20/10/2016

:00:00. > :00:00.Lords. I don't think I have anything further to add to what my honourable

:00:00. > :00:07.friend said on that occasion. THE SPEAKER: I thank the Hotse for

:00:08. > :00:12.co-operation. Statement for community health and care.

:00:13. > :00:17.Thank you, Mr Speaker. With permission I would like to lake a

:00:18. > :00:24.statement on the future of community pharmacy. In December, 2015, the

:00:25. > :00:29.Government set out a range of proposals for reforming the sector.

:00:30. > :00:32.Our intent was to promote a movement towards a clinically focussdd

:00:33. > :00:37.service that is better integrated with primary care and makes better

:00:38. > :00:41.use of pharmacist skills. I now wish to update the House on the outcome

:00:42. > :00:48.of this consultation and thd measures we intend to take forward.

:00:49. > :00:51.Mr Speaker, I let me be cle`r t Government fully appreciates the

:00:52. > :00:58.value of the community pharlacy sector. There are over 11,a 500

:00:59. > :01:03.farmties up -- 11,55 pharmacies up by 11% in the last decade. The

:01:04. > :01:08.overall pharmacy spend has hncreased by over 40% since the last decade.

:01:09. > :01:14.Now stands at ?2.8 billion per an unanimous. -- an number. However we

:01:15. > :01:18.do not believe the current funding system does enough to promote

:01:19. > :01:22.efficiency or quality. Nor does it promote the integration with the

:01:23. > :01:25.rest of the NHS that we and pharmacists themselves would like to

:01:26. > :01:30.see. Mr Speaker, the average pharmacy

:01:31. > :01:37.receives nearly ?1 million per an number for the NHS goods and

:01:38. > :01:43.services it provides. Around ?220,000 of this is direct

:01:44. > :01:48.income. This includes a fixdd sum payment called the establishment fee

:01:49. > :01:53.of ?25,000 per an number pahd from most pharmacies regardless of size

:01:54. > :01:59.and regardless of quality. This is an inefficient allocation of NHS

:02:00. > :02:04.funds, when 40% of pharmacids are now in clusters of three or more,

:02:05. > :02:10.which means two fifths are within den minutes walk of two othdr

:02:11. > :02:14.pharmacies. Clusters of pharmacies of up to 15 within a 10-mintte walk

:02:15. > :02:20.of each other. At a time in which the over`ll NHS

:02:21. > :02:26.budget is under pressure and we need to find ?22 billion in efficiency

:02:27. > :02:31.savings by 2020, it is right that we examine all areas of spend `nd look

:02:32. > :02:37.for improvements. The measures that we are bringing forward tod`y have

:02:38. > :02:40.at their heart our desire to more efficiency spend precious NHS

:02:41. > :02:45.resources. Community pharmacy must play its part as the NHS rises to

:02:46. > :02:51.this challenge. Mr Speaker, I am today annotncing a

:02:52. > :02:57.two-year funding settlement. In summary, contractors providd the NHS

:02:58. > :03:03.pharmaceutical services unddr the community pharmacy framework, will

:03:04. > :03:13.receive ?2.86 billion funding in 2016, 2017 and ?2.5 #9d billion in

:03:14. > :03:22.2017/18. This represents a 4% reduction in 2017/18 and 3.4% in

:03:23. > :03:29.17/18. Mr Speaker, every pensy saved by this reset will be reinvdsted and

:03:30. > :03:35.reallocated back into our NHS. To ensure the very best pathent

:03:36. > :03:40.care. Furthermore, separately commissioned services by NHS

:03:41. > :03:42.England, and Clinical Commissioning Groups and local authorities will

:03:43. > :03:48.not be affected by this change. I want to see this commissionhng of

:03:49. > :03:55.services continue to grow. From December 1st, 2016, we will also

:03:56. > :03:59.simplify the current outdatdd payment structure, introducd a

:04:00. > :04:03.payment for quality, so that first, for the first time we will pay

:04:04. > :04:08.pharmacies for the services they provide, not just the volumd of

:04:09. > :04:14.prescriptions they dispense. We will also be relieving pressure on other

:04:15. > :04:20.parts of the NHS by for the first time properly embedding pharmacy in

:04:21. > :04:26.the urgent care pathway. As we continue the path of reform we will

:04:27. > :04:30.be informed both by the revhew of community pharmacy services being

:04:31. > :04:34.carried out by Richard Mowex of the King's Fund and other stakeholders

:04:35. > :04:42.such as the royal pharmaceutical society. NHS England is invdsting

:04:43. > :04:48.?42 million in the pharmacy integration fund for 2016/17, 1 /18.

:04:49. > :04:52.24 will facilitate the movelent of the sector faster into valud added

:04:53. > :04:57.services. As an example Mr Speaker, last week I announced two additional

:04:58. > :05:02.initiatives to improve our offer to patients. First, those who need

:05:03. > :05:10.urgent repeat medicines will be referred to NHS Directly. Bx NHS 111

:05:11. > :05:15.directly to pharmacists, not out-of-hours GPs, as at present

:05:16. > :05:21.Secondly, NHS England will dncourage a national rollout of the mhnor

:05:22. > :05:26.ailment schemes or any commhssion by NNCGs. This is expected to be

:05:27. > :05:29.complete by April 2018. Mr Speaker, we are confident these

:05:30. > :05:33.measures can be made without jeopardising the quality of

:05:34. > :05:40.services. In fact we believd the changes will improve them. To

:05:41. > :05:46.safeguard patient access we will introduce a pharmacy ak schdme in

:05:47. > :05:49.areas with fewer pharmacies and higher health needs. We are

:05:50. > :05:54.publishing the list of pharlacies which will be eligible to ftnd from

:05:55. > :05:58.this scheme. Copies are avahlable on gove UK and the Vote Office. This

:05:59. > :06:04.list includes all pharmacies which are more than one mile in dhstance

:06:05. > :06:11.from another pharmacy. Thesd pharmacies will be protected from

:06:12. > :06:17.the full impact of the reductions W ewill have a review process to deal

:06:18. > :06:23.with any unforeseen circumstances like road closure. We will review

:06:24. > :06:26.cases where there may be a higher level of deprivation but ph`rmacies

:06:27. > :06:31.are less than a mile from another pharmacy. If that pharmacy hs

:06:32. > :06:37.critical for access. This whll cover pharmacies that are located in the

:06:38. > :06:42.20% most deprived areas in Dngland. And areal le kated 0.8 miles or more

:06:43. > :06:47.from another pharmacy. And `re critical for access.

:06:48. > :06:50.Additional funding over and above the base settlement mentiondd above

:06:51. > :06:56.will be made available for this as needed.

:06:57. > :07:01.Mr Speaker, we have already announced NHS England's proposal to

:07:02. > :07:05.significantly increase the number of pharmacists working directlx in

:07:06. > :07:10.general practise. A budget of ? 12 million has been allocated `nd will

:07:11. > :07:15.deliver a further 1500 pharlacists to general practise by 2020.

:07:16. > :07:21.. Colleagues will be aware th`t the

:07:22. > :07:24.Government consulted the pharmaceutical negotiating committee

:07:25. > :07:31.and other stakeholders. I am grateful for the responses

:07:32. > :07:34.received. They re-enforced the value of community pharmacy and confirmed

:07:35. > :07:38.its front line role at the heart of the NHS. The consultation also

:07:39. > :07:44.confirmed there was a potential for the sector to add more valud. But we

:07:45. > :07:48.are disappointed by the fin`l response from the PSMC. We dndeavour

:07:49. > :07:53.to collaborate and listen to their many suggestions over many lonths.

:07:54. > :07:58.Sadly, we were unable in thd end to reach agreement.

:07:59. > :08:05.Their role is to represent the interests of their members `nd I

:08:06. > :08:12.respect that. My role is to do the right thing for the taxpayer, the

:08:13. > :08:17.patient and the NHS. I want to close by setting out my firm belidf that

:08:18. > :08:22.the future for community ph`rmacy is right. These vital reforms will

:08:23. > :08:27.protect access the payments, properly reward quality for the

:08:28. > :08:32.first time and far better integrate care with GP and other servhces

:08:33. > :08:37.This is what the NHS needs, what patients expect, and I belidve what

:08:38. > :08:47.the vast majority of communhty pharmacists are keen to delhver I

:08:48. > :08:52.commend this statement to the House. I thank the Minister for his

:08:53. > :08:57.statement. Community pharmacies play a crucial role in our Health and

:08:58. > :09:03.Social Care Act system. 80% of patient contact in the NHS hs in

:09:04. > :09:08.community pharmacies so the government decision to press ahead

:09:09. > :09:12.with damaging cuts to pharm`cies, representing a 12% cut for this year

:09:13. > :09:20.and 7% for the year after wd'll cause widespread concern and dismay.

:09:21. > :09:23.-- will cause. When the cuts were proposed public petition on this

:09:24. > :09:29.became the largest ever on ` health-care issue. It has 2.2

:09:30. > :09:34.million signatures so the mdssage is that people want to see comlunity

:09:35. > :09:40.pharmacies protected. In thd face of unprecedented demands on he`lth and

:09:41. > :09:45.social two care services, the role of pharmacies is greater th`n ever.

:09:46. > :09:51.They signpost people to othdr services, they are important to

:09:52. > :09:55.carers and they reduce demand on GPs and other services. The minhsters

:09:56. > :09:58.not recognise the extent of the support community pharmacies offer

:09:59. > :10:06.and the impact their loss whll have on communities? The governmdnt's

:10:07. > :10:11.latest funding offer was regular -- neglected by the pharmaceuthcal

:10:12. > :10:18.negotiating group Vickers the outcome would be the same as the

:10:19. > :10:24.previous offer. -- because. The Member for bed and Fred -- the

:10:25. > :10:27.Member for Bedfordshire said up to a quarter of community pharmacies

:10:28. > :10:34.would close and many of the remaining ones would be forced to

:10:35. > :10:38.scale back their services. Can he tell the House how many comlunity

:10:39. > :10:43.pharmacies he expects to close as a result of the government cuts and

:10:44. > :10:47.pharmacies that do survive the cuts will be under significant pressure,

:10:48. > :10:51.reducing in job losses and service reduction, putting patient safety at

:10:52. > :10:54.risk. The government plans `re not only deeply unpopular, they are

:10:55. > :11:00.short-sighted and they will hit areas with the greatest health

:11:01. > :11:05.inequalities hardest. A study by Durham University has shown that

:11:06. > :11:10.pharmacy clusters occur most in areas of greatest deprivation and

:11:11. > :11:15.need. Will he reassure us that areas of greatest deprivation will not

:11:16. > :11:19.lose pharmacies they rely on and be disproportionately hit by these

:11:20. > :11:23.cuts? I was not reassured bx his statements. The impact will be

:11:24. > :11:28.significant on older people, people with disabilities or long-tdrm

:11:29. > :11:36.illnesses, or carers who often do not even seek GP appointments. The

:11:37. > :11:41.Minister said nothing about an impact assessment for these cuts.

:11:42. > :11:45.Given their effect is likelx to be substantial with rural, remote and

:11:46. > :11:51.deprived areas most affected, when we will see -- when will we see an

:11:52. > :12:01.impact assessment? Communitx pharmacies relieve pressure on

:12:02. > :12:07.overstretched health and social care services. It seems to me th`t

:12:08. > :12:15.ministers are ignoring "Of ` recent report by Price Waterhouse Coopers

:12:16. > :12:27.showing that community farm pharmacists give a huge bendfit As

:12:28. > :12:34.the Minister considered the long-term impact this will have on

:12:35. > :12:45.other NHS services? Has Billy macro -- has the. Can the Minister

:12:46. > :12:49.reassure us that all parts of the NHS, including NHS England, support

:12:50. > :12:52.these proposals? He said earlier in the week that no community will be

:12:53. > :12:58.left without a pharmacy but he was unable to say which will close and

:12:59. > :13:03.where. Will he repeat the pledge that no community will be ldft

:13:04. > :13:06.without a pharmacy? We recognise the need, as does the Minister, to

:13:07. > :13:12.integrate pharmacy services greater with the rest of primary care, but

:13:13. > :13:22.introducing cuts on this sc`le will not improve health services, it will

:13:23. > :13:29.damage them. A lot of that frankly was scaremongering. It doesn't help

:13:30. > :13:35.what we are doing here and some of the difficult decisions we have had

:13:36. > :13:39.to make, and they are directed at modernising this service, bringing

:13:40. > :13:44.it up today, making it much more by manic in terms of added valte and

:13:45. > :13:49.less static in terms of dispensing and all that goes with that but I

:13:50. > :13:54.will offer Billy macro answdr specific points. There was ` full

:13:55. > :14:00.impact assessment which will be released after this statement. She

:14:01. > :14:08.also asked about the PWC report an excellent piece of work, and I am on

:14:09. > :14:11.record as saying that on a number of occasions, and it drives hole the

:14:12. > :14:15.value of community pharmacy, which we accept on this side of the House.

:14:16. > :14:21.It doesn't address the extent to which those services could be

:14:22. > :14:25.delivered for less cost to the NHS and that is what I have to `ddress

:14:26. > :14:34.and that is what we have done. She asked whether NHS England stpport

:14:35. > :14:38.these changes that we are m`king. She may have heard comments by Simon

:14:39. > :14:49.Stephens but I will read out to her quote from the chief pharmaceutical

:14:50. > :14:53.officer of NHS England." NHS England as a national commission of

:14:54. > :14:57.community pharmacy services can reassure the public that thd

:14:58. > :15:05.efficiencies being asked for will be manageable and sufficient to ensure

:15:06. > :15:08.that they are accessible and convenient so they will be NHS

:15:09. > :15:19.pharmacy services in every community in England." That is the chhef

:15:20. > :15:23.pharmaceutical officer. The honourable lady is asking how many

:15:24. > :15:28.are closing, the answer is H don't know. Possibly none will close. I

:15:29. > :15:35.don't believe that 3000 will close. But I would say that the avdrage

:15:36. > :15:40.margin in operating margin that a pharmacy makes on the numbers I

:15:41. > :15:48.quoted earlier is 15%. That is after salaries and rate. The cuts we are

:15:49. > :15:51.making, the efficiencies we are asking for, is significantlx lower

:15:52. > :15:56.than that. Of course there hs no such thing as an average ph`rmacy

:15:57. > :16:00.which is why I can't guarantee there will be no changes but I can say

:16:01. > :16:06.that if there are mergers and consolidation that demand doesn t go

:16:07. > :16:10.away, it goes to other pharlacies, and to say that those will be put

:16:11. > :16:14.under more pressure is plain wrong. I wanted to say again that what we

:16:15. > :16:19.are doing here is building `n industry which is fit for the

:16:20. > :16:25.future, modern and which adds value in a way it hasn't been abld to do

:16:26. > :16:29.in the past. Members who arrived after the start of the statdment

:16:30. > :16:33.should not expect to be called. Secondly, there is extensivd

:16:34. > :16:39.interest in this very important statement, interest I am kedn to

:16:40. > :16:42.accommodate, and there are to follow very heavily subscribed deb`tes

:16:43. > :16:49.under the auspices of the B`ckbench Business Committee, said thdre is a

:16:50. > :16:57.premium on brevity. We will be led in that by Sir Alex Hazlehurst. My

:16:58. > :17:03.honourable friend acknowledged that the NHS has become such a p`rt of

:17:04. > :17:05.the nation's DNA that doctors' surgeries are frequently ovdrloaded

:17:06. > :17:11.and absolutely the right wax forward is to have a network of pharmacies

:17:12. > :17:17.and that is of particular ilportance in rural areas. Director denies

:17:18. > :17:23.that. He made the point that it is well spaced and that all ardas are

:17:24. > :17:29.protected. I also make the point, as I said, that we are recruithng a

:17:30. > :17:36.further 1500 pharmacists into the GP network and they will also have a

:17:37. > :17:41.big part in that integration. Aren't these cuts the latest evidence of

:17:42. > :17:46.the unprecedented financial pressure the NHS is under and isn't ht the

:17:47. > :17:50.case that cutting community pharmacy services are the very last place you

:17:51. > :17:54.would begin, because they t`ke the pressure of GP surgeries and

:17:55. > :18:04.hospitals, offer excellent service, the government should be investing,

:18:05. > :18:08.not cutting. This year we invested a further ?5 billion in the NHS, three

:18:09. > :18:15.times the rate of inflation. In June of this year the OECD noted that we

:18:16. > :18:20.were now above average in tdrms of NHS and social care spend in the

:18:21. > :18:25.OECD. The facts are that however much we spend it is right that we

:18:26. > :18:28.look to do it as efficientlx and effectively as possible to lodernise

:18:29. > :18:36.the service and make it better for patients and that is what wd are

:18:37. > :18:41.doing. The Minister knows mx views, that I think this 4% cut is not

:18:42. > :18:44.wise, but I note and I think it is important that everybody reports

:18:45. > :18:49.this accurately, that money is going to stay within the NHS, so ht is

:18:50. > :18:56.very important we don't report this as a cut. I would ask the Mhnister

:18:57. > :18:59.to assure us that any incentives for pharmacies and the delivery of

:19:00. > :19:07.public health measures, not`bly preventative measures. I re`ssure

:19:08. > :19:12.her that for the first time we will be allowing pharmacists to `ccess a

:19:13. > :19:17.quality fund, meaning that the average pharmacy could earn up to

:19:18. > :19:21.?6,000 or ?7,000 over and above what they get just for dispensing, and

:19:22. > :19:30.that will include specific leasures around public health. We discussed

:19:31. > :19:38.this on Monday and as I pointed out Scotland has had a national minor

:19:39. > :19:41.ailments chronic medicine sdrvice and that prevention service for

:19:42. > :19:47.years within community pharlacies and we have found them very

:19:48. > :19:54.effective. Research showed that they cut 10% of the pressure on GPs and

:19:55. > :19:58.5% on A I feel this will be a bit random, just pharmacies shutting on

:19:59. > :20:03.the basis that they can't strvive. Will there not be a planned system

:20:04. > :20:08.to look at and discuss wherd they should be? It is not just rtral or

:20:09. > :20:12.deprived, it is transport. @ mile away may be a real problem hf you

:20:13. > :20:19.are elderly and frail and there isn't a bus that takes you there. My

:20:20. > :20:22.concern about this, I welcole England taking forward thesd

:20:23. > :20:25.services and it is just how it will be done. If it is just due to cuts

:20:26. > :20:32.it might not give you the answer you really want. I thank her for her

:20:33. > :20:36.point and she mentioned the Scotland first programme in terms of minor

:20:37. > :20:39.ailments. The announcement H made about a week ago on that was in many

:20:40. > :20:44.ways modelled on the Scottish model because we know that pharmacies can

:20:45. > :20:50.do much more in minor ailments than they do right now. That can be

:20:51. > :20:53.commissioned in sympathy to the other things we talked about and

:20:54. > :20:56.paid for by the integration fund. We are bit behind Scotland in that

:20:57. > :21:04.regard and we are having to catch up. Can I congratulate the Linister

:21:05. > :21:08.for recognising what Labour failed to, that NHS money is taxpaxers

:21:09. > :21:12.money and the priority should always be patient care, not the profits of

:21:13. > :21:20.private sector -- equity firms? Can I make -- thank him for acute clear

:21:21. > :21:27.that those in deprived commtnities will have their services enhanced as

:21:28. > :21:29.a result of these changes? H won't say much more because of tile

:21:30. > :21:35.constraints but I thank him for his comments and it is right to remind

:21:36. > :21:38.the House that the sector is concentrated towards public

:21:39. > :21:42.companies. That is not to s`y that there are not some individu`l

:21:43. > :21:45.pharmacists that will be affected but something like 25% of pharmacies

:21:46. > :21:53.are owned by two or three ptblic companies. I should reclaim my

:21:54. > :22:03.interests, chairman of the `ll-party group on pharmacies. If we `re

:22:04. > :22:05.getting to a situation wherd pharmacies are merging, my

:22:06. > :22:10.understanding is that the regulations are not in placd yet for

:22:11. > :22:14.that to happen. Is that trud and if it is needed when will it h`ppen?

:22:15. > :22:20.That is an extremely good point they are not yet in place btt they

:22:21. > :22:24.will be by the 1st of December. I congratulate the Minister on his

:22:25. > :22:28.statement this morning. It hs worth reminding the House that many urban

:22:29. > :22:32.pharmacies exist in clusters very close to each other so it is right

:22:33. > :22:36.that we should look at how they are subsidised. As a result of these

:22:37. > :22:44.savings are an pleased that the Minister is looking out for rural

:22:45. > :22:51.pharmacies that are more disbursed. -- I am pleased. I should s`y that

:22:52. > :22:56.the access scheme we referrdd to will apply to rural and urb`n

:22:57. > :22:58.pharmacies, there is more urban than rural in it but it will protect

:22:59. > :23:09.rural pharmacies. Zep This amounts to a significant

:23:10. > :23:13.cut in prevention services which is what happens when the finances of

:23:14. > :23:18.the NHS are under pressure. While I accept the need for reform for

:23:19. > :23:23.financial incentives to enstre we get the best outcome from the money

:23:24. > :23:28.spent, surely we should invdst more in prevention in order to cdnsure

:23:29. > :23:34.the NHS is sustainable. The quality system that I talked about hs about

:23:35. > :23:39.investing potentially more hn prevention and linking the

:23:40. > :23:43.high-quality pharmacies closely to the public health schemes and thaw

:23:44. > :23:48.go with that. I -- thaw go with that. There is are efficiency

:23:49. > :23:55.savings under the requirement here. We don't believe it will affect

:23:56. > :24:01.access overall. We don't believe it will affect the public's abhlity to

:24:02. > :24:05.use farm as they do now. It will be part of digitising the servhce and

:24:06. > :24:09.to free other parts for the NHS which need it very much.

:24:10. > :24:14.Bearing in mind my responsibility for the difficult equigs whhch my

:24:15. > :24:18.honourable friend has had to solve by coming here this morning can I

:24:19. > :24:22.thank him and welcome the statement he's made, which brings clarity to

:24:23. > :24:26.these long discussions. Can I ask him to repeat very clearly the

:24:27. > :24:30.Government's commitment to ` strong community pharmacy network, to do

:24:31. > :24:33.all he can to ensure the NHS delivers on the commissioning of

:24:34. > :24:37.quality services that will be essential and looking ahead to the

:24:38. > :24:42.future now we've got past this that there is a good review of community

:24:43. > :24:46.pharmacy services, so that we can see what value they can bring to the

:24:47. > :24:52.NHS. I am sure, like me, he will find that sector extremely value to

:24:53. > :24:55.-- valuable to work with. I thank The Right Honourable gentlelan for

:24:56. > :24:59.his fantastic work in pharm`cy sector over the time. He makes a

:25:00. > :25:04.very important point, is th`t what we are trying to achieve here is to

:25:05. > :25:07.move the sector more into sdrvices and added value T two announcements

:25:08. > :25:15.I made two weeks ago are part of that. As is the work currently being

:25:16. > :25:20.done by the David Murray from the King's Fund. That will inform how we

:25:21. > :25:26.spend the integration money and enable the sector to move qtick

:25:27. > :25:31.irinto the services -- quicker into the services he talks about. There

:25:32. > :25:37.is a deep knowledge of the patients and the families. My concern is as a

:25:38. > :25:42.small pharmacy it will be under more pressure from the cuts than the

:25:43. > :25:47.larger pharmacies. Does the minister recognise this pressure and the

:25:48. > :25:52.vital role pharmacies can play? I repeat the point again that we

:25:53. > :25:58.absolutely recognise the vital role that community pharmacies c`n play.

:25:59. > :26:02.We want to make them move towards an even more vital role by providing

:26:03. > :26:05.more services, which is what pharmacies want to do and not

:26:06. > :26:09.getting all of their money, as they do at present from the dispdnsing

:26:10. > :26:14.activities. High quality ph`rmacies are in a position to really prosper

:26:15. > :26:20.in terms of the new world wd are talking about now. If there are

:26:21. > :26:24.closures what additional support will be give on the the pharmacies

:26:25. > :26:29.which are left, in particul`r taking pressure off GPs in the comlunity?

:26:30. > :26:34.Well, Mr Speaker, the volumd of business is gradually incre`sing all

:26:35. > :26:38.of the time. If pharmacies close in a cluster, that business will be

:26:39. > :26:42.redirected to other pharmaches within that cluster. They whll be in

:26:43. > :26:48.a position to expand, take on more people and all of the rest of it.

:26:49. > :26:54.Mr Speaker, can I declare mx interests as a type two diabetic.

:26:55. > :27:00.He's wrong when he says that Leicester has too many pharlacists.

:27:01. > :27:04.The fact is that the population demands those services and hnstead

:27:05. > :27:09.of making these cuts, why doesn t he use that ?25,000 to spend on

:27:10. > :27:14.diabetes prevention, thus s`ving the National Health Service a htge ament

:27:15. > :27:18.of money in the future? Mr Speaker, first of all, I have never said that

:27:19. > :27:25.Leicester has too many pharlacies. What I said on Monday n the urgent

:27:26. > :27:29.question, is one road in Lehcester, Loughborough Road, has 12 pharmacies

:27:30. > :27:36.within half a mile and that is quite hard to justify. In terms though of

:27:37. > :27:43.the general point... Half a mile. Sorry, what did I say? Half a mile.

:27:44. > :27:47.In terms of his other point about diabetes and long-term condhtions, I

:27:48. > :27:52.mention the King's Fund work being done by David Murray, long-term

:27:53. > :27:56.conditions is the sort of value-added ser siss that pharmacies

:27:57. > :28:00.need to provide in the future. 42 million of integration fund that was

:28:01. > :28:06.set aside will enable that to happen. Mr Speaker, I welcole the

:28:07. > :28:11.news this Conservative Government is spending ?150 million a year more on

:28:12. > :28:16.pharmacies than the last Labour Government and will pay pharmacists

:28:17. > :28:22.for their quality of servicd, not just dispensing prescriptions.

:28:23. > :28:28.Pharmacies have the double whammy of being rural and they providd much

:28:29. > :28:34.needed services and home deliveries. What news can the minister share

:28:35. > :28:38.with me that I can share with my constituents in Wealden. Ph`rmacies

:28:39. > :28:42.more than one mile apart from each other, many will exist in rtral

:28:43. > :28:46.constituencies of the type that the honourable lady mentions will be

:28:47. > :28:53.largely protected in terms of this scheme.

:28:54. > :28:56.The minister was right to ddscribe community pharmacists as thd

:28:57. > :28:59.essential front line of the NHS What assessment of the additional

:29:00. > :29:06.pressures and additional costs which will be put on other parts of the

:29:07. > :29:14.NHS as a result of this dechsion? Mr Speaker, the King's Fund st`udy and

:29:15. > :29:19.the ?42 million integration fund is directly focussed on servicds and

:29:20. > :29:23.enabling pharmacists to become more integrated with GPs. In addhtion to

:29:24. > :29:28.that, make the point again that we are going to have 1500 more clinical

:29:29. > :29:32.pharmacists working for GPs in 020 than we have now. That is a huge

:29:33. > :29:37.difference. . I would like to thank the minister

:29:38. > :29:41.for coming to the House tod`yism welcome his statement and hhs

:29:42. > :29:46.update. It is right to look at the improvements. In doing so, can I

:29:47. > :29:52.urge him to ensure that these reforms are part of a broaddr policy

:29:53. > :29:56.on community pharmacy which seeks to integrate the vital services they

:29:57. > :30:01.provide better into the NHS. Mr Speaker, I give her that assurance.

:30:02. > :30:06.She used the word "integrathon. "That is at the core of this, as is

:30:07. > :30:09.modernisation. This is a patient-first initiative. Wd'll make

:30:10. > :30:14.it happen. Thank you. It is interesting that

:30:15. > :30:18.the minister keeps referring to the evils of these major chains because

:30:19. > :30:24.it is impossible to listen to his statement and not realise that what

:30:25. > :30:28.he's talking about is supporting those big major pharmacies `nd

:30:29. > :30:32.actually the people who will suffer are the smaller pharmacies that

:30:33. > :30:37.don't have so wide a patient base and don't have such wide services.

:30:38. > :30:42.Does he acknowledge and recognise it is small pharmacies that will close

:30:43. > :30:46.as a result of the changes he's made and say where the savings are coming

:30:47. > :30:50.from? Mr Speaker, the schemd we have put into place here is blind to

:30:51. > :30:55.ownership. So, we do not take into account whether they are Boots,

:30:56. > :30:59.Lloyds or a small pharmacy. But I do not believe, as I have said earlier,

:31:00. > :31:04.in terms of the gross margins that are currently made by the average

:31:05. > :31:07.pharmacies, including small ones, the efficiency savings that we are

:31:08. > :31:13.asking for will cause wide-spread closures. To imply it is

:31:14. > :31:19.scaremongering. Those of us who represent

:31:20. > :31:22.constituencies with remote rural communities and urban communities

:31:23. > :31:26.understand at first-hand thd difficult issues that the mhnister

:31:27. > :31:29.and his have wrestled with. Does he not agree with me that any party in

:31:30. > :31:33.Government at the moment wotld have to be taking this decision because

:31:34. > :31:36.it is right to make sure th`t the service is modern, efficient and

:31:37. > :31:42.represents security for people in rural communities? Modern, dfficient

:31:43. > :31:49.and/orien tated towards excdllent patient care. Yes, Mr Speakdr.

:31:50. > :31:59.Mr Speaker, my constituency is within the South TTCG, which is a

:32:00. > :32:02.pilot for the minor ailment. It was Cleveland minor skeleton medical

:32:03. > :32:09.centre and other centres all in my constituency. Now we are seding a

:32:10. > :32:16.shortfall in Vanguard service and a lack of GP provision. What hs going

:32:17. > :32:19.on within primary care? I don't wholly understand that question

:32:20. > :32:22.other than to assume that the honourable member, like othdrs in

:32:23. > :32:26.this House is welcoming the fact that we are rolling out a n`tional

:32:27. > :32:34.ailment system, delivered bx pharmacists, which as the l`dy from

:32:35. > :32:34.Ayrshire said earlier is thd future. Thank you. Mr Speaker, the

:32:35. > :32:39.Government is right to requhre pharmacies to make efficiencies as

:32:40. > :32:44.the NHS is. Can I welcome the pharmacy access scheme, which I hope

:32:45. > :32:48.will help my village pharmacies and can I urge NHS England to press

:32:49. > :32:53.ahead with rolling out the linor ailments service. It is important to

:32:54. > :32:59.make the most of the skills and capacities of pharmacies to provide

:33:00. > :33:04.valuable services to communhties and reduce the burden on GPs. I

:33:05. > :33:08.re-enforce what I said, that NHS England plan to have it rolled out

:33:09. > :33:12.nationally by April 2018. Thank you Mr Speaker. I recognise the

:33:13. > :33:20.difficult decisions the minhster's had to make. Rural pharmacids are

:33:21. > :33:25.going to be particularly hit. He has attempted sweeten thd pill

:33:26. > :33:31.with his access scape. This is only a two-year scheme. What support will

:33:32. > :33:37.come beyond that? This is the first time ever we have given pharmacies a

:33:38. > :33:42.two-year planning horizon. Normally the negotiations that go on is after

:33:43. > :33:45.a year-period. After that there ll be further negotiations and we will

:33:46. > :33:50.take forward at that time what is right to do so. Mr Speaker, I

:33:51. > :33:54.congratulate my honourable friend on the way he's sorted out this mess.

:33:55. > :33:57.Isn't it the case that this unnecessary and wasteful cltstering

:33:58. > :34:04.of pharmacies the a direct consequence of the former L`bour

:34:05. > :34:10.Government's broken payment. Mr Speaker, I not sure that takes us

:34:11. > :34:14.forward, but it is right to say that spending NHS money on payments of

:34:15. > :34:18.?25,000 to many pharmacies within half a mile of each other is the

:34:19. > :34:23.wrong way to spend money whdn we need more in cancer drug funds. We

:34:24. > :34:24.need more in GP surgeries and we need more in A That is what we

:34:25. > :34:35.need to be doing. There are a large number of rural

:34:36. > :34:38.villages and small towns in my constituency served by individual

:34:39. > :34:42.local pharmacies which play an important part in the community I

:34:43. > :34:46.welcome the minister's commdnts about the access scheme. Can he

:34:47. > :34:51.assure me it is small pharm`cies in rural areas such as mine th`t will

:34:52. > :34:55.be among those to benefit from the access protection as he's ottlined?

:34:56. > :35:02.I can reassure him on. That I can make the specific point that for the

:35:03. > :35:08.pharmacies that are the 25% of larger pharmacies they won't have

:35:09. > :35:12.any ak. : They will not be hn the access scheme. It is directdd more

:35:13. > :35:18.at smaller pharmacies. Thank you very much. The minister is

:35:19. > :35:21.right to identify that thosd areas with fewer pharmacies will benefit

:35:22. > :35:25.from protection not only because the travel time to a pharmacy whll be

:35:26. > :35:29.longer but also the travel time to all support services will bd longer.

:35:30. > :35:34.So, can the minister confirl that pharmacies in rural constittency of

:35:35. > :35:39.southeast Cambridgeshire will benefit from the pharmacy access

:35:40. > :35:42.scheme? Mr Speaker, I don't have the specifics for her constituency in

:35:43. > :35:46.front of me. We have published the full list. It is in the Votd Office

:35:47. > :35:51.as I speak. I am sure she whll, when she has a look at that, finds there

:35:52. > :35:58.are some pharmacies in her `rea that are indeed protected.

:35:59. > :36:04.Mr Speaker, I is right to protect services by being more focussed but

:36:05. > :36:09.is there any other kind of commercial retail entertain to which

:36:10. > :36:15.Government hands and establhshment fee of ?25,000?

:36:16. > :36:23.Mr Speaker, there isn't that I know about. But there may be well. But

:36:24. > :36:27.the facts are that the ?2.8 billion that we currently spend is for

:36:28. > :36:31.services and for dispersing ?8 billion of drugs. It is a v`luable

:36:32. > :36:36.service, but it is right th`t we look to see that that money is spent

:36:37. > :36:41.effectively and as effectivdly as oh thisser parts of the NHS. It is our

:36:42. > :36:45.job in the Government to make sure that every penny that we give the

:36:46. > :36:49.NHS provides maximum value for patients.

:36:50. > :36:54.Can I declare an interest in that my wife is a community pharmachst. I

:36:55. > :36:59.should probably be cautious for welcoming this for obvious reasons.

:37:00. > :37:04.Can the minister propose th`t the spoke and hub model are not part of

:37:05. > :37:07.this step forward? Mr Speaker, I can confirm that no

:37:08. > :37:12.part of what we are talking about today is in respect of the hub and

:37:13. > :37:19.spoke model that he talks about THE SPEAKER: I am grateful to those

:37:20. > :37:23.for facilitating progress. We come to the backbench... No we don't We

:37:24. > :37:35.have the presentation of bill first of all, Mr Frank Field.

:37:36. > :37:36.Preparation of foods by ten`nts in receive of universal benefit.

:37:37. > :37:59.THE SPEAKER: Which day? In a moment I will ask the Lember

:38:00. > :38:04.for Birkenhead to move the lotion. Can I emphasise that there `re 4

:38:05. > :38:12.backbench members who wish to contribute to the debate and so even

:38:13. > :38:14.those who are not subject to a time constraint formally will dotbtless

:38:15. > :38:24.wish to tailor their contributions to take account of the level of

:38:25. > :38:31.interest. May I buy way of introduction thank the backbench

:38:32. > :38:36.committee forgiving us the opportunity and I do that on the

:38:37. > :38:45.half of both of our committdes, because it was a two committee

:38:46. > :38:51.report. Can I do, in light of what you have said, I know a lot of

:38:52. > :38:54.people will wanting to intervene and contribute, and while of cotrse I am

:38:55. > :38:59.more than happy to take interventions, if those

:39:00. > :39:02.interventions could be ones genuinely enquiring or crithcal of

:39:03. > :39:18.me I would be really happy for those to be fielded. Thirdly, might I say,

:39:19. > :39:23.might we thank our advisers, staff, especially the two key people who

:39:24. > :39:29.guided our work. Mindful of the comic you have just made, wd are

:39:30. > :39:34.anxious for everybody to get in I have four things to touch on. First

:39:35. > :39:45.of all, what do I see as thd main findings of our joint unanilous

:39:46. > :39:49.report? Secondly, from that base, a successful BHS in the initi`l

:39:50. > :39:58.stages, what was Sir Philip Green able to achieve? Thirdly I want to

:39:59. > :40:03.comment on what I see as thhs sad, slowly unfolding Greek tragddy.

:40:04. > :40:08.Fourthly, because of -- bec`use the work of this House is never done,

:40:09. > :40:14.what lessons might we draw from this report from our future agenda? In

:40:15. > :40:23.saying that, nothing that I want to say, and I am sure other melbers who

:40:24. > :40:28.contribute will wish to draw attention away from the central

:40:29. > :40:40.concern of our deliberations and of this debate, the 11,000 workers who

:40:41. > :40:43.cruelly lost their jobs, thd 20 000 pensioners, plus, who are now in

:40:44. > :40:48.doubt about what pensions they will get although they contributdd to a

:40:49. > :40:57.set promised pension, and thirdly, where does it leave in the public

:40:58. > :41:02.mind these operations if thdy are an accurate representation of how we

:41:03. > :41:11.earn our wealth? Now to the first theme. What do I see as the main

:41:12. > :41:15.findings of the report? Members will have other views and it will be

:41:16. > :41:20.great if they do as we build up a more comprehensive picture for

:41:21. > :41:31.people following this debatd. My first view, which was never knocked

:41:32. > :41:38.at all by any of the doings that we had all the meetings we had with Sir

:41:39. > :41:45.Philip Green, was that literally nothing happened in the age S or

:41:46. > :41:54.Arcadia without Sir Philip Green deciding directly or people knowing

:41:55. > :42:12.what his mind was. -- in BHS or Arcadia. I never knew Napoldon but

:42:13. > :42:17.in my minds this was a char`cter based on the Napoleon I read about

:42:18. > :42:23.at school. -- in my mind's H've It is important to remember, as history

:42:24. > :42:28.is always under pressure to be rewritten, especially those who feel

:42:29. > :42:32.it has treated them unfairlx, when Sir Philip acquired BHS it was a

:42:33. > :42:40.relatively prosperous busindss and it had a pension scheme. Thd idea

:42:41. > :42:45.that are a pension scheme strplus. The idea that somebody was charging

:42:46. > :42:54.to the rescue of a failing British industry is not borne out bx the

:42:55. > :43:03.report or anybody else publhshed. Given that the pension fund was left

:43:04. > :43:10.at the end of a ?571 million deficit, must we look to more

:43:11. > :43:15.broadly at corporate govern`nce to see how an individual came to be

:43:16. > :43:22.able to behave like this? It is a wonderful point and I will draw

:43:23. > :43:30.attention to that at the end. I hope he develops that point. I would like

:43:31. > :43:38.to pay tribute to my right honourable friend's way of

:43:39. > :43:42.conducting this enquiry. Given his to of Mr Green as a Napoleonic

:43:43. > :43:47.figure, does he share my concern that when he came to the colmittee

:43:48. > :43:51.in June and asserted he would fix the problem, several months later

:43:52. > :43:59.that does not appear to havd taken place and he appears to be hn the

:44:00. > :44:07.media in the next -- saying he will do that in the next couple of days,

:44:08. > :44:11.that seems very irregular. We were certainly left, it would be sorted

:44:12. > :44:17.shortly. There was no concrdte proposal on the table to brhng

:44:18. > :44:21.justice to those pensioners and it does raise the question abott

:44:22. > :44:29.corporate governance, how you can take over a company in surplus with

:44:30. > :44:35.its pension fund and with a good order book. An interesting `spect of

:44:36. > :44:39.Sir Philip's evidence was that he said he could have a new tids all of

:44:40. > :44:53.the pension duties and liabhlities when he took over BHS. -- hd could

:44:54. > :44:59.have annuitised. This Napoldon thing, I have always thought that

:45:00. > :45:05.Sir Philip Green was more of a Maxwell. He had the money, the

:45:06. > :45:14.yachts, the workers, and he robbed them of their pensions. It hs almost

:45:15. > :45:20.a parallel. Sir Philip has threatened to sue me over mx camel

:45:21. > :45:29.once on that. -- over my colments on that. I am waiting for the writ to

:45:30. > :45:36.arrive. I may be in court btt that will be another day. To go back to

:45:37. > :45:40.what for me are the main findings, there was some pretty important

:45:41. > :45:44.engineering going on in respect to the profitability of this company

:45:45. > :45:52.and from the early years. Wd were much amused in committee th`t Sir

:45:53. > :45:57.Philip said his business prowess extended to halving the cost of coat

:45:58. > :46:02.hangers. What would have bedn more interesting would have been for him

:46:03. > :46:08.to told us about his secret share dealing with one main supplher, who

:46:09. > :46:15.during those early years, bdcause they were actually party to BHS

:46:16. > :46:25.decisions, knew what the costs of those other orders that tenders were

:46:26. > :46:29.coming in and was therefore able to bid accordingly. Therefore H

:46:30. > :46:34.maintain, thanks to that me`sure, that Sir Philip was able to get

:46:35. > :46:41.perhaps artificially low supply costs and during that period boosted

:46:42. > :46:46.BHS profits, it looked even more profitable than it was, and that

:46:47. > :46:54.individual shareholder, as H say, owner of a secret share deal, when

:46:55. > :47:00.he came to sell his shares, managed to sell them the ?90 million. But

:47:01. > :47:11.what if we then take the issue on from there, we actually know that a

:47:12. > :47:19.very key part in the dividends able to be taken from BHS, in wh`t most

:47:20. > :47:26.observers would not necessarily have seen as anything extraordin`ry, it

:47:27. > :47:33.is the next stage of this sorry saga. My second theme is, from what

:47:34. > :47:41.was able to Lee macro Sir Philip able to achieve from that BHS base?

:47:42. > :47:48.-- what was Sir Philip able to achieve. He was able to acqtire that

:47:49. > :47:54.group of companies known as Arcadia and from Arcadia he managed to

:47:55. > :48:02.sponsor a huge hearing oper`tion. Was it 2.6 billion, was it 2.9

:48:03. > :48:08.billion? But the key thing of ownership of Arcadia, which only

:48:09. > :48:14.came from what appeared to be a more than adequate running of BHS, was

:48:15. > :48:26.that there were huge sums of money sloshing around Arcadia, and all too

:48:27. > :48:31.soon and billion of that was money geared, loans acquired on Arcadia

:48:32. > :48:44.through a number of companids found their way up to Lady GREEN. Isn t

:48:45. > :48:48.this the heart of the issue, that the ability of corporate bandits to

:48:49. > :48:57.asset strip in this way, le`ving employees and pensioners in the

:48:58. > :49:02.lurch, one of the key things that need to be addressed? Peopld feel it

:49:03. > :49:09.works for people like Philip Green and not the working class khds of

:49:10. > :49:15.Doncaster. It is an issue that I wished to go onto, because despite

:49:16. > :49:18.all of the razzmatazz and so on there was nothing the committee

:49:19. > :49:24.could find or evidence resented to the committee which shows that Sir

:49:25. > :49:29.Philip Green was king of thd high street. He was and is a verx

:49:30. > :49:34.successful traditional asset stripper and I think many pdople

:49:35. > :49:42.will want to come on and develop that aspect of the debate. H think

:49:43. > :49:50.many of the workers in Arcadia must feel that they may stand re`dy to be

:49:51. > :49:55.pushed into the same hole that the BHS workers and pensioners were

:49:56. > :50:00.pushed. But I think a check has been put in place and it is interesting

:50:01. > :50:04.how it has been put in placd, because there were again thdse

:50:05. > :50:12.wonderful moments where you think why is somebody telling you that?

:50:13. > :50:14.During the hearing it was John and -- Jonathan Chappel, triple

:50:15. > :50:23.bankrupt, largely a creation of Sir Philip Green, told us that he had

:50:24. > :50:28.first refusal should Arcadi` come up for sale, but the only restraint was

:50:29. > :50:36.that top shop wouldn't be sold as part of that next sell-off. -- Top

:50:37. > :50:41.Shop. Of course, they remain the crown jewel of the Arcadia group,

:50:42. > :50:46.part of the Arcadia group that's a Philip Green has tried to t`ke to

:50:47. > :50:56.America and succeeded, but we now know he has had to sell part of his

:50:57. > :51:01.stake in Top Shop. It is inconceivable that this American

:51:02. > :51:07.financier will have agreed to buying into Arcadia without having the

:51:08. > :51:21.power to lock the tills. Thd idea that Arcadia companies, in

:51:22. > :51:26.particular Top Shop, will sde money flowing to pensioners from the

:51:27. > :51:34.Philip Green family, is cle`rly stopped. Why is this the only part

:51:35. > :51:38.of his empire that was making money, so why did he sell? I think it comes

:51:39. > :51:42.down to those mega loans. More recently they have had to bd

:51:43. > :51:47.refinanced and given what both of the Select Committees have brought

:51:48. > :51:52.out I think Sir Philip Green had real difficulty in finding `

:51:53. > :52:02.refinancing champion and had to give up access to the Crown Jewels, Top

:52:03. > :52:08.Shop, to refinance the loans, half of which probably went very quickly

:52:09. > :52:19.through a network of companhes up to Lady Green and the Green falily

:52:20. > :52:25.Regarding this Greek tragedx, as I see it, which has unfolded before

:52:26. > :52:34.us, Sir Philip has many timds made a criticism of me that I am bhased,

:52:35. > :52:39.from the first interview I gave on the two-day programme I was asked if

:52:40. > :52:43.he should lose his knighthood and I said yes. Maybe I should have

:52:44. > :52:49.dissembled but I answered as I then thought the evidence was, although I

:52:50. > :52:54.much wanted the evidence to overthrow that original view. The

:52:55. > :53:00.idea that had I kept that vhew, publicly or privately, that the two

:53:01. > :53:09.Select Committees which in this House elected to represent ht on

:53:10. > :53:18.business and on the WP mattdrs could somehow be manipulated by md, fine

:53:19. > :53:23.chance I would say. -- DWP latters. # My Right Honourable friend should

:53:24. > :53:30.consider it as a badge of honour. On a whole host of subjects, btt the

:53:31. > :53:33.money in which he has carridd out his duties, with my honourable

:53:34. > :53:37.friend who chairs the other committee, he has carried ott both

:53:38. > :53:41.of them, their duties with distinction and it should bd

:53:42. > :53:46.recognised by the House. Th`nk you. I don't have time to go down that

:53:47. > :53:49.road. I am really grateful to my Right Honourable friend. He always

:53:50. > :53:56.emphasises how much we disagree when he's agreeing with me. I hope that

:53:57. > :54:01.doesn't mean that we both h`ve got reselection prons coming down the --

:54:02. > :54:08.reselection problems coming back down the tracks to us we ard dealing

:54:09. > :54:13.a man who has huge, tremendous sums of wealth, which it is diffhcult to

:54:14. > :54:19.comprehend what wealth he does have. And yet we know that he could have

:54:20. > :54:25.paid up modestly compared whth that wealth base of ?3.5 billion plus or

:54:26. > :54:30.whatever it was, and walked away smelling of roses. Not only that, he

:54:31. > :54:40.would have helped us, as a House, through our committee systel, begin

:54:41. > :54:44.to set the debate about how we base the whole challenge of deficits into

:54:45. > :54:47.that new era which we have come It would have helped answer thd

:54:48. > :54:52.question raised by my honourable friend, what are the lessons, in

:54:53. > :54:58.fact was he drawing, vis a vis corporate Governments? All of those

:54:59. > :55:02.he could have set the debatd on pension deficit, on the reform of

:55:03. > :55:05.private companies in partictlar He's had nothing to say and he could

:55:06. > :55:13.have actually helped us lead the debate. Last timely give wax to my

:55:14. > :55:18.honourable friend. Isn't thhs the heart of the issue, that he could,

:55:19. > :55:22.he says he is sorry, but it comes across as crocodile tears bdcause he

:55:23. > :55:30.won't put his money where hhs mouth is and he ought to make recompense.

:55:31. > :55:45.There is a mega, megamoral response inltd. Mega Morale responsibility. A

:55:46. > :55:49.man who has everything in lhfe, who risked losing everything important

:55:50. > :55:55.in life. His standing, how his friends regard him and he does so

:55:56. > :56:01.because he seems somehow unwilling to surrender a modest part of his

:56:02. > :56:05.mega-fortune. But a modest part which would make is such a

:56:06. > :56:11.difference to those pensiondrs who are still awaiting their fates. My

:56:12. > :56:15.fourth theme, what's been tdsted by our reports, starting our ddbate

:56:16. > :56:20.today? First of all, members will have a chance to comment on how your

:56:21. > :56:25.committees, two of your comlittees have actually carried out their

:56:26. > :56:33.work. I really, really hope, Mr Speaker, that if anyone wishes to

:56:34. > :56:37.respond to Lord Pannick's r`ther appropriately named report, it will

:56:38. > :56:40.begin the Americanisation of our committee system, where we have no

:56:41. > :56:45.role and all the lawyers take over and we sit there like puppets will

:56:46. > :56:50.be strongly resisted. What, and I know other members wishing to catch

:56:51. > :56:55.your eye will want to talk `bout this, quotes, judgment. What Lord

:56:56. > :56:59.panic's report has shown if, if you pay a lawyer and they are friends of

:57:00. > :57:03.yours, they will come up with the actual opinion you want. And that

:57:04. > :57:09.report does nothing for the legal profession.

:57:10. > :57:12.And it is interesting that Lord Pannick, within moments of

:57:13. > :57:21.publishing the supposed report had to admit that he was actually very

:57:22. > :57:26.close friends with two of the key players undertaking. Next, there are

:57:27. > :57:32.clearly questions about the pension regulator, which people will touch

:57:33. > :57:41.on today, the committee will look at. Are there legal powers or legal

:57:42. > :57:50.powers up to the challenge `nd the increasing challenge faces. Do they

:57:51. > :57:56.have the right staff, are the pension regulators organisation run

:57:57. > :58:00.by within the right culture? And if so, what needs to change? Of course

:58:01. > :58:05.that will be much more diffhcult than changing legal powers or

:58:06. > :58:09.getting the right staff. Next, what are the lessons for Governmdnts My

:58:10. > :58:15.Right Honourable friend has already raised one and that is, a ldsson I

:58:16. > :58:20.learnt, maybe I should have learnt it long ago, I somehow thought that

:58:21. > :58:25.private companies governed the future destinies of only a few

:58:26. > :58:36.employees at a time. Was I wrong on that when we look at

:58:37. > :58:42.Sir Phillip Green's empire BHS with all the jobs destroyed and `ll the

:58:43. > :58:47.jobs at stake in. Arcadia. The comments are mega. It fits hn with

:58:48. > :58:54.the Prime Minister's wish that in trying to protect better thd

:58:55. > :58:58.vulnerable soft underbelly of British society at how capitalism

:58:59. > :59:06.behaves in this country, two more quick points if I may, secondly the

:59:07. > :59:11.first of those, how do we ensure the independence of those bodies which

:59:12. > :59:15.are put into operation to try and recover the assets of a company that

:59:16. > :59:19.has gone down like BHS? Verx important questions which h`ve been

:59:20. > :59:25.raised in respect of this rdcovery operation for BHS. Lastly, hf we

:59:26. > :59:30.were needed to add to the staff power and changes of approach of the

:59:31. > :59:34.Serious Fraud Office, given we are waiting to know how they will

:59:35. > :59:38.respond, how would in a non-threatening way, how wotld this

:59:39. > :59:43.proper committee and then this House respond to that? Just on th`t point,

:59:44. > :59:50.a very brief pointed, my honourable friend is making such a good speech,

:59:51. > :59:54.but, he has touched on this, he touched on the professional advice

:59:55. > :00:01.which was given to Sir Phillip Green and part of that is this on going

:00:02. > :00:06.problem that we have in terls of how the big consultancies operate in our

:00:07. > :00:10.country. Grant Thornton in this case and in others and the fact the

:00:11. > :00:16.Serious Fraud Office increasingly depend on those big consult`nts The

:00:17. > :00:22.quicker I finish, the quickdr I know my friend for Hartlepool will be

:00:23. > :00:26.able to deal with this. I h`ve one last point. This is the first time I

:00:27. > :00:31.have stood before the House since being elected chairman of one of its

:00:32. > :00:36.Select Committees. Might I `ctually thank the House for electing me to

:00:37. > :00:39.that position and say what ` pleasure it has been, despite the

:00:40. > :00:43.hard work and particularly the work that we, as comrades, have been

:00:44. > :00:48.involved in over this inquiry? THE SPEAKER: Thank you. The question

:00:49. > :00:54.is as on the order paper, to move the amendment I call Mr Richard

:00:55. > :01:02.Fuller. Thank you very much. I am fortunate to follow such a gracious

:01:03. > :01:08.speech by the member for Workington, bir Ken head, sorry, Mr Spe`ker but

:01:09. > :01:13.also to move the amendment hn my name and the name of 113 other

:01:14. > :01:17.members of this House. Mr Speaker, I took part in the

:01:18. > :01:22.inquiry into British home stores, not only as a member of the business

:01:23. > :01:26.Select Committee, but also `s someone who believes passionately in

:01:27. > :01:29.the good the business can do. I have seen that in my own life. I have

:01:30. > :01:35.seen it in countries around the world that the force of market

:01:36. > :01:40.economies helps everyone. It helps people who want to earn a lhving.

:01:41. > :01:45.Helps people who want to buhld a future for themselves and create ass

:01:46. > :01:49.stable basis for broader in society to withhold. In the weeks of our

:01:50. > :01:54.inquiry it became apparent when we look in the particular of British

:01:55. > :01:57.home stores and more generally at corporate governance in this country

:01:58. > :02:02.but all of our rules that hdlp to set the stage for our market economy

:02:03. > :02:08.presume one thing - that thd freedoms that are given to people

:02:09. > :02:13.who have enormous power over thousands of their fellow chtizens,

:02:14. > :02:17.assume that when times are tough, when that phrase when push comes to

:02:18. > :02:22.shove that people will not just do what is the legal thing, but they

:02:23. > :02:27.will do what is the right thing But they will do what is the honourable

:02:28. > :02:33.thing. Honour may seem for some to be an unusual word to use when it

:02:34. > :02:39.comes to business, but for dffective business, ultimately honour is all

:02:40. > :02:42.that you have. You can amass a great fortune, but in such turbuldnt

:02:43. > :02:48.market times you can lose it in a day. All you are left with hs your

:02:49. > :02:53.honour. And so the underpinnings for the

:02:54. > :02:59.amendment today are to gaugd in the specifics of the inquiry th`t we

:03:00. > :03:04.have in Parliament to British Home Stores, not were the actions legal?

:03:05. > :03:08.But were the actions of Sir Phillip Green honourable? That is pdrmanent

:03:09. > :03:16.because he received his honour for services to retail.

:03:17. > :03:21.Now, Mr Speaker, in the inqtiry and as my Right Honourable friend has

:03:22. > :03:25.mentioned, a very core issud was the issue of pensions, both he `nd other

:03:26. > :03:29.members will talk about the short comings of that which have led to

:03:30. > :03:34.pensioners of British Home Stores facing lower pensions and the

:03:35. > :03:38.taxpayer facing the prospect to pick up the tab for the difference. But

:03:39. > :03:45.there were other issues that can be drawn to the specifics of British

:03:46. > :03:53.Home Stores, the role of advisers. It was bizarre that in a fldet of

:03:54. > :03:57.well paid advisers on a transaction that apparently the only vohce that

:03:58. > :04:03.mattered was the adviser who said they weren't an adviser.

:04:04. > :04:06.Now, that may be OK if you're dealing with just yourself `nd your

:04:07. > :04:10.family, but when you are de`ling with people who are going to get up

:04:11. > :04:14.on Monday to try and earn a living in a shop, then the advice hs

:04:15. > :04:19.important. We saw it many thmes that the role of advisers was not just in

:04:20. > :04:24.giving advice, it was also hn conveying an impression that the

:04:25. > :04:32.person was a person of substance. We need to look at that isste.

:04:33. > :04:38.A person of substance. To own an enterprise of ?600 million

:04:39. > :04:42.of revenue, 11,000 employees, the responsibility to put money into the

:04:43. > :04:45.pensions of 20,000 people, surely the people running that shotld be

:04:46. > :04:52.people of substance, people with experience.

:04:53. > :04:59.What goes through the mind of knight of a realm to say those livdlihoods

:05:00. > :05:03.and futures should be consigned to a three-time bankrupt? What goes

:05:04. > :05:08.through the mind of the owndr of such a substantial business that

:05:09. > :05:12.this, the problems that he has faced and have found to him quite

:05:13. > :05:16.challenging, been to him quhte challenging, can more easilx be

:05:17. > :05:21.solved by someone with zero experience of the industry that they

:05:22. > :05:26.are about to take on? I givd way. I thank the honourable membdr. I was

:05:27. > :05:32.contacted by e-mail by my efficient Irene who shared the followhng. I

:05:33. > :05:34.have twro friends who worked in BHS Glasgow and are devastated by what

:05:35. > :05:38.has happened to them and thdir pensions. They worked there for

:05:39. > :05:41.years. Don't have much chance of getting another job or being able to

:05:42. > :05:45.build up work pension. This has happened to my friends and

:05:46. > :05:50.colleaguing all because he risked his worker's pensions while he made

:05:51. > :05:56.huge profits. I feel that wd most certainly should should not be

:05:57. > :06:03.honouring people like that. Would the honourable member agree with

:06:04. > :06:08.Irene and myself that he should not enjoy his honour after what happened

:06:09. > :06:12.has been endured I agree with the honourable lady opposite. I would

:06:13. > :06:15.say to the people who worked for British Home Sfors who want to make

:06:16. > :06:22.sure what we are doing is t`ngible to them and the issue of a

:06:23. > :06:26.knighthood is separate. We `re debaiteding about the fact that many

:06:27. > :06:32.lost their -- di baiting about the fact that many lost their jobs.

:06:33. > :06:38.There is a step we can take, those behaviours are not, do not lerit the

:06:39. > :06:43.continuation of an honour. Lr Speaker, the report and the reply

:06:44. > :06:48.this week from Lord Pannick and his colleague talked about issuds about

:06:49. > :06:53.governance. It was shocking to us to see that the response would say that

:06:54. > :06:57.it was technically not the responsibility of the board of a

:06:58. > :07:00.holding company to even to `ttend a meeting that disposed of a

:07:01. > :07:06.subsidiary with all those livelihoods attached. Now it may not

:07:07. > :07:10.have been legal, but for Lord Grabiner not to have even attended

:07:11. > :07:13.the meeting when this busindss was disposed of to this three-thme

:07:14. > :07:16.bankrupt strikes to me to bd a question of the character of the

:07:17. > :07:19.members of that board. Yes, it may not have been ldgal but

:07:20. > :07:24.what went through your mind not to think it was the right thing to do?

:07:25. > :07:29.It wasn't supposed to be just with a brush of the pen that you would

:07:30. > :07:35.consign these people into the wilderness. And for a Lord to do

:07:36. > :07:39.that, again I think points to the issue that honour has to me`n

:07:40. > :07:44.something in behaviour of otr businesses.

:07:45. > :07:47.Mr Speaker, there are some htems that I wish the Government to look

:07:48. > :07:51.at further. An issue to do with the paylent of

:07:52. > :07:54.dividends when there are pension deficits. I don't have an answer on

:07:55. > :07:59.that but I think we should look at that. The issue of transpardncy and

:08:00. > :08:05.large private companies compared to public companies.

:08:06. > :08:08.Should we continue with the role of chairman being precisely thd same as

:08:09. > :08:12.other directors or look for greater roles for the chairman?

:08:13. > :08:19.What are the responsibilitids of advisers?

:08:20. > :08:26.Colleagues in this house have spoken to me and say that on the issue of

:08:27. > :08:30.the night, Sir Philip Green is no longer deserving of the honour but

:08:31. > :08:35.fell not sure that is a rold for this house. Respectfully I disagree,

:08:36. > :08:38.we are here to assert a view of the opinion of the people and I think it

:08:39. > :08:43.is perfectly valid that we should consider this in the context of a

:08:44. > :08:48.report that we have undertaken, it is now work that we are expressing a

:08:49. > :08:52.view, we do not make the final decision but I think it is worthy

:08:53. > :08:59.and honourable for this house to have a view about Sir Philip Green.

:09:00. > :09:04.Over the summer, Sir Philip as had the opportunity to find his moral

:09:05. > :09:09.compass. To do the right thhng, in the absence of that, the hotse has

:09:10. > :09:14.no other options Mr Speaker than to support the amendment and the

:09:15. > :09:21.motion. The question is that the amendment be made, Mr Ian Wright. It

:09:22. > :09:26.is a genuine pleasure to follow my honourable friend, not just on the

:09:27. > :09:32.PHS in quarry but throughout the whole enquiring that we carry out on

:09:33. > :09:36.this select committee. -- the BHS Inquiry. I am proud of what the

:09:37. > :09:41.honourable members and membdrs carried out. We came togethdr

:09:42. > :09:47.extremely well, to work fordnsically and diligently on the hundrdds of

:09:48. > :09:51.hours of evidence, and to consider thousands of pages of writtdn

:09:52. > :09:54.evidence. That's when it cale to agreeing the final report it was

:09:55. > :10:00.agreed unanimously without ` single vote required. Such work was only

:10:01. > :10:03.made possible because of thd professionalism and hard work not

:10:04. > :10:08.only of vulnerable members but the clerks of the committee to. I am

:10:09. > :10:13.very proud of the report and I stand by it every single word. Wh`t came

:10:14. > :10:17.out of the evidence was a story of massive contrasts and huge

:10:18. > :10:21.inequalities. Tens of thous`nds of low paid workers, those tryhng to

:10:22. > :10:26.get by on a small pension losing out because of the greed for a very

:10:27. > :10:33.small number of people to bd rich to themselves, who gorged on BHS to the

:10:34. > :10:38.tune of millions of pounds. BHS folded this year, one year `fter Sir

:10:39. > :10:44.Philip Green sold it, to Dolinic Chappel. But it's to Mies w`s on the

:10:45. > :10:51.cards long before that. -- hts demise. Between 2003 at 2004 it paid

:10:52. > :10:55.dividends of ?423 million even though the operating profit for that

:10:56. > :11:03.period was significantly less than that amount, ?325 million. Hn 2 04

:11:04. > :11:09.PHS group had dividends of ?199 5 million, this dividend excedded the

:11:10. > :11:15.group operating profit that year of ?137 million. That dividend, also

:11:16. > :11:22.coincided with a long-term loan carried out that year of ?200

:11:23. > :11:25.million. That dividend policies revealing and it set the scdne for

:11:26. > :11:30.the eventual demise of the company. The pay-out to shareholders,

:11:31. > :11:35.predominantly the Green famhly did not reflect a corporate turnaround

:11:36. > :11:40.or Goode transformation. BHS did not have the cash flow or the profits to

:11:41. > :11:44.fund the dividends, it did knew did the company reserves and had to pay

:11:45. > :11:48.in the case of that final dhvidend to be funded by a long-term loan.

:11:49. > :11:52.Sir Philip could say quite reasonably and he did that he

:11:53. > :11:56.received dividends for only a short period of time, early on in his

:11:57. > :12:01.period of ownership. It was a long time ago, that is true. But I do

:12:02. > :12:05.think that the dividend polhcy is crucial to understanding thd whole

:12:06. > :12:10.sorry business of PHS and the wider lessons that we need to learn. Read

:12:11. > :12:14.was to direction sub com his family and his friends at the expense of

:12:15. > :12:21.long-term and sustainable growth. -- green was to in richest famhly.

:12:22. > :12:28.There was certainly dividends but they were like a short term sugar

:12:29. > :12:32.boost rather than a long-term diet. He was able to cut costs whdn he

:12:33. > :12:36.took over it, an achievement that should not be dismissed but he was

:12:37. > :12:41.never able to boost turnover, so much for the King of retail. It is

:12:42. > :12:46.true that he owns the company for 15 years and retained ownership a full

:12:47. > :12:49.decade after taking the last dividends, in that regard, Sir

:12:50. > :12:55.Philip Green cannot be described as a short-term corporate raiddr, but

:12:56. > :12:59.raid the company he did. And his ability to do so meant that he was

:13:00. > :13:04.then in a financial position to be able to obtain the debt, acpuire

:13:05. > :13:11.Acadia and through the same modus operandi that he operated in BHS

:13:12. > :13:15.bought Arcadia and paid his family the biggest corporate dividdnd in

:13:16. > :13:20.British history. He took thd rings from PHS's fingers, he beat it black

:13:21. > :13:23.and blue comedy star did food and water, he putted on life support and

:13:24. > :13:30.then he wanted credit for kdeping it alive. The BHS balance sheet was

:13:31. > :13:34.made considerably weaker during his tenure of the company, his

:13:35. > :13:39.extraction of value made thd company less able to innovate, retahn market

:13:40. > :13:43.share or have a competitive place in the retail market which would allow

:13:44. > :13:48.the firm to generate the profits and be in more of a position to survive

:13:49. > :13:54.the growing pension deficit. This decline provided the backdrop to his

:13:55. > :13:59.wish to sell the business. Ht would be difficult to come up with a more

:14:00. > :14:05.unlikely or incredible knight in shining armour than Dominic Chappel.

:14:06. > :14:09.He was a former bankrupt with no experience in running any thing in

:14:10. > :14:14.retail of any competition shze comedy was introduced to thd deal by

:14:15. > :14:18.a convicted fraudster, for whom he was carrying out driving duties He

:14:19. > :14:22.boasted that he had senior retail figures on board when this was not

:14:23. > :14:27.the case. He stated he would be investing his own money into the

:14:28. > :14:30.deal and add ?120 million of working capital available when this was not

:14:31. > :14:39.true. His own investment bankers walked away when they discovered

:14:40. > :14:42.that he had lied about the nature of the deal. And yet the due dhligence

:14:43. > :14:45.carried out by the myriad of advisers did nothing to stop the

:14:46. > :14:47.deal or even pause it. Therd was a remarkable amount of groupthink

:14:48. > :14:50.among the supposedly independent advisers. Grant Thornton received

:14:51. > :14:56.four times that the that thdy normally received from similar

:14:57. > :15:02.transactions. He did not have the means to pay advisers unless the

:15:03. > :15:06.deal with BHS went through. The fact, that he did not have the cash

:15:07. > :15:11.to pay the invoices let alone provide the working capital for a

:15:12. > :15:16.loss-making business with h`lf 1 billion pension deficit, should have

:15:17. > :15:24.run alarm bells are banned down the city into where the disengagement

:15:25. > :15:27.should have been taken on. Ht clearly is a question, as to whether

:15:28. > :15:33.blind eyes were turned to insure that fees were paid, regardless of

:15:34. > :15:39.whether the company toppled soon after that. Goldman Sachs provided

:15:40. > :15:44.Sir Philip would I quote prdliminary observations, and were not paid The

:15:45. > :15:46.lack of any clear letter of engagement showed appalling levels

:15:47. > :15:53.of informality given that tdns of thousands of jobs were at stake The

:15:54. > :15:58.fact that Dominic Chappel w`s able, to say that Goldman Sachs w`s on

:15:59. > :16:01.board was able to give his bid credibility, there is a certain

:16:02. > :16:04.irony Madam Deputy Speaker that the firm not getting paid having an

:16:05. > :16:08.ambiguous role in the trans`ction claiming that they were merdly

:16:09. > :16:12.providing preliminary observations was the only one that reallx

:16:13. > :16:13.expressed concern about the transaction noting that "Thdre were

:16:14. > :16:21.risks are attached to the proposal in the

:16:22. > :16:26.light of the little exporters, bankruptcy, and so on and so forth".

:16:27. > :16:30.Goldman Sachs's attitude to document management seems to be on p`r with

:16:31. > :16:36.some dodgy and ramshackle cowboy operation than the world prdmiere

:16:37. > :16:39.consulting firm. If that was deliberate thinking that th`t

:16:40. > :16:44.informal process would exondrate them of any involvement thex were

:16:45. > :16:48.wrong. Although they were ultimately not responsible for the dechsions

:16:49. > :16:51.taken, that was a Philip Grden, their involvement mattered, they

:16:52. > :16:56.were up to their necks and dven to the extent of offering a ?40 million

:16:57. > :17:02.credit seriously. The risks to their reputation should have made those

:17:03. > :17:08.advisers think again, much tour was placed on advice by such advisers.

:17:09. > :17:11.Certainly in the case of PHS, the use of prestigious names, ghves the

:17:12. > :17:16.party legitimacy when it should have been none -- in the case of BHS All

:17:17. > :17:21.of this was possible through weak and incompetent corporate

:17:22. > :17:25.governance. We saw opaque structures, overlapping strtctures,

:17:26. > :17:29.in a complex web of companids and effective leadership at board level.

:17:30. > :17:34.Lord grabbing, chairman of the ultimate selling company pl`yed no

:17:35. > :17:38.effective part. He wasn't even present, not even invited to the

:17:39. > :17:44.meeting of the subsidiary that took the ultimate decision to approve the

:17:45. > :17:49.sale to Philip Chappel -- Dominic Chappel. He showed no interdst, was

:17:50. > :17:53.docile, offered no effectivd scrutiny, challenge your le`dership.

:17:54. > :17:57.This was indicative of a culture often common in corporate scandals

:17:58. > :18:02.where a domineering and overbearing and actually bullying indivhdual was

:18:03. > :18:06.able to get away with things, with little if any challenge. Thhs is a

:18:07. > :18:10.key reason behind the decishon of our select committee to unddrtake an

:18:11. > :18:15.enquiring into corporate governance. Given Aric spirits and BHS, we want

:18:16. > :18:17.to look about whether company law is sufficiently clear on the roles of

:18:18. > :18:30.nonexecutive directors are the right ones. We are

:18:31. > :18:32.examining whether the duties of shareholders and other stakdholders

:18:33. > :18:34.are balanced and how the decisions of boards be better scrutinhsed and

:18:35. > :18:36.open to challenge. Given BHS's status as a private non-listed

:18:37. > :18:41.company, how should we align corporate governance arrangdments,

:18:42. > :18:45.so that it is not in the interests of chief executives or directors to

:18:46. > :18:49.take firm is private to hidd them from effective scrutiny and

:18:50. > :18:52.transparency. Now Madam Deptty Speaker it may be argued th`t the

:18:53. > :18:57.Green family has ultimate shareholders could do whatever they

:18:58. > :19:02.wanted with BHS. And they dhd. But as a company with tens of thousands

:19:03. > :19:05.of workers and former emploxees dependent on the long-term

:19:06. > :19:10.viability, that cannot be rtn as a personal fiefdom or a massive

:19:11. > :19:14.piggybank even though it was. Corporate governance rules `nd

:19:15. > :19:17.regulations should be no dotbt adapted to reflect that. Thd duties

:19:18. > :19:24.of directors are somewhat v`guely defined. Section 172 states that the

:19:25. > :19:28.director of a company must promote the success of the company hs a sure

:19:29. > :19:33.way to have regard for the likely consequences of any decision in the

:19:34. > :19:35.long term, the interest of the company employees, the need to

:19:36. > :19:40.foster the company 's busindss relationships with suppliers,

:19:41. > :19:47.customers and others of the company maintaining high standards of

:19:48. > :19:55.business conduct. Certainly. I will be very brief, the employees of BHS

:19:56. > :19:59.lost their jobs. They say to me why was it when the sort of advhsers and

:20:00. > :20:04.consultants, and auditors that didn't do their job in the banking

:20:05. > :20:09.crisis, all this time later, they are still not doing their job as

:20:10. > :20:12.auditors and professional pdople? I think that is a case and my

:20:13. > :20:16.honourable friend for Bedford looked at this, we need to look at how

:20:17. > :20:19.these firms look not just a reputation but a lot of deals go

:20:20. > :20:24.through simply because they are involved. He's that good enough

:20:25. > :20:29.Also, the point I was making in terms of directors. Can anybody look

:20:30. > :20:34.at BHS and say that in terms of the spirit and intention of section 117

:20:35. > :20:38.that was being enforced. In companies legislation, directors are

:20:39. > :20:43.equal in status, but in the corporate governance code, though

:20:44. > :20:50.sharing in priority, have a higher state. Lord Grabiner was trtly

:20:51. > :20:53.hopeless and shocking, and the week ending corporate and corpor`te

:20:54. > :20:59.governance, I think there is a strong case to align the code into

:21:00. > :21:04.legislation. Finally I wantdd to touch upon Sir Philip's knighthood,

:21:05. > :21:09.the received that for services to retail. However throughout the

:21:10. > :21:13.course of our enquiring, -- Inquiry, it became increasingly eviddnt that

:21:14. > :21:17.he was acting particularly good at retail at all. True he was good in

:21:18. > :21:20.the early days sniffing out corporate bargains, and rooting out

:21:21. > :21:25.efficiencies for cost. Therd is nothing wrong with that but he did

:21:26. > :21:30.not the BHS turnover, the lost market share to more nimble and even

:21:31. > :21:34.to some not so nimble competitors and he failed to anticipate the

:21:35. > :21:39.online retail revolution. I failing to invest and innovate in the brand,

:21:40. > :21:43.BHS even though it was an ilportant anchor in the high street looked

:21:44. > :21:46.like a remnant of the 1970s and 80s in a cut-throat sector wherd

:21:47. > :21:51.grabbing the customer 's attention and retaining their loyalty are

:21:52. > :21:58.paramount. He lacked the success and the ingenuity and the busindss

:21:59. > :22:03.acumen of the likes of Charlie Medfield, whose group responded well

:22:04. > :22:08.and his employees modelled generally help staff. He could not match the

:22:09. > :22:12.virtues of Sarah, whose supdrfast turnaround based on clever tse of

:22:13. > :22:23.customer data and local suppliers and a rapid turnover, has increased

:22:24. > :22:28.market share. -- Zara. I thhnk it is these people, Charlie Mayfidld, and

:22:29. > :22:33.the founder of Zara, to be classed as true kings of modern ret`il, not

:22:34. > :22:37.Sir Philip Green. Madam Deptty Speaker, BHS is one of the biggest

:22:38. > :22:40.corporate scandals of modern times, I think the whole house has sympathy

:22:41. > :22:45.for the thousands of workers and pensioners who have lost thdir jobs

:22:46. > :22:48.and seen their benefits redtced as a result of greed, incompetence and

:22:49. > :22:53.hubris. The reputation of btsiness has been tarnished as a restlt and

:22:54. > :23:03.the vast majority of business are not run and managed like thhs.

:23:04. > :23:11.# # I am very grateful to mx honourable friend and the w`y he's

:23:12. > :23:16.presented the argument. I h`ve no difficulty in supporting a lotion in

:23:17. > :23:23.the name of The Right Honourable member for birken head and others.

:23:24. > :23:27.In principal I agree with the amendments in the name of the

:23:28. > :23:30.honourable member for Bedford. The only question I have and my

:23:31. > :23:38.honourable friend may be helpful in this, is this the right timd to

:23:39. > :23:42.accept the amendment or shotld it be left until other issues are sorted

:23:43. > :23:47.out? Parliament will have its view upon the knighthood. There hs an

:23:48. > :23:52.urgent need to make sure th`t the pension is sorted. Sir Phillip Green

:23:53. > :23:59.came before us on June 15th and said he would sort it. We are fotr months

:24:00. > :24:02.beyond that. He is meant to be the consummate deal maker being able to

:24:03. > :24:07.buy and sell companies worth billions in a couple of days. Why if

:24:08. > :24:12.he's intent on sorting this hasn't it been done already? Regardless of

:24:13. > :24:18.what Parliament decides to do. And regardless of the hon honours

:24:19. > :24:24.forfeiture and knighthood. He has a duty to sort this. He should make

:24:25. > :24:29.amends for this whole sorry story and put right the wrongs th`t he

:24:30. > :24:33.himself engineered. THE SPEAKER: It is obvious to House

:24:34. > :24:37.that we have a short time this afternoon. I expect this debate to

:24:38. > :24:44.finish around about half two. I don't want to put on a limit time in

:24:45. > :24:50.such an err nest and well m`nnered debate. I hope that members will

:24:51. > :24:58.restrict themselves to some seven minutes. That way, if everyone who

:24:59. > :25:03.has indicated they wish to speak Speaks for seven minutes gets

:25:04. > :25:09.a chance, otherwise I will put on a time limit. It is a pleasurd to

:25:10. > :25:12.follow the wise words of thd honourable member for Hartldpool. It

:25:13. > :25:19.was a pleasure to serve with him on this committee. May I assochate

:25:20. > :25:23.myself with the remarks he `nd the member for Birkenhead made. When the

:25:24. > :25:27.news of BHS stroke, I felt bad about the loss of a high street icon,

:25:28. > :25:33.desperate for the employees affected, including those in my

:25:34. > :25:36.constituency. I have a confdssion to the make to the House, my gtt

:25:37. > :25:42.reaction was a committee inpuiry would be raking over the ashes of a

:25:43. > :25:46.sad event with little to be gained. I was initially not convincdd the

:25:47. > :25:49.inquiry would be productive. I was persuaded to take part. I al glad I

:25:50. > :25:54.did. And I am glad that this inqtiry has

:25:55. > :25:59.taken place. I believe we'rd in a position to lay concerns before this

:26:00. > :26:02.House. The largest concerns for me are not particularly about the

:26:03. > :26:08.individual trading circumst`nces leading to the demise of BHS. Though

:26:09. > :26:14.it seems as the honourable gentleman preceded me said there was little

:26:15. > :26:19.magic around the revitallis`tion of BHS's margins in the early xears of

:26:20. > :26:25.ownership. Dividend payments, generous as they were, excedding

:26:26. > :26:40.profits as they did, may or may not have undermined the BHS thrdw

:26:41. > :26:52.underinvest lt. Directors c`nnot... ... If any company is paying out

:26:53. > :26:58.dividends in excess of the free cash flow, there should be a meeting The

:26:59. > :27:02.honourable gentleman as so often reads my mind. I will come on to a

:27:03. > :27:06.similar point at a later pohnt in this speech. What I would s`y in

:27:07. > :27:09.terms of that period of timd when these very generous dividends were

:27:10. > :27:14.paid out, directors cannot be expected to have the gift of

:27:15. > :27:17.profitsy. They must be expected to understand the fundamental trends

:27:18. > :27:20.driving the underlying profhtability of their business and its

:27:21. > :27:24.sustainability. I am far from convinced that was the case in this

:27:25. > :27:28.situation. The most serious questions, as raised by the

:27:29. > :27:31.honourable gentleman from Hartlepool, intervention from the

:27:32. > :27:35.honourable gentleman are about the corporate governance of large

:27:36. > :27:40.private companies with millhons of employees and pensioners. Unlike my

:27:41. > :27:43.friend, the honourable membdr for Bedford, I intended to come here

:27:44. > :27:48.without making any referencd to the individuals concerned in thd sad

:27:49. > :27:51.demise of BHS I wanted to focus on the more general lessons to be

:27:52. > :27:57.learned. I have been brought back to the particular circumstances of BHS,

:27:58. > :28:04.having read last night the joint legal opinion produced by ldarned

:28:05. > :28:07.counsel. The two lead QCs, `s the honourable gentleman made rdference,

:28:08. > :28:12.they are friends of the chahrman of TIL and I hope the report which is

:28:13. > :28:16.considerably longer than thd joint report it analyses wasn't unduly

:28:17. > :28:22.costly. The report basicallx starts by saying let's pretend this is not

:28:23. > :28:27.a particularly inquiry but some other kind of inquiry. Would that

:28:28. > :28:33.type of inquiry be set asidd by the courts? Having set up in a relevant

:28:34. > :28:43.question the opinion producds an irrelevant answer. It seems somewhat

:28:44. > :28:49.ironic that Sir fillip was complaining about an jut cole he

:28:50. > :28:55.doesn't agree and he was able to pay hamsomely for the pages of recruits,

:28:56. > :29:00.a tactic the pensioners cannot able to resort to, I imagine. It depends

:29:01. > :29:05.on the quality of the report. I have not read the report, having find a

:29:06. > :29:08.series of strawmen set up for demolition I doesn't help this

:29:09. > :29:12.chamber, doesn't help the pensioners, anyone to understand the

:29:13. > :29:25.circumstances of the demise of BHS. But to put the minds at rest of the

:29:26. > :29:30.learned counsel t committee did not object... We question the c`sh and

:29:31. > :29:34.the choice of partner this the circumstances that BHS faced.

:29:35. > :29:38.Nor do we question the concdpt of a company being sold for ?1.

:29:39. > :29:46.Clearly this is a matter for TIL too, the selling company. THL 2

:29:47. > :29:50.having received ?1. It is unfortunate that TIL 2 ultilately

:29:51. > :29:56.controlled by Lady Green is still paying back to Lady green the ? 00

:29:57. > :30:02.million consideration for its acquisition of BHS in 2009. This

:30:03. > :30:07.satisfaction being satisfied by ?200 million loan stock, being controlled

:30:08. > :30:13.by three overseas companies by Lady Green with a coupon of 8%. H am

:30:14. > :30:18.mindful others wish to parthcipate I would take a longer debate to draw

:30:19. > :30:24.out aut the strawmen contained in learned counsel's opinion. @ rare

:30:25. > :30:30.point on which the joint colmittee's perspective is shared by le`rned

:30:31. > :30:35.counsel is on the, in our vhew lax governance around the sale, so

:30:36. > :30:40.eloquently described be I the member for Bedford. However learned counsel

:30:41. > :30:47.state it is an irrelevance because in any event the sharehold drrs in

:30:48. > :30:51.TIL could provide a direction, and therefore the directors werd in no

:30:52. > :30:57.position to prevent the sald of BH is. To any party. Well, mad dern

:30:58. > :31:03.Deputy Speaker, this may be legally true, but to this House it should

:31:04. > :31:10.raise questions. TIL is owndd 8 % by a company registered in Jersey and

:31:11. > :31:16.12% by six minority shareholders. The beneficial owner is ladx Green.

:31:17. > :31:20.Learned counsel inform us under the articles Lady Green acting `ny one

:31:21. > :31:25.of the other minority shareholders could have directed the sald of BHS

:31:26. > :31:30.at any time and on any terms. The right to own and to dispose of

:31:31. > :31:34.property under English law hs absolutely fundamental. Parliament

:31:35. > :31:39.will be wise to tread very softly. But I am concerned in this context

:31:40. > :31:49.about checks and balances. Not only on the sale, but more gener`lly

:31:50. > :31:53.What is the value of a secthon 72 to have regard in these

:31:54. > :31:56.circumstances? What is the role and purpose of non-executive directors,

:31:57. > :32:01.when the 88% shareholders is not present around the boardrool table?

:32:02. > :32:05.It is not to my mind appropriate for directors serving private companies

:32:06. > :32:10.to decide they take a dicht approach to what is good corporate governance

:32:11. > :32:14.because they can be ultimatdly directed. It makes it more

:32:15. > :32:19.important, especially on major or related transactions and on

:32:20. > :32:24.honouring commitments to pensioners that they bend over backwards to

:32:25. > :32:28.adhere to strong demanding codes and call out owners if they feel actions

:32:29. > :32:32.are taken which do not take sufficient regard to other

:32:33. > :32:36.stakeholders. There are thotsands of very successful medium and large

:32:37. > :32:43.private companies employing millions for those millions I think the

:32:44. > :32:47.ownership should be transparent Other issues from which I h`ve been

:32:48. > :32:51.side tracked I fear from thd legal opinion, but which this House should

:32:52. > :32:57.give consideration and if I may these include the application of

:32:58. > :33:01.corporate codes, as referred to by the honourable gentleman from

:33:02. > :33:05.Hartlepool to be applied not only to listed companies but those owned

:33:06. > :33:09.privately. On related party transactions, the importancd of

:33:10. > :33:16.independent valuations or independent opinions when these

:33:17. > :33:20.exceed certain levels T utility with regard to section 172 and how

:33:21. > :33:27.directors can take regard while owning responsibility elsewhere The

:33:28. > :33:31.appropriateness above certahn thresholds, particularly if a

:33:32. > :33:33.pension is in deficit, as I was approached by the gentleman from the

:33:34. > :33:48.Scottish National Party. In private, when pension problems

:33:49. > :33:53.may be less transparent than in the listed market, consideration should

:33:54. > :33:57.be give on the compulsory engagement with the regulator and trust tees.

:33:58. > :34:03.For both directors and adviser engaged in processes in respect of a

:34:04. > :34:08.company in which the pensions regulator has expressed concern if a

:34:09. > :34:13.sale is not taken by the pensions regulator, all parties should be

:34:14. > :34:17.very aware of the actuality of the count party to which they are

:34:18. > :34:23.selling. English law requirds no due diligence to be done on the buyer,

:34:24. > :34:27.nor to my mind should it. Btt common sense suggests a certain we`riness

:34:28. > :34:30.to be wise. There are lessons in conclusion, there are lessons to be

:34:31. > :34:40.learnt from this sad story. Above all we will all be focussed on the

:34:41. > :34:46.loss of a well-loved icon. The employees and who right. I

:34:47. > :34:51.understand from the radio this morning that he's not for the first

:34:52. > :34:56.time planning to meet the rdgulators in the next few days. Time will tell

:34:57. > :35:03.whether pensioners have been waiting for a result or if they havd been

:35:04. > :35:09.made to endure a poorly dirdcted Waiting for Godot. This is hndeed

:35:10. > :35:13.miserable business we are dhscussing today. We should not forget for one

:35:14. > :35:19.moment those who have been `dversely affected. 11,000 employees. 22, 00

:35:20. > :35:22.pensioners who will not know if they are going to receive the sort of

:35:23. > :35:26.pension that they have the right to expect.

:35:27. > :35:31.One of the stores, BHS stords, was in the Walsall borough and like the

:35:32. > :35:37.others, of course, closed. The least that can be done, the least can tha

:35:38. > :35:42.can be done is for Phillip Green to act along the lines of the

:35:43. > :35:46.conclusion of the report, n`mely a satisfactory resolution to the BHS

:35:47. > :35:51.pension fund. There's no dotbt again as the report makes clear that his

:35:52. > :35:56.massive private wealth should not make that in anyway difficult for

:35:57. > :36:01.him. Now I have risen because I am very keen to support the amdndment

:36:02. > :36:06.which we are now, which has been accepted by the speaker for debate.

:36:07. > :36:12.I want to support that. Now, it is true, of course, that

:36:13. > :36:18.taking away Green's knighthood should be recommended by thd

:36:19. > :36:23.appropriate committee. It whll not make anify man shall differdnces to

:36:24. > :36:28.those affected. They will not receive a penny more becausd the

:36:29. > :36:32.knighthood has been taken away. Why should we vote in favour if there is

:36:33. > :36:40.to be a vote? I would argue that that honour to be taken awax from

:36:41. > :36:43.Green would be a form of censure on that individual and more ovdrone

:36:44. > :36:48.which he would intensely dislike. Far more so, far more so, in

:36:49. > :36:53.removing that knighthood, as far as he's concerned, would be an

:36:54. > :36:59.indictment than all the words in the report that we are discussing. Now,

:37:00. > :37:03.mention is made in the report as well, Madam Deputy Speaker of the

:37:04. > :37:11.arrangements as far as the business and tax is concerned in Mon`co. Now

:37:12. > :37:15.I am not entirely a strange tore these matters because in September

:37:16. > :37:26.2012 I raised the issue in ` debate on taxes in the House of Colmons.

:37:27. > :37:30.And I made the point that though Philip Green undoubtedly paxs his

:37:31. > :37:34.taxes in the usual way this country. That is not in doubt. It is not

:37:35. > :37:38.questioned. He's not one of those who are non-domiciled for t`x

:37:39. > :37:44.reasons. He pays them. But ht does not change the fact that in the main

:37:45. > :37:49.the business is in his wife's name and his wife is resident in Monaco.

:37:50. > :37:56.That means, if in effect, that the amount of tax which is paid on the

:37:57. > :38:02.vast business empire that Green is closely involved in, which hn common

:38:03. > :38:05.sense terms means he is, me`ns he owns those businesses, the `mount of

:38:06. > :38:10.tax is minimal. I find it dhfficult to understand.

:38:11. > :38:16.How it is for person whose tax arrangements are well known, quite

:38:17. > :38:20.publicised, no secret at all, should receive a knighthood in the first

:38:21. > :38:31.place. That is a damning indictment in my view of what occurred.

:38:32. > :38:39.At the time I pointed out that he had paid himself a son, and he owes

:38:40. > :38:48.another sum. Which came to 0.2 billion, not million, billion. I

:38:49. > :38:53.don't know what other bonusds he has received since. Now hardly ` week

:38:54. > :38:57.goes by, some would say hardly a day goes by where you don't pick up a

:38:58. > :39:06.newspaper and find details of his lavish lifestyle. A billion`ire 's

:39:07. > :39:10.lifestyle if there ever was one It is a matter of provocation `part

:39:11. > :39:16.from anything else for the people had personally affected, nalely the

:39:17. > :39:22.employees who have lost, thd pensioners, who have lost a future

:39:23. > :39:28.of financial security. I sax this in conclusion had my remarks wdre meant

:39:29. > :39:35.to be brief. I see him as a billionaire spiv who should never

:39:36. > :39:40.have received a knighthood, he has shamed British capitalism and the

:39:41. > :39:53.least we can do today is to make our views clear and strong, and moreover

:39:54. > :39:56.put enough pressure, and to try and persuade the appropriate colmittee

:39:57. > :40:05.that if there is one person who doesn't deserve a knighthood, it is

:40:06. > :40:09.Philip Green. Thank you for calling me to speak in this debate, which

:40:10. > :40:17.has been called in the names of several of us. And, I followed the

:40:18. > :40:22.chairman of the select commhttee, the right Honourable member for

:40:23. > :40:26.Birkenhead, and also my othdr members on the committee, for

:40:27. > :40:31.Hartlepool Bedford and Horsham. I want to start by saying what this

:40:32. > :40:36.debate is not about. It is not to suggest that the deficit of any

:40:37. > :40:41.pension scheme in this land, is entirely the fault of one

:40:42. > :40:48.individual. Or indeed the responsibility of the owner of any

:40:49. > :40:54.sponsoring scheme. It is also worth noting, that of the Sun 6000 defined

:40:55. > :40:58.benefit pension schemes in Tnited Kingdom, about 1000 are in

:40:59. > :41:02.difficulties of various kind and very few of them indeed havd

:41:03. > :41:09.surpluses, therefore, the shtuation of the pension scheme, is not

:41:10. > :41:13.particularly unique, but thd circumstances around it are. And

:41:14. > :41:20.that brings me really to my second point. Which is the deficit pension

:41:21. > :41:24.funds go up and down, particularly faster time when interest r`tes are

:41:25. > :41:27.moving fast. And the value of assets are driven by bond yields when those

:41:28. > :41:33.are depressed, exacerbated by quantitative easing and quality

:41:34. > :41:39.then clearly pension deficits will rise. There are all sorts of people

:41:40. > :41:42.who have responsibility for this, including the investment

:41:43. > :41:46.policymakers of the scheme, investment managers and the cost of

:41:47. > :41:52.all of those involved may s`y significant difference to the scheme

:41:53. > :41:58.deficit as well. And I totally accept the argument, in the 80 page

:41:59. > :42:02.report, by Sir Philip Green's lawyers, that longevity and

:42:03. > :42:08.macroeconomic environment, lake it difficult for schemes, to ilprove

:42:09. > :42:15.their funding situation. I will give way briefly. I'm very grateful and I

:42:16. > :42:19.had to say that I agree with every comment that he has made but will he

:42:20. > :42:24.not accept a part of the difficulty with defined benefit schemes, has

:42:25. > :42:30.been the sole policy of the government to give responsibility to

:42:31. > :42:35.the Bank of England, and a 05th basis point reduction in yidld is

:42:36. > :42:40.about 120 billion on the defined pension benefit deficit. Thd

:42:41. > :42:46.government has created this by failing to balance this school

:42:47. > :42:49.policy. I don't accept that intervention, this is not a debate

:42:50. > :42:53.about the Bank of England 's monetary policy and the Honourable

:42:54. > :42:57.member would be well advised to read the select committee into vhew with

:42:58. > :43:01.the Deputy Governor of Engl`nd which I chaired in the Right Honotrable

:43:02. > :43:05.members absence, he is not paying attention from his seat as tsual.

:43:06. > :43:10.The Honourable member would be well advised to read that. Getting rid of

:43:11. > :43:14.quantitative easing is not going to solve the pension scheme problems

:43:15. > :43:19.and in particular, it is not going to solve the BHS pension scheme

:43:20. > :43:24.With his approval I will return to the subject that we are discussing.

:43:25. > :43:29.I finished before the intervention by remarking that the circulstances

:43:30. > :43:34.of the BHS pension deficit were extraordinary. That is what I now

:43:35. > :43:39.want to come onto. The schele went from surplus to large deficht in

:43:40. > :43:44.about ten years without any clear plan, without any really significant

:43:45. > :43:47.action by the sponsor, without decent relationships between the

:43:48. > :43:51.trustees and the sponsor, whth conflicts of interest betwedn some

:43:52. > :43:56.of the trustees appointed bx the sponsor, that they largely didn t

:43:57. > :44:02.recognise during our Inquirx, with contribution holidays in thd years,

:44:03. > :44:06.where the investors were taking out large dividends and all of this

:44:07. > :44:11.cannot by any stretch of thd imagination be described as best

:44:12. > :44:16.practice. The plan that was put forward to resolve the deficit that

:44:17. > :44:20.was a staggered series of injections over 23 years, without any dvidence

:44:21. > :44:24.of a long-term commitment bx the owners to the company is also not

:44:25. > :44:33.best practice. And something which our report highlighted as an issue

:44:34. > :44:38.in terms of the regulator approving very long-term solutions. Then Madam

:44:39. > :44:42.Deputy Speaker we come to the moment of the sale when information was

:44:43. > :44:45.withheld from trustees and the pensions regulator, there is a

:44:46. > :44:51.certain amount of dispute bdtween the seller and the buyer on pressure

:44:52. > :44:55.on the buyer not to communicate at all to the pensions regulator,

:44:56. > :45:03.reiterated in a further piece of evidence submitted only yesterday,

:45:04. > :45:07.by the buyer, Raul, and there was no significant attempt to clear it with

:45:08. > :45:15.a regulator whatsoever. Indded most shocking of all to many of ts is the

:45:16. > :45:18.concept from both the seller, that effectively, BHS was being sold debt

:45:19. > :45:27.free when it has such an enormous pension deficit. That is at the very

:45:28. > :45:31.least disingenuous. I think it was naive of the buyer and cynical of

:45:32. > :45:37.the seller. It brings us to Sir Philip Green himself, he sahd on the

:45:38. > :45:41.15th of June, "I want to respond to Mr Graham, we want to find `

:45:42. > :45:44.solution to the 20,000 penshoners, we still believe that money does not

:45:45. > :45:49.resolve it, without getting into it, the schemes are quite compldx, but

:45:50. > :45:53.we will sort it, we will find a solution, I want to give an

:45:54. > :45:58.assurance to the 20,000 pensioners that I'm there to sort this in the

:45:59. > :46:03.correct way. And with that, none of us could disagree. The question of

:46:04. > :46:07.course, which is why today's motion and debate is important is what has

:46:08. > :46:11.happened in the four months since. There has been some dialogud with

:46:12. > :46:17.the pensions regulator, that is clear. But the public wants to know,

:46:18. > :46:21.when this is going to be resolved, they are worried, that after our

:46:22. > :46:26.report, nothing is really going to happen, and that an important

:46:27. > :46:31.powerful man will not be held to account, so today, is an opportunity

:46:32. > :46:38.for this house to stress our commitment to holding Sir Philip

:46:39. > :46:43.Green 's commitment to accotnt. Thank you for giving way, does he

:46:44. > :46:48.agree to me, a pension schele collapsed about 12 years ago in my

:46:49. > :46:52.constituency, it goes into various things and all of the time, it is

:46:53. > :46:57.uncertainty. Does he not thhnk that Philip Green should deal with this

:46:58. > :47:01.as he is set because all of this uncertainty is impacting on the

:47:02. > :47:06.sport people and these poor pensioners? I am grateful to him and

:47:07. > :47:11.that is why, and I intend to finish my remarks really on this note, that

:47:12. > :47:16.is why today's debate does latter, it is not about grandstanding, it is

:47:17. > :47:20.not about parliament tried to demonstrate moral superiority over

:47:21. > :47:25.the behaviour of individuals but what it is about, is to say three

:47:26. > :47:28.important things. Firstly to Philip Green, you made a commitment and we

:47:29. > :47:35.accepted it in good faith and we expect you to fulfil it. And I

:47:36. > :47:38.believe, that waiting too long, is damaging to his reputation, whereas

:47:39. > :47:42.a quick resolution would be extremely helpful to him. It is a

:47:43. > :47:48.chance to say to the pensioners and future pensioners BHS that we held

:47:49. > :47:52.this in quarry and we will not let you down. It is a chance to say to

:47:53. > :47:56.employees of other large businesses and people in general that we

:47:57. > :47:59.understand your resentment of business people who run thehr

:48:00. > :48:05.businesses in cavalier fashhon without due regard to your hnterest.

:48:06. > :48:11.And we have held a complicated enquirer that has held to account,

:48:12. > :48:15.the powerful owners of BHS `nd their advisers to account. The

:48:16. > :48:21.consequences of our findings I believe, will be heard, by

:48:22. > :48:31.businesses, and echoes cauthonary tales for years to come. Th`nk you.

:48:32. > :48:34.Thank you Madam Deputy Speaker, it is a privilege to speak in this

:48:35. > :48:37.debate and let me thank the committee that has brought the

:48:38. > :48:41.report into the Honourable lember for Birkenhead for securing the

:48:42. > :48:46.important debate today. Just leading into this, the issue of court to the

:48:47. > :48:51.easing has come up, and I h`d to say, that the analysis, may have

:48:52. > :48:55.departed him today. Because you cannot get away from the fact that

:48:56. > :48:58.having a quantitative easing programme of 435 billion and that

:48:59. > :49:01.there is no underlying investment in the read economy and the only

:49:02. > :49:06.conclusion that you can loghcally draw is that business does not have

:49:07. > :49:10.confidence in the economy, that is why that into relationship between

:49:11. > :49:15.fiscal and monetary policy hs important. Because we need to get

:49:16. > :49:20.back to a balance, one wherd we have interest rates that reflect a normal

:49:21. > :49:24.economy, that is what the government has to take responsibility for and

:49:25. > :49:30.that is what the member for Gloucester seems to ignore. Madam

:49:31. > :49:34.Deputy Speaker the UK Government needs to see the work of thd select

:49:35. > :49:38.committee on the outcome of the debate, and acknowledge that we need

:49:39. > :49:45.to take action now, that protects all of us from the outcomes that we

:49:46. > :49:49.have seen from BHS. The BHS pension scheme represented 20,000 p`st and

:49:50. > :49:54.present workers in deficit, possibly for more than 500 million and scheme

:49:55. > :49:58.members are facing reduced entitlements as a result. That is

:49:59. > :50:02.really what should be at thd heart of this matter. It is the rdduced

:50:03. > :50:05.pensions for all of those workers that should be concerning us in this

:50:06. > :50:10.house today, and all of those workers who have lost a job. Why

:50:11. > :50:14.should pensioners, be put at risk, and fail to be protected, for what

:50:15. > :50:19.is now fully acknowledged as corporate greed. We all had to look

:50:20. > :50:25.at ourselves as legislators, and ask what could we have done differently

:50:26. > :50:28.to make sure that this situ`tion should not have arisen in the first

:50:29. > :50:34.case? The issue highlights the fundamental need to address the

:50:35. > :50:37.regulation of the pensions hndustry. Madam Deputy Speaker, approximately

:50:38. > :50:42.11 million people in this country, are relying on the final pension

:50:43. > :50:47.scheme, increasingly, these teams have come under pressure as funding

:50:48. > :50:50.has become stretched with around 5000 private-sector defined benefit

:50:51. > :50:59.schemes now in deficit to the tune of more than 900 billion, according

:51:00. > :51:04.to Robinson. 900 billion. Ddspite the situation that the membdr for

:51:05. > :51:07.Gloucester has taken, we cannot escape the impact of quantitative

:51:08. > :51:14.easing in this and the lack of a balanced response. It defies logic

:51:15. > :51:18.not to do that. As I highlighted in the debate in the savings bhll on

:51:19. > :51:25.Monday the 11th of July. Thd previous Secretary of State work and

:51:26. > :51:30.pensions, came to this housd and said, there is a very real systemic

:51:31. > :51:33.risk with defined benefit pdnsion schemes that we need to look at and

:51:34. > :51:41.my department will be discussing it further in the months ahead. Madam

:51:42. > :51:50.Deputy Speaker, since the statement, despite questions from the SNP,

:51:51. > :51:55.there has been silence. Sildnce from the UK Government. Where is the

:51:56. > :51:59.response to the fundamental challenges and as some might argue,

:52:00. > :52:04.a crisis for defined benefit schemes. When will the government

:52:05. > :52:08.face up to the challenges and threats that exist for many who are

:52:09. > :52:13.beneficiaries of those scheles. When will the government respond to the

:52:14. > :52:17.detail of the Cabinet Secretary That was no throw a lay lind, it was

:52:18. > :52:22.a senior Cabinet Secretary `dmitting what we know to be the case. Does

:52:23. > :52:24.the Minister agree with the assessment that was given to this

:52:25. > :52:30.house and will she address that point this afternoon? What hs it

:52:31. > :52:34.doing to deal with the governments own analysis of systemic risk? And I

:52:35. > :52:43.suspect sadly the answer is still nothing. Nothing is being done, the

:52:44. > :52:46.government court like a rabbit in the headlights, court been doing

:52:47. > :52:51.nothing, which threatens thd pensioners up and down the country.

:52:52. > :52:54.In the light of the governmdnt is sitting on its hands, I welcome the

:52:55. > :52:57.recently announced committed enquiring which will look at the

:52:58. > :53:04.adequacy of the pensions regulator 's powers and this must be welcomed.

:53:05. > :53:12.Why isn't the Government dohng its job in addressing this issud? SNP

:53:13. > :53:18.MPs will be working to strengthen the powers of the regulator in order

:53:19. > :53:21.to ensure that people like Philip Green are dealt with effecthvely

:53:22. > :53:26.when they seek to avoid pension responsibilities. It is, however,

:53:27. > :53:30.the duty of government to protect its citizens from undue pension

:53:31. > :53:33.risks and indeed from the sxstemic risks referred to by the Secretary

:53:34. > :53:38.of State. Defined benefit pdnsion schemes need to be placed on a

:53:39. > :53:42.sustainable footing and employees must be protected. And look forward

:53:43. > :53:47.to see if the minister does do this when she gets to her feet. Perhaps I

:53:48. > :53:54.should not hold my breath. Lore likely, it will be the case of

:53:55. > :53:57.waiting for the debate to end and scurrying for cover. We do not

:53:58. > :54:06.expect we'll answer is from this government. Brexit means pension

:54:07. > :54:12.disasters such as BHS are mtch more likely challenges for UK colpanies.

:54:13. > :54:15.Only where companies are able to afford to keep promises to dmployees

:54:16. > :54:20.can pension funds be regarddd as safe. Even large and successful

:54:21. > :54:25.companies can fail. The pension protection fund offers protdction in

:54:26. > :54:30.these cases. It has been forecast that up to 1000 pension schdmes

:54:31. > :54:34.could end up in the PPF over the next two years for that there are

:54:35. > :54:40.more disasters to come if they are correct. There will be a defined

:54:41. > :54:45.deficit of ?45 billion which would be overwhelming. That is trx to take

:54:46. > :54:49.this out of politics. The SNP has long called for the establishment of

:54:50. > :54:54.an Independent pensions comlission to ensure that employees savings are

:54:55. > :54:58.protect it and the more progressive approach is adopted when we moved to

:54:59. > :55:01.a period where defined benefit schemes become a thing of the past.

:55:02. > :55:07.Why don't we establish a pensions commission that will look at all of

:55:08. > :55:19.these issues in a holistic lanner? Let's come back to be -- BHS. They

:55:20. > :55:24.do not want to talk about government responsibilities because thdy have

:55:25. > :55:27.run away from Matt. 20,000 pensioners at BHS will suffdr and

:55:28. > :55:32.thousands of people have lost their jobs. This government is looking on

:55:33. > :55:39.from the sidelines. That is the reality of this Tory governlent

:55:40. > :55:42.Let's come back to BHS, perhaps this time without laughter from the

:55:43. > :55:45.Government benches. I hope the workers at the HS are watchhng the

:55:46. > :55:54.response from the Government backbenchers. How disgraceftl! How

:55:55. > :56:00.contentious the people in this country! I am going to make some

:56:01. > :56:05.progress. I will give way in a second. Philip Green's apology is a

:56:06. > :56:10.case of too little, too latd. He lined his pockets and did not stop

:56:11. > :56:15.to think about his employees. On Tuesday the 18th of October, Philip

:56:16. > :56:20.Green decided to say he is sad and very sorry for the hardship caused

:56:21. > :56:26.by the collapse of BHS and that he still wants to sort out the pension

:56:27. > :56:31.deficit. He has still tried to defend indefensible and duck his

:56:32. > :56:37.duties by shifting the blamd. I will happily give way. I am gratdful to

:56:38. > :56:43.be allowed to intervene. Thd point being made by colleagues of mine on

:56:44. > :56:49.this side of the house, we had a very long speech about systdmic

:56:50. > :56:54.pension risk. There has been a very worthy report, over 60 pages

:56:55. > :56:57.produced on BHS. I am pleasdd you are addressing this issue about

:56:58. > :57:00.employees who have lost thehr jobs, pensioners who have been left with

:57:01. > :57:08.lower benefits than they wotld have expected. I'm delighted that the

:57:09. > :57:12.honourable members getting hnto that part of his speech. The point I am

:57:13. > :57:15.making is we have been put hn a situation where workers havd

:57:16. > :57:20.suffered as a consequence of the actions of Philip Green. Let not the

:57:21. > :57:25.Government think that it can walk away from its responsibilithes to

:57:26. > :57:31.effectively regulate business and effectively regulate pension schemes

:57:32. > :57:35.in this country. But I recognise that Sir Philip owes it to the BHF

:57:36. > :57:39.pensioners to find a resolution urging need. We do need to look at

:57:40. > :57:42.corporate governance in the UK to see what can be done to offdr

:57:43. > :57:47.protection from the kind of corporate excesses that havd taken

:57:48. > :57:52.place with BHS. The Prime Mhnister has talked about bringing forward

:57:53. > :57:57.the proposals. While Philip Green put the hands filthy, Tory

:57:58. > :58:04.government's or is not so clean A lifetime of shying away frol a

:58:05. > :58:11.crackdown on the irresponsibility of the likes of Philip Green h`s begun

:58:12. > :58:21.to be caught up. It is time the minister today gave us some answers.

:58:22. > :58:26.Minister, Margot James. Thank you. I warmly congratulate the right

:58:27. > :58:30.honourable member for Birkenhead for securing this berry important debate

:58:31. > :58:35.this afternoon. I also congratulate and thank the right honourable

:58:36. > :58:42.member for Hartlepool and both select committees for their

:58:43. > :58:46.invaluable work in exposing the governance and decision-makhng

:58:47. > :58:52.issues that have contributed to the terrible consequences of so many

:58:53. > :58:59.people, formerly of BHS. I will give way in a minute. Reading thd report

:59:00. > :59:04.made me painfully aware of the responsibilities that directors

:59:05. > :59:09.have. Under section 1.72 of the companies act, directors must have

:59:10. > :59:13.regard to the long-term consequences for the company of their

:59:14. > :59:17.decision-making and they must consider the interests of elployees,

:59:18. > :59:24.customers, and the impact on the community. BHS should have been

:59:25. > :59:29.making plans to mark its 90th anniversary in 2018. Said which can

:59:30. > :59:33.all of its stores are now closed and employees, some of whom likd Mrs

:59:34. > :59:39.Patel, mentioned in the report, who has spent most of their working

:59:40. > :59:44.lives building the value of BHS they have seen their careers end in

:59:45. > :59:49.redundancy and uncertainty, rather than the secure retirement to which

:59:50. > :59:52.they had been looking forward and to which they had a right to expect. I

:59:53. > :59:58.will give way to my honourable friend. I wanted to make thd point

:59:59. > :00:02.it is wonderful to see the linister here. She is absolutely not

:00:03. > :00:06.scurrying away from anything. I have never seen her scurrying aw`y from

:00:07. > :00:10.anything in her life. Does she agree with me holiday are debating a

:00:11. > :00:15.motion put up by the backbench committee after a report done by an

:00:16. > :00:20.entirely cross-party committee, where parties involved workdd

:00:21. > :00:25.incredibly well together, it was disappointing to hear the SNP

:00:26. > :00:31.spokesman, like an agitated Humpty Dumpty, talking about monet`ry

:00:32. > :00:36.policy. I thank my honourable friend for his intervention and for his

:00:37. > :00:44.work. Disappointed, I may bd, but not surprised. So, my thoughts. I

:00:45. > :00:50.know those of members across the House are with the ex-BHS workers,

:00:51. > :00:57.pensioners and their familids. We know about two owners of BHS. Philip

:00:58. > :01:02.Green, who bought the company in 2000. It was profitable in the early

:01:03. > :01:07.years and Dominic Chappel. Hn his interview with ITV last week and he

:01:08. > :01:12.admitted he had no retail expedience and was categorically the wrong

:01:13. > :01:19.buyer and horror decision. ,- experience. In his powerful speech,

:01:20. > :01:25.the consequences were laid bare of the decision to sell to Domhnic

:01:26. > :01:29.Chappel. The key thing in the report is the sharp contrast betwedn the

:01:30. > :01:32.impact of the demise of BHS on workers and pensioners and the

:01:33. > :01:41.payments received by senior executives in BHS and their

:01:42. > :01:46.advisers. The report also hhghlights serious weaknesses, as indedd this

:01:47. > :01:49.debate has done this afternoon, into the corporate governance of the

:01:50. > :01:54.companies concerned. The Government is very concerned about these

:01:55. > :01:58.issues. The Prime Minister has already made clear that we will

:01:59. > :02:03.review corporate governance, including further reforms on

:02:04. > :02:06.Executive pay as part of thd Government's work to build `n

:02:07. > :02:10.economy that works fairly for everybody and not just the

:02:11. > :02:16.privileged view, about whom we have heard so much this afternoon. Strong

:02:17. > :02:20.and transparent corporate governance is vital to providing trust in

:02:21. > :02:25.business, in fostering good decision-making by companies. The

:02:26. > :02:30.Government intends to consult later this autumn on options to strengthen

:02:31. > :02:33.the existing framework. The right honourable member for Hartldpool

:02:34. > :02:40.made some very salient points about the gap between public and large,

:02:41. > :02:43.private company in governance terms. The business select committde

:02:44. > :02:52.enquiry into corporate governance will provide an opportunity...

:02:53. > :02:57.Minister, point of order. Thank you very much. Thank you for indulging

:02:58. > :03:01.me. Please excuse me. You m`y be my ignorance of Parliamentary process

:03:02. > :03:04.but I am confused as to why the minister is responding halfway

:03:05. > :03:07.through the debate before all of the members have had another gyl teacher

:03:08. > :03:15.to bring forward the concerns of their constituents. The honourable

:03:16. > :03:20.lady has herself make clear that, in asking this question but shd has not

:03:21. > :03:25.served for very long in this House are no one would expect her to have

:03:26. > :03:32.a perfect knowledge of procddure. This being a backbench debate, the

:03:33. > :03:35.minister and spokesman for the two main opposition parties, can choose

:03:36. > :03:39.at what point they wish to dnter the debate. The spokesman for the

:03:40. > :03:43.Scottish National Party has already entered the debate, the minhster is

:03:44. > :03:46.coming to the debate now. The spokesman for the official

:03:47. > :03:50.opposition will come in at ` later stage. It is entirely up to them and

:03:51. > :03:55.up to the chair as to when happens. Want to make sure there is dnough

:03:56. > :03:58.time for the minister to take on the points that have been made points

:03:59. > :04:03.that will be made later in the debate. Minister...

:04:04. > :04:10.Thank you. I was just coming to welcome the inquiry announcdd by the

:04:11. > :04:14.business select committee into corporate governance. I am sure it

:04:15. > :04:20.will add to the evidence we need to take sound decisions on how to

:04:21. > :04:25.strengthen our corporate governance framework for big, private companies

:04:26. > :04:30.as well as public companies. Turning to the very vexed issue of BHS

:04:31. > :04:34.pensions, the fate of the BHS pension schemes and the

:04:35. > :04:39.circumstances leading to thhs are of key interest to many but obviously,

:04:40. > :04:45.especially, to the ex-BHS elployees and its pensioners. Serve Philip has

:04:46. > :04:49.been quoted as saying how s`d and very sorry he is for all thd

:04:50. > :04:54.hardship and sadness caused to the people who work there and the

:04:55. > :05:00.pensioners. And that he is hn a very strong dialogue with the pensions

:05:01. > :05:05.regulator to find a solution for BHS pension deficit. Like my honourable

:05:06. > :05:10.friend the Gloucester, I wotld urge Sir Philip to sort it out qtickly so

:05:11. > :05:14.that the workers and pensioners have greater certainty about thehr future

:05:15. > :05:22.pensions. Surely they deserve that much. Alongside any discusshons in

:05:23. > :05:26.the respect of a potential settlement, the pensions regulator

:05:27. > :05:31.has continued to investigatd the handling of the BHS schemes will do

:05:32. > :05:35.this has involved reviewing almost 100,000 documents and remains on

:05:36. > :05:41.course to reach a conclusion soon. As part of this, the regulator is

:05:42. > :05:44.considering whether it can tse statutory anti-avoidance powers

:05:45. > :05:50.against a number of parties and expects to conclude this in the

:05:51. > :05:55.coming weeks. Nevertheless, I recognise the BHS case has generated

:05:56. > :06:00.much interest in the role of the regulator and whether these are

:06:01. > :06:03.sufficient. I will give way to the honourable lady. Is the minhster

:06:04. > :06:11.aware of any formal proposal put forward by Sir Philip to thd

:06:12. > :06:15.pensions regulator? Minister. I am not aware of the specifics but I

:06:16. > :06:19.thank the honourable lady for raising the important point. I would

:06:20. > :06:23.like to ensure the house th`t neither the Government, nor the

:06:24. > :06:28.regulator, are complacent when it comes to the regulation of schemes,

:06:29. > :06:32.or the power is needed to t`ckle and deter this sort of misbehavhour

:06:33. > :06:40.Should we need to bring forward further legislation... I'm going to

:06:41. > :06:44.continue. Should we need to bring forward further legislation in light

:06:45. > :06:49.of the evidence, including that emerging from the BHS investigation,

:06:50. > :06:53.we will do so. In the meanthme, we must allow the Independent regulator

:06:54. > :06:58.the time they need to prepare any case and to follow the statttory

:06:59. > :07:02.process wherever it takes them. I will give way for one last time

:07:03. > :07:08.Mindful of many backbenchers who want to get in. I appreciatd the

:07:09. > :07:12.minister giving way. The grdat deal has been made about waiting for it

:07:13. > :07:16.to come to a conclusion that it is also about leadership. The

:07:17. > :07:20.Government should put on thd table the actions of Philip Green are not

:07:21. > :07:26.acceptable in a fair societx and condemn him on that basis. H thank

:07:27. > :07:31.the honourable gentleman for his intervention and I sympathise with

:07:32. > :07:35.the strength of his feeling stock but there are certain legal aspects

:07:36. > :07:40.that may or may not arise in future. I had to be little guarded hn what I

:07:41. > :07:47.say. I hope he will forgive me for that. Turning to the ongoing

:07:48. > :07:50.investigations surrounding BHS. I can ensure the House that

:07:51. > :07:57.investigations are well unddr way into conduct of the managers of the

:07:58. > :08:00.pension scheme. The insolvency service investigation into the

:08:01. > :08:04.activity of former BHS directors is ongoing. It is one of the bhggest

:08:05. > :08:07.investigations ever to be undertaken by the agency and the Government has

:08:08. > :08:14.made additional resources available to support what we regard as vital

:08:15. > :08:18.work. If evidence is uncovered that indicates that any of the dhrectors

:08:19. > :08:23.conduct fell below that to be expected, then action will be taken.

:08:24. > :08:31.The financial reporting Council has announced an investigation hnto the

:08:32. > :08:36.audit by PwC of BHS's accounts for the year ending their teeth of

:08:37. > :08:40.August, 2014. The Serious Fraud Office is continuing to revhew

:08:41. > :08:43.material and liaise closely with the pension regulator and insolvency

:08:44. > :08:46.service to identify any regtlation which gives rise to a reasonable

:08:47. > :08:52.suspicion of serious or complex fraud.

:08:53. > :08:59.High understand that Honour`ble members and the general public and

:09:00. > :09:03.the government are keen to see the outcome of these investigathons

:09:04. > :09:07.However it is vitally important drawing my remarks to a close that

:09:08. > :09:13.investigating bodies are given time to examine, consider hand compiled a

:09:14. > :09:19.significant body of evidencd, this is a very complex in quarry. The

:09:20. > :09:25.number of in quarries and complexity of the documentation that is being

:09:26. > :09:30.received. So I can assure the house, should the evidence supportdd in the

:09:31. > :09:35.end, there will be enforcemdnt and action of a more tough nature taken.

:09:36. > :09:38.That is all I propose to sax this afternoon but I look forward Madam

:09:39. > :09:48.Deputy Speaker to hearing the rest the debate. Thank you very luch

:09:49. > :09:54.Madam Deputy Speaker, I'm proud to be a member of a select comlittee

:09:55. > :09:58.that has been part of a process a joint select committee procdss, that

:09:59. > :10:02.has led to the reports that have brought us here today, I wotld

:10:03. > :10:06.congratulate both of the ch`irs of those select committees for their

:10:07. > :10:12.leadership of this process, for their excellent speeches and also

:10:13. > :10:17.commend, the superb contribttions by colleagues, on the other side of the

:10:18. > :10:22.house who has spoken today hn this debate. Ably assisted, by otr

:10:23. > :10:26.excellent staff. I think thhs committee investigation has been

:10:27. > :10:34.robust and a truly forensic`lly enquirer into this scandal `t BHS,

:10:35. > :10:39.and, I think that it does ldave the reputation of this house good, to be

:10:40. > :10:45.able to do this. Now I don't have a cynical bone in my body Mad`m Deputy

:10:46. > :10:51.Speaker, but even I, and slhghtly taken aback by the fact that it has

:10:52. > :10:56.been today's business, the debate on this committee, that has brought Sir

:10:57. > :11:01.Philip Green into the public light again in the last week or two, and

:11:02. > :11:08.most recently giving an indhcation that he is closer to making a

:11:09. > :11:15.settlement to BHS pensioners. It does show, the business of this

:11:16. > :11:20.house can have a direct imp`ct on the affairs that we are looking at.

:11:21. > :11:26.When the Prime Minister, I don't always agree with the new Prime

:11:27. > :11:30.Minister, what makes you angry, in a televised interview, she replied the

:11:31. > :11:35.powerful abusing their position and she was absolutely right, as we

:11:36. > :11:41.heard from contributors, it is something that should make ts all

:11:42. > :11:44.angry. This story of British home stores is exactly that, it hs a tale

:11:45. > :11:54.someone who crewed staggering wealth but then failed to meet thehr thing

:11:55. > :11:58.with the company made them rich 20,000 pensioners face cuts to their

:11:59. > :12:03.pensions, including many people in this room, in some case fachng the

:12:04. > :12:06.cut in extreme up to three puarters of their pension and these `re

:12:07. > :12:11.people who in some cases ard approaching pension age and on our

:12:12. > :12:14.end the last years of their pension, are unable to take action in what is

:12:15. > :12:20.a shortfall in their income and who still today do not know what money

:12:21. > :12:25.they will be able to draw upon to live, to pay their mortgages, to pay

:12:26. > :12:30.of their lives. That is absolutely of their lives. That is absolutely

:12:31. > :12:34.shocking, people deserve security, in their retirement and when they

:12:35. > :12:39.are let down, that is something that we should be very concerned about.

:12:40. > :12:43.Indeed, as our report makes absolutely clear, this is something

:12:44. > :12:47.that gets lost, that the pension contributions that a companx makes

:12:48. > :12:52.are not try double donations, they are the means by which the dmployer

:12:53. > :12:58.meet their obligations for the third page. It is that that has bden

:12:59. > :13:01.breached. I know, that Sir Philip Green feels much aligned by the

:13:02. > :13:06.investigation, he made that extremely clear when he was in front

:13:07. > :13:09.of us but until and unless he provides proper redress for those

:13:10. > :13:15.pensioners, he has absolutely no right to do so, we have heard from

:13:16. > :13:19.many people today, the scald of the Richmond, the extent to which the

:13:20. > :13:23.country was milked for dividends during a profitable years and nearly

:13:24. > :13:26.part of the last decade and it is not for me, it has been well done by

:13:27. > :13:32.others to talk about the wax in which the company assets were proved

:13:33. > :13:37.to be less robust than were expected, and profits taken in the

:13:38. > :13:42.good years, leaving the company more exposed to the tougher clim`te that

:13:43. > :13:45.came afterwards. What concerns me Madam Deputy Speaker is what

:13:46. > :13:49.happened after that, it's what happened to the pension schdme after

:13:50. > :13:57.it moved out of the surplus that it was in, when the company was bought

:13:58. > :14:04.in 2000 to a deficit of ?344 million, and by the time of the

:14:05. > :14:12.collapse of VHS, ?571 million. What we know is that BHS, that Sophia

:14:13. > :14:14.Green refused to make the elployee contributions necessary -- dmployer

:14:15. > :14:21.contributions necessary to sustain it over that year, that is something

:14:22. > :14:24.that caused concerns to the board of trustees, one said she told us about

:14:25. > :14:28.the declining state of the scheme in the second part of the last decade

:14:29. > :14:32.to seek assurances from the company about its long-term contribttions to

:14:33. > :14:35.the scheme including pay and contributions, those assurances were

:14:36. > :14:43.not given, there's contributions were not made. Green told otr

:14:44. > :14:47.committee in the summer, th`t he had no involvement in those discussions

:14:48. > :14:52.around the pension scheme bdfore 2012 and claimed to be unaw`re of

:14:53. > :14:55.the problem and basically blamed the trustees. He suggested that the

:14:56. > :14:59.trustees had made stupid and did your tick mistakes and were asleep

:15:00. > :15:02.at the wheel of the pension scheme and indicated he would have been

:15:03. > :15:07.willing to make much larger contributions had he only bden aware

:15:08. > :15:10.of the growing deficit. I h`d to say Madam Deputy Speaker that otr

:15:11. > :15:17.committee was deeply sceptical about those comments. And in the now

:15:18. > :15:22.infamous evidence of the sulmer a surprise you Tube hit it was later

:15:23. > :15:26.to become. We were asked to believe that someone who had the reputation

:15:27. > :15:32.for the micromanagement of British home stores, that he knew nothing

:15:33. > :15:34.whatsoever about the growing pension fund, and he became activelx

:15:35. > :15:41.involved to do something about it and we have already heard that this

:15:42. > :15:45.lead at one stage to a proposal for a 23 year recovery, an unprdcedented

:15:46. > :15:48.23 year recovery programme that was based on a contribution that BHS

:15:49. > :15:55.affected to make rather than one that was driven by the needs of the

:15:56. > :16:04.trustees. Of course, we havd already heard, with the sale of BHS, with a

:16:05. > :16:07.lack of due diligence, people have need no understanding whatsoever of

:16:08. > :16:15.business to know that it was truly shocking. I'm very grateful on that

:16:16. > :16:23.point of due Joe Dudgeon is, would she agree with me, the trustees it

:16:24. > :16:32.was as though the blind werd leading the blind, it was extraordinary The

:16:33. > :16:39.entire process, as we heard, involving a whole range of

:16:40. > :16:45.participants, in the lead up to the sale, was truly stunning. In terms

:16:46. > :16:50.of its lack of robust enquiries checks, and that should be ` lesson

:16:51. > :16:54.that I hope will be learned by all of those agencies involved `nd by

:16:55. > :16:58.government and business. Thdy are issues Madam Deputy Speaker of

:16:59. > :17:03.judgment and personal responsibility as well as issues of law and all of

:17:04. > :17:08.those were sorely missing, ht is little wonder that Simon Walker the

:17:09. > :17:11.director-general of the of directors, normally known as an

:17:12. > :17:16.assiduous defender of the free market said that the circumstances

:17:17. > :17:20.of the collapse of PHS were a blight on the reputation of British

:17:21. > :17:26.business. -- of BHS. British business has much to be protd of, we

:17:27. > :17:29.have already heard that we want to have an environment in which

:17:30. > :17:33.business flourishes, in which risks can be taken and sometimes there

:17:34. > :17:38.will be failures, and indeed there have been in many cases pension

:17:39. > :17:43.deficits and funds that go hnto deficit, BHS was not alone hn that,

:17:44. > :17:49.but British businesses need to make sure, and be part of a procdss that

:17:50. > :17:53.its reputation as a whole is not sullied by the shocking beh`viour,

:17:54. > :18:01.the cavalier behaviour of some of the outliers in terms of implement

:18:02. > :18:06.law or the handling of penshons In the last few years, and the

:18:07. > :18:10.financial crash of 2008, we have seen shock waves of anger and

:18:11. > :18:14.alienation, we have seen th`t across much of the developed world and

:18:15. > :18:18.there is a sense that the g`me is rigged. It is a sense that the

:18:19. > :18:22.wealthy and the powerful have their own rules, that they are not held to

:18:23. > :18:27.account whether for incompetence or greed or sometimes even worse. The

:18:28. > :18:39.crisis of 2008 highlighted ht, they brought it into highlight btt it

:18:40. > :18:41.didn't begin or end there. There had to be consequences for this type of

:18:42. > :18:43.behaviour. There have to be consequences for the sake of the

:18:44. > :18:47.reputation of good business. There have

:18:48. > :18:52.look at itself in the face. The consequences had to be proportionate

:18:53. > :18:58.and achieved through due process and they must be there, some of them

:18:59. > :19:02.have been set out excellently about the kinds of changes in the law

:19:03. > :19:08.corporate governance, the process by which dividends are paid out. And so

:19:09. > :19:12.forth, these are all measurds that this house must scrutinise `nd

:19:13. > :19:16.consider bringing forward btt there must be individual accountability.

:19:17. > :19:20.What I want to see more than anything, nor than further damage to

:19:21. > :19:25.Sir Philip Green's reputation, the mediation, removal of his

:19:26. > :19:29.knighthood, is the money. I want to see that the damage done to his

:19:30. > :19:33.reputation in the select colmittee process and this debate tod`y, to

:19:34. > :19:37.actually bring him finally to the table to do the right things so that

:19:38. > :19:41.he can hold his head up high, so that the pensioners can get the deal

:19:42. > :19:46.that they deserve and all of us are engaged in a process of scrttiny of

:19:47. > :19:53.the sorry tale of BHS and whll know that the sorry tale has been

:19:54. > :19:58.vindicated. Thank you Madam Deputy Speaker, as a member of the joint

:19:59. > :20:03.committee that enquired into the collapse of BHS, it is a pldasure to

:20:04. > :20:07.follow the honourable member for Westminster North, a fellow member

:20:08. > :20:12.of the joint committee and `lso my honourable friend, the Minister and

:20:13. > :20:18.member for Stourbridge, I would like to welcome her to her place, a

:20:19. > :20:22.slightly different place, she was my whip. Before being elected to this

:20:23. > :20:27.place, I worked in business and like my honourable friend for Bedford, I

:20:28. > :20:32.am pro-business, pro-enterprise but not at any cost. I have been

:20:33. > :20:37.appalled by the category of events that led to the demise of BHS and

:20:38. > :20:42.also what we learned in the business innovations and skills select

:20:43. > :20:47.committee, both are bad for business and I'm sorry to say very b`d for

:20:48. > :20:51.the reputation of business. Picking up the point that the member for

:20:52. > :20:55.Westminster North has made. Quite rightly reputable businesses have

:20:56. > :20:59.also been appalled by both situations. The irresponsible

:21:00. > :21:04.behaviours of a feud in danger the reputations of the majority who do

:21:05. > :21:07.operate responsibly. That is why I fully support the Prime Minhster and

:21:08. > :21:12.the government 's position that we need to make the economy work for

:21:13. > :21:18.everyone. She has said on the steps of Downing Street, we are the part

:21:19. > :21:22.of enterprise and that does not mean that we should be prepared to accept

:21:23. > :21:26.that anything goes. This is not as I see it an attack on business, far

:21:27. > :21:32.from it but a desire to protect the reputation of business. Aftdr all,

:21:33. > :21:35.we do not want to see the bdhaviours of irresponsible businesses, of the

:21:36. > :21:43.futile rushing the reputation of good business. -- of the few

:21:44. > :21:48.tarnishing. We only need look at the result of the banking crisis, and

:21:49. > :21:56.the tarnishing of the banks, to see the dangers of reputational damage

:21:57. > :22:01.resulting in events such as these. I will happily give way. Refldcting on

:22:02. > :22:03.the banking crisis and the remarks of the Minister, would the

:22:04. > :22:08.honourable member agree with me that in the matter of the banking crisis

:22:09. > :22:15.and particularly how are yot state deals with these issues, and the

:22:16. > :22:19.continued RBS saga, in the global development group, how quickly and

:22:20. > :22:25.how effectively, agencies ddal with these matters, is pivotal? The

:22:26. > :22:29.honourable member makes an interesting point and I know, that

:22:30. > :22:34.the honourable member has a lot of personal interest in looking at RBS

:22:35. > :22:38.and the banking industry. I think from my perspective, the government

:22:39. > :22:50.have been very quick in terls of responding to the collapse of BHS.

:22:51. > :22:57.The devastating events resulting in the collapse of BHS raised several

:22:58. > :23:00.questions as to whether -- whether the framework of corporate

:23:01. > :23:05.governance is satisfactory particularly relating to prhvate

:23:06. > :23:08.businesses. Those with largd workforces and also large pdnsion

:23:09. > :23:12.liabilities that debate is `bout protecting our economy, protecting

:23:13. > :23:17.the tax payer from picking tp the bill but also, most importantly our

:23:18. > :23:20.responsibility to do everything we can to protect employees. The

:23:21. > :23:26.consequences that have been discussed today in terms of the

:23:27. > :23:29.collapse of BHS by many honourable and Right Honourable members has

:23:30. > :23:36.looked at both the employees and also the members of the pension

:23:37. > :23:40.scheme. I would like to focts my contribution on the employeds. The

:23:41. > :23:44.11,000 people, Madam Deputy Speaker, lost their jobs as a result of the

:23:45. > :23:48.collapse of BHS. For these people it was not just about losing their

:23:49. > :23:52.jobs, it was the impact on their lives and that of their famhlies but

:23:53. > :23:56.many of these people have mortgages to pay and are worried at whether

:23:57. > :24:02.they can keep a roof over their heads and that of their famhlies. I

:24:03. > :24:12.will give way. If I can just echo what she is saying. The member for

:24:13. > :24:18.Harlow has said his store h`s been one of the most profitable stores

:24:19. > :24:25.for BHS. This impact has bedn felt around the country, town after town

:24:26. > :24:29.and store after the tour, h`sn't it? Thank you for your intervention

:24:30. > :24:34.These stores are all across the country. I do not have one hn my

:24:35. > :24:37.constituency but many honourable and right Honourable members do have

:24:38. > :24:46.stores who were employing htndreds of people at each store. Thhs is not

:24:47. > :24:50.just about employees, it is about their families and the numbdr of

:24:51. > :24:57.people who have been affectdd by this is far more than the 10,00

:24:58. > :25:01.employees. As the honourabld member for Rutherglen and Hamilton West

:25:02. > :25:05.mentioned, this has been devastating cost of this has been a horrid

:25:06. > :25:09.period of time for these employees who now no longer have thesd jobs

:25:10. > :25:14.and will be facing difficulties in terms of finding new employlent I

:25:15. > :25:19.will happily give way. Thank you. I agree with the case. It is not just

:25:20. > :25:23.the employees in the store directly employed by Companies Act, ht are

:25:24. > :25:29.catering and cleaning and everyone in the supply chain who will also

:25:30. > :25:37.adverse league affected. -- adversely affected. That is a very

:25:38. > :25:40.important point. It is not just about employees, it is about

:25:41. > :25:46.contractors and the wider stpply chain. The select committee enquiry,

:25:47. > :25:52.Madam Deputy Speaker, has highlighted the events which led to

:25:53. > :25:56.the collapse of BHS, suggesting a review of regulation and corporate

:25:57. > :25:59.governance in particular in terms of large private businesses. It also

:26:00. > :26:03.suggests the need to create a more level playing field between large

:26:04. > :26:07.private companies have a cldar listed companies in terms of

:26:08. > :26:13.transparency and codes of conduct. As the chairman of the select

:26:14. > :26:17.committee has all dimensions, the honourable member for Hartldpool, we

:26:18. > :26:20.will be conducting an inquiry looking at corporate govern`nce and

:26:21. > :26:25.the roles and responsibilitx directors. It addresses isstes

:26:26. > :26:29.highlighted in this particular enquiry. I am pleased to sed the

:26:30. > :26:34.Government is committed to reforming corporate governance. It is clear

:26:35. > :26:38.that we need to review this. The practices of large private

:26:39. > :26:42.businesses, the role of dirdctors in their decision-making, and the

:26:43. > :26:45.responsibilities of directors to consider how they protect the

:26:46. > :26:51.interests of their employees and the members of their pension schemes. I

:26:52. > :26:57.welcome the minister this afternoon and I hope the Government and

:26:58. > :27:01.minister will consider the observations and recommendations

:27:02. > :27:07.from the inquiry and the pohnts made by honourable and right Honourable

:27:08. > :27:12.members this afternoon. To conclude, Madam Deputy Speaker, we have a

:27:13. > :27:18.responsibility as policy and lawmakers, to learn lessons from the

:27:19. > :27:26.collapse of BHS. I look forward to the Government publishing its

:27:27. > :27:29.consultation this autumn. M`ny thanks, Madam Deputy Speaker. I

:27:30. > :27:32.would like to thank the right honourable member for Birkenhead for

:27:33. > :27:35.introducing this incredibly important debate to the House

:27:36. > :27:41.Antipater evicted cross-party members involved in the comlittee

:27:42. > :27:46.reports, including Mike honourable colleague and friend from Edinburgh

:27:47. > :27:51.East, Edinburgh West, sorry. In July of this year, British home stores

:27:52. > :27:59.closed in my constituency. The long-standing store was the third

:28:00. > :28:02.largest retail unit in the Dast Kilbride shopping mall. Staff were

:28:03. > :28:08.left with huge uncertainty `s to what would happen. The stord was

:28:09. > :28:13.eventually closed but it was a very sad day. And for constituents. I

:28:14. > :28:18.have frequented this store since childhood. Walking by the elpty unit

:28:19. > :28:23.is still strange and stark reminder to our community of the unjtst is

:28:24. > :28:30.that unfolded, the loss of jobs and loss of pensions. Whilst our local

:28:31. > :28:34.staff oversaw the closure of our BHS, the former owner, Sir Philip

:28:35. > :28:39.Green, reportedly continued his holiday in the Mediterranean on

:28:40. > :28:45.board his ?100 million superyacht. I understand that Sir Philip Green

:28:46. > :28:51.owned BHS for 15 years before selling it to Dominic Chappdl for ?1

:28:52. > :28:56.in 2015. He had rightly comd under fire for taking more than a massive

:28:57. > :29:00.?400 billion in dividends from the department store chain and for

:29:01. > :29:07.selling it to a man without retail experience in such a manner. Eight

:29:08. > :29:11.damning report from the and business committee found British homd stores

:29:12. > :29:19.were subject to systematic plunder by Philip Green and Dominic Chappel

:29:20. > :29:23.in the unacceptable face of capitalism. People have lost their

:29:24. > :29:26.jobs and pensions. Ordinary people are the losers. They gave their

:29:27. > :29:34.service and good faith, both locally and to the company. Real qudstions

:29:35. > :29:39.must be answered on multi-n`tural -- multinational corporate strtctures

:29:40. > :29:45.and pensions regulation by this House. The UK governor needs to take

:29:46. > :29:51.action and not allow such shtuations to occur in the future. We need to

:29:52. > :29:58.tackle a series that are issues of asset stripping. It does not protect

:29:59. > :30:03.working people. Those who h`ve done the right thing who have contributed

:30:04. > :30:08.to pensions, contributed to society, only to have been taken adv`ntage of

:30:09. > :30:12.and failed. SNP MPs will be working to strengthen the powers of the

:30:13. > :30:16.regulator, to ensure that pdople like Philip Green are dealt with

:30:17. > :30:20.effectively when they seek to avoid pension responsibilities. There is

:30:21. > :30:26.also a real need to address inequality, to work with businesses

:30:27. > :30:31.and industry, to provide appropriate regulation. Many of my affected

:30:32. > :30:34.constituents have contacted me to ask that Sir Philip Green bd

:30:35. > :30:39.stripped of his knighthood, that he is keeping the title adds s`lt to

:30:40. > :30:51.their wings and the injustice of this situation. -- wound is. We also

:30:52. > :30:57.need to address the very re`l issues that exists, of all the people like

:30:58. > :31:02.Philip Green in this world being able to treat workers in thhs

:31:03. > :31:07.manner, and they need to be made an example. I would agree that

:31:08. > :31:11.workplace regulation needs to be addressed. It is a further latter to

:31:12. > :31:16.be addressed in terms of his knighthood. When his actions

:31:17. > :31:20.honourable? Both I and my constituents say, no. I would

:31:21. > :31:23.conclude by suggesting the Companies Act supports the moment and take

:31:24. > :31:31.appropriate action. Demonstrate to the constituents who have bden so

:31:32. > :31:38.badly affected. We heed and hear their voices and we fully stpport

:31:39. > :31:44.them at this devastating tile. Michelle Thompson. Thank yot.

:31:45. > :31:49.Following on in this very ilportant debate, I would also like to add my

:31:50. > :31:53.voice to thank both the chahrs of the combined select committdes and

:31:54. > :31:59.point out any suggestion th`t the combined select committee rdport was

:32:00. > :32:03.not a robust, details, eviddnce led enquiry which can be rebuttdd, it

:32:04. > :32:08.ran for months and had many sessions. A session alone whth

:32:09. > :32:13.Philip Green lasted for six hours. I support the view that from hts

:32:14. > :32:18.initial purchase, Sir Philip saw the- for cash as the primarx

:32:19. > :32:21.purpose. In nearly days, thdre was limited evidence of a successful

:32:22. > :32:26.retailer improving turnover and market share. Other members will

:32:27. > :32:33.continue to highlight the v`rious ways the money was redeploydd to the

:32:34. > :32:38.Green family, often away from the clutches of the taxman. I h`ve no

:32:39. > :32:44.doubt they were all entirelx legal but were they in the? We have heard

:32:45. > :32:51.much today already about thd nature of corporate governance. Our report

:32:52. > :32:57.described it as a variety of things. We have also heard referencd to the

:32:58. > :33:01.UK corporate governance codd. What struck me was one of the kex roles

:33:02. > :33:08.for the board involves establishing culture, roles, values and dthics of

:33:09. > :33:12.the company. I thank the honourable member and I would like to praise

:33:13. > :33:16.her and members of both comlittees. I have pleasure to sit in and listen

:33:17. > :33:22.to quite a lot of the interrogation and I thought it was first class.

:33:23. > :33:25.Despite the problems we havd heard of corporate architecture rdgulation

:33:26. > :33:30.and the like, with the honotrable member agree with me that Adam Smith

:33:31. > :33:35.was right when he said like you cannot divorce business practice

:33:36. > :33:43.from human behaviour? The problem here is we have had human bdhaviour

:33:44. > :33:48.of Philip Green back is unddrmining corporate governance and undermined

:33:49. > :33:52.any positive culture. I thank my honourable friend for that

:33:53. > :33:57.intervention. The code in that very same sentence goes on to sax that

:33:58. > :34:01.directors should lead by ex`mple and ensure good standards of behaviour

:34:02. > :34:08.permeate throughout all the levels in an organisation. We know

:34:09. > :34:14.correctly that only companids with a listing of equity shares it does not

:34:15. > :34:20.absolve a private owner frol any responsibility. Opportunitids were

:34:21. > :34:27.missed time and again to it -- to address the pensions deficit. Sir

:34:28. > :34:32.Philip had accountability for addressing the deficit and could

:34:33. > :34:38.have chosen to so do on a ntmber of occasions as other schemes lanaged

:34:39. > :34:43.to do. The QC report cites lany examples of the legal rights the

:34:44. > :34:46.Green family has as a majorhty shareholder but very little of the

:34:47. > :34:50.responsibility it brings will pensioners and employees. I am

:34:51. > :34:55.sorry, Sir Philip, you cannot have it all your own way. It was a lack

:34:56. > :35:00.of judgment that allowed thd pension situation to continue and it was a

:35:01. > :35:05.lack of judgment that progrdssed the sale to a unsuitable third-party.

:35:06. > :35:09.The nonexecutive chairman is at pains to point out the code does not

:35:10. > :35:13.apply to private companies `nd the QC report notes the chair of the

:35:14. > :35:18.board has nearly the same dtties as the other directors. Legallx this is

:35:19. > :35:25.true. Might I then enquire `s to what exactly their remuneration of

:35:26. > :35:31.?125,000 as chair of the bo`rd exactly was for? I support the

:35:32. > :35:34.suggestion of the governing body who have suggested reforming thd code

:35:35. > :35:40.and we have heard a number of calls into that today. In terms of general

:35:41. > :35:44.culture of organisations, it is or was a key risk of any organhsation

:35:45. > :35:50.where you have a level of power concentrated in just if you key

:35:51. > :35:53.individuals. Where there is weak leadership that chooses to surround

:35:54. > :36:00.itself with people who are reluctant to disagree for falling out of

:36:01. > :36:04.favour with the organisation. It is common knowledge but remains

:36:05. > :36:08.unchallenged. We all have a duty to speak out in these cases. Bx

:36:09. > :36:14.remaining silent, we become complicit in the contract of the

:36:15. > :36:18.bully and the bullied. In the case of BHS, the final decision was made

:36:19. > :36:21.without the nonexecutive ch`ir asking about the credentials of

:36:22. > :36:29.purchasing the company and why it was believed to be the best outcome

:36:30. > :36:33.for employees and pensioners. Incredibly they were not invited to

:36:34. > :36:38.the ratification meeting. Only one nonexecutive director was present,

:36:39. > :36:43.the son-in-law of Sir Philip Green, whose stated brief was to rdpresent

:36:44. > :36:50.the interests of Lady Green. I challenge board members to name the

:36:51. > :36:53.time, any time, where this has happened. The response was looted

:36:54. > :36:58.that you could literally cotnt the seconds ticking by one by one, as

:36:59. > :37:03.each respondent looked for `n example. Our report notes absolute

:37:04. > :37:08.power in business, as in politics, is a dangerous thing. It was

:37:09. > :37:14.certainly absolute power th`t enabled Sir Philip and the Green

:37:15. > :37:20.family to run BHF a personal fiefdom. To bully weak senior

:37:21. > :37:25.managers and this contributdd to the ultimate failure of BHS and the

:37:26. > :37:30.ultimate failure in its dutx of care to pensioners and employers. Just to

:37:31. > :37:36.finish off a little note on the amendment, this UK legislattre is

:37:37. > :37:40.already struggling to demonstrate relevance to many people. It must be

:37:41. > :37:46.able to give voice to peopld in important issues of the day. The

:37:47. > :37:55.saga of BHS has been played out in the media. The loads of mondy

:37:56. > :37:59.parties, the knighthoods, the rocket -- the record-breaking dividends and

:38:00. > :38:03.the sale. People have asked, how can this be questioned how can the owner

:38:04. > :38:10.of a company act with such hmpunity in a matter of 11,000 jobs `nd

:38:11. > :38:14.20,000 pensions? Insight is a wonderful thing. Who amongst us does

:38:15. > :38:18.not recognise circumstances with which we would do things

:38:19. > :38:22.differently? I'm sure Sir Philip Green regrets the circumstances We

:38:23. > :38:27.are talking about a night of the row and surely, it surely, this position

:38:28. > :38:34.must justify a higher bar of ethical behaviour.

:38:35. > :38:42.I'm very grateful to my honourable friend for giving way, she's making

:38:43. > :38:45.a powerful speech. As she rdceived letters from constituents, who are

:38:46. > :38:51.very concerned about Sir Phhlip Green being held up as an example.

:38:52. > :38:55."Someone In business who takes pride in our staff and customers, it is

:38:56. > :39:02.hard to understand house of Philip would be retaining his knighthood,

:39:03. > :39:08.surely we should not be makhng that aspirational for the public". I too

:39:09. > :39:12.agree, many of us have recehved hundreds of letters from our

:39:13. > :39:18.constituents. I was going to make the point that it is on that, that

:39:19. > :39:21.the whole argument turns for me The corporate governance code is not

:39:22. > :39:26.there to produce a loose set of rules that companies are invited to

:39:27. > :39:30.maybe think about now and again they are fundamentally framdwork for

:39:31. > :39:34.behaviour in business. Business is not just about the bottom lhne, it

:39:35. > :39:41.is about providing jobs, sustaining communities and the best businesses

:39:42. > :39:47.are based in partnership. Now Sir Philip Green you for many ydars

:39:48. > :39:53.that BHS was in trouble, his action and inaction directly lead to 1 ,000

:39:54. > :39:58.jobs and affects the lives of 2 ,000 pensioners. He seems to belheve that

:39:59. > :40:02.being a private company neg`ted any cant ability or responsibilhty for

:40:03. > :40:12.the lives of people who depdndent on him and ironically made his success.

:40:13. > :40:18.Thank you Deputy Speaker, it is an honour to be seeing you back in the

:40:19. > :40:24.chair and I will wait be as loud as I was last time. Like many

:40:25. > :40:27.colleagues in the chamber, H speak on behalf of a number of

:40:28. > :40:33.constituents who have been profoundly affected by coll`pse of

:40:34. > :40:37.BHS, through the loss of employment. Before I proceed, I would lhke to

:40:38. > :40:41.put on the record my thanks both select committees. Particul`rly the

:40:42. > :40:49.honourable member for Birkenhead who has had to undertake and public

:40:50. > :40:54.vitriol from somebody who does not deserve a knighthood. And I thank

:40:55. > :41:02.you, for your work on the sdlect committee. My constituency was home

:41:03. > :41:06.to a BHS, on Clydebank for nearly 40 years and the day that it closed for

:41:07. > :41:10.good, was at the end of the year, it was sad for the committee and those

:41:11. > :41:14.who had given loyal service to a company that did not value them

:41:15. > :41:19.back. The collapse of BHS bdcame public and the announcement was made

:41:20. > :41:23.that stores including the one in Clydebank, in closing, I visited the

:41:24. > :41:27.store to offer my support, `nd to hear concerns for the futurd. This

:41:28. > :41:31.as I'm sure many members recognise is never a pleasant experience and

:41:32. > :41:36.there was a genuine concern about what lay ahead in the futurd. It was

:41:37. > :41:41.at this time that the true picture began to emerge over the handling of

:41:42. > :41:44.the BHS pension fund and thd assistance of a massive defhcit of

:41:45. > :41:48.nearly 500 million which has been talked about at some length. In

:41:49. > :41:50.speaking to the staff who h`d contributed to the pension scheme

:41:51. > :41:56.and had just found out that they were about to lose their job, the

:41:57. > :42:00.bills on time shock, that the situation had been allowed to occur

:42:01. > :42:04.was undeniable. This situathon has filled me personally with anger over

:42:05. > :42:08.the injustice that has been represented, for those who believed

:42:09. > :42:13.they had a secure future in old age and not only to have it announced

:42:14. > :42:16.that they may lose up to 10$ of their pensions when reaching

:42:17. > :42:21.pensionable age although I `m heartened to hear that therd may be

:42:22. > :42:24.some resolution to the mattdr. I hope it comes quickly. Nevertheless

:42:25. > :42:30.it is completely unacceptable and a downright disgrace that thex

:42:31. > :42:34.critically, profoundly, had majority are women, have found themsdlves in

:42:35. > :42:38.this pension predicament, I would go so far as to say that this hs

:42:39. > :42:43.nothing short of criminal. That being said, the professional and

:42:44. > :42:46.dignified manner in which the staff has behaved is something th`t is in

:42:47. > :42:53.striking contrast to Mr Gredn, and his dodgy cohort of people hncluding

:42:54. > :42:57.the trustees, who are culpable in this tobacco. They should bd ashamed

:42:58. > :43:00.of themselves for the manner in which they have behaved but sadly

:43:01. > :43:06.they are too busy quaffing champagne and sailing in a yacht and visiting

:43:07. > :43:12.Monaco to care about what they have created. I would like to crdate this

:43:13. > :43:16.opportunity, to praise the store management and local operathons as

:43:17. > :43:20.well as the local authority, the Department for Work and Pensions and

:43:21. > :43:24.the Scottish Government agencies. Such as Scottish enterprise who

:43:25. > :43:27.worked in concert to assist the staff who found themselves seeking

:43:28. > :43:33.alternative employment. I w`s informed recently that everx member

:43:34. > :43:38.of staff who sought alternative employment, was successful hn their

:43:39. > :43:42.applications, which was a great relief to myself, and I'm stre it

:43:43. > :43:46.helps myself and the staff sleep a bit better. This is an example of

:43:47. > :43:50.all levels of government coling together and using whatever levers

:43:51. > :43:55.they have at their disposal to counter had first situation that

:43:56. > :44:01.communities face. Whilst I'l full of praise for those organisations that

:44:02. > :44:05.help deal with the aftermath of BHS and its impact, serious questions

:44:06. > :44:14.must be asked as to why the situation was even allowed to unfold

:44:15. > :44:17.in the first place. I bank lile rubble friend, it encapsulates the

:44:18. > :44:23.human element associated with people working with BHS, I too had a BHS

:44:24. > :44:28.store in my constituency, I have got staff members that lost thehr jobs

:44:29. > :44:34.and had their pension affected, there is one other aspect to this,

:44:35. > :44:37.as well for me and that is the building element, because that is

:44:38. > :44:46.another building on the high street of Kilmarnock that now has ` to let

:44:47. > :44:52.sign. It affects footfall and businesses. That is a consepuence. I

:44:53. > :44:55.certainly couldn't disagree with my honourable friend, it will be

:44:56. > :45:00.affecting constituency is the length and breadth of the UK. I wotld like

:45:01. > :45:04.to also commends the recent joint report of the Business, Innovation

:45:05. > :45:08.and Skills, which will be pdnsion protection fund is an pension

:45:09. > :45:11.regulation and the sale and acquisition of BHS. The report

:45:12. > :45:16.should make very uncomfortable reading for those involved hn the

:45:17. > :45:21.governance of the company, @jax he watched the committees, and listened

:45:22. > :45:24.to them from the public gallery It must be acted upon by the government

:45:25. > :45:29.and I ask the Minister to state that it is a matter of urgency. The

:45:30. > :45:33.government must now show re`l leadership in tackling the problem.

:45:34. > :45:37.The less if their policies of the UK Government must be consigned to the

:45:38. > :45:42.19th century where they belong along with Philip Green's knighthood.

:45:43. > :45:46.While they are no longer acceptable, action must be taken now all we are

:45:47. > :45:52.in danger of more companies going the same way of British homd stores.

:45:53. > :45:56.That would have serious and profound consequences for the economx. Which

:45:57. > :45:59.due to the ongoing uncertainty Brexit is already under serhous

:46:00. > :46:04.pressure and struggling to cope Without action, the Philip Green 's

:46:05. > :46:26.of this world continue to undermine public confidence in

:46:27. > :46:29.private business and have a serious impact on private enterprisd. As

:46:30. > :46:31.Simon Walker the director of the Institute of directors has said the

:46:32. > :46:33.institutions of corporate Britain have not recovered from the

:46:34. > :46:35.financial crisis and there `re important questions that nedd to be

:46:36. > :46:37.addressed including transparency, executive pay and board divdrsity.

:46:38. > :46:40.We cannot allow business to mess about with people's's futurd income

:46:41. > :46:42.and the government must up hts game in terms of pension regulathon and

:46:43. > :46:44.indeed on pensions altogethdr but that is another debate entirely I

:46:45. > :46:47.very much welcome the announcement of the DWP committee of that further

:46:48. > :46:49.in Quarry which will look at the adequacy of the pension regtlators

:46:50. > :46:52.power in dealing with issues, and how best it can be prevented from

:46:53. > :47:02.happening in the future -- further Inquiry. I fully support, that no

:47:03. > :47:05.one is able to avoid pension responsibilities and I know that our

:47:06. > :47:11.SNP colleagues will be workhng hard to make this a reality. I therefore

:47:12. > :47:15.await the report of the DWP committee in great interest and I

:47:16. > :47:18.hope that it concludes that the regulator must be in a strong

:47:19. > :47:24.position to protect employeds from rogue bosses. I turned to the

:47:25. > :47:27.amendment that has been sublitted about the Honours forfeiturd

:47:28. > :47:31.committee, central to my contribution has been to thd welfare

:47:32. > :47:35.of those who had been at first effected by the actions of Lr Green

:47:36. > :47:40.has the government must comd to grips with unscrupulous bushness

:47:41. > :47:44.people, to insure that this does not occur again. I well underst`nd the

:47:45. > :47:49.frustrations and anger affected towards Philip Green and I have

:47:50. > :47:53.already made it known, and ht is right, that we should now sdek to

:47:54. > :47:57.inform those with authority to do so to strip him with his honour. It

:47:58. > :48:01.should come as no surprise, that I'm no fan of an honour system given my

:48:02. > :48:08.participation in the house of Ulster bait last night. Finally, the

:48:09. > :48:11.British BHS workforce, we owe it to them, and to hold Philip Grden to

:48:12. > :48:18.his promise of resolving thd deficit in the BHS fund. And I make a

:48:19. > :48:20.personal commitment to my constituents that I will not stop

:48:21. > :48:28.fighting for them and told that has been resolved and they have received

:48:29. > :48:32.what they fully deserved. Thank you very much Madam Deputy Speaker,

:48:33. > :48:36.having listened to the colldagues, two principles come to mind, which I

:48:37. > :48:40.think at to the core of what we are debating here today. What wd have

:48:41. > :48:43.seen from Sir Philip Green `nd the collapse of BHS is the lack of

:48:44. > :48:49.responsibility and moreover a lack of respect. I want to commend both

:48:50. > :48:53.of those committees, its melbers and the committee staff on what is a

:48:54. > :49:01.copper hinted, factual and damning report of the fiasco of the collapse

:49:02. > :49:07.of BHS. He mismanaged the btsiness to the point that it could only be

:49:08. > :49:11.sold for ?1. Then he abandoned all responsibility for their pensions

:49:12. > :49:14.and failed company that fell apart under his jurisdiction. The

:49:15. > :49:18.committee 's report makes for grim reading, particularly when ht states

:49:19. > :49:26.that the total dividend is paid by BHS Limited were 440 million, in

:49:27. > :49:32.2002-2004 period, almost dotble the after-tax profits of 208 million.

:49:33. > :49:38.BHS group paid dividends of 423 million, in this period. We were

:49:39. > :49:42.told that the Green family received ?307 million office money. This

:49:43. > :49:45.effectively removed value from the company, including its useftl

:49:46. > :49:51.purpose such as investment or pension contributions. Mr Ddputy

:49:52. > :49:54.Speaker it is our constituents that they're the grant of this

:49:55. > :49:59.recklessness and greed, a constituent of mine reached out just

:50:00. > :50:04.yesterday to share how BHS's collapse has impacted her lhfe.

:50:05. > :50:08.Having worked for BHS for 17 years, she remained there until it

:50:09. > :50:14.collapsed completely. She rdferred to herself as a very loyal lember of

:50:15. > :50:18.staff who stayed to the verx end. My constituent was not better Lr Deputy

:50:19. > :50:22.Speaker, instead she was disappointed and concerned for her

:50:23. > :50:26.colleagues many of whom havd been unable to find new jobs. Another

:50:27. > :50:30.constituent of mine, Laurence Robertson contacted me to s`y that

:50:31. > :50:34.he feels very strongly on the issue of greed at the expense of the

:50:35. > :50:38.average person. Another constituent reached out to express how he and

:50:39. > :50:43.his family had always love shopping at BHS and he had been disgtsted on

:50:44. > :50:46.discovering what he called Sir Philip's absolute greed and complete

:50:47. > :50:51.lack of compassion. Many of them have asked that Mr Green be stripped

:50:52. > :50:54.of his knighthood. Which sedms only fair given that many have bden

:50:55. > :51:05.stripped of their jobs and pensions under his leadership. I am very

:51:06. > :51:10.grateful to my honourable friend, BHS was a very popular stord, at

:51:11. > :51:14.Edinburgh, I'm ever going to the food hall with my mother whhch was

:51:15. > :51:18.quite a long time ago. Does my honourable friend

:51:19. > :51:25.agree with me, that we owe ht to the staff to make sure that what has

:51:26. > :51:30.occurred is sanctioned, and also to make sure that what has occtrred

:51:31. > :51:35.cannot be allowed to happen again? As ever, my honourable friend is

:51:36. > :51:40.absolutely spot on, what I would say Mr Deputy Speaker is that a

:51:41. > :51:45.knighthood for thousands of pensions does not seem unreasonable because

:51:46. > :51:48.the 32 BHS stores, closed in Scotland across Livingston,

:51:49. > :51:53.Hamilton, Concordia, Leith `nd many other areas amounted to over 70

:51:54. > :51:57.employees in losing their jobs. Their livelihoods and a place of

:51:58. > :52:01.work that many like my constituent, gave a huge chunk of their working

:52:02. > :52:05.career too. When employees lose their jobs and their pensions, the

:52:06. > :52:11.families are hit by that loss, Sophia Panda stood the idea of

:52:12. > :52:16.providing financially, he understood it very well. In fact the entire

:52:17. > :52:21.Green family hugely benefitdd from BHS, reports say that in total the

:52:22. > :52:29.Green family made around ?2.7 billion out of BHS. And his other

:52:30. > :52:35.company. Mr Green paid financial money to his wife, and BHS people

:52:36. > :52:40.want to provide for their f`milies but Mr Green is clearly blind to

:52:41. > :52:44.this parallel. Indeed Sir Philip has the done well out of BHS and other

:52:45. > :52:48.investments, he has got a helicopter, a jet and three yachts.

:52:49. > :52:53.Mr Speaker I have got nothing against some on spending thdir hard

:52:54. > :52:55.and money as they please but it isn't, shouldn't be at the cost of

:52:56. > :53:13.our constituents pension pots. Mr Deputy Speaker, the formdr

:53:14. > :53:22.employees will not have a pdnsion to retire on. Philip Green's and is and

:53:23. > :53:28.the actions of Dominic Chappel and BHS directors fly in the face of

:53:29. > :53:33.good business practice. This reflects the dire need to encourage

:53:34. > :53:37.fear and inclusive business practices across the UK. Thhs debate

:53:38. > :53:42.is not just about placing blame on sir Philip Green, it is abott doing

:53:43. > :53:49.what is right for BHS emploxees and future employees, cheated ott of

:53:50. > :53:51.their jobs and pensions. Thdre are fewer business models in pl`ce to

:53:52. > :54:02.ensure such a collapse will never occur again. A further enquhry is a

:54:03. > :54:06.constructive start to the mhssion. My SNP colleagues and myself have

:54:07. > :54:10.called for the establishment of an Independent pensions commission so

:54:11. > :54:14.we can create the architecttre that people like Philip Green can no

:54:15. > :54:19.longer run away with people's hard earned money. Now that workdrs'

:54:20. > :54:23.rights will no longer be gu`ranteed and transferred to UK workers, it is

:54:24. > :54:28.more important than ever to ensure us constituents are treated fairly.

:54:29. > :54:35.As we embark on Brexit negotiations, there may be no running comlentary

:54:36. > :54:41.but you can be sure that ard running concerns. Employees will relain in a

:54:42. > :54:46.state of the -- uncertainty. It includes those put out of a job and

:54:47. > :54:55.pension by BHS. The Prime Mhnister said she would guarantee workers'

:54:56. > :55:02.rights would be upheld. We require rights to be guaranteed far beyond

:55:03. > :55:06.her term or any term of this government. She is making an

:55:07. > :55:12.excellent case. I am pleased to hear the point she is making. Do you

:55:13. > :55:19.think it would enhanced -- dnhance workers' rights to be on a company's

:55:20. > :55:25.board? I know that is something the Prime Minister has mooted. H hope

:55:26. > :55:29.she gets the support of her party. Returning to serve Philip, `s he is

:55:30. > :55:35.for the time being, he has responded to criticism waged against him by

:55:36. > :55:41.saying England is a place where you get lots of jealous, envious,

:55:42. > :55:44.negative people. What the shoddy and shameful way to describe anxone

:55:45. > :55:50.particularly people who are customers and consumers? Wh`t I

:55:51. > :55:54.would say today, and I hope Philip Green is listening, M honourable

:55:55. > :56:01.friend here today from Engl`nd, Scotland and anywhere in thd UK are

:56:02. > :56:06.not jealous and envious of his gross mismanagement of BHS. I think I am

:56:07. > :56:12.right in saying we do indeed feel negative. Negative about how hard Mr

:56:13. > :56:15.Green's former employees, otr constituents, will be hit bx that

:56:16. > :56:21.mismanagement and his daily to make amends. Mr Deputy Speaker, ht comes

:56:22. > :56:27.back to responsibility and respect. Serve Philip did not respect hard

:56:28. > :56:29.work, loyalty and hard work of his employees, my constituents of

:56:30. > :56:34.Livingston and constituents across this chamber. Just as the company is

:56:35. > :56:42.responsible for employees, Parliament is responsible for

:56:43. > :56:44.citizens. It is about responsible business practices and responsible

:56:45. > :56:46.regulatory practices. It is about holding businesses and individuals

:56:47. > :56:51.to account by any means possible and sending a strong message th`t we

:56:52. > :56:55.will not accept such shoddy practices for our people. So, strip

:56:56. > :57:02.vote Green of his knighthood, take him to task and maybe get hhm to

:57:03. > :57:05.sell a few of his superb yachts so people can get pensions and

:57:06. > :57:09.retirement they worked so h`rd for. You must have proper, strong,

:57:10. > :57:16.regulatory framework Fenners dereliction of duty can nevdr happen

:57:17. > :57:21.again. -- so this dereliction of duty. It is a pleasure to follow so

:57:22. > :57:25.many great speakers today. H would like to thank the Honourabld member

:57:26. > :57:28.for Birkenhead for his work and chairmanship of the Work and

:57:29. > :57:32.Pensions Committee in producing this joint report alongside the

:57:33. > :57:36.Honourable member for Hartldpool and his chairmanship of the bushness,

:57:37. > :57:40.energy and industrial stratdgy committee. I wish to also thank the

:57:41. > :57:44.Honourable members who have contributed and served under their

:57:45. > :57:48.leadership on both select committees to help conduct of this

:57:49. > :57:53.investigation of the handling and failing governance of the HS. It was

:57:54. > :57:57.my privilege to be on the ptblic benches when Sir Philip Gredn was

:57:58. > :58:02.called to appear before the select committee. It was an educathon for

:58:03. > :58:08.me to witness at first hand he is dismissive and belligerent `ttitude.

:58:09. > :58:13.Variously referring to my honourable friend at the member for Westminster

:58:14. > :58:19.North, as your lady. And qudsting the Honourable member for Bddford

:58:20. > :58:27.should stop staring at him. -- as a young lady. The title, sir, is the

:58:28. > :58:31.sowed Dash and bestowed of those worthy of the honour. With ht comes

:58:32. > :58:35.the expectation of a person who conducts himself with respect and

:58:36. > :58:40.dignity which was sadly absdnt from the performance of Sir Philhp that

:58:41. > :58:45.day. I would specifically lhke to concentrate on the aspect of the BHS

:58:46. > :58:49.pension fund, rather than the potential stripping away of Sir

:58:50. > :58:54.Philip Green's I heard. If he does indeed lose his honorary title, I

:58:55. > :59:02.guess we will have two except it was an honest mistake to bestow that

:59:03. > :59:04.title upon him. Unfortunately, some honest mistakes, such as unloading

:59:05. > :59:09.BHS onto a serial bankrupt `re bigger than others. However, should

:59:10. > :59:14.serve Philip be stripped of his knighthood, I would like to suggest

:59:15. > :59:23.as a symbolic gesture it is given to one of Sir Philip's redundant

:59:24. > :59:30.employees. The demise of BHS has been chronicled in a series of very

:59:31. > :59:35.sad, funny, touching and eloquent articles via the pages of the

:59:36. > :59:38.Guardian. He is still looking for work and, as he himself writes, if

:59:39. > :59:47.anyone happens to know of any good jobs going that might suit ` deeply

:59:48. > :59:53.cynical 43 Robert Huth key skills include folding towels and writing

:59:54. > :59:57.slightly bleak yet comical portraits of ramshackle department stores do

:59:58. > :00:00.please get in touch. He livds in Kent were just in case any

:00:01. > :00:07.Honourable member has a job he might be interested in offering hhm. Going

:00:08. > :00:12.back to the issue of pensions, I am pleased to hear that talks `nd

:00:13. > :00:17.negotiations have begun to find a solution to the pensions problems of

:00:18. > :00:22.those who worked at the HS. I do raise concerns as to the spded and

:00:23. > :00:27.commitment of this process. Serve Philip has made a vow to rescue the

:00:28. > :00:32.pension scheme but, unfortunately, according to the pensions rdgulator,

:00:33. > :00:36.they have yet to receive a credible offer to implement the deal. The

:00:37. > :00:49.Pensions Minister yesterday said neither he nor the Government had

:00:50. > :00:50.received a written offer. This means leaving 20,000 pensioners, who are

:00:51. > :00:53.still uncertain about that investment and future, and how

:00:54. > :00:57.indeed they will survive thdir retirement. The joint select

:00:58. > :01:01.committee report stated, Sir Philip Green systematically extracted

:01:02. > :01:07.hundreds of millions of pounds from BHS, paying very little tax and

:01:08. > :01:12.fantastically enriching himself and his family, leaving the company and

:01:13. > :01:20.its pension fund weakened to the point of the inevitable collapse of

:01:21. > :01:28.both. This is quite clearly unethical, immoral, and in breach of

:01:29. > :01:32.Article 172 of the 2006 companies act. That says the director of a

:01:33. > :01:36.company must act in the way he considers in good faith would be

:01:37. > :01:41.most likely to promote the success of the company for the benefit of

:01:42. > :01:45.its members as a whole. In doing so, have regard to the likely

:01:46. > :01:52.consequences of any decision in the long term and the interests of the

:01:53. > :01:57.company's employees. I think there is cross-party agreement in this

:01:58. > :02:03.House that he felt to meet `ny of these requirements on any ldvel We

:02:04. > :02:06.hear, in this House, have an obligation that the regulatory body

:02:07. > :02:13.ensures this section of leghslation is implemented and for the law to be

:02:14. > :02:18.carried out. It is imperative that a deal can be done. And that serve

:02:19. > :02:23.Philip makes a credible offdr and as soon as possible. He is on the

:02:24. > :02:28.record as saying that he did everything possible to stop BHS from

:02:29. > :02:34.going under. He should now be doing everything possible to protdct those

:02:35. > :02:39.families from the hardship that his mismanagement has potentially left

:02:40. > :02:46.them in. He left BHS, as we have heard, with a ?571 million pension

:02:47. > :02:51.deficit, after taking it ovdr in surplus. Taking ?400 million in

:02:52. > :02:59.dividends from the company `nd then he sold the department stord for ?1.

:03:00. > :03:04.That led to 11,000 job lossds and the final store closing last August.

:03:05. > :03:11.He has an obligation to those who worked hard in good faith whthin the

:03:12. > :03:15.BHS company to secure a settlement that is necessary to ensure the

:03:16. > :03:20.long-term viability of the pension scheme. During his appearance,

:03:21. > :03:25.before the joint select comlittee, Sir Philip promised he would sort

:03:26. > :03:35.the pension scheme. I say to him now, serve Philip, get it sorted.

:03:36. > :03:38.Thank you. Thank you, Mr Deputy Speaker. And I've personallx thank

:03:39. > :03:42.the backbench committee for organising this debate on stch a

:03:43. > :03:46.timely subject? Would also like to thank the combine select colmittee

:03:47. > :03:51.for their report. It is thehr work which has brought us here today and

:03:52. > :03:53.they deserve great credit h`ving so patiently and thoroughly

:03:54. > :04:03.investigated this whole, sordid shabby affair will stop also thanks

:04:04. > :04:07.to the Honourable friends who have participated in the debate today. In

:04:08. > :04:11.particular I would like to lake reference to the Honourable members

:04:12. > :04:17.to Hartlepool and Birkenhead, both of whom have shone a light on some

:04:18. > :04:23.of the systematic abuses of Sir Philip Green and his accomplices. I

:04:24. > :04:27.would also like to raise a certain point of my honourable friend from

:04:28. > :04:32.Hayward and Middleton who stggest we strip Sir Philip Green of hhs

:04:33. > :04:34.knighthood and award it to one of his former employees, a

:04:35. > :04:40.self-confessed critic, and how can we blame him after the last few

:04:41. > :04:43.years for being a cynic? Mr Deputy Speaker I have referred to some

:04:44. > :04:47.contributions made by Honourable members today and it is cle`r this

:04:48. > :04:52.issue cuts across party linds. There is a great deal of anger in the

:04:53. > :04:56.House. In that we are reflecting the anger that many of those who elected

:04:57. > :05:03.us are feeling. Serve Philip Green treated British home stores as his

:05:04. > :05:07.own personal plaything. He failed to invest in the company's Ronchi is.

:05:08. > :05:14.He neglected the brand and ran down the pension scheme. -- branches He

:05:15. > :05:20.jumped ship like the proverbial rat from a sinking ship. Despitd this

:05:21. > :05:24.woeful, even wilful neglect of this historic company, he still retains

:05:25. > :05:29.his knighthood for services to retail. The chamber has rightly

:05:30. > :05:35.expressed widespread incredtlity at this state of affairs, a vidw I

:05:36. > :05:39.share entirely. All human societies have found ways of honouring those

:05:40. > :05:42.who have acted with great distinction. We recognise those who

:05:43. > :05:46.receive such others as people who have enriched all of our lives,

:05:47. > :05:51.peoples whose lives challenge is all to try to emulate them. But,

:05:52. > :05:54.although it is clear that sdrve Philip Green has, by his own

:05:55. > :06:00.actions, tarnished the honotr that we, as a society, give him, he has

:06:01. > :06:06.tarnished his own good name far more gravely. Mr Deputy Speaker,

:06:07. > :06:11.stripping Sir Philip Green of his knighthood will not create jobs for

:06:12. > :06:14.the 11,000 who lost them. It will not fill the deficit in the pension

:06:15. > :06:20.fund or the whole left on hhgh streets up and down the country It

:06:21. > :06:27.will not pay back the ?6 million owed to HM RC. Nor will it dnsure

:06:28. > :06:35.that the HS's supply chain `re paid what they are owed. -- beep BHS

:06:36. > :06:39.supply chain. Our first priority is that we need to say that pension

:06:40. > :06:43.funds. As far as I am concerned he can keep his honour, providdd he

:06:44. > :06:47.pays back the pension deficht in fall from his own, and Paul Wells.

:06:48. > :06:52.He should make good he is wrong is with deeds, not just the good

:06:53. > :06:57.intentions he offered the sdlect committee. If all we do tod`y is

:06:58. > :07:03.posture in condemnation of one man, we are doing little except hndulge

:07:04. > :07:06.in scapegoating. For me, I `m sure I speak for many people in thhs

:07:07. > :07:13.country when I say this. Thd most extraordinary thing about the whole

:07:14. > :07:16.affair is that legally, Sir Philip Green has done nothing wrong. Had he

:07:17. > :07:21.broken the law, where he crhminal court with his hand in the till

:07:22. > :07:27.it'll be up to the courts to act. But he is not and there is no

:07:28. > :07:31.suggestion that he is. As stch at this House can condemn the `ctions

:07:32. > :07:36.of a man but we cannot escape our own responsibility for this affair.

:07:37. > :07:41.Where are our laws made? Here. He makes them? We do. Who is

:07:42. > :07:45.responsible when powerful mdn shamelessly rip of the week and yet

:07:46. > :07:52.they have not broken the law? We are. I am very grateful and

:07:53. > :07:57.heartened to hear the remarks the Honourable gentleman has made. Does

:07:58. > :08:01.he not share with me my disgust that this government seems to have failed

:08:02. > :08:05.to learn any lessons from this and failed to put any proposals forward

:08:06. > :08:14.their erection we don't havd any other situations like this `gain?

:08:15. > :08:21.I will address that a bit l`ter on in my speech, and the government has

:08:22. > :08:26.said that it is now the party of the workers, we shall see if thdy are

:08:27. > :08:33.genuinely the party of the workers. I went hold my breath but wd will

:08:34. > :08:38.see. Thank you for giving w`y, there has been a number of occasions, with

:08:39. > :08:43.similar incidents, but about 12 months ago in the outskirts of

:08:44. > :08:47.Coventry nearly a thousand jobs went, I tried to get a ten linute

:08:48. > :08:54.rule Bill and I was defeated and it was time to get some tough

:08:55. > :08:59.legislation. I thank my honourable friend for that, we want to see

:09:00. > :09:03.action not words. When scandals like this break, we cannot have ht both

:09:04. > :09:09.ways. We must either shrug our shoulders and say tough luck guys,

:09:10. > :09:12.that is the way it works, you lose. All we will say that we will

:09:13. > :09:18.legislate to make sure that this never happens again. Will wd do

:09:19. > :09:23.that? Will we look at the role of the auditors who signed off on BHS

:09:24. > :09:29.as a going concern? Just ond year before it was sold off for ` pound,

:09:30. > :09:33.like a second-hand yo-yo or the huge city financial advisers who wade

:09:34. > :09:37.through the sale of it, or the pillaging of the pension scheme

:09:38. > :09:41.which let us remember is not unique to British home stores. This is not

:09:42. > :09:46.the story of one bad apple spoiling everyone's reputation, this is the

:09:47. > :09:52.story of a system that is bdnt and we know in whose favour. Mr Deputy

:09:53. > :09:56.Speaker, good businesses ard the lifeblood of our economy. Btt as

:09:57. > :10:00.honest responsible hard-working business people around the country

:10:01. > :10:04.know well, the system often allows good businesses to be undercut by

:10:05. > :10:10.bad businesses. When companhes are used to distract wealth rather than

:10:11. > :10:15.created, it hurts everybody. In the near future the shape of thd modern

:10:16. > :10:19.economy is going to be transformed. Let us make sure that the

:10:20. > :10:22.transformation is truly for the benefit of all, and we don't need to

:10:23. > :10:27.come back to this house agahn and again and again to express our

:10:28. > :10:31.outrage at yet another scandal, another rip-off of the ordinary

:10:32. > :10:38.people of this country. The rules of the game need changing. Mr Deputy

:10:39. > :10:42.Speaker I'm delighted to sed cross-party condemnation of Sir

:10:43. > :10:45.Philip Green's conduct. I'm also delighted if not more than ` little

:10:46. > :10:50.surprised to hear the Prime Minister claiming to have thrown out the

:10:51. > :10:54.fanaticism that has dominatdd her party 's thinking for the l`st 0

:10:55. > :10:59.years. We on this side of the house welcome any move towards an economy

:11:00. > :11:04.founded on fairness and Chrhssy it is after all what our party has

:11:05. > :11:09.always stood for. It is not what the party opposite has always stood for.

:11:10. > :11:13.Are we really to believe th`t the party of billionaires and t`x

:11:14. > :11:19.avoidance are the ones to transform our economy in the interests of

:11:20. > :11:24.fairness? Let us take one example Mr Deputy Speaker, the Prime Mhnister

:11:25. > :11:28.Bosma modest proposal to give workers a voice by allowing them

:11:29. > :11:32.representatives on boards. @gain, we welcome that, giving workers a voice

:11:33. > :11:37.is again what our party has always stood for. But I'm not convhnced

:11:38. > :11:42.that the proposal goes far dnough. Are we to believe that an individual

:11:43. > :11:48.work of two would have been able to stand up to the likes of Sir Philip

:11:49. > :11:52.Green? A voice must to Speaker is useless without teeth. Yet dven her

:11:53. > :11:57.own Cabinet won't support this modest proposal. They are rhce I is

:11:58. > :12:02.more honest than the Prime Linister, more aware of which side thdir bread

:12:03. > :12:07.is buttered. I hope that Sir Philip Green is better held to account as a

:12:08. > :12:11.result of today, I hope even more that it serves as a wake-up call to

:12:12. > :12:17.deeper problems and that today will prove a turning point in thd way

:12:18. > :12:22.that our economy is governed. I welcome the Prime Minister's

:12:23. > :12:25.rhetorical conversion to our party's values, the question that she and

:12:26. > :12:34.honourable members must answer is this, you have talked the t`lk but

:12:35. > :12:37.can you walk the walk? One lessage Mr Speaker, today we have sden the

:12:38. > :12:43.House of Commons illustrating to the country how we work, reports are

:12:44. > :12:48.commissioned, delivered, debated here. But the message I'm stre we

:12:49. > :12:53.all want to go out is just lerely doing a report is not the end of the

:12:54. > :12:57.tale, in many of these reports we have two actually follow up and the

:12:58. > :13:04.message to those who have lost jobs, who have lost pensions, is that this

:13:05. > :13:09.place is not going to give tp until we have gained maximum justhce that

:13:10. > :13:13.we can for you but also, like my honourable friend has just said

:13:14. > :13:17.there is a full agenda about how we reform pension law and comp`ny law

:13:18. > :13:28.and we have already started that task. The question is will the

:13:29. > :13:45.amendment be made? As many `s say aye? Aye! Has many who say `ye, say

:13:46. > :13:51.aye. Aye. We now come to thd backbench debate on industrhal

:13:52. > :14:03.strategy, Chris Wright to move the. Thank you Mr Deputy Speaker, may I

:14:04. > :14:09.start my speech, by thanking the approval of this application and can

:14:10. > :14:14.I also thank the members from Hove, Edinburgh West and Hartlepool for

:14:15. > :14:19.supporting this debate. It hs a rare opportunity, we often debatd policy

:14:20. > :14:23.in this chamber, it is a rare opportunity to debate the creation

:14:24. > :14:30.of the new department, and what it will in fact mean. In my mahden

:14:31. > :14:33.speech I referred to my constituency, Warwick and

:14:34. > :14:37.Leamington, as being at the centre of the country both geographically

:14:38. > :14:42.and demographically. We havd good schools, colleges, two highly

:14:43. > :14:48.respected universities on otr doorstep. We have many housdhold

:14:49. > :14:56.names as businesses. A skilled workforce, and low unemploylent The

:14:57. > :14:59.constituency has a strong rdputation in the technology sector,

:15:00. > :15:02.particularly in the video g`mes industry and the wider region has a

:15:03. > :15:08.heritage firmly based in manufacturing. In my constituency

:15:09. > :15:15.only in the last month, I w`s pleased to visit the site that will

:15:16. > :15:19.house a new factory, for thd furniture manufacturer and dxporter,

:15:20. > :15:25.on the very spot that was home to the Ford foundry until it s`dly

:15:26. > :15:33.closed in 2007. It is quite early but I will give way. I thank the

:15:34. > :15:39.honourable gentleman for giving way, he will know an example, Jaguar Land

:15:40. > :15:44.Rover is the main development, with five or 6000 employees and dqually,

:15:45. > :15:50.he will also know that the Chinese have put more investment in it, they

:15:51. > :15:53.are constructing a new site and I think it is a new demonstration of

:15:54. > :16:00.some of the industries that have been created in the Midlands. Thank

:16:01. > :16:03.you and I welcome interventhon and I welcome the honourable gentleman,

:16:04. > :16:07.having attended some of the very interesting institutions and work

:16:08. > :16:11.together at Warwick Univershty as well, one of our leading

:16:12. > :16:21.international universities. I am also, pleased to see, that Tata has

:16:22. > :16:24.also based its new technology Centre, in Leamington which shows

:16:25. > :16:31.what inward investment can have two hour constituency and country.

:16:32. > :16:36.Despite the collaboration, the links between our education institutions

:16:37. > :16:42.and business, its location `nd its workforce, how much more cotld we do

:16:43. > :16:48.as a constituency and as a country, if we had a strong foundation of an

:16:49. > :16:52.industrial strategy? Since working in the automotive sector, I have

:16:53. > :16:56.always had a passion for manufacturing, not least has the

:16:57. > :17:01.co-chair of the all-party manufacturing group. Now as a member

:17:02. > :17:04.of the business, energy indtstrial strategy select committee, `nd I'm

:17:05. > :17:11.pleased to see the chair man in his seat. We are currently taking

:17:12. > :17:16.evidence on this concept. Wd have recently heard evidence frol the

:17:17. > :17:21.Right Honourable member for Tatton, the former member for Twickdnham,

:17:22. > :17:27.and Lord Heseltine, who all insured us in their own very differdnt and

:17:28. > :17:33.special ways, that we have had an industrial strategy all along.

:17:34. > :17:40.Perhaps they are right but H would like to use this speech and saying

:17:41. > :17:44.how I think an industrial strategy could be reformed, to meet some of

:17:45. > :17:50.the challenges that we face today. In the last Queen 's speech debate,

:17:51. > :17:54.I spoke on industrial stratdgy. And I ran the most of the other speakers

:17:55. > :18:03.were speaking about important issue of sugar tax, at the time. H must

:18:04. > :18:08.admit I was not entirely ovdrwhelmed by the infuse Yaz from thesd

:18:09. > :18:13.government benches, for wall I was saying. Send their one can be more

:18:14. > :18:19.delighted than I, to see thd inclusion of industrial str`tegy in

:18:20. > :18:27.the name of a government department. There has been a sense of scepticism

:18:28. > :18:31.about industrial strategy. LAUGHTER That was more warmth than I received

:18:32. > :18:37.in my remarks in the Queen 's speech debate. But it has been givdn a

:18:38. > :18:41.negative connotation, British economic performance for ex`mple in

:18:42. > :18:47.the post-war period. Britain's relatively poor record betwden 950

:18:48. > :18:51.and 1979 has been generally blamed on the lack of competition with

:18:52. > :18:58.traditional firms being hung willing to adopt technological or process

:18:59. > :19:04.advances. Wilson's white he`t of the scientific revolution, was replaced

:19:05. > :19:11.by a heavy reliance on the financial sector. Neglect in the past has seen

:19:12. > :19:20.a weakening of our supply chains, and a huge shortfall in the skills

:19:21. > :19:26.that a world-class industri`l base requires to satisfy both to my aunt

:19:27. > :19:30.and opportunity. We need to have a strategy and a structure in place,

:19:31. > :19:38.made more even urgent following the referendum. In addition, highly

:19:39. > :19:42.capital intensive advanced manufacturing requires long,term

:19:43. > :19:47.planning. There is a burden on companies in terms of investing in

:19:48. > :19:52.skills, equipment, and a burden on the state to help create st`bility

:19:53. > :19:56.for long-term decision-making, macroeconomics, fiscal and

:19:57. > :20:00.regulatory. For manufacturing to grow, emphasis needs to be placed on

:20:01. > :20:07.encouraging investment and greater long-term is. While initiathves such

:20:08. > :20:13.as the Midlands engine, the northern powerhouse are laudable, thdy need

:20:14. > :20:20.to be supported by strong t`ngible policy, and that policy will be less

:20:21. > :20:23.effective if it is piecemeal. For example, capital allowances were

:20:24. > :20:30.popular with industry but wdre discreet in their design. A coherent

:20:31. > :20:35.strategy can work for the Mhdlands, the North and the South. Trhed in

:20:36. > :20:42.growth, building economies `nd providing sustainable emploxment,

:20:43. > :20:48.and the subsequent reduction in community and individual indquality.

:20:49. > :20:52.Any industrial strategy, anx new industrial strategy must fit the

:20:53. > :20:57.times that we live in. The domestic economy, the global marketplace and

:20:58. > :21:07.developing themes such as industry 4.0. Insect Ember 65, the then

:21:08. > :21:12.Secretary of State economic affairs, -- in September 65. Produce the

:21:13. > :21:17.National plan to cover all parts of economic development over the next

:21:18. > :21:21.five years. The plan was ovdr 4 0 pages long and looks at everything

:21:22. > :21:27.from the running cost of schools to the future development of the

:21:28. > :21:30.electronics industry. This plan was comprehensive in scope, but our

:21:31. > :21:34.economy no longer operates tnder such a structure and it would have

:21:35. > :21:39.negative consequences if replicated today. The lack of success of

:21:40. > :21:44.documents like the national plan does not mean there should not be a

:21:45. > :21:49.national industrial strategx, now for the UK. Although there hs and a

:21:50. > :21:57.case for a coherent document to be drafted by the government ottlined

:21:58. > :22:01.in support, it intends to ghve the sector and across departments. In

:22:02. > :22:05.countries such as Germany, long seen as a model as an industrialhsed

:22:06. > :22:09.nation, there has been little need for the government to pin down

:22:10. > :22:13.formal strategies all statelents recalls this philosophy is so

:22:14. > :22:20.entrenched, so he embedded hn all activity. -- so embedded. In Britain

:22:21. > :22:26.there has been a traditional volunteerism when it comes to

:22:27. > :22:32.economic organisation. Would my noble friend agree with me that in

:22:33. > :22:37.Germany, with the KF W that has been in place since the late 1940s and

:22:38. > :22:40.provided long-term support to SMEs, we have a model that could go

:22:41. > :22:46.forward here, with UK investment and development?

:22:47. > :22:52.I thank my honourable friend for his contribution. I would gentlx suggest

:22:53. > :22:57.to him this slightly misses the point. It is just one element of an

:22:58. > :23:03.industrial strategy that wotld make up the whole. I would be delighted

:23:04. > :23:20.to give way to my co-chair. If the Honourable gentleman will

:23:21. > :23:25.allow me. It seems to me, the real challenge we have, and only 10% of

:23:26. > :23:30.our people are in manufacturing today as a workforce. With ` smart

:23:31. > :23:33.bit of kit you can manufacttre anywhere in the world that has a

:23:34. > :23:40.wonderful opportunity. Doesn't he think Germany is a bit of an

:23:41. > :23:46.outdated model to follow? I would suggest to him that, in terls of

:23:47. > :23:52.economic advances with our technology, we can, with

:23:53. > :23:56.institutions such as the Warwick Manufacturing group, and in his

:23:57. > :24:02.constituency, this is where we need to be investing in research and an

:24:03. > :24:06.element to make sure you mahntain that is Michael we maintain the

:24:07. > :24:12.cutting edge and bleed in these technologies. In my view, cdntral

:24:13. > :24:18.government and Whitehall responds well to objectives and targdts which

:24:19. > :24:26.provide focus and concentrate minds. Such a cohesive document will allow

:24:27. > :24:30.the company and business to hold them to account. Long-term

:24:31. > :24:34.consensual policy would prevail The document all statement would lay out

:24:35. > :24:39.policies to support manufacturing for the medium term, say for ten

:24:40. > :24:43.years. Giving clear objectives for the economy and stating how the

:24:44. > :24:50.Government... I will be happy to give way. Would he agree th`t in

:24:51. > :24:57.this country the Government has tended to intervene but failed to

:24:58. > :25:02.support a successful sector because we sort of step back and sax, why

:25:03. > :25:07.should we carry on supporting that? It is doing fine on its own. Is that

:25:08. > :25:12.not one of the big problems we have faced for many years. The Government

:25:13. > :25:16.should intervene before a sdctor is failing. We always seem to liss the

:25:17. > :25:23.particular issue when it coles up and it makes it much more dhfficult

:25:24. > :25:25.to resolve some of our... Not least in some allow more strategic

:25:26. > :25:32.industries. The Government needs to say how it intends to achieve these

:25:33. > :25:37.objectives through a long-tdrm framework. Manufacturing dods not

:25:38. > :25:42.make up the majority of the economy but it can be seen as a driver for

:25:43. > :25:47.other sectors. Efficiencies, processes, skills, exports `nd so

:25:48. > :25:52.on. It requires more explicht planning than other sectors, which

:25:53. > :25:57.can be seen as interdependent, with the state playing a more active

:25:58. > :26:01.role. It should not come however at the expense of creativity or

:26:02. > :26:06.productivity, but assist rather than hinder. One of the most consistent

:26:07. > :26:08.calls from manufacturing has been for the Government to artictlate

:26:09. > :26:15.long-term commitment to the sector and give an indication as to the

:26:16. > :26:20.policy framework they are lhkely to operate within the medium to

:26:21. > :26:24.long-term. This should be a rolling document, updated regularly, taking

:26:25. > :26:27.into account fluctuations in the wider global economy and within the

:26:28. > :26:31.sector in the UK, debated in parliament and providing

:26:32. > :26:37.transparency and accountability for stuck kit should address a wide

:26:38. > :26:44.range of challenges. -- and accountability. What capital is

:26:45. > :26:50.required to radically changd investment decisions? Can incentives

:26:51. > :26:54.be created? What progress is being made with green Manufacturing?

:26:55. > :27:02.Education is a vital compondnt to the strategy. There is little

:27:03. > :27:09.Management in supporting stdm subjects in primary education. These

:27:10. > :27:12.subjects are the bedrock of degrees and apprenticeships and left to the

:27:13. > :27:21.latter stages of education, often too late to influence the

:27:22. > :27:26.decision-making process. Dods he know there are tens of thousands of

:27:27. > :27:30.young people in further education colleges up and down our land

:27:31. > :27:34.desperate to get an apprenthceship but they cannot because thex cannot

:27:35. > :27:40.get it easy on the in English and maths. Will he persuade his

:27:41. > :27:46.government to introduce not just maths but a practical maths GCSE to

:27:47. > :27:55.unblock that? Thank you. I will leave the minister to answer that

:27:56. > :27:57.question. In addition, in a truly global trading nation, more

:27:58. > :28:02.provision should be made for the studying of languages. What is the

:28:03. > :28:08.number of children at school studying Chinese and Russian? How

:28:09. > :28:13.can this be improved? The wdlcome manifesto commitment, as thd

:28:14. > :28:16.Honourable member suggested, want increased the number of

:28:17. > :28:21.apprenticeships to 3 million by 20 20. How will we take down the

:28:22. > :28:28.barriers stopping this happdn? Infrastructure is a central part of

:28:29. > :28:31.the strategy. They should include a comprehensive development of the

:28:32. > :28:38.digital infrastructure, fit for purpose. Other elements of the

:28:39. > :28:43.strategy will include an endrgy policy, procurement, immigr`tion,

:28:44. > :28:46.export, including the role of supporting other bodies. Research

:28:47. > :28:53.and development, through life engineering services. Social

:28:54. > :28:59.enterprises may not be the first issue that springs to mind. They are

:29:00. > :29:03.a sizeable part of our economy. The positive impact that social

:29:04. > :29:07.enterprise has is of huge v`lue There will be an improved to shaping

:29:08. > :29:17.industrial strategy for such sectors. I am sorry. I will not give

:29:18. > :29:22.way one more time. Clearly `n industrial strategy needs to

:29:23. > :29:25.establish a framework. How lany children are studying stem subjects

:29:26. > :29:30.at primary school right through the strategic pipeline to how m`ny

:29:31. > :29:36.businesses are exporting? Where have targets been met and where has

:29:37. > :29:42.further intervention being needed? This will not come as a shock but

:29:43. > :29:48.more as a minor adjustment to the leaders of policy. We used to say

:29:49. > :29:55.quite a lot about the long-term economic plan. We need an economic

:29:56. > :30:02.plan. I just think that unddrneath any economic plan we need a strong

:30:03. > :30:06.and robust industrial stratdgy. The question is that this Companies Act

:30:07. > :30:11.has considered industrial policy. Can I suggest, if we look about

:30:12. > :30:18.eight minutes, everyone will get the same. -- this House. I need to have

:30:19. > :30:23.a productivity improvement of about 20% immediately. It is a re`l honour

:30:24. > :30:27.to follow the Honourable gentleman for Warwick and Leamington. He has,

:30:28. > :30:31.I think, exactly the same principles, motivations and

:30:32. > :30:38.objectives when it comes to having industrial policy. He is a fantastic

:30:39. > :30:42.member of the select committee. I thank him, other members of the

:30:43. > :30:45.select committee and the Backbench Business Committee for allowing this

:30:46. > :30:52.important topic to be debatdd today I welcome the rhetoric from the

:30:53. > :30:55.Prime Minister. We have emb`rked upon an inquiry into industrial

:30:56. > :30:59.strategy to help assist with the development of policy. Therd are a

:31:00. > :31:06.number of fundamental questhons which need to be addressed to ensure

:31:07. > :31:08.we have a modern, competitive, productive, sustainable and

:31:09. > :31:13.profitable business plays in this country. What is the optimul level

:31:14. > :31:16.of state intervention in economic and business policy? It would be

:31:17. > :31:20.ludicrous and naive to suggdst the governor does not intervene every

:31:21. > :31:27.single day in terms of legislation and regulation which affects the

:31:28. > :31:29.prospects of hundreds of thousands of businesses. How can this

:31:30. > :31:33.intervention be done in a strategic and coordinated manner as possible?

:31:34. > :31:37.The primary consideration for business in any industrial strategy

:31:38. > :31:40.or any government policy is long-term certainty. That is

:31:41. > :31:46.something the Honourable gentleman has already mentioned. How can we be

:31:47. > :31:51.sure a broad sweep of industrial policy transcends parliaments and

:31:52. > :31:55.can withstand changes of governance? There is a mismatch between the

:31:56. > :31:59.long-term requirements of btsiness and the short term political

:32:00. > :32:02.pressures. Ministers of all governments, of all persuashons are

:32:03. > :32:08.prone to temptations of announcements, initiatives `nd

:32:09. > :32:11.reviews. Government are keen to give the impression of action and

:32:12. > :32:18.activity, even if that is not matched by reality. How better a way

:32:19. > :32:25.of giving an impression of purpose than by announcing a review? My

:32:26. > :32:30.honourable friend talks abott the importance of the long-term, as he

:32:31. > :32:33.yet again stumbles into the same state that politicians make

:32:34. > :32:38.generation after generation that they know what industrial strategy

:32:39. > :32:42.is. My experience of business has been in technology. Any long-term

:32:43. > :32:47.thing integrity was tomorrow will be different from today. How is

:32:48. > :32:52.government, with its slumbering way of manoeuvring supposed to be able

:32:53. > :32:58.to keep up with entrepreneurs who made so much progress in society? We

:32:59. > :33:03.can have many debates on industrial policy. He touches upon somdthing I

:33:04. > :33:09.want to dress as may be the second big thing of my contribution. What

:33:10. > :33:14.we mean by picking winners? If I go back to the notion of long-term

:33:15. > :33:17.business considerations and wishes for policy stability at the expense

:33:18. > :33:21.of short-term political culture I think we have seen this alrdady with

:33:22. > :33:25.the new government. The new Prime Minister has announced we nded to

:33:26. > :33:31.have, in her words, a proper industrial strategy. In doing so

:33:32. > :33:35.seems to have jettisoned much in terms of what has gone before. In a

:33:36. > :33:38.letter to me this week, the Secretary of State said, thdre needs

:33:39. > :33:42.to be a much stronger relathonship between government and business For

:33:43. > :33:46.that reason, now is not the time for the Government to set out its

:33:47. > :33:50.approach in detail. That provides clear blue water between thd present

:33:51. > :33:54.government and what went before when David Cameron was Prime Minhster. It

:33:55. > :33:59.hardly gives reassurance of certainty for business at a time

:34:00. > :34:03.when the process of Brexit lease business with unprecedented

:34:04. > :34:06.uncertainty and is giving c`use to future investment in this country,

:34:07. > :34:12.greater detail should have been provided. It is a cause for concern

:34:13. > :34:15.that over three months after the new department was formed, the Secretary

:34:16. > :34:20.of State is still insisting he cannot set out the Government's

:34:21. > :34:25.industrial strategy in any form of detail. Equally, important steps on

:34:26. > :34:29.large ditch eejit matters lhke airport expansion and new energy

:34:30. > :34:32.generation are taking far too long, especially when Britain needs to

:34:33. > :34:39.demonstrate to the world th`t we remain open for business. Wd also

:34:40. > :34:44.need effective cross governlent coordination. Industrial strategy

:34:45. > :34:51.will be a failure if it reshdes in one victorious streak. It h`s been

:34:52. > :34:57.demonstrated that unless thd relevant department, unless that is

:34:58. > :35:01.headed by a big beast, whether Heseltine or Mandelson, the notion

:35:02. > :35:08.of effective coordination across Whitehall turns into dust. Darly

:35:09. > :35:12.signs are encouraging. The new Cabinet committee is chaired by the

:35:13. > :35:16.Prime Minister herself is that this should ensure coordination `nd

:35:17. > :35:18.effectively bridge from Number 0 and demonstrates to other

:35:19. > :35:23.departments that the Prime Linister is very interested in this hssue and

:35:24. > :35:26.will be pushing to bang heads together if departments do not

:35:27. > :35:33.demonstrate to you respect to industrial strategy. That s`id, the

:35:34. > :35:38.Cabinet committee still has two conduct such an approach from

:35:39. > :35:42.departments. The Secretary of State recognises this. To be succdssful,

:35:43. > :35:44.the industrial strategy will need to deliver an upgrade to our

:35:45. > :35:51.infrastructure and yet the Treasury will not will increase control over

:35:52. > :35:54.infrastructure spend. He st`ted an effective industrial strategy will

:35:55. > :35:57.need to improve our education and training system to provide the

:35:58. > :36:02.skilled workforce needed in the future. The department has lost

:36:03. > :36:08.control of the skills policx. Lord Heseltine, in giving evidence to our

:36:09. > :36:11.committee, said, industrial strategy starts in primary schools. When we

:36:12. > :36:16.met the permanent Secretary this week and asked, what is the extent

:36:17. > :36:20.to which this has influence over the design of primary school policy in

:36:21. > :36:26.order to link it with industrial policy, he said the departmdnt has

:36:27. > :36:29.no such influence. I have ydt to be convinced based on experience and

:36:30. > :36:33.the privilege of serving as a minister myself that Whiteh`ll

:36:34. > :36:35.departments will have, as a primary objective, the effective

:36:36. > :36:42.implementation of an industrial strategy. I hope the ministdr can

:36:43. > :36:46.demonstrate otherwise. A further key way in which effective government

:36:47. > :36:52.coordination can be demonstrated is through smarter procurement. There

:36:53. > :36:54.may be a tension between departments securing goods and services at the

:36:55. > :37:01.cheapest cost and considering the use of British-based products which,

:37:02. > :37:05.at times, maybe more expenshve. It is often falls economy to bty

:37:06. > :37:11.off-the-shelf from overseas at the long-term expense of an effdctive

:37:12. > :37:13.British manufacturing sector. The announcement this month that the

:37:14. > :37:17.holes in replacement Trident submarines are to be built with

:37:18. > :37:22.French deal at a time when the steel industry has pushed to the brink of

:37:23. > :37:26.extinction shows an acute f`ilure of industrial policy. I am not

:37:27. > :37:30.endorsing for one moment thd idea of protectionism. That insulatd

:37:31. > :37:36.domestic companies from the harsh realities having to compete in the

:37:37. > :37:40.global economy on cost, and innovation and dooms those companies

:37:41. > :37:45.to obsolescence. Given the great success story of many parts of

:37:46. > :37:50.British manufacturing, why hsn't every single public organis`tion's

:37:51. > :37:54.fleet using Nissan cars built in Sunderland or Vauxhall vans built in

:37:55. > :37:57.Luton? How is the procurement process is nurturing British

:37:58. > :38:00.industry and how will a proper industrial strategy ensure that

:38:01. > :38:07.becomes the case? In a similar way, this government...

:38:08. > :38:15.I'm very grateful for him, but he is just stated that he was not stalked

:38:16. > :38:23.about protecting users. But then he's outlined a protectionist

:38:24. > :38:28.position, that we should be buying British products. Procurement can

:38:29. > :38:32.end junior proper prosperitx. But I would warn my honourable frhend

:38:33. > :38:40.wait to you hear what I havd to say next. He will have spasms. @nd that

:38:41. > :38:43.is about the link between a proper industrial strategy, and foreign

:38:44. > :38:54.takeovers. And how the statd could intervene to perhaps limit the range

:38:55. > :38:57.of foreign takeovers. In her speech, the Prime Minister stated, "A proper

:38:58. > :39:04.industrial strategy wouldn't automatically stop the Brithsh sale

:39:05. > :39:09.of businesses to foreign onds,. ." I welcome that, I think one of the

:39:10. > :39:14.virtues of Britain is its openness, and the fact that this lends itself

:39:15. > :39:17.to dynamism and the willingness to innovate new products. That

:39:18. > :39:22.ultimately leads to better competitiveness. But I think there

:39:23. > :39:28.is a risk that in this country, we sell off the crown jewels. @nd that

:39:29. > :39:32.is detrimental. We are at the heart of a dynamic and connected global

:39:33. > :39:37.economy. But we are at greater risk of investment, affecting Brhtish

:39:38. > :39:42.industry, being made follow way from these shorts by parents overseas.

:39:43. > :39:47.Indeed, within days of the Prime Minister entering number ten it was

:39:48. > :39:55.announced that Softbank was buying Cambridge -based, that does not

:39:56. > :40:00.require a bailout from the state, this was a successful British

:40:01. > :40:09.company in the growing glob`l tech revolution. If we stepped in to

:40:10. > :40:13.defend in this instance, it is difficult to see when they would be

:40:14. > :40:18.applied. Let me just finishdd this point. But every instance of

:40:19. > :40:22.unwelcome takeover, there are numerous examples of takeovdrs where

:40:23. > :40:28.industrial capacity was movdd offshore. Such as Kraft's t`keover

:40:29. > :40:36.of Cadbury. What are the crhteria of this betting in an intervenhng? That

:40:37. > :40:43.is music to my ears. I workdd as a young man, leading architect

:40:44. > :40:50.company, to be taken over not by a normal company, but nice colpany

:40:51. > :40:55.that is part of the Communist government of China. What is this

:40:56. > :40:59.company doing about it? I h`ven t had any thing. That is a fahr point,

:41:00. > :41:03.and it gets the heart of wh`t we think about foreign takeovers. I am

:41:04. > :41:11.conscious of, Leeds wanting to make their own statements. -- colleagues

:41:12. > :41:16.wanted to make their own st`tements. I would like to finish, whether it

:41:17. > :41:20.is individual sectors or technologies is something which is

:41:21. > :41:24.lit yet to be articulated bx the government. There seems to be a move

:41:25. > :41:28.away from a sectorial appro`ch but there was no clarity in terls of

:41:29. > :41:32.what the criteria will be. Ht is obvious that the government is not

:41:33. > :41:39.clear what an industrial strategy looks like. Starting with a bank

:41:40. > :41:43.piece of paper gives the select committee an opportunity to

:41:44. > :41:47.contribute meaningfully. But does not provide much certain se`t of the

:41:48. > :41:51.firm is working hard to provide wealth and prosperity for this

:41:52. > :42:03.country. And 70s what they'd cry out for at the moment. It is a privilege

:42:04. > :42:08.to buy low. -- to follow. The words industrial strategy struck fear into

:42:09. > :42:14.the heart, it brought back that era of excessive government invdntion,

:42:15. > :42:18.government picking winners, but usually that where declining, and

:42:19. > :42:28.government unnaturally strategic industry. Policies that stifled

:42:29. > :42:31.competition, I will give wax... The most interventionist governlent in

:42:32. > :42:40.Europe, where it comes to industry is Germany,, which is also the most

:42:41. > :42:43.successful. It very much depends how you would define intervention, and

:42:44. > :42:48.we make come onto that later this afternoon. The meet, the ch`llenges

:42:49. > :42:55.of the 21st-century, in particular in a post-Brexit Britain, industrial

:42:56. > :43:01.strategy should be about thd government creating an ecosxstem, or

:43:02. > :43:07.the environment where interdst geek can exceed, and therefore ensuring

:43:08. > :43:13.our country has the skills ,- environment where industry can

:43:14. > :43:19.exceed. Are the ones that wd boost and seek to promote. When wd talk

:43:20. > :43:22.about the environment, we almost inevitably talk about

:43:23. > :43:26.infrastructure. One of the achievements of the previous

:43:27. > :43:32.government, was even a time when we have to pay down the deficit, the

:43:33. > :43:37.key factor in economic growth potential. We have seen public

:43:38. > :43:43.sector support, rightly, ard all types of development over the years.

:43:44. > :43:47.The role and the implementation of the National infrastructure

:43:48. > :43:53.committee which has allowed some look across the sectors of getting

:43:54. > :43:57.away from the previous approach has had a great impact. But, as the

:43:58. > :44:01.chairman of the select commhttee pointed out, and edge into

:44:02. > :44:07.commitment for the government must speak not how we achieve success by

:44:08. > :44:14.how we deliver. And that is about making the government and

:44:15. > :44:20.intelligent client. Our ability to specify design, -- or inability Has

:44:21. > :44:26.meant much higher project m`nagement costs and throughout that the

:44:27. > :44:31.Treasury optimism bias has hacked to be increased. With the procdss of

:44:32. > :44:35.driving into the infrastructure projects authority, some of those

:44:36. > :44:42.skills about deliver mint of smart book your mint, we will be `t a

:44:43. > :44:46.reduced the cost costs -- about deliver Riemann of smart

:44:47. > :44:50.procurement. We need to get the private sector much more involved.

:44:51. > :44:54.If anyone travels across thd rest of the world to use roads and bridges

:44:55. > :45:04.that privately run, and it doesn't make them any less useful. H gently

:45:05. > :45:07.say to the Minister, I hope he will push his colleagues this show that

:45:08. > :45:12.we will see an appointment `t the new Minister for infrastructure And

:45:13. > :45:19.preferably with responsibilhty in this House and not any other place.

:45:20. > :45:26.More over, the departure from the European Union will allow as a

:45:27. > :45:32.couple of fortune is possibhlities, amongst what I think some whll see

:45:33. > :45:35.as a difficult time. The EU procure liquid fuels as some of the most in

:45:36. > :45:43.Orissa bureaucratic anywherd in the wealth. Getting when of those will

:45:44. > :45:49.undoubtedly help small industry and the supply chain. Equally, state aid

:45:50. > :45:54.has been a way of reporting as well as supporting investment. Wd no

:45:55. > :46:00.longer have to apply by these rules. I hope the Minister will sax later

:46:01. > :46:07.that he is except the challdnge that that will bring Allred. On the point

:46:08. > :46:12.of state age, it in my constituency state aid helps those company and

:46:13. > :46:18.will create more jobs and more jobs on jobs. It seems our leader Chris

:46:19. > :46:27.situation and we would be wdll rid of bit. -- it seems as ludicrous

:46:28. > :46:32.situation. To ensure that the UK is at the forefront not only of

:46:33. > :46:36.oversight but also competithon. If the movement of labour is to be

:46:37. > :46:42.restricted then there is gohng to be an acute skill shortage in this

:46:43. > :46:49.country. Some of the ways of curing that, are to be locked that

:46:50. > :46:55.urgently. One, what we need to do more of is major infrastructure

:46:56. > :47:01.projects. We already have academies in place to deal with these skills

:47:02. > :47:07.we have lost. For example the Cross rail Academy. We would do wdll to

:47:08. > :47:14.continue to push that sort of thing all with the recent spate of

:47:15. > :47:21.devolution report recommends that creation of those pipelines on a

:47:22. > :47:28.regional basis to identify where the opportunity exists so that training

:47:29. > :47:36.can be invested in. In the longer term, the government should urgently

:47:37. > :47:41.be thinking about the knowlddge to 14 to 18-year-olds that academic

:47:42. > :47:47.skills are not the only reqtirement for success in life. Some of the

:47:48. > :47:52.other skills, why not have `n NVQ which works alongside GCSEs and

:47:53. > :47:56.A-levels so we see people bding attracted into engineering. Equally,

:47:57. > :48:00.I think it would be possibld for the government to encourage universities

:48:01. > :48:08.to set up outreach project hs to teach Bian and the theoretical, the

:48:09. > :48:13.application of stem sciences. - to teach the answer the theoretical.

:48:14. > :48:19.Consider some of the possibhlities that are going to be open to us

:48:20. > :48:25.almost inevitably sovereign debt is chosen for projects. What, `ctually

:48:26. > :48:30.other countries look at the possibilities in the privatd sector,

:48:31. > :48:35.sovereign bonds, the UK still seems to be suspicious of that. It seems

:48:36. > :48:41.to me that we should be in courage in both the UK pension industry and

:48:42. > :48:48.other industries. But equally the government should explore the

:48:49. > :48:54.ability to set up regionallx -based infrastructure and regional industry

:48:55. > :49:00.bonds. Or indeed set up reghonal equity schemes. This could be the

:49:01. > :49:12.new popular capitalism, and it could be the that I think could bd give

:49:13. > :49:15.people to invest in your cotntry, you can invest in your region and

:49:16. > :49:21.you can invest in that country's ticks test. Just say that the

:49:22. > :49:25.Scottish Government has alrdady set up a Scottish investment bank

:49:26. > :49:29.managed by Scottish enterprhse which has significantly raised thd level

:49:30. > :49:34.of equity investment in small businesses. I'm delighted to hear

:49:35. > :49:39.that I'm sure they will also want to take the opportunity to raise a

:49:40. > :49:46.sovereign wealth on to others as well. Now we can do this on a beach

:49:47. > :49:49.in basis. Finally, there was the challenge in any infrastructure

:49:50. > :49:54.policy about what the government needs to do in times of setting

:49:55. > :49:59.around the machinery of govdrnment support. The national infrastructure

:50:00. > :50:04.is equates to strategic adv`ntage to this country. The Minister `lready

:50:05. > :50:09.had me say about the need to ensure that the IPA delivers as a smart

:50:10. > :50:14.client to the government. Btt equally the government should look