertainty lies ahead. The Government urgently need to get ahead of that and make sure there is a comprehensive plan. There is a massive surge of a cash-flow crisis ahead of us, with businesses going bust. In the next few months, we are going to see the end of the evictions ban, the business rates holiday and the Government-backed loans. Corporation tax payments will be due and there will be an end to the VAT cut, the VAT deferral and measures to prevent insolvencies.
Businesses will need to start repaying their VAT deferrals and business rates in April, yet we heard this weekend that hospitality businesses will not even be reopened by then. This is now urgent. Businesses looking ahead at their cash flow are taking decisions about their staff and the future of their businesses today. This cannot wait until March. Something must be done. The VAT reduction will have little benefit for most businesses, because they have been closed during that time.
The failure of the Government to set out what might happen to those deadlines is creating massive anxiety, and will lead to wave after wave of insolvency and consequential job losses, not only extending and deepening the economic crisis, but taking with them all the loans and the previous investment in keeping them going up to this point. It makes no economic sense whatsoever.
Alongside this economic spring plan for businesses, we need a clear route map to reopening, as called for by the British Beer and Pub Association, UKHospitality and others. They want proper discussion now about the route map to reopening. What levels of vaccination, hospitalisations and mortality are needed for reopening, and what does that reopening look like? No household mixing? Substantial meals again? Curfews again? These have all caused extra burden when the evidence is clear.
In conclusion, hospitality businesses and their associated ecosystem need better leadership, focus and understanding. They need cash support that matches business need and revenue loss. There will be no businesses for firms to employ people unless this is done. They need immediate action on the uncertainty created about these cliff edges. That may involve big, creative thinking on some of the big issues coming up the track, with rent deferrals and the huge debt overhang, that will need to be addressed at some point. The Government need to stop their scattergun approach, which leads to sticking-plaster solutions, and come up with a proper long-term plan for this hugely important sector in distress.
Graham Stringer (in the Chair)
Minister, I ask you to leave two or three minutes at the end for the proposer.
United Kingdom Internal Market Bill
Lucy Powell ExcerptsWednesday 16th December 2020
(3 years, 4 months ago)
Commons ChamberRead Full debate United Kingdom Internal Market Act 2020 View all United Kingdom Internal Market Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Message as at 16 December 2020 - (16 Dec 2020)
Paul Scully
Ironically, not particularly on common frameworks or the United Kingdom Internal Market Bill, although I have taken over from my ministerial colleague, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), in the quad discussions with the devolved Administrations. We had my first one this morning, and I look forward to further conversations. As for what happens to Northern Ireland goods to GB and vice versa, we have had an agreement in the Joint Committee. I look forward to seeing the results of the talks that are continuing in Brussels, because ultimately if there is a pathway to a deal, that will help to smooth the transition process. Ultimately, however, the long-term aim of what happens to the workings of the Northern Ireland protocol will sit with the elected representatives of Northern Ireland, given their vote in a few years’ time.
The Government here are demonstrating their commitment to the programme by, first, placing common frameworks on the face of the Bill, through our amendments yesterday in the other place, and, secondly, clarifying the relationship that we see between agreements made under the common frameworks processes and the internal market principles established by the Bill. Specifically, we are making it clear, through amendments 8P to 8S, that delegated powers under clauses 10 and 17 may be utilised to, among other things, make provision to reflect common framework agreements. In such cases, the Secretary of State would be able to bring to the House a statutory instrument to exclude from market access principles a specific agreed area of divergence. That would follow consensus being reached between the UK Governments and all the relevant parties that that was appropriate, in respect of a specific defined topic within a common framework.
For parts 1 and 2 of the Bill, previous amendments are provided for consent to be sought from the devolved Administrations. If that is not forthcoming within a month, MPs and peers from all parts of the UK would thereafter be able to debate and, if appropriate, agree to the change. We do not currently expect such cases to arise very frequently, but want to be clear that appropriate means are in place to respect them when they do.
The amendments to clauses 10 and 17 are complemented by amendments 8T and 8U. In line with other Government amendments to enhance the overall transparency of the United Kingdom Internal Market Bill and the role of the Office for the Internal Market, these amendments demonstrate our commitment to transparency and evidence building regarding the interaction between the market access principles and the common frameworks programme. As part of the OIM’s five-yearly review into the effectiveness of parts 1 to 3 in supporting a healthy internal market, the OIM will now also address how parts 1 to 3 have affected the operation of agreements under common frameworks, including the effect that those agreements have had on the operation of the internal market. This will ensure proper scrutiny of both regulatory changes and the progress made under common frameworks.
The Government are confident that these amendments provide an appropriate way to ensure that market access principles in the Bill can act to ensure certainty and a seamlessly functioning internal market for all British businesses and citizens. They do this while allowing a degree of agreed flexibility, reflecting different circumstances in particular parts of the UK. In reaching agreement on these amendments and thus agreeing on the final outstanding issues of the Bill, both Houses will be protecting and preserving the United Kingdom’s internal market, which has been the bedrock of our shared prosperity for centuries.
Lucy Powell (Manchester Central) (Lab/Co-op)
Well here we are again—groundhog day. Early on, I dubbed this Bill the infernal market Bill, and it has certainly lived up to that name. It is good to see the hon. Member for Stone (Sir William Cash) in his seat again. I am not sure what he is going to do in a few weeks’ time after all his doughty energies tackling issues around Brexit. I am not sure whose fault it is all going to be in a few weeks’ time. Perhaps Ministers should watch their backs; they might find it is their fault once Brexit can no longer be blamed for all his ills.
Let me start by thanking Ministers and their officials for the discussions that we have had in recent days about how we can make the best of this bad Bill. Let us be honest: when it first saw the light of day, it was clear for all to see what a terrible Bill this was. It was wrong in seeking to break international law, and it was wrong in disrespecting the devolution settlement and failing to understand the way the UK now works through power sharing. That is why we have been so vociferously opposed to it in this House.
We led the way on that, starting, as you will remember, Madam Deputy Speaker, with my right hon. Friend the Member for Doncaster North (Edward Miliband) taking down every single argument of the Prime Minister, who was here himself on Second Reading. Through the Bill’s many stages in this House, we have been clear in our opposition to some of its serious flaws. It has been a long and difficult process.
Alan Brown
If Labour has really led the way, why did it back down in the votes in the other place on protecting devolution in respect of Westminster’s ability to spend and meddle in devolved affairs?
Lucy Powell
The hon. Gentleman knows that that is not the case. That is not what happened in the other place. It is thanks to the Labour leadership in the other place that we have seen improvements to the Bill, and I will say a bit more about that in a minute.
The Bill is now in much better shape than it was. It is far from good, let alone perfect, but it is better. That is thanks to the leadership shown by Labour colleagues in the other place, who built alliances and worked with guile and tenacity to get us to where we are. The Government, by the way, have a majority in the other place; despite that, we managed to inflict a number of Government defeats. As a result, the Government dropped most of part 5, which was the international lawbreaking part of the Bill originally and now upholds the Northern Ireland protocol.
After Labour worked cross-party with colleagues and others to ensure successive Government defeats in the other place, and after several rounds of ping-pong— I have lost count of how many—the Bill has been improved in a number of ways. We have the one-month mechanism for the devolved Administrations’ consent on regulations; the operation of the internal market in the interest of consumers; the consent and involvement of the devolved Administrations on the make-up and operation of the Office for the Internal Market, and the removal and review of the Henry VIII powers.
Today, we welcome the Government’s concessions on common frameworks in response to Lord Hope and Lord Stevenson’s amendments. In particular, amendments to clauses 10 and 17 allow for agreements arising from common frameworks to be excluded from the application of market principles. They also include in the Bill a definition of a common framework agreement, something that we have been seeking from the beginning. We also welcome the amendment to clause 31 that provides for the Competition and Markets Authority and the Office for the Internal Market to include in their five-year reporting details of the interaction between market access principles and common framework agreements, and of the impact of common framework agreements on the operation and development of the internal market.
We have fought long and hard to ensure that the Bill does not undermine devolution, because we believe in devolution. These are important safeguards that really do strengthen the Bill.
Jonathan Edwards
The hon. Lady will be aware that, as I alluded to earlier, the Labour Government in Wales are threatening legal action. Is that something that she and the Labour party in Westminster will be supporting?
Lucy Powell
I have just been alerted to that. I am not sure of the details at this stage, so it is probably best that I do not comment. However, it is obviously a Labour Administration, and we support them and have worked very closely with them. I thank them for their co-operation with us on the Bill.
Common frameworks will allow different nations in the UK to set their own standards in key areas and to agree minimum standards for all. That is why it was so important to us from the start that there was recognition of common frameworks on the face of the Bill. However, it is still far from ideal, and the Government have been dragged kicking and screaming to these issues only because of the pressure we have applied, working tirelessly in the other place, and I pay tribute again to Lord Hope, Lord Stevenson and Baroness Hayter for all their work on this.
United Kingdom Internal Market Bill
Lucy Powell ExcerptsTuesday 15th December 2020
(3 years, 4 months ago)
Commons ChamberRead Full debate United Kingdom Internal Market Act 2020 View all United Kingdom Internal Market Act 2020 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 159-I Marshalled list for consideration of Commons reason - (15 Dec 2020)
Paul Scully
I am glad that the hon. Gentleman thinks that I can force my will through both this House and the other place. What we have done throughout is to seek to collaborate. We continue to seek to collaborate on both the common frameworks and the internal market as we move forward. I hope that the Scottish Government will come with us on that journey, but the common frameworks process is just that—a process for agreeing and managing policy divergence in a variety of specific policy areas. As such, the programme is primarily concerned with ways of working, rather than determining policy outcomes.
The common frameworks programme will put in place durable arrangements for the intergovernmental working between the Government and the devolved Administrations in the policy areas covered by individual common frameworks. Those clearly defined ways of working will lend themselves to the common frameworks programme, and the individual common frameworks of which it is comprised are being considered as part of the business as usual discussions that will take place in our future intergovernmental relations infrastructure, and will benefit accordingly. Our intention is that these mechanisms for sector-specific co-operation will allow for coherent policy making between the UK Government and the devolved Administrations in those policy areas. I therefore ask the House to disagree with amendments 1F, 1G, 1H, 1J, 1K and 1L, and to vote instead to provide certainty for businesses.
Amendment 8M would cut across the Government’s objectives, and leave businesses exposed to new burdens and barriers. Despite a reduced list of aims, very broad areas of public policy could be excluded from the market access principles. Alongside the problems posed by the areas suggested for exclusion, there is a more fundamental issue with the approach taken. To be excluded under the approach proposed in the amendment, a requirement must only “make a contribution to” the achievement of one of the aims from the list, meaning that a policy need only have a tangential relationship to a social policy objective to be taken out of scope. The amendment would also lead to uncertainty as to when the market access principles apply, not least by a very unusual use of the term “proportionate”. It would fall to the courts to determine the relative extent to which different policies meet one of the aims, with no consideration of the burdens introduced. This will not deliver the certainty that business needs.
In addition, I want to stress one point that I feel has sometimes been overlooked. Market access principles do not prevent the devolved Administrations from introducing innovative policies designed to meet their own goals and objectives, including those relating to the environment and public health. They can do so in the context of mutual recognition, which is necessary to protect the free flow of goods around the UK. Without this, we would see a decrease in consumer choice, increased prices and additional costs for businesses. I do not believe that anyone in either House would support such an outcome, nor is it in the interests of business or our constituents. I have constantly heard claims in this House and the other place that the Bill would prevent charges on single-use plastics in Wales, for example. That is categorically not true, as the Government have repeatedly made clear across both Houses.
Manner of sales policies, which have typically been the most innovative types of policies, will not be impacted by the market access principles, as long as they do not discriminate and are not designed artificially to circumvent mutual recognition. This covers innovative policies such as plastic bag charging and minimum unit alcohol pricing. The Bill is also clear that the devolved Administrations would no longer need to notify and justify new measures to the EU Commission when they want to innovate and try new policies. What they will not be able to do is erect harmful and unwanted trade barriers between other parts of the UK. I therefore call on the House to support the Government and disagree with amendment 8M.
I end by saying that the other place, as is their right as a revising Chamber, asked the Government and the House to reflect on their approach. The Government have carefully considered the arguments put forward by hon. Members, right hon. Members and Lords across both Houses, and we have come to agreement on reasonable proposals in some areas. However, the Government cannot agree to these amendments as they stand.
I appreciate the constructive approach that peers in the other place have taken in discussions with Government, and we will continue to engage and find common ground. However, I am afraid that these amendments as drafted still do not provide the certainty that businesses need. I therefore call upon the House to support the Government and provide the clarity that our businesses need and, ultimately, preserve the UK internal market, which has been the engine of growth and prosperity for centuries.
Lucy Powell (Manchester Central) (Lab/Co-op)
I rise to uphold the Lords amendments that we are discussing today. It is a pleasure to be back at the Dispatch Box, given that I have been cooped up at home self-isolating, having been pinged. I was not pinged as part of this ping-pong though; I was in fact pinged by the coronavirus app, so I was not here last week. I put on record my thanks to my boss, my right hon. Friend the Member for Doncaster North (Edward Miliband), who deputised for me on these occasions last week—and did so incredibly well, I hasten to add.
As ever, my right hon. Friend made a strong case against the Government’s United Kingdom Internal Market Bill, which has been poorly drafted from the outset. Without the Lords amendments we are debating today, the Bill poses a real threat to the future of our United Kingdom. Even though I was not here last week, it does feel a bit like we have been in suspended animation with this Bill. I appreciate there have been welcome changes in the meantime as a result of the Government dropping part 5, but it still, I am afraid, feels a bit like groundhog day. Here we are, yet again asking where the oven-ready deal is for Brexit. We are still asking the same questions on market access principles. We are still seeking the same recognition in the Bill of the devolution settlement through the common frameworks process. As with every other groundhog day where we have been debating this Bill, we will soon be hearing from the hon. Member for Stone (Sir William Cash).
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I am sure that the shadow Minister agrees that the Bill is a disaster for devolution, but let us just focus on financial powers and state aids, because Labour abstained on those amendments in the Lords yesterday, despite there being no meaningful safeguards in the Bill. How does she explain why her party in the other place saw fit to throw the Labour Welsh Government under the proverbial Tory bus, rather than seek even minimum safeguards to devolved powers in these areas?
Lucy Powell
I disagree with the point that the right hon. Lady makes. We have been making the weather on the Bill, both in this place and the other place, which I will come on to discuss. We have been seeking safeguards for consent from the devolved Administrations when it comes to financial assistance powers. Now that we are trapped in groundhog day, perhaps today and tomorrow will be the moment when the Government listen and take on board some of the amendments from the other place.
Sir William Cash
The question of state aids very much lies at the heart of much of these debates. Does the hon. Lady accept that the EU state aid rules are a racket? I know very well the areas around Sheffield, Yorkshire and the midlands, where the coal and steel communities were destroyed, effectively, by the application and the discrimination that was made against—[Interruption.] And in Scotland. Does she accept that is why we need our own sovereign state aid rules, as I said yesterday on the Floor of the House?
Lucy Powell
It would be really nice if the Government used the powers that they already have, let alone those that it will soon acquire, to invest once and for all in British industry and British manufacturing. I am afraid that the Conservative Government do not have a great record when it comes to supporting our industrial heartlands, and that is plain for everyone to see.
I hope the Government will take on board the amendments from the other place, especially those in the name of Lord Hope and Lord Stevenson, which have received clear support on each occasion.
In normal times it would be Christmas party season—I am sure we will debate that again at some point—but the Government’s hokey-cokey on the Bill really needs to end. We had part 5 in; now we have part 5 out. We were told the Bill would create a thriving internal market that would strengthen the Union and keep Scotland in, yet the reality is that it could lead to Scotland being out—something that Members on both sides of the House do not want to happen. The Government have been shaking it all about with the legislative games they have been playing in respect of the Bill, and I am not sure that has been good for anybody. I really hope that we can now see the end to some of these shenanigans.
On the amendments, I will not rehearse the arguments: we have heard them put eloquently by their lordships and Members of this House on previous occasions. [Interruption.] Sorry, did somebody want to intervene? Or is the hon. and learned Member for Edinburgh South West (Joanna Cherry) just trying to sledge me from behind? Just the usual.
Lucy Powell
Yes, I will give way, if the hon. and learned Lady has something she wants to say.
Joanna Cherry
I have got something useful to say: why did the Labour party abstain on the amendment in the House of Lords that would have re-reserved state aid? Devolution is Labour’s baby—it was the late Donald Dewar who devolved state aid—so why did her party abstain on that? I think the people of Scotland would like an answer.
Lucy Powell
We have worked incredibly hard to maintain the devolution settlement through the Bill; that is not something that the hon. and learned Lady’s party want to do. The SNP wants to use measures in the Bill to break up the Union and seek independence in Scotland. That is not something that we agree with. We have tabled amendments and voted on them to ensure that the devolution settlement in this country is respected, and I hope that the Government will continue to talk to us about that.
We welcome the Government concessions so far and are hopeful that with some more good will we can get some more recognition of common frameworks in the Bill in these late stages of ping-pong. The Lords amendments to strengthen the common-frameworks approach and fair access to the market are good ones that we will vote to uphold today. I am grateful to Ministers and Lords colleagues, especially Lord Hope and others, for their continued engagement on this issue, because there is a lot of agreement between us. Ministers are rightly proud of the common frameworks process, which has brought about a number of areas of agreement on standards and market access because it involves the Government working with the devolved Administrations. It is an approach that both Front-Bench teams agree on.
We also agree—unlike the SNP—that the UK Parliament should be the ultimate arbiter of the internal market, and we agree that no one nation should be able to frustrate that process, that all must act in good faith before the UK Parliament intervenes, and that safeguards should be in place to make sure that that is the case. It really feels to me like the Government could move further on this issue, because there is a huge amount of common ground. We need to see in the Bill a recognition of the common frameworks process and the devolution settlement that it represents, which is why I hope and expect that in returning the Bill to the other place today, the Government will introduce some final amendments along those lines. If they do so, they could receive broad support. It did not need to take quite so many iterations and pleas from both Houses, had the Government not taken such a hostile, blunderbuss approach with the Bill in the first place.
Lucy Powell
No, I am afraid I will not; I am finishing.
I sincerely hope that the Government will reflect on that approach in future.
Sir William Cash
I have already made my point about the European Scrutiny Committee. I would now like to turn quickly to the issues that face us in these negotiations, because what is going on in the Bill is mirrored by the negotiations. We have not yet had a draft treaty text in black and white. We need to see it. We wish the negotiators well. As far as I am concerned, along with my colleagues who support my propositions, it is essential that we get this right, because it is about our national interests and the future of this country.
Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability For WrongFul Trading and Extension of the Relevant Period) Regulations 2020
Lucy Powell Excerpts(3 years, 4 months ago)
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Lucy Powell (Manchester Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship for the first time, Dr Huq. I am going to race to see whether I can beat the Minister; I shall endeavour to do that so that colleagues can get elsewhere. We support the statutory instrument. In fact, I hate to say that I told him so, but on previous occasions we asked the Minister to introduce these measures. As much as I enjoy our exchanges on all the statutory instruments and Bills that we have been considering lately, I am sure that we could all have done without this today.
We welcome the measure to suspend wrongful trading and we also support the extension of measures introduced in the Corporate Insolvency and Governance Act on AGMs and so on. I briefly remind colleagues that we called on Ministers to extend the provisions during the passage of the original Bill back in the summer, and we have continued to do so when we have considered other statutory instruments.
Back in July, when we were debating the Bill, the sunset clauses were then for September and we asked the Minister to extend them to the end of the year, because we knew that September would not be long enough. We then had statutory instruments to extend all the other measures in the Bill, but not wrongful trading. Again, we warned the Minister that it would be necessary to do that. So here we are again.
I want to put on record my thanks to the Institute of Directors, which I know has been lobbying incredibly hard on these important issues. I met the IOD again this morning. Better late than never, however, so we will obviously support the regulations. But let us remind ourselves that many businesses face a huge cash crisis as a result of the pandemic, with their trading levels terrifyingly low or non-existent. It is therefore important that they are given this flexibility to wrongfully trade—because that is what they are doing when they have overheads but no income coming in. Whether they are hospitality businesses, those in their supply chains or those in the events and wedding industry, which the Minister and I have recently debated, we still need more support for these sectors. Measures such as the furlough scheme are welcome, but, as we have discussed before, if businesses go bust the furlough scheme will be of no use to the workers who will not have any job to return to.
Although today’s measures will provide some temporary relief for businesses worried about insolvencies, there is still a great deal of concern about the many cliff edges that businesses face all coming to a head at the end of March—the VAT referral, the business rate holiday, the measures in these regulations, measures on loan repayments and the furlough scheme will all come to an end. Can the Minister tell us what he is doing to ensure that we will not see wave after wave of insolvency as these cliff edges all come at once? As we hear today, London and other areas are going into tier 3 and that will concern many businesses.
I am sure that the Minister agrees with us that the best way for our economy to recover is to save businesses and jobs today. Rather than just talking the talk, we need to walk the walk and have a proper plan in place for businesses to recover. Instead of constantly returning to these Committee rooms to extend the cliff edges, will the Government pledge today to do something to deal with them rather than just extending the deadline further and further?
The Chair
Oral Answers to Questions
Lucy Powell Excerpts(3 years, 5 months ago)
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Lucy Powell (Manchester Central) (Lab/Co-op)
The Minister for Housing (Christopher Pincher)
We are providing £1.6 billion to speed up the removal of unsafe cladding and make homes safer, and to make them safer quicker. Where funding alone has not been enough to increase the pace of remediation, we are providing direct expert support to projects. We will continue to listen to leaseholders to resolve their concerns.
Lucy Powell [V]
I thank the Minister for his continued engagement on these issues, but, as he knows, the very difficult and serious issues now facing tens of thousands of leaseholders around the country are growing, not declining, and they are taking a serious toll on people’s lives and livelihoods. From buildings unable to get insurance, to the nightmares of acquiring an EWS1 form even for buildings with no cladding and the many now deemed out of scope of the building safety fund, this is becoming a national scandal and a real crisis for leaseholders. Will the Minister meet me and Manchester City Council to discuss an excellent piece of work that it has done on the wider and acute impacts of these issues on a place such as Manchester?
Christopher Pincher
I am obliged to the hon. Lady for her question and for the tone of it. Of course I will continue to engage with her and will happily meet her, as I think I did in July, to discuss these matters. She raised the EWS1 form particularly, and I think it would be worthwhile if I said a few words about it.
First, it is worth pointing out that the Royal Institution of Chartered Surveyors EWS1 form is not a Government document; it was devised by RICS and by the industry. Not all lenders require it; some use other tools. Lenders that do require it are working with us to ensure that there are more nuanced tools available to resolve leaseholders’ concerns. I should say, with respect to those lenders that use EWS1 forms for buildings less than 18 metres in height, that that is not something that the Government support. We do not support a blanket approach to the use of EWS1 forms. Lenders should use other tools in order to discuss the safety or otherwise of those sorts of buildings.