Euratom Membership

Richard Graham Excerpts

Wednesday 12th July 2017 Westminster Hall

[Robert Neill]

My hon. Friend is absolutely right. That is my next point.

Unless the Government seek clarity—there is a dispute among lawyers about the matter—the likelihood is that an interested party may itself seek to litigate and it would be much better if the Government seized the initiative and said that politically they wanted to stay in and would do whatever is necessary legally to achieve that objective. That would be altogether better. If they cannot achieve that, certainly an association agreement would be the next best thing and I suggest it should be the Swiss model because the small amount of jurisdiction of the European Court of Justice is a minor price to pay for the benefits. I cannot believe that anyone would object to the very modest movement of skilled nuclear scientists who only benefit this country. Otherwise, we would be cutting off our economic and scientific nose to spite our political face and we should not do such a thing. That would be a good compromise, but we should stay in until such time as that is in place because we cannot have any risks in the interim.

[Richard Graham (Gloucester) (Con)]

If the Minister is unable today to give the legal certainty of being able to stay in Euratom, which is what my hon. Friend is looking for, does he agree that we need a commitment today from the Minister that the Government will pursue a solution that replicates the benefits of Euratom membership as closely as possible?

[Robert Neill]

We must certainly do that and we must be flexible about the means by which we achieve it. There may be ways forward and my hon. Friend the Member for Stone (Sir William Cash) made a constructive point about a tribunal being one way forward. I take that in the spirit intended. Equally, the jurisprudence of the ECJ on Euratom matters is so discrete and so technical that it should give no offence to anyone, unless they are a complete purist about maintaining that jurisdiction.

Oral Answers to Questions

Richard Graham Excerpts

Tuesday 27th June 2017 Commons Chamber

[Richard Graham (Gloucester) (Con)]

Earlier this year, 116 MPs signed a letter I wrote to the Secretary of State urging him to implement the recommendations of the Hendry review for the world’s first ever tidal lagoon. When will a decision be taken?

[Richard Harrington]

The Hendry review also said that there are significant questions as to whether tidal lagoons can be cost-effective, and very complex issues are involved. We are fully aware that a Government decision is needed in order for anything to proceed, but it is absolutely right that we take the necessary time to consider this carefully.

Nissan: Sunderland

Richard Graham Excerpts

Monday 31st October 2016 Commons Chamber

[Greg Clark]

I will indeed. In fact, I am meeting Hitachi tomorrow, and have the privilege of presenting an award at Asia House in commemoration of the very long and positive association that we have had with it. On one of my previous visits to Japan in this role, I had the great pleasure of meeting many of the Hitachi directors and seeing their innovation and their continued commitment to this country—very important.

[Richard Graham (Gloucester) (Con)]

The desperate search for a commercial bung in this announcement by some Members of the Opposition is, frankly, insulting to Britain, Japan, Nissan and Sunderland. Does my right hon. Friend agree that, rather than talking the country down, we should be celebrating the recent inward investment successes, not least from the far east, which demonstrate that the Government are living up to their commitment to making a success of Brexit?

[Greg Clark]

As I said earlier, it is unambiguously good news, and I hope that the whole House will welcome it.

BHS

Richard Graham Excerpts

Thursday 20th October 2016 Commons Chamber

[Richard Graham (Gloucester) (Con)]

This debate has been called in several of our names, and I take particular pleasure in following the speeches of many earlier contributors, but especially those of the Chairman of our Select Committee, the right hon. Member for Birkenhead (Frank Field), and my colleagues on the joint Committees, the hon. Member for Hartlepool (Mr Wright) and my hon. Friends the Members for Bedford (Richard Fuller) and for Horsham (Jeremy Quin).

I will start by saying what the debate is not about. It is not an attempt to suggest that the deficit of any pension scheme in this land is entirely the fault of one individual, or, indeed, the responsibility of the owner of any sponsoring scheme. It is also worth noting that, of the some 6,000 defined-benefit pension schemes in the United Kingdom, about 1,000 are in difficulties of various kinds and very few indeed have surpluses. The situation of the BHS pension scheme is not particularly unique, but the circumstances around it are.

That brings me to my second point. The deficits of pension funds go up and down. They do so particularly quickly at a time when interest rates are moving fast. The value of assets is driven by bond yields; when those are depressed, and that is exacerbated by quantitative easing and monetary policy, pension deficits will clearly rise. All sorts of people are responsible for that, including the scheme’s investment policy makers and investment managers; the costs of all those involved make a significant difference to the scheme deficit as well. I totally accept the argument in the 80-page report by Sir Philip Green’s lawyers that longevity and the macro-economic environment make it difficult for schemes to improve their funding situation.

[Ian Blackford]

I agree with every comment that the hon. Gentleman has made, but does he not accept that part of the difficulty we are in with defined-benefit schemes has been the Government’s policy of giving responsibility to the Bank of England in the quantitative easing programme, which is now at £435 billion? If we look at what has happened recently, the 50 basis point reduction in yields means about £120 billion on the defined-benefit pension deficit. The Government have created that by refusing to balance fiscal and monetary policy.

[Richard Graham]

I do not remotely accept the argument in that intervention. This is not a debate about the Bank of England’s monetary policy. The hon. Gentleman would be well advised to read the transcript of the Work and Pensions Committee’s hearing with the Bank of England Deputy Governor three days ago, which I chaired in the absence of the right hon. Member for Birkenhead—[Interruption.] The hon. Member for Ross, Skye and Lochaber (Ian Blackford) is not paying attention, as usual. He would be well advised to read that evidence. Getting rid of quantitative easing will not solve the pension scheme problems, and, in particular, will not solve the problems of the BHS pension scheme. With his approval, I will return to the subject we are discussing.

Before the hon. Gentleman intervened I was remarking that the circumstances of the BHS pension deficit were extraordinary, and that is what I want now to come on to. The BHS scheme went from surplus to large deficit in about 10 years, without any clear plan or any really significant action by the sponsor, without decent relationships between the trustees and the sponsor, with conflicts of interest between some of the trustees appointed by the sponsor that they largely did not recognise during our inquiry, and with contribution holidays in the years when Taveta Investments, the owner of BHS, was taking out large dividends. All that cannot, by any stretch of the imagination, be described as best practice. The plan put forward to resolve the deficit—a staggered series of injections over 23 years—without any evidence of a long-term commitment by the owners to the company, is also not best practice. Our report highlighted that there was an issue with the regulator approving very long-term solutions.

Then we come to the moment of the sale of BHS, when information was withheld both from trustees and from the Pensions Regulator. There was a certain amount of dispute between the seller and the buyer about pressure on the buyer not to communicate with the Pensions Regulator at all, which was reiterated in further evidence submitted to the Select Committee only yesterday by RAL, the buyer. Most significantly, there was no attempt whatever at pre-clearance of the sale with the Pensions Regulator. Most shocking of all to many of us is the concept from both the buyer and the seller that in effect BHS was being sold debt-free, yet it had such an enormous pension deficit. That is at the very least disingenuous. It was naive of the buyer and cynical of the seller.

That brings us to Sir Philip Green himself. He said on 15 June:

“I want to respond to Mr Graham…We want to find a solution for the 20,000 pensioners. We still believe that money into the PPF does not resolve it. Without getting into it…the schemes are quite complex…We will sort it and we will find a solution. I want to give an assurance to the 20,000 pensioners—I am there to sort this in the correct way.”

With that, none of us could disagree. The question, of course—and this is why today’s motion and debate are important—is what has happened in the four months since. There has been some dialogue with the Pensions Regulator. That is absolutely clear. But the public want to know when this is going to be resolved. They are worried that after our report nothing is really going to happen and that an important and powerful man will not be held to account. Today is an opportunity for this House to stress our commitment to holding Sir Philip Green to account.

[Andrew Bingham (High Peak) (Con)]

I had a pension scheme collapse in my constituency about 12 years ago, the Federal-Mogul scheme. Schemes go into the PPF and there are assessments, and all the while that that is going on there is uncertainty. Does my hon. Friend not agree that Philip Green should deal with the situation as he has said he would—well, first of all he should have his knighthood taken away—because all the uncertainty impacts on those poor BHS pensioners?

[Richard Graham]

I am grateful to my hon. Friend, and that is why—I intend to finish my remarks on this note—today’s debate matters. It is not about grandstanding. It is not about Parliament trying to demonstrate moral superiority over the behaviour of individuals. What it is about, I believe, is to say three important things.

First, to Philip Green we are saying, “You made a commitment. We accepted it in good faith and we expect you to fulfil it.” I believe that waiting too long is damaging to his reputation, whereas a quick resolution would be extremely helpful to him. Secondly, the debate is a chance to say to the pensioners and the future pensioners of BHS, “We held this inquiry and we will not let you down.” Finally, it is a chance to say to the employees of other large businesses and the people of Britain in general, “We understand your resentment of businesspeople who run their businesses in cavalier fashion without due regard to your interests.” We have held a complicated inquiry that has held to account the powerful owners of BHS and their advisers. I believe the consequences of our findings will be heard by businesses and echo as cautionary tales for years to come.

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

It is a privilege to speak in the debate. I thank the Committees for the report and the right hon. Member for Birkenhead (Frank Field) for securing this important debate.

The issue of quantitative easing has come up, and I have to say that the powers of analysis of the hon. Member for Gloucester (Richard Graham) have somewhat deserted him today. He cannot get away from the fact that having had a quantitative easing programme of £435 billion, there is no underlying investment in the real economy. The only conclusion we can logically draw is that business does not have confidence in the economy, and that is why the interrelationship between fiscal and monetary policy is important. We need to get back to a balanced scenario in which interest rates reflect a normal economy. That is what the Government have to take responsibility for and that is what the hon. Gentleman seems to ignore.

The UK Government need to see the work of the Select Committees and the outcome of the debate as a lesson, and to acknowledge that we need to take action now that protects us all from outcomes that we have seen with BHS. The BHS pension scheme, representing 20,000 past and present workers, is in deficit by perhaps more than £500 million, meaning that scheme members face reduced entitlements. That is what should be at the heart of this matter. The reduced pensions of the workers and all those who lost their job should be what concerns us today. Why should pensioners be put at risk and fail to be protected from what is now fully acknowledged as corporate greed? As legislators, we all have to look at ourselves and ask what we could have done differently to have ensured that this situation did not arise in the first place.

This issue highlights the fundamental need to address the regulation of the pensions industry. Approximately 11 million people rely on a final salary pension scheme run by a private sector company. Schemes have come under increasing pressure as funding has become stretched, with about 5,000 private sector defined-benefit schemes now in deficit to the tune of more than £900 billion, according to Hymans Robertson. Despite the view that the hon. Member for Gloucester takes, we cannot escape the impact of quantitative easing and the lack of a balanced response from the Government. It defies logic not to have that.

As I highlighted on Second Reading of the Savings (Government Contributions) Bill, the previous Secretary of State for Work and Pensions, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), said in this House:

“there is a very real systemic issue with DB pension schemes that we need to look at, and my Department will be discussing it further in the months ahead.”—[Official Report, 11 July 2016; Vol. 613, c. 10.]

Since that statement, despite questions from the SNP, there has been silence from the UK Government. Where is the response to the fundamental challenges facing pensions today and what some might argue is a crisis for defined-benefit schemes? When will the Government face up to the challenges and threats to many who are beneficiaries of those schemes? When will the Government respond in detail to what the former Work and Pensions Secretary said was “systemic risk”? That was no throwaway line; a senior Cabinet Minister was admitting what we know to be the case. Does the Minister agree with that assessment given to this House and will she address the point this afternoon? What are the Government doing to deal with their own analysis of systemic risk? Sadly, I suspect the answer is still nothing.

Nothing is being done. The Government have been caught like a rabbit in the headlights—caught doing nothing in the face of systemic risk that threatens the interests of pensioners up and down the country. In the light of the Government sitting on their hands, I welcome the recently announced Select Committee inquiry to examine the adequacy of the Pension Regulator’s powers. That must be welcomed, but why should we be reliant on the Work and Pensions Committee? Why are the Government not doing their job and addressing this issue?

Scottish National party MPs will work to strengthen the powers of the regulator to ensure that the Philip Greens of the world are dealt with effectively when they seek to avoid their pension responsibilities. It is, however, a duty of government to protect citizens from undue pensions risk and the systemic risk to which the Secretary of State referred. Ultimately, defined-benefit pension schemes need to be placed on a sustainable footing and employees must be protected. I look forward to seeing whether the Minister responds to this when she makes her speech, but perhaps I should not hold my breath. More likely, she will have a Government briefing of handwringing, and then she will wait for the debate to end and scurry for cover. After all, we do not expect real answers from this Government.

Brexit means that pension disasters such as BHS and Tata Steel will be much more likely challenges for UK companies. Only when companies are able to afford to keep their promises to employees can pension funds be regarded as safe. Even large and successful companies can fail. The Pension Protection Fund offers help in such cases, but Cass Business School forecasts that up to 1,000 pension schemes could end up in the PPF over the next few years. There are more BHS disasters to come if that is correct. There will be a combined deficit of £45 billion, which would be overwhelming.

Let us try to take this out of politics. The SNP has long called for the establishment of an independent pensions commission to ensure that employees’ savings are protected and a more progressive approach to fairer savings is considered as we move to a period in which defined-benefit schemes are becoming a thing of the past. Why will the Government not do that? Why do we not establish a pensions commission that can consider all these issues in a holistic manner?

Let us come back to BHS—[Hon. Members: “Yes.”] Well, of course Government Members do not want to talk about the Government’s responsibilities, because they have run away from them. They can scoff and laugh, but 20,000 pensioners at BHS are going to suffer and thousands of people have lost their job while the Government looked on from the sidelines. That is the reality of this Tory Government.

Let us come back to BHS, perhaps this time without the laughter from the Government Members. I hope the BHS workers are watching the response of Government Back Benchers. How disgraceful; how contemptuous of people in this country!

[Richard Graham]

Will the hon. Gentleman give way?

[Jeremy Quin]

Will the hon. Gentleman give way?

--- Later in debate ---

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

I warmly congratulate the right hon. Member for Birkenhead (Frank Field) on securing this afternoon’s very important debate. I thank him, the hon. Member for Hartlepool (Mr Wright) and both Select Committees for their invaluable work in exposing the governance and decision-making issues that have contributed to terrible consequences for so many people formerly of BHS.

Reading the report made me painfully aware of the responsibilities of directors. Under section 172 of the Companies Act 2006, directors must have regard to the long-term consequences for their company of their decision making, and they must consider the interests of employees and customers, and the impact on the community. BHS should have been making plans to mark its 90th anniversary in 2018, instead of which all its stores have now closed, and its employees—some, like Mrs Patel, are mentioned in the report—who had spent most of their working lives building the value of BHS have seen their careers end in redundancy and uncertainty, rather than the secure retirement to which they had been looking forward and had a right to expect.

[Richard Graham]

I simply want to say that it is wonderful to see the Minister in the Chamber today. She is absolutely not scurrying away from anything—I have never seen her scurry away from anything in her life. Does she agree that on a day when we are debating a Back-Bench motion arising from a report by entirely cross-party Committees, the members of which worked incredibly well together, it is really disappointing to hear the SNP spokesman acting like an agitated Humpty-Dumpty talking about monetary policy?

[Margot James]

I thank my hon. Friend for his intervention and for his work. Disappointed I may be, but not surprised. My thoughts—and, I know, those of Members of all parties—are with the ex-BHS workers, pensioners and their families.

We have heard about two owners of BHS: Philip Green, who bought the company for £200 million in 2000—it was profitable in the early years—and Dominic Chappell, who even Sir Philip in his ITV interview last week admitted had no retail experience, and was categorically the wrong buyer and the result of a horrid decision. In his powerful speech, my hon. Friend the Member for Bedford (Richard Fuller) laid bare the consequences of the decision to sell to Dominic Chappell.

A key theme in the report is the sharp contrast between the impact of BHS’s demise on workers and pensioners, and the payments received by senior executives in BHS and RAL and their advisers. The report also highlighted serious weaknesses, as has this debate, in the corporate governance of the companies concerned. The Government are very concerned about these issues.

The Prime Minister has already made it clear that we will review corporate governance, including further reforms on executive pay, as part of work to build an economy that works fairly for everybody, not just the privileged few, about whom we have heard so much this afternoon. Strong and transparent corporate governance is vital to provide trust in business and to foster good decision making by companies. The Government intend to consult later this autumn on options to strengthen the existing framework.

The hon. Member for Hartlepool made some salient points about the gap in governance between a public and a large private company. His Select Committee’s inquiry into corporate governance will provide an opportunity—