Oral Answers to Questions

Debate between Rebecca Long Bailey and Andrea Leadsom

Tuesday 22nd October 2019 Commons Chamber

[Andrea Leadsom]

My hon. Friend is right that peatlands have a vital role to play in delivering net zero. In addition to £10 million to help to restore more than 6,000 hectares of peatland over a three-year period, we are working with Natural England on a number of pilot projects, including one in North Yorkshire, to test our approach for moving all peatlands in England on to a path of recovery and restoration.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

I welcome the Secretary of State to her place for our first BEIS orals together. I know that we will have many a productive exchange.

Nine thousand UK jobs lost and 150,000 holidaymakers repatriated at an estimated cost to the taxpayer £100 million, yet the former chairman of Thomas Cook confirmed that Government financial support would have allowed him to save the company. A report from Unite the Union and Syndex also showed that £188 million in bridging loans would have prevented Thomas Cook’s collapse. With reports that banks and investors were still willing, even on the day of the collapse, to support a deal provided that the Government stepped in, will the Business Secretary explain why she failed to meet with the company in the final days and clarify her rationale for not offering support?

[Andrea Leadsom]

First, I would like to reciprocate by saying that I am delighted to be working with the hon. Lady. I look forward to many exchanges across the Dispatch Box.

The hon. Lady will appreciate that my Department and I were very closely involved in the run-up to Thomas Cook’s insolvency. It is a Department for Transport lead and, as all hon. Members will appreciate, too many cooks can spoil the broth, so I liaised closely with the Secretary of State for Transport who took the lead on this, but BEIS officials were very closely involved.

At the weekend I wrote to the insolvency practitioner about clawback and malus, to ATOL about looking after the insurance for those who booked holidays, and to the banking associations about ensuring that proper restraint is shown to those who sadly lost their jobs in that run-up.

Why did we not bail out Thomas Cook? Simply because it was clear that the £200 million it was asking for was just a drop in the ocean. There was no way the company could realistically be restored, despite the Government seriously considering the prospects for doing so and for making it an ongoing concern.

[Rebecca Long Bailey]

It is interesting that the German Government saw fit to intervene. Not only did our Government refuse, they also failed to take the basic action needed to ensure good corporate behaviour. Today, reports demonstrate a clear conflict of interest for auditing firms that, while signing off on Thomas Cook’s finances, separately advised directors on securing bumper bonuses.

BHS, Carillion and the banks all had similar auditing conflicts. Sir John Kingman officially advised the Government nearly a year ago to create a more robust statutory regulator, but to no avail. Will the Secretary of State confirm if and when she will bring forward reforms to the Financial Reporting Council and the wider auditing sector, as proposed by the Kingman review, Professor Prem Sikka and the Competition and Markets Authority?

[Andrea Leadsom]

First, may I gently say to the hon. Lady that the situation in Germany was extremely different? It was a separate business in Germany. If there had been an opportunity to save Thomas Cook, we would have done so. We looked very carefully at the prospects—[Interruption.] The hon. Lady is just demonstrating a lack of understanding of how UK business works, and I am very sorry to hear that. She really needs to look at the facts here, and not just at trying to make a point. This was a very serious issue, and it was something the Government took very seriously.

We have done everything possible to protect those who sadly lost their jobs. I am delighted, but the hon. Lady did not even mention, that Hays Travel has taken over many Thomas Cook shops, which is fantastic news for many of those employees. She has also not paid any regard to the fact that the Government were able to establish a repatriation on the biggest scale ever in peacetime to bring more than 140,000 people back to the United Kingdom.