(6 years, 7 months ago)
Commons ChamberI completely agree. Unfortunately, what I see as I travel around Britain is a bit of a postcode lottery in business support, and the Government need to address that urgently.
As I said, the Government failed to recognise the impediments facing many businesses and to outline any more general protections. That could not have been displayed more clearly than in the Government’s handling of the Carillion scandal, where key requests by business organisations to mandate 30-day payment to suppliers and instigate the use of project bank accounts were effectively ignored. The Government simply looked on as Carillion and other big players like it abused the businesses that they contracted with and passed on financial liability and risk down the supply chain. Labour pledged to mandate 30-day prompt payment and the use of project bank accounts for all Government projects, and I will be grateful if the Minster will do the same today when summing up.
My hon. Friend rightly points to the failures around the collapse of Carillion, which was a disaster for the many thousands of people who worked for it. The other organisations that failed were the regulators, so does she agree that we need a root-and-branch think about how we regulate the private sector, particularly when organisations are delivering public services at vast cost to the public purse?
I completely agree again.
Another issue that has been brought to my attention relates to sector deals. I understand that sectors are ready with proposals for such deals, but there is no clear structure or process in place for them to follow. For example, the rail industry has had a proposal for a sector deal ready since October, and the plan would deliver transformation across rail over the next 20 years, including new approaches that will cut the cost of digital signalling, addressing capacity issues and reliability. Perhaps the Minister will explain to the House what the delay is. How many proposals for sector deals has he received and how many have been agreed? Perhaps he will also commit to setting out in clear guidance, accessible to all businesses, how to go about pitching for a sector deal? Finally, will he update us on the implementation of the “Made Smarter” review? It was effectively ready to go, but I am sad to say that it received only a few cursory lines in the Government’s industrial strategy White Paper.
In short, Mr Deputy Speaker, as I am sure you have gleaned from my comments, the Government's industrial strategy, as drafted, is inadequate. While they now recognise the importance of an industrial strategy—well done—they are not prepared to use the full policy levers at their disposal to achieve it.
(6 years, 8 months ago)
Commons ChamberThrough our industrial strategy, we have highlighted the potential for new developments in battery storage. If Cornwall can supply the lithium to power that new industry then I am delighted to hear it. I will discuss the possibilities further with my hon. Friend.
At yesterday’s Select Committee visit, mentioned by the hon. Member for Rugby (Mark Pawsey), it became very apparent that the market for electric vehicles is maturing at a much faster rate than many people realise. Is it possible that the ambition of the sector itself is outstripping the ambition of the Government, and should the 2040 target not be brought forward, perhaps even by a decade?
When it comes to the new generation of automotive technology, the ambition of this Government is not outstripped by anyone. We are working very closely—hand in glove—with the industry, through the Automotive Council, to make sure that we are the best placed in the world not only to research the new technologies, but to manufacture them in this country.
(6 years, 8 months ago)
Commons ChamberI apologise for having to leave soon after I have spoken, but I am hosting another event elsewhere in the House of Commons.
High energy costs are felt most significantly by the vulnerable and those on lower incomes, which is why I strongly support the Bill and congratulate both the Business Secretary and the Energy Minister for what they are doing. Those who pay the most for energy are the ones who can least afford it. Eight out of 10 people on high-cost standard tariffs earn £18,000 a year. Scope, the charity for disabled people, found that households with disabled persons make up 38% of all fuel-poor households in England. More than a quarter of households with a disabled person—over 4 million households—spend more than £1,500 a year on energy bills, which is why this is a matter of social justice. The Government’s emphasis on the cost of living is incredibly important. I welcome that more than 4 million households are on prepayment meters. I also welcome the freeze in fuel duty for eight consecutive years, meaning that the average motorist has saved £850 since 2010.
The truth is that our energy market is fundamentally uncompetitive. The six largest energy providers focus on cheap introductory offers and leave loyal customers on poor-value tariffs. These standard tariffs earn the big six an average of £1.4 billion more than they would earn if the market was working well. The lack of competition means that suppliers can charge what they please. We have seen in recent weeks how increasing wholesale energy costs have had a knock-on effect on tariffs in smaller providers and those in the big six.
I urge the Minister to look at other issues hitting energy consumers. For example, those who do not pay by direct debit face an extra bill. I had an email only yesterday from someone telling me that they refuse to pay by direct debit, so they have to pay the electricity company—the Co-operative Energy—£200 a year more than if they had signed up by direct debit. We know that the vulnerable often do not pay by direct debit and sometimes do not have bank accounts. Some are paying up to £390 extra a year. This charge is unfair. I urge the Minister to look into these cases.
I also have concerns about the huge wages and the way in which profits are used by the big six bosses. Now, I am not against high wages or profits, but I do not think that these wages are linked to performance. For example, top staff in Centrica get £13.1 million a year, and the chief executive officer of E.ON UK said that his company had £235 million in profits. Although I am not against profits or high wages, wages should be linked to performance and we should ensure that those profits are ploughed back into helping the most vulnerable consumers.
We need a consumer Bill of rights to bolster the position of all energy consumers. It should be easily digestible and understood. To get cheaper tariffs, everybody should know what their energy bills should be and what rights they have. A consumer Bill of rights should ensure access to the lowest possible cost for loyal customers who decide not to switch and end up on the standard tariffs.
I would normally be pleased to take interventions but, if the hon. Gentleman does not mind, I will not give way because of the demands on time. There are a lot of speakers and Madam Deputy Speaker has asked us to cut down our contributions.
My next point is about injecting competition into the market that is currently dominated by the big six. We have a problem because, although this is very much about competition in the private sector, energy is actually a public good. The Government need to do much more to support not-for-profit providers. The hon. Member for Harrow West (Gareth Thomas) mentioned co-operatives, of which I am very supportive. Robin Hood Energy, launched by Nottingham City Council, is an example of a not-for-profit provider. Although we need market competition, we need to look much more at the co-operative model when we are talking about a public good. I do not believe in nationalisation, but I do think that we should have not-for-profit models in essential services, because energy is the lifeblood of our country and, without it, we would be in the dark ages. For too long, to use a well-known phrase, the market has been dominated by the few, not the many.
I very much support the Bill because it is the right thing to do symbolically. It sets the tone of what this Government are about—helping the most vulnerable. It is also the right thing to do practically. To me, this is not an argument about big government or small government; it is simply an argument about good government.
I hope that does not happen. Ofgem and the Competition and Markets Authority are putting the cap in place to make it easier for customers to switch. Northern Ireland, where there is a price cap, has as much switching as we do. The international examples suggest that we can have switching in a market that also has a price cap.
Sorry, I am not going to give way again, otherwise I am going to get into trouble with Madam Deputy Speaker, and I am more scared of her than I am of my hon. Friend.
Indeed.
There are two areas where the Government need to take action to ensure that, once the price cap is over in 2021 or 2023, we do not go back to business as usual. First, they need to give greater clarity about what will happen to things such as the energy company obligation and the warm home discount once the price cap goes away.
Secondly, I welcome the Secretary of State’s commitment today that the statutory instrument on data sharing to allow energy companies to know who their vulnerable customers are will be tabled before the Bill receives Royal Assent. We need to see that SI and those changes, because the energy companies do not know all the customers who are vulnerable and experiencing financial difficulties. Our Committee is convinced that those two issues will be key in ensuring that, both during and after implementation of the price cap, those who need it most get the protection they need.
The time for action is over-ripe. These rip-off practices cannot be allowed to continue. There is cross-party support for this legislation, and both the Labour and Conservative manifestos at the last election included a commitment to cap energy prices. Now the Government must make that cap a reality before next winter. I strongly urge colleagues across the House to support the Bill, to deliver some fairness to all our constituents.
(6 years, 8 months ago)
Commons ChamberThe issue that I should like to raise tonight has arisen in my constituency in recent weeks, but it has national implications. I am also sure that it will be familiar to many Members of this House: namely, the sudden collapse of a private sector business—in this case, a building services company. That collapse has left my constituents out of pocket and in some cases literally out of their home. Understandably, they are angry and frustrated by the response, or more accurately, the lack of it from the relevant state bodies.
DMB Solutions, a Brighton-based building and design company, went into voluntary liquidation over the new year. It had operated in my constituency since about 2009 and, to a slightly lesser extent, in the neighbouring constituencies of the hon. Member for Hove (Peter Kyle), who I am delighted to see in his place, and the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle). The fallout from the collapse of the company has gained national media attention, owing to both the number of people affected and the scale of the financial losses they suffered. More than 400 local people have joined a victim support group on Facebook set up more than a year before the company collapsed—a point to which I will return—while a significant number have lost in excess of £50,000. This was money saved up over years and paid to DMB for work that will now never be completed, or at least not by DMB Solutions.
It has been shocking and heart-breaking to meet my constituents and hear at first hand the devastating situations in which many have been left by the demise of the company. For example, Norma Smith, who is 84 years old, employed DMB Solutions last summer to build a wet room with a toilet in the downstairs of her house in anticipation of one day being unable to use the stairs. In common with many others who have complained to me about DMB Solutions, Norma paid in full before work commenced. She reports that the contract time of three to four weeks for completion stretched into months and months, during which she was confined to living in her bedroom.
Norma eventually cancelled part of the project in a bid to save costs, but that money was never returned to her. Moreover, a leaking pipe caused flooding in her home and damage to floorboards that she had to pay a carpenter to repair. The project was never fully completed by DMB Solutions, and Norma has since had to employ another building company to create a shower space instead of the wet room originally envisaged. She says:
“As the weeks went by with very little work being carried out, downstairs a building site, I become very exhausted. In the end, I had to ask my son-in-law to take on all communication with the company, and with Trading Standards. I do hope that the company will be fully investigated, as the damage, not only in financial terms but also the emotional toll, has been huge.”
The psychological impact of such cases—the stress and anxiety caused, as well as the financial problems—cannot be overestimated.
The hon. Lady is making a powerful point. To add to her catalogue of constituents, I can speak of those who have turned to me, such as Alison, who gave £30,000 to this company six days before it went bust. It knew it would not fulfil the order, yet it took £30,000 from somebody—in the full knowledge that it would not complete the work. Does the hon. Lady not think that in such cases the authorities should investigate fully to ensure that the full force of the law is on the side of people such as Alison, not of the directors, who were clearly ripping her off?
I thank the hon. Gentleman for his intervention, and I agree entirely. It is a point to which I will return shortly. As he says, the company must have known six days before it chose to go into liquidation that it was about to do that. I would have thought that to seek tens of thousands of pounds just days before was criminal—I would have thought it was fraud—but we are having great difficulty prosecuting the case.
I want to share one last story from a constituent who told me:
“My partner and I started a project with DMB Solutions in May last year. The project – to rearrange rooms in the loft extension, and create an extension housing a large open plan family room downstairs – was intended to take four weeks and cost about £95,000. We did some research on the company and were unable to find anything concerning. We had seen several boards outside houses and were impressed by the website and by the promises of the design consultant. However, in early January this year, we found ourselves in the position of having an upstairs with no heating, water or Building Control approval, and a downstairs with holes in the ceilings, unattached electrical cables hanging through ceilings, damage to rooms which were outside the scope of works, and a water system which does not provide enough hot water for a bath. We had paid all the money in accordance with the staged payment plan we had signed, so we are £60,000 out of pocket, and our lovely home has been ruined. These events have rocked me to the core and I still cannot quite believe this awful thing has happened to us. In my opinion, DMB Solutions have acted incompetently, immorally and illegally. What I find so distressing is that various bodies and organisations that exist partly to protect the public in these situations seem to have been ineffectual, enabling the company and Directors to continue to operate.”
Thank you, Mr Speaker, for such a lengthy and erudite introduction. I expected nothing less, and I was not disappointed.
The hon. Member for Brighton, Pavilion (Caroline Lucas) has brought a serious matter to the House, and I thank her for raising this important issue. I am also grateful for the interventions and contributions from the hon. Members for Hove (Peter Kyle) and for Strangford (Jim Shannon). We have heard terrible stories about their constituents. I have to say that I was not surprised, however. I had heard such stories before, being an occasional reader of the Brighton Argus, and I know that the hon. Lady is not just describing a one-off here. It is the job of the Insolvency Service, the Department for Business, Energy and Industrial Strategy and the entire trading standards system to do what they can to provide recompense for her constituents.
I am pleased to hear that the Minister reads the Brighton and Hove Argus. He has mentioned several of the agencies that people can turn to in these situations, but is it not the case that the landscape of regulation is very complicated? The constituents that we have been describing today simply do not think that any one agency has a grip on such situations.
I thank the hon. Gentleman for his intervention. I hope that I will be able to partly satisfy him with the comments that I am going to make. If not, I will be happy to meet him and the hon. Lady, representing the Greater Brighton constituencies, to take up any further points.
The insolvency regime is an important part of the framework of business, even though it has to deal with the unintended consequences of it. To put this into perspective, levels of insolvency are low, but when it does happen—particularly in consumer-facing companies such as this building company—it can have a significant impact on customers, employees and suppliers. It is an unfortunate fact of life that companies sometimes have to cease trading without paying their debts, and that when they do, creditors can often suffer, with little or no chance of receiving their money back. This is exacerbated in circumstances such as these when customers have paid for work in advance, because those people have often saved for some considerable time to have improvements made to their house, for example.
In many cases, insolvency proceedings such as liquidation will follow. These allow an expert in insolvency, who is authorised and bonded, to be appointed to oversee an orderly winding-up of the company’s affairs, to sell its assets and to make dividend payments to creditors from the funds available. It is an important principle of the insolvency regime that unsecured creditors rank equally when it comes to receiving such payments. Only certain creditors, such as employees, are paid in priority.
Hon. Members will appreciate that I cannot comment specifically on the liquidation of DMB at this early stage of the proceedings. The liquidators have an important task to carry out in winding up the company and making such reports to the creditors as are appropriate. I am aware that complaints have been made to trading standards—
(6 years, 11 months ago)
Commons ChamberI completely agree with my hon. Friend. I had the privilege of leading a trade delegation to India that included many companies from Aberdeen and the north-east of Scotland that are selling their wares and expertise right around the world. That is one of the big opportunities in the deal that is being negotiated.
The steel industry met the criteria for a sectoral deal, it wanted one and applied for one, but it did not get one. Will the Secretary of State please explain why?
The discussions with the steel sector are continuing and I fully expect to conclude an important and ambitious deal for this foundational industry.
(7 years, 2 months ago)
Commons ChamberWe still have in this country some of the lower energy prices in Europe, but the major energy companies’ increases for those on the standard variable tariffs are clearly unacceptable. The issue has been identified by Ofgem, which needs to take action to correct it.
Since the launch of the much heralded productivity plan 18 months ago, productivity has plummeted to pre-crash levels. Will the Secretary of State tell us which one part of that productivity plan he feels is responsible for the cataclysmic productivity figures we have today?
The hon. Gentleman is an intelligent fellow and knows that the route to building productivity in this country is to look to the long term to establish, in a serious way, a shared analysis and determination about what is to be done. On skills, for example, I hope he will share our view that by investing in technical education through the new T-levels and extending the hours for which people are educated, we are taking a step towards addressing what is a generational challenge for the UK economy.
(7 years, 8 months ago)
General CommitteesFirst, I congratulate the hon. Member for Birmingham, Erdington on all the work that he undertook to advance the concept of a national living wage, which he outlined at the beginning of his remarks. I agree with several points he made. There is more than a moral case for a living wage; it is indeed good for employers and the economy—especially local economies.
The hon. Gentleman kindly exempted me from the record of my party, which he alleged had always been against the introduction of the national minimum wage, but I gently remind him that I am not alone on the Government side of the House in being a keen supporter of a national minimum wage. We are comfortable that the Conservative party has changed in its roots. I can remember the 1990s and he is quite right that people just thought, “Well, if you have a national minimum wage, it’ll cost jobs”, and no more argument was brooked. People were wrong about that.
I turn now to the difference between what I think the hon. Gentleman was arguing for, which was a living wage more along the lines advocated by the Living Wage Foundation, and the national living wage that we have put into law. Of course, I want to see people on that sort of pay being paid more, but we have set the rate as it is, which is lower than the Living Wage Foundation supports, because we are very concerned that it does not cost jobs. [Laughter.] Hon. Members are laughing, but the living wage is set by the Government on the advice of the independent Low Pay Commission. The commission is tasked with assessing the rates of the national living wage and the national minimum wage against the performance of the economy overall, and gives its considered view about the impact of those wage rates on employment. That is why I think that setting the rates at the levels we do is justified.
My hon. Friend the Member for York Outer was quite right to make the point he did. As I have said, I have spoken to small businesses, particularly retailers, and some of them are really up against it in terms of costs, and if we were suddenly to override the advice of the Low Pay Commission and whack the minimum wage up to £10 an hour, I seriously think that a lot of people would lose their jobs.
I will make some progress, because I want to respond to some of the points that the hon. Member for Airdrie and Shotts made. He was concerned about the rates for the under-25s, apart from the apprenticeship rates, which have gone up significantly. Again, the Government take the advice of the Low Pay Commission.
The issue that the hon. Gentleman did not mention is the rate of unemployment among younger people, which is significantly greater than it is among the over-25s. That is really the reason that the Low Pay Commission advises that there should be a lower rate for younger people, because it recognises that younger people need to get experience in order to command the higher rates and indeed to command a job in the first place, with the obvious exception of the hon. Member for Paisley and Renfrewshire South.
I remind Members that the unemployment rate for people aged between 16 and 24 is 12.6%. That is hugely greater than the unemployment rate for the over-25s, which is 3.6%. That is why the Low Pay Commission recommends a difference in the rates.
My hon. Friend the Member for Walthamstow made the point about young people—actually, people of all ages—struggling to get on to the housing ladder and being able to buy property. Does the Minister accept that our economy is stacked in favour of people who have assets and that people who are talent-rich but asset-poor really struggle to get on? That is why it is so important that we have more ambition for the minimum wage, so that everybody has access to the assets that will get them all the benefits that modern 21st-century life has to offer.
The hon. Gentleman makes the point very well indeed. That is why we are trying as a Government to build a more inclusive society, in order to ensure that, as he says, people who are talent-rich but asset-poor get a fairer start in life. That is also why we are investing hugely in skills and infrastructure to try to bring better-paid jobs to all. It is not just about the minimum wage; it is also about the architecture of the economy surrounding people for whom there are few opportunities at the moment or opportunities just for low-paid work.
To correct the impression given by the hon. Member for Airdrie and Shotts in his remarks, real wages have grown every month for more than two years now. The average rate of growth across the economy of real wages was 2.6% over the last 12 months.
(7 years, 8 months ago)
Commons ChamberThe hon. Gentleman is absolutely right. In terms of bang for our buck, the amount of great work that the universities sector carries out and the number of spin-out companies that higher education provides are a magnet, in contrast with the “stickiness”, for foreign direct investment. We have to make this country as attractive as possible to such investment. Just as I referred to London and the south-east pulling up our productivity, I dread to think what our productivity and investment levels might be if we did not have that foreign direct investment.
Despite the R and D spend of both Government and business, we have never spent the OECD average—far from it. In the past 35 years or so, we have spent 2% of GDP on R and D only once and that was in 1986. The long-term trend is around 1.6% or 1.7%, which is not good enough if we want living standards to be maintained or productivity to rise. Productivity weaknesses clearly need addressing, and the previous Government introduced the productivity plan. We welcomed the Government’s attention on this pressing matter, but the plan lacked focus and did not demonstrate how success would be judged. Rather than being a clear road map or strategy for how the UK would close the productivity gap, it disappointed by being a mere collection of existing policies, with nothing new, distinctive or game-changing. The plan had 15 areas covering all aspects of Government and business activity, incorporating skills, R and D, housing and transport. However, it had no meaningful metrics to evaluate its relative success or failure and no milestones to track progress.
Although the plan was a Treasury initiative, the old Department for Business, Innovation and Skills clearly had a role to play, but clear lines of communication and accountability were non-existent. BIS and Treasury Ministers told our Committee that the plan was monitored by civil servants, which seemed somewhat relaxed given that productivity was meant to be the Government’s most pressing economic challenge. They seemed to forget that they were members of a ministerial Sub-Committee. Productivity now seems so 2015.
My hon. Friend is giving a superb speech about the impact of productivity and the role of the Business, Energy and Industrial Strategy Committee, which he chairs and on which I proudly serve. Will he say a couple more words about the importance of the machinery of government in delivering a productivity plan? He just mentioned it, but it is shocking that Ministers came before our Committee and were totally unaware that their responsibility for the productivity plan was being scrutinised by a Cabinet Sub-Committee. The machinery of government and Departments, such as the Treasury, will play a crucial role in scrutinising the strategy and delivering for organisations on the frontline.
One of the weaknesses of government—this is based not on the colour of Administrations but on the nature and culture of Whitehall—is that it is silo-based. The lack of co-ordination is clear. In the modern age, with pressing economic challenges, we need greater monitoring, scrutiny, supervision and co-ordination across the Government.
It would be interesting to hear about the current status of the productivity plan because, as I said, it seems so 2015. It was intensely fashionable, but only for around 12 months. The new buzz phrase is “industrial strategy.” The strategy contains 12 pillars, as opposed to the 15 areas of the productivity plan, so we are seeing some efficiency. I welcome the Government’s willingness to embrace the phrase as a potentially positive thing, but it exemplifies one of the problems that we face. Successive Governments have tended to announce something, to provide a new initiative or to undertake a review. Policy flits like a butterfly from one thing to the next, with little if any meaningful impact on the ground on firms’ productivity or our constituents’ living standards, which is to the detriment of long-term economic competitiveness.
(7 years, 11 months ago)
Commons ChamberAs I said to a number of hon. Members, the energy prices that are paid by businesses generally, and by energy-intensive industries in particular, are a crucial part of competitiveness, and we want to work with these industries to reduce the costs.
Nissan has benefited from a pre-Brexit deal. What reassurance can the Secretary of State offer Brighton-based businesses such as American Express and EDF that, after Brexit, they will still be able to have an open and free relationship with the EU?
American Express is a very important employer in Brighton, and it is very welcome here. It has located itself in this country because Britain is a fantastic place from which to do business. That is the message that I receive wherever I travel to in the world. There is great appetite to invest in Britain, and the hon. Gentleman will know of our recent success stories. I hope that American Express will continue to invest more and employ more in his constituency.
(8 years ago)
Commons ChamberI want our economy to be as competitive in the future as it is now, without the need for state aid to keep it so. It is on the basis of our strengths in innovation, the talent of our workforce and the industries in which we are competitive that I want us to compete with the best in the world.
During the Select Committee visit to the Shirebrook facility of Sports Direct yesterday, the positive seeds of change that we witnessed on the frontline regarding workers’ rights in the facility were contradicted by control-freakery and the surveillance of the MPs on that trip, which completely ruined all the positive things that have been happening there. We saw the surveillance of a private meeting of MPs. Does the Secretary of State agree that there is no place for this kind of behaviour in the senior parts of big business in this country, which should be outward looking and engaging with the community, not surveilling it?
I agree with the hon. Gentleman. I find what has been reported this morning to be extraordinary, especially for a company that has made declarations that it wants to improve its reputation and image. I merely point out that I do not think that this practice is representative. The practices in that company that the Select Committee has uncovered should not be taken as representative of the very high standards of behaviour that almost every company in Britain adheres to.