Companies House Corporate Targets 2021-22
Paul Scully Excerpts(2 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
My noble Friend the Under-Secretary of State for Business, Energy and Industrial Strategy, Lord Callanan, has today made the following statement:
I have set Companies House the following corporate targets for the year 2021-22:
Complete and up to date data
Ninety seven per cent. of companies on the register will have an up-to-date confirmation statement.
Digital service availability
Digital services will be available for a minimum of 99.9% of the time.
New services
Develop a new online journey for submission of confirmation statements.
Develop a digital filing capability for insolvency transactions.
Customer satisfaction
Be in the top quartile of public service organisations for customer satisfaction.
Diversity
Increase the number of staff recruited to Companies House from under-represented groups by 10%.
Delivering value
Manage expenditure within budgetary limits.
Spending with small and medium businesses
Fifteen per cent. of spend will be spent directly with small and medium businesses.
[HCWS191]
Hospitality Strategy: Reopening, Recovery, Resilience
Paul Scully Excerpts(2 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
On Friday, I published a hospitality strategy to support this vital sector.
The hospitality sector contributes significantly to the economy and plays a leading role in supporting local communities, high streets and city centres across the country. However, it has been one of the sectors hardest hit by the pandemic.
The impact of the covid-19 pandemic on a sector that exists to bring people together was always going to be significant. That is why the Government’s £352 billion package of support included specific and targeted help for hospitality businesses. Despite this, over the course of the pandemic, hospitality businesses have largely been operating at a loss.
To support the sector’s bounce back, we have developed a forward-looking strategy that sets out the Government’s long-term vision to help businesses on their road to recovery and beyond. This will sit alongside and support other Government strategies and plans, including the build back better high streets strategy and tourism recovery plan.
We have worked closely with sector partners and businesses to develop an ambitious vision for the sector which reflects the aims of returning the sector to its pre-pandemic health, supporting wider economic recovery and creating thousands of resilient and dynamic businesses for years to come.
The strategy recognises the vital role that hospitality businesses will play in the UK’s economic recovery, to society and the levelling-up agenda.
[HCWS190]
Covid-19 Business Regulatory Easements
Paul Scully Excerpts(2 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
The challenges faced by the UK, and other countries across the world, since the pandemic began have been substantial and many businesses have experienced unprecedented disruption. In the face of the threat of the virus the Government acted rapidly to provide support to protect businesses, individuals and public services across the UK, and have adapted their economic response as the pandemic has evolved. Our plan for jobs has supported jobs and businesses with over £400 billion of economic support, from generous employment support schemes to tax cuts, deferrals, loan schemes and cash grants.
Alongside financial support, the Government took the extraordinary step of temporarily relaxing a wide range of rules and regulations to make it easier for businesses to continue working through the disruption caused by covid-19. These easements cover a variety of areas, including capacity market easements, competition, and the suspension of liability for wrongful trading, among others.
As we have successfully progressed through the stages of the road map we have reduced many of the restrictions that have been in place over the last 15 months. And the progress we have made on the road map means that many of the rules that were relaxed can be reinstated.
While the phenomenal vaccine roll-out has offered every adult some protection against the virus, and the crucial link between cases, hospitalisations and deaths is weakened, the global pandemic is not over yet, and cases are currently rising across the UK. This means that vigilance must be maintained and people will be asked to continue to act carefully to manage the risks to themselves and others. There will still be high levels of infection and illness and therefore disruption to lives, businesses and the economy.
We are therefore retaining or extending some of the regulatory easements. This is necessary where they continue to provide flexibility to businesses while they feel ongoing impacts from covid-19, including on workforce absences, and where relaxed rules will enable them to recover, helping to reinvigorate the high street and boost consumption.
We will be publishing the details on the easements that will expire or be retained on www.gov.uk shortly.
The relaxation of these rules will be reviewed again in autumn at which point the Government will consider the status of these measures for further extension, permanent retention or expiry.
Ministers will continue to review the measures at regular intervals as needed thereafter to provide certainty to business and ensure that the appropriate regulatory environment is in place as required. A separate process is being taken forward for the measures protecting businesses from eviction, insolvency and debt recovery, which has been outlined in an oral statement by the Chief Secretary to the Treasury on June 16.
Better regulation framework impact assessments
The Government introduced a significant amount of emergency legislation responding to covid-19 and we recognise that there may be a risk that current better regulation framework requirements might lead to disproportionate administrative burdens on Government Departments, particularly on the retrospective validation of temporary emergency legislation that is extended to be in force for 12 months or more.
For emergency covid-19 legislation which is exempt from the business impact target (BIT) under the “civil emergencies” exemption we have decided to relax the administrative requirements set out in the better regulation framework for full impact assessments to be undertaken and scrutinised by the Regulatory Policy Committee (RPC). This relaxation of the policy requirement covers time-limited measures only. As a matter of policy under the framework, impact assessments are still expected for other emergency measures which are not temporary, even if they are non-qualifying measures under the “civil emergencies” exemption, and so not legally required to be supported by an impact assessment. Such impact assessments are to be submitted to the RPC in the normal way. The statutory requirement for measures exempted in this way from legal requirements for IAs to be verified as such by the RPC remains.
This adjustment of requirements will remain in place in advance of the wider reform of the better regulation framework completing.
[HCWS192]
Aquind Interconnector
Paul Scully Excerpts(2 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully) [V]
It is a pleasure to serve under your chairmanship, Sir Charles. I congratulate the hon. Member for Portsmouth South (Stephen Morgan) on securing this important debate.
Great Britain currently has 6 GW of electricity interconnection with Belgium, the Netherlands, France and the island of Ireland, supporting our security of supply, keeping consumer prices low and supporting our decarbonisation goal of net zero emissions by 2050. Interconnectors widen the energy markets and thus make them more efficient, transporting electricity from where it is cheaper to higher-priced regions. That predominantly leads to imports of cheaper electricity to Great Britain, delivering benefits to consumers, but in future it will allow us to export renewable energy to the rest of continental Europe.
Interconnectors also act as a source of flexibility, helping the system rapidly respond to changes in demand and supply, which is crucial when helping integrate intermittent renewable energy sources, and reducing curtailment, thus supporting decarbonisation. A study commissioned by the Department, and published alongside the energy White Paper, illustrates the decarbonisation that could be facilitated in Great Britain and the European Union by an increased level of interconnection to 2050. Interconnectors can contribute to security of supply by providing access to a wider pool of generation. They can also currently participate in the capacity market and can be available at times of system distress. They provide additional options to system operators, helping ensure system stability and security.
The Secretary of State has three months to take his decision on receipt of the Planning Inspectorate’s report, meaning that he has to make his decision on the Aquind interconnector on or before 8 September 2021. That decision will be taken in line with Government propriety guidance. Given the Secretary of State’s quasi-judicial role in determining the application, I cannot comment on specific matters regarding the proposal as that could be seen as prejudicing the decision-making process, but I can say something about the planning process for nationally significant infrastructure projects.
I want to make it clear that the system absolutely recognises how important the views of local people are. Indeed, the hon. Member for Portsmouth South talked about the potential adverse impacts on local communities. Clearly, that would be given appropriate consideration in the planning process, and therefore also in the Secretary of State’s decision-making process. When the developer makes an application to the Planning Inspectorate, the developer has to demonstrate that it has complied with all of its consultation requirements and that it has regard to consultation responses that it has received. At the pre-application stage, the developer has to prepare that consultation strategy and must carry out a pre-application consultation with the local community, in accordance with that strategy.
The developer has to explain how the application was informed and influenced by those responses, outlining any changes that were made as a result, and provide an explanation as to why responses advising on major changes to the project were not followed out. The Planning Inspectorate will also ask relevant local authorities whether the consultation was adequate. The Planning Inspectorate will consider the local authorities’ view on the consultation before deciding whether to accept the application for examination.
The application consultation with local communities cannot be taken lightly by developers. If the application is accepted for examination, an examining authority is appointed to examine it. People with an interest in the project can then register as interested parties and will have an opportunity to make written representations on the project. There may also be open-floor hearings, as well as hearings on specific issues, where interested parties can make formal submissions to the examining agent. I understand that during the Aquind examination there were two open-floor hearings, as well as issue-specific hearings on matters including traffic, air quality and the environment.
After that examination closes, the examining authority will write a report to the Secretary of State, containing its recommendations for the project. In the case of Aquind, the Secretary of State received the examining authority’s report on 8 June. As I have said, the Secretary of State then has three months to decide whether to grant or refuse development consent. For Aquind, the Secretary of State has until 8 September to make a decision. That decision must be based solely on the planning merits of the proposal.
Although it is not possible to comment on specific projects in the planning process, the Government are supportive of interconnection generally, as a core part of our energy strategy, due to its benefits in helping to provide an electricity supply that progresses towards our net zero decarbonisation goals in a low-cost and secure way. In last year’s energy White Paper, we committed to work with Ofgem, developers and our European partners to realise at least 18 GW of interconnector capacity by 2030, which is triple the current capacity.
In conclusion, I can assure the hon. Gentleman and the residents of the proposed area that the Secretary of State will take into account both sides of the proposal. He will base his decision on the work of the Planning Inspectorate and the quasi-judicial process that he has in front of him, rather than any of the accusations that have been thrown at him to influence his decision either way.
Question put and agreed to.
Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (Second sitting)
Paul Scully ExcerptsTuesday 6th July 2021
(2 years, 9 months ago)
Public Bill CommitteesRead Full debate Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 View all Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 6 July 2021 - (6 Jul 2021)
Navendu Mishra
Your contribution is quite depressing, but thank you for making it.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
Q
It is interesting: you talked about the amendment, which actually asks for a single report in a year. Clearly, we want to be managing the situation and making sure that it is effective. In terms of the time that you are looking at, obviously that does not negate the ability for criminal action to be taken; it is to restore directors.
I really want to focus on the Bill itself, and the focus within that and what we are doing positively to try to tackle some of these issues—including on phoenixing, which you started off talking about. I know you talked about lots of other things, and other things that we can be doing and are doing, but do you agree that the Bill adds an extra weapon to tackle phoenixing itself?
Andrew Agathangelou: I certainly do. As I said earlier, it is a significant, valuable, worthwhile step in the right direction. My plea—forgive me; I guess I am repeating myself here—is that we look at the whole ecosystem. For example, why on earth are we not including fraud and so on in the online safety Bill? I know that is another topic, but can you see how, from my point of view, these are all interconnected issues—this is all the ecosystem?
I guess I am saying that Parliament can take one of two views here. You can either deal with this tactical, ad hoc Bill, which is of course worthwhile, in isolation of everything else. However, for goodness’ sake, please do not do that; actually look at the bigger picture here—the interconnected matrices of other issues that Parliament ought to be grabbing by the scruff of the neck and finally sorting out.
Paul Scully
I appreciate that. If you look at corporate governance and Companies House reform and all these issues, and indeed at the online harms Bill, I am sure you will have plenty of opportunity to comment on that. As I say, this deals with one specific issue because of the impetus now. That is all I wanted to raise.
The Chair
If nobody else has any questions for our witness, I thank you on behalf of the Committee for your evidence, Mr Agathangelou. I am sure the Committee welcomed your frank speaking throughout. Thank you very much.
Andrew Agathangelou: Thank you all.
Examination of Witness
Kate Nicholls gave evidence.
Luke Hall
Q
Kate Nicholls: We would urge local authorities to work with us to identify themselves where the areas of greatest need are. One of the things that has frustrated a lot of our businesses is that there is a central message from Government, and it is not necessarily interpreted on the ground as fluidly as Government might have hoped. When you look at some of the local authority areas, we have had businesses that are clearly designed to be captured and covered by the support mechanisms that are available, but local authorities have often taken the view that if it is not directly specified in guidance and it is not a named company or a named type of business, they are precluded from using their discretion and being able to provide support to those businesses. That is the frustration that our businesses have had on the ground going forward.
It would be helpful if local authorities could be a bit more permissive in identifying the businesses that they know are hurting at a local level, rather than applying a prescriptive approach that says, “If your name’s not down, you’re not coming in,” or “Here’s a tick, you are covered.” That would help immeasurably in those businesses that tend to fall between the cracks because they are not clearcut: if you are a coach operator, are you a tourist business or are you not? A local authority should be able to understand its local area and know which ones are and therefore need to be helped, and which ones actually managed okay. Those are the kinds of areas in which we would like local authorities to use their own discretion, not wait to be told specifically by Government that they can help those businesses.
Paul Scully
Q
Kate Nicholls: There are a few notable exceptions, but you can measure on the fingers of fewer than two hands the local authorities and businesses we have been able to help that have had a positive response to that request. All too often, the response has been that the grants that we are talking about are closed, there is no more money, and they will get back in touch with the businesses if more money becomes available.
It is incredibly frustrating that you have this disconnect at a central level. We hear what is being pledged, and we hear and understand the work that is being done by Ministers to communicate to those local authorities, but the operators on the ground just get a “No”. Some local authorities have been more creative than others, and some have been more proactive than others, but generally speaking it has been a long, slow process, and it has been very difficult to get money out of the local authorities for the businesses that desperately need it. It has been too slow in being processed. We know, because of the work we are doing we are doing at a central Government level, that it is there and has been made available; it is just not cascading out.
Peter Grant
Q
Duncan Swift: I have to say, from experience, it is too short. Rogue directors or individuals who abuse the position of director go to great pains to extract all the asset value out of the companies that they are abusing and to provide a false, or certainly incomplete, trail of their actions as directors of the company. As an office holder coming in after the event, it is like pulling together a 3,000 or 4,000-piece jigsaw puzzle when holding only about five pieces to start with. You are having to make inquiries with multiple stakeholders, as well as interviewing the directors and their associates, to start to get the bits of the jigsaw puzzle necessary for a picture of what actually went on, in order to convince a court that what went on was actually a fraud upon the creditors and that the director had not acted properly. Again, from experience, although a relatively speedy pulling together of the jigsaw puzzle and convincing of the court takes three years, there are many cases where it takes far longer.
Paul Scully
Q
Duncan Swift: What I was explaining about the timeline was that for the office holder—whether it be the Insolvency Service or the official receiver as liquidator, or the Insolvency Service coming in to pull together a picture of the company’s financial dealings and the director’s conduct in the course of those dealings—it takes time. In the first phase in particular, it can take two years to get a reasonably complete picture before one can be confident of putting forward an application to court, either for a recovery of assets or, I would have thought, the disqualification of a director in circumstances where that individual may well be using the proceeds of such activities to defend their position, as well as seeking to confuse it to defend against the likelihood of such claims being brought against them.
Paul Scully
Q
Duncan Swift: Forgive me, but my understanding and experience of compensation orders is that they are brought on behalf of a single creditor or a few creditors. I suggest a more comprehensive approach: that the insolvency process that already exists is applied, and if a dissolved company is found to be insolvent, it is readily restored to the register and put through the insolvency process. That will have two consequences: a full investigation by the office holder, who in the first instance of the compulsory liquidation is the official receiver of the directors’ conduct; and for that process to recover such assets that are available for the benefit of all creditors of that company, not only a few.
Paul Scully
Q
Duncan Swift: All I can go on is the statistics issued by the Insolvency Service on disqualification orders or undertakings from directors for misconduct relative to the total number of corporate insolvencies per annum, and the member feedback that R3 receives. At an anecdotal level, members report that they have submitted serious adverse conduct reports against individuals, only to find that no action has been taken against said individuals by the Insolvency Service. We are not told why. Clearly there is a threshold.
Coming back to the statistics, it would appear that the Insolvency Service is consistently—year in, year out, irrespective of fluctuations in the total number of corporate insolvencies—disqualifying about 1,200 individuals per annum. That suggests to me that there is a resource issue. I am not in a position to ask the Insolvency Service whether that is the case, but that is what it feels like.
Paul Scully
Q
Duncan Swift: Yes. As I said at the start, this is a step in the right direction, but unfortunately it does not go far enough.
Paul Scully
Q
Duncan Swift: I repeat: it is a step in the right direction, but it is not enough. Individuals who would choose to abuse the benefits of directorship of limited liability companies are not dissuaded by the prospect of being disqualified—that is my experience and that of the members of R3. A more significant deterrent is that they are not only disqualified but the ill-gotten gains of said actions that led to their disqualification are required to be repaid and recovered for the benefit of those who have suffered as a consequence of those actions. If that also includes criminal liability, so much the better; I am sure that will add to the weight of the deterrent. They are far less likely to do it if they can see the routes to the gains that they obtain from such behaviour being readily recoverable.
The Chair
There are no further questions, Mr Swift. We thank you for your evidence this afternoon, and for your flexibility on timing, which we greatly appreciate. That brings us to the end of today’s sitting. The Committee will meet again on Thursday 8 July to begin line-by-line scrutiny of the Bill.
Ordered, That further consideration be now adjourned. —(Paul Scully.)
Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (First sitting)
Paul Scully ExcerptsTuesday 6th July 2021
(2 years, 9 months ago)
Public Bill CommitteesRead Full debate Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 View all Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 6 July 2021 - (6 Jul 2021)
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
Q
“have effect in relation to conduct…occurring, and in relation to companies dissolved, at any time before, as well as after, the passing of this Act.”
Do you support making these provisions retrospective and, if so, how should the Insolvency Service make use of these retrospective powers?
Stephen Pegge: As I understand it, the support for this measure was confirmed as early as 2018 and it has really been a lack of parliamentary time that has made it difficult for it to be put in place. Given that we are aware of abuse that has happened in the meantime, I support this measure being retrospective. I appreciate that that retrospectivity is not often applied to such Bills, but we are talking about a fairly high evidence threshold and about situations where natural justice would support this measure being made with retrospective effect.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
Q
Stephen Pegge: Clearly, when lenders are undertaking a credit assessment, they will consider both the willingness to repay and the ability to repay, the probability of default and the loss in the event of default. All those could potentially be, and I would say probably at the margin, factors that could be influenced by the use of dissolution as a means of avoiding liability.
Quite clearly, it is very difficult for a company that has been struck off the register to make payments under a loan, so there will be the avoidance of debt in those circumstances. Given that currently there is time and cost involved in restoring a company to the register, the ability then to take this action against directors after the event both to deter and, if the activity should still carry on, to investigate and take action against directors in a more timely and cost-effective way should reduce the ultimate losses to creditors. I think there has been an estimate that creditors could be saved around £1 billion as a result of this measure, which would be significant in terms of credit assessments.
The net effect is the ability to provide more finance with less time having to be spent on assessment up front, on better terms, and in circumstances that should help the recovery. However, I will emphasise, Minister, that this is only one factor and it is all operating at the margin. Nevertheless, it is certainly something that during the past year has become a matter of concern, especially in relation to bounce back loans.
Paul Scully
Q
Stephen Pegge: Yes, exactly. It will, therefore, be possible to focus more time and support on those who deserve the finance, without the distraction of those who are abusing the process.
Paul Scully
Q
Stephen Pegge: As you say, it is a matter of a chilling effect. It is one other factor that would weigh on finance providers’ minds when making lending decisions. This is a crucial time for lenders to provide finance. If you look at the latest Bank of England figures, for May, which were published last week, some £7 billion of new lending was provided to SMEs.
Latest surveys suggest that high proportions of loan applications are being sanctioned—something like 85%—and we want that to continue. The expectation that this sort of loophole is being closed should build confidence. It will ensure that there is discouragement of bad actors, so that it does not grow out of proportion, which we fear might otherwise be the case.
Peter Grant
Q
Clearly, we are not creating a new offence that was not illegal at the time. We are considering legislation to make it easier for the authorities to act against people who may have committed offences, which I think is an important distinction. Even given that, is there an argument that the retrospective power should apply only to the date when the Government first published their proposals to legislate? Would you still support the Insolvency Service if it wanted to take action in relation to things that had happened in, say, 2015 or 2016? Would you have any concerns about that?
Stephen Pegge: As you say, this is essentially a technical loophole, which the Bill seeks to close. All it does is confer powers of investigation, with significant and rigorous practices in terms of investigation. The risk of miscarriage of justice is relatively limited. I do not have a particular date in mind. The point I was trying to emphasise was that this has widespread support and has had for some time.
Peter Grant
Q
David Kerr: Perhaps some in the creditor community would like it to be a six-year period, but I do not think they have argued strongly for it, and I do not think there is a necessarily a case made for that. From a creditor perspective, in an ideal world, perhaps it would be open ended. That may be unrealistic.
Paul Scully
Q
David Kerr: The current disqualification provisions act as a deterrent to some extent, because directors know that, in respect of every company that goes into an insolvent liquidation or administration, there will be some inquiry. There is an obligation on the insolvency practitioner to carry out a certain amount of inquiry into the conduct of the directors of those companies and make a report in each of those cases to the Insolvency Service on their conduct. The provisions do not provide for the same report. It will have to be triggered by something else, whether that is a creditor complaint or other information, but it will provide the opportunity for the service to make the same inquiry.
Paul Scully
Q
David Kerr: Do you mean the work of the Insolvency Service?
Paul Scully
Yes. We are talking about Insolvency Service resources. We would have expected the Insolvency Service to prioritise the work that it does on the most egregious cases, and that would indeed be how we would anticipate it moving forward. Have you seen that first hand?
David Kerr: This may not be a direct answer to your question, but the concern of the creditor community might be that, if this provision were used almost exclusively for the purposes of pursuing bounce back loan fraud, perhaps it would not have the wider benefit that could come from it. Perhaps that has to be the emphasis in the short term, but in the long run—it is a provision that was considered worthy of introducing back in 2018, before covid came along—one would hope that it will be of broader use.
Quite how the service will prioritise its limited resources and decide which cases to look at is a matter for it to work out once it gets the powers. One would hope that the cases that come to its attention through the insolvency practitioners’ reports will receive equal attention and that it will not be to the detriment of those cases that these other cases are being pursued.
Paul Scully
Q
David Kerr: That can happen, whether it is through an insolvency process or a dissolution. To the extent that it has happened through dissolution, the measure plugs that gap, because it is gives the same investigative powers to the Insolvency Service. It comes back to the deterrent point that you made previously. If the service is seen to be taking action in these cases and publicising the fact that it has done so, that will, one would have thought, have a deterrent effect.
Paul Scully
Q
David Kerr: Generally, if the system is seen to be working well and those who abuse it are brought to account, then it helps enhance the confidence of those engaged in providing credit, whether it is through loans, trade credit or anything else. In that sense, it is a welcome provision that, if resourced and used as intended, should have the desired effect.
Seema Malhotra
Q
David Kerr: I think the cost issue is the bigger disincentive for creditors that previously might have wanted to take steps to try and get somebody appointed to investigate. The service itself has made the point that there are legal costs and other costs associated with that process, and it would not be practical for creditors to mount that kind of action alone or, in many case, at all, given the amounts of their own debts.
The bigger disincentive is probably the cost and this avoids that. You are right in the sense that if there is a lengthy time process and if it takes several months, that eats into the three-year time limit that we have talked about, so that could be a problem. I think here, with this measure, we avoid that because the Department can have the ability to make appropriate inquiries and take action, without the need to go through that process.
Paul Scully
Q
Dr Tribe: In some writing on this point in relation to Carillion, I suggested the reason that the Insolvency Service might be looking at a large public limited company to bring these mechanisms to bear is because that is a pretty well known, massive liquidation, which has lots of Government contracts linked to it and taxpayer money bound up in its activities. You can see why it would perhaps be appropriate, much as with previous well-known disqualifications, for the Insolvency Service to bring the action or the proceedings if the relevant public interest tests are met. That is because it helps with the agenda of sending out the appropriate messages to the commercial community that you should use corporate vehicles and corporate forms in an appropriate way, and that you should live up to your duties in an appropriate way generally, as well as facing some of the consequences if you misuse the form and harm creditors and other stakeholders.
On the prioritisation point, you could go for good messaging, in the sense of prioritising cases. I suppose that the problem with the bounce back loan scheme and this dissolution issue that we are dealing with is that, as I think one of the previous questions hinted at, the volume of cases could be so great that with prioritisation you will need to have quite a large group of civil servants working on the issue.
As for the question of how likely it is that we might get a result in a case, and therefore whether we should bring proceedings, we have seen recently that once the Insolvency Service’s tests are met, it is wholly appropriate that it should bring these proceedings, even if in due course the result is not what it thought or what its specialist advisers—the QCs and so on who have advised it—would have predicted. Hopefully, the money will be well spent in bringing proceedings, but sometimes we do not get the result for factual reasons, basically.
Paul Scully
Q
Dr Tribe: Carillion, because it is a large plc, has messaging on the plc side of our regime, thinking about how directors behave in relation to those types of companies. This perhaps goes back to Mr Grant’s question about group structures—do not use group structures in a way that is problematic. That will be interesting to monitor on what is a live case; I do not want to mull on the facts of that case too closely.
Sorry, what was the second part of your question?
Paul Scully
Q
Dr Tribe: Thanks for that clarification. If we can ensure that any vehicle that is used in any form of creditor relationship with different entities has an individual put-off effect by going down this dissolution route that we have identified, it will hopefully increase confidence in the way people use the corporate form. The more loopholes we can close down that have caused us to think the form is being used inappropriately, the better.
Unfortunately, phoenixing, as we have discussed, has been going on for literally decades, and perhaps in the future we might be back here again with some other problem that has arisen because of nefarious activity.
Jeff Smith
Q
“Applying the current controls properly, putting dissolved companies into liquidation and publicising that new policy will be a far more effective deterrent...That requires no new legislation at all.”
Do you have a view on that?
Dr Tribe: The trouble is that to get to that liquidation point, you have to go through the restoration stage. I think that submission might have also talked about the idea of restoring an entity to the register and then going through that insolvency route. I think the Insolvency Service did 33 of those in 2019—pre the bounce back loan issue and pre corona, obviously. Each one of those 33 will have cost it court fees, process fees at Companies House and so on, which means there is this extra layer of procedure that it has to get through before it can ultimately investigate the unfitness activity. I think the dissolution reform in this legislation ensures that that extra layer of bureaucracy—getting the companies back on the register, through restoration, then going through the insolvency processes—is cleared out, and we move straight to the enforcement section.
The other problem with restoration is that you perhaps undermine the integrity of the register itself if you take 33 companies off it, but you then want to put them back on because you need to go through the steps that we want for enforcement and so on. It is an interesting point, but I think you have a quicker public protection mechanism process that you can do now that gets you to a less costly enforcement outcome.
Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill
Paul Scully ExcerptsMonday 28th June 2021
(2 years, 10 months ago)
Commons ChamberRead Full debate Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 View all Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
This is a Bill of two halves, considering that the football is on at the moment, and the contributions that we have heard from Members throughout the House attest to the importance of each of them. I am grateful to my hon. Friend the Minister for Regional Growth and Local Government for opening these proceedings by setting out the context and the background of both elements of the Bill. I am also grateful to all the Members in all parts of the House who have participated in the debate. The points that have been raised are really important and I am glad to have the opportunity to respond, first on business rates and then on the measures relating to the disqualification of unfit directors of dissolved companies.
The House has today supported the point made by hon. Friend that the pandemic has unquestionably had a significant impact on ratepayers. This impact has been felt particularly by those in the retail, hospitality and leisure sectors, but also by many other businesses that sit elsewhere in the wider economy. That is why since April 2020 the Government have provided £16 billion of business rates relief targeted at ratepayers in the retail, hospitality and leisure sectors. As announced on 25 March, the Government intend that this will be supplemented by an additional £1.5 billion of relief to be made available to ratepayers who have not been able to benefit from the reliefs already put in place throughout the pandemic. Taken together, that represents an unprecedented package of support that reflects the unique impact of the pandemic on our economy.
These unprecedented circumstances have also tested other aspects of the business rates system, which was created long before covid-19 and was not designed with pandemics in mind. The material change of circumstances process is designed to be used in cases such as localised roadworks. Market-wide economic changes such as those arising from a pandemic can and should be considered only at a comprehensive business rates revaluation. Arguing material change of circumstances cases through the courts could result in years of uncertainty and is unnecessary where we can, as we are doing now, amend the law to ensure that it meets its original intention.
Sarah Olney
On what the Minister has said about the material change of circumstances argument not being appropriate in this case, would it not have been appropriate to have made it clear earlier in the pandemic, perhaps as long as a year ago, that it would not be an appropriate route for businesses looking to reduce their rates payment and not a circumstance that could be cited?
Paul Scully
A lot of messages can go out and have gone out over the past year so that we can flex in our ability to work with businesses. I think I can boil down my relatively long job title to “Minister for unintended consequences”. We are always trying to make sure that we can flex and get clear messages out to businesses. The hon. Lady makes an interesting point. We have heard a lot about the £1.5 billion and when the guidance will be out. Clearly that is dependent on the passage of this Bill, but we want to make sure that we can work with the LGA and councils to give the clearest guidance so that they can get the money out as quickly as possible. The argument made by Members on both sides of the House is countered by the fact that by not having to go through so many appeals we can speed up the process and get the money out within weeks rather than, in certain cases, if we had to go through the entire process, years. That is why we can provide certainty to local authorities, which rely on income from business rates to fund their vital local services. It is on that basis that the Public Accounts Committee has welcomed the approach taken by the Government in the Bill.
Members have raised questions relating to when ratepayers will be able to benefit from the £1.5 billion relief that was announced on 25 March. We will work with all areas of local government to deliver the new relief scheme as soon as possible, once the Bill is passed, so that local authorities can set up their local relief scheme. The allocation of the £1.5 billion among local authorities will be made according to which sectors have suffered most economically rather than on the basis of temporary falls in individual property values. That will ensure that the support is provided to businesses in the fastest and the fairest way possible.
Seema Malhotra
Does the Minister have any clarity at all on the timetable so that local authorities know what to expect and when?
Paul Scully
The answer is as soon as possible, once this Bill has passed. I am looking forward to working with the hon. Lady in Committee to make sure that we can work through this as quickly as possible. Clearly, work will be done in consultation and conversation with the LGA and local councils to ensure that we can get comprehensive guidance in place. That is how we have been working over the past 14 months with local authorities on the other grant schemes.
Let me briefly cover a couple of quick points. The hon. Member for Manchester, Withington (Jeff Smith) asked whether there will be a blanket ban on MCCs. I can absolutely confirm that there is no blanket ban. On airports, it is a core principle of the business rates system that a material change of circumstances should be used between rate revaluations, so the drop in demand for airports in light of the pandemic is exactly the sort of market-wide economic change affecting property values that can and should only be considered at revaluation. We have been supporting airports with their fixed costs over the past year from the airport and ground operations support scheme. In his recent Budget, the Chancellor announced a further six months of support up to the equivalent of their business rates liability for the first half of the 2021-22 financial year, subject to certain conditions, and a cap per claimant of £4 million.
Paul Scully
I will not give way, but I will happily come back to the hon. Lady if I have not answered her question. I do want to get through a few areas.
Let me quickly turn to the disqualification of directors of dissolved companies. The issue of insolvency funding came up a few times. Clearly, we will be working with the Insolvency Service to ensure that it has the resources to do its job. It employs its finite resources to the maximum effect by prioritising cases in which there has been most harm to the public and the wider marketplace. Clearly, its resources are not limitless.
The hon. Member for Strangford (Jim Shannon) asked about insolvencies. Actually, the number of insolvencies has been at a 40-year low over the past few months because, effectively, in many areas, the economy has been held in stasis. That is why it is so important that, having put £352 billion-worth of support into the economy, we now have 352 billion reasons why we have to get the next bit right—why we have to help shape the recovery through these mitigations. We need to make sure that we continue to flex and continue to extend the support. That is why furlough carries on until September and why we have ensured that the winding-up proceedings have been extended for another nine months as well, so that we can get conversations going with landlords and tenants. It is so, so important to continue these measures.
I am glad that we have had broad support for the measures. In terms of compensation, directors can obviously be held personally liable for debt, and where there are breaches, there is disqualification.
Peter Grant
I note the Minister’s comments that directors can be held personally liable, but does he accept that allowing an individual investor or creditor to sue a director at their own risk is very different from a scheme through which the Government or some other body effectively take that legal action on behalf of a group of aggrieved individuals, who individually cannot afford the risk of taking that action?
Paul Scully
I take the hon. Gentleman’s point. Let me just answer a couple of his points. He talked about corporate governance and audit reform. That is something that we will legislate on as soon as parliamentary time allows. He referenced a Minister saying that we would adhere to standards that we thought that we could get away with. No, that is absolutely not the case. I did not hear that comment, but I suspect what the Minister said and meant was that we are accountable to the electorate. When I heard about that comment, I thought about my own constituency where I know at least one High Court judge, an insolvency practitioner, lawyers, forensic accountants, civil servants—I have them in my own Department never mind my constituency—and journalists and, boy, will they hold me to account at the ballot box, in my local media and in the national media should it be appropriate to do so. That is that standard to which we expect to work as a Government. I am glad that he also mentioned phoenixing, because this will strengthen the phoenixing legislation as well.
I have noted the helpful contributions made by Members across the House, and I am looking forward to working with colleagues in Committee to make sure that we can get this really important legislation for both of these measures through. The scrutiny that has been provided today is, as always, greatly appreciated. I look forward to discussing this Bill with Members throughout its passage, and I commend it to the House.
Sarah Olney
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question put and agreed to.
Bill accordingly read a Second time.
Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 8 July 2021.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Proceedings on Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed.—(Scott Mann.)
Question agreed to.
Beauty and Wellbeing Sector Workforce
Paul Scully Excerpts(2 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
It is a pleasure to see you back in the chair, Sir Roger, and to serve under your chairmanship. I congratulate the hon. Member for Swansea East (Carolyn Harris) on securing today’s important debate, and I congratulate her and others, including the hon. Member for Bradford South (Judith Cummins) and other members of the APPG, on the work that they are doing in support of this important sector.
Today’s debate is important because the beauty and wellbeing sector is so important. It is important because of its contribution to the economy, its pivotal role in high streets and communities in every corner of the UK, its showcasing of female entrepreneurship, as we have heard, and its role in improving our health and wellbeing. We have heard a little about high streets. We have to remember that high streets are an ecosystem. It is not just about retail, hospitality or the beauty and wellbeing sector; they all work together to make our high streets vibrant. It is important that we protect all of that as we reimagine the future of the high street.
I was keen, as we looked to the end of this lockdown and at the Prime Minister’s road map, that we should secure the reopening of the beauty and wellbeing sector at an earlier stage than last time. The sector was last to open after previous lockdowns, but among the first to open this time. That is testament to the appreciation that we were able to get across to the Government and the understanding that people’s wellbeing is so important, as well as the economic situation and the recovery. Today’s debate has highlighted the key role that the sector plays in our economic society and I hope it will go some way to strengthen the perception of the sector as highly skilled, entrepreneurial and accessible.
As we have heard, the personal care sector consists of over 280,000 businesses employing about 561,000 people and adding £21 billion to the economy. Over 95% of the businesses are small or medium sized. As for levelling up, 30% of all hair and beauty enterprises are based in local authorities that fall into the ninth and tenth deciles of multiple deprivation. Although its economic contribution is significant, what is arguably even more valuable is its impact on society and its role in communities. It plays a key role in supporting jobs, as was eloquently shared by my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), especially jobs for women and young people. Some 82% of hair and beauty businesses are female owned, 60% of workers are self-employed and around 20% of hair and beauty workers are under the age of 25.
The pandemic has had a major impact on our mental health and we need to recognise how the sector can help the nation’s recovery by improving people’s physical and mental wellbeing. Whether it is feeling fresh after a new haircut, catching up with the local beauty therapist or getting a massage to relax, as the hon. Member for Swansea East said, the beauty and wellbeing sector provides the services needed to make people feel better.
The sector tells us that 68% of British adults who get their hair done professionally agree that having their hair done supports their mental health and wellbeing, and it is interesting to hear the hon. Member for Feltham and Heston (Seema Malhotra) tell us about how she had to bring out her hairdressing skills. There was no way that I was going to try that. I know that some people thought that I was taking my loyalty to our Prime Minister to the nth degree with the hair that I sometimes brandished in the Chamber, and I am glad that I have been able to get it cut since.
As we have heard, the sector also plays a key role for some people with serious medical needs, such as those with cancer. We therefore allowed treatments to continue during lockdown for those with health issues when they could not be deferred—for example, some people undergoing cancer treatment were able to visit spas and salons to receive specific treatment tailored to their comfort. Throughout the pandemic, I have worked really closely with the sector to understand the issues, so that I can best represent its interests within Government. Although it has always been represented in Government, we had a dedicated personal care sector support team back in January, and we look forward to working with organisations within the sector, the APPG and other interested parties in the coming months and years.
However, this has been a really tough year for personal care businesses, which have been closed at various points of the year and faced restrictions for the remainder. That is why, in recognition of the impact that the pandemic and the restrictions have had on the sector, we put in place an unprecedented package of support worth £382 million. That is the largest peacetime support package in history, and it included the job retention measures that we have talked about, support for the self-employed, access to the highest grants, the restart grants of up to £18,000 and loans. Indeed, the restart grants are a testament to the sector. Although it was able to restart at an early stage of this part of the road map, the restart grants are a testament to the extra costs that the sector had to bear by getting the PPE and other mitigation measures in place. As we have heard, we have also provided business rates relief and a moratorium on commercial rent evictions.
The business support programmes have helped many businesses and protected many jobs, but they cannot substitute for operating in an open market. The road map that I have talked about has always been cautious and gradual, but it has to be irreversible. To help the sector reopen, we developed guidance that could get it to reopen safely. Through compliance with that, it has been able to operate since 12 April. The road map laid out the timing for easing restrictions, and it is an approach that is being led by data, not dates. We have obviously had the announcement by the Prime Minister that we are taking a four-week pause at step 3, meaning that restrictions, including social distancing measures, are still in place. That will still have an impact on the beauty and wellbeing industry, because operating at reduced capacity is extremely challenging—not only for revenue, as we have heard, but by making certain roles in the workforce redundant—but by pausing step 3, we will further improve protection in the population and reduce the need for stringent restrictions to control the virus.
Seema Malhotra
The Minister has just mentioned the extension of the restrictions in line with the required public health measures, based on the data. Can he explain—the Government have not explained this—why furlough support has not been extended in line with public health measures? There seems to be a mismatch, and there is no explanation that does not leave the most vulnerable businesses continuing to pay and having a greater gap between their revenues and costs.
Paul Scully
I will cover support in a bit more detail in a few minutes. In his Budget, the Chancellor essentially went long by extending furlough to September, which allowed a cushion within the road map. It was about data, not dates, so it was never on the June date specifically—it was not before the June date. That is the essential thing, but I will cover support in a second, including the VAT request that has been made by number of hon. Members.
Over the next few weeks, we obviously want to ensure that the pause allows us to get more people vaccinated, but I hope that our unprecedented package of financial support will continue to go some way towards reducing the impact of the pause. As I say, we erred on the side of generosity, as well as going long, in the Budget in March, specifically to accommodate short delays to the road map. Most of the schemes do not end until September or after in order to provide continuity and certainty to businesses. It is fantastic that the sector is looking at ways to boost consumer confidence to maintain the high demand—for example, the Oh Hello Beauty campaign, which I have supported.
Until then, it is critical that we all continue to follow advice on safe behaviours, including social distancing, wearing a face covering when required, washing hands, and letting fresh air into indoor spaces. It is so important that hands, face, space and fresh air are really there, because we will not get to that July date to find that suddenly the baddie has been killed and it is the end of the film—roll credits. We will still be living with covid for some time, but we want to ensure that the social distancing measures can melt away, in order to allow capacity to increase in the personal care sector and others.
Seema Malhotra
May I probe the Minister a bit further? He will know that quarterly rents, for example, are due today and that other support measures, such as furlough, are being reduced from next week. From 1 July the level of grant will be reduced and businesses will have to pay a contribution to those wages. Those decisions were made assuming that lockdown measures would be lifted on 21 June. That has not happened, yet there has not been a corresponding change to the economic measures. Nothing that he has said so far has answered that question, which is a matter of real concern to employers across my constituency. I am sure that employers across the country have raised the same concern with their MP.
Paul Scully
I talked about the fact that the Chancellor went long and was overly generous—well, not overly generous. He erred on the side of generosity in the Budget to cope with the possibility of an extension. On the grant scheme, I have written, along with the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), to local authorities to ensure that the additional restrictions grant can be widened. We have offered £425 million more to top up the additional restrictions grant, but that will be given to councils only if they have spent their original allocation. There are two ways that they can do that: they can either give businesses to which they are already paying grants more money or widen the number of businesses to include some of those that have fallen between the cracks, of which we know there are many.
Interestingly, different sectors are saying different things about furlough. It is a drag on bringing people back into work for some sectors, such as in some parts of the hospitality sector, but others, such as the personal care sector, are saying that they want to extend it. That is why it is really important that the Chancellor looks at it in a holistic way, right across the economy. Although these debates are so important to highlight the pleas and plight of a particular sector, the Chancellor has to take a macro view, while understanding that there is a human cost within all of this. When I say a macro view, it is not all about spreadsheets; it is about personal loss in terms of people’s jobs and businesses. That is why we have had to wrap our arms around the economy so much.
A number of contributors to the debate talked about VAT. It is interesting to note that the majority of businesses within the personal care sector are not registered for VAT in the first place, so it was considered by the Chancellor as probably not the best way of getting support directly out to a number of the small businesses affected. VAT is one of the larger and more costly measures for the Treasury, so the Chancellor again has to take a holistic view. From memory, the cost of the VAT cut to the hospitality sector was something like £27 billion, contrasted with about £12 billion for the business rates sector. That was a figure from around January, so it may be slightly out of date, but not by much.
Turning to jobs and skills, it is really good that the sector is accessible and flexible, and that it benefits young people and women, including those who have to balance work with looking after their children. In 2018, 65,000 qualifications were achieved in hair and beauty, and the hair profession specifically saw approximately 10,000 new apprenticeships—the hon. Member for Strangford (Jim Shannon) raised this issue—being taken up in England, but I recognise how the deeply challenging restrictions caused by the pandemic have affected employers’ ability to hire new staff, especially apprentices, due to capacity restrictions and financial hardship.
Jim Shannon
Is it the Government’s intention to help hair and beauty salons to employ apprentices in order to have in place, as I said earlier, the next generation of those who can do the job?
Paul Scully
The hon. Gentleman, as ever, predicts the next few paragraphs of my speech. Yes, we want to encourage and work with the sector, and incentivise it to take on more apprentices. I am aware of how highly skilled and valued practitioners are, but they are tempted to start careers in different industries because they have lost confidence in the sector’s future viability. That is why it is important that we talk about it, support the sector and demonstrate how viable and flexible it is, and how it very much has a key role in the high street ecosystem that I talked about earlier.
Caroline Nokes
My hon. Friend was quick to respond that he wishes to support apprenticeships and demonstrate how important they are in the sector. Can he outline what specific work he is doing with the Department for Education to make sure that it, too, promotes them?
Paul Scully
I can indeed, and I will come to that in a second. We also have to examine why apprenticeships were in decline before the pandemic began. We can look at it holistically across Government with the Department for Education, the Department for Work and Pensions and BEIS.
We have provided a range of support for the beauty and wellbeing sector. For example, the sector is eligible for the kickstart scheme, which provides a fully funded six-month job for 16 to 24-year-olds on universal credit and at risk of long-term unemployment. I am pleased to say that 600 high quality industry-designed apprenticeship standards are now available. I want to work with the sector to increase the number of small and medium-sized beauty businesses offering apprenticeships.
The Government have recently increased the cash incentive to £3,000 for every apprentice that a business hires, and that helps to maintain and attract the sector’s future workforce. It is good to see sector initiatives aimed at upskilling the workforce. For example, I commend L’Oréal on its education platform, Access, which I am told 54,000 hair professionals have used. We will continue to work with the sector to advance the reputation of beauty and wellbeing as an invaluable, skilled and highly rewarding career path.
I have talked about some of the issues that the hon. Member for Swansea East raised in her speech. I was pleased that she was forthright in mentioning the benefit of holistic treatment to the menopause. It is important that we do not shy from talking in this place about a treatment that can be of so much benefit to so many women across the country. It is great to see that issue highlighted.
My right hon. Friend the Member for Romsey and Southampton North talked about the entrepreneurial spirit, as did the hon. Member for Strangford. My right hon. Friend is absolutely right that we should not talk about just beauty therapists and just the beauty sector. As we have heard, the hospitality sector, for example, has a low bar to entry, but that does not make it a low-skilled sector. The hair and beauty sector does not have a particularly high bar to entry, but someone cannot just pick up a pair of scissors and expect to walk into a hairdresser’s and say, “Can I start work, please?” It is really important to demonstrate the skills required in the sector.
The hon. Member for Bradford South talked about regulation, and we are working with the Department of Health and Social Care to look at regulation and what needs to be done for particular treatments. We will continue to make sure that we can work with the Department, the APPG and the sector to ensure the safety of customers. They need to see not just a certificate on the wall, as she said, but that there are skills behind it. We have to be really careful in those areas.
The hon. Member for Strangford talked about people—specifically, women—setting up businesses. We have talked about the fact that this is largely a female-led-business sector. He is absolutely right when he talks about female entrepreneurs. This fits into a wider piece of work that we are doing in my Department. What are the barriers to female entrepreneurs? They include access to finance, peer-to-peer networking and mentoring. The issue there is not just having the big beasts—the Deborah Meadens, the Richard Bransons and all those people. It is how you get mentors for people who have perhaps just opened their first salon, having been a mobile worker for a number of years; perhaps they have just taken on their first employee—it is about all those kinds of things. That is the kind of example that women want to see—someone in their mould, speaking to them about their issues. It is a question of getting consistency across the country, but also, as I have said, access to finance.
Alison Rose, the chief executive of NatWest, led the Rose review a few years ago. I chair the Rose Review Board with her—we have a meeting next week—and we talk about access to finance. We have 100 signatories to the “Investing in Women Code”, which involves a number of venture capitalists as well as lenders. We are trying to get them to change their teams so that they can get diversity of thought in their investment decisions. That will lead to having diversity in their investments and ensure that they are investing in more women, and that has to be brilliant for the UK economy.
We also have the start-up loans, available for anybody to set up a new business, of up to £25,000, alongside free mentoring. That is run by the British Business Bank and has been since 2012, and 40% of those loans are going to women. That is clearly far lower than the percentage of women in the population, but compared with some other lenders, it is going in the right direction. We still need to do more, so I am pleased to be able to encourage that. The Budget in March from my right hon. Friend the Chancellor of the Exchequer was focused on helping those most affected by the pandemic, including small businesses and vulnerable groups such as young people, women and those from disadvantaged groups in our communities. It is really important that we continue to do that.
In conclusion, we will continue to listen to the sector to understand its views and concerns. As we move to step 4 on the road map, we will work together to address the key problems facing the beauty and wellbeing workforce, discussed in the debate today. We will keep on reviewing the data; we will keep on making an assessment against the four tests at least a week in advance and will announce whether we proceed to step 4 on the new date of no later than 12 July. I want the sector to fully open as soon as that is safe, so that it can bounce back and recover from the restrictions and the financial pressures caused by the pandemic. That will help to address the issues relating to jobs and the skills gap. There is clearly more to do, after we reopen, to address the longer term challenges for the sector, but we need to keep making the point that the beauty and wellbeing sector is a fantastic industry to work in because of the people and the skills that they bring.
McVitie’s Tollcross Factory
Paul Scully Excerpts(2 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
I add my congratulations to the hon. Member for Glasgow East (David Linden) on securing and indeed completing today’s important debate. I had feared that we were going to have one of Parliament’s longest ever interventions by the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) should that not have been the case. As Mr Deputy Speaker has said, we are here to be the voice of our constituents and I am glad that the hon. Gentleman’s voice is being heard at full volume here today, as he brings this really important issue to the attention of the House.
I also pay tribute to Kate Forbes, the Scottish Government Cabinet Secretary for Finance and the Economy, for all the work that she is doing with Susan Aitken, the leader of Glasgow City Council, the unions and other agencies to secure a positive outcome for the site and its 468 employees, and I know that their message will be heard loud and clear today.
I, too, join the hon. Gentleman in remembering Andy Millar. I pay my sincere condolences to his family, friends and colleagues. This is such a reminder of the human nature of these issues. These decisions are not just about spreadsheets; there is a human cost. It is so, so important that we remember what is at stake here. Unfortunately, the stakes are incredibly high and I pay tribute to Andy Millar.
The employees and their families are central to the debate and we must continue to focus our efforts on them to secure a positive future. As we have heard, it is the employees who have made the McVitie’s brand so successful. Some belong to families who have worked at Tollcross for generations, and they should rightly be proud to be part of the century-long history of making the famous biscuits that have been household names in Britain for decades and are enjoyed by people all over the world. The petition that the hon. Gentleman referred to, which has attracted more than 54,000 signatures, demonstrates that that is a widely held view.
I therefore pay tribute to the workers who have continued to work through the pandemic, like many other factory workers, to ensure that the nation can continue to enjoy its favourite products. I sympathise with all those who will be affected by the company’s decision to close the Tollcross site factory, which is so important to the local community and the wider local economy. I say to them that we will do all we can, working with the Scottish Government, to ensure that they can access the support that they need.
I am sure that the hon. Gentleman will appreciate that, although we are disappointed that pladis has taken this decision and issued the redundancy notices, it is a commercial decision for the company. Although the Government have no role in the strategic direction or management of private companies, we stand ready to support anyone affected by the redundancies.
Gavin Newlands
I am grateful to the Minister for giving way; I had not given him an indication that I would intervene. May I ask what the Government have done thus far? I take him at his word on his sincerity on the issue, but when I secured a debate on the hundreds of jobs that were going to go at Rolls-Royce at Inchinnan, the then Minister—the hon. Member for Stratford-on-Avon (Nadhim Zahawi)—essentially said that the workers should be grateful that they had been offered voluntary redundancy. Can the present Minister tell us, and particularly my hon. Friend the Member for Glasgow East (David Linden) and the workers at Tollcross, what the Government are actually doing about it?
Paul Scully
Yes, I will outline a few of the issues that my colleagues at the Department for Work and Pensions will be standing up as a result. I do recognise that this is a worrying time for those Pladis employees. We will do all we can to support each of the workers affected, including through the Department for Work and Pensions, Jobcentre Plus and the support that they can access through Partnership Action for Continuing Employment in Scotland. People will also be able to access redundancy help and job search advice through the Department for Work and Pensions’ jobhelp.campaign.gov.uk website.
There is also information on gov.uk and updated information packs provided to employers to help them to signpost employees to the support that is available. That support includes connecting people to jobs in the local labour market; help with job searches, including CV writing, interview skills, where to find jobs and how to apply for them; and help to identify transferable skills and skills gaps linked to the local labour market, along with advice on what benefits they may get and how to claim. Additionally, the Government’s plan for jobs is helping to support businesses to recover from the pandemic and create more jobs, with measures such as VAT cuts, business rates relief and cash grants for the sectors most affected.
David Linden
By virtue of shadowing it, I take as much interest as anybody in this House in the role of the Department for Work and Pensions, but as I have discussed with the Under-Secretary of State, there is another Department in this Government that has a crucial role to play: the Foreign Office. Pladis is, of course, a Turkish-owned company. Will the Minister give a commitment at the Dispatch Box that every single bit of machinery in the UK Government, including in Her Majesty’s Foreign Office, will be engaged to try to put as much pressure as possible on the Turkish owner, Salman Amin, to ensure that Pladis does not take a decision that would lead to work for the Department for Work and Pensions? Instead, will the Government use the global Britain brand? I am not, perhaps, as much a fan of it as the Minister, but if the global Britain brand is to be taken at its word, will that pressure be brought to bear on Salman Amin in Turkey?
Paul Scully
It is frustrating, because it is clearly a commercial decision for Pladis, but we want to make sure that we work with Pladis and other companies to keep and increase investment within the UK and show them the opportunities. Indeed, should the factory end up closing, perhaps it might be repurposed for other areas of productive work that could re-engage the workforce. These are conversations that I am sure will continue in partnership with the Scottish Government, the hon. Gentleman, unions and other agencies in the local area.
Let me turn to a slightly wider point. I know how important manufacturing is to the local area, to Scotland and to the whole of Britain. As the largest of the manufacturing sectors, food and beverage manufacturing contributed £31 billion of gross value added to the UK economy in 2019 and directly employed more than 450,000 people across every region of the UK. It provided £4.8 billion to Scotland’s economy in 2019. The importance of manufacturing to Scotland’s industrial history is well known, and today Scotland has a high-tech, high-value offer in other areas as well, including leading sectors such as space, aerospace, defence, and marine and life sciences.
Manufacturing is so often the economic anchor in local communities, providing good jobs, and the Tollcross site is no exception, so we must work together to ensure that Glasgow and other local areas in Scotland continue to provide an attractive offer to manufacturing firms and to all investors, both domestic and foreign-owned. That is how we will ensure the future of the 190,000 manufacturing jobs in Scotland and the 2.7 million across the UK.
We will continue to support UK manufacturing capability in its transition to net zero through significant investment in research, development and innovation, so that it is globally competitive and can continue to provide the products demanded across the world and the jobs that are so important to local communities. The Prime Minister’s 10-point plan for a green industrial revolution mobilises more than £12 billion to create more than 250,000 high-skilled jobs across the UK.
Scotland and other industrial heartlands are central to this blueprint for building industries of the future and decarbonising existing ones. Scotland’s clean energy and high-tech manufacturing capability, together with Glasgow’s aspirations to be a net zero city, have made it the obvious place to host COP26 later this year. That is going to showcase the city’s sustainable industrial credentials. The offshore wind manufacturing investment fund will have particularly strong benefits in Scotland and, due to geographical factors, we expect much of the UK’s future floating wind deployment to be in Scottish and Welsh waters. There is significant growth potential there, and that can ultimately deliver new and disruptive local supply-chain content to support the future floating offshore wind projects in Scotland. That could lead to the creation of new high-value jobs in a sustainable growth industry.
I want to assure the hon. Member for Glasgow East that my officials are in regular dialogue with officials in the Scottish Government and with colleagues in Scottish Enterprise, and we will continue to work with them to support not only the Scottish Government’s efforts to help those affected but the broader manufacturing industry and economy in Scotland. As we build back from the pandemic, we should be pulling together more than ever to strengthen our United Kingdom and learning from one another to try to achieve the best outcomes for our great nation. We will continue to deliver for people across Scotland as part of a strong United Kingdom, and I am not saying that to make a partisan point or to show up political differences. I just think that when we look at the human cost, it is so important to realise that we are a collection of communities as well as of nations together.
The United Kingdom Internal Market Act 2020 provides the opportunity for the UK Government to complement and strengthen the support that is already given to citizens, businesses and communities across Scotland, Northern Ireland and Wales. For the first time in decades, we will be able to provide direct financial support to regenerate town centres and high streets together, to improve local transport links and infrastructure together, and to invest in cultural, sporting and economic development that will level up the whole of the UK.
We are going to boost funding for communities with the £4.8 billion levelling-up fund to support local infrastructure and with £220 million to invest in local areas, ahead of launching the UK shared prosperity fund in 2022. That is in addition to the £1 billion Glasgow city deal that supports tens of thousands of new jobs through infrastructure and also through innovative industries including high-tech manufacturing, life sciences and advanced design. Scotland will clearly continue to benefit from our £352 billion package of covid-19 support, which has protected one in three Scottish jobs.
Glasgow and East Kilbride will benefit from new jobs and investment from the Government, with the Cabinet Office and the Foreign, Commonwealth and Development Office moving hundreds of civil service roles to Scotland. That will create new opportunities for brilliant Scottish public servants to join UK efforts to tackle joint domestic and international challenges. We will continue to work for every citizen, every community and every business across Britain to improve quality of life and access to opportunity by harnessing local economic strengths.
Coming back to Tollcross, I know that this will be a deeply worrying time for the workers and families affected by the recent announcement from Pladis on 17 June that it was going to issue the HR1 redundancy notice. We have to work together to do everything we can to ensure a bright future for these workers so that their skills can continue to be used to benefit the local economy in Glasgow and more widely. I join the hon. Member for Glasgow East to encourage Pladis to work in a responsible and compassionate way for its employees. My ministerial colleagues and officials stand ready to work with the Scottish Government and the hon. Gentleman to do all we can to assist the employees affected so that they have access to all available support. We must work together to make sure that manufacturing continues to grow and provide skilled, well-paid jobs in Glasgow and Scotland. The proud history of Glasgow’s manufacturing sectors, together with its achievements in sustainability and aspirations to be the UK’s first zero-carbon city, provide a firm and enduring foundation for future jobs and great opportunities.
Question put and agreed to.
Covid-19: Recovery of Central London Businesses
Paul Scully Excerpts(2 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) on securing this really important debate. I thank her for all the work that she is doing to engage with businesses and ensure that their voices are heard in this place and across London through the Mayor, the Greater London Authority and all the boroughs. It is so important that, as she says, we work together really constructively in this area, because that is the only way we will bounce back.
As my hon. Friend says, London normally bounces back every time. It normally leads the charge in the UK for bouncing back from adversity and every recession. I have no doubt that the same will be true this time, but rather than leading the way, it is clear from the feedback we are getting from the cultural and hospitality sectors that London is lagging behind, and my hon. Friend outlined some of the reasons why.
London is three times the size of the next biggest European city, never mind UK cities, so it has a centre of gravity that is mainly based on public transport. We must give people the confidence to come back in, as my hon. Friend says, and enjoy the benefits of being in the workplace and what London has to offer. It goes beyond confidence: I describe it as confidence and joy. We can get people back in the first time, but if things are too onerous and difficult in hospitality terms, they will perhaps go back and rely on a ready meal and a bottle of wine in their back garden. That might be great every now and again, but it is the last thing we want if we are to help London’s recovery and ensure that it remains the greatest city in the world in which to live, work and bring up a family, and to really enjoy.
I have lived on the outskirts of London for the best part of 30 years, and the greatest thing about it is that I can enjoy the green spaces and schools in outer London, and raise a family there, but I have London on my doorstep. As well as the benefits of the suburbs, I have the benefits of the city—the theatres, the London Eye, as the hon. Member for Vauxhall (Florence Eshalomi) said, and the restaurants that rival anything available elsewhere in the world. We can go around the world within the few square miles of Greater London. That is so important.
When we talk to business that are encouraging people—or not, as my hon. Friend the Member for Cities of London and Westminster said—back into their workplaces, we have to remind them that London and the businesses that serve people in their workplaces cannot sit there and wait. They cannot survive on fresh air. They cannot be there for people if people do not come back and use them. That is why it is important that we encourage people to come back into London. London generates 25% of the GDP of the entire country, and the west end generates 4% of the country’s gross value added—that is before we get to the City and Canary Wharf. That is testament to the work of my hon. Friend and all the people she engages with; it is important that we celebrate and showcase it.
My hon. Friend talked about business rates. Clearly, London has a particular issue because of the cost of property here, and the business rates that follow. She will be aware—she referenced this—that we have a fundamental review, which is due to report back in October. I hope it is as fundamental as it suggests. My hon. Friend is right that, due to property costs, business rates particularly affect London.
One of the things that I discovered as I was working through the covid support measures that we were putting in place is that the grant system—seemingly the easiest system to deliver—still had its challenges. It was seemingly the easiest because local authorities across the country knew exactly who qualified, because in the first tranche of grants they knew which retailers, who in the hospitality sector and which small businesses were getting small business rates relief. However, they did not have the bank account details or know who to pay it to. The challenges were about fundamental things such as that. Sometimes the local authority’s relationship with its local businesses was not quite as close as it might have liked and expected. We have had to work through all those unintended consequences at pace over the past year, which led to me speaking to something like 112 local authorities across the country to see what more we could do to help them along.
In London, there was the grant scheme. I am pleased that with all these schemes, we were able to flex, following representations from colleagues such as my hon. Friend, to iron out some of the unintended consequences. Indeed, the early discretionary grants were based on the residents living in those areas. That obviously affected my hon. Friend’s constituency. There are not that many people living in the City of London, but there are a lot of businesses. That was an unintended consequence that we were able to correct in later iterations of the discretionary grants. That is testament to the fact that we have been able to flex and work in what were, frankly, completely unprecedented times. We have had to work at pace to change and develop the support accordingly, and we will continue to do that.
We have put in £352 billion to date—it is £407 billion when the various types of fiscal support are included, with the following year to come. As a small-government, free-market Conservative, having just made one of the biggest interventions since the second world war, that gives me 407 billion reasons why we have to get the next bit right. Having protected those jobs, businesses and the spirit of London, we have to make sure that we keep those gains.
Florence Eshalomi
I thank the Minister for giving way and for his crucial point on jobs and opportunities. Obviously, today we celebrate the 73rd anniversary of Windrush Day and the contributions of so many people who came to the UK to rebuild our country on the back of the war. Does the Minister agree that many people who work in businesses in his constituency and mine, and in that of the hon. Member for Cities of London and Westminster (Nickie Aiken), rely on people from a diverse range of backgrounds? What more assurance can he give to struggling businesses that want to help Londoners get back to work, but that are struggling financially?
Paul Scully
The hon. Lady is absolutely right. My father came over not on Windrush, but from the other direction—from Burma—in the 1950s, at around the same time. He completed his apprenticeship here in the UK, having started it in Rangoon, as it was, after the war. At the time, he had that shared experience of helping Britain to recover through his engineering work. The interesting point that she raises about how we support that particular section of the workforce is crucial—I talked about the spirit of London—in making sure that we get the recovery right for everybody.
I have talked about the Mayor of London, and my hon. Friend the Member for Cities of London and Westminster is absolutely right that we have to work constructively together. Now we have the London elections out of the way, although we will always do party politics and the ding-dong, we have to make sure that we collaborate closely together.
My fear has always been that he wanted to have the title of Mayor, but did not work out which city he wanted to be Mayor of. It is important that he is the Mayor for all London; otherwise, we will have a Gotham City scenario. Frankly, I do not think he would mind it if he was the mayor of Gotham City. What do I mean by that? In Gotham City in the Batman movies—“Joker” and so on—there is the holistic city that has the ultra-rich, who can be insulated from all these sorts of things, because they have the money to be able to support it. There are then the lowest-paid in society—the people who service all the workforces and workplaces, and who have to travel into the middle of town. There are then those in the middle, who live in areas like mine on the suburbs and outskirts, who can opt out. They can sit in their back gardens with their ready meal and a bottle of wine, and shop locally in their outer London high streets, which are starting to bounce back quite well.
That leaves a massive gap in the city centre—in the central activity zone, as it has slightly unromantically been titled over the last few years. Essentially, that is the west end, the City of London, Canary Wharf and those areas that people around the world know so well. People look to London, invest in London and want to travel to London because they know those areas. Those are the areas we see in the films and tourism brochures.
We then get to the question: how do we attract international visitors to go into those areas and beyond, across the UK? That is why the tourism recovery strategy is so important in making sure that we start that slow burn, because we know that it will take time to get international visitors back to the UK. However, we must do it.
We also have to get domestic tourists to London. That is why I absolutely agree with the Mayor that his campaign, Let’s Do London, is a far better campaign than we have had in previous re-openings after lockdown. It is a real call to action. If one looks around London, whether at the London Eye, the Tower of London—which I had the privilege of going to the other day—the Museum of London, the British Museum or the Royal Opera House, there are no queues. People who live in the south-east and who walk past those areas on their way to work or when they are in the workplace should go to them, because they will not have another chance to do so with no international tourists and without having to queue up for half an hour. They can see some of the best places, the best cultural buildings and the best institutions in the world right on their doorstep. That is what Let’s Do London is all about—getting people to rediscover the spirit of London.
There are two more types of people we want to encourage back, as we start to reopen. One is students. There are 40 universities in London—a massive chunk of organisations that attract young people who will want to spend more time in London after their studies. They will get jobs and fill some of the roles in the City and elsewhere that my hon. Friend spoke about. We also want to get people back into their workplaces.
The Prime Minister rightly wrangled with the decision over when to reach stage 4 of the road map. He did not make that decision easily because there were so many factors to consider, but it was the right one to take when making the argument that we want to ensure that we are moving in only one direction. The big lesson of last year is not to chase the virus and not to have the stop-start, because that costs businesses even more. A cautious reopening, put back a few weeks, is the right thing to do.
However, one of the unintended consequences of moving the reopening to July is that that leads quickly to August, which tends to be a quiet month for London. We want to ensure that we are working with big employers now, and looking at what more we can do to be flexible and encourage people back to their workplaces.
I am glad that my hon. Friend welcomed the flexible season ticket. We are demonstrating—not just doing it—that Transport for London has never cleaned the tube network as many times before. The problem is that that is being done at 2 o’clock in the morning, so we need to show people what is being done. Public transport is safe. I have been taking it most days for the past year and I have never worried about it. I encourage people to try it and see for themselves. They should spread their journeys out beyond rush hour to maintain space, because hands, face, space and fresh air are still important. We are not going to kill the virus in one day when we reopen and get to step 4. This is not like a thriller where the baddie is killed and the credits roll. We are going to be living with this for some time, but that is no reason to stay closed.
Finally, my hon. Friend talked about Sunday trading. I have been speaking to the Heart of London Business Alliance and the New West End Company about that. It is a tough one. We have looked at it time and again in Parliament, and it has always been incredibly controversial. Although she talks about international centres for it, it still needs primary legislation. We will keep it under review and work with colleagues to see what the objections are and get the balance right.
We will continue to look at what we can do with business rates. My hon. Friend talked about VAT. Something like £27 billion of support has gone into the VAT reduction. The Chancellor needs to look at measures in the round and holistically, just as she talked about looking at London holistically.
London is an ecosystem. People do not stay in a hotel in London just to sleep in another bed; they do it because of the theatres, the restaurants and all the other things London has to offer. That is what we have to protect. We will continue to try to do that, working together with the Mayor, the boroughs, this place, and our businesses and communities.
Question put and agreed to.