Post Office: Compensation for Horizon Scandal

Debate between Peter Grant and Paul Scully

Thursday 30th June 2022 Commons Chamber

[Paul Scully]

I thank my hon. Friend for his kind words. Receiving this praise is great for me, but this is not about me. As he rightly says—please do carry on, by the way—it is about the people who have suffered terribly at the hands of people in authority. Some of them have taken their own lives and many of them have been stigmatised and left in debt and abject poverty, so we have to keep the pace going, not just to get that compensation for them but to get those lessons learned and hold people to account.

[Peter Grant (Glenrothes) (SNP)]

Among the other catastrophic and inexcusable failures, this House failed. This House was made to fail in its duty to get to the bottom of this quicker, because somewhere in the machinery of government there was a deliberate and sustained conspiracy to send Minister after Minister unwittingly to the Dispatch Box to say things that we now know are not true. This House has to look at that very seriously indeed. It cannot be acceptable in any circumstances for this House to be prevented from doing its job by conspirators, whether in Government or in outside agencies, and I hope the appropriate authorities of the House will look into that urgently.

Can the Minister tell me what further action he proposes to take in forthcoming legislation to widen the circumstances in which directors of companies can be held personally liable as well as corporately liable for serious misconduct in office? In particular, one of the things my constituents find frustrating is that directors of these companies, who at the very least should have known what was going on and did nothing to stop it, were able to walk away and become directors of other companies. They have had 20 years of a good lifestyle that was denied to the victims and, if they are called to account, they will get a fair trial, which was denied to the victims. Will the Minister look for ways to speed up the process of preventing directors from taking up other highly paid directorships if there are serious questions to be answered about their conduct in office?

[Paul Scully]

I am not sure if it is the House authorities, but it is certainly the case that Wyn Williams’s inquiry will see exactly where the failings were—including, if there are any, failings by Ministers or others who have stood here—without fear or favour. In terms of directors, we have already brought in a number of measures since I have been a Minister, including the disqualified directors legislation, which allows the Insolvency Service to bring companies back on the books and then to take action against their directors, but we will always look to make sure we have the most robust system to tackle rogue directors.

Oral Answers to Questions

Debate between Peter Grant and Paul Scully

Tuesday 7th June 2022 Commons Chamber

[Peter Grant (Glenrothes) (SNP)]

The recently published preliminary report by the administrators of the failed Safe Hands funeral plans company suggest that this is yet another instance in which company directors have made false promises to innocent people, taken their money, played fast and loose with it and are likely to have lost it all. Will the Minister give us a timetable for the various bits of legislation in the Queen’s Speech so that dodgy company directors can be held to account immediately and not 10 or 15 years later?

[Paul Scully]

On corporate governance, we will see, in the economic crime Bill, the reviews relating to Companies House, and we have also had the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021. However, the hon. Gentleman cites a particularly egregious example and I will make sure that my colleague Lord Callanan, the Minister responsible for corporate governance, responds accordingly.

Sub-Postmasters: Compensation

Debate between Peter Grant and Paul Scully

Tuesday 22nd March 2022 Commons Chamber

[Paul Scully]

First, I do not want to pre-empt anything that we may do, but when I talk about a short consultation, this is about 555 people who have a well organised group together and their lawyers. We have already started, so this is not something where we are writing out to people and waiting for answers to come back; this is a focused bit of work. What I can say is that we will start the process that is agreed with the JFSA as soon as possible—and as soon, Mr Speaker, as I have updated the House first.

[Peter Grant (Glenrothes) (SNP)]

The Minister will be aware of the plight of my constituent Myra, who jointly ran a post office with her mum. They begged and borrowed £70,000 from friends and families to fill a shortfall that they could not understand, but which we now know—and the Post Office probably knew at the time—was not a shortfall at all. They lost their jobs, lost their home and were branded thieves and liars. Myra’s mum did not live to see her name cleared. Myra was not allowed to claim under the historical shortfall scheme. Does the Minister agree that no matter how carefully the criteria for any compensation scheme are drawn, there will always be people who do not fit those criteria? Will he ensure that there is a catch-all clause in the compensation scheme so that nobody but nobody is left without the compensation for which they have waited far too long?

[Paul Scully]

Please send my condolences to Myra and the family. Within any scheme there will always be hard edges, but please let me know if particular people are falling through the gaps and let me see what further we can do to support them through this difficult time.

Economic Crime: Planned Government Bill

Debate between Peter Grant and Paul Scully

Wednesday 26th January 2022 Commons Chamber

[Paul Scully]

I agree with my hon. Friend that we want to get this right. It is a technical and complex issue, and we will continue to work with people who are experts and knowledgeable in this field to make sure that we can get that legislation totally in place so that we can push it through in good time.

[Peter Grant (Glenrothes) (SNP)]

The Minister will be aware, and certainly his Treasury colleagues are aware, of the activities of Patrick McCreesh and Philip Nunn, of Blackmore Bond notoriety. Nearly five years after their dodgy and probably illegal sales tactics were first brought to the attention of regulators, those two are still allowed to continue in operation at the helm of a veritable spider’s web of companies, collecting scores of yellow cards, and some red cards, for breaches of statutory obligations. They are subject to no personal sanction, other than the occasional closure of one of the companies that they wanted to close down anyway. How much longer are we supposed to be satisfied with a regulator that, in one case, accepted the registration of a 10-year-old as a company officer? When are we going to have a regulator with teeth to drag dodgy directors out from hiding behind company nameplates in order for them to be held personally responsible, in a way that correctly reflects the fortunes that they have made and the financial misery they have inflicted on their victims?

[Paul Scully]

I know the hon. Gentleman has used that example on a number of occasions. It is a particularly pertinent example but, as I say, Companies House reform is foremost among our priorities and it will come as soon as parliamentary time allows.

Draft National Security and Investment Act 2021 (Monetary Penalties) (Turnover of a Business) Regulations 2021 Draft National Security and Investment Act 2021 (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021

Debate between Peter Grant and Paul Scully

Wednesday 20th October 2021 General Committees

[Paul Scully]

I thank hon. Members from both sides of the room for their valuable contributions. First, let me have another go at responding to my hon. Friend the Member for North East Bedfordshire: turnover does not include stock and assets, but it does include any income that derives from their use. The hon. Member for Newcastle upon Tyne Central raised with my right hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), now Education Secretary, when he was covering this subject in Committee, the question of where the fines go. As she knows, the fines are going to the Consolidated Fund, but none the less, she makes her case powerfully.

In terms of what changes have been made to the definitions since the consultation, the scope of a number of descriptions—communications, critical suppliers to Government, data infrastructure, energy, suppliers to the emergency services, and synthetic biology—was narrowed following the publication of the consultation response, and a few descriptions were amended. For example, in the area of communications, qualifying entities carrying on activities in the UK that related to public communications supply chains were removed from the definition, substantially narrowing the activity of the qualifying entities captured. For critical suppliers to Government, two of the five limbs of the definition set out in the Government response to the consultation were removed, again to narrow the scope of the definition. Those two limbs were the provision of services to facilitate the security of network and information systems, and the guarding of premises to insure against unauthorised access or occupation and against outbreaks of disorder or damage.

In the area of data infrastructure, as was mentioned by the hon. Member for Glenrothes, the Government response to the consultation provided a definition of a public sector authority using the meaning of “contracting authority” in the Public Contracts Regulations 2015. The final regulations revised the definition of a public sector authority to a much narrower list of authorities, set out in a table within the regulations. I understand the hon. Gentleman’s point: I would say that first of all, the purpose of that table is to make sure that the notifications to the Secretary of State are proportionate and balanced. None the less, we will review this SI within three years, rather than the normal five years, to ensure that we lean into this and get it right, to give certainty to businesses and to ensure that we capture the whole gamut of the areas that he raised.

In terms of energy, changes were made to clarify the infrastructure activities carried on in the UK and captured within this description. Suppliers to the emergency services, as the hon. Lady mentioned, and several meanings in the definition, published in the Government response to the consultation, have since been amended and narrowed to provide an objective list of activities, captured for the purposes that require self-identification. The applicability of each activity to each type of emergency service listed has been narrowed to ensure that the activities of qualifying entities, captured by mandatory notification, are as targeted and proportionate as possible.

Finally, on synthetic biology, new paragraph 6 was added to the definition to create exceptions relating to human or veterinary medicines, or immunomodulatory approaches, which is not easy to say.

The hon. Lady also asked who was consulted on this and what was said. We are proactively and extensively engaging across all the relevant sectors. For example, our policy colleagues at the Department for Business, Energy and Industrial Strategy have attended meetings with techUK members, the AI Council, an aerospace, defence, security and space group webinar, and an electricity industry forum. We conducted targeted and extensive engagement with organisations most likely to be affected by the NSI Act, including companies that invest in or acquire entities in the 17 mandatory areas of the economy, and those providing legal or financial advice in UK acquisitions.

We have met and spoken to more than 200 cross-economy organisations through workshops, teaching and presentations, including the Law Society, the Institute of Chartered Accountants in England and Wales, techUK, international investors and UK universities. Tailored communications have been sent out to more than 100 industry bodies in those mandatory areas of the economy, including 70 major law and financial services firms, 36 international investors and 550,000 businesses via Companies House.

Additional care has been taken to ensure that we can reach small and medium-sized enterprises, because the hon. Lady is absolutely right that they need to have the capacity to be ready and will be affected by the regulations. We have used associations, such as the Federation of Small Businesses, the British Chambers of Commerce and the Confederation of British Industry, so together there is a network of 580,000 businesses. We will continue to ensure that we work with SMEs in particular, to give them guidance ahead of time, because we need to keep on engaging directly with businesses around this Act, ahead of the full commencement.

The first tranche of detailed guidance has already been published to assist businesses, investors and advisers in understanding the Act and how to comply with its requirements. We have established a BEIS expert panel, which includes business representative organisations, higher education bodies, investment associations, law societies and others, that has provided detailed feedback on the draft guidance, ensuring that the guidance is fit for purpose, rather than rushing it.

Our second tranche of guidance will be published ahead of regime commencement, to continue to aid the interaction of parties with the new investment security unit and to ensure compliance, including how to submit a notification form and guidance around notifiable acquisitions. A communications campaign will focus on delivering teaching and guidance to that cross-section of businesses in the UK and internationally.

The hon. Member for Glenrothes asked about turnover and whether we were confident about getting this right; absolutely, we are. If the Secretary of State and a business disagree on the business’s turnover, the Secretary of State can overrule the business. Clearly, the Secretary of State has to act reasonably under public law duty, so it does not give him a free pass, but it is a fallback option if there is a disagreement on business turnover for the reasons mentioned.

[Peter Grant]

I am grateful for that answer. When assessing a business’s turnover, can the Minister confirm whether sufficient attention will be paid to previous years? If a business has a big turnover for several years and it suddenly drops, looking at a single year will not necessarily flag that up. However, if that is noticed, it may well raise suspicions that turnover is being artificially depressed. Will that kind of examination be standard practice whenever a business’s turnover is being examined?

[Paul Scully]

As is set out in the statutory instrument, annual turnover is calculated by taking the turnover for the available period and scaling it up to a full year—if there is not even information for one year. None the less, the Secretary of State will have to take a view, albeit under his public law duties, to ensure that turnover is a realistic. There must be an effective deterrent against a breach of the rules, which is why in some cases the Secretary of State may even deal with a subsidiary business with a small turnover that is funded and controlled by a large, wealthy parent business. Indeed, the subsidiary may have been established specifically to carry out the acquisition in question and may not even have a turnover, full stop, at the point when the Secretary of State is calculating a penalty. That is why there is scope for the Secretary of State to overrule and take the wider view that he is asking for.

I hope that I have covered most of the areas that were raised and provided sufficient clarifications and assurances to hon. Members on today’s statutory instruments. Both SIs are essential for the effective operation and running of the NSI Act and the provision of a safeguard for the UK, and I commend them to the Committee.

Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (Second sitting)

Debate between Peter Grant and Paul Scully

Committee stage
Tuesday 6th July 2021 Public Bill Committees

[Peter Grant]

Q I have one final question. The legislation as it stands would set a three-year time limit on any application for disqualification, starting from when the company was dissolved. What are your views on that three-year time limit? Is too short, too long, or just about right?

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 To expand on a few of those areas, starting with the three-year time limit to file a disqualification application, the Insolvency Service or the Secretary of State can already examine historic conduct, but they have three years to file the application for disqualification. Can you expand a bit on what you meant about the court process, which presumably comes afterwards?

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.

Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (First sitting)

Debate between Peter Grant and Paul Scully

Committee stage
Tuesday 6th July 2021 Public Bill Committees

[Paul Scully]

Q Finally, what effect do you think there would be on lending if this regime did not come into place or the loophole were not closed? Would there be a chilling effect?

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 Good morning again, Mr Pegge. I apologise because I think I mispronounced your name earlier because I tried to read it without my glasses on. In an earlier answer, you referred to the retrospective nature of parts of the Bill. You indicated that you supported them. In particular, you referred to the fact that the Government had made it clear since 2018 that the legislation was coming.

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.

--- Later in debate ---

[Peter Grant]

Q You say that you have not heard any such representations from the Insolvency Service. Have you had any such representations from lenders or creditors? They may take a different view from the Insolvency Service if it is their money that is at stake.

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 Thank you for giving evidence, Mr Kerr. Can you talk a little bit more about the deterrent that you spoke about? How much of an impact do you think the measure, and especially the threat of disqualification, will have on providing the necessary deterrence?

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.

Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (First sitting)

Debate between Peter Grant and Paul Scully

Tuesday 6th July 2021 Public Bill Committees

[Paul Scully]

[Peter Grant]

--- Later in debate ---

[Peter Grant]

[Paul Scully]

Oral Answers to Questions

Debate between Peter Grant and Paul Scully

Tuesday 6th July 2021 Commons Chamber

[Paul Scully]

Travel has an impact beyond the sector itself and the impact of reopening our cities. We will continue to work with the sector to offer it support and to flex our support. My hon. Friend mentioned weddings. On 21 June, the restrictions on weddings were eased, which I was pleased to see. The number is now determined by how many a venue can safely accommodate with social distancing measures in place. I am looking forward to the day when those final social distancing measures can melt away.

[Peter Grant (Glenrothes) (SNP)]

This morning the Government tweeted to tell us that about 1.7 million businesses had been allowed to borrow money under the various coronavirus loan schemes. Do they also intend to send out a tweet to tell us how many jobs have been lost and how many businesses have been destroyed by the decision to exclude 3 million business owners from any coronavirus support whatever?

[Paul Scully]

I have continued to converse, whether in person or on social media, with some of the people leading the campaign in this area. As I have said before, a lot of the schemes we put in place have been reverse engineered so we can deliver them quickly, at pace and at scale. We have not been able to save every business and every job, but clearly, we will look to not only reopen and recover, so that we can bounce back better and protect as many jobs as we can, but create new jobs as well.

Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Debate between Peter Grant and Paul Scully

2nd reading
Monday 28th June 2021 Commons Chamber

[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?

Uber: Supreme Court Ruling

Debate between Peter Grant and Paul Scully

Wednesday 24th February 2021 Commons Chamber

[Paul Scully]

My hon. Friend is absolutely right to make sure that we continue to look at the number of private hire licences compared with black cab licences in London to ensure that there is no unfair advantage, but, ultimately, there is a market there, as he rightly says.

[Peter Grant (Glenrothes) (SNP) [V]]

We can judge this Government’s sincerity and their claims to care about workers’ rights by the fact that the Secretary of State is on record as saying that British workers are among the worst idlers in the world; of course, her own treatment of her staff would have got her sacked from almost any other job.

Given that in just over two months the Scottish people will, for the sixth time in succession, elect a Scottish Government who care about the rights of workers, is it not time that employment legislation was delegated to the Scottish Parliament and the Scottish Government so that, at the very least, the workers of Scotland can get the government that they vote for?

[Paul Scully]

I am afraid that the question just goes to show that the hon. Member is more interested in votes than jobs and workers’ rights. That is why the employment rights Bill will come before this House in due course.

Oral Answers to Questions

Debate between Peter Grant and Paul Scully

Wednesday 21st October 2020 Commons Chamber

[Paul Scully]

I thank my hon. Friend for her concern, especially about childcare. We have already introduced 30 hours of free childcare for eligible working parents of three and four-year-olds. We have ensured that wraparound childcare remains open, to support parents to continue to work under all three covid levels. As set out in our manifesto, the Department for Education will be investing £1 billion from 2021 to help create more high-quality wraparound and holiday childcare places, including before and after school and during the school holidays.

[Peter Grant (Glenrothes) (SNP)]

What steps her Department is taking to support older people during the covid-19 outbreak.