Business of the House
Debate between Penny Mordaunt and Jessica Morden(9 months, 3 weeks ago)
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Penny Mordaunt
I thank my hon. Friend for her work on that matter. Her question comes in a week when we have also seen reports about previous whistleblowers on other issues, such as Maggie Oliver and her work on grooming gangs, at tremendous personal cost to herself, losing her career and livelihood in the process. We owe those individuals a huge debt of gratitude, and I will certainly make sure that the Cabinet Office has heard what my hon. Friend has said. As I mentioned, I wrote last week to the Cabinet Office asking it to reflect on what it could learn from Horizon and from other inquiries that we have established. My hon. Friend may wish to raise the matter directly at the Business and Trade questions on 25 January.
Jessica Morden (Newport East) (Lab)
There was no transport Bill in the King’s Speech and therefore no opportunity to update legislation relating to e-scooters and e-bikes, and, obviously, we have seen a massive increase in their use. May we have an opportunity, on behalf of constituents who regularly raise with me the antisocial use of e-bikes and e-scooters, to question Ministers on what more they can do to tackle this?
Penny Mordaunt
I thank the hon. Lady for her question; I know this is an issue of concern to many Members across the House. She will know how to apply for a debate, but I will also make sure that the Secretaries of State for Levelling Up, Housing and Communities and for Transport have heard what she said.
Business of the House
Debate between Penny Mordaunt and Jessica Morden(1 year, 2 months ago)
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Penny Mordaunt
I thank my right hon. Friend for raising this important point. We have a great track record on improving animal welfare, and our animal welfare legislation is now world leading. We are still committed to those manifesto commitments, and my committee is busy looking at these issues. She will know that further business will be announced in the usual way, but she should be reassured.
Jessica Morden (Newport East) (Lab)
Today is 270 days since Azerbaijan began its blockade of the Lachin corridor, causing huge hardship to the population of Nagorno-Karabakh, who are under siege without basic supplies and whose suffering is getting worse. Can we have an urgent statement from a Foreign, Commonwealth and Development Office Minister to make sure the Government are using all the levers they have to press Azerbaijan to comply with international obligations and lift the blockade?
Penny Mordaunt
I thank the hon. Lady for raising this matter. Foreign, Commonwealth and Development Office questions are not until 24 October, so I will write on her behalf to make sure that Ministers have heard her concerns.
Business of the House
Debate between Penny Mordaunt and Jessica Morden(1 year, 7 months ago)
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Jessica Morden (Newport East) (Lab)
Will the Leader of the House give us the forthcoming business?
The Leader of the House of Commons (Penny Mordaunt)
The business for the week commencing 17 April will include:
Monday 17 April—Second Reading of the Data Protection and Digital Information (No. 2) Bill.
Tuesday 18 April—Consideration in Committee of the Finance (No. 2) Bill (day 1).
Wednesday 19 April—Consideration in Committee of the Finance (No. 2) Bill (day 2).
Thursday 20 April—General debate on international trade and geopolitics, followed by general debate on human rights protections for Palestinians. The subjects for these debates were determined by the Backbench Business Committee.
Friday 21 April—The House will not be sitting.
The provisional business for the week commencing 24 April includes:
Monday 24 April—Second Reading of the Non-Domestic Rating Bill.
Tuesday 25 April—Remaining stages of the Illegal Migration Bill.
Wednesday 26 April—Opposition day (14th allotted day). Debate in the name of the official Opposition, subject to be announced.
Thursday 27 April—Business to be determined by the Backbench Business Committee.
Friday 28 April—The House will not be sitting.
Jessica Morden
I thank the Leader of the House for the forthcoming business. It is good to be stepping in for the shadow Leader of the House, my hon. Friend the Member for Bristol West (Thangam Debbonaire), this week. I want to start by wishing everybody across the House a very happy Easter, or Pasg hapus in Welsh, including all our staff who work so hard not just for us but for the people we represent and all those in the House service who help us and allow us to get on with our jobs every day.
I congratulate the Government on making it through a full term with the same Prime Minister. He is just about still standing, seemingly with a full set of Ministers too—what an achievement for the Government! It is a true triumph for the Tories, given their recent track record.
Easter is the perfect time for a spring clean. The Government clearly agree, because today they have dusted off 17 written ministerial statements, but are the Government planning to allow MPs to ask Ministers questions in the House on any of them? I note the Prime Minister’s statement on the machinery of government. Will the Leader of the House tell us whether that includes plans to publish an updated list of ministerial responsibilities? It is essential that MPs’ staff and our constituents have a clear understanding of who is responsible for what and how best to contact them.
I wonder whether the Department of Health and Social Care is also planning a clear-out this recess. Perhaps it could go in search of the NHS workforce plan. After repeatedly calling for it from the Back Benches, the Chancellor finally promised that he would deliver it in the autumn statement. Then he said at the Budget that it would be published “shortly”. Where is it? Do they actually have a plan at all? Can the Leader of the House tell us whether Ministers plan to publish their missing plan in recess, when Parliament is not sitting? Perhaps they think that that way, they will not be held to account.
As my hon. Friend the Member for Aberavon (Stephen Kinnock) highlighted in a point of order this week, the UK Statistics Authority has debunked the claim made by the Minister for Immigration that the asylum backlog when Labour left office was in the hundreds of thousands. It was in fact 18,954. Under the Tories, it is 166,261—eight times higher than in 2010. The shadow Home Secretary, my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), has called out claims that the Government are recruiting extra police officers. In recent years they have hollowed out neighbourhood policing, as we have all seen. In the spirit of Easter and new beginnings, could the Leader of the House get the appropriate Ministers to correct the record? Will they wipe the slate clean and commit to sticking to accurate figures in future?
The Leader of the House has announced the remaining stages of her Illegal Migration Bill. Perhaps she could learn some lessons from the year 5s at Lliswerry Primary School in my constituency who I met last week, who have been studying the Bill and shared their wise insights on it with me. Of course, we must stop these dangerous boat crossings that are putting lives at risk, but the people of Newport East know that this is not the way to do it. They support Labour’s plan to crack down on criminal gangs instead.
Why is the Leader of the House happy with such a poorly worded Bill? It has a number of inconsistencies, meaning that it will not even work as the Government say it will. It is not just morally wrong; it is impractical too. Can she explain what the Government will do with someone who, after appeal, cannot legally be deported but would still be barred from claiming asylum? They would be in legal limbo, would they not?
Finally, the shadow Leader of the House has tried three times in a row to get the Leader of the House to tell us when the Government’s impact assessment on the Illegal Migration Bill will be published. The Government failed to provide one on Second Reading or in Committee. Will we get it before the remaining stages? What are they hiding? What is the cost of the Bill, and what is the Government’s current detention capacity? The Leader of the House is clearly unwilling to tell the shadow Leader of the House when the impact assessment will be published, so today, can I have a go too?
Penny Mordaunt
I start by joining the hon. Lady in wishing everyone in this House and all of our staff a very happy Easter recess. I will pass on her kind words to the Prime Minister—I thank her for mentioning that—and I also place on record my congratulations and thanks to not just our new Clerk of the House, who will be taking over later this year, but all the excellent candidates who put themselves forward for that post.
Of course, there are plenty of opportunities for questions: standard Department Question Times, the ability to ask for urgent questions, and of course Ministers make statements to this House on a regular basis. We always publish the list of ministerial responsibilities. It is an incredibly important tool to enable Members of this House to address any concerns they have to the appropriate Minister, and I will certainly make sure that that is done in a timely way.
Turning to the hon. Lady’s questions about the impact assessment on the Illegal Migration Bill, I am the Government’s representative in Parliament, but I am also Parliament’s representative in Government. Members have made very reasonable requests about impact assessments and having sight of them. I take those responsibilities very seriously, and I have made representations to the Home Office, both to the Home Secretary and through my officials speaking to the permanent secretary. It is very important that we send this Bill to the Lords in a good state, and I have heard what Members of this House have said about the level of scrutiny of the Bill.
We are producing this legislation at pace: it is a priority for the Prime Minister that we get the statute book to give us some powers to tackle this very serious problem. The hon. Lady knows the reason why we are facing increased illegal migration: it is a global phenomenon. That trend will continue, which is why it is really important that we have these new powers to deal with it, and to ensure that the international rules are able to deal with these new challenges. I urge the Opposition to support us in those efforts to modernise the rules and processes, so that we can direct resource to the people who really need that support.
I am very pleased to welcome the hon. Member for Newport East (Jessica Morden) to her place today, although we miss the shadow Leader of the House, the hon. Member for Bristol West (Thangam Debbonaire). We understand that she is launching Labour’s local government campaign today. I was disappointed, but not surprised, to see the central plank of that campaign being the brilliant idea of saving taxpayers money off their council tax bills by subsidising them with taxpayers’ money. That perfectly illustrates Labour’s approach: since 2010, council tax has risen by 36%. Under Labour in the same time period, it rose by 110%, and what was true then is true now: Labour’s councils deliver poorer services for more of your money. If your council is Labour, on average, you will be paying £80 more for those services. If your police and crime commissioner is Labour, your chances of being burgled double, and you are 44% more likely to be a victim of knife crime.
Labour-run Slough is increasing council tax by 10%, having bankrupted the local authority. Sandwell is raising its council tax by a mere 5%, but is hiking additional waste collection services, and Westminster has decided that in a time of public sector pay restraint, its councillors ought to have a 45% pay increase—10 times what its hard- working staff will get. In contrast, Conservative councils keep tax low while maintaining and increasing services, and some are even reducing council tax bills for vulnerable families: North Lincolnshire is doing so for 7,000 households. That is public service to be proud of.
Further business will be announced in the usual way.
Business of the House
Debate between Penny Mordaunt and Jessica Morden(1 year, 10 months ago)
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Jessica Morden (Newport East) (Lab)
Will the Leader of the House give us the forthcoming business?
The Leader of the House of Commons (Penny Mordaunt)
I welcome the hon. Lady to her place, and wish a happy new year to you, Mr Speaker, and to everyone in the House.
The business for the week commencing 16 January will include:
Monday 16 January—Second Reading of the Strikes (Minimum Service Levels) Bill.
Tuesday 17 January—Conclusion of remaining stages of the Online Safety Bill.
Wednesday 18 January—Remaining stages of the Retained EU Law (Revocation and Reform) Bill.
Thursday 19 January—General debate on the imprisonment of Jagtar Singh Johal, followed by a general debate on Russian grand strategy. The subjects for these debates were determined by the Backbench Business Committee.
Friday 20 January—Private Members’ Bills.
The provisional business for the week commencing 23 January includes:
Monday 23 January—All stages of the Northern Ireland Budget Bill.
Tuesday 24 January—Remaining stages of the Economic Crime and Corporate Transparency Bill (day 1).
Wednesday 25 January—Remaining stages of the Economic Crime and Corporate Transparency Bill (day 2).
Thursday 26 January—Business to be determined by the Backbench Business Committee.
Friday 27 January—The House will not be sitting.
Jessica Morden
I thank the Leader of the House for the forthcoming business and wish everyone across the House a very happy new year.
I apologise for the absence of the shadow Leader of the House, my hon. Friend the Member for Bristol West (Thangam Debbonaire), who is under the weather and, I am afraid to say, has lost her voice. As the Leader of the House will know, it is not often that my hon. Friend finds herself speechless—I put it down to all the times she has had to call out the Government’s failing legislative agenda over the past year. I know we all wish her well and look forward to cheering her on when she is back at the Dispatch Box next week, undoubtedly in full voice.
The Leader of the House has announced the next in her Government’s long line of unworkable and impractical Bills. As my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) rightly said, the Strikes (Minimum Service Levels) Bill does not actually make any mention of public safety. The Government are putting an intolerable burden on employers, unions and workers, and for what? To sweeten some of their own Back Benchers. The Transport Secretary does not think it will work and the Education Secretary has said she does not want it applied to teachers. In fact, the Government’s own impact assessment said that there is no need for minimum service levels in other sectors. If her own Cabinet colleagues do not support the Bill, how on earth does the Leader of the House expect the public to do so?
MPs must be able to scrutinise the Bill properly. We are already concerned about the Government’s lack of engagement with key stakeholders. Have they spoken to employers, unions or workers? I understand the Government have not even published their official consultation yet. Why not? What have they got to hide? They have said they will do so “in due course”. What does that mean? Can the Leader of the House tell us when the consultation will be published?
The Leader of the House has also scheduled the Retained EU Law (Revocation and Reform) Bill. Its Henry VIII clauses represent a huge Government power grab from Parliament. Yet again, they think they can get away with swerving scrutiny. Under that legislation, MPs will have practically no powers to determine what legislation stays or goes. After the chaos the Government have caused in this House over past months and years, on what basis does the Leader of the House think it a good idea to leave it to a Minister’s whim to replace 2,400 pieces of legislation with next to no parliamentary scrutiny?
If the Government are set on pressing ahead, will the Leader of the House tell us how they plan to square the practical difficulties? The irresponsible cliff edge they have set—to remove thousands of laws by the end of this year—is creating yet more chaos and uncertainty for British businesses and people, and they could do without it. The Government have not left enough time to produce serious replacements for complex areas of regulation, including environmental protection, food safety, civil aviation codes, health and safety in the workplace, employment law, parental leave, product safety, biosecurity —the list goes on. Does the Leader of the House not think that those important issues deserve to be properly thought through?
We do not even have a full list of the regulations. The Government have introduced a dashboard which, I understand, may not even be complete, so when will they ensure that it is? Will they consider extending the sunset clauses beyond the end of this year so that MPs can give these laws the scrutiny they deserve? It is a real possibility that some will slip through the cracks and be scrapped by accident. The Government must get their act together.
New year, same Government swerving scrutiny—time for change.
Penny Mordaunt
I start by wishing the shadow Leader of the House a speedy recovery. She will be frustrated to have lost her voice. I wish her well and hope she is not feeling too bad.
I shall be charitable to the hon. Member for Newport East (Jessica Morden), because I do not think she has understood what the strikes Bill is doing. In addition to the powers in the Bill, we will focus on three areas: two blue-light services, and rail. That is because unions have behaved responsibly in other areas, such as nursing, where agreements are in place. We will act where we have concerns about threat to life or huge disruption and misery for the general public, with devastating impacts on their lives. For example, some people are losing their job because they cannot consistently get to work. Labour’s London has had nearly 100 public transport strikes, which is unacceptable to the public.
The proposal is modest and proportionate, many other countries do similar, and it will not prevent people from taking strike action should they wish. It will protect the public from the worst impacts on their lives and wellbeing. To dismiss a sensible approach before seeing the legislation and before the consultation that will help us arrive at the safety levels is, frankly, putting dogma before duty to the public.
However, I live in hope of a U-turn, because there have been quite a few from Labour recently. This week, we learned that the Opposition have gone from placing education at the heart of what they do to having nothing to say on the matter, except on the tax status of schools. They said they would defend freedom of movement, but now they are not. They said they would nationalise rail, mail, energy and water, except they are not, but then they might. They said they would not use private sector providers for the NHS; now they would. They said they wanted patients at the heart of healthcare and no more NHS reorganisation, except they now plan to abolish GP practices: the largest possible NHS reorganisation. They said they would abolish tuition fees; now they would not. They said they would restore faith in politics, but then blocked Brexit and now oppose the Retained EU Law (Revocation and Reform) Bill, which includes good scrutiny measures and, as the hon. Lady knows, flexibility on whether to push out each statutory instrument and on what areas are priorities for Government reform. They said they want local people in the driving seat, except that at every possible opportunity they want to take powers away from communities and give them to regional bodies.
The Leader of the Opposition said he did not want to get out the “big Government chequebook”, but Labour’s current spending commitments say otherwise, with £90 billion of uncosted spending plans. The Opposition say they want to clean up politics and that they are patriotic and on the side of hard-working families, yet some of their largest donors are also backing Just Stop Oil and one has been an agent of the Chinese state. They say that the unions’ demands are unaffordable, but join them on the picket line. So I live in hope that we might have another U-turn from the Opposition and that their position on this important strike legislation will change by Second Reading.
Oral Answers to Questions
Debate between Penny Mordaunt and Jessica Morden(3 years ago)
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Penny Mordaunt
The agreement in principle that we have just secured with New Zealand, in addition to being good in itself, helps pave the way towards the comprehensive and progressive agreement for trans-Pacific partnership, which will be hugely beneficial to my hon. Friend’s constituency. I thank him for the work that he has been doing in championing the Solent freeport, which will benefit Southampton but also another port just slightly further along the coast in which I have more than a passing interest.
Jessica Morden (Newport East) (Lab)
Oral Answers to Questions
Debate between Penny Mordaunt and Jessica Morden(3 years, 5 months ago)
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Jessica Morden (Newport East) (Lab)
The Paymaster General (Penny Mordaunt)
I would be very happy to meet the hon. Lady and any of the victims of this appalling scandal. I raised this issue at the recent meeting of the all-party parliamentary group on haemophilia and contaminated blood, and I want to let all those people who have lost children know that just because we published the written ministerial statement, which made reference to other support for other individuals, that does not mean that they are not at the forefront of our minds. The compensation study that we recently announced will obviously be looking at many of the issues that they have raised, but I would be happy to meet them.
Oral Answers to Questions
Debate between Penny Mordaunt and Jessica Morden(5 years, 9 months ago)
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Penny Mordaunt
The hon. Lady is absolutely right that there is some great work out there: 97% of businesses offer some form of flexible working—to tie this back to the original question—but only 68% of employees for whom that situation is available are taking up this option. I think this is changing, but there are further things we can do to encourage it. Sharing good practice is one of those things, and I think the charters have played a good role in that.
Jessica Morden (Newport East) (Lab)
Penny Mordaunt
I thank the hon. Lady for putting another example of good practice out there. I absolutely would encourage that. It is only by sharing good practice that we are going to be able to encourage employers that are not doing that to raise their game.
Oral Answers to Questions
Debate between Penny Mordaunt and Jessica Morden(6 years ago)
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Penny Mordaunt
My right hon. Friend is absolutely right that we are not just ensuring that the aid we provide is as effective as possible; we are introducing new tests to ensure that we are doing things that are also in the national interest. The chief economist has placed that in our aid allocation formula and we are also looking at ways of improving that.
Jessica Morden (Newport East) (Lab)
Gift Cards
Debate between Penny Mordaunt and Jessica MordenWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Penny Mordaunt (Portsmouth North) (Con)
It is always a pleasure, Mr Bone, to see you in the Chair. I know that many in the House are exercised by the stories we have heard in the wake of companies going into administration of people not being able to cash in their gift vouchers or losing their savings in schemes such as Farepak. It is terribly unjust and it is time that we did something about it.
My experience with Portsmouth FC has taught me that the victims of a company’s administration are not always obvious. In that case, rules that were not widely known meant that football creditors were at the head of the queue for repayment, despite the fact that the credit of others had been just as vital to the running of the club. Those at the head of these queues might receive only a tiny fraction of their investment, and those at the back nothing at all. It is devastating to be told that, through the mismanagement of others, one will not receive back a penny of one’s loan. How much worse is it to be told that money one has paid over, not as a loan but in exchange for goods, will be taken without redress?
Jessica Morden (Newport East) (Lab)
The hon. Lady is quite right to highlight the issue of unsecured creditors losing money when companies go under. As she said, the situation is reminiscent of what happened with Farepak, when thousands of people lost their Christmas savings. It is only now, seven years later, that we have come to a very unsatisfactory conclusion. Does she agree that we should redouble our efforts, because what might seem like quite small amounts of money to some people are very significant to those whom she mentions?
Penny Mordaunt
I am grateful to the hon. Lady for her intervention. She is absolutely right to say that this matter disproportionately affects those people on the lowest incomes. As she rightly said, the Farepak incident, which happened before I was elected to this House, has been going on for a number of years, so it is really time that the Government acted to stop such poor practice continuing.
Penny Mordaunt
I agree with my hon. Friend and I am grateful to him for his expertise. As I share a corridor with him in Parliament, I know that he is a champion of consumers in Dover and Deal and I am grateful to him for his support on this issue.
It is a terribly unjust position in which the holders of gift cards find themselves when the shop that issued the card goes into administration. Such people should not be treated as ordinary creditors. A grandmother who buys her grandchildren the once-ubiquitous WHSmith voucher for Christmas does not regard herself as having lent Smith’s any money. On the contrary, she has made a purchase. Indeed, her circumstances are just the opposite of a creditor’s, who might expect to receive some interest on his loan, as her gift card is worth less and less as time passes, due to the effects of inflation. It is as illogical to deny gift card holders the right to redeem their vouchers as it would be to demand that people who had bought their goods return them to the shop to help pay off the creditors. It is from that essential point that we must proceed today. A gift card is not a bond certificate; the money has not been loaned to the company. Quite simply, the collection of the product has been deferred, which is, in any case, to the advantage of the company. That principle has already been recognised at an EU level in respect of e-money, which is money put on to pre-paid cards or gift cards bought through third parties. Those moneys must be kept in segregated accounts pending the use of the cards, so that the consumer is protected.
In Britain, that scheme is regulated by the Financial Conduct Authority, a successor to the Financial Services Authority. Individual retailers may opt in to the scheme, but, for perhaps obvious reasons, the temptation seems to have been uniformly resisted. Although there is no mandatory and regulated scheme for cards issued by companies independently for use in their own shops, there appears to be no impediment to its introduction. Already many retailers that issue their own unregulated cards accept the regulated cards issued by third parties, such as the One4all card, including Argos, Boots, B&Q, Currys, Debenhams, Topshop and the aforementioned WHSmith. In all, the Gift Voucher Shop, which is responsible for the One4all card, has more than 1,500 corporate clients. Surely that is a double standard that should not be allowed to continue. Two customers who intend to spend their vouchers at the same shop could thus be in the absurd situation that one can have a full refund and the other receives nothing. The matter is left entirely to the discretion of the administrator.
It is true that under the Consumer Credit Act 2006, those who bought vouchers with credit cards are protected, but only if they bought between £100 and £30,000 of vouchers. The problem here is twofold: people who buy vouchers as savings, perhaps against the expense of Christmas, are very unlikely to use credit cards; and those who buy vouchers as gifts to put towards say the purchase of white goods on a wedding list are unlikely to do so to the sum of £100. Chargeback offers some protection to consumers using certain debit cards, such as Visa, American Express and MasterCard. In all circumstances, there is a 120-day window in which to make a claim for a refund, and the claim must be made by the purchaser, not the holder of the voucher. Once again, that is contingent on a given card supplier operating the scheme, and, in all circumstances, those who bought vouchers with cash, which is a likely scenario when smaller sums are involved and if the people buying them are paid in cash, are entirely exposed.
What is hard to understand is why the administrator is allowed to appropriate the money held against vouchers for the purposes of winding up the business. As I said earlier, that is akin to telling anyone who has previously bought something from that shop to return it without a refund, or the practices of the most artless playground bully.
Some administrators are prepared to accept vouchers, such as those for Nicole Farhi and Blockbuster. Holders of Republic vouchers were not so fortunate, which meant that the administrator simply took £1.2 million in advance payments. That is £1.2 million with just one retailer. The evidence of total sales suggests that there is still a demand for gift vouchers. Last year, more than £4 billion was spent on their purchase and, as they are not exchangeable for cash, one can only assume that retailers like them, too. How many of the people who contributed to that £4 billion knew that they, or the vouchers’ intended recipients, were so vulnerable?
Currently, holders of gift cards are well down the order of priority for creditors. They are on a par with Her Majesty’s Revenue and Customs, suppliers and unsecured creditors, but behind secured creditors, the costs of insolvency, and debts due to preferential creditors and employees. I do not argue too much with the order of creditors other than to say that employees should never be an afterthought. My point is simply that gift card holders do not belong on a list of creditors at all. It is not possible to exchange gift vouchers for cash, which is further proof that they are not a form of credit as there is never any prospect of getting back one’s money. It would be bizarre if this were permitted when a company went into administration. Rather, it should be possible to redeem one’s vouchers. That would resolve some of the concerns of the Association of Business Recovery Professionals about the knock-on effects of promoting holders of vouchers up the list of preferred creditors. R3, as it is known, is anxious that were card holders prioritised, businesses and suppliers, which are currently with card holders in the fifth tranche of those to be paid by administrators, would be even worse off.
I mentioned my experience with Portsmouth FC’s administration, and I understand only too well the hardship that is borne by small businesses that must extend credit in order to get the trade they need to survive when they are left hanging on administrators’ decisions. The same goes for employees, who are placed in the invidious position of waiting in limbo to know whether they will have a job in the future or be paid for the work they have already done.
There is also a concern that preferred creditors—those who issue secured loans—would be more wary of extending cheap or reasonable credit in the future if the list of preferred creditors were to be expanded to include gift card holders. At a time when small businesses and retailers are still concerned that lending is not getting through to the degree that is needed, that concern must not be dismissed.
R3 has put forward three possible solutions—a requirement to purchase bonds against the value of issued gift cards; the ring-fencing of the money used to buy cards until they are redeemed; and the extension of the 2006 Act to include purchases under £100. However, each of these solutions has problems. In the case of the first two, they would handicap solvent businesses by restricting cash flow and they could make administration more likely. Equally, extending the 2006 Act would come into effect only if administration procedures began, but cash buyers would still be out in the cold.
If one takes all of these factors into account—the need to protect the viability of going concerns and to treat gift card holders equitably, without undermining lending or supplier confidence, or disadvantaging employees —the solution seems clear. If vouchers are allowed to be redeemed, the administrator does not need to surrender the money that it has on deposit through the sale of gift cards. Instead stock, which would be very likely to be sold off at a generous discount to raise money quickly, would be exchanged for the vouchers.
Jessica Morden
The hon. Member has made some really important points. Does she agree that, at the very least, some kind of warning should be put on gift cards or vouchers? That would be a start—telling people what risk they face if things go wrong. It would also be a good way forward.
Penny Mordaunt
I agree absolutely with the hon. Lady. I have already said that there are products out there that would do the same thing as some of these gift vouchers and that could be exchanged for goods at an enormous number of retailers. Clearly, if people were aware of those particular e-money products and of how exposed they make themselves by not buying them, they would go and buy them. So she is absolutely right to point out that raising awareness is half the solution to this problem.
If the gift voucher holders were allowed to redeem those vouchers in exchange for goods, that would be done at pre-insolvency prices, which is after all the basis on which the cards were bought. Therefore, the impact on the administrator would be more modest than otherwise. Furthermore, the goodwill of the card holders would be sustained. The fact that they hold vouchers for a specific shop suggests that they would like to buy its goods, and they are the very people on whom the administrator would rely during a post-insolvency sale. Indeed, treating gift card holders better could make the administrator’s life much easier.
I do not pretend that this problem is easily solved, but it would be helpful if the Department for Business, Innovation and Skills recognised that there was a problem and that a solution was required. I have raised this matter in the House and I have written a number of times to the Minister who is here in Westminster Hall today. In one of the replies that I received, it was even acknowledged that gift cards are considered to be pre-payments for specific goods and services, rather than cash or an extension of credit—quite. However, the Department is content to continue to allow gift card holders to be treated as creditors.
I appreciate what the Minister has said to me in the past, namely, that in administration proceedings there is only so much money to go round and that administrators have to act in the best interests of creditors as a whole. However, it is apparently accepted that voucher holders are not creditors, so setting aside stock for them would not be to prefer one creditor over another. Indeed, the process might even lead to the sale of other stock for ready money. Her Majesty’s Treasury has shown a willingness to engage on this matter, and I hope that BIS will now be prepared to do so too.