Live Events and Weddings: Covid-19 Support

Lucy Powell Excerpts

Monday 9th November 2020 Westminster Hall

[Lucy Powell (Manchester Central) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Gray. I am getting used to following the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) and preceding the Minister. I often agree with much of what the hon. Member for Inverness, Nairn, Badenoch and Strathspey says, apart from his last point, which I nearly always disagree with.

We are discussing two important petitions, and we can see from the number of Members here that they are attracting quite a lot of attention. I pay tribute to the hon. Member for Carshalton and Wallington (Elliot Colburn) for his excellent opening speech and for introducing the petitions, the first of which is the “Let Us Dance” petition, created by Jasper Levine. As somebody who, I must confess, was often found in the Haçienda nightclub in her youth and is a regular attendee at the Glastonbury festival, I am particularly pleased to speak in this debate. It was no surprise to me that there were more signatories of that petition from my constituency than from most other constituencies across the country. At this point, I thank Sacha Lord, the night-time economy spokesperson for Greater Manchester, who has been a great advocate on these issues on behalf of those in this industry, including those from outside Greater Manchester. The second petition is on the number of guests permitted at weddings, which we have heard a lot about. The arguments made on these issues by a number of Members are compelling, and I hope that Ministers will listen.

As we have heard, these sectors were a thriving and deeply interconnected ecosystem that supported millions of jobs across the country. I have held a number of Zoom roundtables with representatives from these shut-down sectors and those sectors closed in all but name. Many of the problems that we are discussing also affect the conferences and exhibitions sector, which we have heard a little bit about, as well as big sporting events. Together, these sectors make up a large proportion of the visitor and hospitality economies of our towns and cities. These sectors are at the centre of a wider ecology of jobs and employment, from make-up artists to florists, hairdressers, music technicians, security guards and many others. They contribute to thriving town centres, which include the hotel industry, hospitality, taxi drivers and many more, not to mention a huge supply chain, which we have heard much about. The majority of those businesses are not just viable, but are world-leading enterprises, generating and contributing billions of pounds to our economy. As we have heard, the wedding industry generated £15 billion in the previous year, the night-time economy over £66 billion, and conferences and events businesses billions more, on top of all the important trade deals made at those business events.

Since the first lockdown, the financial impact on those sectors has been alarming. I heard today in a roundtable I held with those from Greater Manchester that the night-time economy is down 90% since the beginning of the pandemic. Tens of thousands of weddings have been cancelled, although not for the right hon. Member for Tatton (Esther McVey), who managed to have hers—congratulations to her. The wedding sector is not officially closed, but it is closed in all but name. Its trade has essentially stopped, but it has not been officially closed, which is having an impact. All the changes and inconsistencies have meant successive waves of restarts and refunds having to be paid out. There are also many sole traders, small and medium-sized enterprises in supply chains, and freelancers who have lost work, as we have heard. The chopping and changing has really taken its toll. As we have heard, bookings are made way in advance. The uncertainty in this sector could be the death knell for the weddings industry.

Even before the second national lockdown, which we are now in, it was clear that those industries needed more support. Although the reintroduction of the furlough scheme is welcome, that will have come far too late for too many. Those I have spoken to, on the many Zoom calls I have held, took decisions on redundancies weeks ago. Let us remember that, without the businesses to administer the furlough scheme, the jobs will not be saved either. What we are seeing is businesses starting to go bust, unable to pay the overheads that they incur—the rents, the venue hire, the utilities, the equipment hire and so on.

The first wave of cash grants has not reached most in the events and weddings industry—they did not qualify—let alone those in the supply chain. The second wave will not help most either. Even though the Government now seem to accept the principle of supporting businesses through the continued restrictions, in practice they are falling well short. For example, nightclubs and live events can qualify for a grant only from 1 November, despite being closed since March. Big conference events will not get anything at all, and the weddings industry will have to rely on the discretionary pots, which are seriously insufficient and will lead to a postcode lottery.

We should also remember that many businesses and self-employed workers in those sectors have been unable to receive any support at all, as we have heard, because they are from the 3 million excluded. Sole traders and the self-employed are excluded, while many company directors receive all their income through dividend payments. We need some proper sectoral support, as we have heard, and we have also heard some good ideas about that today—discretionary grants, action on rents, action on the 3 million excluded and ideas for rates relief for the next year and beyond.

However, as we have heard today, what most businesses want—this is what they tell me, and I am sure they say it to the Minister, too—is a route map out of closure. This is now the critical business issue, because most businesses want to trade. That is their job; that is what they do. We urgently need a real plan—a route map out for the sector. Mass testing, test, track and trace and isolate, and a vaccine would all make a difference. In the interim, these sectors need sensible guidance on how they can operate safely—we have heard some really good ideas from the hon. Member for Eddisbury (Edward Timpson) and others on bringing all that together—because they want a level playing field, as we have heard in the debate. Why can a restaurant operate with 60 people from different households, but a wedding venue cannot? That just does not make sense. Why can people be in close quarters on an aeroplane, but cannot come together for a family celebration?

There are a number of other fixes, and I urge the Minister to bring the industry together, because these are creative, expert people, and let us not forget that they are used to managing events. That is what they do, so they know the people in the room, and they can manage it well.

These are viable businesses. They are not going through some structural change, like some other parts of our economy. They were massively growing before the pandemic. Let us be honest: the minute we are allowed to celebrate and party with our families again, we will be doing so. There will be huge demand for events and weddings. I hope the Minister has heard the calls today and that we can get this sector rolling again, and we can all have a party.

Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) ) REGULATIONS 2020

Lucy Powell Excerpts

Monday 19th October 2020 General Committees

[Lucy Powell (Manchester Central) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Efford. I think it is the first time I have done so. It is good to be here. While we are very supportive of the regulations, we could have saved all Members here time—in fact, I was nearly late—because we tabled an amendment to the Corporate Insolvency and Governance Bill that would have made these extensions. We pressed Ministers, both in private and during the passage of the Bill, to extend the time periods, because we foresaw that businesses would need this help for longer.

We welcome the extension to the provisions, and indeed called for it. It is absolutely right that companies should continue to benefit from these provisions while experiencing financial difficulties at this unprecedented time. It is now clear that they will be living alongside those difficulties for a lot longer than was foreseen when the Bill was first drafted. We agreed at the time that emergency legislation was required, and we worked closely with the Government to bring it about, but we made it clear during the passage of the Bill that any previously viable business that was forced to call on any provision of the legislation would have been fundamentally failed.

The Minister spoke about those viable businesses; many businesses now feel that they have been left on the scrapheap, and have been consigned to being unviable, when in normal times they would have been very viable indeed.

I have a few questions about some of the measures. Does the Minister think that we will be here again in a few weeks’ or months’ time to extend these provisions further, at the end of December 2020—or March 2021, for some of the provisions? If so, would it not have made sense for us to have done that here and now, and just extended some of these provisions further?

A particular worry to us, and something I know the Institute of Directors has raised with the Government and with us on a number of occasions, is that the one measure that it is particularly concerned about, the suspension of wrongful trading, is not being extended. That was included in the original Act, but it is the only temporary measure from the Act that is not being extended. That will open the door for aggressive creditors, suppliers, the banks, financial institutions and others to threaten struggling businesses whose cash flow has been damaged by the continuing crisis.

Although there are issues with a moratorium on wrongful trading, it is important in this difficult time that businesses that might be seen as not viable, but that are viable in normal times, are given the discretion of a moratorium on wrongful trading. Can the Minister tell us the rationale behind that? Why was that measure right in June, but not now? I do not really understand. Those businesses are severely impacted by the lack of safety net for them at the moment, just at the time that they need that extra support—the extension of the furlough, the extension of sector supports, of cash grants and so on. It is all being pulled away from them at the wrong time, and the new measures coming in from the Chancellor are much reduced from those that were available earlier in the year,.

As we see regional and local lockdowns—I have yet to see whether that will come into my own area in the next 24 hours—businesses will need more support than is currently on offer from the Government. The cash grants are worth about one third of what they were back in March and April. Without that support, we will need to reconsider the wrongful trading provisions that are now leaving many businesses hanging in the wind. Hopefully the Minister can reassure us on some of those points.

Draft Consumer Protection (Enforcement) (Amendment etc.) (EU Exit) Regulations 2020

Lucy Powell Excerpts

Tuesday 6th October 2020 General Committees

[Lucy Powell (Manchester Central) (Lab/Co-op)]

It is a pleasure to serve under your excellent chairmanship, Sir David.

Labour supports the regulations on the whole because, as the Minister outlined, these technical changes to update the 2019 exit regulations are required to ensure that the Northern Ireland protocol is properly enshrined. While we are happy to support the general thrust of the statutory instrument, I want to raise a couple of questions with the Minister.

As the Minister said, the Enterprise Act 2002 is being amended to ensure that consumer protections are enforceable across all four nations. That is okay in principle, because we support the idea that the UK Government are the ultimate arbiter of the UK internal market, meaning that laws need to cover the four nations and the devolved Administrations of the UK. However, I do have concerns—the Minister and I are familiar with this conversation following our recent debates on the United Kingdom Internal Market Bill—that the devolved Administrations do not necessarily have a voice in any consultation on outlining frameworks for consumer protection.

Will the Minister say a little more about how we will ensure that, unlike under the Internal Markets Bill, the UK Government will not legislate for all four nations without the devolved Administrations having a voice, and the right to be consulted and included? I am talking about not a veto, but the right to a voice and inclusion, because we believe that the devolution settlement is precarious as we leave the EU. It was promised that all the powers coming back from the EU would be devolved and passed down but, unfortunately, that is not quite what we see in some of the Government’s statutory instruments and the Internal Markets Bill.

The Minister knows that the consumer protections enjoyed by UK citizens when we were part of the EU were a reason why citizens valued that membership. Such protections included measures on data roaming, travel compensation and addressing unscrupulous trading practice. We still have not heard much from the Government about how consumer rights will be protected as we leave the EU to ensure that we have unfettered access to the single market and consumer rights, with standards driven up rather than being diminished. I hope that he can respond to those points.

United Kingdom Internal Market Bill

Lucy Powell Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Tuesday 29th September 2020 Commons Chamber

[Paul Scully]

I know that a number of people want to speak. I hope that I have set out the rationale for the Government’s amendments to the Bill, and that hon. Members will support them. I trust that I have addressed in sufficient detail the Government’s objections to the amendments put forward by other hon. Members, and that they will therefore feel able to withdraw them. I look forward to engaging in the debate on this crucial Bill.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

I rise to speak to the new clauses in my name and those of my hon. and right hon. Friends.

Here we are again—day five in the new House of Commons series, “The Internal Market Bill Debates”. While the coronavirus crisis rages on, here we are again, watching Ministers justify a Bill that breaches an international agreement signed only months ago and that threatens to break up our United Kingdom. It is a shame that we will not hear from the Prime Minister again today on Third Reading, as my right hon. Friend the Member for Doncaster North (Edward Miliband) was hoping for a sequel. He will have to make do with the Prime Minister’s understudy, the Business Secretary—what fun.

If Government Members have not been tuning in to the previous episodes, let me repeat our position on this Bill. We support a strong, successful internal market that underpins a vibrant, prosperous Union, with the UK Parliament as the ultimate arbiter of that market. We do not want a Brexit rerun; we want to get on to the next series—you know, the one where the Prime Minister delivers on his oven-ready deal and gets a good trade deal with the EU? That one. That is what the trailers promised us, anyway, and it is what the Prime Minister promised us, too.

[Mr Vara]

The hon. Lady talks about delivery. Does she accept that it might not be a bad idea if Her Majesty’s Opposition agreed with the delivery of what the people of the United Kingdom have voted for? They have voted for this Bill to go through.

[Lucy Powell]

That is what we are calling for: getting Brexit done. Get the oven-ready deal done. The hon. Gentleman says that is what this Bill is about. The Government have had months to prepare it, and here we are adding amendment to amendment at this late stage.

We have been clear that the Bill, as drafted, is a bad Bill that is not in the national interest. Today, we will once again work to try to improve it. It is a Bill that breaks the law and could break up the UK. We have heard some noble and notable interventions during the debates. We saw that many distinguished Government Members felt unable to support the Bill on Second Reading and on some of the key clauses in Committee. As usual, though, they were met with a tin ear from the Government.

[Stephen Doughty]

I wonder whether my hon. Friend is aware that this disquiet seems to stretch across Government. The Foreign, Commonwealth and Development Office this weekend launched a campaign called “This is democracy”. It features a picture of a judge standing in their robes, and it says:

“Independent judges free to uphold the law. This is democracy. #BeHeard”.

Does she think that perhaps the FCDO is trying to send a message to the rest of the Government and the Prime Minister?

[Lucy Powell]

My hon. Friend makes a good point. Like him, I had a wry laugh when I saw that advert.

[Sir William Cash]

Will the hon. Lady give way?

[Lucy Powell]

I will just make some progress, if the hon. Gentleman does not mind.

Those noble contributions aside, we really have heard it all from those on the Government Benches during these debates. In trying to justify their latest cack-handed approach to public relations ahead of crunch trade talks with the EU, they have come up with a whole menu of reasons to support the Bill as drafted. Here is the highlights package. Do the Government break an international agreement—an agreement that the Prime Minister signed a few months ago? Do they break the law? Apparently, this Bill only breaks the law in a “limited and specific way”. Others on the Government’s own Benches, as we have already heard today, disagree. Some Members said that the Bill does not break the law in any way, but the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said that it was okay because other people break the law, too. So which is it?

[Sir William Cash]

rose—

[Lucy Powell]

Perhaps the hon. Gentleman might be able to answer that question. Which is it?

[Sir William Cash]

I would just like the hon. Lady to answer a simple question. Is she aware that, when in power, the Labour party frequently overrode treaties and has, therefore, in her own terms, broken international law. Is she aware of the number of times that that has happened and how egregious it was? The same applies to many of the matter to which she has just referred.

[Lucy Powell]

The hon. Gentleman has failed to give me an example, so I am not sure what he is referring to. He has spent his whole political career campaigning for us to leave the EU treaties, and the withdrawal agreement, which he supported and which his Government signed, did exactly that, and he is still not happy with it, so I do not know which it is.

The former Prime Minister said in a powerful speech last week that this Bill will tarnish and do “untold damage” to our reputation and weaken the UK in the eyes of the world.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Does my hon. Friend agree that this breaking of the law not only affects our relationships with the European Union, but jeopardises our chances of securing a deal with the United States?

[Lucy Powell]

My hon. Friend is absolutely right on that. We heard that from the presidential candidate and others after the Foreign Secretary’s visit there the other week.

As I was saying, the former Prime Minister made a very powerful speech. Others agree with her. One said:

“The rule of law is the most precious asset of any civilised society.”

Another said that the UK is renowned

“for promoting the rule of law, and for doing business with integrity.”

In another notable quote, we heard that

“the rules-based international order, which we uphold in global Britain, is an overwhelming benefit for the world as a whole.”

It was not Members on the Opposition Benches who said those words—oh, no—but the Chancellor of the Duchy of Lancaster, the Foreign Secretary and the Prime Minister himself. We have had some debate about when the withdrawal agreement would actually break the law. Is it now as we pass the Bill, or upon the powers being used? The truth is that, even with the additional vote conceded from my friend the hon. Member for Bromley and Chislehurst (Sir Robert Neill), it does not change the fundamentals that this Bill itself breaks the agreement and breaks international law.

[Alex Sobel]

Will my hon. Friend give way on that point?

[Lucy Powell]

I will give way one more time, and then I will make some progress.

[Alex Sobel]

My hon. Friend is making an excellent speech. We also heard another former leader of the Conservative party, Lord Howard, say that, even with the concessions, even with the amendments that the Minister is bringing forward, the Government are still asking Parliament to pass legislation that will break international law.

[Lucy Powell]

My hon. Friend is absolutely right. For the first time probably in my political career, I agree with Lord Howard on that point as well. Our new clause 1 would require Ministers to respect the rule of law while implementing their own withdrawal agreement. This is the crucial amendment today for those who want to stand by those values espoused by members of the Cabinet.

The Government have also told us that this is merely a tidying-up exercise or an insurance policy, as we have heard today—it is okay because there were “deep flaws” in the withdrawal agreement, and it was not any good anyway. It just beggars belief. In October last year, the Prime Minister tweeted that he had a “great” new Brexit deal. He told the House that this deal was a good arrangement for Northern Ireland, so which is it? No, okay, we do not have any answers to that. As the former Prime Minister also said in her speech last week:

“The United Kingdom Government signed the withdrawal agreement with the Northern Ireland protocol. This Parliament voted that withdrawal agreement into UK legislation. The Government are now changing the operation of that agreement. Given that, how can the Government…be trusted to abide by the legal obligations in the agreements it signs?”—[Official Report, 8 September 2020; Vol. 679, c. 499.]

Ministers had no answer for her then and I wonder whether they do today—no, no answer on that one.

[Caroline Lucas]

The hon. Member is making a powerful case in favour of new clause 1, which I absolutely support. Does she agree that Government amendment 13 makes the illegal power grab that she is describing even worse, because not only are Ministers seeking to take powers to legislate in breach of international law, but they are trying to close down every possible way in which Parliament could hold the Government to account?

[Lucy Powell]

I strongly agree; I will come to that point shortly.

The Government’s next justification was that it was necessary to rip up the withdrawal agreement because the European Union is ripping it up itself, but we have heard differing accounts of this: the Northern Ireland Secretary said throughout the summer:

“The Government is extremely confident that the EU is working in good faith”.

Which is it? We are still not clear about that.

Perhaps the most dangerous of all the contortions relates to Northern Ireland. The shifting justifications of the Government over the last three weeks have added to the sense that they are using Northern Ireland as a pawn in a wider negotiating strategy. Remember, this is a deal that the Prime Minister told the House was

“in perfect conformity with the Good Friday agreement”—[Official Report, 19 October 2019; Vol. 666, c. 583.]

Callous or careless? Untrustworthy or incompetent? The Government are playing a dangerous game, and it is the people and businesses of Northern Ireland who risk paying the price.

[Jim Shannon]

I thank the shadow Minister for the constructive way in which she is putting forward her point of view. Does she agree that new clause 7, which was tabled by my colleagues, among others, and has some supporters in the House, is essential to ensure the viability of businesses in my constituency and across the whole of Northern Ireland whose biggest trading partner is the UK? Does she further agree that Northern Ireland cannot be left at the whim of Europe and that we must have security when these measures go before the House?

[Lucy Powell]

Yes, I do agree. I will mention that point in a moment.

For the people of Northern Ireland, this is not the latest episode in a Brexit drama; it is a profoundly worrying moment. Little wonder that the Lord Chief Justice of Northern Ireland himself, Sir Declan Morgan—a widely respected voice—said that the Government’s actions “undermine trust”. Let us remember that this issue could scarcely be more sensitive. In order to ensure the continuity of the Good Friday agreement in all its dimensions—recognising the unique circumstances of Northern Ireland sharing a land border with the Republic, and therefore the special responsibility and role that the UK and the Republic of Ireland have as co-guarantors of the Good Friday agreement—any change in the constitutional status of Northern Ireland rests on the consent of the people of Northern Ireland in their plurality. That is why it is essential that the protocol upholds Northern Ireland’s place in the internal market and that this delicate compromise builds the confidence of all communities. That is the principle behind new clause 7, which we have co-sponsored with the DUP and Alliance.

But instead of proceeding with due caution and going the extra mile to seek consensus, the Government resort to legislative vandalism. They also stoop pretty low—into “straight bananas” land—with scare stories about what the Bill is needed to prevent, some of which we have heard again today. The Prime Minister warned that the Bill was necessary because the EU wants to enforce an embargo on the transport of goods from Great Britain to Northern Ireland and are

“holding out the possibility of blockading food and agricultural transports within our own country.”—[Official Report, 14 September 2020; Vol. 680, c. 43.]

Yet nowhere in the Bill do the Government safeguard against this. Despite the many amendments at every stage, there is nothing at all in the Bill regarding the movement of goods from GB to NI.

[Mr Vara]

The hon. Lady talks about scare stories. Would she be clear and state precisely which bits of the Good Friday agreement are affected by which clauses in the Bill?

[Lucy Powell]

The hon. Gentleman is failing to answer my point, which is that there is nothing in the Bill to protect against the very thing that the Prime Minister told us we needed an insurance policy to guard against.

When the Prime Minister was challenged—or, should I say, humiliated—by my right hon. Friend the Member for Doncaster North on this point, the Prime Minister shrank into his seat. They then said that they would bring forward changes in the Finance Bill to protect against these imaginary blockades by EU warships in the Irish sea, but there is no Finance Bill now, is there? So what is their plan for dealing with this? Maybe the Minister could tell us.

In their final flourish to push the Bill through, the Government say it gives back powers to the nations, but the devolved Administrations strongly disagree. The Labour Welsh Counsel General has called the Bill

“an attack on democracy and an affront to the people of Wales, Scotland and Northern Ireland.”

A Conservative Senedd Member, the former shadow Counsel General, resigned because he shared those concerns. As we have argued, if the Westminster Government decided to lower standards, there could be no voice for the devolved nations, because the Government have decided not to legislate for common frameworks, but are legislating for their own veto.

The Government must respect the devolution settlement and work collaboratively in good faith with the devolved Administrations to build a strong and thriving internal market. Our new clause 2 would facilitate just that. Not doing so would threaten our precious Union by putting rocket boosters under the campaign for independence in Scotland and elsewhere.

The Government have also said that this Bill will ensure more money for the nations and regions, as we heard again today, yet we still have no detail on how the shared prosperity fund will operate. They say they want to level up and invest in the regions and nations. “Trust us,” they say on this point, “because we have the right motives.” Yet last week, the mask slipped, didn’t it, with the breath-taking admission from the Chancellor of the Duchy of Lancaster that his Government were going to funnel this cash into the new Conservative seats—pork barrel politics at its worst.

Our new clause 3 would ensure that Ministers had a duty to report to Parliament and ensure oversight of the progress of this and other measures in the Bill.

[Karin Smyth (Bristol South) (Lab)]

My hon. Friend makes an excellent point, particularly about the English regions. I am from the south-west as she well knows, and the south-west has consistently returned Conservative MPs and received a great deal of money from Europe, and is frankly getting little in return. Could not the Government elucidate on how they are going to meet their promises across the regions in England and across the various nations in the United Kingdom, and on how they will make sure that places such as Cornwall do not lose out further?

[Lucy Powell]

My hon. Friend makes a good point, but I am afraid that, as we heard last week, her constituency is unlikely to get more money because it is not one of the new Conservative seats that we heard were going to be prioritised for this reallocation of money.

The truth is that the Government have been making it up as they go along. The UK’s reputation and territorial integrity are collateral damage to a No. 10 fixated on public relations and posturing more than on making sure that its policy works and is in the national interest. We have had an unprecedented number of amendments from Ministers to their own Bill during its passage. We have further new clauses today, which, as we have heard, further undermine the rule of law. They are making it up as they go along—change after change underlying the haphazard incompetence of this Government.

We want a successful internal market. This Bill does not deliver that. We want a strong Union built on mutual respect. This Bill could fatally undermine it. We want the UK to play a global role for good. This Bill actively damages that. The Prime Minister says that measures in the Bill are just an “insurance policy”, but you cannot get insurance for a house you have already torched.

I hope Conservative Members who still have reservations about the Bill will support our new clauses and join us in the Lobby.

United Kingdom Internal Market Bill

Lucy Powell Excerpts

Tuesday 22nd September 2020 Commons Chamber

[Lucy Powell (Manchester Central) (Lab/Co-op)]

I rise to speak to the amendments and new clauses in my name, and in the names of my right hon. and hon. Friends.

We are the end of four full days of debate on the Bill. We have heard from many new Members, some of whom I, until recently, served with on the Education Committee, as we have just heard. Remarkably, we also heard a former Conservative Prime Minister, a former Northern Ireland Secretary, the Conservative Chairs of the Foreign Affairs Committee and the Defence Committee, and many other highly respected Members across the House voicing their deep concerns about the Bill. Yet as we come to the final day in Committee, aside from a small amendment on a further vote, the Government have, I am afraid, been typically blinkered in their response.

Such is the significance and seriousness of the Bill, it has even caught the attention of presidential candidates and the Congress in the United States for all the wrong reasons. At every stage, good and decent people inside and outside this House have warned the Government that this is a bad and damaging Bill: five former Prime Ministers; four former Lord Chief Justices; three former Conservative Attorneys General; two senior Government Law Officers, now resigned; and even one want-to-be director general for the World Trade Organisation, the right hon. Member for North Somerset (Dr Fox). Many of them are self-proclaimed ardent Brexiteers. The Government’s charge that this is an attempt to stop Brexit has fallen very short indeed.

Most, including the Labour party, support the intention behind the Bill. An internal market Bill could have achieved widespread support: a strong, flourishing UK internal market, respecting the devolution settlement and underpinning the Union; Northern Ireland’s unique place within our Union safeguarded; a successful trade deal with the EU delivered. Yet the legislative hooligans in No. 10 won out and instead we have this blunderbuss of a Bill fronted by the Prime Minister, which undermines each and every one of those intentions.

The Prime Minister promised an oven-ready trade deal with the EU, yet the antics of the Government around the Bill now mean we are further than ever from achieving that. The Prime Minister promised to safeguard Northern Ireland’s unique place within our Union, yet the unpicking in the Bill of delicate and sensitive agreements is now putting that at risk. The Prime Minister promised a successful global Britain doing trade deals around the world, yet this Bill’s disregard for a treaty the Prime Minister himself signed up to less than a year ago now makes his signature not worth the paper it is written on. The Prime Minister promised to strengthen and keep intact our precious United Kingdom, yet the utter disrespect of the devolution settlement in the Bill has handed the First Minister of Scotland all the ammunition she needs to power her campaign for Scottish independence. We have sought, at every stage, to improve the Bill in the national interest. Today, we try again.

I will turn now to our principal amendment. New clause 11 would place a duty on Ministers to report on the progress and impact of the Bill. Throughout the Committee stage, the Government have sought to reassure both sides of the House of their good intentions in relation to the common frameworks process, the Joint Committee talks and their ambitions for the shared prosperity fund, yet their warm words have not been backed by either statutory underpinning or transparency in the publication of their plans. As such, our new clause 11 gives the Government one last opportunity to report back to the House regularly on those important issues.

On common frameworks, the Government should stand by their stated intentions. Ministers herald this approach yet refuse to put them on a statutory footing. Our new clause would require Ministers to return to the House regularly to update us on the progress of agreeing common standards. Crucially, they would have to demonstrate that they had agreed them, as they said they would, and that they were acting in good faith in exhausting all opportunities to do so before using the powers in this Bill. For the sake of completeness, we believe—for those who did not hear my comments last week—that the ultimate arbiter of the UK internal market has to be the UK Parliament. However, the Government could and should have taken a more respectful and co-operative approach to agreeing the minimum standards that underpin that market.

On the collective desire for a shared prosperity fund to replace the EU structural funds, we had a long debate with concerns raised across the Committee about how these funds will be distributed. The promised framework has yet to be published, and Members from all parties have been left unconvinced by the Government’s reassurances. We want to ensure that within three months of this Bill becoming an Act, the Government must produce the framework and operating principles of the new shared prosperity fund. At its heart, funds should follow need and be administered locally.

We have heard much over the past four days in Committee about how the clauses in part 5 would be used only as a very last resort after serious breaches in terms of bad faith by the EU. Yet we have heard a lot less about how the conversations are progressing through the Joint Committee. Indeed, we have heard contradictory accounts from the Government as to whether the EU is or is not acting in bad faith. It is about time we had a more transparent and honest appraisal of Joint Committee progress. Our new clause 11 would put a legal duty on the Government to report back to the House on this within three months.

Our amendments 86 and 87 seek to clarify the Government’s position about the impact of this Bill on public procurement policies of the devolved Administrations. Public procurement is a crucial lever in the promotion of industrial strategy, regional economic development, employment, and environmental standards. Unless specifically exempted, there are concerns that restrictions may be placed on the ability of the devolved authorities to adopt new or revised public procurement policies. Will the Minister confirm that public procurement is outside the scope of the Bill?

[Dr Whitford]

I echo the importance of public procurement remaining a devolved power. The Government contracted Amazon to deliver and collect home tests for covid without bothering to think through the fact that Amazon does not deliver to huge swathes of the Scottish highlands and islands. That kind of ignorance is the reason we need devolution.

[Lucy Powell]

The hon. Lady makes a good point. As Labour has been arguing throughout this crisis, local decisions are how we are going to overcome this virus, if we can make them effectively.

Many of the Government amendments are a tidying-up exercise and we have no quarrel with them. However, as learned Friends on the Labour Benches and in the other place, as well as on the Government Benches, know, Government amendment 66, which we will be voting on tonight, still amounts to tearing up an international agreement and breaking an international treaty that the Prime Minister has himself just signed. As my hon. Friend the Member for Sheffield Central (Paul Blomfield) said in his excellent speech yesterday, the breach of international law is not when we enact the provisions of this Bill, but prior to that. The Government could not answer the point made by the right hon. Member for Staffordshire Moorlands (Karen Bradley) yesterday regarding the point at which this international treaty is being broken. Many would argue that even publishing these measures breaches article 5 of the withdrawal agreement. Can the Minister clarify that for us today?

The ink is not even dry on the bilateral treaty between the UK and the EU—a treaty that is about and for dealing with some of the difficult issues that we have debated over four days. Reneging on that treaty so soon, and the loss of trust resulting from that, is not comparable with a disagreement arising from a ruling by the European Court of Human Rights, as was the case with, say, prisoner voting, which was raised by Members across the House. Government Members do not have to take our word for it. They should listen to the right hon. Member for Maidenhead (Mrs May), who delivered the most scathing rebuke of this Bill yesterday, saying that the Government were “acting recklessly and irresponsibly” and warning of “untold damage” to the UK’s international reputation.

It could have been all so different. The Government could have worked cross-party and in a respectful way with the devolved Administrations to build a strong internal market based on mutual respect, to deliver the “oven-ready” deal we were promised, to enhance our reputation around the world, not diminish it, and to strengthen our precious Union, not put it at risk. Ministers could accept new clauses this evening and introduce further amendments on Report that unite the whole House. They could drop the clauses of the Bill that are so divisive and against the national interest. I hope that, for once, this Government will remove their blinkers and listen.

[Paul Scully]

It is a pleasure to serve under your chairmanship, Mr Evans, and to conclude this debate. We have heard a number of passionate contributions, not least from my hon. Friends the Members for St Ives (Derek Thomas), for North West Durham (Mr Holden), for Vale of Clwyd (Dr Davies), for Hitchin and Harpenden (Bim Afolami), for Montgomeryshire (Craig Williams) and for Bromley and Chislehurst (Sir Robert Neill), who were passionate about the Union and the need to ensure that businesses can continue to trade in Scotland, Wales, Northern Ireland and England without interruption.

Before I address the details of the clauses and amendments, let me explain what that means to each of the nations in the UK. About 50% of Northern Ireland’s sales are to Great Britain, and nearly 60% of Scottish and Welsh exports are to the rest of the UK, which is about three times as much as their exports to the whole of the rest of the EU. That is £51.2 billion worth of trade for Scotland, £10.6 billion for Northern Ireland and £30.1 billion for Wales. The Bill secures and clarifies the internal market, which has been the bedrock of our shared prosperity for centuries.

The Bill will establish a market access commitment by enshrining mutual recognition and non-discrimination in law. The principle of mutual recognition is that goods and services from one part of the UK will continue to be recognised across the country, and that ensures that the devolved Administrations will benefit from freedom outside the EU. As the transition period ends, they will gain increased powers to set their own rules and standards across a wide range of policy areas within their competence. At the same time, this provides firm assurances to our businesses, which they have been asking for, that their goods can continue to flow freely throughout the United Kingdom.

Non-discrimination ensures that there is continued equal opportunity for companies to trade in the UK regardless of where in the UK their business is based. Measures in the Bill will also ensure that Northern Ireland qualifying goods benefit from the market access commitment and receive mutual recognition in the rest of the UK. That means that we are going to fulfil our commitment to legislate for unfettered access, as we promised the people and businesses of Northern Ireland.

In addition, the Bill will ensure that the same principles of mutual recognition and non-discrimination continue to apply to services, and it will establish a process for the recognition of professional qualifications across the UK internal market, allowing professionals such as doctors and teachers qualified in any part of the UK nations to continue work in any other part, as all hon. Members would expect.

A couple of canards kept coming up during the debate, including one about teachers. As my hon. Friend the Member for Bromley and Chislehurst pointed out, someone needs to have a qualification in the first place for it to be recognised in another nation of the UK, but it is true that the General Teaching Council for Scotland will continue to regulate teaching in Scotland, as happens at the moment, uninterrupted. This package guarantees a continuation of the centuries-old position that there should be no economic barriers to trading within the UK. Businesses need this—they are asking for this. Citizens need this. That is why it is right that we deliver this Bill.

I turn to the amendments in question today, starting with some of those tabled by the Government. Government amendments 90, 91 and 92 are technical drafting amendments that I hope the House will be able to pass.

Government amendments 5 and 6 are designed to ensure that local sanitary and phytosanitary measures are based on science and are technically justified to prevent barriers to trade arising that go beyond what is necessary to effectively prevent pests and diseases spreading to pest and disease-free areas.

United Kingdom Internal Market Bill

Lucy Powell Excerpts

Tuesday 15th September 2020 Commons Chamber

To conclude, will the House please stand with us and send a very clear message that if the intention is to undermine British sovereignty and for negotiations to fail, as they have failed thus far, we will not be pushed? Northern Ireland, as part of the United Kingdom of Great Britain and Northern Ireland, is worth standing up for, and I urge all in this House to do just that.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Evans. I rise to speak to the amendments tabled in my name and the names of my right hon. and hon. Friends.

We have had some good contributions from colleagues from all parties in today’s discussion of the United Kingdom Internal Market Bill—or, as the Prime Minister now calls it after his roasting yesterday, the infernal market Bill. Let us hope that when the Minister rises to speak he is better briefed than the Prime Minister, although I have no doubt that he will be because, unlike his boss, he very much is a details man.

Before I address the substance of the amendments, I want the House to be clear on a few points. Labour wants the Government to get Brexit done and we want a strong internal market that respects devolution and protects high regulatory standards, but we will not fall for the Prime Minister’s attempt to rerun the Brexit arguments, and neither should the public. The Brexit issue is settled and the Government now need to get on and get the deal that they promised the British people at the general election.

The Prime Minister’s attempts to boost his falling poll ratings have failed. Brexiteer after Brexiteer has denounced this Bill; they clearly did not get the memo that opposing it was some kind of remainer plot, which it is not. We have had a roll call of the great and good—some not so good, but I will let Members decide—including Lord Howard and Lord Lamont, the right hon. and learned Member for Torridge and West Devon (Mr Cox) and the hon. Member for Gillingham and Rainham (Rehman Chishti), to name but a few. They have spoken out with courage because this Bill, in its current form, is not in the national interest.

Let me turn to the amendments. The central challenge that faced those drafting the Bill was how to square an internal market where goods can be sold across the UK with the fact that regulatory standards are devolved in key areas such as animal welfare, the environment, food safety and many others. There was an obvious answer, because since 2017 there has been a process of agreeing common frameworks—a joint approach to standards in the different devolved areas. The Government could have chosen to legislate for those common frameworks to make them the default option for regulation, thereby granting a proper voice to the devolved nations on the regulatory standards to which we have to adhere.

To be clear, that approach would have imposed a duty on all Governments to seek to establish common high standards. There would have needed to be an ultimate last resort in case the way forward could not be agreed on, at which point the UK Parliament would have needed to step in. That would have been the way to square the circle of the internal market and respect for devolution but, unfortunately, it is not the route that the Government have chosen. Instead, they have chosen non-binding common frameworks, up against what is in essence a Westminster veto, potentially leading to lower standards, with no guarantee of a voice for the devolved nations.

The Government say that they will still negotiate for common frameworks; that is welcome but it is not enough. If we do not put the process for common frameworks on a statutory footing, we undermine the very process itself, making the nuclear option of imposition more and more likely. Common frameworks without legislation are toothless. As time for regulations to be implemented becomes more and more pressing, and with the looming prospect of other trade deals and their inevitable call on UK-wide standards, we can see how things will play out, with the imposition of regulations via statutory instruments becoming the norm.

In line with getting Brexit done, there is now a huge repatriation of powers from the EU to the UK. The Government have a choice to make: do they want to respect and strengthen the devolution settlement by pushing power closer to people in communities, as promised in the referendum? Or do they want to retain all those powers here in Westminster? At best, the Bill is a missed opportunity to strengthen our Union; at worst, it threatens the future of the UK itself, giving—as we have heard today—the First Minister and the SNP all the grievances they need to turbo-charge their independence campaign. One has only to listen to the voices across our four nations to realise that, yet the Prime Minister and the Government have a tin ear.

A Front-Bench Conservative Member of the Welsh Assembly resigned because of the Bill’s disregard of and disrespect towards the nations of the UK. It is worth listening to what he had to say, which was that

“the Internal Market Bill has done nothing to lessen my anxieties about the dangers facing our 313 year old Union. Indeed they have been gravely aggravated by the decisions made in the last few days by the Prime Minister…I will feel it necessary to speak out against what I consider to be a lack of statecraft at this crucial time for the UK’s very survival”

as a multi-state Union.

[Stephen Doughty]

My hon. Friend is absolutely right to draw attention to those comments by a very honourable man, one of my constituents, David Melding, the shadow Counsel General, a lifelong and loyal Conservative with whom I disagree on many issues. However, he was pointing out the pattern of behaviour from the Government of disrespect for devolution. I have just been speaking to the First Minister of Wales, and he has been clear this is a pattern of behaviour in everything from covid testing to the situation regarding the Bill. Does she agree that the Government need to take a completely different approach if they want the UK internal market to work, as we do?

[Lucy Powell]

I absolutely do. My hon. Friend has made some powerful points today about the disrespectful way in which the Welsh Government were consulted over the Bill, and he is absolutely right to highlight those. I am afraid that, if that continues, that will not be good at all.

Labour firmly believes that the UK single market is the foundation stone of our Union and brings huge economic benefits to the entire UK. That is why we support the principle behind the Bill and why our amendments are so necessary to improve the Bill in Committee. The UK internal market will be essential in recovery from the coronavirus pandemic. We know that we need mutual recognition for our internal market to function coherently, and we believe that we should use this opportunity to drive standards up further.

Our amendments are about the way in which we arrive at those minimum standards, not whether minimum standards are required. The common frameworks programme has been in place since 2017 and has led to some extremely positive outcomes, even in policy areas as complex and contentious as food standards. I am grateful to the Minister of State, Cabinet Office, the hon. Member for Norwich North (Chloe Smith), for speaking to me last night about how the common frameworks programme is progressing. The Government and the devolved Governments should be commended for having established this collaborative forum. It could have proceeded with perhaps a little more speed and zeal, but we recognise the competing demands on the Government.

However, the Bill as it stands has the potential to undermine those processes entirely. On food standards, for example, where a common framework has already been agreed, if the Prime Minister were to pursue a free trade deal with the US, we may see chlorinated chicken imported into the UK and making its way on to Welsh, Scottish and Northern Irish supermarket shelves, irrespective of the standards that they have worked so hard to agree through the common framework.

However, it is not only about food. The Bill could have far-reaching implications for the country’s ability to reduce waste and meet our net zero targets. Wales, as we heard, has high ambitions to reduce single-use plastic items, but the UK Government have proposed a less ambitious target for England. It would be tragic if the UK Government imposed a lower standard on Wales, when we should all be working together to eradicate plastics and keep standards as high as possible and going ever higher. Instead, my fear is that the Government are firing a starting pistol on a race to the bottom for regulatory standards across the United Kingdom, which we do not want to happen.

New clause 2 sets out a process that would underpin the common frameworks approach in good faith and within reasonable time commitments and would put the common frameworks programme on a clear statutory footing. We propose that, where common frameworks are already in place, Ministers should not be able to unilaterally override them via secondary legislation to impose lower standards on devolved Administrations without their consent, as the Bill would currently allow. Where any frameworks are currently in development, or as any new common frameworks become necessary, Ministers would need to allow a consensus-based negotiation via the framework process within a reasonable timeframe before making any further intervention via Westminster. Only if an agreement could not be reached through this process would a Minister be able to intervene and protect the internal market.

[Jonathan Edwards]

I agree with the vast majority of new clause 2, but this is the one point that really worries me, because it indicates that Westminster will have supremacy over Wales, Scotland and Northern Ireland. Am I right in interpreting the end of the new clause in that manner? Surely the hon. Lady’s colleagues in Wales will be very concerned about any proposal that means that the Westminster Parliament will have supremacy over the Welsh Parliament.

[Lucy Powell]

This might be where we differ, as I was going to come on to say, because we believe that the ultimate arbiter of the UK internal market would need to be the UK Parliament. Our amendments seek to ensure that negotiations through common frameworks are conducted in good faith and given proper time and that this would need to come back to the UK Parliament in primary legislation, rather than secondary legislation, as is proposed.

Labour supports the need for some kind of independent body to arbitrate the effectiveness of the internal market. However, we want to ensure that this body is fully accountable to the views of England, Northern Ireland, Scotland and Wales and, crucially, has proper teeth to be able to do what it needs to do. New clause 3 would therefore place a legal obligation on the CMA to monitor, to report and, most importantly, to consult with the devolved Administrations when discharging its new and enhanced duties.

I turn to the amendments tabled by the Scottish national party. While I agree with much of what the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) said, it appears from the amendments that the SNP does not want a functioning internal market; it wants to frustrate one. I am afraid that some of its amendments would, in essence, give a veto to the Scottish Parliament of the internal UK single market. We cannot support that. We believe that the UK Parliament has to be the final arbiter of a functioning internal market because we believe in the UK, and the SNP does not. Its amendments would clog up the process and effectively offer one Parliament a veto.

As MPs, we have a responsibility and a duty to protect the interests of this country. The rule of law and the safety and security of our nation should be paramount. For the Conservative and Unionist party—let us remind ourselves of that name—to propose legislation that breaks the law and threatens the Union by putting rocket boosters under those campaigning for independence is near unthinkable. We hope that Ministers will accept our amendments to strengthen the Bill and to respect devolution as it stands and that they will table amendments at the next stage to strengthen the Bill further, so that we can keep our Union intact, get Brexit done, get the deal that this country was offered and move on.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

It is a pleasure to serve under your chairmanship, Mr Evans. I would like to thank all Members who have spoken today. Before I proceed to discuss part 4 in some detail and the amendments that have been tabled, I want to put the Bill into context, so that we can see where it sits. I would particularly like to thank my hon. Friends the Members for Stone (Sir William Cash), for Rother Valley (Alexander Stafford), for Hertford and Stortford (Julie Marson) and for Beaconsfield (Joy Morrissey) for their support of the Bill. This is an economic Bill to ensure that UK companies can trade unhindered in every part of the UK, and their focus on the core issue of ensuring that free trade must be commended.

The United Kingdom’s internal market has been the bedrock of our shared prosperity for centuries. It has enabled businesses and individuals to thrive and has been the source of unhindered and open trade across the country. It has helped to demonstrate that, as a Union, our country is greater than the sum of its parts. The economies of our four nations within one United Kingdom are forged as one. Around 60% of Scottish and Welsh exports are to the rest of the UK, which is around three times as much as the exports to the rest of the EU. About 50% of Northern Ireland’s sales are to Great Britain. In some local authorities in Wales, over a quarter of workers commute across the border. So when we leave the transition period at the end of this year, and the laws made in Europe can now be made across the UK, hundreds of powers will flow from the EU to the devolved nations and the UK Government in an unprecedented transfer of powers. It is really important to remember that we are devolving powers down to those devolved nations.

The Bill will not limit the devolved Administrations from innovating, as some Members have suggested. If an Administration wanted to introduce minimum alcohol pricing laws in the future, as was mentioned earlier, our proposals in the Bill would have no effect on them as long as the rules did not have a discriminatory effect on goods from other parts of the UK. Nor would our proposals do anything to prevent any Administration from introducing rules and regulations on how and where products could be used, including bans on smoking in public places. As these powers return to the devolved Administrations and as we recover from covid, we must ensure that our economy is stronger than ever. That is why the Government have brought forward this legislation to guarantee the continued functioning of our internal market and to ensure that trade remains unhindered in the UK.

Our manifesto committed us to maintaining and strengthening the integrity and smooth operation of our internal market, and eight weeks ago, my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy presented to Parliament a White Paper that set out plans to preserve our internal market after the transition period. Since then, we have spoken to hundreds of businesses and business representative organisations across the UK to gather views and feedback on our proposals. Overwhelmingly, businesses supported our approach. For example, the British Chambers of Commerce stressed that a fragmented system would create additional costs, bureaucracy and supply chain challenges that could disrupt operations for firms across the UK. As these proposals progress, business communities will want practical considerations, not politics, at the heart of the debates on shaping solutions. I want to thank those businesses, along with colleagues across the devolved Administrations, for their engagement on the White Paper.

Turning now to the independent body that will be created by the provisions in part 4, we consulted on how to ensure that an independent monitoring and advice function could uphold the internal market. In response, to oversee the functioning of the internal market, the Bill sets up the Office for the Internal Market within the Competition and Markets Authority. In some of the contributions today, Members have talked about who will serve in the Office for the Internal Market. I must remind people that the Competition and Markets Authority sits aside from Government and the directors of its board can be seen on its website. It is open to everyone to see their expertise in their fields. These are not people who are passed on through grace and favour; these are technical roles and it is really important that we have the greatest expertise in that body.

Draft Enterprise Act 2002 (EU Foreign Direct Investment) (Modifications) Regulations 2020

Lucy Powell Excerpts

Wednesday 8th July 2020 General Committees

[Lucy Powell (Manchester Central) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mrs Miller. I note that some of us have made good use of our local enterprises over the past few days by getting our hair done—something the Minister was much concerned about the last time we spoke. I hope that all Members will make use of those local enterprises in the coming days.

The Opposition are happy to support today’s instrument. It is right for the Government to make sure that the UK meets its legal obligations under all EU regulations, including the foreign direct investment regulation, until the transition period comes to a formal end. We support the enhancements to the Competition and Markets Authority’s existing powers to gather the necessary information and share it with our European partners when required. If the UK leaves the transition period on 31 December 2020, as the Government intend, the foreign direct investment regulation and this instrument will have been in place for just 12 weeks. We therefore consider its impact to be minimal, and that is why we support it.

However, the instrument contains a number of desirable powers. I therefore urge the Government to bring forward the necessary legislation to which the Minister has alluded in good time, to ensure there is not the gap that my right hon. Friend the Member for North Durham has highlighted. I also ask the Minister to work with the CMA to ensure that its enhanced powers are deployed proportionately, respecting the additional burdens placed on many small businesses at the moment due to the covid-19 crisis.

It is, of course, important that the regulation is backed up by a meaningful sanctions regime, but we hope those sanctions will be used in a proportionate and considerate manner, given the short window covered by this instrument.

Oral Answers to Questions

Lucy Powell Excerpts

Monday 15th June 2020 Commons Chamber

[Mr Clarke]

BIDs have a significant part to play in our high street regeneration programme, and they will be even more important given the setback we have all experienced during the first half of this year. That is why we have legislated to allow BIDs that were due to re-ballot this year to continue until March 2021 and have announced £6.1 million in emergency support funding for BIDs. I am pleased that the Love Loughborough BID—not one to be said unless you have a taste for tongue-twisters—will receive £12,747 from this additional fund.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

What criteria his Department uses to determine eligibility for the new building safety fund.

[The Minister for Housing (Christopher Pincher)]

The eligibility criteria for the building safety fund are set out in the prospectus that was published in May—as Members know, the fund was launched on 1 June. Where buildings are not eligible, our guidance is clear that building safety is the responsibility of building owners, and we have given expert advice on a range of safety issues and measures that can provide clarity.

[Lucy Powell [V]]

As my hon. Friend the Member for Sheffield South East (Mr Betts) has explained, the fund is not big enough for the demand, and many buildings in Manchester are ineligible for it. Last week, I met residents of Skyline Central 1, whose building will not be eligible because the freeholder has already begun works on the property, yet the freeholder is passing all those costs on to leaseholders, to the tune of £20,000-plus each. So what more will the Government do to ensure that leaseholders are not bearing the brunt of removing dangerous cladding from their buildings?

[Christopher Pincher]

I am obliged to the hon. Lady for her question, and I know she is campaigning doughtily on behalf of her constituents. As I have said, we have been absolutely clear that where those buildings are already being remediated—where remediation was under way before 11 March—residents, leaseholders, should first seek to recover the costs from the owner, and the owner should do this from the developer of the buildings where the defects are found. The point of the fund is to get the remediation work under way quickly. I can quite understand the points she has raised and I am happy to talk to her further about that case.

Corporate Insolvency and Governance Bill

Lucy Powell Excerpts

Committee stage & 3rd reading & 3rd reading: House of Commons & Committee: 1st sitting & Committee: 1st sitting: House of Commons
Wednesday 3rd June 2020 Commons Chamber

[Lucy Powell (Manchester Central) (Lab/Co-op)]

I beg to move, amendment 1, page 3, line 24, after “debts,”, insert—

“(da) a statement on behalf of any trade union made on behalf of employees affected by the proposed rescue of the company as a going concern,”

This amendment would include trade union views among the relevant documents which must accompany an application by the directors of the company to the court for a moratorium.

[The Chairman of Ways and Means (Dame Eleanor Laing)]

With this it will be convenient to consider:

Amendment 2, page 4, line 38, at end insert—

“(2A) For small businesses, in this Chapter, the initial period, in relation to a moratorium, means the period of 30 business days beginning with the business day after the day on which the moratorium comes into force.”

This amendment would extend the moratorium for small business from 20 days to 30 days for businesses facing insolvency.

Clause stand part.

Clauses 2 to 9 stand part.

Amendment 3, in clause 10, page 63, line 21, leave out “June” and insert “September”

This amendment would extend to 30 September 2020 the period since 1 March 2020 during which a court in Great Britain is to assume that a person is not responsible for any worsening of the financial position of the company or its creditors that has occurred, following the onset of the coronavirus pandemic.

Clause 10 stand part.

Amendment 4, in clause 11, page 64, line 46, leave out “June” and insert “September”

This amendment would extend to 30 September 2020 the period since 1 March 2020 during which a court in Northern Ireland is to assume that a person is not responsible for any worsening of the financial position of the company or its creditors that has occurred, following the onset of the coronavirus pandemic.

Clauses 11 to 12 stand part.

Amendment 5, in clause 13, page 69, line 12, leave out “June” and insert “September”

This amendment would extend to 30 September 2020 the period since 1 March 2020 during which section 233B of the Insolvency Act 1986 (to be inserted by clause 12 of this Bill) does not apply in Great Britain in relation to a contract for the supply of goods or services to a company where the company becomes subject to a relevant insolvency procedure, and the supplier is a small entity at the time the company becomes subject to the procedure.

Clauses 13 to 16 stand part.

Amendment 6, in clause 17, page 76, line 1, leave out “June” and insert “September”

This amendment would extend to 30 September 2020 the period since 1 March 2020 during which Article 197B of the Insolvency (Northern Ireland) Order 1989 (to be inserted by clause 16 of this Bill) does not apply in Northern Ireland in relation to a contract for the supply of goods or services to a company where the company becomes subject to a relevant insolvency procedure, and the supplier is a small entity at the time the company becomes subject to the procedure.

Clauses 17 to 22 stand part.

Amendment 13, in clause 23, page 79, line 20, leave out “section 18” and insert

“sections (Moratoriums in Great Britain: time-limited effect and renewal), (Moratoriums in Northern Ireland: time-limited effect and renewal), (Arrangements and reconstructions for companies in financial difficulty: time-limited effect and renewal), (Protection of supplies of goods and services: time-limited effect and renewal) and 18”

This amendment allows the Secretary of State to make consequential, incidental or supplementary or transitional provision or savings (including modifying the effect of this Act or any other enactment, making different provision for different purposes and binding the Crown) in connection with NC6, NC7, NC8 and NC9.

Clauses 23 to 47 stand part.

New clause 1—Ring-fence for unsecured creditors—

“(1) Section 176A of the Insolvency Act 1986 is amended as follows.

(2) After subsection (2), insert—

‘(2A) The prescribed part of the company’s net property available for the satisfaction of unsecured debts shall not be less than 30 per cent.’”

This new clause inserts into section 176A of the Insolvency Act 1986 a requirement that at least 30 per-cent of the proceeds from the sale of assets of businesses (after the deduction of the amounts owed to preferential creditors and the fees/expenses of the insolvency practitioners) in administration and liquidation shall be ring-fenced for payment to unsecured creditors.

New clause 3—Corporate governance: reforms—

“(1) Before 31 December 2020, the Secretary of State must—

(a) carry out a review of corporate governance;

(b) set out the conclusions of the review in a report;

(c) publish the report; and

(d) arrange for copies of the report to be laid before both Houses of Parliament.

(2) The report under subsection (1) must in particular set out the Government’s proposals for—

(a) ensuring greater accountability of directors in group companies which sell failing subsidiaries;

(b) legislating to enhance powers for insolvency practitioners in relation to value extraction schemes (removal of value from a firm at the expense of its creditors when in financial distress);

(c) further raising standards by ensuring that directors of a company publish regular explanations to their shareholders as to what extent the company can afford to pay dividends alongside its financial commitments such as capital investments, workers’ rewards and pension schemes.”

This new clause paves the way for the introduction of measures proposed in the 2018 consultation on Insolvency and Corporate Governance.

New clause 4— Preference for pension scheme deficits in case of insolvency—

“(1) The Secretary of State, after consulting the Pensions Regulator, may make regulations amending this Act to ensure that contributions owed to pension schemes by a company are treated in the categories of preferential debts under the Insolvency Act 1986 as a priority secured creditor.

(2) Regulations under this section may not be made unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.”

The intention of this new clause is to make pension scheme deficits a ‘priority creditor’ in the event of insolvency and therefore due to be paid before unsecured creditors.

New clause 5—Trade union representation in restructuring process—

“(1) Before 31 December 2020, the Secretary of State must—

(a) carry out a review of the role of trade unions in company restructuring arrangements;

(b) set out the conclusions of the review in a report;

(c) publish the report; and

(d) arrange for copies of the report to be laid before both Houses of Parliament.

(2) The report under subsection (1) must in particular set out the Government’s proposals for ensuring that trade unions representing employees affected by any proposed restructuring are—

(a) provided with all the information made available to the court,

(b) fully consulted by the directors of a company before any application for restructuring is made, and

(c) given the opportunity to contribute to decisions made by the court affecting their members.”

The intention of this new clause is to require mandatory discussion with trade union representatives once a company has entered the restructuring process.

New clause 6—Moratoriums in Great Britain: time-limited effect and renewal—

“(1) Part A1 of the Insolvency Act 1986 (inserted by section 1 of this Act) ceases to have effect on 30 September 2020, subject to the condition in subsection (2).

(2) The condition in this subsection is that the Secretary of State has made regulations by statutory instrument providing that Part A1 of the Insolvency Act 1986 should continue to have effect for a specified further period of no more than one year.

(3) Regulations under this section may not be made unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.

(4) The Secretary of State must keep under review the operation of Part 1A of the Insolvency Act 1986 during the period for which it has effect.

(5) The Secretary of State must arrange for a report of a review under subsection (4) to be laid before both Houses of Parliament no later than 15 September 2020.”

This new clause would terminate the free-standing moratorium provision for Great Britain on 30 September 2020, subject to temporary renewal for up to one year.

New clause 7—Moratoriums in Northern Ireland: time-limited effect and renewal—

“(1) Part 1A of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) (inserted by section 4 of this Act) ceases to have effect on 30 September 2020, subject to the condition in subsection (2).

(2) The condition in this subsection is that the Secretary of State has made regulations by statutory instrument providing that Part 1A of the Insolvency (Northern Ireland) Order 1989 should continue to have effect for a specified further period of no more than one year.

(3) Regulations under this section may not be made unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.

(4) The Secretary of State must keep under review the operation of Part 1A of the Insolvency (Northern Ireland) Order 1989 during the period for which it has effect.

(5) The Secretary of State must arrange for a report of a review under subsection (4) to be laid before both Houses of Parliament and the Northern Ireland Assembly no later than 15 September 2020.”

This new clause would terminate the free-standing moratorium provision fin Northern Ireland on 30 September 2020, subject to temporary renewal for up to one year.

New clause 8—Arrangements and reconstructions for companies in financial difficulty: time-limited effect and renewal—

“(1) Part 26A of the Companies Act 2006 (inserted by section 7 of this Act and Schedule 9 to this Act) ceases to have effect on 30 September 2020, subject to the condition in subsection (2).

(2) The condition in this subsection is that the Secretary of State has made regulations by statutory instrument providing that Part 26A of the Companies Act 2006 should continue to have effect for a specified further period of no more than one year.

(3) Regulations under this section may not be made unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.

(4) The Secretary of State must keep under review the operation of Part 26A of the Companies Act 2006 during the period for which it has effect.

(5) The Secretary of State must arrange for a report of a review under subsection (4) to be laid before both Houses of Parliament no later than 15 September 2020.”

This new clause would terminate the new restructuring plan provisions on 30 September 2020, subject to temporary renewal for up to one year.

New clause 9—Protection of supplies of goods and services: time-limited effect and renewal—

“(1) Sections 233B and 233C of the Insolvency Act 1986 (inserted by section 12 of this Act) cease to have effect on 30 September 2020, subject to the condition in subsection (2).

(2) The condition in this subsection is that the Secretary of State has made regulations by statutory instrument providing that sections 233B and 233C of the Insolvency Act 1986 should continue to have effect for a specified further period of no more than one year.

(3) Regulations under this section may not be made unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.

(4) The Secretary of State must keep under review the operation of sections 233B and 233C of the Insolvency Act 1986 during the period for which they have effect.

(5) The Secretary of State must arrange for a report of a review under subsection (4) to be laid before both Houses of Parliament no later than 15 September 2020.”

This new clause would terminate the widening of Ipso facto (termination) clauses in supply contracts on 30 September 2020, subject to temporary renewal for up to one year.

That schedule 1 be the First schedule to the Bill.

That schedule 2 be the Second schedule to the Bill.

That schedule 3 be the Third schedule to the Bill.

Amendment 7, in schedule 4, page 122, line 38, leave out “June” and insert “September”

This amendment would extend to 30 September 2020 the period after this Act comes into force during which the Secretary of State may by regulations made by statutory instrument provide for any temporary modifications to primary legislation in relation to moratoriums in Great Britain made by Part 2 of Schedule 4 to cease to have effect.

Government amendment 15.

That schedule 4 be the Fourth schedule to the Bill.

That schedule 5 be the Fifth schedule to the Bill.

That schedule 6 be the Sixth schedule to the Bill.

Government amendment 16.

That schedule 7 be the Seventh schedule to the Bill.

Amendment 8, in schedule 8, page 165, line 28, leave out “June” and insert “September”

This amendment would extend to 30 September 2020 the period after this Act comes into force during which the Department for the Economy in Northern Ireland may by regulations provide for any temporary modifications to primary legislation, or temporary Rules under Article 359 of the Insolvency (Northern Ireland) Order 1989, in relation to moratoriums in Northern Ireland in made by provision made by Part 2 of Schedule 8 to cease to have effect before the end of the relevant period.

Government amendment 17.

That schedule 8 be the Eighth schedule to the Bill.

Government amendments 18 to 25.

That schedule 9 be the Ninth schedule to the Bill.

Amendment 9, in schedule 10, page 203, line 15, leave out “June” and insert “September”

This amendment would extend to 30 September 2020 the period in relation to which petitions for the winding up of a registered company may not be presented on or after 27 April 2020 on the statutory grounds specified in section 123(1)(a) or section 124 of the Insolvency Act 1986 (that a written demand has not been paid within 3 weeks) where the demand was served during that period.

Amendment 10, page 209, line 36, leave out “June” and insert “September”

This amendment would extend to 30 September 2020 the period in relation to which petitions for the winding up of a registered company may not be presented on the grounds specified in Part 2 of Schedule 10 to this Bill (except where coronavirus had not had an effect on the company).

That schedule 10 be the Tenth schedule to the Bill.

Amendment 11, in schedule 11, page 211, line 2, leave out “June” and insert “September”

This amendment would extend to 30 September 2020 the period in relation to which petitions for the winding up of a registered company may not be presented on or after 27 April 2020 on the grounds specified in sub-paragraph (a) of Article 103(1)(a) or Article 104 of the Insolvency (Northern Ireland) Order 1989 Order (that a written demand has not been paid within 3 weeks) where the demand was served during that period.

Amendment 12, page 216, line 25, leave out “June” and insert “September”

This amendment would extend to 30 September 2020 the period in relation to which petitions for the winding up of a registered company in Northern Ireland may not be presented on the grounds specified in Part 2 of Schedule 11 to this Bill (except where coronavirus had not had an effect on the company).

That schedule 11 be the Eleventh schedule to the Bill.

That schedule 12 be the Twelfth schedule to the Bill.

That schedule 13 be the Thirteenth schedule to the Bill.

That schedule 14 be the Fourteenth schedule to the Bill.

Amendment 14, Title, line 3, after “make” insert “temporary”

This consequential amendment clarifies the temporary nature of the Bill’s provisions.

[Lucy Powell]

As my right hon. Friend the Member for Doncaster North (Edward Miliband) and I have said, we support the principle of the Bill and urge the Government to do more to support businesses, so that they can remain solvent and do not need to use these provisions. I hope the Minister will take the amendments in the constructive way they are meant. I will speak to each of them in turn and set out why we are seeking reassurances or think that the Government should consider changes to the Bill as it progresses. This has been a very truncated process, so we are relying on Ministers’ good will to take on board not just the comments I am about to make but those made on Second Reading, some of which were excellent suggestions.

I will take the self-explanatory amendments first. Amendments 3 to 12 inclusive would extend the time limits of the covid-19-specific provisions in the Bill. We welcome the retrospective nature of the provisions, but as we have discussed with the Minister, we suggest that the Government amend the Bill to extend the time limits for a number of the provisions, as they are insufficient given the prolonged nature of the crisis. Specifically, the suspension of the wrongful trading liability and statutory demands and winding-up petition measures should be extended to the same date as when the AGM and company account filing measures are valid, which is until 30 September.

Clearly, there was a sense from Government when the Bill was being drafted that on 30 June, most things would be back to business as usual. It is now clear that many sectors will not even be partially open for business again by that deadline—I am thinking particularly of hospitality, travel, tourism and the arts and their associated supply chains. They will not even have begun trading by the end of this month, let alone be getting back to any kind of solvency.

[Jim Shannon (Strangford) (DUP)]

I agree wholeheartedly with what the hon. Lady is saying. In Northern Ireland the start date for the hospitality sector, including hotels, is 20 July, so nothing will even be in place until that time. I am a wee bit disappointed that the Minister has not acknowledged that we should have a six-month extension, maybe even to the end of the year.

[Lucy Powell]

The hon. Member makes a good point. Businesses that are struggling to keep their heads above water need certainty, and they need to know that the lifeline measures in the Bill will not be pulled from under their feet before they even reach needing them.

The point of the suspension of the wrongful trading provisions is that lots of businesses are effectively trading technically insolvent already through no fault of their own. Just as we have seen Ministers rightly extend the furlough scheme, support for the self-employed and other measures, they should get ahead of this now. Rather than having to spend time on a statutory instrument in only two or three weeks’ time, Ministers could and should take the opportunity to get this done today by agreeing to our amendment.

Amendment 2 would extend the moratorium for small businesses from 20 days to 30 days for businesses facing insolvency. The Federation of Small Businesses has called on Government to extend the moratorium period for small businesses because it does not believe that the 20-day period in the Bill is sufficient. We support that call and ask Ministers to agree to that change.

New clause 2 has not been selected, and we will have a proper look at this in the other place, but we think that the powers of the Small Business Commissioner should be strengthened, as we discussed on Second Reading.

We have long argued for some of the permanent measures in the Bill, particularly in the wake of the Carillion collapse. However, we have some concerns about what has been left out, as I said on Second Reading. There could be unintended consequences in the restructuring proposals that are being put in place that could disadvantage small businesses, employees or other unsecured creditors, such as pension funds. The Minister and I have discussed the issue in private, and it was also raised by a number of Government Members earlier. Given the crisis and the numbers of businesses already struggling, we appreciate the haste in bringing forward the changes, but we are concerned that Members and outside bodies have not had a lot of time to scrutinise the Bill and its implications, so we think the Government could consider having a period for reflection and review.

We have included as amendments a number of omissions from the 2018 consultation. The collapse of Carillion and the consequences for workers, supply-chain businesses and the public were a national scandal and an abject failure of British corporate governance policies. There have been huge repercussions for taxpayers, with unfulfilled contracts, unfinished buildings and thousands of apprentices laid off—the taxpayer had to foot the bill for those failures of corporate governance. There is, rightfully, public anger at the failure to hold people to account for such things. As ever, it seems that in such instances the profits are taken by the private sector, but the public sector foots the bill when the risks have been taken by directors over whom they have no control. Given the economic crisis that we face and the likely recession, it is clear that in the next few months and years we will see more big corporate collapses and failures, so it really is remiss of the Government not to strengthen the corporate governance measures, as they said they would do in 2018. I wish to make it clear, especially because Members raised this earlier, that the measures in our amendment are lifted entirely from the Government’s own recommendations.

Alongside key omissions from the Bill, we have heard from academics, trade unions and other organisations about some of the sweeping powers in the legislation and the fact that there could be considerable scope for the misuse of some measures to disadvantage particular groups. The next set of amendments would seek to safeguard funds for unsecured creditors, protect pension schemes, and protect employees by giving trade unions a voice in any restructuring plans. I urge the Minister to have conversations with the trade unions and to look to add our provision—or a provision like it, as Members from both sides were calling for earlier—to the Bill as it progresses to the other place.

We have concerns about how the restructuring plan will hit employees: many more could be pushed to or around the national minimum wage and lose their rights and their wages, as we are currently seeing with what British Airways is doing. Pension scheme deficits will be left unaddressed and more workers could end up losing out from their pension schemes. If this was not an emergency Bill, we would have had a lot more time to probe Ministers on these issues in a full Committee and to discuss what could be done to strengthen the protections in the Bill.

New clause 1 would insert into section 176A of the Insolvency Act 1986 a requirement that at least 30% of the proceeds from the sale of assets of businesses in administration or liquidation should be ring-fenced for payments to unsecured creditors, who often end up losing out to larger creditors, such as banks. The new clause explores a way for unsecured creditors to be guaranteed some assets so that they do not miss out. The legislation assumes that all creditors are identical and take a hit, but we know that that is not borne out in reality. There is a case for protecting the debts of SMEs and other unsecured creditors up to a specified amount, and that should not be reduced. What assurances can the Minister give that unsecured creditors will not lose out as a result of the Bill—although I know that that is what it is designed to try to achieve—and what mitigation is in place to protect unsecured creditors, who are often in the SME sector?

The intention of new clause 4 is to make pension scheme deficits a priority creditor in the event of insolvency and therefore due to be paid before unsecured creditors. The new clause would require the Government to make pension scheme deficits a priority, meaning that they would be the first in the queue in the event of insolvency and paid before other creditors. That could make employees’ votes count and offer them some protection. It is worth remembering that pension schemes are unsecured creditors in normal circumstances. If the deficit is not addressed by companies, employees face an erosion of their pension rights and their pension value goes down. Our amendment would help them to become a separate class in their own right and not to be subsumed into the amorphous mass of unsecured creditors. Members would be able to vote on any restructuring plan. That way, there would be a clear message to past and present employees. Given the nature of this debate and the number of colleagues from both sides of the House who have raised this issue, I hope that Ministers will look at the matter.

The intention of new clause 5 is to require mandatory discussion with trade union representatives once a company has entered the restructuring process. I understand that US evidence shows that restructuring plans often hit employees hardest, and many of the provisions in the Bill are based on US-European models. Wages can be reduced and employment terms changed. Many employees end up on zero-hours contracts or, as we have seen recently with BA, are sacked and then offered worse terms and conditions when they are re-employed. Pension rights are also reduced, and that could happen in the UK. I am sure that Ministers do not wish that to be an unintended consequence of the legislation, so we hope that the Minister will look at our idea, or a similar idea, and see if it can be introduced in the other place. I hope he can provide reassurance on that, not least because my boss, the shadow Secretary of State, is particularly agitated—and rightly so—about this issue.

I hope that the Minister will consider the amendments in the constructive way in which they are tabled. A number of Government amendments have been tabled, and they seem reasonable. We have not had a lot of time to study them, but I am grateful to the Minister for arranging a briefing with his officials. I look forward to his providing us with a bit more detail and assurance as the Bill proceeds.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

This Bill has been produced with ministerial colleagues, the Bill team, which has worked through weekends, representatives of businesses, consumers, workers, shareholders, investors, insolvency experts and, indeed, after really constructive conversations with Opposition Members from all parts of the House. For all those people, I want to put on the record thanks for the constructive way in which the measure has been introduced.

We have had a good debate and there are a number of issues that we need to explore. I am more than happy to cover as much ground as I can. An amendment on prompt payment was cited on Second Reading, but it was not selected. However, as the Secretary of State has said, we made a manifesto commitment to consult on extending a range of powers to the small business commissioner and to clamp down on late payment. We still plan to consult on doing so to allow the small business commissioner to advocate for and support small businesses. We are keen to capture as many views as possible to ensure that the policy response is the right one. In the light of businesses furloughing staff and of other priorities, we do not believe that consulting now is the right thing to do, but the Government remain committed to the prompt payment code.

Amendment 1 seeks to add a statement from a trade union on behalf of employees to the document that must be filed at court at the commencement of the moratorium. It is important to note that a successful rescue would be of direct benefit to employees, as it would result in jobs being saved. Requiring a statement from the trade union on their behalf alongside statements from the insolvency practitioner and directors would add little to the process. In fact, it might risk publicising the company’s financial problems before the protection from creditor action that a moratorium would bring, making rescue less likely.

Employees benefit from considerable protection in the moratorium, which will not be a bomb shelter for bad employers. As I have set out previously, wages and any redundancy payments relating to a period before as well as during the moratorium should be paid by the company. If it does not pay such amounts the monitor must bring the moratorium to an end. While legal process cannot be begun or continued against the company while it is in a moratorium without the leave of the court, an exception is made for employment tribunal claims and other proceedings between an employer and the worker. For those reasons I have set out, I am unable to accept this amendment and I hope it will not be pressed, but I do value the regular meetings I have with TUC members, a number of whom I will be speaking to tomorrow as part of my regular engagement. I value their input at every stage on employment rights and other issues that fall within my brief.

--- Later in debate ---

[Sarah Olney (Richmond Park) (LD)]

Thank you, Dame Eleanor. I was not expecting to be next, but I willingly take my place. I state my intention not to press my amendments, but I would just like to say a few words on why I tabled them.

We are in an emergency situation. The response to coronavirus has been first and foremost a public health response, but the necessary measures taken to contain the spread of this appalling virus, supported by all the hon. Members of my party, have now resulted in an economic crisis. While we look forward to a point where the public health emergency has passed at least sufficiently to allow some semblance of a normal life, the economic crisis is likely to have longer and more far-reaching effects. In my constituency, as in those of every parliamentary colleague I am sure, the most immediate impacts are being felt by our small businesses and the self-employed. If we are to plot the most effective path out of this crisis, it is to our small and growing businesses that we should allocate the most care and attention. Apart from the important role that they play in supporting our communities and providing jobs, the new businesses that will emerge from the current shutdown will be offering the innovative goods and services necessary for a new way of life that we may have to get used to. Our recovery—both physical and economic—depends on the next generation of entrepreneurs, and it should be the first priority of the Secretary of State to identify and support them.

The Liberal Democrats support the temporary measures in the Bill. They are sensible measures that should carry successful businesses through the current crisis until such time as they can thrive again on their own terms. We support them, however, only as temporary measures designed to respond to the specific challenges posed by the current crisis. We oppose the bundling into the legislation of permanent changes to our insolvency and corporate governance processes. Permanent changes should be subject to a greater level of scrutiny and debate. My amendment 14 sought to put all the proposed changes on a temporary footing, able to be renewed, but also allowing the proposed permanent measures to be reintroduced to the House at such time as we may be able to consider and debate them properly.

Introducing the proposals as temporary measures would also allow their effect to be properly analysed. Our particular concern is for the ipso facto clause, which can be triggered if an insolvency effectively ends a contract to supply. This will require key suppliers to continue to supply struggling companies, despite the risk that they may not get paid. This transfers the risk from the struggling company to the supplier, which, whether in an economic crisis or not, is unacceptable. In times when cash flow is limited, it is not sufficient protection for a supplier to get in the queue with other creditors in the event of one of its customers falling into administration. Suppliers should retain the right to choose to withdraw their services if they perceive that their resources will face a lower risk return elsewhere. To compel them to continue their supply would be unethical.

I am particularly concerned that such a change would have a disproportionate impact on smaller businesses, especially those that only have the capacity to service a handful of clients, and would be unduly disadvantaged by being required to supply goods and services without the certainty of being paid. I accept that there is a balance to be struck between the needs of customers and suppliers, and that during these difficult times supply chains are critical and need to be supported, but we need to take time to consider the long-term risks of introducing such a change to our insolvency procedures, and the introduction of emergency legislation is not that time.

The acid test of any new legislation at this time should be whether its provisions stimulate and support economic activity. There will be, regrettably, some businesses that will not survive the shutdown. For the sake of those who lose their jobs and livelihoods, it is imperative that capital and investment can be quickly diverted towards those endeavours that can thrive and provide new employment and economic activity. The increase in the scope of exclusions to the ipso facto clause will have precisely the reverse effect, injecting precious working capital into companies that cannot create economic value from it. Now more than ever is not the time to restrict our small business activity in such a way. I urge the Government to adopt the Liberal Democrat proposal that all the provisions of this Bill be time-limited and that we consider the permanent provisions more fully at a later date, when we would have greater insight into the impact of their introduction on our business environment.

[Lucy Powell]

We are happy to withdraw our amendment on the basis that the Minister undertakes to address the concerns of the trade unions leadership—concerns which they have raised with us about the loss of rights that may result from the Bill—in his meeting with them tomorrow. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 1 to 47 agreed to.

Schedules 1 to 3 agreed to.

Schedule 4

Moratoriums in Great Britain: temporary provision

Amendment made: 15, page 144, line 14, at end insert—

“Part 5

Entities other than companies

91 Regulations under section 14(1) of the Limited Liability Partnership Act 2000 may make provision applying or incorporating provision made by or under this Schedule, with such modifications as appear appropriate, in relation to a limited liability partnership registered in Great Britain.

92 An order or regulations under section 118(1)(a), (3B) or (3C) of the Cooperative and Community Benefit Societies Act 2014 may provide for provision made by or under this Schedule to apply (with or without modifications) in relation to registered societies (or to registered societies of the kind mentioned there).”—(Paul Scully.)

This amendment ensures that powers to apply Part A1 of the Insolvency Act 1986 to certain entities can also be used to apply Schedule 4 to the Bill.

Schedule 4, as amended, agreed to.

Schedules 5 and 6 agreed to.

Schedule 7

Moratoriums in Northern Ireland: further amendments

Amendment made: 16, page 165, line 4, leave out “2 to 8” and insert

“2 to 5, 7 and 8”.—(Paul Scully.)

This amendment removes the repeal of paragraph 6 of Schedule 1 to the Insolvency (NI) Order 2002, as the amendment made by that paragraph remains relevant for certain limited purposes.

Schedule 7, as amended, agreed to.

Schedule 8

Moratoriums in Northern Ireland: temporary provision

Amendment made: 17, page 178, line 14, at end insert—

“Part 5

Entities other than companies

55 Regulations under section 14(1) of the Limited Liability Partnership Act 2000 may make provision applying or incorporating provision made by or under this Schedule, with such modifications as appear appropriate, in relation to a limited liability partnership registered in Northern Ireland.

56 An order under Article 10(2) of the Insolvency (Northern Ireland) Order 2005 may provide for provision made by or under this Schedule to apply (with or without modification) in relation to—

(a) a registered society within the meaning of the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969, or

(b) a credit union within the meaning of the Credit Unions (Northern Ireland) Order 1985.”—(Paul Scully.)

This amendment ensures that powers to apply Part 1A of the Insolvency (Northern Ireland) Order 1989 to certain entities can also be used to apply Schedule 8 to the Bill.

Schedule 8, as amended, agreed to.

Schedule 9

Arrangements and reconstructions for companies in financial difficulty

Amendments made: 18, page 180, line 17, leave out “and 901I (special cases)” and insert “(moratorium debts, etc)”.

This amendment is consequential on amendment 21.

Amendment 19, page 181, line 44, leave out from “etc),” to end of line 1 on page 182.

This amendment is consequential on amendment 21.

Amendment 20, page 183, line 34, after “as” insert “including”.

This amendment makes a minor drafting correction.

Amendment 21, page 184, leave out lines 7 to 30.

This amendment removes enhanced protection for creditors with interests in aircraft equipment, which will make it easier for airline companies to make use of the new restructuring process provided for by Part 26A of the Companies Act 2006.

Amendment 22, page 194, line 40, leave out “and 899B (special cases)” and insert “(moratorium debts, etc)”.

This amendment is consequential on amendment 25.

Amendment 23, page 194, line 44, leave out from “etc),” to end of line 45.

This amendment is consequential on amendment 25.

Amendment 24, page 195, line 24, after “as” insert “including”.

This amendment makes a minor drafting correction.

Amendment 25, page 195, leave out from end of line 42 to beginning of line 21 on page 196.—(Paul Scully.)

This amendment removes enhanced protection for creditors with interests in aircraft equipment, which will make it easier for airline companies to make use of the existing restructuring process provided for by Part 26 of the Companies Act 2006.

Schedule 9, as amended, agreed to.

Schedules 10 to 14 agreed to.

The Deputy Speaker resumed the Chair.

Bill, as amended, reported.

Bill, as amended in the Committee, considered.

Bill read the Third time and passed.

Leaseholders and Cladding

Lucy Powell Excerpts

Wednesday 12th February 2020 Westminster Hall

[Hilary Benn]

My hon. Friend is correct: there is a fundamental unfairness in the treatment of different types of leaseholders. That is the argument that I will make.

As we have just heard from two colleagues, a growing number of our constituents face this problem—in my case, leaseholders from St George’s building and a number of blocks in Leeds Dock and Timble Beck, who have other types of dangerous cladding. I pay tribute to the Leeds Cladding Scandal group, to all the other groups that have been organised up and down the country, and to the very aptly named Manchester Cladiators, who have really got organised. That name tells us how determined they are to win.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

I thank my right hon. Friend for securing the debate, and for mentioning the Manchester Cladiators: a network of dozens of blocks in my constituency that are affected by such issues. What the Manchester Cladiators really want is to be at the heart of an ongoing dialogue with the Government to resolve the issues. The period of passing the buck between freeholders, insurers and the Government has to stop.

[Hilary Benn]

I agree completely, and I hope that today’s debate is part of the dialogue that has already begun. Leaseholders want to feel that they are being listened to, and they want to be able to meet Ministers. I hope that this debate will ensure that more of that happens.