Industrial Strategy Consultation

Debate between Greg Clark and Richard Fuller

Monday 23rd January 2017 Commons Chamber

[Greg Clark]

The decision to back Sunderland and to build the two new models here was a significant moment for the hon. Lady’s constituents and for the country. It is true that all investors, whether domestic or international, constantly look to make sure that they are competitive, and what every page of the Green Paper does is show our determination to make sure that this economy is competitive now and into the future and to take the actions that will make it so.

[Richard Fuller (Bedford) (Con)]

I welcome this wide-ranging discussion of Government policies at this time, even if the broad buffet of good things outlined will unleash a torrent of insatiable demands, not least from the Davos business leaders jetting back with their Government advisers to barge their way to the table. Will my right hon. Friend therefore assure me that his agenda will be set by entrepreneurs? Will he be honest about the fact that, for every sector that is favoured, other sectors of the economy will be shunned? Will he assure me that he understands that there are no magic levers in his Department saying “raise productivity” or “improve skills”? Those things eluded his predecessors, and they will likely elude him.

Oral Answers to Questions

Debate between Greg Clark and Richard Fuller

Tuesday 13th December 2016 Commons Chamber

[Greg Clark]

I am grateful to my hon. Friend for his industry. He has published an excellent report for the Centre for Policy Studies, which makes for very good reading. He knows that I am considering it with my colleagues, and I commend him for writing it and putting it forward.

[Richard Fuller (Bedford) (Con)]

As my right hon. Friend develops his industrial strategy, may I give him some friendly advice? Drop the word “industrial” and drop the word “strategy”, and replace them with the words, “competition, innovation and skills policy”.

[Greg Clark]

I am grateful to my hon. Friend for his question. He will see that one of the differences between our approach to industrial strategy and policy—it is important to note that industry, for this purpose, means the services sector as well as manufacturing—and previous approaches is that our approach will not be about simply addressing the needs of incumbents; we want to make Britain the best, the most competitive and the most contestable place for business to locate. I would be grateful if my hon. Friend contributed to it. I think that he will find that it is music to his ears.

Corporate Governance

Debate between Greg Clark and Richard Fuller

1st reading: House of Commons
Tuesday 29th November 2016 Commons Chamber

[Greg Clark]

I can confirm that. We had it in mind that small businesses will be the beneficiary of these reforms, because, as suppliers to big companies, they are a group whose important voice should be reflected. That point was made in our conversations with small business organisations, which is why small suppliers are specifically referenced in the proposals on which we are consulting.

[Richard Fuller (Bedford) (Con)]

A common theme at British Home Stores and Sports Direct was that someone who was directly or indirectly a dominant shareholder also acted as chief executive officer. In the corporate world, Mike Ashley and Philip Green are outliers-become-outcasts, but the risk remains in those situations. Will my right hon. Friend, in his review, pay careful attention to that combination of dominant shareholding and chief executive powers?

[Greg Clark]

I will indeed. The Green Paper considers such matters. The responsibility that companies have through the privilege of limited liability status extends to employees, customers, pensioners and others, and that is part of the understanding under which good businesses operate to ensure that they are good for all those groups.

Oral Answers to Questions

Debate between Greg Clark and Richard Fuller

Tuesday 11th February 2014 Commons Chamber

[Richard Fuller (Bedford) (Con)]

1. What steps the Government are taking with local enterprise partnerships to promote entrepreneurship in towns and communities across the UK.

[The Minister of State, Cabinet Office (Greg Clark)]

Local enterprise partnerships, independently and through city deals, promote entrepreneurship in a variety of ways, including by providing help and advice to small businesses, premises for start-ups and access to venture capital funds. Next month, in my hon. Friend’s area, a small business support service will begin, bringing together the local enterprise partnership, the chambers of commerce, the Federation of Small Businesses, the Institute of Directors and the Engineering Employers Federation, to assist new and growing businesses in his area.

[Richard Fuller]

Successful entrepreneurs, particularly in local communities, are best placed to promote growth, jobs and prosperity. May I meet the Minister to discuss how we can work together to develop a national network of local enterprise funds to tap into communities’ sense of entrepreneurship?

[Greg Clark]

I would be delighted to do that. I pay tribute to my hon. Friend’s efforts in Bedford, where I think he has brought investors together to fund start-ups and rapidly growing businesses. That is characteristic of many of the city deals that we have struck around the country. For example, in Nottingham, £40 million has been made available, jointly by the Government, Nottinghamshire county council and Nottingham city council, as well as local investors, to help invest in Nottingham businesses. I commend that to colleagues across the House.

Financial Services (Banking Reform) Bill

Debate between Greg Clark and Richard Fuller

Monday 8th July 2013 Commons Chamber

[Greg Clark]

No. The right hon. Gentleman has not got it quite right. We are absolutely enthusiastic about creating regional banks, and the exchange that I had with my hon. Friend the Member for Hexham, and the changes made by the regulator to the approvals process, underline that. The right hon. Member for Wolverhampton South East (Mr McFadden) asks a specific question about whether RBS, in which we, of course, have a very substantial stake, should be broken up in that way. It is important that we have regard to value for the taxpayer. I suspect that we will talk about these things tomorrow, but I confirm that it is the Government’s view that we should not damage the potential value to the taxpayer in that way.

As members of the Bill Committee will recall, I made a commitment to introduce on Report amendments to implement electrification, and here they are. The amendments give powers to the regulator, with the consent of the Treasury, to require a group to separate completely its retail and wholesale banking operations. The regulator would be able to require the group either to sell its interests in ring-fenced or non-ring-fenced entities, or to transfer specified businesses to outside ownership. The regulator will be able to require separation if it is satisfied either that the group’s ring-fenced bank is not sufficiently independent of the rest of the group or that the conduct of any member of the group is such that it undermines the regulator’s ability to achieve its new statutory objective to ensure the continuity of core services.

The amendments set out a process for the exercise of that power. The first step is that the regulator must notify all affected members of a group that it is minded to exercise its powers and how it proposes to do so. The affected bank has the right to make representations following the receipt of each notice. Following that stage, the regulator is required to allow members of the group at least a year to take action to rectify the position. If, after that period, the regulator wishes to proceed it must issue a warning notice before a requirement to separate is imposed. The regulator would then allow five years to complete the separation required in line with the disposals required under competition law, particularly state aid interventions.

As the parliamentary commission recommended, the Treasury’s approval is required before that action can be taken. We agree with the commission that providing for a deterrent against any bank that seeks to game or evade the ring fence is a sensible reinforcement in keeping with the recommendations of the Independent Commission on Banking. Government amendments 11,12, 13 and 14 make technical adjustments to ensure that all the necessary components of structural reform comply with the ring fence and are brought within the scope of the ring-fencing transfer scheme.

[Richard Fuller (Bedford) (Con)]

I am grateful to my right hon. Friend for his clear explanation of how the ring fence will work. He is discussing time frames that make sense in benign economic circumstances, but some of the problems with the interaction of retail and investment banking came about in circumstances of great financial trauma. Is he confident that the measures he has proposed will work in those circumstances as well?

[Greg Clark]

My hon. Friend makes a good point. The use of state aid is often a response in the context of difficult circumstances. That was certainly the case in the financial crisis, and it happens in other industries as well. Five years is the standard period for these arrangements to be executed or completed, and that is the reason, anticipating an intervention from my hon. Friend, that period was chosen. I dare say, however, that that there can be reflection on that: my hon. Friend the Member for Chichester may have a different view that he may wish to share with the House later.

Government amendments 15 and 16 reflect concerns expressed both by the Commission and in Committee that the use of ring-fencing transfer schemes to restructure groups could provide unscrupulous banks with an opportunity to shirk their responsibilities, such as liability with past misconduct. The requirement for PRA approval is a substantial safeguard against that, but Government amendment 16 requires that before the PRA can consent to a ring-fencing transfer scheme it must commission an independent report to assess whether anyone other than the bank itself would be adversely affected by the transfer. Government amendment 15 requires the PRA to “have regard” to that report in deciding whether to approve a ring-fencing transfer.

The hon. Member for Nottingham East will of course have more to say about amendments tabled by the Opposition, but his first amendment was debated extensively in Committee. It requires a review of ring-fencing every two years. I am certainly not set against an independent review. Indeed, the Bill builds in future reviews, including the PRA being able to report annually on the operation of the ring fence, and being able to report every five years on whether the detailed rules it has made are still delivering the objectives of the ring fence. Requiring another review specifically to look at the case for full separation risks in many ways achieving the opposite of the Bill’s intention, which is to secure consensus, as far as that can be established, and to provide for a stable regulatory structure.

It would be paradoxical for such a review to be confined to looking at ring-fencing or full separation, but not any other remedy for deficiencies that the review might uncover. Amendment 18 is identical to an amendment that was debated in Committee. The Government’s position is clear: in the Bill, we are following the advice of the commission chaired by Sir John Vickers, which considered the case for full separation—that relates to the point made by the hon. Member for Brighton, Pavilion (Caroline Lucas)—and rejected it. It is a different policy. I know that it has some distinguished advocates, but it is a different policy. Of course, any future Government could adopt it, but they should do so properly, through thorough analysis and following parliamentary and public scrutiny.

It is worth reminding ourselves briefly of the history of the proposals before us. They were not invented during the past few weeks or months. They go right back to 2010, when the Government established the Independent Commission on Banking under the chairmanship of Sir John Vickers. The commission produced three reports, instigated two public consultations, considered 1,500 pages of written submissions and hosted more than 300 separate meetings. The Government produced a response and a White Paper, on which they again consulted fully before coming to Parliament. At each stage there was full cost-benefit analysis. Now in Parliament each detail of the policy is being debated—and has been debated in Committee—and in many cases improved.

Oral Answers to Questions

Debate between Greg Clark and Richard Fuller

Monday 28th February 2011 Commons Chamber

[Greg Clark]

They can indeed, and I am grateful to my hon. Friend. Reading council, for example, has taken the opportunity to increase funding to the voluntary sector, knowing that actually it helps it to change its services and make some of the savings it is required to make.

[Richard Fuller (Bedford) (Con)]

Does my right hon. Friend recognise the need to bring forward legislation to strengthen the ability of charities to come together to get the expertise to procure and gain contracts from local authorities that all too often set the rules in ways that do not enable charities to provide the services in their local communities that they really want to provide?

[Greg Clark]

My hon. Friend is exactly right, and that is why he will know that in the Localism Bill we are establishing rights for every voluntary organisation in the country not to be rebuffed by local authorities but to make a challenge to provide services, if they can demonstrate that they can do it better. That is the right approach, but it did not happen during the 13 years of Labour party rule.