Browse content similar to 20/10/2016. Check below for episodes and series from the same categories and more!
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Lords. I don't think I have anything further to add to what my honourable | :00:00. | :00:00. | |
friend said on that occasion. THE SPEAKER: I thank the Hotse for | :00:00. | :00:07. | |
co-operation. Statement for community health and care. | :00:08. | :00:12. | |
Thank you, Mr Speaker. With permission I would like to lake a | :00:13. | :00:17. | |
statement on the future of community pharmacy. In December, 2015, the | :00:18. | :00:24. | |
Government set out a range of proposals for reforming the sector. | :00:25. | :00:29. | |
Our intent was to promote a movement towards a clinically focussdd | :00:30. | :00:32. | |
service that is better integrated with primary care and makes better | :00:33. | :00:37. | |
use of pharmacist skills. I now wish to update the House on the outcome | :00:38. | :00:41. | |
of this consultation and thd measures we intend to take forward. | :00:42. | :00:48. | |
Mr Speaker, I let me be cle`r t Government fully appreciates the | :00:49. | :00:51. | |
value of the community pharlacy sector. There are over 11,a 500 | :00:52. | :00:58. | |
farmties up -- 11,55 pharmacies up by 11% in the last decade. The | :00:59. | :01:03. | |
overall pharmacy spend has hncreased by over 40% since the last decade. | :01:04. | :01:08. | |
Now stands at ?2.8 billion per an unanimous. -- an number. However we | :01:09. | :01:14. | |
do not believe the current funding system does enough to promote | :01:15. | :01:18. | |
efficiency or quality. Nor does it promote the integration with the | :01:19. | :01:22. | |
rest of the NHS that we and pharmacists themselves would like to | :01:23. | :01:25. | |
see. Mr Speaker, the average pharmacy | :01:26. | :01:30. | |
receives nearly ?1 million per an number for the NHS goods and | :01:31. | :01:37. | |
services it provides. Around ?220,000 of this is direct | :01:38. | :01:43. | |
income. This includes a fixdd sum payment called the establishment fee | :01:44. | :01:48. | |
of ?25,000 per an number pahd from most pharmacies regardless of size | :01:49. | :01:53. | |
and regardless of quality. This is an inefficient allocation of NHS | :01:54. | :01:59. | |
funds, when 40% of pharmacids are now in clusters of three or more, | :02:00. | :02:04. | |
which means two fifths are within den minutes walk of two othdr | :02:05. | :02:10. | |
pharmacies. Clusters of pharmacies of up to 15 within a 10-mintte walk | :02:11. | :02:14. | |
of each other. At a time in which the over`ll NHS | :02:15. | :02:20. | |
budget is under pressure and we need to find ?22 billion in efficiency | :02:21. | :02:26. | |
savings by 2020, it is right that we examine all areas of spend `nd look | :02:27. | :02:31. | |
for improvements. The measures that we are bringing forward tod`y have | :02:32. | :02:37. | |
at their heart our desire to more efficiency spend precious NHS | :02:38. | :02:40. | |
resources. Community pharmacy must play its part as the NHS rises to | :02:41. | :02:45. | |
this challenge. Mr Speaker, I am today annotncing a | :02:46. | :02:51. | |
two-year funding settlement. In summary, contractors providd the NHS | :02:52. | :02:57. | |
pharmaceutical services unddr the community pharmacy framework, will | :02:58. | :03:03. | |
receive ?2.86 billion funding in 2016, 2017 and ?2.5 #9d billion in | :03:04. | :03:13. | |
2017/18. This represents a 4% reduction in 2017/18 and 3.4% in | :03:14. | :03:22. | |
17/18. Mr Speaker, every pensy saved by this reset will be reinvdsted and | :03:23. | :03:29. | |
reallocated back into our NHS. To ensure the very best pathent | :03:30. | :03:35. | |
care. Furthermore, separately commissioned services by NHS | :03:36. | :03:40. | |
England, and Clinical Commissioning Groups and local authorities will | :03:41. | :03:42. | |
not be affected by this change. I want to see this commissionhng of | :03:43. | :03:48. | |
services continue to grow. From December 1st, 2016, we will also | :03:49. | :03:55. | |
simplify the current outdatdd payment structure, introducd a | :03:56. | :03:59. | |
payment for quality, so that first, for the first time we will pay | :04:00. | :04:03. | |
pharmacies for the services they provide, not just the volumd of | :04:04. | :04:08. | |
prescriptions they dispense. We will also be relieving pressure on other | :04:09. | :04:14. | |
parts of the NHS by for the first time properly embedding pharmacy in | :04:15. | :04:20. | |
the urgent care pathway. As we continue the path of reform we will | :04:21. | :04:26. | |
be informed both by the revhew of community pharmacy services being | :04:27. | :04:30. | |
carried out by Richard Mowex of the King's Fund and other stakeholders | :04:31. | :04:34. | |
such as the royal pharmaceutical society. NHS England is invdsting | :04:35. | :04:42. | |
?42 million in the pharmacy integration fund for 2016/17, 1 /18. | :04:43. | :04:48. | |
24 will facilitate the movelent of the sector faster into valud added | :04:49. | :04:52. | |
services. As an example Mr Speaker, last week I announced two additional | :04:53. | :04:57. | |
initiatives to improve our offer to patients. First, those who need | :04:58. | :05:02. | |
urgent repeat medicines will be referred to NHS Directly. Bx NHS 111 | :05:03. | :05:10. | |
directly to pharmacists, not out-of-hours GPs, as at present | :05:11. | :05:15. | |
Secondly, NHS England will dncourage a national rollout of the mhnor | :05:16. | :05:21. | |
ailment schemes or any commhssion by NNCGs. This is expected to be | :05:22. | :05:26. | |
complete by April 2018. Mr Speaker, we are confident these | :05:27. | :05:29. | |
measures can be made without jeopardising the quality of | :05:30. | :05:33. | |
services. In fact we believd the changes will improve them. To | :05:34. | :05:40. | |
safeguard patient access we will introduce a pharmacy ak schdme in | :05:41. | :05:46. | |
areas with fewer pharmacies and higher health needs. We are | :05:47. | :05:49. | |
publishing the list of pharlacies which will be eligible to ftnd from | :05:50. | :05:54. | |
this scheme. Copies are avahlable on gove UK and the Vote Office. This | :05:55. | :05:58. | |
list includes all pharmacies which are more than one mile in dhstance | :05:59. | :06:04. | |
from another pharmacy. Thesd pharmacies will be protected from | :06:05. | :06:11. | |
the full impact of the reductions W ewill have a review process to deal | :06:12. | :06:17. | |
with any unforeseen circumstances like road closure. We will review | :06:18. | :06:23. | |
cases where there may be a higher level of deprivation but ph`rmacies | :06:24. | :06:26. | |
are less than a mile from another pharmacy. If that pharmacy hs | :06:27. | :06:31. | |
critical for access. This whll cover pharmacies that are located in the | :06:32. | :06:37. | |
20% most deprived areas in Dngland. And areal le kated 0.8 miles or more | :06:38. | :06:42. | |
from another pharmacy. And `re critical for access. | :06:43. | :06:47. | |
Additional funding over and above the base settlement mentiondd above | :06:48. | :06:50. | |
will be made available for this as needed. | :06:51. | :06:56. | |
Mr Speaker, we have already announced NHS England's proposal to | :06:57. | :07:01. | |
significantly increase the number of pharmacists working directlx in | :07:02. | :07:05. | |
general practise. A budget of ? 12 million has been allocated `nd will | :07:06. | :07:10. | |
deliver a further 1500 pharlacists to general practise by 2020. | :07:11. | :07:15. | |
. Colleagues will be aware th`t the | :07:16. | :07:21. | |
Government consulted the pharmaceutical negotiating committee | :07:22. | :07:24. | |
and other stakeholders. I am grateful for the responses | :07:25. | :07:31. | |
received. They re-enforced the value of community pharmacy and confirmed | :07:32. | :07:34. | |
its front line role at the heart of the NHS. The consultation also | :07:35. | :07:38. | |
confirmed there was a potential for the sector to add more valud. But we | :07:39. | :07:44. | |
are disappointed by the fin`l response from the PSMC. We dndeavour | :07:45. | :07:48. | |
to collaborate and listen to their many suggestions over many lonths. | :07:49. | :07:53. | |
Sadly, we were unable in thd end to reach agreement. | :07:54. | :07:58. | |
Their role is to represent the interests of their members `nd I | :07:59. | :08:05. | |
respect that. My role is to do the right thing for the taxpayer, the | :08:06. | :08:12. | |
patient and the NHS. I want to close by setting out my firm belidf that | :08:13. | :08:17. | |
the future for community ph`rmacy is right. These vital reforms will | :08:18. | :08:22. | |
protect access the payments, properly reward quality for the | :08:23. | :08:27. | |
first time and far better integrate care with GP and other servhces | :08:28. | :08:32. | |
This is what the NHS needs, what patients expect, and I belidve what | :08:33. | :08:37. | |
the vast majority of communhty pharmacists are keen to delhver I | :08:38. | :08:47. | |
commend this statement to the House. I thank the Minister for his | :08:48. | :08:52. | |
statement. Community pharmacies play a crucial role in our Health and | :08:53. | :08:57. | |
Social Care Act system. 80% of patient contact in the NHS hs in | :08:58. | :09:03. | |
community pharmacies so the government decision to press ahead | :09:04. | :09:08. | |
with damaging cuts to pharm`cies, representing a 12% cut for this year | :09:09. | :09:12. | |
and 7% for the year after wd'll cause widespread concern and dismay. | :09:13. | :09:20. | |
-- will cause. When the cuts were proposed public petition on this | :09:21. | :09:23. | |
became the largest ever on ` health-care issue. It has 2.2 | :09:24. | :09:29. | |
million signatures so the mdssage is that people want to see comlunity | :09:30. | :09:34. | |
pharmacies protected. In thd face of unprecedented demands on he`lth and | :09:35. | :09:40. | |
social two care services, the role of pharmacies is greater th`n ever. | :09:41. | :09:45. | |
They signpost people to othdr services, they are important to | :09:46. | :09:51. | |
carers and they reduce demand on GPs and other services. The minhsters | :09:52. | :09:55. | |
not recognise the extent of the support community pharmacies offer | :09:56. | :09:58. | |
and the impact their loss whll have on communities? The governmdnt's | :09:59. | :10:06. | |
latest funding offer was regular -- neglected by the pharmaceuthcal | :10:07. | :10:11. | |
negotiating group Vickers the outcome would be the same as the | :10:12. | :10:18. | |
previous offer. -- because. The Member for bed and Fred -- the | :10:19. | :10:24. | |
Member for Bedfordshire said up to a quarter of community pharmacies | :10:25. | :10:27. | |
would close and many of the remaining ones would be forced to | :10:28. | :10:34. | |
scale back their services. Can he tell the House how many comlunity | :10:35. | :10:38. | |
pharmacies he expects to close as a result of the government cuts and | :10:39. | :10:43. | |
pharmacies that do survive the cuts will be under significant pressure, | :10:44. | :10:47. | |
reducing in job losses and service reduction, putting patient safety at | :10:48. | :10:51. | |
risk. The government plans `re not only deeply unpopular, they are | :10:52. | :10:54. | |
short-sighted and they will hit areas with the greatest health | :10:55. | :11:00. | |
inequalities hardest. A study by Durham University has shown that | :11:01. | :11:05. | |
pharmacy clusters occur most in areas of greatest deprivation and | :11:06. | :11:10. | |
need. Will he reassure us that areas of greatest deprivation will not | :11:11. | :11:15. | |
lose pharmacies they rely on and be disproportionately hit by these | :11:16. | :11:19. | |
cuts? I was not reassured bx his statements. The impact will be | :11:20. | :11:23. | |
significant on older people, people with disabilities or long-tdrm | :11:24. | :11:28. | |
illnesses, or carers who often do not even seek GP appointments. The | :11:29. | :11:36. | |
Minister said nothing about an impact assessment for these cuts. | :11:37. | :11:41. | |
Given their effect is likelx to be substantial with rural, remote and | :11:42. | :11:45. | |
deprived areas most affected, when we will see -- when will we see an | :11:46. | :11:51. | |
impact assessment? Communitx pharmacies relieve pressure on | :11:52. | :12:01. | |
overstretched health and social care services. It seems to me th`t | :12:02. | :12:07. | |
ministers are ignoring "Of ` recent report by Price Waterhouse Coopers | :12:08. | :12:15. | |
showing that community farm pharmacists give a huge bendfit As | :12:16. | :12:27. | |
the Minister considered the long-term impact this will have on | :12:28. | :12:34. | |
other NHS services? Has Billy macro -- has the. Can the Minister | :12:35. | :12:45. | |
reassure us that all parts of the NHS, including NHS England, support | :12:46. | :12:49. | |
these proposals? He said earlier in the week that no community will be | :12:50. | :12:52. | |
left without a pharmacy but he was unable to say which will close and | :12:53. | :12:58. | |
where. Will he repeat the pledge that no community will be ldft | :12:59. | :13:03. | |
without a pharmacy? We recognise the need, as does the Minister, to | :13:04. | :13:06. | |
integrate pharmacy services greater with the rest of primary care, but | :13:07. | :13:12. | |
introducing cuts on this sc`le will not improve health services, it will | :13:13. | :13:22. | |
damage them. A lot of that frankly was scaremongering. It doesn't help | :13:23. | :13:29. | |
what we are doing here and some of the difficult decisions we have had | :13:30. | :13:35. | |
to make, and they are directed at modernising this service, bringing | :13:36. | :13:39. | |
it up today, making it much more by manic in terms of added valte and | :13:40. | :13:44. | |
less static in terms of dispensing and all that goes with that but I | :13:45. | :13:49. | |
will offer Billy macro answdr specific points. There was ` full | :13:50. | :13:54. | |
impact assessment which will be released after this statement. She | :13:55. | :14:00. | |
also asked about the PWC report an excellent piece of work, and I am on | :14:01. | :14:08. | |
record as saying that on a number of occasions, and it drives hole the | :14:09. | :14:11. | |
value of community pharmacy, which we accept on this side of the House. | :14:12. | :14:15. | |
It doesn't address the extent to which those services could be | :14:16. | :14:21. | |
delivered for less cost to the NHS and that is what I have to `ddress | :14:22. | :14:25. | |
and that is what we have done. She asked whether NHS England stpport | :14:26. | :14:34. | |
these changes that we are m`king. She may have heard comments by Simon | :14:35. | :14:38. | |
Stephens but I will read out to her quote from the chief pharmaceutical | :14:39. | :14:49. | |
officer of NHS England." NHS England as a national commission of | :14:50. | :14:53. | |
community pharmacy services can reassure the public that thd | :14:54. | :14:57. | |
efficiencies being asked for will be manageable and sufficient to ensure | :14:58. | :15:05. | |
that they are accessible and convenient so they will be NHS | :15:06. | :15:08. | |
pharmacy services in every community in England." That is the chhef | :15:09. | :15:19. | |
pharmaceutical officer. The honourable lady is asking how many | :15:20. | :15:23. | |
are closing, the answer is H don't know. Possibly none will close. I | :15:24. | :15:28. | |
don't believe that 3000 will close. But I would say that the avdrage | :15:29. | :15:35. | |
margin in operating margin that a pharmacy makes on the numbers I | :15:36. | :15:40. | |
quoted earlier is 15%. That is after salaries and rate. The cuts we are | :15:41. | :15:48. | |
making, the efficiencies we are asking for, is significantlx lower | :15:49. | :15:51. | |
than that. Of course there hs no such thing as an average ph`rmacy | :15:52. | :15:56. | |
which is why I can't guarantee there will be no changes but I can say | :15:57. | :16:00. | |
that if there are mergers and consolidation that demand doesn t go | :16:01. | :16:06. | |
away, it goes to other pharlacies, and to say that those will be put | :16:07. | :16:10. | |
under more pressure is plain wrong. I wanted to say again that what we | :16:11. | :16:14. | |
are doing here is building `n industry which is fit for the | :16:15. | :16:19. | |
future, modern and which adds value in a way it hasn't been abld to do | :16:20. | :16:25. | |
in the past. Members who arrived after the start of the statdment | :16:26. | :16:29. | |
should not expect to be called. Secondly, there is extensivd | :16:30. | :16:33. | |
interest in this very important statement, interest I am kedn to | :16:34. | :16:39. | |
accommodate, and there are to follow very heavily subscribed deb`tes | :16:40. | :16:42. | |
under the auspices of the B`ckbench Business Committee, said thdre is a | :16:43. | :16:49. | |
premium on brevity. We will be led in that by Sir Alex Hazlehurst. My | :16:50. | :16:57. | |
honourable friend acknowledged that the NHS has become such a p`rt of | :16:58. | :17:03. | |
the nation's DNA that doctors' surgeries are frequently ovdrloaded | :17:04. | :17:05. | |
and absolutely the right wax forward is to have a network of pharmacies | :17:06. | :17:11. | |
and that is of particular ilportance in rural areas. Director denies | :17:12. | :17:17. | |
that. He made the point that it is well spaced and that all ardas are | :17:18. | :17:23. | |
protected. I also make the point, as I said, that we are recruithng a | :17:24. | :17:29. | |
further 1500 pharmacists into the GP network and they will also have a | :17:30. | :17:36. | |
big part in that integration. Aren't these cuts the latest evidence of | :17:37. | :17:41. | |
the unprecedented financial pressure the NHS is under and isn't ht the | :17:42. | :17:46. | |
case that cutting community pharmacy services are the very last place you | :17:47. | :17:50. | |
would begin, because they t`ke the pressure of GP surgeries and | :17:51. | :17:54. | |
hospitals, offer excellent service, the government should be investing, | :17:55. | :18:04. | |
not cutting. This year we invested a further ?5 billion in the NHS, three | :18:05. | :18:08. | |
times the rate of inflation. In June of this year the OECD noted that we | :18:09. | :18:15. | |
were now above average in tdrms of NHS and social care spend in the | :18:16. | :18:20. | |
OECD. The facts are that however much we spend it is right that we | :18:21. | :18:25. | |
look to do it as efficientlx and effectively as possible to lodernise | :18:26. | :18:28. | |
the service and make it better for patients and that is what wd are | :18:29. | :18:36. | |
doing. The Minister knows mx views, that I think this 4% cut is not | :18:37. | :18:41. | |
wise, but I note and I think it is important that everybody reports | :18:42. | :18:44. | |
this accurately, that money is going to stay within the NHS, so ht is | :18:45. | :18:49. | |
very important we don't report this as a cut. I would ask the Mhnister | :18:50. | :18:56. | |
to assure us that any incentives for pharmacies and the delivery of | :18:57. | :18:59. | |
public health measures, not`bly preventative measures. I re`ssure | :19:00. | :19:07. | |
her that for the first time we will be allowing pharmacists to `ccess a | :19:08. | :19:12. | |
quality fund, meaning that the average pharmacy could earn up to | :19:13. | :19:17. | |
?6,000 or ?7,000 over and above what they get just for dispensing, and | :19:18. | :19:21. | |
that will include specific leasures around public health. We discussed | :19:22. | :19:30. | |
this on Monday and as I pointed out Scotland has had a national minor | :19:31. | :19:38. | |
ailments chronic medicine sdrvice and that prevention service for | :19:39. | :19:41. | |
years within community pharlacies and we have found them very | :19:42. | :19:47. | |
effective. Research showed that they cut 10% of the pressure on GPs and | :19:48. | :19:54. | |
5% on A I feel this will be a bit random, just pharmacies shutting on | :19:55. | :19:58. | |
the basis that they can't strvive. Will there not be a planned system | :19:59. | :20:03. | |
to look at and discuss wherd they should be? It is not just rtral or | :20:04. | :20:08. | |
deprived, it is transport. @ mile away may be a real problem hf you | :20:09. | :20:12. | |
are elderly and frail and there isn't a bus that takes you there. My | :20:13. | :20:19. | |
concern about this, I welcole England taking forward thesd | :20:20. | :20:22. | |
services and it is just how it will be done. If it is just due to cuts | :20:23. | :20:25. | |
it might not give you the answer you really want. I thank her for her | :20:26. | :20:32. | |
point and she mentioned the Scotland first programme in terms of minor | :20:33. | :20:36. | |
ailments. The announcement H made about a week ago on that was in many | :20:37. | :20:39. | |
ways modelled on the Scottish model because we know that pharmacies can | :20:40. | :20:44. | |
do much more in minor ailments than they do right now. That can be | :20:45. | :20:50. | |
commissioned in sympathy to the other things we talked about and | :20:51. | :20:53. | |
paid for by the integration fund. We are bit behind Scotland in that | :20:54. | :20:56. | |
regard and we are having to catch up. Can I congratulate the Linister | :20:57. | :21:04. | |
for recognising what Labour failed to, that NHS money is taxpaxers | :21:05. | :21:08. | |
money and the priority should always be patient care, not the profits of | :21:09. | :21:12. | |
private sector -- equity firms? Can I make -- thank him for acute clear | :21:13. | :21:20. | |
that those in deprived commtnities will have their services enhanced as | :21:21. | :21:27. | |
a result of these changes? H won't say much more because of tile | :21:28. | :21:29. | |
constraints but I thank him for his comments and it is right to remind | :21:30. | :21:35. | |
the House that the sector is concentrated towards public | :21:36. | :21:38. | |
companies. That is not to s`y that there are not some individu`l | :21:39. | :21:42. | |
pharmacists that will be affected but something like 25% of pharmacies | :21:43. | :21:45. | |
are owned by two or three ptblic companies. I should reclaim my | :21:46. | :21:53. | |
interests, chairman of the `ll-party group on pharmacies. If we `re | :21:54. | :22:03. | |
getting to a situation wherd pharmacies are merging, my | :22:04. | :22:05. | |
understanding is that the regulations are not in placd yet for | :22:06. | :22:10. | |
that to happen. Is that trud and if it is needed when will it h`ppen? | :22:11. | :22:14. | |
That is an extremely good point they are not yet in place btt they | :22:15. | :22:20. | |
will be by the 1st of December. I congratulate the Minister on his | :22:21. | :22:24. | |
statement this morning. It hs worth reminding the House that many urban | :22:25. | :22:28. | |
pharmacies exist in clusters very close to each other so it is right | :22:29. | :22:32. | |
that we should look at how they are subsidised. As a result of these | :22:33. | :22:36. | |
savings are an pleased that the Minister is looking out for rural | :22:37. | :22:44. | |
pharmacies that are more disbursed. -- I am pleased. I should s`y that | :22:45. | :22:51. | |
the access scheme we referrdd to will apply to rural and urb`n | :22:52. | :22:56. | |
pharmacies, there is more urban than rural in it but it will protect | :22:57. | :22:58. | |
rural pharmacies. Zep This amounts to a significant | :22:59. | :23:09. | |
cut in prevention services which is what happens when the finances of | :23:10. | :23:13. | |
the NHS are under pressure. While I accept the need for reform for | :23:14. | :23:18. | |
financial incentives to enstre we get the best outcome from the money | :23:19. | :23:23. | |
spent, surely we should invdst more in prevention in order to cdnsure | :23:24. | :23:28. | |
the NHS is sustainable. The quality system that I talked about hs about | :23:29. | :23:34. | |
investing potentially more hn prevention and linking the | :23:35. | :23:39. | |
high-quality pharmacies closely to the public health schemes and thaw | :23:40. | :23:43. | |
go with that. I -- thaw go with that. There is are efficiency | :23:44. | :23:48. | |
savings under the requirement here. We don't believe it will affect | :23:49. | :23:55. | |
access overall. We don't believe it will affect the public's abhlity to | :23:56. | :24:01. | |
use farm as they do now. It will be part of digitising the servhce and | :24:02. | :24:05. | |
to free other parts for the NHS which need it very much. | :24:06. | :24:09. | |
Bearing in mind my responsibility for the difficult equigs whhch my | :24:10. | :24:14. | |
honourable friend has had to solve by coming here this morning can I | :24:15. | :24:18. | |
thank him and welcome the statement he's made, which brings clarity to | :24:19. | :24:22. | |
these long discussions. Can I ask him to repeat very clearly the | :24:23. | :24:26. | |
Government's commitment to ` strong community pharmacy network, to do | :24:27. | :24:30. | |
all he can to ensure the NHS delivers on the commissioning of | :24:31. | :24:33. | |
quality services that will be essential and looking ahead to the | :24:34. | :24:37. | |
future now we've got past this that there is a good review of community | :24:38. | :24:42. | |
pharmacy services, so that we can see what value they can bring to the | :24:43. | :24:46. | |
NHS. I am sure, like me, he will find that sector extremely value to | :24:47. | :24:52. | |
-- valuable to work with. I thank The Right Honourable gentlelan for | :24:53. | :24:55. | |
his fantastic work in pharm`cy sector over the time. He makes a | :24:56. | :24:59. | |
very important point, is th`t what we are trying to achieve here is to | :25:00. | :25:04. | |
move the sector more into sdrvices and added value T two announcements | :25:05. | :25:07. | |
I made two weeks ago are part of that. As is the work currently being | :25:08. | :25:15. | |
done by the David Murray from the King's Fund. That will inform how we | :25:16. | :25:20. | |
spend the integration money and enable the sector to move qtick | :25:21. | :25:26. | |
irinto the services -- quicker into the services he talks about. There | :25:27. | :25:31. | |
is a deep knowledge of the patients and the families. My concern is as a | :25:32. | :25:37. | |
small pharmacy it will be under more pressure from the cuts than the | :25:38. | :25:42. | |
larger pharmacies. Does the minister recognise this pressure and the | :25:43. | :25:47. | |
vital role pharmacies can play? I repeat the point again that we | :25:48. | :25:52. | |
absolutely recognise the vital role that community pharmacies c`n play. | :25:53. | :25:58. | |
We want to make them move towards an even more vital role by providing | :25:59. | :26:02. | |
more services, which is what pharmacies want to do and not | :26:03. | :26:05. | |
getting all of their money, as they do at present from the dispdnsing | :26:06. | :26:09. | |
activities. High quality ph`rmacies are in a position to really prosper | :26:10. | :26:14. | |
in terms of the new world wd are talking about now. If there are | :26:15. | :26:20. | |
closures what additional support will be give on the the pharmacies | :26:21. | :26:24. | |
which are left, in particul`r taking pressure off GPs in the comlunity? | :26:25. | :26:29. | |
Well, Mr Speaker, the volumd of business is gradually incre`sing all | :26:30. | :26:34. | |
of the time. If pharmacies close in a cluster, that business will be | :26:35. | :26:38. | |
redirected to other pharmaches within that cluster. They whll be in | :26:39. | :26:42. | |
a position to expand, take on more people and all of the rest of it. | :26:43. | :26:48. | |
Mr Speaker, can I declare mx interests as a type two diabetic. | :26:49. | :26:54. | |
He's wrong when he says that Leicester has too many pharlacists. | :26:55. | :27:00. | |
The fact is that the population demands those services and hnstead | :27:01. | :27:04. | |
of making these cuts, why doesn t he use that ?25,000 to spend on | :27:05. | :27:09. | |
diabetes prevention, thus s`ving the National Health Service a htge ament | :27:10. | :27:14. | |
of money in the future? Mr Speaker, first of all, I have never said that | :27:15. | :27:18. | |
Leicester has too many pharlacies. What I said on Monday n the urgent | :27:19. | :27:25. | |
question, is one road in Lehcester, Loughborough Road, has 12 pharmacies | :27:26. | :27:29. | |
within half a mile and that is quite hard to justify. In terms though of | :27:30. | :27:36. | |
the general point... Half a mile. Sorry, what did I say? Half a mile. | :27:37. | :27:43. | |
In terms of his other point about diabetes and long-term condhtions, I | :27:44. | :27:47. | |
mention the King's Fund work being done by David Murray, long-term | :27:48. | :27:52. | |
conditions is the sort of value-added ser siss that pharmacies | :27:53. | :27:56. | |
need to provide in the future. 42 million of integration fund that was | :27:57. | :28:00. | |
set aside will enable that to happen. Mr Speaker, I welcole the | :28:01. | :28:06. | |
news this Conservative Government is spending ?150 million a year more on | :28:07. | :28:11. | |
pharmacies than the last Labour Government and will pay pharmacists | :28:12. | :28:16. | |
for their quality of servicd, not just dispensing prescriptions. | :28:17. | :28:22. | |
Pharmacies have the double whammy of being rural and they providd much | :28:23. | :28:28. | |
needed services and home deliveries. What news can the minister share | :28:29. | :28:34. | |
with me that I can share with my constituents in Wealden. Ph`rmacies | :28:35. | :28:38. | |
more than one mile apart from each other, many will exist in rtral | :28:39. | :28:42. | |
constituencies of the type that the honourable lady mentions will be | :28:43. | :28:46. | |
largely protected in terms of this scheme. | :28:47. | :28:53. | |
The minister was right to ddscribe community pharmacists as thd | :28:54. | :28:56. | |
essential front line of the NHS What assessment of the additional | :28:57. | :28:59. | |
pressures and additional costs which will be put on other parts of the | :29:00. | :29:06. | |
NHS as a result of this dechsion? Mr Speaker, the King's Fund st`udy and | :29:07. | :29:14. | |
the ?42 million integration fund is directly focussed on servicds and | :29:15. | :29:19. | |
enabling pharmacists to become more integrated with GPs. In addhtion to | :29:20. | :29:23. | |
that, make the point again that we are going to have 1500 more clinical | :29:24. | :29:28. | |
pharmacists working for GPs in 020 than we have now. That is a huge | :29:29. | :29:32. | |
difference. . I would like to thank the minister | :29:33. | :29:37. | |
for coming to the House tod`yism welcome his statement and hhs | :29:38. | :29:41. | |
update. It is right to look at the improvements. In doing so, can I | :29:42. | :29:46. | |
urge him to ensure that these reforms are part of a broaddr policy | :29:47. | :29:52. | |
on community pharmacy which seeks to integrate the vital services they | :29:53. | :29:56. | |
provide better into the NHS. Mr Speaker, I give her that assurance. | :29:57. | :30:01. | |
She used the word "integrathon. "That is at the core of this, as is | :30:02. | :30:06. | |
modernisation. This is a patient-first initiative. Wd'll make | :30:07. | :30:09. | |
it happen. Thank you. It is interesting that | :30:10. | :30:14. | |
the minister keeps referring to the evils of these major chains because | :30:15. | :30:18. | |
it is impossible to listen to his statement and not realise that what | :30:19. | :30:24. | |
he's talking about is supporting those big major pharmacies `nd | :30:25. | :30:28. | |
actually the people who will suffer are the smaller pharmacies that | :30:29. | :30:32. | |
don't have so wide a patient base and don't have such wide services. | :30:33. | :30:37. | |
Does he acknowledge and recognise it is small pharmacies that will close | :30:38. | :30:42. | |
as a result of the changes he's made and say where the savings are coming | :30:43. | :30:46. | |
from? Mr Speaker, the schemd we have put into place here is blind to | :30:47. | :30:50. | |
ownership. So, we do not take into account whether they are Boots, | :30:51. | :30:55. | |
Lloyds or a small pharmacy. But I do not believe, as I have said earlier, | :30:56. | :30:59. | |
in terms of the gross margins that are currently made by the average | :31:00. | :31:04. | |
pharmacies, including small ones, the efficiency savings that we are | :31:05. | :31:07. | |
asking for will cause wide-spread closures. To imply it is | :31:08. | :31:13. | |
scaremongering. Those of us who represent | :31:14. | :31:19. | |
constituencies with remote rural communities and urban communities | :31:20. | :31:22. | |
understand at first-hand thd difficult issues that the mhnister | :31:23. | :31:26. | |
and his have wrestled with. Does he not agree with me that any party in | :31:27. | :31:29. | |
Government at the moment wotld have to be taking this decision because | :31:30. | :31:33. | |
it is right to make sure th`t the service is modern, efficient and | :31:34. | :31:36. | |
represents security for people in rural communities? Modern, dfficient | :31:37. | :31:42. | |
and/orien tated towards excdllent patient care. Yes, Mr Speakdr. | :31:43. | :31:49. | |
Mr Speaker, my constituency is within the South TTCG, which is a | :31:50. | :31:59. | |
pilot for the minor ailment. It was Cleveland minor skeleton medical | :32:00. | :32:02. | |
centre and other centres all in my constituency. Now we are seding a | :32:03. | :32:09. | |
shortfall in Vanguard service and a lack of GP provision. What hs going | :32:10. | :32:16. | |
on within primary care? I don't wholly understand that question | :32:17. | :32:19. | |
other than to assume that the honourable member, like othdrs in | :32:20. | :32:22. | |
this House is welcoming the fact that we are rolling out a n`tional | :32:23. | :32:26. | |
ailment system, delivered bx pharmacists, which as the l`dy from | :32:27. | :32:34. | |
Ayrshire said earlier is thd future. Thank you. Mr Speaker, the | :32:35. | :32:34. | |
Government is right to requhre pharmacies to make efficiencies as | :32:35. | :32:39. | |
the NHS is. Can I welcome the pharmacy access scheme, which I hope | :32:40. | :32:44. | |
will help my village pharmacies and can I urge NHS England to press | :32:45. | :32:48. | |
ahead with rolling out the linor ailments service. It is important to | :32:49. | :32:53. | |
make the most of the skills and capacities of pharmacies to provide | :32:54. | :32:59. | |
valuable services to communhties and reduce the burden on GPs. I | :33:00. | :33:04. | |
re-enforce what I said, that NHS England plan to have it rolled out | :33:05. | :33:08. | |
nationally by April 2018. Thank you Mr Speaker. I recognise the | :33:09. | :33:12. | |
difficult decisions the minhster's had to make. Rural pharmacids are | :33:13. | :33:20. | |
going to be particularly hit. He has attempted sweeten thd pill | :33:21. | :33:25. | |
with his access scape. This is only a two-year scheme. What support will | :33:26. | :33:31. | |
come beyond that? This is the first time ever we have given pharmacies a | :33:32. | :33:37. | |
two-year planning horizon. Normally the negotiations that go on is after | :33:38. | :33:42. | |
a year-period. After that there ll be further negotiations and we will | :33:43. | :33:45. | |
take forward at that time what is right to do so. Mr Speaker, I | :33:46. | :33:50. | |
congratulate my honourable friend on the way he's sorted out this mess. | :33:51. | :33:54. | |
Isn't it the case that this unnecessary and wasteful cltstering | :33:55. | :33:57. | |
of pharmacies the a direct consequence of the former L`bour | :33:58. | :34:04. | |
Government's broken payment. Mr Speaker, I not sure that takes us | :34:05. | :34:10. | |
forward, but it is right to say that spending NHS money on payments of | :34:11. | :34:14. | |
?25,000 to many pharmacies within half a mile of each other is the | :34:15. | :34:18. | |
wrong way to spend money whdn we need more in cancer drug funds. We | :34:19. | :34:23. | |
need more in GP surgeries and we need more in A That is what we | :34:24. | :34:24. | |
need to be doing. There are a large number of rural | :34:25. | :34:35. | |
villages and small towns in my constituency served by individual | :34:36. | :34:38. | |
local pharmacies which play an important part in the community I | :34:39. | :34:42. | |
welcome the minister's commdnts about the access scheme. Can he | :34:43. | :34:46. | |
assure me it is small pharm`cies in rural areas such as mine th`t will | :34:47. | :34:51. | |
be among those to benefit from the access protection as he's ottlined? | :34:52. | :34:55. | |
I can reassure him on. That I can make the specific point that for the | :34:56. | :35:02. | |
pharmacies that are the 25% of larger pharmacies they won't have | :35:03. | :35:08. | |
any ak. : They will not be hn the access scheme. It is directdd more | :35:09. | :35:12. | |
at smaller pharmacies. Thank you very much. The minister is | :35:13. | :35:18. | |
right to identify that thosd areas with fewer pharmacies will benefit | :35:19. | :35:21. | |
from protection not only because the travel time to a pharmacy whll be | :35:22. | :35:25. | |
longer but also the travel time to all support services will bd longer. | :35:26. | :35:29. | |
So, can the minister confirl that pharmacies in rural constittency of | :35:30. | :35:34. | |
southeast Cambridgeshire will benefit from the pharmacy access | :35:35. | :35:39. | |
scheme? Mr Speaker, I don't have the specifics for her constituency in | :35:40. | :35:42. | |
front of me. We have published the full list. It is in the Votd Office | :35:43. | :35:46. | |
as I speak. I am sure she whll, when she has a look at that, finds there | :35:47. | :35:51. | |
are some pharmacies in her `rea that are indeed protected. | :35:52. | :35:58. | |
Mr Speaker, I is right to protect services by being more focussed but | :35:59. | :36:04. | |
is there any other kind of commercial retail entertain to which | :36:05. | :36:09. | |
Government hands and establhshment fee of ?25,000? | :36:10. | :36:15. | |
Mr Speaker, there isn't that I know about. But there may be well. But | :36:16. | :36:23. | |
the facts are that the ?2.8 billion that we currently spend is for | :36:24. | :36:27. | |
services and for dispersing ?8 billion of drugs. It is a v`luable | :36:28. | :36:31. | |
service, but it is right th`t we look to see that that money is spent | :36:32. | :36:36. | |
effectively and as effectivdly as oh thisser parts of the NHS. It is our | :36:37. | :36:41. | |
job in the Government to make sure that every penny that we give the | :36:42. | :36:45. | |
NHS provides maximum value for patients. | :36:46. | :36:49. | |
Can I declare an interest in that my wife is a community pharmachst. I | :36:50. | :36:54. | |
should probably be cautious for welcoming this for obvious reasons. | :36:55. | :36:59. | |
Can the minister propose th`t the spoke and hub model are not part of | :37:00. | :37:04. | |
this step forward? Mr Speaker, I can confirm that no | :37:05. | :37:07. | |
part of what we are talking about today is in respect of the hub and | :37:08. | :37:12. | |
spoke model that he talks about THE SPEAKER: I am grateful to those | :37:13. | :37:19. | |
for facilitating progress. We come to the backbench... No we don't We | :37:20. | :37:23. | |
have the presentation of bill first of all, Mr Frank Field. | :37:24. | :37:35. | |
Preparation of foods by ten`nts in receive of universal benefit. | :37:36. | :37:36. | |
THE SPEAKER: Which day? In a moment I will ask the Lember | :37:37. | :37:59. | |
for Birkenhead to move the lotion. Can I emphasise that there `re 4 | :38:00. | :38:04. | |
backbench members who wish to contribute to the debate and so even | :38:05. | :38:12. | |
those who are not subject to a time constraint formally will dotbtless | :38:13. | :38:14. | |
wish to tailor their contributions to take account of the level of | :38:15. | :38:24. | |
interest. May I buy way of introduction thank the backbench | :38:25. | :38:31. | |
committee forgiving us the opportunity and I do that on the | :38:32. | :38:36. | |
half of both of our committdes, because it was a two committee | :38:37. | :38:45. | |
report. Can I do, in light of what you have said, I know a lot of | :38:46. | :38:51. | |
people will wanting to intervene and contribute, and while of cotrse I am | :38:52. | :38:54. | |
more than happy to take interventions, if those | :38:55. | :38:59. | |
interventions could be ones genuinely enquiring or crithcal of | :39:00. | :39:02. | |
me I would be really happy for those to be fielded. Thirdly, might I say, | :39:03. | :39:18. | |
might we thank our advisers, staff, especially the two key people who | :39:19. | :39:23. | |
guided our work. Mindful of the comic you have just made, wd are | :39:24. | :39:29. | |
anxious for everybody to get in I have four things to touch on. First | :39:30. | :39:34. | |
of all, what do I see as thd main findings of our joint unanilous | :39:35. | :39:45. | |
report? Secondly, from that base, a successful BHS in the initi`l | :39:46. | :39:49. | |
stages, what was Sir Philip Green able to achieve? Thirdly I want to | :39:50. | :39:58. | |
comment on what I see as thhs sad, slowly unfolding Greek tragddy. | :39:59. | :40:03. | |
Fourthly, because of -- bec`use the work of this House is never done, | :40:04. | :40:08. | |
what lessons might we draw from this report from our future agenda? In | :40:09. | :40:14. | |
saying that, nothing that I want to say, and I am sure other melbers who | :40:15. | :40:23. | |
contribute will wish to draw attention away from the central | :40:24. | :40:28. | |
concern of our deliberations and of this debate, the 11,000 workers who | :40:29. | :40:40. | |
cruelly lost their jobs, thd 20 000 pensioners, plus, who are now in | :40:41. | :40:43. | |
doubt about what pensions they will get although they contributdd to a | :40:44. | :40:48. | |
set promised pension, and thirdly, where does it leave in the public | :40:49. | :40:57. | |
mind these operations if thdy are an accurate representation of how we | :40:58. | :41:02. | |
earn our wealth? Now to the first theme. What do I see as the main | :41:03. | :41:11. | |
findings of the report? Members will have other views and it will be | :41:12. | :41:15. | |
great if they do as we build up a more comprehensive picture for | :41:16. | :41:20. | |
people following this debatd. My first view, which was never knocked | :41:21. | :41:31. | |
at all by any of the doings that we had all the meetings we had with Sir | :41:32. | :41:38. | |
Philip Green, was that literally nothing happened in the age S or | :41:39. | :41:45. | |
Arcadia without Sir Philip Green deciding directly or people knowing | :41:46. | :41:54. | |
what his mind was. -- in BHS or Arcadia. I never knew Napoldon but | :41:55. | :42:12. | |
in my minds this was a char`cter based on the Napoleon I read about | :42:13. | :42:17. | |
at school. -- in my mind's H've It is important to remember, as history | :42:18. | :42:23. | |
is always under pressure to be rewritten, especially those who feel | :42:24. | :42:28. | |
it has treated them unfairlx, when Sir Philip acquired BHS it was a | :42:29. | :42:32. | |
relatively prosperous busindss and it had a pension scheme. Thd idea | :42:33. | :42:40. | |
that are a pension scheme strplus. The idea that somebody was charging | :42:41. | :42:45. | |
to the rescue of a failing British industry is not borne out bx the | :42:46. | :42:54. | |
report or anybody else publhshed. Given that the pension fund was left | :42:55. | :43:03. | |
at the end of a ?571 million deficit, must we look to more | :43:04. | :43:10. | |
broadly at corporate govern`nce to see how an individual came to be | :43:11. | :43:15. | |
able to behave like this? It is a wonderful point and I will draw | :43:16. | :43:22. | |
attention to that at the end. I hope he develops that point. I would like | :43:23. | :43:30. | |
to pay tribute to my right honourable friend's way of | :43:31. | :43:38. | |
conducting this enquiry. Given his to of Mr Green as a Napoleonic | :43:39. | :43:42. | |
figure, does he share my concern that when he came to the colmittee | :43:43. | :43:47. | |
in June and asserted he would fix the problem, several months later | :43:48. | :43:51. | |
that does not appear to havd taken place and he appears to be hn the | :43:52. | :43:59. | |
media in the next -- saying he will do that in the next couple of days, | :44:00. | :44:07. | |
that seems very irregular. We were certainly left, it would be sorted | :44:08. | :44:11. | |
shortly. There was no concrdte proposal on the table to brhng | :44:12. | :44:17. | |
justice to those pensioners and it does raise the question abott | :44:18. | :44:21. | |
corporate governance, how you can take over a company in surplus with | :44:22. | :44:29. | |
its pension fund and with a good order book. An interesting `spect of | :44:30. | :44:35. | |
Sir Philip's evidence was that he said he could have a new tids all of | :44:36. | :44:39. | |
the pension duties and liabhlities when he took over BHS. -- hd could | :44:40. | :44:53. | |
have annuitised. This Napoldon thing, I have always thought that | :44:54. | :44:59. | |
Sir Philip Green was more of a Maxwell. He had the money, the | :45:00. | :45:05. | |
yachts, the workers, and he robbed them of their pensions. It hs almost | :45:06. | :45:14. | |
a parallel. Sir Philip has threatened to sue me over mx camel | :45:15. | :45:20. | |
once on that. -- over my colments on that. I am waiting for the writ to | :45:21. | :45:29. | |
arrive. I may be in court btt that will be another day. To go back to | :45:30. | :45:36. | |
what for me are the main findings, there was some pretty important | :45:37. | :45:40. | |
engineering going on in respect to the profitability of this company | :45:41. | :45:44. | |
and from the early years. Wd were much amused in committee th`t Sir | :45:45. | :45:52. | |
Philip said his business prowess extended to halving the cost of coat | :45:53. | :45:57. | |
hangers. What would have bedn more interesting would have been for him | :45:58. | :46:02. | |
to told us about his secret share dealing with one main supplher, who | :46:03. | :46:08. | |
during those early years, bdcause they were actually party to BHS | :46:09. | :46:15. | |
decisions, knew what the costs of those other orders that tenders were | :46:16. | :46:25. | |
coming in and was therefore able to bid accordingly. Therefore H | :46:26. | :46:29. | |
maintain, thanks to that me`sure, that Sir Philip was able to get | :46:30. | :46:34. | |
perhaps artificially low supply costs and during that period boosted | :46:35. | :46:41. | |
BHS profits, it looked even more profitable than it was, and that | :46:42. | :46:46. | |
individual shareholder, as H say, owner of a secret share deal, when | :46:47. | :46:54. | |
he came to sell his shares, managed to sell them the ?90 million. But | :46:55. | :47:00. | |
what if we then take the issue on from there, we actually know that a | :47:01. | :47:11. | |
very key part in the dividends able to be taken from BHS, in wh`t most | :47:12. | :47:19. | |
observers would not necessarily have seen as anything extraordin`ry, it | :47:20. | :47:26. | |
is the next stage of this sorry saga. My second theme is, from what | :47:27. | :47:33. | |
was able to Lee macro Sir Philip able to achieve from that BHS base? | :47:34. | :47:41. | |
-- what was Sir Philip able to achieve. He was able to acqtire that | :47:42. | :47:48. | |
group of companies known as Arcadia and from Arcadia he managed to | :47:49. | :47:54. | |
sponsor a huge hearing oper`tion. Was it 2.6 billion, was it 2.9 | :47:55. | :48:02. | |
billion? But the key thing of ownership of Arcadia, which only | :48:03. | :48:08. | |
came from what appeared to be a more than adequate running of BHS, was | :48:09. | :48:14. | |
that there were huge sums of money sloshing around Arcadia, and all too | :48:15. | :48:26. | |
soon and billion of that was money geared, loans acquired on Arcadia | :48:27. | :48:31. | |
through a number of companids found their way up to Lady GREEN. Isn t | :48:32. | :48:44. | |
this the heart of the issue, that the ability of corporate bandits to | :48:45. | :48:48. | |
asset strip in this way, le`ving employees and pensioners in the | :48:49. | :48:57. | |
lurch, one of the key things that need to be addressed? Peopld feel it | :48:58. | :49:02. | |
works for people like Philip Green and not the working class khds of | :49:03. | :49:09. | |
Doncaster. It is an issue that I wished to go onto, because despite | :49:10. | :49:15. | |
all of the razzmatazz and so on there was nothing the committee | :49:16. | :49:18. | |
could find or evidence resented to the committee which shows that Sir | :49:19. | :49:24. | |
Philip Green was king of thd high street. He was and is a verx | :49:25. | :49:29. | |
successful traditional asset stripper and I think many pdople | :49:30. | :49:34. | |
will want to come on and develop that aspect of the debate. H think | :49:35. | :49:42. | |
many of the workers in Arcadia must feel that they may stand re`dy to be | :49:43. | :49:50. | |
pushed into the same hole that the BHS workers and pensioners were | :49:51. | :49:55. | |
pushed. But I think a check has been put in place and it is interesting | :49:56. | :50:00. | |
how it has been put in placd, because there were again thdse | :50:01. | :50:04. | |
wonderful moments where you think why is somebody telling you that? | :50:05. | :50:12. | |
During the hearing it was John and -- Jonathan Chappel, triple | :50:13. | :50:14. | |
bankrupt, largely a creation of Sir Philip Green, told us that he had | :50:15. | :50:23. | |
first refusal should Arcadi` come up for sale, but the only restraint was | :50:24. | :50:28. | |
that top shop wouldn't be sold as part of that next sell-off. -- Top | :50:29. | :50:36. | |
Shop. Of course, they remain the crown jewel of the Arcadia group, | :50:37. | :50:41. | |
part of the Arcadia group that's a Philip Green has tried to t`ke to | :50:42. | :50:46. | |
America and succeeded, but we now know he has had to sell part of his | :50:47. | :50:56. | |
stake in Top Shop. It is inconceivable that this American | :50:57. | :51:01. | |
financier will have agreed to buying into Arcadia without having the | :51:02. | :51:07. | |
power to lock the tills. Thd idea that Arcadia companies, in | :51:08. | :51:21. | |
particular Top Shop, will sde money flowing to pensioners from the | :51:22. | :51:26. | |
Philip Green family, is cle`rly stopped. Why is this the only part | :51:27. | :51:34. | |
of his empire that was making money, so why did he sell? I think it comes | :51:35. | :51:38. | |
down to those mega loans. More recently they have had to bd | :51:39. | :51:42. | |
refinanced and given what both of the Select Committees have brought | :51:43. | :51:47. | |
out I think Sir Philip Green had real difficulty in finding ` | :51:48. | :51:52. | |
refinancing champion and had to give up access to the Crown Jewels, Top | :51:53. | :52:02. | |
Shop, to refinance the loans, half of which probably went very quickly | :52:03. | :52:08. | |
through a network of companhes up to Lady Green and the Green falily | :52:09. | :52:19. | |
Regarding this Greek tragedx, as I see it, which has unfolded before | :52:20. | :52:25. | |
us, Sir Philip has many timds made a criticism of me that I am bhased, | :52:26. | :52:34. | |
from the first interview I gave on the two-day programme I was asked if | :52:35. | :52:39. | |
he should lose his knighthood and I said yes. Maybe I should have | :52:40. | :52:43. | |
dissembled but I answered as I then thought the evidence was, although I | :52:44. | :52:49. | |
much wanted the evidence to overthrow that original view. The | :52:50. | :52:54. | |
idea that had I kept that vhew, publicly or privately, that the two | :52:55. | :53:00. | |
Select Committees which in this House elected to represent ht on | :53:01. | :53:09. | |
business and on the WP mattdrs could somehow be manipulated by md, fine | :53:10. | :53:18. | |
chance I would say. -- DWP latters. # My Right Honourable friend should | :53:19. | :53:23. | |
consider it as a badge of honour. On a whole host of subjects, btt the | :53:24. | :53:30. | |
money in which he has carridd out his duties, with my honourable | :53:31. | :53:33. | |
friend who chairs the other committee, he has carried ott both | :53:34. | :53:37. | |
of them, their duties with distinction and it should bd | :53:38. | :53:41. | |
recognised by the House. Th`nk you. I don't have time to go down that | :53:42. | :53:46. | |
road. I am really grateful to my Right Honourable friend. He always | :53:47. | :53:49. | |
emphasises how much we disagree when he's agreeing with me. I hope that | :53:50. | :53:56. | |
doesn't mean that we both h`ve got reselection prons coming down the -- | :53:57. | :54:01. | |
reselection problems coming back down the tracks to us we ard dealing | :54:02. | :54:08. | |
a man who has huge, tremendous sums of wealth, which it is diffhcult to | :54:09. | :54:13. | |
comprehend what wealth he does have. And yet we know that he could have | :54:14. | :54:19. | |
paid up modestly compared whth that wealth base of ?3.5 billion plus or | :54:20. | :54:25. | |
whatever it was, and walked away smelling of roses. Not only that, he | :54:26. | :54:30. | |
would have helped us, as a House, through our committee systel, begin | :54:31. | :54:40. | |
to set the debate about how we base the whole challenge of deficits into | :54:41. | :54:44. | |
that new era which we have come It would have helped answer thd | :54:45. | :54:47. | |
question raised by my honourable friend, what are the lessons, in | :54:48. | :54:52. | |
fact was he drawing, vis a vis corporate Governments? All of those | :54:53. | :54:58. | |
he could have set the debatd on pension deficit, on the reform of | :54:59. | :55:02. | |
private companies in partictlar He's had nothing to say and he could | :55:03. | :55:05. | |
have actually helped us lead the debate. Last timely give wax to my | :55:06. | :55:13. | |
honourable friend. Isn't thhs the heart of the issue, that he could, | :55:14. | :55:18. | |
he says he is sorry, but it comes across as crocodile tears bdcause he | :55:19. | :55:22. | |
won't put his money where hhs mouth is and he ought to make recompense. | :55:23. | :55:30. | |
There is a mega, megamoral response inltd. Mega Morale responsibility. A | :55:31. | :55:45. | |
man who has everything in lhfe, who risked losing everything important | :55:46. | :55:49. | |
in life. His standing, how his friends regard him and he does so | :55:50. | :55:55. | |
because he seems somehow unwilling to surrender a modest part of his | :55:56. | :56:01. | |
mega-fortune. But a modest part which would make is such a | :56:02. | :56:05. | |
difference to those pensiondrs who are still awaiting their fates. My | :56:06. | :56:11. | |
fourth theme, what's been tdsted by our reports, starting our ddbate | :56:12. | :56:15. | |
today? First of all, members will have a chance to comment on how your | :56:16. | :56:20. | |
committees, two of your comlittees have actually carried out their | :56:21. | :56:25. | |
work. I really, really hope, Mr Speaker, that if anyone wishes to | :56:26. | :56:33. | |
respond to Lord Pannick's r`ther appropriately named report, it will | :56:34. | :56:37. | |
begin the Americanisation of our committee system, where we have no | :56:38. | :56:40. | |
role and all the lawyers take over and we sit there like puppets will | :56:41. | :56:45. | |
be strongly resisted. What, and I know other members wishing to catch | :56:46. | :56:50. | |
your eye will want to talk `bout this, quotes, judgment. What Lord | :56:51. | :56:55. | |
panic's report has shown if, if you pay a lawyer and they are friends of | :56:56. | :56:59. | |
yours, they will come up with the actual opinion you want. And that | :57:00. | :57:03. | |
report does nothing for the legal profession. | :57:04. | :57:09. | |
And it is interesting that Lord Pannick, within moments of | :57:10. | :57:12. | |
publishing the supposed report had to admit that he was actually very | :57:13. | :57:21. | |
close friends with two of the key players undertaking. Next, there are | :57:22. | :57:26. | |
clearly questions about the pension regulator, which people will touch | :57:27. | :57:32. | |
on today, the committee will look at. Are there legal powers or legal | :57:33. | :57:41. | |
powers up to the challenge `nd the increasing challenge faces. Do they | :57:42. | :57:50. | |
have the right staff, are the pension regulators organisation run | :57:51. | :57:56. | |
by within the right culture? And if so, what needs to change? Of course | :57:57. | :58:00. | |
that will be much more diffhcult than changing legal powers or | :58:01. | :58:05. | |
getting the right staff. Next, what are the lessons for Governmdnts My | :58:06. | :58:09. | |
Right Honourable friend has already raised one and that is, a ldsson I | :58:10. | :58:15. | |
learnt, maybe I should have learnt it long ago, I somehow thought that | :58:16. | :58:20. | |
private companies governed the future destinies of only a few | :58:21. | :58:25. | |
employees at a time. Was I wrong on that when we look at | :58:26. | :58:36. | |
Sir Phillip Green's empire BHS with all the jobs destroyed and `ll the | :58:37. | :58:42. | |
jobs at stake in. Arcadia. The comments are mega. It fits hn with | :58:43. | :58:47. | |
the Prime Minister's wish that in trying to protect better thd | :58:48. | :58:54. | |
vulnerable soft underbelly of British society at how capitalism | :58:55. | :58:58. | |
behaves in this country, two more quick points if I may, secondly the | :58:59. | :59:06. | |
first of those, how do we ensure the independence of those bodies which | :59:07. | :59:11. | |
are put into operation to try and recover the assets of a company that | :59:12. | :59:15. | |
has gone down like BHS? Verx important questions which h`ve been | :59:16. | :59:19. | |
raised in respect of this rdcovery operation for BHS. Lastly, hf we | :59:20. | :59:25. | |
were needed to add to the staff power and changes of approach of the | :59:26. | :59:30. | |
Serious Fraud Office, given we are waiting to know how they will | :59:31. | :59:34. | |
respond, how would in a non-threatening way, how wotld this | :59:35. | :59:38. | |
proper committee and then this House respond to that? Just on th`t point, | :59:39. | :59:43. | |
a very brief pointed, my honourable friend is making such a good speech, | :59:44. | :59:50. | |
but, he has touched on this, he touched on the professional advice | :59:51. | :59:54. | |
which was given to Sir Phillip Green and part of that is this on going | :59:55. | :00:01. | |
problem that we have in terls of how the big consultancies operate in our | :00:02. | :00:06. | |
country. Grant Thornton in this case and in others and the fact the | :00:07. | :00:10. | |
Serious Fraud Office increasingly depend on those big consult`nts The | :00:11. | :00:16. | |
quicker I finish, the quickdr I know my friend for Hartlepool will be | :00:17. | :00:22. | |
able to deal with this. I h`ve one last point. This is the first time I | :00:23. | :00:26. | |
have stood before the House since being elected chairman of one of its | :00:27. | :00:31. | |
Select Committees. Might I `ctually thank the House for electing me to | :00:32. | :00:36. | |
that position and say what ` pleasure it has been, despite the | :00:37. | :00:39. | |
hard work and particularly the work that we, as comrades, have been | :00:40. | :00:43. | |
involved in over this inquiry? THE SPEAKER: Thank you. The question | :00:44. | :00:48. | |
is as on the order paper, to move the amendment I call Mr Richard | :00:49. | :00:54. | |
Fuller. Thank you very much. I am fortunate to follow such a gracious | :00:55. | :01:02. | |
speech by the member for Workington, bir Ken head, sorry, Mr Spe`ker but | :01:03. | :01:08. | |
also to move the amendment hn my name and the name of 113 other | :01:09. | :01:13. | |
members of this House. Mr Speaker, I took part in the | :01:14. | :01:17. | |
inquiry into British home stores, not only as a member of the business | :01:18. | :01:22. | |
Select Committee, but also `s someone who believes passionately in | :01:23. | :01:26. | |
the good the business can do. I have seen that in my own life. I have | :01:27. | :01:29. | |
seen it in countries around the world that the force of market | :01:30. | :01:35. | |
economies helps everyone. It helps people who want to earn a lhving. | :01:36. | :01:40. | |
Helps people who want to buhld a future for themselves and create ass | :01:41. | :01:45. | |
stable basis for broader in society to withhold. In the weeks of our | :01:46. | :01:49. | |
inquiry it became apparent when we look in the particular of British | :01:50. | :01:54. | |
home stores and more generally at corporate governance in this country | :01:55. | :01:57. | |
but all of our rules that hdlp to set the stage for our market economy | :01:58. | :02:02. | |
presume one thing - that thd freedoms that are given to people | :02:03. | :02:08. | |
who have enormous power over thousands of their fellow chtizens, | :02:09. | :02:13. | |
assume that when times are tough, when that phrase when push comes to | :02:14. | :02:17. | |
shove that people will not just do what is the legal thing, but they | :02:18. | :02:22. | |
will do what is the right thing But they will do what is the honourable | :02:23. | :02:27. | |
thing. Honour may seem for some to be an unusual word to use when it | :02:28. | :02:33. | |
comes to business, but for dffective business, ultimately honour is all | :02:34. | :02:39. | |
that you have. You can amass a great fortune, but in such turbuldnt | :02:40. | :02:42. | |
market times you can lose it in a day. All you are left with hs your | :02:43. | :02:48. | |
honour. And so the underpinnings for the | :02:49. | :02:53. | |
amendment today are to gaugd in the specifics of the inquiry th`t we | :02:54. | :02:59. | |
have in Parliament to British Home Stores, not were the actions legal? | :03:00. | :03:04. | |
But were the actions of Sir Phillip Green honourable? That is pdrmanent | :03:05. | :03:08. | |
because he received his honour for services to retail. | :03:09. | :03:16. | |
Now, Mr Speaker, in the inqtiry and as my Right Honourable friend has | :03:17. | :03:21. | |
mentioned, a very core issud was the issue of pensions, both he `nd other | :03:22. | :03:25. | |
members will talk about the short comings of that which have led to | :03:26. | :03:29. | |
pensioners of British Home Stores facing lower pensions and the | :03:30. | :03:34. | |
taxpayer facing the prospect to pick up the tab for the difference. But | :03:35. | :03:38. | |
there were other issues that can be drawn to the specifics of British | :03:39. | :03:45. | |
Home Stores, the role of advisers. It was bizarre that in a fldet of | :03:46. | :03:53. | |
well paid advisers on a transaction that apparently the only vohce that | :03:54. | :03:57. | |
mattered was the adviser who said they weren't an adviser. | :03:58. | :04:03. | |
Now, that may be OK if you're dealing with just yourself `nd your | :04:04. | :04:06. | |
family, but when you are de`ling with people who are going to get up | :04:07. | :04:10. | |
on Monday to try and earn a living in a shop, then the advice hs | :04:11. | :04:14. | |
important. We saw it many thmes that the role of advisers was not just in | :04:15. | :04:19. | |
giving advice, it was also hn conveying an impression that the | :04:20. | :04:24. | |
person was a person of substance. We need to look at that isste. | :04:25. | :04:32. | |
A person of substance. To own an enterprise of ?600 million | :04:33. | :04:38. | |
of revenue, 11,000 employees, the responsibility to put money into the | :04:39. | :04:42. | |
pensions of 20,000 people, surely the people running that shotld be | :04:43. | :04:45. | |
people of substance, people with experience. | :04:46. | :04:52. | |
What goes through the mind of knight of a realm to say those livdlihoods | :04:53. | :04:59. | |
and futures should be consigned to a three-time bankrupt? What goes | :05:00. | :05:03. | |
through the mind of the owndr of such a substantial business that | :05:04. | :05:08. | |
this, the problems that he has faced and have found to him quite | :05:09. | :05:12. | |
challenging, been to him quhte challenging, can more easilx be | :05:13. | :05:16. | |
solved by someone with zero experience of the industry that they | :05:17. | :05:21. | |
are about to take on? I givd way. I thank the honourable membdr. I was | :05:22. | :05:26. | |
contacted by e-mail by my efficient Irene who shared the followhng. I | :05:27. | :05:32. | |
have twro friends who worked in BHS Glasgow and are devastated by what | :05:33. | :05:34. | |
has happened to them and thdir pensions. They worked there for | :05:35. | :05:38. | |
years. Don't have much chance of getting another job or being able to | :05:39. | :05:41. | |
build up work pension. This has happened to my friends and | :05:42. | :05:45. | |
colleaguing all because he risked his worker's pensions while he made | :05:46. | :05:50. | |
huge profits. I feel that wd most certainly should should not be | :05:51. | :05:56. | |
honouring people like that. Would the honourable member agree with | :05:57. | :06:03. | |
Irene and myself that he should not enjoy his honour after what happened | :06:04. | :06:08. | |
has been endured I agree with the honourable lady opposite. I would | :06:09. | :06:12. | |
say to the people who worked for British Home Sfors who want to make | :06:13. | :06:15. | |
sure what we are doing is t`ngible to them and the issue of a | :06:16. | :06:22. | |
knighthood is separate. We `re debaiteding about the fact that many | :06:23. | :06:26. | |
lost their -- di baiting about the fact that many lost their jobs. | :06:27. | :06:32. | |
There is a step we can take, those behaviours are not, do not lerit the | :06:33. | :06:38. | |
continuation of an honour. Lr Speaker, the report and the reply | :06:39. | :06:43. | |
this week from Lord Pannick and his colleague talked about issuds about | :06:44. | :06:48. | |
governance. It was shocking to us to see that the response would say that | :06:49. | :06:53. | |
it was technically not the responsibility of the board of a | :06:54. | :06:57. | |
holding company to even to `ttend a meeting that disposed of a | :06:58. | :07:00. | |
subsidiary with all those livelihoods attached. Now it may not | :07:01. | :07:06. | |
have been legal, but for Lord Grabiner not to have even attended | :07:07. | :07:10. | |
the meeting when this busindss was disposed of to this three-thme | :07:11. | :07:13. | |
bankrupt strikes to me to bd a question of the character of the | :07:14. | :07:16. | |
members of that board. Yes, it may not have been ldgal but | :07:17. | :07:19. | |
what went through your mind not to think it was the right thing to do? | :07:20. | :07:24. | |
It wasn't supposed to be just with a brush of the pen that you would | :07:25. | :07:29. | |
consign these people into the wilderness. And for a Lord to do | :07:30. | :07:35. | |
that, again I think points to the issue that honour has to me`n | :07:36. | :07:39. | |
something in behaviour of otr businesses. | :07:40. | :07:44. | |
Mr Speaker, there are some htems that I wish the Government to look | :07:45. | :07:47. | |
at further. An issue to do with the paylent of | :07:48. | :07:51. | |
dividends when there are pension deficits. I don't have an answer on | :07:52. | :07:54. | |
that but I think we should look at that. The issue of transpardncy and | :07:55. | :07:59. | |
large private companies compared to public companies. | :08:00. | :08:05. | |
Should we continue with the role of chairman being precisely thd same as | :08:06. | :08:08. | |
other directors or look for greater roles for the chairman? | :08:09. | :08:12. | |
What are the responsibilitids of advisers? | :08:13. | :08:19. | |
Colleagues in this house have spoken to me and say that on the issue of | :08:20. | :08:26. | |
the night, Sir Philip Green is no longer deserving of the honour but | :08:27. | :08:30. | |
fell not sure that is a rold for this house. Respectfully I disagree, | :08:31. | :08:35. | |
we are here to assert a view of the opinion of the people and I think it | :08:36. | :08:38. | |
is perfectly valid that we should consider this in the context of a | :08:39. | :08:43. | |
report that we have undertaken, it is now work that we are expressing a | :08:44. | :08:48. | |
view, we do not make the final decision but I think it is worthy | :08:49. | :08:52. | |
and honourable for this house to have a view about Sir Philip Green. | :08:53. | :08:59. | |
Over the summer, Sir Philip as had the opportunity to find his moral | :09:00. | :09:04. | |
compass. To do the right thhng, in the absence of that, the hotse has | :09:05. | :09:09. | |
no other options Mr Speaker than to support the amendment and the | :09:10. | :09:14. | |
motion. The question is that the amendment be made, Mr Ian Wright. It | :09:15. | :09:21. | |
is a genuine pleasure to follow my honourable friend, not just on the | :09:22. | :09:26. | |
PHS in quarry but throughout the whole enquiring that we carry out on | :09:27. | :09:32. | |
this select committee. -- the BHS Inquiry. I am proud of what the | :09:33. | :09:36. | |
honourable members and membdrs carried out. We came togethdr | :09:37. | :09:41. | |
extremely well, to work fordnsically and diligently on the hundrdds of | :09:42. | :09:47. | |
hours of evidence, and to consider thousands of pages of writtdn | :09:48. | :09:51. | |
evidence. That's when it cale to agreeing the final report it was | :09:52. | :09:54. | |
agreed unanimously without ` single vote required. Such work was only | :09:55. | :10:00. | |
made possible because of thd professionalism and hard work not | :10:01. | :10:03. | |
only of vulnerable members but the clerks of the committee to. I am | :10:04. | :10:08. | |
very proud of the report and I stand by it every single word. Wh`t came | :10:09. | :10:13. | |
out of the evidence was a story of massive contrasts and huge | :10:14. | :10:17. | |
inequalities. Tens of thous`nds of low paid workers, those tryhng to | :10:18. | :10:21. | |
get by on a small pension losing out because of the greed for a very | :10:22. | :10:26. | |
small number of people to bd rich to themselves, who gorged on BHS to the | :10:27. | :10:33. | |
tune of millions of pounds. BHS folded this year, one year `fter Sir | :10:34. | :10:38. | |
Philip Green sold it, to Dolinic Chappel. But it's to Mies w`s on the | :10:39. | :10:44. | |
cards long before that. -- hts demise. Between 2003 at 2004 it paid | :10:45. | :10:51. | |
dividends of ?423 million even though the operating profit for that | :10:52. | :10:55. | |
period was significantly less than that amount, ?325 million. Hn 2 04 | :10:56. | :11:03. | |
PHS group had dividends of ?199 5 million, this dividend excedded the | :11:04. | :11:09. | |
group operating profit that year of ?137 million. That dividend, also | :11:10. | :11:15. | |
coincided with a long-term loan carried out that year of ?200 | :11:16. | :11:22. | |
million. That dividend policies revealing and it set the scdne for | :11:23. | :11:25. | |
the eventual demise of the company. The pay-out to shareholders, | :11:26. | :11:30. | |
predominantly the Green famhly did not reflect a corporate turnaround | :11:31. | :11:35. | |
or Goode transformation. BHS did not have the cash flow or the profits to | :11:36. | :11:40. | |
fund the dividends, it did knew did the company reserves and had to pay | :11:41. | :11:44. | |
in the case of that final dhvidend to be funded by a long-term loan. | :11:45. | :11:48. | |
Sir Philip could say quite reasonably and he did that he | :11:49. | :11:52. | |
received dividends for only a short period of time, early on in his | :11:53. | :11:56. | |
period of ownership. It was a long time ago, that is true. But I do | :11:57. | :12:01. | |
think that the dividend polhcy is crucial to understanding thd whole | :12:02. | :12:05. | |
sorry business of PHS and the wider lessons that we need to learn. Read | :12:06. | :12:10. | |
was to direction sub com his family and his friends at the expense of | :12:11. | :12:14. | |
long-term and sustainable growth. -- green was to in richest famhly. | :12:15. | :12:21. | |
There was certainly dividends but they were like a short term sugar | :12:22. | :12:28. | |
boost rather than a long-term diet. He was able to cut costs whdn he | :12:29. | :12:32. | |
took over it, an achievement that should not be dismissed but he was | :12:33. | :12:36. | |
never able to boost turnover, so much for the King of retail. It is | :12:37. | :12:41. | |
true that he owns the company for 15 years and retained ownership a full | :12:42. | :12:46. | |
decade after taking the last dividends, in that regard, Sir | :12:47. | :12:49. | |
Philip Green cannot be described as a short-term corporate raiddr, but | :12:50. | :12:55. | |
raid the company he did. And his ability to do so meant that he was | :12:56. | :12:59. | |
then in a financial position to be able to obtain the debt, acpuire | :13:00. | :13:04. | |
Acadia and through the same modus operandi that he operated in BHS | :13:05. | :13:11. | |
bought Arcadia and paid his family the biggest corporate dividdnd in | :13:12. | :13:15. | |
British history. He took thd rings from PHS's fingers, he beat it black | :13:16. | :13:20. | |
and blue comedy star did food and water, he putted on life support and | :13:21. | :13:23. | |
then he wanted credit for kdeping it alive. The BHS balance sheet was | :13:24. | :13:30. | |
made considerably weaker during his tenure of the company, his | :13:31. | :13:34. | |
extraction of value made thd company less able to innovate, retahn market | :13:35. | :13:39. | |
share or have a competitive place in the retail market which would allow | :13:40. | :13:43. | |
the firm to generate the profits and be in more of a position to survive | :13:44. | :13:48. | |
the growing pension deficit. This decline provided the backdrop to his | :13:49. | :13:54. | |
wish to sell the business. Ht would be difficult to come up with a more | :13:55. | :13:59. | |
unlikely or incredible knight in shining armour than Dominic Chappel. | :14:00. | :14:05. | |
He was a former bankrupt with no experience in running any thing in | :14:06. | :14:09. | |
retail of any competition shze comedy was introduced to thd deal by | :14:10. | :14:14. | |
a convicted fraudster, for whom he was carrying out driving duties He | :14:15. | :14:18. | |
boasted that he had senior retail figures on board when this was not | :14:19. | :14:22. | |
the case. He stated he would be investing his own money into the | :14:23. | :14:27. | |
deal and add ?120 million of working capital available when this was not | :14:28. | :14:30. | |
true. His own investment bankers walked away when they discovered | :14:31. | :14:39. | |
that he had lied about the nature of the deal. And yet the due dhligence | :14:40. | :14:42. | |
carried out by the myriad of advisers did nothing to stop the | :14:43. | :14:45. | |
deal or even pause it. Therd was a remarkable amount of groupthink | :14:46. | :14:47. | |
among the supposedly independent advisers. Grant Thornton received | :14:48. | :14:50. | |
four times that the that thdy normally received from similar | :14:51. | :14:56. | |
transactions. He did not have the means to pay advisers unless the | :14:57. | :15:02. | |
deal with BHS went through. The fact, that he did not have the cash | :15:03. | :15:06. | |
to pay the invoices let alone provide the working capital for a | :15:07. | :15:11. | |
loss-making business with h`lf 1 billion pension deficit, should have | :15:12. | :15:16. | |
run alarm bells are banned down the city into where the disengagement | :15:17. | :15:24. | |
should have been taken on. Ht clearly is a question, as to whether | :15:25. | :15:27. | |
blind eyes were turned to insure that fees were paid, regardless of | :15:28. | :15:33. | |
whether the company toppled soon after that. Goldman Sachs provided | :15:34. | :15:39. | |
Sir Philip would I quote prdliminary observations, and were not paid The | :15:40. | :15:44. | |
lack of any clear letter of engagement showed appalling levels | :15:45. | :15:46. | |
of informality given that tdns of thousands of jobs were at stake The | :15:47. | :15:53. | |
fact that Dominic Chappel w`s able, to say that Goldman Sachs w`s on | :15:54. | :15:58. | |
board was able to give his bid credibility, there is a certain | :15:59. | :16:01. | |
irony Madam Deputy Speaker that the firm not getting paid having an | :16:02. | :16:04. | |
ambiguous role in the trans`ction claiming that they were merdly | :16:05. | :16:08. | |
providing preliminary observations was the only one that reallx | :16:09. | :16:12. | |
expressed concern about the transaction noting that "Thdre were | :16:13. | :16:13. | |
risks are attached to the proposal in the | :16:14. | :16:21. | |
light of the little exporters, bankruptcy, and so on and so forth". | :16:22. | :16:26. | |
Goldman Sachs's attitude to document management seems to be on p`r with | :16:27. | :16:30. | |
some dodgy and ramshackle cowboy operation than the world prdmiere | :16:31. | :16:36. | |
consulting firm. If that was deliberate thinking that th`t | :16:37. | :16:39. | |
informal process would exondrate them of any involvement thex were | :16:40. | :16:44. | |
wrong. Although they were ultimately not responsible for the dechsions | :16:45. | :16:48. | |
taken, that was a Philip Grden, their involvement mattered, they | :16:49. | :16:51. | |
were up to their necks and dven to the extent of offering a ?40 million | :16:52. | :16:56. | |
credit seriously. The risks to their reputation should have made those | :16:57. | :17:02. | |
advisers think again, much tour was placed on advice by such advisers. | :17:03. | :17:08. | |
Certainly in the case of PHS, the use of prestigious names, ghves the | :17:09. | :17:11. | |
party legitimacy when it should have been none -- in the case of BHS All | :17:12. | :17:16. | |
of this was possible through weak and incompetent corporate | :17:17. | :17:21. | |
governance. We saw opaque structures, overlapping strtctures, | :17:22. | :17:25. | |
in a complex web of companids and effective leadership at board level. | :17:26. | :17:29. | |
Lord grabbing, chairman of the ultimate selling company pl`yed no | :17:30. | :17:34. | |
effective part. He wasn't even present, not even invited to the | :17:35. | :17:38. | |
meeting of the subsidiary that took the ultimate decision to approve the | :17:39. | :17:44. | |
sale to Philip Chappel -- Dominic Chappel. He showed no interdst, was | :17:45. | :17:49. | |
docile, offered no effectivd scrutiny, challenge your le`dership. | :17:50. | :17:53. | |
This was indicative of a culture often common in corporate scandals | :17:54. | :17:57. | |
where a domineering and overbearing and actually bullying indivhdual was | :17:58. | :18:02. | |
able to get away with things, with little if any challenge. Thhs is a | :18:03. | :18:06. | |
key reason behind the decishon of our select committee to unddrtake an | :18:07. | :18:10. | |
enquiring into corporate governance. Given Aric spirits and BHS, we want | :18:11. | :18:15. | |
to look about whether company law is sufficiently clear on the roles of | :18:16. | :18:17. | |
nonexecutive directors are the right ones. We are | :18:18. | :18:30. | |
examining whether the duties of shareholders and other stakdholders | :18:31. | :18:32. | |
are balanced and how the decisions of boards be better scrutinhsed and | :18:33. | :18:34. | |
open to challenge. Given BHS's status as a private non-listed | :18:35. | :18:36. | |
company, how should we align corporate governance arrangdments, | :18:37. | :18:41. | |
so that it is not in the interests of chief executives or directors to | :18:42. | :18:45. | |
take firm is private to hidd them from effective scrutiny and | :18:46. | :18:49. | |
transparency. Now Madam Deptty Speaker it may be argued th`t the | :18:50. | :18:52. | |
Green family has ultimate shareholders could do whatever they | :18:53. | :18:57. | |
wanted with BHS. And they dhd. But as a company with tens of thousands | :18:58. | :19:02. | |
of workers and former emploxees dependent on the long-term | :19:03. | :19:05. | |
viability, that cannot be rtn as a personal fiefdom or a massive | :19:06. | :19:10. | |
piggybank even though it was. Corporate governance rules `nd | :19:11. | :19:14. | |
regulations should be no dotbt adapted to reflect that. Thd duties | :19:15. | :19:17. | |
of directors are somewhat v`guely defined. Section 172 states that the | :19:18. | :19:24. | |
director of a company must promote the success of the company hs a sure | :19:25. | :19:28. | |
way to have regard for the likely consequences of any decision in the | :19:29. | :19:33. | |
long term, the interest of the company employees, the need to | :19:34. | :19:35. | |
foster the company 's busindss relationships with suppliers, | :19:36. | :19:40. | |
customers and others of the company maintaining high standards of | :19:41. | :19:47. | |
business conduct. Certainly. I will be very brief, the employees of BHS | :19:48. | :19:55. | |
lost their jobs. They say to me why was it when the sort of advhsers and | :19:56. | :19:59. | |
consultants, and auditors that didn't do their job in the banking | :20:00. | :20:04. | |
crisis, all this time later, they are still not doing their job as | :20:05. | :20:09. | |
auditors and professional pdople? I think that is a case and my | :20:10. | :20:12. | |
honourable friend for Bedford looked at this, we need to look at how | :20:13. | :20:16. | |
these firms look not just a reputation but a lot of deals go | :20:17. | :20:19. | |
through simply because they are involved. He's that good enough | :20:20. | :20:24. | |
Also, the point I was making in terms of directors. Can anybody look | :20:25. | :20:29. | |
at BHS and say that in terms of the spirit and intention of section 117 | :20:30. | :20:34. | |
that was being enforced. In companies legislation, directors are | :20:35. | :20:38. | |
equal in status, but in the corporate governance code, though | :20:39. | :20:43. | |
sharing in priority, have a higher state. Lord Grabiner was trtly | :20:44. | :20:50. | |
hopeless and shocking, and the week ending corporate and corpor`te | :20:51. | :20:53. | |
governance, I think there is a strong case to align the code into | :20:54. | :20:59. | |
legislation. Finally I wantdd to touch upon Sir Philip's knighthood, | :21:00. | :21:04. | |
the received that for services to retail. However throughout the | :21:05. | :21:09. | |
course of our enquiring, -- Inquiry, it became increasingly eviddnt that | :21:10. | :21:13. | |
he was acting particularly good at retail at all. True he was good in | :21:14. | :21:17. | |
the early days sniffing out corporate bargains, and rooting out | :21:18. | :21:20. | |
efficiencies for cost. Therd is nothing wrong with that but he did | :21:21. | :21:25. | |
not the BHS turnover, the lost market share to more nimble and even | :21:26. | :21:30. | |
to some not so nimble competitors and he failed to anticipate the | :21:31. | :21:34. | |
online retail revolution. I failing to invest and innovate in the brand, | :21:35. | :21:39. | |
BHS even though it was an ilportant anchor in the high street looked | :21:40. | :21:43. | |
like a remnant of the 1970s and 80s in a cut-throat sector wherd | :21:44. | :21:46. | |
grabbing the customer 's attention and retaining their loyalty are | :21:47. | :21:51. | |
paramount. He lacked the success and the ingenuity and the busindss | :21:52. | :21:58. | |
acumen of the likes of Charlie Medfield, whose group responded well | :21:59. | :22:03. | |
and his employees modelled generally help staff. He could not match the | :22:04. | :22:08. | |
virtues of Sarah, whose supdrfast turnaround based on clever tse of | :22:09. | :22:12. | |
customer data and local suppliers and a rapid turnover, has increased | :22:13. | :22:23. | |
market share. -- Zara. I thhnk it is these people, Charlie Mayfidld, and | :22:24. | :22:28. | |
the founder of Zara, to be classed as true kings of modern ret`il, not | :22:29. | :22:33. | |
Sir Philip Green. Madam Deptty Speaker, BHS is one of the biggest | :22:34. | :22:37. | |
corporate scandals of modern times, I think the whole house has sympathy | :22:38. | :22:40. | |
for the thousands of workers and pensioners who have lost thdir jobs | :22:41. | :22:45. | |
and seen their benefits redtced as a result of greed, incompetence and | :22:46. | :22:48. | |
hubris. The reputation of btsiness has been tarnished as a restlt and | :22:49. | :22:53. | |
the vast majority of business are not run and managed like thhs. | :22:54. | :23:03. | |
# # I am very grateful to mx honourable friend and the w`y he's | :23:04. | :23:11. | |
presented the argument. I h`ve no difficulty in supporting a lotion in | :23:12. | :23:16. | |
the name of The Right Honourable member for birken head and others. | :23:17. | :23:23. | |
In principal I agree with the amendments in the name of the | :23:24. | :23:27. | |
honourable member for Bedford. The only question I have and my | :23:28. | :23:30. | |
honourable friend may be helpful in this, is this the right timd to | :23:31. | :23:38. | |
accept the amendment or shotld it be left until other issues are sorted | :23:39. | :23:42. | |
out? Parliament will have its view upon the knighthood. There hs an | :23:43. | :23:47. | |
urgent need to make sure th`t the pension is sorted. Sir Phillip Green | :23:48. | :23:52. | |
came before us on June 15th and said he would sort it. We are fotr months | :23:53. | :23:59. | |
beyond that. He is meant to be the consummate deal maker being able to | :24:00. | :24:02. | |
buy and sell companies worth billions in a couple of days. Why if | :24:03. | :24:07. | |
he's intent on sorting this hasn't it been done already? Regardless of | :24:08. | :24:12. | |
what Parliament decides to do. And regardless of the hon honours | :24:13. | :24:18. | |
forfeiture and knighthood. He has a duty to sort this. He should make | :24:19. | :24:24. | |
amends for this whole sorry story and put right the wrongs th`t he | :24:25. | :24:29. | |
himself engineered. THE SPEAKER: It is obvious to House | :24:30. | :24:33. | |
that we have a short time this afternoon. I expect this debate to | :24:34. | :24:37. | |
finish around about half two. I don't want to put on a limit time in | :24:38. | :24:44. | |
such an err nest and well m`nnered debate. I hope that members will | :24:45. | :24:50. | |
restrict themselves to some seven minutes. That way, if everyone who | :24:51. | :24:58. | |
has indicated they wish to speak Speaks for seven minutes gets | :24:59. | :25:03. | |
a chance, otherwise I will put on a time limit. It is a pleasurd to | :25:04. | :25:09. | |
follow the wise words of thd honourable member for Hartldpool. It | :25:10. | :25:12. | |
was a pleasure to serve with him on this committee. May I assochate | :25:13. | :25:19. | |
myself with the remarks he `nd the member for Birkenhead made. When the | :25:20. | :25:23. | |
news of BHS stroke, I felt bad about the loss of a high street icon, | :25:24. | :25:27. | |
desperate for the employees affected, including those in my | :25:28. | :25:33. | |
constituency. I have a confdssion to the make to the House, my gtt | :25:34. | :25:36. | |
reaction was a committee inpuiry would be raking over the ashes of a | :25:37. | :25:42. | |
sad event with little to be gained. I was initially not convincdd the | :25:43. | :25:46. | |
inquiry would be productive. I was persuaded to take part. I al glad I | :25:47. | :25:49. | |
did. And I am glad that this inqtiry has | :25:50. | :25:54. | |
taken place. I believe we'rd in a position to lay concerns before this | :25:55. | :25:59. | |
House. The largest concerns for me are not particularly about the | :26:00. | :26:02. | |
individual trading circumst`nces leading to the demise of BHS. Though | :26:03. | :26:08. | |
it seems as the honourable gentleman preceded me said there was little | :26:09. | :26:14. | |
magic around the revitallis`tion of BHS's margins in the early xears of | :26:15. | :26:19. | |
ownership. Dividend payments, generous as they were, excedding | :26:20. | :26:25. | |
profits as they did, may or may not have undermined the BHS thrdw | :26:26. | :26:40. | |
underinvest lt. Directors c`nnot... ... If any company is paying out | :26:41. | :26:52. | |
dividends in excess of the free cash flow, there should be a meeting The | :26:53. | :26:58. | |
honourable gentleman as so often reads my mind. I will come on to a | :26:59. | :27:02. | |
similar point at a later pohnt in this speech. What I would s`y in | :27:03. | :27:06. | |
terms of that period of timd when these very generous dividends were | :27:07. | :27:09. | |
paid out, directors cannot be expected to have the gift of | :27:10. | :27:14. | |
profitsy. They must be expected to understand the fundamental trends | :27:15. | :27:17. | |
driving the underlying profhtability of their business and its | :27:18. | :27:20. | |
sustainability. I am far from convinced that was the case in this | :27:21. | :27:24. | |
situation. The most serious questions, as raised by the | :27:25. | :27:28. | |
honourable gentleman from Hartlepool, intervention from the | :27:29. | :27:31. | |
honourable gentleman are about the corporate governance of large | :27:32. | :27:35. | |
private companies with millhons of employees and pensioners. Unlike my | :27:36. | :27:40. | |
friend, the honourable membdr for Bedford, I intended to come here | :27:41. | :27:43. | |
without making any referencd to the individuals concerned in thd sad | :27:44. | :27:48. | |
demise of BHS I wanted to focus on the more general lessons to be | :27:49. | :27:51. | |
learned. I have been brought back to the particular circumstances of BHS, | :27:52. | :27:57. | |
having read last night the joint legal opinion produced by ldarned | :27:58. | :28:04. | |
counsel. The two lead QCs, `s the honourable gentleman made rdference, | :28:05. | :28:07. | |
they are friends of the chahrman of TIL and I hope the report which is | :28:08. | :28:12. | |
considerably longer than thd joint report it analyses wasn't unduly | :28:13. | :28:16. | |
costly. The report basicallx starts by saying let's pretend this is not | :28:17. | :28:22. | |
a particularly inquiry but some other kind of inquiry. Would that | :28:23. | :28:27. | |
type of inquiry be set asidd by the courts? Having set up in a relevant | :28:28. | :28:33. | |
question the opinion producds an irrelevant answer. It seems somewhat | :28:34. | :28:43. | |
ironic that Sir fillip was complaining about an jut cole he | :28:44. | :28:49. | |
doesn't agree and he was able to pay hamsomely for the pages of recruits, | :28:50. | :28:55. | |
a tactic the pensioners cannot able to resort to, I imagine. It depends | :28:56. | :29:00. | |
on the quality of the report. I have not read the report, having find a | :29:01. | :29:05. | |
series of strawmen set up for demolition I doesn't help this | :29:06. | :29:08. | |
chamber, doesn't help the pensioners, anyone to understand the | :29:09. | :29:12. | |
circumstances of the demise of BHS. But to put the minds at rest of the | :29:13. | :29:25. | |
learned counsel t committee did not object... We question the c`sh and | :29:26. | :29:30. | |
the choice of partner this the circumstances that BHS faced. | :29:31. | :29:34. | |
Nor do we question the concdpt of a company being sold for ?1. | :29:35. | :29:38. | |
Clearly this is a matter for TIL too, the selling company. THL 2 | :29:39. | :29:46. | |
having received ?1. It is unfortunate that TIL 2 ultilately | :29:47. | :29:50. | |
controlled by Lady Green is still paying back to Lady green the ? 00 | :29:51. | :29:56. | |
million consideration for its acquisition of BHS in 2009. This | :29:57. | :30:02. | |
satisfaction being satisfied by ?200 million loan stock, being controlled | :30:03. | :30:07. | |
by three overseas companies by Lady Green with a coupon of 8%. H am | :30:08. | :30:13. | |
mindful others wish to parthcipate I would take a longer debate to draw | :30:14. | :30:18. | |
out aut the strawmen contained in learned counsel's opinion. @ rare | :30:19. | :30:24. | |
point on which the joint colmittee's perspective is shared by le`rned | :30:25. | :30:30. | |
counsel is on the, in our vhew lax governance around the sale, so | :30:31. | :30:35. | |
eloquently described be I the member for Bedford. However learned counsel | :30:36. | :30:40. | |
state it is an irrelevance because in any event the sharehold drrs in | :30:41. | :30:47. | |
TIL could provide a direction, and therefore the directors werd in no | :30:48. | :30:51. | |
position to prevent the sald of BH is. To any party. Well, mad dern | :30:52. | :30:57. | |
Deputy Speaker, this may be legally true, but to this House it should | :30:58. | :31:03. | |
raise questions. TIL is owndd 8 % by a company registered in Jersey and | :31:04. | :31:10. | |
12% by six minority shareholders. The beneficial owner is ladx Green. | :31:11. | :31:16. | |
Learned counsel inform us under the articles Lady Green acting `ny one | :31:17. | :31:20. | |
of the other minority shareholders could have directed the sald of BHS | :31:21. | :31:25. | |
at any time and on any terms. The right to own and to dispose of | :31:26. | :31:30. | |
property under English law hs absolutely fundamental. Parliament | :31:31. | :31:34. | |
will be wise to tread very softly. But I am concerned in this context | :31:35. | :31:39. | |
about checks and balances. Not only on the sale, but more gener`lly | :31:40. | :31:49. | |
What is the value of a secthon 72 to have regard in these | :31:50. | :31:53. | |
circumstances? What is the role and purpose of non-executive directors, | :31:54. | :31:56. | |
when the 88% shareholders is not present around the boardrool table? | :31:57. | :32:01. | |
It is not to my mind appropriate for directors serving private companies | :32:02. | :32:05. | |
to decide they take a dicht approach to what is good corporate governance | :32:06. | :32:10. | |
because they can be ultimatdly directed. It makes it more | :32:11. | :32:14. | |
important, especially on major or related transactions and on | :32:15. | :32:19. | |
honouring commitments to pensioners that they bend over backwards to | :32:20. | :32:24. | |
adhere to strong demanding codes and call out owners if they feel actions | :32:25. | :32:28. | |
are taken which do not take sufficient regard to other | :32:29. | :32:32. | |
stakeholders. There are thotsands of very successful medium and large | :32:33. | :32:36. | |
private companies employing millions for those millions I think the | :32:37. | :32:43. | |
ownership should be transparent Other issues from which I h`ve been | :32:44. | :32:47. | |
side tracked I fear from thd legal opinion, but which this House should | :32:48. | :32:51. | |
give consideration and if I may these include the application of | :32:52. | :32:57. | |
corporate codes, as referred to by the honourable gentleman from | :32:58. | :33:01. | |
Hartlepool to be applied not only to listed companies but those owned | :33:02. | :33:05. | |
privately. On related party transactions, the importancd of | :33:06. | :33:09. | |
independent valuations or independent opinions when these | :33:10. | :33:16. | |
exceed certain levels T utility with regard to section 172 and how | :33:17. | :33:20. | |
directors can take regard while owning responsibility elsewhere The | :33:21. | :33:27. | |
appropriateness above certahn thresholds, particularly if a | :33:28. | :33:31. | |
pension is in deficit, as I was approached by the gentleman from the | :33:32. | :33:33. | |
Scottish National Party. In private, when pension problems | :33:34. | :33:48. | |
may be less transparent than in the listed market, consideration should | :33:49. | :33:53. | |
be give on the compulsory engagement with the regulator and trust tees. | :33:54. | :33:57. | |
For both directors and adviser engaged in processes in respect of a | :33:58. | :34:03. | |
company in which the pensions regulator has expressed concern if a | :34:04. | :34:08. | |
sale is not taken by the pensions regulator, all parties should be | :34:09. | :34:13. | |
very aware of the actuality of the count party to which they are | :34:14. | :34:17. | |
selling. English law requirds no due diligence to be done on the buyer, | :34:18. | :34:23. | |
nor to my mind should it. Btt common sense suggests a certain we`riness | :34:24. | :34:27. | |
to be wise. There are lessons in conclusion, there are lessons to be | :34:28. | :34:30. | |
learnt from this sad story. Above all we will all be focussed on the | :34:31. | :34:40. | |
loss of a well-loved icon. The employees and who right. I | :34:41. | :34:46. | |
understand from the radio this morning that he's not for the first | :34:47. | :34:51. | |
time planning to meet the rdgulators in the next few days. Time will tell | :34:52. | :34:56. | |
whether pensioners have been waiting for a result or if they havd been | :34:57. | :35:03. | |
made to endure a poorly dirdcted Waiting for Godot. This is hndeed | :35:04. | :35:09. | |
miserable business we are dhscussing today. We should not forget for one | :35:10. | :35:13. | |
moment those who have been `dversely affected. 11,000 employees. 22, 00 | :35:14. | :35:19. | |
pensioners who will not know if they are going to receive the sort of | :35:20. | :35:22. | |
pension that they have the right to expect. | :35:23. | :35:26. | |
One of the stores, BHS stords, was in the Walsall borough and like the | :35:27. | :35:31. | |
others, of course, closed. The least that can be done, the least can tha | :35:32. | :35:37. | |
can be done is for Phillip Green to act along the lines of the | :35:38. | :35:42. | |
conclusion of the report, n`mely a satisfactory resolution to the BHS | :35:43. | :35:46. | |
pension fund. There's no dotbt again as the report makes clear that his | :35:47. | :35:51. | |
massive private wealth should not make that in anyway difficult for | :35:52. | :35:56. | |
him. Now I have risen because I am very keen to support the amdndment | :35:57. | :36:01. | |
which we are now, which has been accepted by the speaker for debate. | :36:02. | :36:06. | |
I want to support that. Now, it is true, of course, that | :36:07. | :36:12. | |
taking away Green's knighthood should be recommended by thd | :36:13. | :36:18. | |
appropriate committee. It whll not make anify man shall differdnces to | :36:19. | :36:23. | |
those affected. They will not receive a penny more becausd the | :36:24. | :36:28. | |
knighthood has been taken away. Why should we vote in favour if there is | :36:29. | :36:32. | |
to be a vote? I would argue that that honour to be taken awax from | :36:33. | :36:40. | |
Green would be a form of censure on that individual and more ovdrone | :36:41. | :36:43. | |
which he would intensely dislike. Far more so, far more so, in | :36:44. | :36:48. | |
removing that knighthood, as far as he's concerned, would be an | :36:49. | :36:53. | |
indictment than all the words in the report that we are discussing. Now, | :36:54. | :36:59. | |
mention is made in the report as well, Madam Deputy Speaker of the | :37:00. | :37:03. | |
arrangements as far as the business and tax is concerned in Mon`co. Now | :37:04. | :37:11. | |
I am not entirely a strange tore these matters because in September | :37:12. | :37:15. | |
2012 I raised the issue in ` debate on taxes in the House of Colmons. | :37:16. | :37:26. | |
And I made the point that though Philip Green undoubtedly paxs his | :37:27. | :37:30. | |
taxes in the usual way this country. That is not in doubt. It is not | :37:31. | :37:34. | |
questioned. He's not one of those who are non-domiciled for t`x | :37:35. | :37:38. | |
reasons. He pays them. But ht does not change the fact that in the main | :37:39. | :37:44. | |
the business is in his wife's name and his wife is resident in Monaco. | :37:45. | :37:49. | |
That means, if in effect, that the amount of tax which is paid on the | :37:50. | :37:56. | |
vast business empire that Green is closely involved in, which hn common | :37:57. | :38:02. | |
sense terms means he is, me`ns he owns those businesses, the `mount of | :38:03. | :38:05. | |
tax is minimal. I find it dhfficult to understand. | :38:06. | :38:10. | |
How it is for person whose tax arrangements are well known, quite | :38:11. | :38:16. | |
publicised, no secret at all, should receive a knighthood in the first | :38:17. | :38:20. | |
place. That is a damning indictment in my view of what occurred. | :38:21. | :38:31. | |
At the time I pointed out that he had paid himself a son, and he owes | :38:32. | :38:39. | |
another sum. Which came to 0.2 billion, not million, billion. I | :38:40. | :38:48. | |
don't know what other bonusds he has received since. Now hardly ` week | :38:49. | :38:53. | |
goes by, some would say hardly a day goes by where you don't pick up a | :38:54. | :38:57. | |
newspaper and find details of his lavish lifestyle. A billion`ire 's | :38:58. | :39:06. | |
lifestyle if there ever was one It is a matter of provocation `part | :39:07. | :39:10. | |
from anything else for the people had personally affected, nalely the | :39:11. | :39:16. | |
employees who have lost, thd pensioners, who have lost a future | :39:17. | :39:22. | |
of financial security. I sax this in conclusion had my remarks wdre meant | :39:23. | :39:28. | |
to be brief. I see him as a billionaire spiv who should never | :39:29. | :39:35. | |
have received a knighthood, he has shamed British capitalism and the | :39:36. | :39:40. | |
least we can do today is to make our views clear and strong, and moreover | :39:41. | :39:53. | |
put enough pressure, and to try and persuade the appropriate colmittee | :39:54. | :39:56. | |
that if there is one person who doesn't deserve a knighthood, it is | :39:57. | :40:05. | |
Philip Green. Thank you for calling me to speak in this debate, which | :40:06. | :40:09. | |
has been called in the names of several of us. And, I followed the | :40:10. | :40:17. | |
chairman of the select commhttee, the right Honourable member for | :40:18. | :40:22. | |
Birkenhead, and also my othdr members on the committee, for | :40:23. | :40:26. | |
Hartlepool Bedford and Horsham. I want to start by saying what this | :40:27. | :40:31. | |
debate is not about. It is not to suggest that the deficit of any | :40:32. | :40:36. | |
pension scheme in this land, is entirely the fault of one | :40:37. | :40:41. | |
individual. Or indeed the responsibility of the owner of any | :40:42. | :40:48. | |
sponsoring scheme. It is also worth noting, that of the Sun 6000 defined | :40:49. | :40:54. | |
benefit pension schemes in Tnited Kingdom, about 1000 are in | :40:55. | :40:58. | |
difficulties of various kind and very few of them indeed havd | :40:59. | :41:02. | |
surpluses, therefore, the shtuation of the pension scheme, is not | :41:03. | :41:09. | |
particularly unique, but thd circumstances around it are. And | :41:10. | :41:13. | |
that brings me really to my second point. Which is the deficit pension | :41:14. | :41:20. | |
funds go up and down, particularly faster time when interest r`tes are | :41:21. | :41:24. | |
moving fast. And the value of assets are driven by bond yields when those | :41:25. | :41:27. | |
are depressed, exacerbated by quantitative easing and quality | :41:28. | :41:33. | |
then clearly pension deficits will rise. There are all sorts of people | :41:34. | :41:39. | |
who have responsibility for this, including the investment | :41:40. | :41:42. | |
policymakers of the scheme, investment managers and the cost of | :41:43. | :41:46. | |
all of those involved may s`y significant difference to the scheme | :41:47. | :41:52. | |
deficit as well. And I totally accept the argument, in the 80 page | :41:53. | :41:58. | |
report, by Sir Philip Green's lawyers, that longevity and | :41:59. | :42:02. | |
macroeconomic environment, lake it difficult for schemes, to ilprove | :42:03. | :42:08. | |
their funding situation. I will give way briefly. I'm very grateful and I | :42:09. | :42:15. | |
had to say that I agree with every comment that he has made but will he | :42:16. | :42:19. | |
not accept a part of the difficulty with defined benefit schemes, has | :42:20. | :42:24. | |
been the sole policy of the government to give responsibility to | :42:25. | :42:30. | |
the Bank of England, and a 05th basis point reduction in yidld is | :42:31. | :42:35. | |
about 120 billion on the defined pension benefit deficit. Thd | :42:36. | :42:40. | |
government has created this by failing to balance this school | :42:41. | :42:46. | |
policy. I don't accept that intervention, this is not a debate | :42:47. | :42:49. | |
about the Bank of England 's monetary policy and the Honourable | :42:50. | :42:53. | |
member would be well advised to read the select committee into vhew with | :42:54. | :42:57. | |
the Deputy Governor of Engl`nd which I chaired in the Right Honotrable | :42:58. | :43:01. | |
members absence, he is not paying attention from his seat as tsual. | :43:02. | :43:05. | |
The Honourable member would be well advised to read that. Getting rid of | :43:06. | :43:10. | |
quantitative easing is not going to solve the pension scheme problems | :43:11. | :43:14. | |
and in particular, it is not going to solve the BHS pension scheme | :43:15. | :43:19. | |
With his approval I will return to the subject that we are discussing. | :43:20. | :43:24. | |
I finished before the intervention by remarking that the circulstances | :43:25. | :43:29. | |
of the BHS pension deficit were extraordinary. That is what I now | :43:30. | :43:34. | |
want to come onto. The schele went from surplus to large deficht in | :43:35. | :43:39. | |
about ten years without any clear plan, without any really significant | :43:40. | :43:44. | |
action by the sponsor, without decent relationships between the | :43:45. | :43:47. | |
trustees and the sponsor, whth conflicts of interest betwedn some | :43:48. | :43:51. | |
of the trustees appointed bx the sponsor, that they largely didn t | :43:52. | :43:56. | |
recognise during our Inquirx, with contribution holidays in thd years, | :43:57. | :44:02. | |
where the investors were taking out large dividends and all of this | :44:03. | :44:06. | |
cannot by any stretch of thd imagination be described as best | :44:07. | :44:11. | |
practice. The plan that was put forward to resolve the deficit that | :44:12. | :44:16. | |
was a staggered series of injections over 23 years, without any dvidence | :44:17. | :44:20. | |
of a long-term commitment bx the owners to the company is also not | :44:21. | :44:24. | |
best practice. And something which our report highlighted as an issue | :44:25. | :44:33. | |
in terms of the regulator approving very long-term solutions. Then Madam | :44:34. | :44:38. | |
Deputy Speaker we come to the moment of the sale when information was | :44:39. | :44:42. | |
withheld from trustees and the pensions regulator, there is a | :44:43. | :44:45. | |
certain amount of dispute bdtween the seller and the buyer on pressure | :44:46. | :44:51. | |
on the buyer not to communicate at all to the pensions regulator, | :44:52. | :44:55. | |
reiterated in a further piece of evidence submitted only yesterday, | :44:56. | :45:03. | |
by the buyer, Raul, and there was no significant attempt to clear it with | :45:04. | :45:07. | |
a regulator whatsoever. Indded most shocking of all to many of ts is the | :45:08. | :45:15. | |
concept from both the seller, that effectively, BHS was being sold debt | :45:16. | :45:18. | |
free when it has such an enormous pension deficit. That is at the very | :45:19. | :45:27. | |
least disingenuous. I think it was naive of the buyer and cynical of | :45:28. | :45:31. | |
the seller. It brings us to Sir Philip Green himself, he sahd on the | :45:32. | :45:37. | |
15th of June, "I want to respond to Mr Graham, we want to find ` | :45:38. | :45:41. | |
solution to the 20,000 penshoners, we still believe that money does not | :45:42. | :45:44. | |
resolve it, without getting into it, the schemes are quite compldx, but | :45:45. | :45:49. | |
we will sort it, we will find a solution, I want to give an | :45:50. | :45:53. | |
assurance to the 20,000 pensioners that I'm there to sort this in the | :45:54. | :45:58. | |
correct way. And with that, none of us could disagree. The question of | :45:59. | :46:03. | |
course, which is why today's motion and debate is important is what has | :46:04. | :46:07. | |
happened in the four months since. There has been some dialogud with | :46:08. | :46:11. | |
the pensions regulator, that is clear. But the public wants to know, | :46:12. | :46:17. | |
when this is going to be resolved, they are worried, that after our | :46:18. | :46:21. | |
report, nothing is really going to happen, and that an important | :46:22. | :46:26. | |
powerful man will not be held to account, so today, is an opportunity | :46:27. | :46:31. | |
for this house to stress our commitment to holding Sir Philip | :46:32. | :46:38. | |
Green 's commitment to accotnt. Thank you for giving way, does he | :46:39. | :46:43. | |
agree to me, a pension schele collapsed about 12 years ago in my | :46:44. | :46:48. | |
constituency, it goes into various things and all of the time, it is | :46:49. | :46:52. | |
uncertainty. Does he not thhnk that Philip Green should deal with this | :46:53. | :46:57. | |
as he is set because all of this uncertainty is impacting on the | :46:58. | :47:01. | |
sport people and these poor pensioners? I am grateful to him and | :47:02. | :47:06. | |
that is why, and I intend to finish my remarks really on this note, that | :47:07. | :47:11. | |
is why today's debate does latter, it is not about grandstanding, it is | :47:12. | :47:16. | |
not about parliament tried to demonstrate moral superiority over | :47:17. | :47:20. | |
the behaviour of individuals but what it is about, is to say three | :47:21. | :47:25. | |
important things. Firstly to Philip Green, you made a commitment and we | :47:26. | :47:28. | |
accepted it in good faith and we expect you to fulfil it. And I | :47:29. | :47:35. | |
believe, that waiting too long, is damaging to his reputation, whereas | :47:36. | :47:38. | |
a quick resolution would be extremely helpful to him. It is a | :47:39. | :47:42. | |
chance to say to the pensioners and future pensioners BHS that we held | :47:43. | :47:48. | |
this in quarry and we will not let you down. It is a chance to say to | :47:49. | :47:52. | |
employees of other large businesses and people in general that we | :47:53. | :47:56. | |
understand your resentment of business people who run thehr | :47:57. | :47:59. | |
businesses in cavalier fashhon without due regard to your hnterest. | :48:00. | :48:05. | |
And we have held a complicated enquirer that has held to account, | :48:06. | :48:11. | |
the powerful owners of BHS `nd their advisers to account. The | :48:12. | :48:15. | |
consequences of our findings I believe, will be heard, by | :48:16. | :48:21. | |
businesses, and echoes cauthonary tales for years to come. Th`nk you. | :48:22. | :48:31. | |
Thank you Madam Deputy Speaker, it is a privilege to speak in this | :48:32. | :48:34. | |
debate and let me thank the committee that has brought the | :48:35. | :48:37. | |
report into the Honourable lember for Birkenhead for securing the | :48:38. | :48:41. | |
important debate today. Just leading into this, the issue of court to the | :48:42. | :48:46. | |
easing has come up, and I h`d to say, that the analysis, may have | :48:47. | :48:51. | |
departed him today. Because you cannot get away from the fact that | :48:52. | :48:55. | |
having a quantitative easing programme of 435 billion and that | :48:56. | :48:58. | |
there is no underlying investment in the read economy and the only | :48:59. | :49:01. | |
conclusion that you can loghcally draw is that business does not have | :49:02. | :49:06. | |
confidence in the economy, that is why that into relationship between | :49:07. | :49:10. | |
fiscal and monetary policy hs important. Because we need to get | :49:11. | :49:15. | |
back to a balance, one wherd we have interest rates that reflect a normal | :49:16. | :49:20. | |
economy, that is what the government has to take responsibility for and | :49:21. | :49:24. | |
that is what the member for Gloucester seems to ignore. Madam | :49:25. | :49:30. | |
Deputy Speaker the UK Government needs to see the work of thd select | :49:31. | :49:34. | |
committee on the outcome of the debate, and acknowledge that we need | :49:35. | :49:38. | |
to take action now, that protects all of us from the outcomes that we | :49:39. | :49:45. | |
have seen from BHS. The BHS pension scheme represented 20,000 p`st and | :49:46. | :49:49. | |
present workers in deficit, possibly for more than 500 million and scheme | :49:50. | :49:54. | |
members are facing reduced entitlements as a result. That is | :49:55. | :49:58. | |
really what should be at thd heart of this matter. It is the rdduced | :49:59. | :50:02. | |
pensions for all of those workers that should be concerning us in this | :50:03. | :50:05. | |
house today, and all of those workers who have lost a job. Why | :50:06. | :50:10. | |
should pensioners, be put at risk, and fail to be protected, for what | :50:11. | :50:14. | |
is now fully acknowledged as corporate greed. We all had to look | :50:15. | :50:19. | |
at ourselves as legislators, and ask what could we have done differently | :50:20. | :50:25. | |
to make sure that this situ`tion should not have arisen in the first | :50:26. | :50:28. | |
case? The issue highlights the fundamental need to address the | :50:29. | :50:34. | |
regulation of the pensions hndustry. Madam Deputy Speaker, approximately | :50:35. | :50:37. | |
11 million people in this country, are relying on the final pension | :50:38. | :50:42. | |
scheme, increasingly, these teams have come under pressure as funding | :50:43. | :50:47. | |
has become stretched with around 5000 private-sector defined benefit | :50:48. | :50:50. | |
schemes now in deficit to the tune of more than 900 billion, according | :50:51. | :50:59. | |
to Robinson. 900 billion. Ddspite the situation that the membdr for | :51:00. | :51:04. | |
Gloucester has taken, we cannot escape the impact of quantitative | :51:05. | :51:07. | |
easing in this and the lack of a balanced response. It defies logic | :51:08. | :51:14. | |
not to do that. As I highlighted in the debate in the savings bhll on | :51:15. | :51:18. | |
Monday the 11th of July. Thd previous Secretary of State work and | :51:19. | :51:25. | |
pensions, came to this housd and said, there is a very real systemic | :51:26. | :51:30. | |
risk with defined benefit pdnsion schemes that we need to look at and | :51:31. | :51:33. | |
my department will be discussing it further in the months ahead. Madam | :51:34. | :51:41. | |
Deputy Speaker, since the statement, despite questions from the SNP, | :51:42. | :51:50. | |
there has been silence. Sildnce from the UK Government. Where is the | :51:51. | :51:55. | |
response to the fundamental challenges and as some might argue, | :51:56. | :51:59. | |
a crisis for defined benefit schemes. When will the government | :52:00. | :52:04. | |
face up to the challenges and threats that exist for many who are | :52:05. | :52:08. | |
beneficiaries of those scheles. When will the government respond to the | :52:09. | :52:13. | |
detail of the Cabinet Secretary That was no throw a lay lind, it was | :52:14. | :52:17. | |
a senior Cabinet Secretary `dmitting what we know to be the case. Does | :52:18. | :52:22. | |
the Minister agree with the assessment that was given to this | :52:23. | :52:24. | |
house and will she address that point this afternoon? What hs it | :52:25. | :52:30. | |
doing to deal with the governments own analysis of systemic risk? And I | :52:31. | :52:34. | |
suspect sadly the answer is still nothing. Nothing is being done, the | :52:35. | :52:43. | |
government court like a rabbit in the headlights, court been doing | :52:44. | :52:46. | |
nothing, which threatens thd pensioners up and down the country. | :52:47. | :52:51. | |
In the light of the governmdnt is sitting on its hands, I welcome the | :52:52. | :52:54. | |
recently announced committed enquiring which will look at the | :52:55. | :52:57. | |
adequacy of the pensions regulator 's powers and this must be welcomed. | :52:58. | :53:04. | |
Why isn't the Government dohng its job in addressing this issud? SNP | :53:05. | :53:12. | |
MPs will be working to strengthen the powers of the regulator in order | :53:13. | :53:18. | |
to ensure that people like Philip Green are dealt with effecthvely | :53:19. | :53:21. | |
when they seek to avoid pension responsibilities. It is, however, | :53:22. | :53:26. | |
the duty of government to protect its citizens from undue pension | :53:27. | :53:30. | |
risks and indeed from the sxstemic risks referred to by the Secretary | :53:31. | :53:33. | |
of State. Defined benefit pdnsion schemes need to be placed on a | :53:34. | :53:38. | |
sustainable footing and employees must be protected. And look forward | :53:39. | :53:42. | |
to see if the minister does do this when she gets to her feet. Perhaps I | :53:43. | :53:47. | |
should not hold my breath. Lore likely, it will be the case of | :53:48. | :53:54. | |
waiting for the debate to end and scurrying for cover. We do not | :53:55. | :53:57. | |
expect we'll answer is from this government. Brexit means pension | :53:58. | :54:06. | |
disasters such as BHS are mtch more likely challenges for UK colpanies. | :54:07. | :54:12. | |
Only where companies are able to afford to keep promises to dmployees | :54:13. | :54:15. | |
can pension funds be regarddd as safe. Even large and successful | :54:16. | :54:20. | |
companies can fail. The pension protection fund offers protdction in | :54:21. | :54:25. | |
these cases. It has been forecast that up to 1000 pension schdmes | :54:26. | :54:30. | |
could end up in the PPF over the next two years for that there are | :54:31. | :54:34. | |
more disasters to come if they are correct. There will be a defined | :54:35. | :54:40. | |
deficit of ?45 billion which would be overwhelming. That is trx to take | :54:41. | :54:45. | |
this out of politics. The SNP has long called for the establishment of | :54:46. | :54:49. | |
an Independent pensions comlission to ensure that employees savings are | :54:50. | :54:54. | |
protect it and the more progressive approach is adopted when we moved to | :54:55. | :54:58. | |
a period where defined benefit schemes become a thing of the past. | :54:59. | :55:01. | |
Why don't we establish a pensions commission that will look at all of | :55:02. | :55:07. | |
these issues in a holistic lanner? Let's come back to be -- BHS. They | :55:08. | :55:19. | |
do not want to talk about government responsibilities because thdy have | :55:20. | :55:24. | |
run away from Matt. 20,000 pensioners at BHS will suffdr and | :55:25. | :55:27. | |
thousands of people have lost their jobs. This government is looking on | :55:28. | :55:32. | |
from the sidelines. That is the reality of this Tory governlent | :55:33. | :55:39. | |
Let's come back to BHS, perhaps this time without laughter from the | :55:40. | :55:42. | |
Government benches. I hope the workers at the HS are watchhng the | :55:43. | :55:45. | |
response from the Government backbenchers. How disgraceftl! How | :55:46. | :55:54. | |
contentious the people in this country! I am going to make some | :55:55. | :56:00. | |
progress. I will give way in a second. Philip Green's apology is a | :56:01. | :56:05. | |
case of too little, too latd. He lined his pockets and did not stop | :56:06. | :56:10. | |
to think about his employees. On Tuesday the 18th of October, Philip | :56:11. | :56:15. | |
Green decided to say he is sad and very sorry for the hardship caused | :56:16. | :56:20. | |
by the collapse of BHS and that he still wants to sort out the pension | :56:21. | :56:26. | |
deficit. He has still tried to defend indefensible and duck his | :56:27. | :56:31. | |
duties by shifting the blamd. I will happily give way. I am gratdful to | :56:32. | :56:37. | |
be allowed to intervene. Thd point being made by colleagues of mine on | :56:38. | :56:43. | |
this side of the house, we had a very long speech about systdmic | :56:44. | :56:49. | |
pension risk. There has been a very worthy report, over 60 pages | :56:50. | :56:54. | |
produced on BHS. I am pleasdd you are addressing this issue about | :56:55. | :56:57. | |
employees who have lost thehr jobs, pensioners who have been left with | :56:58. | :57:00. | |
lower benefits than they wotld have expected. I'm delighted that the | :57:01. | :57:08. | |
honourable members getting hnto that part of his speech. The point I am | :57:09. | :57:12. | |
making is we have been put hn a situation where workers havd | :57:13. | :57:15. | |
suffered as a consequence of the actions of Philip Green. Let not the | :57:16. | :57:20. | |
Government think that it can walk away from its responsibilithes to | :57:21. | :57:25. | |
effectively regulate business and effectively regulate pension schemes | :57:26. | :57:31. | |
in this country. But I recognise that Sir Philip owes it to the BHF | :57:32. | :57:35. | |
pensioners to find a resolution urging need. We do need to look at | :57:36. | :57:39. | |
corporate governance in the UK to see what can be done to offdr | :57:40. | :57:42. | |
protection from the kind of corporate excesses that havd taken | :57:43. | :57:47. | |
place with BHS. The Prime Mhnister has talked about bringing forward | :57:48. | :57:52. | |
the proposals. While Philip Green put the hands filthy, Tory | :57:53. | :57:57. | |
government's or is not so clean A lifetime of shying away frol a | :57:58. | :58:04. | |
crackdown on the irresponsibility of the likes of Philip Green h`s begun | :58:05. | :58:11. | |
to be caught up. It is time the minister today gave us some answers. | :58:12. | :58:21. | |
Minister, Margot James. Thank you. I warmly congratulate the right | :58:22. | :58:26. | |
honourable member for Birkenhead for securing this berry important debate | :58:27. | :58:30. | |
this afternoon. I also congratulate and thank the right honourable | :58:31. | :58:35. | |
member for Hartlepool and both select committees for their | :58:36. | :58:42. | |
invaluable work in exposing the governance and decision-makhng | :58:43. | :58:46. | |
issues that have contributed to the terrible consequences of so many | :58:47. | :58:52. | |
people, formerly of BHS. I will give way in a minute. Reading thd report | :58:53. | :58:59. | |
made me painfully aware of the responsibilities that directors | :59:00. | :59:04. | |
have. Under section 1.72 of the companies act, directors must have | :59:05. | :59:09. | |
regard to the long-term consequences for the company of their | :59:10. | :59:13. | |
decision-making and they must consider the interests of elployees, | :59:14. | :59:17. | |
customers, and the impact on the community. BHS should have been | :59:18. | :59:24. | |
making plans to mark its 90th anniversary in 2018. Said which can | :59:25. | :59:29. | |
all of its stores are now closed and employees, some of whom likd Mrs | :59:30. | :59:33. | |
Patel, mentioned in the report, who has spent most of their working | :59:34. | :59:39. | |
lives building the value of BHS they have seen their careers end in | :59:40. | :59:44. | |
redundancy and uncertainty, rather than the secure retirement to which | :59:45. | :59:49. | |
they had been looking forward and to which they had a right to expect. I | :59:50. | :59:52. | |
will give way to my honourable friend. I wanted to make thd point | :59:53. | :59:58. | |
it is wonderful to see the linister here. She is absolutely not | :59:59. | :00:02. | |
scurrying away from anything. I have never seen her scurrying aw`y from | :00:03. | :00:06. | |
anything in her life. Does she agree with me holiday are debating a | :00:07. | :00:10. | |
motion put up by the backbench committee after a report done by an | :00:11. | :00:15. | |
entirely cross-party committee, where parties involved workdd | :00:16. | :00:20. | |
incredibly well together, it was disappointing to hear the SNP | :00:21. | :00:25. | |
spokesman, like an agitated Humpty Dumpty, talking about monet`ry | :00:26. | :00:31. | |
policy. I thank my honourable friend for his intervention and for his | :00:32. | :00:36. | |
work. Disappointed, I may bd, but not surprised. So, my thoughts. I | :00:37. | :00:44. | |
know those of members across the House are with the ex-BHS workers, | :00:45. | :00:50. | |
pensioners and their familids. We know about two owners of BHS. Philip | :00:51. | :00:57. | |
Green, who bought the company in 2000. It was profitable in the early | :00:58. | :01:02. | |
years and Dominic Chappel. Hn his interview with ITV last week and he | :01:03. | :01:07. | |
admitted he had no retail expedience and was categorically the wrong | :01:08. | :01:12. | |
buyer and horror decision. ,- experience. In his powerful speech, | :01:13. | :01:19. | |
the consequences were laid bare of the decision to sell to Domhnic | :01:20. | :01:25. | |
Chappel. The key thing in the report is the sharp contrast betwedn the | :01:26. | :01:29. | |
impact of the demise of BHS on workers and pensioners and the | :01:30. | :01:32. | |
payments received by senior executives in BHS and their | :01:33. | :01:41. | |
advisers. The report also hhghlights serious weaknesses, as indedd this | :01:42. | :01:46. | |
debate has done this afternoon, into the corporate governance of the | :01:47. | :01:49. | |
companies concerned. The Government is very concerned about these | :01:50. | :01:54. | |
issues. The Prime Minister has already made clear that we will | :01:55. | :01:58. | |
review corporate governance, including further reforms on | :01:59. | :02:03. | |
Executive pay as part of thd Government's work to build `n | :02:04. | :02:06. | |
economy that works fairly for everybody and not just the | :02:07. | :02:10. | |
privileged view, about whom we have heard so much this afternoon. Strong | :02:11. | :02:16. | |
and transparent corporate governance is vital to providing trust in | :02:17. | :02:20. | |
business, in fostering good decision-making by companies. The | :02:21. | :02:25. | |
Government intends to consult later this autumn on options to strengthen | :02:26. | :02:30. | |
the existing framework. The right honourable member for Hartldpool | :02:31. | :02:33. | |
made some very salient points about the gap between public and large, | :02:34. | :02:40. | |
private company in governance terms. The business select committde | :02:41. | :02:43. | |
enquiry into corporate governance will provide an opportunity... | :02:44. | :02:52. | |
Minister, point of order. Thank you very much. Thank you for indulging | :02:53. | :02:57. | |
me. Please excuse me. You m`y be my ignorance of Parliamentary process | :02:58. | :03:01. | |
but I am confused as to why the minister is responding halfway | :03:02. | :03:04. | |
through the debate before all of the members have had another gyl teacher | :03:05. | :03:07. | |
to bring forward the concerns of their constituents. The honourable | :03:08. | :03:15. | |
lady has herself make clear that, in asking this question but shd has not | :03:16. | :03:20. | |
served for very long in this House are no one would expect her to have | :03:21. | :03:25. | |
a perfect knowledge of procddure. This being a backbench debate, the | :03:26. | :03:32. | |
minister and spokesman for the two main opposition parties, can choose | :03:33. | :03:35. | |
at what point they wish to dnter the debate. The spokesman for the | :03:36. | :03:39. | |
Scottish National Party has already entered the debate, the minhster is | :03:40. | :03:43. | |
coming to the debate now. The spokesman for the official | :03:44. | :03:46. | |
opposition will come in at ` later stage. It is entirely up to them and | :03:47. | :03:50. | |
up to the chair as to when happens. Want to make sure there is dnough | :03:51. | :03:55. | |
time for the minister to take on the points that have been made points | :03:56. | :03:58. | |
that will be made later in the debate. Minister... | :03:59. | :04:03. | |
Thank you. I was just coming to welcome the inquiry announcdd by the | :04:04. | :04:10. | |
business select committee into corporate governance. I am sure it | :04:11. | :04:14. | |
will add to the evidence we need to take sound decisions on how to | :04:15. | :04:20. | |
strengthen our corporate governance framework for big, private companies | :04:21. | :04:25. | |
as well as public companies. Turning to the very vexed issue of BHS | :04:26. | :04:30. | |
pensions, the fate of the BHS pension schemes and the | :04:31. | :04:34. | |
circumstances leading to thhs are of key interest to many but obviously, | :04:35. | :04:39. | |
especially, to the ex-BHS elployees and its pensioners. Serve Philip has | :04:40. | :04:45. | |
been quoted as saying how s`d and very sorry he is for all thd | :04:46. | :04:49. | |
hardship and sadness caused to the people who work there and the | :04:50. | :04:54. | |
pensioners. And that he is hn a very strong dialogue with the pensions | :04:55. | :05:00. | |
regulator to find a solution for BHS pension deficit. Like my honourable | :05:01. | :05:05. | |
friend the Gloucester, I wotld urge Sir Philip to sort it out qtickly so | :05:06. | :05:10. | |
that the workers and pensioners have greater certainty about thehr future | :05:11. | :05:14. | |
pensions. Surely they deserve that much. Alongside any discusshons in | :05:15. | :05:22. | |
the respect of a potential settlement, the pensions regulator | :05:23. | :05:26. | |
has continued to investigatd the handling of the BHS schemes will do | :05:27. | :05:31. | |
this has involved reviewing almost 100,000 documents and remains on | :05:32. | :05:35. | |
course to reach a conclusion soon. As part of this, the regulator is | :05:36. | :05:41. | |
considering whether it can tse statutory anti-avoidance powers | :05:42. | :05:44. | |
against a number of parties and expects to conclude this in the | :05:45. | :05:50. | |
coming weeks. Nevertheless, I recognise the BHS case has generated | :05:51. | :05:55. | |
much interest in the role of the regulator and whether these are | :05:56. | :06:00. | |
sufficient. I will give way to the honourable lady. Is the minhster | :06:01. | :06:03. | |
aware of any formal proposal put forward by Sir Philip to thd | :06:04. | :06:11. | |
pensions regulator? Minister. I am not aware of the specifics but I | :06:12. | :06:15. | |
thank the honourable lady for raising the important point. I would | :06:16. | :06:19. | |
like to ensure the house th`t neither the Government, nor the | :06:20. | :06:23. | |
regulator, are complacent when it comes to the regulation of schemes, | :06:24. | :06:28. | |
or the power is needed to t`ckle and deter this sort of misbehavhour | :06:29. | :06:32. | |
Should we need to bring forward further legislation... I'm going to | :06:33. | :06:40. | |
continue. Should we need to bring forward further legislation in light | :06:41. | :06:44. | |
of the evidence, including that emerging from the BHS investigation, | :06:45. | :06:49. | |
we will do so. In the meanthme, we must allow the Independent regulator | :06:50. | :06:53. | |
the time they need to prepare any case and to follow the statttory | :06:54. | :06:58. | |
process wherever it takes them. I will give way for one last time | :06:59. | :07:02. | |
Mindful of many backbenchers who want to get in. I appreciatd the | :07:03. | :07:08. | |
minister giving way. The grdat deal has been made about waiting for it | :07:09. | :07:12. | |
to come to a conclusion that it is also about leadership. The | :07:13. | :07:16. | |
Government should put on thd table the actions of Philip Green are not | :07:17. | :07:20. | |
acceptable in a fair societx and condemn him on that basis. H thank | :07:21. | :07:26. | |
the honourable gentleman for his intervention and I sympathise with | :07:27. | :07:31. | |
the strength of his feeling stock but there are certain legal aspects | :07:32. | :07:35. | |
that may or may not arise in future. I had to be little guarded hn what I | :07:36. | :07:40. | |
say. I hope he will forgive me for that. Turning to the ongoing | :07:41. | :07:47. | |
investigations surrounding BHS. I can ensure the House that | :07:48. | :07:50. | |
investigations are well unddr way into conduct of the managers of the | :07:51. | :07:57. | |
pension scheme. The insolvency service investigation into the | :07:58. | :08:00. | |
activity of former BHS directors is ongoing. It is one of the bhggest | :08:01. | :08:04. | |
investigations ever to be undertaken by the agency and the Government has | :08:05. | :08:07. | |
made additional resources available to support what we regard as vital | :08:08. | :08:14. | |
work. If evidence is uncovered that indicates that any of the dhrectors | :08:15. | :08:18. | |
conduct fell below that to be expected, then action will be taken. | :08:19. | :08:23. | |
The financial reporting Council has announced an investigation hnto the | :08:24. | :08:31. | |
audit by PwC of BHS's accounts for the year ending their teeth of | :08:32. | :08:36. | |
August, 2014. The Serious Fraud Office is continuing to revhew | :08:37. | :08:40. | |
material and liaise closely with the pension regulator and insolvency | :08:41. | :08:43. | |
service to identify any regtlation which gives rise to a reasonable | :08:44. | :08:46. | |
suspicion of serious or complex fraud. | :08:47. | :08:52. | |
High understand that Honour`ble members and the general public and | :08:53. | :08:59. | |
the government are keen to see the outcome of these investigathons | :09:00. | :09:03. | |
However it is vitally important drawing my remarks to a close that | :09:04. | :09:07. | |
investigating bodies are given time to examine, consider hand compiled a | :09:08. | :09:13. | |
significant body of evidencd, this is a very complex in quarry. The | :09:14. | :09:19. | |
number of in quarries and complexity of the documentation that is being | :09:20. | :09:25. | |
received. So I can assure the house, should the evidence supportdd in the | :09:26. | :09:30. | |
end, there will be enforcemdnt and action of a more tough nature taken. | :09:31. | :09:35. | |
That is all I propose to sax this afternoon but I look forward Madam | :09:36. | :09:38. | |
Deputy Speaker to hearing the rest the debate. Thank you very luch | :09:39. | :09:48. | |
Madam Deputy Speaker, I'm proud to be a member of a select comlittee | :09:49. | :09:54. | |
that has been part of a process a joint select committee procdss, that | :09:55. | :09:58. | |
has led to the reports that have brought us here today, I wotld | :09:59. | :10:02. | |
congratulate both of the ch`irs of those select committees for their | :10:03. | :10:06. | |
leadership of this process, for their excellent speeches and also | :10:07. | :10:12. | |
commend, the superb contribttions by colleagues, on the other side of the | :10:13. | :10:17. | |
house who has spoken today hn this debate. Ably assisted, by otr | :10:18. | :10:22. | |
excellent staff. I think thhs committee investigation has been | :10:23. | :10:26. | |
robust and a truly forensic`lly enquirer into this scandal `t BHS, | :10:27. | :10:34. | |
and, I think that it does ldave the reputation of this house good, to be | :10:35. | :10:39. | |
able to do this. Now I don't have a cynical bone in my body Mad`m Deputy | :10:40. | :10:45. | |
Speaker, but even I, and slhghtly taken aback by the fact that it has | :10:46. | :10:51. | |
been today's business, the debate on this committee, that has brought Sir | :10:52. | :10:56. | |
Philip Green into the public light again in the last week or two, and | :10:57. | :11:01. | |
most recently giving an indhcation that he is closer to making a | :11:02. | :11:08. | |
settlement to BHS pensioners. It does show, the business of this | :11:09. | :11:15. | |
house can have a direct imp`ct on the affairs that we are looking at. | :11:16. | :11:20. | |
When the Prime Minister, I don't always agree with the new Prime | :11:21. | :11:26. | |
Minister, what makes you angry, in a televised interview, she replied the | :11:27. | :11:30. | |
powerful abusing their position and she was absolutely right, as we | :11:31. | :11:35. | |
heard from contributors, it is something that should make ts all | :11:36. | :11:41. | |
angry. This story of British home stores is exactly that, it hs a tale | :11:42. | :11:44. | |
someone who crewed staggering wealth but then failed to meet thehr thing | :11:45. | :11:54. | |
with the company made them rich 20,000 pensioners face cuts to their | :11:55. | :11:58. | |
pensions, including many people in this room, in some case fachng the | :11:59. | :12:03. | |
cut in extreme up to three puarters of their pension and these `re | :12:04. | :12:06. | |
people who in some cases ard approaching pension age and on our | :12:07. | :12:11. | |
end the last years of their pension, are unable to take action in what is | :12:12. | :12:14. | |
a shortfall in their income and who still today do not know what money | :12:15. | :12:20. | |
they will be able to draw upon to live, to pay their mortgages, to pay | :12:21. | :12:25. | |
of their lives. That is absolutely of their lives. That is absolutely | :12:26. | :12:30. | |
shocking, people deserve security, in their retirement and when they | :12:31. | :12:34. | |
are let down, that is something that we should be very concerned about. | :12:35. | :12:39. | |
Indeed, as our report makes absolutely clear, this is something | :12:40. | :12:43. | |
that gets lost, that the pension contributions that a companx makes | :12:44. | :12:47. | |
are not try double donations, they are the means by which the dmployer | :12:48. | :12:52. | |
meet their obligations for the third page. It is that that has bden | :12:53. | :12:58. | |
breached. I know, that Sir Philip Green feels much aligned by the | :12:59. | :13:01. | |
investigation, he made that extremely clear when he was in front | :13:02. | :13:06. | |
of us but until and unless he provides proper redress for those | :13:07. | :13:09. | |
pensioners, he has absolutely no right to do so, we have heard from | :13:10. | :13:15. | |
many people today, the scald of the Richmond, the extent to which the | :13:16. | :13:19. | |
country was milked for dividends during a profitable years and nearly | :13:20. | :13:23. | |
part of the last decade and it is not for me, it has been well done by | :13:24. | :13:26. | |
others to talk about the wax in which the company assets were proved | :13:27. | :13:32. | |
to be less robust than were expected, and profits taken in the | :13:33. | :13:37. | |
good years, leaving the company more exposed to the tougher clim`te that | :13:38. | :13:42. | |
came afterwards. What concerns me Madam Deputy Speaker is what | :13:43. | :13:45. | |
happened after that, it's what happened to the pension schdme after | :13:46. | :13:49. | |
it moved out of the surplus that it was in, when the company was bought | :13:50. | :13:57. | |
in 2000 to a deficit of ?344 million, and by the time of the | :13:58. | :14:04. | |
collapse of VHS, ?571 million. What we know is that BHS, that Sophia | :14:05. | :14:12. | |
Green refused to make the elployee contributions necessary -- dmployer | :14:13. | :14:14. | |
contributions necessary to sustain it over that year, that is something | :14:15. | :14:21. | |
that caused concerns to the board of trustees, one said she told us about | :14:22. | :14:24. | |
the declining state of the scheme in the second part of the last decade | :14:25. | :14:28. | |
to seek assurances from the company about its long-term contribttions to | :14:29. | :14:32. | |
the scheme including pay and contributions, those assurances were | :14:33. | :14:35. | |
not given, there's contributions were not made. Green told otr | :14:36. | :14:43. | |
committee in the summer, th`t he had no involvement in those discussions | :14:44. | :14:47. | |
around the pension scheme bdfore 2012 and claimed to be unaw`re of | :14:48. | :14:52. | |
the problem and basically blamed the trustees. He suggested that the | :14:53. | :14:55. | |
trustees had made stupid and did your tick mistakes and were asleep | :14:56. | :14:59. | |
at the wheel of the pension scheme and indicated he would have been | :15:00. | :15:02. | |
willing to make much larger contributions had he only bden aware | :15:03. | :15:07. | |
of the growing deficit. I h`d to say Madam Deputy Speaker that otr | :15:08. | :15:10. | |
committee was deeply sceptical about those comments. And in the now | :15:11. | :15:17. | |
infamous evidence of the sulmer a surprise you Tube hit it was later | :15:18. | :15:22. | |
to become. We were asked to believe that someone who had the reputation | :15:23. | :15:26. | |
for the micromanagement of British home stores, that he knew nothing | :15:27. | :15:32. | |
whatsoever about the growing pension fund, and he became activelx | :15:33. | :15:34. | |
involved to do something about it and we have already heard that this | :15:35. | :15:41. | |
lead at one stage to a proposal for a 23 year recovery, an unprdcedented | :15:42. | :15:45. | |
23 year recovery programme that was based on a contribution that BHS | :15:46. | :15:48. | |
affected to make rather than one that was driven by the needs of the | :15:49. | :15:55. | |
trustees. Of course, we havd already heard, with the sale of BHS, with a | :15:56. | :16:04. | |
lack of due diligence, people have need no understanding whatsoever of | :16:05. | :16:07. | |
business to know that it was truly shocking. I'm very grateful on that | :16:08. | :16:15. | |
point of due Joe Dudgeon is, would she agree with me, the trustees it | :16:16. | :16:23. | |
was as though the blind werd leading the blind, it was extraordinary The | :16:24. | :16:32. | |
entire process, as we heard, involving a whole range of | :16:33. | :16:39. | |
participants, in the lead up to the sale, was truly stunning. In terms | :16:40. | :16:45. | |
of its lack of robust enquiries checks, and that should be ` lesson | :16:46. | :16:50. | |
that I hope will be learned by all of those agencies involved `nd by | :16:51. | :16:54. | |
government and business. Thdy are issues Madam Deputy Speaker of | :16:55. | :16:58. | |
judgment and personal responsibility as well as issues of law and all of | :16:59. | :17:03. | |
those were sorely missing, ht is little wonder that Simon Walker the | :17:04. | :17:08. | |
director-general of the of directors, normally known as an | :17:09. | :17:11. | |
assiduous defender of the free market said that the circumstances | :17:12. | :17:16. | |
of the collapse of PHS were a blight on the reputation of British | :17:17. | :17:20. | |
business. -- of BHS. British business has much to be protd of, we | :17:21. | :17:26. | |
have already heard that we want to have an environment in which | :17:27. | :17:29. | |
business flourishes, in which risks can be taken and sometimes there | :17:30. | :17:33. | |
will be failures, and indeed there have been in many cases pension | :17:34. | :17:38. | |
deficits and funds that go hnto deficit, BHS was not alone hn that, | :17:39. | :17:43. | |
but British businesses need to make sure, and be part of a procdss that | :17:44. | :17:49. | |
its reputation as a whole is not sullied by the shocking beh`viour, | :17:50. | :17:53. | |
the cavalier behaviour of some of the outliers in terms of implement | :17:54. | :18:01. | |
law or the handling of penshons In the last few years, and the | :18:02. | :18:06. | |
financial crash of 2008, we have seen shock waves of anger and | :18:07. | :18:10. | |
alienation, we have seen th`t across much of the developed world and | :18:11. | :18:14. | |
there is a sense that the g`me is rigged. It is a sense that the | :18:15. | :18:18. | |
wealthy and the powerful have their own rules, that they are not held to | :18:19. | :18:22. | |
account whether for incompetence or greed or sometimes even worse. The | :18:23. | :18:27. | |
crisis of 2008 highlighted ht, they brought it into highlight btt it | :18:28. | :18:39. | |
didn't begin or end there. There had to be consequences for this type of | :18:40. | :18:41. | |
behaviour. There have to be consequences for the sake of the | :18:42. | :18:43. | |
reputation of good business. There have | :18:44. | :18:47. | |
look at itself in the face. The consequences had to be proportionate | :18:48. | :18:52. | |
and achieved through due process and they must be there, some of them | :18:53. | :18:58. | |
have been set out excellently about the kinds of changes in the law | :18:59. | :19:02. | |
corporate governance, the process by which dividends are paid out. And so | :19:03. | :19:08. | |
forth, these are all measurds that this house must scrutinise `nd | :19:09. | :19:12. | |
consider bringing forward btt there must be individual accountability. | :19:13. | :19:16. | |
What I want to see more than anything, nor than further damage to | :19:17. | :19:20. | |
Sir Philip Green's reputation, the mediation, removal of his | :19:21. | :19:25. | |
knighthood, is the money. I want to see that the damage done to his | :19:26. | :19:29. | |
reputation in the select colmittee process and this debate tod`y, to | :19:30. | :19:33. | |
actually bring him finally to the table to do the right things so that | :19:34. | :19:37. | |
he can hold his head up high, so that the pensioners can get the deal | :19:38. | :19:41. | |
that they deserve and all of us are engaged in a process of scrttiny of | :19:42. | :19:46. | |
the sorry tale of BHS and whll know that the sorry tale has been | :19:47. | :19:53. | |
vindicated. Thank you Madam Deputy Speaker, as a member of the joint | :19:54. | :19:58. | |
committee that enquired into the collapse of BHS, it is a pldasure to | :19:59. | :20:03. | |
follow the honourable member for Westminster North, a fellow member | :20:04. | :20:07. | |
of the joint committee and `lso my honourable friend, the Minister and | :20:08. | :20:12. | |
member for Stourbridge, I would like to welcome her to her place, a | :20:13. | :20:18. | |
slightly different place, she was my whip. Before being elected to this | :20:19. | :20:22. | |
place, I worked in business and like my honourable friend for Bedford, I | :20:23. | :20:27. | |
am pro-business, pro-enterprise but not at any cost. I have been | :20:28. | :20:32. | |
appalled by the category of events that led to the demise of BHS and | :20:33. | :20:37. | |
also what we learned in the business innovations and skills select | :20:38. | :20:42. | |
committee, both are bad for business and I'm sorry to say very b`d for | :20:43. | :20:47. | |
the reputation of business. Picking up the point that the member for | :20:48. | :20:51. | |
Westminster North has made. Quite rightly reputable businesses have | :20:52. | :20:55. | |
also been appalled by both situations. The irresponsible | :20:56. | :20:59. | |
behaviours of a feud in danger the reputations of the majority who do | :21:00. | :21:04. | |
operate responsibly. That is why I fully support the Prime Minhster and | :21:05. | :21:07. | |
the government 's position that we need to make the economy work for | :21:08. | :21:12. | |
everyone. She has said on the steps of Downing Street, we are the part | :21:13. | :21:18. | |
of enterprise and that does not mean that we should be prepared to accept | :21:19. | :21:22. | |
that anything goes. This is not as I see it an attack on business, far | :21:23. | :21:26. | |
from it but a desire to protect the reputation of business. Aftdr all, | :21:27. | :21:32. | |
we do not want to see the bdhaviours of irresponsible businesses, of the | :21:33. | :21:35. | |
futile rushing the reputation of good business. -- of the few | :21:36. | :21:43. | |
tarnishing. We only need look at the result of the banking crisis, and | :21:44. | :21:48. | |
the tarnishing of the banks, to see the dangers of reputational damage | :21:49. | :21:56. | |
resulting in events such as these. I will happily give way. Refldcting on | :21:57. | :22:01. | |
the banking crisis and the remarks of the Minister, would the | :22:02. | :22:03. | |
honourable member agree with me that in the matter of the banking crisis | :22:04. | :22:08. | |
and particularly how are yot state deals with these issues, and the | :22:09. | :22:15. | |
continued RBS saga, in the global development group, how quickly and | :22:16. | :22:19. | |
how effectively, agencies ddal with these matters, is pivotal? The | :22:20. | :22:25. | |
honourable member makes an interesting point and I know, that | :22:26. | :22:29. | |
the honourable member has a lot of personal interest in looking at RBS | :22:30. | :22:34. | |
and the banking industry. I think from my perspective, the government | :22:35. | :22:38. | |
have been very quick in terls of responding to the collapse of BHS. | :22:39. | :22:50. | |
The devastating events resulting in the collapse of BHS raised several | :22:51. | :22:57. | |
questions as to whether -- whether the framework of corporate | :22:58. | :23:00. | |
governance is satisfactory particularly relating to prhvate | :23:01. | :23:05. | |
businesses. Those with largd workforces and also large pdnsion | :23:06. | :23:08. | |
liabilities that debate is `bout protecting our economy, protecting | :23:09. | :23:12. | |
the tax payer from picking tp the bill but also, most importantly our | :23:13. | :23:17. | |
responsibility to do everything we can to protect employees. The | :23:18. | :23:20. | |
consequences that have been discussed today in terms of the | :23:21. | :23:26. | |
collapse of BHS by many honourable and Right Honourable members has | :23:27. | :23:29. | |
looked at both the employees and also the members of the pension | :23:30. | :23:36. | |
scheme. I would like to focts my contribution on the employeds. The | :23:37. | :23:40. | |
11,000 people, Madam Deputy Speaker, lost their jobs as a result of the | :23:41. | :23:44. | |
collapse of BHS. For these people it was not just about losing their | :23:45. | :23:48. | |
jobs, it was the impact on their lives and that of their famhlies but | :23:49. | :23:52. | |
many of these people have mortgages to pay and are worried at whether | :23:53. | :23:56. | |
they can keep a roof over their heads and that of their famhlies. I | :23:57. | :24:02. | |
will give way. If I can just echo what she is saying. The member for | :24:03. | :24:12. | |
Harlow has said his store h`s been one of the most profitable stores | :24:13. | :24:18. | |
for BHS. This impact has bedn felt around the country, town after town | :24:19. | :24:25. | |
and store after the tour, h`sn't it? Thank you for your intervention | :24:26. | :24:29. | |
These stores are all across the country. I do not have one hn my | :24:30. | :24:34. | |
constituency but many honourable and right Honourable members do have | :24:35. | :24:37. | |
stores who were employing htndreds of people at each store. Thhs is not | :24:38. | :24:46. | |
just about employees, it is about their families and the numbdr of | :24:47. | :24:50. | |
people who have been affectdd by this is far more than the 10,00 | :24:51. | :24:57. | |
employees. As the honourabld member for Rutherglen and Hamilton West | :24:58. | :25:01. | |
mentioned, this has been devastating cost of this has been a horrid | :25:02. | :25:05. | |
period of time for these employees who now no longer have thesd jobs | :25:06. | :25:09. | |
and will be facing difficulties in terms of finding new employlent I | :25:10. | :25:14. | |
will happily give way. Thank you. I agree with the case. It is not just | :25:15. | :25:19. | |
the employees in the store directly employed by Companies Act, ht are | :25:20. | :25:23. | |
catering and cleaning and everyone in the supply chain who will also | :25:24. | :25:29. | |
adverse league affected. -- adversely affected. That is a very | :25:30. | :25:37. | |
important point. It is not just about employees, it is about | :25:38. | :25:40. | |
contractors and the wider stpply chain. The select committee enquiry, | :25:41. | :25:46. | |
Madam Deputy Speaker, has highlighted the events which led to | :25:47. | :25:52. | |
the collapse of BHS, suggesting a review of regulation and corporate | :25:53. | :25:56. | |
governance in particular in terms of large private businesses. It also | :25:57. | :25:59. | |
suggests the need to create a more level playing field between large | :26:00. | :26:03. | |
private companies have a cldar listed companies in terms of | :26:04. | :26:07. | |
transparency and codes of conduct. As the chairman of the select | :26:08. | :26:13. | |
committee has all dimensions, the honourable member for Hartldpool, we | :26:14. | :26:17. | |
will be conducting an inquiry looking at corporate govern`nce and | :26:18. | :26:20. | |
the roles and responsibilitx directors. It addresses isstes | :26:21. | :26:25. | |
highlighted in this particular enquiry. I am pleased to sed the | :26:26. | :26:29. | |
Government is committed to reforming corporate governance. It is clear | :26:30. | :26:34. | |
that we need to review this. The practices of large private | :26:35. | :26:38. | |
businesses, the role of dirdctors in their decision-making, and the | :26:39. | :26:42. | |
responsibilities of directors to consider how they protect the | :26:43. | :26:45. | |
interests of their employees and the members of their pension schemes. I | :26:46. | :26:51. | |
welcome the minister this afternoon and I hope the Government and | :26:52. | :26:57. | |
minister will consider the observations and recommendations | :26:58. | :27:01. | |
from the inquiry and the pohnts made by honourable and right Honourable | :27:02. | :27:07. | |
members this afternoon. To conclude, Madam Deputy Speaker, we have a | :27:08. | :27:12. | |
responsibility as policy and lawmakers, to learn lessons from the | :27:13. | :27:18. | |
collapse of BHS. I look forward to the Government publishing its | :27:19. | :27:26. | |
consultation this autumn. M`ny thanks, Madam Deputy Speaker. I | :27:27. | :27:29. | |
would like to thank the right honourable member for Birkenhead for | :27:30. | :27:32. | |
introducing this incredibly important debate to the House | :27:33. | :27:35. | |
Antipater evicted cross-party members involved in the comlittee | :27:36. | :27:41. | |
reports, including Mike honourable colleague and friend from Edinburgh | :27:42. | :27:46. | |
East, Edinburgh West, sorry. In July of this year, British home stores | :27:47. | :27:51. | |
closed in my constituency. The long-standing store was the third | :27:52. | :27:59. | |
largest retail unit in the Dast Kilbride shopping mall. Staff were | :28:00. | :28:02. | |
left with huge uncertainty `s to what would happen. The stord was | :28:03. | :28:08. | |
eventually closed but it was a very sad day. And for constituents. I | :28:09. | :28:13. | |
have frequented this store since childhood. Walking by the elpty unit | :28:14. | :28:18. | |
is still strange and stark reminder to our community of the unjtst is | :28:19. | :28:23. | |
that unfolded, the loss of jobs and loss of pensions. Whilst our local | :28:24. | :28:30. | |
staff oversaw the closure of our BHS, the former owner, Sir Philip | :28:31. | :28:34. | |
Green, reportedly continued his holiday in the Mediterranean on | :28:35. | :28:39. | |
board his ?100 million superyacht. I understand that Sir Philip Green | :28:40. | :28:45. | |
owned BHS for 15 years before selling it to Dominic Chappdl for ?1 | :28:46. | :28:51. | |
in 2015. He had rightly comd under fire for taking more than a massive | :28:52. | :28:56. | |
?400 billion in dividends from the department store chain and for | :28:57. | :29:00. | |
selling it to a man without retail experience in such a manner. Eight | :29:01. | :29:07. | |
damning report from the and business committee found British homd stores | :29:08. | :29:11. | |
were subject to systematic plunder by Philip Green and Dominic Chappel | :29:12. | :29:19. | |
in the unacceptable face of capitalism. People have lost their | :29:20. | :29:23. | |
jobs and pensions. Ordinary people are the losers. They gave their | :29:24. | :29:26. | |
service and good faith, both locally and to the company. Real qudstions | :29:27. | :29:34. | |
must be answered on multi-n`tural -- multinational corporate strtctures | :29:35. | :29:39. | |
and pensions regulation by this House. The UK governor needs to take | :29:40. | :29:45. | |
action and not allow such shtuations to occur in the future. We need to | :29:46. | :29:51. | |
tackle a series that are issues of asset stripping. It does not protect | :29:52. | :29:58. | |
working people. Those who h`ve done the right thing who have contributed | :29:59. | :30:03. | |
to pensions, contributed to society, only to have been taken adv`ntage of | :30:04. | :30:08. | |
and failed. SNP MPs will be working to strengthen the powers of the | :30:09. | :30:12. | |
regulator, to ensure that pdople like Philip Green are dealt with | :30:13. | :30:16. | |
effectively when they seek to avoid pension responsibilities. There is | :30:17. | :30:20. | |
also a real need to address inequality, to work with businesses | :30:21. | :30:26. | |
and industry, to provide appropriate regulation. Many of my affected | :30:27. | :30:31. | |
constituents have contacted me to ask that Sir Philip Green bd | :30:32. | :30:34. | |
stripped of his knighthood, that he is keeping the title adds s`lt to | :30:35. | :30:39. | |
their wings and the injustice of this situation. -- wound is. We also | :30:40. | :30:51. | |
need to address the very re`l issues that exists, of all the people like | :30:52. | :30:57. | |
Philip Green in this world being able to treat workers in thhs | :30:58. | :31:02. | |
manner, and they need to be made an example. I would agree that | :31:03. | :31:07. | |
workplace regulation needs to be addressed. It is a further latter to | :31:08. | :31:11. | |
be addressed in terms of his knighthood. When his actions | :31:12. | :31:16. | |
honourable? Both I and my constituents say, no. I would | :31:17. | :31:20. | |
conclude by suggesting the Companies Act supports the moment and take | :31:21. | :31:23. | |
appropriate action. Demonstrate to the constituents who have bden so | :31:24. | :31:31. | |
badly affected. We heed and hear their voices and we fully stpport | :31:32. | :31:38. | |
them at this devastating tile. Michelle Thompson. Thank yot. | :31:39. | :31:44. | |
Following on in this very ilportant debate, I would also like to add my | :31:45. | :31:49. | |
voice to thank both the chahrs of the combined select committdes and | :31:50. | :31:53. | |
point out any suggestion th`t the combined select committee rdport was | :31:54. | :31:59. | |
not a robust, details, eviddnce led enquiry which can be rebuttdd, it | :32:00. | :32:03. | |
ran for months and had many sessions. A session alone whth | :32:04. | :32:08. | |
Philip Green lasted for six hours. I support the view that from hts | :32:09. | :32:13. | |
initial purchase, Sir Philip saw the- for cash as the primarx | :32:14. | :32:18. | |
purpose. In nearly days, thdre was limited evidence of a successful | :32:19. | :32:21. | |
retailer improving turnover and market share. Other members will | :32:22. | :32:26. | |
continue to highlight the v`rious ways the money was redeploydd to the | :32:27. | :32:33. | |
Green family, often away from the clutches of the taxman. I h`ve no | :32:34. | :32:38. | |
doubt they were all entirelx legal but were they in the? We have heard | :32:39. | :32:44. | |
much today already about thd nature of corporate governance. Our report | :32:45. | :32:51. | |
described it as a variety of things. We have also heard referencd to the | :32:52. | :32:57. | |
UK corporate governance codd. What struck me was one of the kex roles | :32:58. | :33:01. | |
for the board involves establishing culture, roles, values and dthics of | :33:02. | :33:08. | |
the company. I thank the honourable member and I would like to praise | :33:09. | :33:12. | |
her and members of both comlittees. I have pleasure to sit in and listen | :33:13. | :33:16. | |
to quite a lot of the interrogation and I thought it was first class. | :33:17. | :33:22. | |
Despite the problems we havd heard of corporate architecture rdgulation | :33:23. | :33:25. | |
and the like, with the honotrable member agree with me that Adam Smith | :33:26. | :33:30. | |
was right when he said like you cannot divorce business practice | :33:31. | :33:35. | |
from human behaviour? The problem here is we have had human bdhaviour | :33:36. | :33:43. | |
of Philip Green back is unddrmining corporate governance and undermined | :33:44. | :33:48. | |
any positive culture. I thank my honourable friend for that | :33:49. | :33:52. | |
intervention. The code in that very same sentence goes on to sax that | :33:53. | :33:57. | |
directors should lead by ex`mple and ensure good standards of behaviour | :33:58. | :34:01. | |
permeate throughout all the levels in an organisation. We know | :34:02. | :34:08. | |
correctly that only companids with a listing of equity shares it does not | :34:09. | :34:14. | |
absolve a private owner frol any responsibility. Opportunitids were | :34:15. | :34:20. | |
missed time and again to it -- to address the pensions deficit. Sir | :34:21. | :34:27. | |
Philip had accountability for addressing the deficit and could | :34:28. | :34:32. | |
have chosen to so do on a ntmber of occasions as other schemes lanaged | :34:33. | :34:38. | |
to do. The QC report cites lany examples of the legal rights the | :34:39. | :34:43. | |
Green family has as a majorhty shareholder but very little of the | :34:44. | :34:46. | |
responsibility it brings will pensioners and employees. I am | :34:47. | :34:50. | |
sorry, Sir Philip, you cannot have it all your own way. It was a lack | :34:51. | :34:55. | |
of judgment that allowed thd pension situation to continue and it was a | :34:56. | :35:00. | |
lack of judgment that progrdssed the sale to a unsuitable third-party. | :35:01. | :35:05. | |
The nonexecutive chairman is at pains to point out the code does not | :35:06. | :35:09. | |
apply to private companies `nd the QC report notes the chair of the | :35:10. | :35:13. | |
board has nearly the same dtties as the other directors. Legallx this is | :35:14. | :35:18. | |
true. Might I then enquire `s to what exactly their remuneration of | :35:19. | :35:25. | |
?125,000 as chair of the bo`rd exactly was for? I support the | :35:26. | :35:31. | |
suggestion of the governing body who have suggested reforming thd code | :35:32. | :35:34. | |
and we have heard a number of calls into that today. In terms of general | :35:35. | :35:40. | |
culture of organisations, it is or was a key risk of any organhsation | :35:41. | :35:44. | |
where you have a level of power concentrated in just if you key | :35:45. | :35:50. | |
individuals. Where there is weak leadership that chooses to surround | :35:51. | :35:53. | |
itself with people who are reluctant to disagree for falling out of | :35:54. | :36:00. | |
favour with the organisation. It is common knowledge but remains | :36:01. | :36:04. | |
unchallenged. We all have a duty to speak out in these cases. Bx | :36:05. | :36:08. | |
remaining silent, we become complicit in the contract of the | :36:09. | :36:14. | |
bully and the bullied. In the case of BHS, the final decision was made | :36:15. | :36:18. | |
without the nonexecutive ch`ir asking about the credentials of | :36:19. | :36:21. | |
purchasing the company and why it was believed to be the best outcome | :36:22. | :36:29. | |
for employees and pensioners. Incredibly they were not invited to | :36:30. | :36:33. | |
the ratification meeting. Only one nonexecutive director was present, | :36:34. | :36:38. | |
the son-in-law of Sir Philip Green, whose stated brief was to rdpresent | :36:39. | :36:43. | |
the interests of Lady Green. I challenge board members to name the | :36:44. | :36:50. | |
time, any time, where this has happened. The response was looted | :36:51. | :36:53. | |
that you could literally cotnt the seconds ticking by one by one, as | :36:54. | :36:58. | |
each respondent looked for `n example. Our report notes absolute | :36:59. | :37:03. | |
power in business, as in politics, is a dangerous thing. It was | :37:04. | :37:08. | |
certainly absolute power th`t enabled Sir Philip and the Green | :37:09. | :37:14. | |
family to run BHF a personal fiefdom. To bully weak senior | :37:15. | :37:20. | |
managers and this contributdd to the ultimate failure of BHS and the | :37:21. | :37:25. | |
ultimate failure in its dutx of care to pensioners and employers. Just to | :37:26. | :37:30. | |
finish off a little note on the amendment, this UK legislattre is | :37:31. | :37:36. | |
already struggling to demonstrate relevance to many people. It must be | :37:37. | :37:40. | |
able to give voice to peopld in important issues of the day. The | :37:41. | :37:46. | |
saga of BHS has been played out in the media. The loads of mondy | :37:47. | :37:55. | |
parties, the knighthoods, the rocket -- the record-breaking dividends and | :37:56. | :37:59. | |
the sale. People have asked, how can this be questioned how can the owner | :38:00. | :38:03. | |
of a company act with such hmpunity in a matter of 11,000 jobs `nd | :38:04. | :38:10. | |
20,000 pensions? Insight is a wonderful thing. Who amongst us does | :38:11. | :38:14. | |
not recognise circumstances with which we would do things | :38:15. | :38:18. | |
differently? I'm sure Sir Philip Green regrets the circumstances We | :38:19. | :38:22. | |
are talking about a night of the row and surely, it surely, this position | :38:23. | :38:27. | |
must justify a higher bar of ethical behaviour. | :38:28. | :38:34. | |
I'm very grateful to my honourable friend for giving way, she's making | :38:35. | :38:42. | |
a powerful speech. As she rdceived letters from constituents, who are | :38:43. | :38:45. | |
very concerned about Sir Phhlip Green being held up as an example. | :38:46. | :38:51. | |
"Someone In business who takes pride in our staff and customers, it is | :38:52. | :38:55. | |
hard to understand house of Philip would be retaining his knighthood, | :38:56. | :39:02. | |
surely we should not be makhng that aspirational for the public". I too | :39:03. | :39:08. | |
agree, many of us have recehved hundreds of letters from our | :39:09. | :39:12. | |
constituents. I was going to make the point that it is on that, that | :39:13. | :39:18. | |
the whole argument turns for me The corporate governance code is not | :39:19. | :39:21. | |
there to produce a loose set of rules that companies are invited to | :39:22. | :39:26. | |
maybe think about now and again they are fundamentally framdwork for | :39:27. | :39:30. | |
behaviour in business. Business is not just about the bottom lhne, it | :39:31. | :39:34. | |
is about providing jobs, sustaining communities and the best businesses | :39:35. | :39:41. | |
are based in partnership. Now Sir Philip Green you for many ydars | :39:42. | :39:47. | |
that BHS was in trouble, his action and inaction directly lead to 1 ,000 | :39:48. | :39:53. | |
jobs and affects the lives of 2 ,000 pensioners. He seems to belheve that | :39:54. | :39:58. | |
being a private company neg`ted any cant ability or responsibilhty for | :39:59. | :40:02. | |
the lives of people who depdndent on him and ironically made his success. | :40:03. | :40:12. | |
Thank you Deputy Speaker, it is an honour to be seeing you back in the | :40:13. | :40:18. | |
chair and I will wait be as loud as I was last time. Like many | :40:19. | :40:24. | |
colleagues in the chamber, H speak on behalf of a number of | :40:25. | :40:27. | |
constituents who have been profoundly affected by coll`pse of | :40:28. | :40:33. | |
BHS, through the loss of employment. Before I proceed, I would lhke to | :40:34. | :40:37. | |
put on the record my thanks both select committees. Particul`rly the | :40:38. | :40:41. | |
honourable member for Birkenhead who has had to undertake and public | :40:42. | :40:49. | |
vitriol from somebody who does not deserve a knighthood. And I thank | :40:50. | :40:54. | |
you, for your work on the sdlect committee. My constituency was home | :40:55. | :41:02. | |
to a BHS, on Clydebank for nearly 40 years and the day that it closed for | :41:03. | :41:06. | |
good, was at the end of the year, it was sad for the committee and those | :41:07. | :41:10. | |
who had given loyal service to a company that did not value them | :41:11. | :41:14. | |
back. The collapse of BHS bdcame public and the announcement was made | :41:15. | :41:19. | |
that stores including the one in Clydebank, in closing, I visited the | :41:20. | :41:23. | |
store to offer my support, `nd to hear concerns for the futurd. This | :41:24. | :41:27. | |
as I'm sure many members recognise is never a pleasant experience and | :41:28. | :41:31. | |
there was a genuine concern about what lay ahead in the futurd. It was | :41:32. | :41:36. | |
at this time that the true picture began to emerge over the handling of | :41:37. | :41:41. | |
the BHS pension fund and thd assistance of a massive defhcit of | :41:42. | :41:44. | |
nearly 500 million which has been talked about at some length. In | :41:45. | :41:48. | |
speaking to the staff who h`d contributed to the pension scheme | :41:49. | :41:50. | |
and had just found out that they were about to lose their job, the | :41:51. | :41:56. | |
bills on time shock, that the situation had been allowed to occur | :41:57. | :42:00. | |
was undeniable. This situathon has filled me personally with anger over | :42:01. | :42:04. | |
the injustice that has been represented, for those who believed | :42:05. | :42:08. | |
they had a secure future in old age and not only to have it announced | :42:09. | :42:13. | |
that they may lose up to 10$ of their pensions when reaching | :42:14. | :42:16. | |
pensionable age although I `m heartened to hear that therd may be | :42:17. | :42:21. | |
some resolution to the mattdr. I hope it comes quickly. Nevertheless | :42:22. | :42:24. | |
it is completely unacceptable and a downright disgrace that thex | :42:25. | :42:30. | |
critically, profoundly, had majority are women, have found themsdlves in | :42:31. | :42:34. | |
this pension predicament, I would go so far as to say that this hs | :42:35. | :42:38. | |
nothing short of criminal. That being said, the professional and | :42:39. | :42:43. | |
dignified manner in which the staff has behaved is something th`t is in | :42:44. | :42:46. | |
striking contrast to Mr Gredn, and his dodgy cohort of people hncluding | :42:47. | :42:53. | |
the trustees, who are culpable in this tobacco. They should bd ashamed | :42:54. | :42:57. | |
of themselves for the manner in which they have behaved but sadly | :42:58. | :43:00. | |
they are too busy quaffing champagne and sailing in a yacht and visiting | :43:01. | :43:06. | |
Monaco to care about what they have created. I would like to crdate this | :43:07. | :43:12. | |
opportunity, to praise the store management and local operathons as | :43:13. | :43:16. | |
well as the local authority, the Department for Work and Pensions and | :43:17. | :43:20. | |
the Scottish Government agencies. Such as Scottish enterprise who | :43:21. | :43:24. | |
worked in concert to assist the staff who found themselves seeking | :43:25. | :43:27. | |
alternative employment. I w`s informed recently that everx member | :43:28. | :43:33. | |
of staff who sought alternative employment, was successful hn their | :43:34. | :43:38. | |
applications, which was a great relief to myself, and I'm stre it | :43:39. | :43:42. | |
helps myself and the staff sleep a bit better. This is an example of | :43:43. | :43:46. | |
all levels of government coling together and using whatever levers | :43:47. | :43:50. | |
they have at their disposal to counter had first situation that | :43:51. | :43:55. | |
communities face. Whilst I'l full of praise for those organisations that | :43:56. | :44:01. | |
help deal with the aftermath of BHS and its impact, serious questions | :44:02. | :44:05. | |
must be asked as to why the situation was even allowed to unfold | :44:06. | :44:14. | |
in the first place. I bank lile rubble friend, it encapsulates the | :44:15. | :44:17. | |
human element associated with people working with BHS, I too had a BHS | :44:18. | :44:23. | |
store in my constituency, I have got staff members that lost thehr jobs | :44:24. | :44:28. | |
and had their pension affected, there is one other aspect to this, | :44:29. | :44:34. | |
as well for me and that is the building element, because that is | :44:35. | :44:37. | |
another building on the high street of Kilmarnock that now has ` to let | :44:38. | :44:46. | |
sign. It affects footfall and businesses. That is a consepuence. I | :44:47. | :44:52. | |
certainly couldn't disagree with my honourable friend, it will be | :44:53. | :44:55. | |
affecting constituency is the length and breadth of the UK. I wotld like | :44:56. | :45:00. | |
to also commends the recent joint report of the Business, Innovation | :45:01. | :45:04. | |
and Skills, which will be pdnsion protection fund is an pension | :45:05. | :45:08. | |
regulation and the sale and acquisition of BHS. The report | :45:09. | :45:11. | |
should make very uncomfortable reading for those involved hn the | :45:12. | :45:16. | |
governance of the company, @jax he watched the committees, and listened | :45:17. | :45:21. | |
to them from the public gallery It must be acted upon by the government | :45:22. | :45:24. | |
and I ask the Minister to state that it is a matter of urgency. The | :45:25. | :45:29. | |
government must now show re`l leadership in tackling the problem. | :45:30. | :45:33. | |
The less if their policies of the UK Government must be consigned to the | :45:34. | :45:37. | |
19th century where they belong along with Philip Green's knighthood. | :45:38. | :45:42. | |
While they are no longer acceptable, action must be taken now all we are | :45:43. | :45:46. | |
in danger of more companies going the same way of British homd stores. | :45:47. | :45:52. | |
That would have serious and profound consequences for the economx. Which | :45:53. | :45:56. | |
due to the ongoing uncertainty Brexit is already under serhous | :45:57. | :45:59. | |
pressure and struggling to cope Without action, the Philip Green 's | :46:00. | :46:04. | |
of this world continue to undermine public confidence in | :46:05. | :46:26. | |
private business and have a serious impact on private enterprisd. As | :46:27. | :46:29. | |
Simon Walker the director of the Institute of directors has said the | :46:30. | :46:31. | |
institutions of corporate Britain have not recovered from the | :46:32. | :46:33. | |
financial crisis and there `re important questions that nedd to be | :46:34. | :46:35. | |
addressed including transparency, executive pay and board divdrsity. | :46:36. | :46:37. | |
We cannot allow business to mess about with people's's futurd income | :46:38. | :46:40. | |
and the government must up hts game in terms of pension regulathon and | :46:41. | :46:42. | |
indeed on pensions altogethdr but that is another debate entirely I | :46:43. | :46:44. | |
very much welcome the announcement of the DWP committee of that further | :46:45. | :46:47. | |
in Quarry which will look at the adequacy of the pension regtlators | :46:48. | :46:49. | |
power in dealing with issues, and how best it can be prevented from | :46:50. | :46:52. | |
happening in the future -- further Inquiry. I fully support, that no | :46:53. | :47:02. | |
one is able to avoid pension responsibilities and I know that our | :47:03. | :47:05. | |
SNP colleagues will be workhng hard to make this a reality. I therefore | :47:06. | :47:11. | |
await the report of the DWP committee in great interest and I | :47:12. | :47:15. | |
hope that it concludes that the regulator must be in a strong | :47:16. | :47:18. | |
position to protect employeds from rogue bosses. I turned to the | :47:19. | :47:24. | |
amendment that has been sublitted about the Honours forfeiturd | :47:25. | :47:27. | |
committee, central to my contribution has been to thd welfare | :47:28. | :47:31. | |
of those who had been at first effected by the actions of Lr Green | :47:32. | :47:35. | |
has the government must comd to grips with unscrupulous bushness | :47:36. | :47:40. | |
people, to insure that this does not occur again. I well underst`nd the | :47:41. | :47:44. | |
frustrations and anger affected towards Philip Green and I have | :47:45. | :47:49. | |
already made it known, and ht is right, that we should now sdek to | :47:50. | :47:53. | |
inform those with authority to do so to strip him with his honour. It | :47:54. | :47:57. | |
should come as no surprise, that I'm no fan of an honour system given my | :47:58. | :48:01. | |
participation in the house of Ulster bait last night. Finally, the | :48:02. | :48:08. | |
British BHS workforce, we owe it to them, and to hold Philip Grden to | :48:09. | :48:11. | |
his promise of resolving thd deficit in the BHS fund. And I make a | :48:12. | :48:18. | |
personal commitment to my constituents that I will not stop | :48:19. | :48:20. | |
fighting for them and told that has been resolved and they have received | :48:21. | :48:28. | |
what they fully deserved. Thank you very much Madam Deputy Speaker, | :48:29. | :48:32. | |
having listened to the colldagues, two principles come to mind, which I | :48:33. | :48:36. | |
think at to the core of what we are debating here today. What wd have | :48:37. | :48:40. | |
seen from Sir Philip Green `nd the collapse of BHS is the lack of | :48:41. | :48:43. | |
responsibility and moreover a lack of respect. I want to commend both | :48:44. | :48:49. | |
of those committees, its melbers and the committee staff on what is a | :48:50. | :48:53. | |
copper hinted, factual and damning report of the fiasco of the collapse | :48:54. | :49:01. | |
of BHS. He mismanaged the btsiness to the point that it could only be | :49:02. | :49:07. | |
sold for ?1. Then he abandoned all responsibility for their pensions | :49:08. | :49:11. | |
and failed company that fell apart under his jurisdiction. The | :49:12. | :49:14. | |
committee 's report makes for grim reading, particularly when ht states | :49:15. | :49:18. | |
that the total dividend is paid by BHS Limited were 440 million, in | :49:19. | :49:26. | |
2002-2004 period, almost dotble the after-tax profits of 208 million. | :49:27. | :49:32. | |
BHS group paid dividends of 423 million, in this period. We were | :49:33. | :49:38. | |
told that the Green family received ?307 million office money. This | :49:39. | :49:42. | |
effectively removed value from the company, including its useftl | :49:43. | :49:45. | |
purpose such as investment or pension contributions. Mr Ddputy | :49:46. | :49:51. | |
Speaker it is our constituents that they're the grant of this | :49:52. | :49:54. | |
recklessness and greed, a constituent of mine reached out just | :49:55. | :49:59. | |
yesterday to share how BHS's collapse has impacted her lhfe. | :50:00. | :50:04. | |
Having worked for BHS for 17 years, she remained there until it | :50:05. | :50:08. | |
collapsed completely. She rdferred to herself as a very loyal lember of | :50:09. | :50:14. | |
staff who stayed to the verx end. My constituent was not better Lr Deputy | :50:15. | :50:18. | |
Speaker, instead she was disappointed and concerned for her | :50:19. | :50:22. | |
colleagues many of whom havd been unable to find new jobs. Another | :50:23. | :50:26. | |
constituent of mine, Laurence Robertson contacted me to s`y that | :50:27. | :50:30. | |
he feels very strongly on the issue of greed at the expense of the | :50:31. | :50:34. | |
average person. Another constituent reached out to express how he and | :50:35. | :50:38. | |
his family had always love shopping at BHS and he had been disgtsted on | :50:39. | :50:43. | |
discovering what he called Sir Philip's absolute greed and complete | :50:44. | :50:46. | |
lack of compassion. Many of them have asked that Mr Green be stripped | :50:47. | :50:51. | |
of his knighthood. Which sedms only fair given that many have bden | :50:52. | :50:54. | |
stripped of their jobs and pensions under his leadership. I am very | :50:55. | :51:05. | |
grateful to my honourable friend, BHS was a very popular stord, at | :51:06. | :51:10. | |
Edinburgh, I'm ever going to the food hall with my mother whhch was | :51:11. | :51:14. | |
quite a long time ago. Does my honourable friend | :51:15. | :51:18. | |
agree with me, that we owe ht to the staff to make sure that what has | :51:19. | :51:25. | |
occurred is sanctioned, and also to make sure that what has occtrred | :51:26. | :51:30. | |
cannot be allowed to happen again? As ever, my honourable friend is | :51:31. | :51:35. | |
absolutely spot on, what I would say Mr Deputy Speaker is that a | :51:36. | :51:40. | |
knighthood for thousands of pensions does not seem unreasonable because | :51:41. | :51:45. | |
the 32 BHS stores, closed in Scotland across Livingston, | :51:46. | :51:48. | |
Hamilton, Concordia, Leith `nd many other areas amounted to over 70 | :51:49. | :51:53. | |
employees in losing their jobs. Their livelihoods and a place of | :51:54. | :51:57. | |
work that many like my constituent, gave a huge chunk of their working | :51:58. | :52:01. | |
career too. When employees lose their jobs and their pensions, the | :52:02. | :52:05. | |
families are hit by that loss, Sophia Panda stood the idea of | :52:06. | :52:11. | |
providing financially, he understood it very well. In fact the entire | :52:12. | :52:16. | |
Green family hugely benefitdd from BHS, reports say that in total the | :52:17. | :52:21. | |
Green family made around ?2.7 billion out of BHS. And his other | :52:22. | :52:29. | |
company. Mr Green paid financial money to his wife, and BHS people | :52:30. | :52:35. | |
want to provide for their f`milies but Mr Green is clearly blind to | :52:36. | :52:40. | |
this parallel. Indeed Sir Philip has the done well out of BHS and other | :52:41. | :52:44. | |
investments, he has got a helicopter, a jet and three yachts. | :52:45. | :52:48. | |
Mr Speaker I have got nothing against some on spending thdir hard | :52:49. | :52:53. | |
and money as they please but it isn't, shouldn't be at the cost of | :52:54. | :52:55. | |
our constituents pension pots. Mr Deputy Speaker, the formdr | :52:56. | :53:13. | |
employees will not have a pdnsion to retire on. Philip Green's and is and | :53:14. | :53:22. | |
the actions of Dominic Chappel and BHS directors fly in the face of | :53:23. | :53:28. | |
good business practice. This reflects the dire need to encourage | :53:29. | :53:33. | |
fear and inclusive business practices across the UK. Thhs debate | :53:34. | :53:37. | |
is not just about placing blame on sir Philip Green, it is abott doing | :53:38. | :53:42. | |
what is right for BHS emploxees and future employees, cheated ott of | :53:43. | :53:49. | |
their jobs and pensions. Thdre are fewer business models in pl`ce to | :53:50. | :53:51. | |
ensure such a collapse will never occur again. A further enquhry is a | :53:52. | :54:02. | |
constructive start to the mhssion. My SNP colleagues and myself have | :54:03. | :54:06. | |
called for the establishment of an Independent pensions commission so | :54:07. | :54:10. | |
we can create the architecttre that people like Philip Green can no | :54:11. | :54:14. | |
longer run away with people's hard earned money. Now that workdrs' | :54:15. | :54:19. | |
rights will no longer be gu`ranteed and transferred to UK workers, it is | :54:20. | :54:23. | |
more important than ever to ensure us constituents are treated fairly. | :54:24. | :54:28. | |
As we embark on Brexit negotiations, there may be no running comlentary | :54:29. | :54:35. | |
but you can be sure that ard running concerns. Employees will relain in a | :54:36. | :54:41. | |
state of the -- uncertainty. It includes those put out of a job and | :54:42. | :54:46. | |
pension by BHS. The Prime Mhnister said she would guarantee workers' | :54:47. | :54:55. | |
rights would be upheld. We require rights to be guaranteed far beyond | :54:56. | :55:02. | |
her term or any term of this government. She is making an | :55:03. | :55:06. | |
excellent case. I am pleased to hear the point she is making. Do you | :55:07. | :55:12. | |
think it would enhanced -- dnhance workers' rights to be on a company's | :55:13. | :55:19. | |
board? I know that is something the Prime Minister has mooted. H hope | :55:20. | :55:25. | |
she gets the support of her party. Returning to serve Philip, `s he is | :55:26. | :55:29. | |
for the time being, he has responded to criticism waged against him by | :55:30. | :55:35. | |
saying England is a place where you get lots of jealous, envious, | :55:36. | :55:41. | |
negative people. What the shoddy and shameful way to describe anxone | :55:42. | :55:44. | |
particularly people who are customers and consumers? Wh`t I | :55:45. | :55:50. | |
would say today, and I hope Philip Green is listening, M honourable | :55:51. | :55:54. | |
friend here today from Engl`nd, Scotland and anywhere in thd UK are | :55:55. | :56:01. | |
not jealous and envious of his gross mismanagement of BHS. I think I am | :56:02. | :56:06. | |
right in saying we do indeed feel negative. Negative about how hard Mr | :56:07. | :56:12. | |
Green's former employees, otr constituents, will be hit bx that | :56:13. | :56:15. | |
mismanagement and his daily to make amends. Mr Deputy Speaker, ht comes | :56:16. | :56:21. | |
back to responsibility and respect. Serve Philip did not respect hard | :56:22. | :56:27. | |
work, loyalty and hard work of his employees, my constituents of | :56:28. | :56:29. | |
Livingston and constituents across this chamber. Just as the company is | :56:30. | :56:34. | |
responsible for employees, Parliament is responsible for | :56:35. | :56:42. | |
citizens. It is about responsible business practices and responsible | :56:43. | :56:44. | |
regulatory practices. It is about holding businesses and individuals | :56:45. | :56:46. | |
to account by any means possible and sending a strong message th`t we | :56:47. | :56:51. | |
will not accept such shoddy practices for our people. So, strip | :56:52. | :56:55. | |
vote Green of his knighthood, take him to task and maybe get hhm to | :56:56. | :57:02. | |
sell a few of his superb yachts so people can get pensions and | :57:03. | :57:05. | |
retirement they worked so h`rd for. You must have proper, strong, | :57:06. | :57:09. | |
regulatory framework Fenners dereliction of duty can nevdr happen | :57:10. | :57:16. | |
again. -- so this dereliction of duty. It is a pleasure to follow so | :57:17. | :57:21. | |
many great speakers today. H would like to thank the Honourabld member | :57:22. | :57:25. | |
for Birkenhead for his work and chairmanship of the Work and | :57:26. | :57:28. | |
Pensions Committee in producing this joint report alongside the | :57:29. | :57:32. | |
Honourable member for Hartldpool and his chairmanship of the bushness, | :57:33. | :57:36. | |
energy and industrial stratdgy committee. I wish to also thank the | :57:37. | :57:40. | |
Honourable members who have contributed and served under their | :57:41. | :57:44. | |
leadership on both select committees to help conduct of this | :57:45. | :57:48. | |
investigation of the handling and failing governance of the HS. It was | :57:49. | :57:53. | |
my privilege to be on the ptblic benches when Sir Philip Gredn was | :57:54. | :57:57. | |
called to appear before the select committee. It was an educathon for | :57:58. | :58:02. | |
me to witness at first hand he is dismissive and belligerent `ttitude. | :58:03. | :58:08. | |
Variously referring to my honourable friend at the member for Westminster | :58:09. | :58:13. | |
North, as your lady. And qudsting the Honourable member for Bddford | :58:14. | :58:19. | |
should stop staring at him. -- as a young lady. The title, sir, is the | :58:20. | :58:27. | |
sowed Dash and bestowed of those worthy of the honour. With ht comes | :58:28. | :58:31. | |
the expectation of a person who conducts himself with respect and | :58:32. | :58:35. | |
dignity which was sadly absdnt from the performance of Sir Philhp that | :58:36. | :58:40. | |
day. I would specifically lhke to concentrate on the aspect of the BHS | :58:41. | :58:45. | |
pension fund, rather than the potential stripping away of Sir | :58:46. | :58:49. | |
Philip Green's I heard. If he does indeed lose his honorary title, I | :58:50. | :58:54. | |
guess we will have two except it was an honest mistake to bestow that | :58:55. | :59:02. | |
title upon him. Unfortunately, some honest mistakes, such as unloading | :59:03. | :59:04. | |
BHS onto a serial bankrupt `re bigger than others. However, should | :59:05. | :59:09. | |
serve Philip be stripped of his knighthood, I would like to suggest | :59:10. | :59:14. | |
as a symbolic gesture it is given to one of Sir Philip's redundant | :59:15. | :59:23. | |
employees. The demise of BHS has been chronicled in a series of very | :59:24. | :59:30. | |
sad, funny, touching and eloquent articles via the pages of the | :59:31. | :59:35. | |
Guardian. He is still looking for work and, as he himself writes, if | :59:36. | :59:38. | |
anyone happens to know of any good jobs going that might suit ` deeply | :59:39. | :59:47. | |
cynical 43 Robert Huth key skills include folding towels and writing | :59:48. | :59:53. | |
slightly bleak yet comical portraits of ramshackle department stores do | :59:54. | :59:57. | |
please get in touch. He livds in Kent were just in case any | :59:58. | :00:00. | |
Honourable member has a job he might be interested in offering hhm. Going | :00:01. | :00:07. | |
back to the issue of pensions, I am pleased to hear that talks `nd | :00:08. | :00:12. | |
negotiations have begun to find a solution to the pensions problems of | :00:13. | :00:17. | |
those who worked at the HS. I do raise concerns as to the spded and | :00:18. | :00:22. | |
commitment of this process. Serve Philip has made a vow to rescue the | :00:23. | :00:27. | |
pension scheme but, unfortunately, according to the pensions rdgulator, | :00:28. | :00:32. | |
they have yet to receive a credible offer to implement the deal. The | :00:33. | :00:36. | |
Pensions Minister yesterday said neither he nor the Government had | :00:37. | :00:49. | |
received a written offer. This means leaving 20,000 pensioners, who are | :00:50. | :00:50. | |
still uncertain about that investment and future, and how | :00:51. | :00:53. | |
indeed they will survive thdir retirement. The joint select | :00:54. | :00:57. | |
committee report stated, Sir Philip Green systematically extracted | :00:58. | :01:01. | |
hundreds of millions of pounds from BHS, paying very little tax and | :01:02. | :01:07. | |
fantastically enriching himself and his family, leaving the company and | :01:08. | :01:12. | |
its pension fund weakened to the point of the inevitable collapse of | :01:13. | :01:20. | |
both. This is quite clearly unethical, immoral, and in breach of | :01:21. | :01:28. | |
Article 172 of the 2006 companies act. That says the director of a | :01:29. | :01:32. | |
company must act in the way he considers in good faith would be | :01:33. | :01:36. | |
most likely to promote the success of the company for the benefit of | :01:37. | :01:41. | |
its members as a whole. In doing so, have regard to the likely | :01:42. | :01:45. | |
consequences of any decision in the long term and the interests of the | :01:46. | :01:52. | |
company's employees. I think there is cross-party agreement in this | :01:53. | :01:57. | |
House that he felt to meet `ny of these requirements on any ldvel We | :01:58. | :02:03. | |
hear, in this House, have an obligation that the regulatory body | :02:04. | :02:06. | |
ensures this section of leghslation is implemented and for the law to be | :02:07. | :02:13. | |
carried out. It is imperative that a deal can be done. And that serve | :02:14. | :02:18. | |
Philip makes a credible offdr and as soon as possible. He is on the | :02:19. | :02:23. | |
record as saying that he did everything possible to stop BHS from | :02:24. | :02:28. | |
going under. He should now be doing everything possible to protdct those | :02:29. | :02:34. | |
families from the hardship that his mismanagement has potentially left | :02:35. | :02:39. | |
them in. He left BHS, as we have heard, with a ?571 million pension | :02:40. | :02:46. | |
deficit, after taking it ovdr in surplus. Taking ?400 million in | :02:47. | :02:51. | |
dividends from the company `nd then he sold the department stord for ?1. | :02:52. | :02:59. | |
That led to 11,000 job lossds and the final store closing last August. | :03:00. | :03:04. | |
He has an obligation to those who worked hard in good faith whthin the | :03:05. | :03:11. | |
BHS company to secure a settlement that is necessary to ensure the | :03:12. | :03:15. | |
long-term viability of the pension scheme. During his appearance, | :03:16. | :03:20. | |
before the joint select comlittee, Sir Philip promised he would sort | :03:21. | :03:25. | |
the pension scheme. I say to him now, serve Philip, get it sorted. | :03:26. | :03:35. | |
Thank you. Thank you, Mr Deputy Speaker. And I've personallx thank | :03:36. | :03:38. | |
the backbench committee for organising this debate on stch a | :03:39. | :03:42. | |
timely subject? Would also like to thank the combine select colmittee | :03:43. | :03:46. | |
for their report. It is thehr work which has brought us here today and | :03:47. | :03:51. | |
they deserve great credit h`ving so patiently and thoroughly | :03:52. | :03:53. | |
investigated this whole, sordid shabby affair will stop also thanks | :03:54. | :04:03. | |
to the Honourable friends who have participated in the debate today. In | :04:04. | :04:07. | |
particular I would like to lake reference to the Honourable members | :04:08. | :04:11. | |
to Hartlepool and Birkenhead, both of whom have shone a light on some | :04:12. | :04:17. | |
of the systematic abuses of Sir Philip Green and his accomplices. I | :04:18. | :04:23. | |
would also like to raise a certain point of my honourable friend from | :04:24. | :04:27. | |
Hayward and Middleton who stggest we strip Sir Philip Green of hhs | :04:28. | :04:32. | |
knighthood and award it to one of his former employees, a | :04:33. | :04:34. | |
self-confessed critic, and how can we blame him after the last few | :04:35. | :04:40. | |
years for being a cynic? Mr Deputy Speaker I have referred to some | :04:41. | :04:43. | |
contributions made by Honourable members today and it is cle`r this | :04:44. | :04:47. | |
issue cuts across party linds. There is a great deal of anger in the | :04:48. | :04:52. | |
House. In that we are reflecting the anger that many of those who elected | :04:53. | :04:56. | |
us are feeling. Serve Philip Green treated British home stores as his | :04:57. | :05:03. | |
own personal plaything. He failed to invest in the company's Ronchi is. | :05:04. | :05:07. | |
He neglected the brand and ran down the pension scheme. -- branches He | :05:08. | :05:14. | |
jumped ship like the proverbial rat from a sinking ship. Despitd this | :05:15. | :05:20. | |
woeful, even wilful neglect of this historic company, he still retains | :05:21. | :05:24. | |
his knighthood for services to retail. The chamber has rightly | :05:25. | :05:29. | |
expressed widespread incredtlity at this state of affairs, a vidw I | :05:30. | :05:35. | |
share entirely. All human societies have found ways of honouring those | :05:36. | :05:39. | |
who have acted with great distinction. We recognise those who | :05:40. | :05:42. | |
receive such others as people who have enriched all of our lives, | :05:43. | :05:46. | |
peoples whose lives challenge is all to try to emulate them. But, | :05:47. | :05:51. | |
although it is clear that sdrve Philip Green has, by his own | :05:52. | :05:54. | |
actions, tarnished the honotr that we, as a society, give him, he has | :05:55. | :06:00. | |
tarnished his own good name far more gravely. Mr Deputy Speaker, | :06:01. | :06:06. | |
stripping Sir Philip Green of his knighthood will not create jobs for | :06:07. | :06:11. | |
the 11,000 who lost them. It will not fill the deficit in the pension | :06:12. | :06:14. | |
fund or the whole left on hhgh streets up and down the country It | :06:15. | :06:20. | |
will not pay back the ?6 million owed to HM RC. Nor will it dnsure | :06:21. | :06:27. | |
that the HS's supply chain `re paid what they are owed. -- beep BHS | :06:28. | :06:35. | |
supply chain. Our first priority is that we need to say that pension | :06:36. | :06:39. | |
funds. As far as I am concerned he can keep his honour, providdd he | :06:40. | :06:43. | |
pays back the pension deficht in fall from his own, and Paul Wells. | :06:44. | :06:47. | |
He should make good he is wrong is with deeds, not just the good | :06:48. | :06:52. | |
intentions he offered the sdlect committee. If all we do tod`y is | :06:53. | :06:57. | |
posture in condemnation of one man, we are doing little except hndulge | :06:58. | :07:03. | |
in scapegoating. For me, I `m sure I speak for many people in thhs | :07:04. | :07:06. | |
country when I say this. Thd most extraordinary thing about the whole | :07:07. | :07:13. | |
affair is that legally, Sir Philip Green has done nothing wrong. Had he | :07:14. | :07:16. | |
broken the law, where he crhminal court with his hand in the till | :07:17. | :07:21. | |
it'll be up to the courts to act. But he is not and there is no | :07:22. | :07:27. | |
suggestion that he is. As stch at this House can condemn the `ctions | :07:28. | :07:31. | |
of a man but we cannot escape our own responsibility for this affair. | :07:32. | :07:36. | |
Where are our laws made? Here. He makes them? We do. Who is | :07:37. | :07:41. | |
responsible when powerful mdn shamelessly rip of the week and yet | :07:42. | :07:45. | |
they have not broken the law? We are. I am very grateful and | :07:46. | :07:52. | |
heartened to hear the remarks the Honourable gentleman has made. Does | :07:53. | :07:57. | |
he not share with me my disgust that this government seems to have failed | :07:58. | :08:01. | |
to learn any lessons from this and failed to put any proposals forward | :08:02. | :08:05. | |
their erection we don't havd any other situations like this `gain? | :08:06. | :08:14. | |
I will address that a bit l`ter on in my speech, and the government has | :08:15. | :08:21. | |
said that it is now the party of the workers, we shall see if thdy are | :08:22. | :08:26. | |
genuinely the party of the workers. I went hold my breath but wd will | :08:27. | :08:33. | |
see. Thank you for giving w`y, there has been a number of occasions, with | :08:34. | :08:38. | |
similar incidents, but about 12 months ago in the outskirts of | :08:39. | :08:43. | |
Coventry nearly a thousand jobs went, I tried to get a ten linute | :08:44. | :08:47. | |
rule Bill and I was defeated and it was time to get some tough | :08:48. | :08:54. | |
legislation. I thank my honourable friend for that, we want to see | :08:55. | :08:59. | |
action not words. When scandals like this break, we cannot have ht both | :09:00. | :09:03. | |
ways. We must either shrug our shoulders and say tough luck guys, | :09:04. | :09:09. | |
that is the way it works, you lose. All we will say that we will | :09:10. | :09:12. | |
legislate to make sure that this never happens again. Will wd do | :09:13. | :09:18. | |
that? Will we look at the role of the auditors who signed off on BHS | :09:19. | :09:23. | |
as a going concern? Just ond year before it was sold off for ` pound, | :09:24. | :09:29. | |
like a second-hand yo-yo or the huge city financial advisers who wade | :09:30. | :09:33. | |
through the sale of it, or the pillaging of the pension scheme | :09:34. | :09:37. | |
which let us remember is not unique to British home stores. This is not | :09:38. | :09:41. | |
the story of one bad apple spoiling everyone's reputation, this is the | :09:42. | :09:46. | |
story of a system that is bdnt and we know in whose favour. Mr Deputy | :09:47. | :09:52. | |
Speaker, good businesses ard the lifeblood of our economy. Btt as | :09:53. | :09:56. | |
honest responsible hard-working business people around the country | :09:57. | :10:00. | |
know well, the system often allows good businesses to be undercut by | :10:01. | :10:04. | |
bad businesses. When companhes are used to distract wealth rather than | :10:05. | :10:10. | |
created, it hurts everybody. In the near future the shape of thd modern | :10:11. | :10:15. | |
economy is going to be transformed. Let us make sure that the | :10:16. | :10:19. | |
transformation is truly for the benefit of all, and we don't need to | :10:20. | :10:22. | |
come back to this house agahn and again and again to express our | :10:23. | :10:27. | |
outrage at yet another scandal, another rip-off of the ordinary | :10:28. | :10:31. | |
people of this country. The rules of the game need changing. Mr Deputy | :10:32. | :10:38. | |
Speaker I'm delighted to sed cross-party condemnation of Sir | :10:39. | :10:42. | |
Philip Green's conduct. I'm also delighted if not more than ` little | :10:43. | :10:45. | |
surprised to hear the Prime Minister claiming to have thrown out the | :10:46. | :10:50. | |
fanaticism that has dominatdd her party 's thinking for the l`st 0 | :10:51. | :10:54. | |
years. We on this side of the house welcome any move towards an economy | :10:55. | :10:59. | |
founded on fairness and Chrhssy it is after all what our party has | :11:00. | :11:04. | |
always stood for. It is not what the party opposite has always stood for. | :11:05. | :11:09. | |
Are we really to believe th`t the party of billionaires and t`x | :11:10. | :11:13. | |
avoidance are the ones to transform our economy in the interests of | :11:14. | :11:19. | |
fairness? Let us take one example Mr Deputy Speaker, the Prime Mhnister | :11:20. | :11:24. | |
Bosma modest proposal to give workers a voice by allowing them | :11:25. | :11:28. | |
representatives on boards. @gain, we welcome that, giving workers a voice | :11:29. | :11:32. | |
is again what our party has always stood for. But I'm not convhnced | :11:33. | :11:37. | |
that the proposal goes far dnough. Are we to believe that an individual | :11:38. | :11:42. | |
work of two would have been able to stand up to the likes of Sir Philip | :11:43. | :11:48. | |
Green? A voice must to Speaker is useless without teeth. Yet dven her | :11:49. | :11:52. | |
own Cabinet won't support this modest proposal. They are rhce I is | :11:53. | :11:57. | |
more honest than the Prime Linister, more aware of which side thdir bread | :11:58. | :12:02. | |
is buttered. I hope that Sir Philip Green is better held to account as a | :12:03. | :12:07. | |
result of today, I hope even more that it serves as a wake-up call to | :12:08. | :12:11. | |
deeper problems and that today will prove a turning point in thd way | :12:12. | :12:17. | |
that our economy is governed. I welcome the Prime Minister's | :12:18. | :12:22. | |
rhetorical conversion to our party's values, the question that she and | :12:23. | :12:25. | |
honourable members must answer is this, you have talked the t`lk but | :12:26. | :12:34. | |
can you walk the walk? One lessage Mr Speaker, today we have sden the | :12:35. | :12:37. | |
House of Commons illustrating to the country how we work, reports are | :12:38. | :12:43. | |
commissioned, delivered, debated here. But the message I'm stre we | :12:44. | :12:48. | |
all want to go out is just lerely doing a report is not the end of the | :12:49. | :12:53. | |
tale, in many of these reports we have two actually follow up and the | :12:54. | :12:57. | |
message to those who have lost jobs, who have lost pensions, is that this | :12:58. | :13:04. | |
place is not going to give tp until we have gained maximum justhce that | :13:05. | :13:09. | |
we can for you but also, like my honourable friend has just said | :13:10. | :13:13. | |
there is a full agenda about how we reform pension law and comp`ny law | :13:14. | :13:17. | |
and we have already started that task. The question is will the | :13:18. | :13:28. | |
amendment be made? As many `s say aye? Aye! Has many who say `ye, say | :13:29. | :13:45. | |
aye. Aye. We now come to thd backbench debate on industrhal | :13:46. | :13:51. | |
strategy, Chris Wright to move the. Thank you Mr Deputy Speaker, may I | :13:52. | :14:03. | |
start my speech, by thanking the approval of this application and can | :14:04. | :14:09. | |
I also thank the members from Hove, Edinburgh West and Hartlepool for | :14:10. | :14:14. | |
supporting this debate. It hs a rare opportunity, we often debatd policy | :14:15. | :14:19. | |
in this chamber, it is a rare opportunity to debate the creation | :14:20. | :14:23. | |
of the new department, and what it will in fact mean. In my mahden | :14:24. | :14:30. | |
speech I referred to my constituency, Warwick and | :14:31. | :14:33. | |
Leamington, as being at the centre of the country both geographically | :14:34. | :14:37. | |
and demographically. We havd good schools, colleges, two highly | :14:38. | :14:42. | |
respected universities on otr doorstep. We have many housdhold | :14:43. | :14:48. | |
names as businesses. A skilled workforce, and low unemploylent The | :14:49. | :14:56. | |
constituency has a strong rdputation in the technology sector, | :14:57. | :14:59. | |
particularly in the video g`mes industry and the wider region has a | :15:00. | :15:02. | |
heritage firmly based in manufacturing. In my constituency | :15:03. | :15:08. | |
only in the last month, I w`s pleased to visit the site that will | :15:09. | :15:15. | |
house a new factory, for thd furniture manufacturer and dxporter, | :15:16. | :15:19. | |
on the very spot that was home to the Ford foundry until it s`dly | :15:20. | :15:25. | |
closed in 2007. It is quite early but I will give way. I thank the | :15:26. | :15:33. | |
honourable gentleman for giving way, he will know an example, Jaguar Land | :15:34. | :15:39. | |
Rover is the main development, with five or 6000 employees and dqually, | :15:40. | :15:44. | |
he will also know that the Chinese have put more investment in it, they | :15:45. | :15:50. | |
are constructing a new site and I think it is a new demonstration of | :15:51. | :15:53. | |
some of the industries that have been created in the Midlands. Thank | :15:54. | :16:00. | |
you and I welcome interventhon and I welcome the honourable gentleman, | :16:01. | :16:03. | |
having attended some of the very interesting institutions and work | :16:04. | :16:07. | |
together at Warwick Univershty as well, one of our leading | :16:08. | :16:11. | |
international universities. I am also, pleased to see, that Tata has | :16:12. | :16:21. | |
also based its new technology Centre, in Leamington which shows | :16:22. | :16:24. | |
what inward investment can have two hour constituency and country. | :16:25. | :16:31. | |
Despite the collaboration, the links between our education institutions | :16:32. | :16:36. | |
and business, its location `nd its workforce, how much more cotld we do | :16:37. | :16:42. | |
as a constituency and as a country, if we had a strong foundation of an | :16:43. | :16:48. | |
industrial strategy? Since working in the automotive sector, I have | :16:49. | :16:52. | |
always had a passion for manufacturing, not least has the | :16:53. | :16:56. | |
co-chair of the all-party manufacturing group. Now as a member | :16:57. | :17:01. | |
of the business, energy indtstrial strategy select committee, `nd I'm | :17:02. | :17:04. | |
pleased to see the chair man in his seat. We are currently taking | :17:05. | :17:11. | |
evidence on this concept. Wd have recently heard evidence frol the | :17:12. | :17:16. | |
Right Honourable member for Tatton, the former member for Twickdnham, | :17:17. | :17:21. | |
and Lord Heseltine, who all insured us in their own very differdnt and | :17:22. | :17:27. | |
special ways, that we have had an industrial strategy all along. | :17:28. | :17:33. | |
Perhaps they are right but H would like to use this speech and saying | :17:34. | :17:40. | |
how I think an industrial strategy could be reformed, to meet some of | :17:41. | :17:44. | |
the challenges that we face today. In the last Queen 's speech debate, | :17:45. | :17:50. | |
I spoke on industrial stratdgy. And I ran the most of the other speakers | :17:51. | :17:54. | |
were speaking about important issue of sugar tax, at the time. H must | :17:55. | :18:03. | |
admit I was not entirely ovdrwhelmed by the infuse Yaz from thesd | :18:04. | :18:08. | |
government benches, for wall I was saying. Send their one can be more | :18:09. | :18:13. | |
delighted than I, to see thd inclusion of industrial str`tegy in | :18:14. | :18:19. | |
the name of a government department. There has been a sense of scepticism | :18:20. | :18:27. | |
about industrial strategy. LAUGHTER That was more warmth than I received | :18:28. | :18:31. | |
in my remarks in the Queen 's speech debate. But it has been givdn a | :18:32. | :18:37. | |
negative connotation, British economic performance for ex`mple in | :18:38. | :18:41. | |
the post-war period. Britain's relatively poor record betwden 950 | :18:42. | :18:47. | |
and 1979 has been generally blamed on the lack of competition with | :18:48. | :18:51. | |
traditional firms being hung willing to adopt technological or process | :18:52. | :18:58. | |
advances. Wilson's white he`t of the scientific revolution, was replaced | :18:59. | :19:04. | |
by a heavy reliance on the financial sector. Neglect in the past has seen | :19:05. | :19:11. | |
a weakening of our supply chains, and a huge shortfall in the skills | :19:12. | :19:20. | |
that a world-class industri`l base requires to satisfy both to my aunt | :19:21. | :19:26. | |
and opportunity. We need to have a strategy and a structure in place, | :19:27. | :19:30. | |
made more even urgent following the referendum. In addition, highly | :19:31. | :19:38. | |
capital intensive advanced manufacturing requires long,term | :19:39. | :19:42. | |
planning. There is a burden on companies in terms of investing in | :19:43. | :19:47. | |
skills, equipment, and a burden on the state to help create st`bility | :19:48. | :19:52. | |
for long-term decision-making, macroeconomics, fiscal and | :19:53. | :19:56. | |
regulatory. For manufacturing to grow, emphasis needs to be placed on | :19:57. | :20:00. | |
encouraging investment and greater long-term is. While initiathves such | :20:01. | :20:07. | |
as the Midlands engine, the northern powerhouse are laudable, thdy need | :20:08. | :20:13. | |
to be supported by strong t`ngible policy, and that policy will be less | :20:14. | :20:20. | |
effective if it is piecemeal. For example, capital allowances were | :20:21. | :20:23. | |
popular with industry but wdre discreet in their design. A coherent | :20:24. | :20:30. | |
strategy can work for the Mhdlands, the North and the South. Trhed in | :20:31. | :20:35. | |
growth, building economies `nd providing sustainable emploxment, | :20:36. | :20:42. | |
and the subsequent reduction in community and individual indquality. | :20:43. | :20:48. | |
Any industrial strategy, anx new industrial strategy must fit the | :20:49. | :20:52. | |
times that we live in. The domestic economy, the global marketplace and | :20:53. | :20:57. | |
developing themes such as industry 4.0. Insect Ember 65, the then | :20:58. | :21:07. | |
Secretary of State economic affairs, -- in September 65. Produce the | :21:08. | :21:12. | |
National plan to cover all parts of economic development over the next | :21:13. | :21:17. | |
five years. The plan was ovdr 4 0 pages long and looks at everything | :21:18. | :21:21. | |
from the running cost of schools to the future development of the | :21:22. | :21:27. | |
electronics industry. This plan was comprehensive in scope, but our | :21:28. | :21:30. | |
economy no longer operates tnder such a structure and it would have | :21:31. | :21:34. | |
negative consequences if replicated today. The lack of success of | :21:35. | :21:39. | |
documents like the national plan does not mean there should not be a | :21:40. | :21:44. | |
national industrial strategx, now for the UK. Although there hs and a | :21:45. | :21:49. | |
case for a coherent document to be drafted by the government ottlined | :21:50. | :21:57. | |
in support, it intends to ghve the sector and across departments. In | :21:58. | :22:01. | |
countries such as Germany, long seen as a model as an industrialhsed | :22:02. | :22:05. | |
nation, there has been little need for the government to pin down | :22:06. | :22:09. | |
formal strategies all statelents recalls this philosophy is so | :22:10. | :22:13. | |
entrenched, so he embedded hn all activity. -- so embedded. In Britain | :22:14. | :22:20. | |
there has been a traditional volunteerism when it comes to | :22:21. | :22:26. | |
economic organisation. Would my noble friend agree with me that in | :22:27. | :22:32. | |
Germany, with the KF W that has been in place since the late 1940s and | :22:33. | :22:37. | |
provided long-term support to SMEs, we have a model that could go | :22:38. | :22:40. | |
forward here, with UK investment and development? | :22:41. | :22:46. | |
I thank my honourable friend for his contribution. I would gentlx suggest | :22:47. | :22:52. | |
to him this slightly misses the point. It is just one element of an | :22:53. | :22:57. | |
industrial strategy that wotld make up the whole. I would be delighted | :22:58. | :23:03. | |
to give way to my co-chair. If the Honourable gentleman will | :23:04. | :23:20. | |
allow me. It seems to me, the real challenge we have, and only 10% of | :23:21. | :23:25. | |
our people are in manufacturing today as a workforce. With ` smart | :23:26. | :23:30. | |
bit of kit you can manufacttre anywhere in the world that has a | :23:31. | :23:33. | |
wonderful opportunity. Doesn't he think Germany is a bit of an | :23:34. | :23:40. | |
outdated model to follow? I would suggest to him that, in terls of | :23:41. | :23:46. | |
economic advances with our technology, we can, with | :23:47. | :23:52. | |
institutions such as the Warwick Manufacturing group, and in his | :23:53. | :23:56. | |
constituency, this is where we need to be investing in research and an | :23:57. | :24:02. | |
element to make sure you mahntain that is Michael we maintain the | :24:03. | :24:06. | |
cutting edge and bleed in these technologies. In my view, cdntral | :24:07. | :24:12. | |
government and Whitehall responds well to objectives and targdts which | :24:13. | :24:18. | |
provide focus and concentrate minds. Such a cohesive document will allow | :24:19. | :24:26. | |
the company and business to hold them to account. Long-term | :24:27. | :24:30. | |
consensual policy would prevail The document all statement would lay out | :24:31. | :24:34. | |
policies to support manufacturing for the medium term, say for ten | :24:35. | :24:39. | |
years. Giving clear objectives for the economy and stating how the | :24:40. | :24:43. | |
Government... I will be happy to give way. Would he agree th`t in | :24:44. | :24:50. | |
this country the Government has tended to intervene but failed to | :24:51. | :24:57. | |
support a successful sector because we sort of step back and sax, why | :24:58. | :25:02. | |
should we carry on supporting that? It is doing fine on its own. Is that | :25:03. | :25:07. | |
not one of the big problems we have faced for many years. The Government | :25:08. | :25:12. | |
should intervene before a sdctor is failing. We always seem to liss the | :25:13. | :25:16. | |
particular issue when it coles up and it makes it much more dhfficult | :25:17. | :25:23. | |
to resolve some of our... Not least in some allow more strategic | :25:24. | :25:25. | |
industries. The Government needs to say how it intends to achieve these | :25:26. | :25:32. | |
objectives through a long-tdrm framework. Manufacturing dods not | :25:33. | :25:37. | |
make up the majority of the economy but it can be seen as a driver for | :25:38. | :25:42. | |
other sectors. Efficiencies, processes, skills, exports `nd so | :25:43. | :25:47. | |
on. It requires more explicht planning than other sectors, which | :25:48. | :25:52. | |
can be seen as interdependent, with the state playing a more active | :25:53. | :25:57. | |
role. It should not come however at the expense of creativity or | :25:58. | :26:01. | |
productivity, but assist rather than hinder. One of the most consistent | :26:02. | :26:06. | |
calls from manufacturing has been for the Government to artictlate | :26:07. | :26:08. | |
long-term commitment to the sector and give an indication as to the | :26:09. | :26:15. | |
policy framework they are lhkely to operate within the medium to | :26:16. | :26:20. | |
long-term. This should be a rolling document, updated regularly, taking | :26:21. | :26:24. | |
into account fluctuations in the wider global economy and within the | :26:25. | :26:27. | |
sector in the UK, debated in parliament and providing | :26:28. | :26:31. | |
transparency and accountability for stuck kit should address a wide | :26:32. | :26:37. | |
range of challenges. -- and accountability. What capital is | :26:38. | :26:44. | |
required to radically changd investment decisions? Can incentives | :26:45. | :26:50. | |
be created? What progress is being made with green Manufacturing? | :26:51. | :26:54. | |
Education is a vital compondnt to the strategy. There is little | :26:55. | :27:02. | |
Management in supporting stdm subjects in primary education. These | :27:03. | :27:09. | |
subjects are the bedrock of degrees and apprenticeships and left to the | :27:10. | :27:12. | |
latter stages of education, often too late to influence the | :27:13. | :27:21. | |
decision-making process. Dods he know there are tens of thousands of | :27:22. | :27:26. | |
young people in further education colleges up and down our land | :27:27. | :27:30. | |
desperate to get an apprenthceship but they cannot because thex cannot | :27:31. | :27:34. | |
get it easy on the in English and maths. Will he persuade his | :27:35. | :27:40. | |
government to introduce not just maths but a practical maths GCSE to | :27:41. | :27:46. | |
unblock that? Thank you. I will leave the minister to answer that | :27:47. | :27:55. | |
question. In addition, in a truly global trading nation, more | :27:56. | :27:57. | |
provision should be made for the studying of languages. What is the | :27:58. | :28:02. | |
number of children at school studying Chinese and Russian? How | :28:03. | :28:08. | |
can this be improved? The wdlcome manifesto commitment, as thd | :28:09. | :28:13. | |
Honourable member suggested, want increased the number of | :28:14. | :28:16. | |
apprenticeships to 3 million by 20 20. How will we take down the | :28:17. | :28:21. | |
barriers stopping this happdn? Infrastructure is a central part of | :28:22. | :28:28. | |
the strategy. They should include a comprehensive development of the | :28:29. | :28:31. | |
digital infrastructure, fit for purpose. Other elements of the | :28:32. | :28:38. | |
strategy will include an endrgy policy, procurement, immigr`tion, | :28:39. | :28:43. | |
export, including the role of supporting other bodies. Research | :28:44. | :28:46. | |
and development, through life engineering services. Social | :28:47. | :28:53. | |
enterprises may not be the first issue that springs to mind. They are | :28:54. | :28:59. | |
a sizeable part of our economy. The positive impact that social | :29:00. | :29:03. | |
enterprise has is of huge v`lue There will be an improved to shaping | :29:04. | :29:07. | |
industrial strategy for such sectors. I am sorry. I will not give | :29:08. | :29:17. | |
way one more time. Clearly `n industrial strategy needs to | :29:18. | :29:22. | |
establish a framework. How lany children are studying stem subjects | :29:23. | :29:25. | |
at primary school right through the strategic pipeline to how m`ny | :29:26. | :29:30. | |
businesses are exporting? Where have targets been met and where has | :29:31. | :29:36. | |
further intervention being needed? This will not come as a shock but | :29:37. | :29:42. | |
more as a minor adjustment to the leaders of policy. We used to say | :29:43. | :29:48. | |
quite a lot about the long-term economic plan. We need an economic | :29:49. | :29:55. | |
plan. I just think that unddrneath any economic plan we need a strong | :29:56. | :30:02. | |
and robust industrial stratdgy. The question is that this Companies Act | :30:03. | :30:06. | |
has considered industrial policy. Can I suggest, if we look about | :30:07. | :30:11. | |
eight minutes, everyone will get the same. -- this House. I need to have | :30:12. | :30:18. | |
a productivity improvement of about 20% immediately. It is a re`l honour | :30:19. | :30:23. | |
to follow the Honourable gentleman for Warwick and Leamington. He has, | :30:24. | :30:27. | |
I think, exactly the same principles, motivations and | :30:28. | :30:31. | |
objectives when it comes to having industrial policy. He is a fantastic | :30:32. | :30:38. | |
member of the select committee. I thank him, other members of the | :30:39. | :30:42. | |
select committee and the Backbench Business Committee for allowing this | :30:43. | :30:45. | |
important topic to be debatdd today I welcome the rhetoric from the | :30:46. | :30:52. | |
Prime Minister. We have emb`rked upon an inquiry into industrial | :30:53. | :30:55. | |
strategy to help assist with the development of policy. Therd are a | :30:56. | :30:59. | |
number of fundamental questhons which need to be addressed to ensure | :31:00. | :31:06. | |
we have a modern, competitive, productive, sustainable and | :31:07. | :31:08. | |
profitable business plays in this country. What is the optimul level | :31:09. | :31:13. | |
of state intervention in economic and business policy? It would be | :31:14. | :31:16. | |
ludicrous and naive to suggdst the governor does not intervene every | :31:17. | :31:20. | |
single day in terms of legislation and regulation which affects the | :31:21. | :31:27. | |
prospects of hundreds of thousands of businesses. How can this | :31:28. | :31:29. | |
intervention be done in a strategic and coordinated manner as possible? | :31:30. | :31:33. | |
The primary consideration for business in any industrial strategy | :31:34. | :31:37. | |
or any government policy is long-term certainty. That is | :31:38. | :31:40. | |
something the Honourable gentleman has already mentioned. How can we be | :31:41. | :31:46. | |
sure a broad sweep of industrial policy transcends parliaments and | :31:47. | :31:51. | |
can withstand changes of governance? There is a mismatch between the | :31:52. | :31:55. | |
long-term requirements of btsiness and the short term political | :31:56. | :31:59. | |
pressures. Ministers of all governments, of all persuashons are | :32:00. | :32:02. | |
prone to temptations of announcements, initiatives `nd | :32:03. | :32:08. | |
reviews. Government are keen to give the impression of action and | :32:09. | :32:11. | |
activity, even if that is not matched by reality. How better a way | :32:12. | :32:18. | |
of giving an impression of purpose than by announcing a review? My | :32:19. | :32:25. | |
honourable friend talks abott the importance of the long-term, as he | :32:26. | :32:30. | |
yet again stumbles into the same state that politicians make | :32:31. | :32:33. | |
generation after generation that they know what industrial strategy | :32:34. | :32:38. | |
is. My experience of business has been in technology. Any long-term | :32:39. | :32:42. | |
thing integrity was tomorrow will be different from today. How is | :32:43. | :32:47. | |
government, with its slumbering way of manoeuvring supposed to be able | :32:48. | :32:52. | |
to keep up with entrepreneurs who made so much progress in society? We | :32:53. | :32:58. | |
can have many debates on industrial policy. He touches upon somdthing I | :32:59. | :33:03. | |
want to dress as may be the second big thing of my contribution. What | :33:04. | :33:09. | |
we mean by picking winners? If I go back to the notion of long-term | :33:10. | :33:14. | |
business considerations and wishes for policy stability at the expense | :33:15. | :33:17. | |
of short-term political culture I think we have seen this alrdady with | :33:18. | :33:21. | |
the new government. The new Prime Minister has announced we nded to | :33:22. | :33:25. | |
have, in her words, a proper industrial strategy. In doing so | :33:26. | :33:31. | |
seems to have jettisoned much in terms of what has gone before. In a | :33:32. | :33:35. | |
letter to me this week, the Secretary of State said, thdre needs | :33:36. | :33:38. | |
to be a much stronger relathonship between government and business For | :33:39. | :33:42. | |
that reason, now is not the time for the Government to set out its | :33:43. | :33:46. | |
approach in detail. That provides clear blue water between thd present | :33:47. | :33:50. | |
government and what went before when David Cameron was Prime Minhster. It | :33:51. | :33:54. | |
hardly gives reassurance of certainty for business at a time | :33:55. | :33:59. | |
when the process of Brexit lease business with unprecedented | :34:00. | :34:03. | |
uncertainty and is giving c`use to future investment in this country, | :34:04. | :34:06. | |
greater detail should have been provided. It is a cause for concern | :34:07. | :34:12. | |
that over three months after the new department was formed, the Secretary | :34:13. | :34:15. | |
of State is still insisting he cannot set out the Government's | :34:16. | :34:20. | |
industrial strategy in any form of detail. Equally, important steps on | :34:21. | :34:25. | |
large ditch eejit matters lhke airport expansion and new energy | :34:26. | :34:29. | |
generation are taking far too long, especially when Britain needs to | :34:30. | :34:32. | |
demonstrate to the world th`t we remain open for business. Wd also | :34:33. | :34:39. | |
need effective cross governlent coordination. Industrial strategy | :34:40. | :34:44. | |
will be a failure if it reshdes in one victorious streak. It h`s been | :34:45. | :34:51. | |
demonstrated that unless thd relevant department, unless that is | :34:52. | :34:57. | |
headed by a big beast, whether Heseltine or Mandelson, the notion | :34:58. | :35:01. | |
of effective coordination across Whitehall turns into dust. Darly | :35:02. | :35:08. | |
signs are encouraging. The new Cabinet committee is chaired by the | :35:09. | :35:12. | |
Prime Minister herself is that this should ensure coordination `nd | :35:13. | :35:16. | |
effectively bridge from Number 0 and demonstrates to other | :35:17. | :35:18. | |
departments that the Prime Linister is very interested in this hssue and | :35:19. | :35:23. | |
will be pushing to bang heads together if departments do not | :35:24. | :35:26. | |
demonstrate to you respect to industrial strategy. That s`id, the | :35:27. | :35:33. | |
Cabinet committee still has two conduct such an approach from | :35:34. | :35:38. | |
departments. The Secretary of State recognises this. To be succdssful, | :35:39. | :35:42. | |
the industrial strategy will need to deliver an upgrade to our | :35:43. | :35:44. | |
infrastructure and yet the Treasury will not will increase control over | :35:45. | :35:51. | |
infrastructure spend. He st`ted an effective industrial strategy will | :35:52. | :35:54. | |
need to improve our education and training system to provide the | :35:55. | :35:57. | |
skilled workforce needed in the future. The department has lost | :35:58. | :36:02. | |
control of the skills policx. Lord Heseltine, in giving evidence to our | :36:03. | :36:08. | |
committee, said, industrial strategy starts in primary schools. When we | :36:09. | :36:11. | |
met the permanent Secretary this week and asked, what is the extent | :36:12. | :36:16. | |
to which this has influence over the design of primary school policy in | :36:17. | :36:20. | |
order to link it with industrial policy, he said the departmdnt has | :36:21. | :36:26. | |
no such influence. I have ydt to be convinced based on experience and | :36:27. | :36:29. | |
the privilege of serving as a minister myself that Whiteh`ll | :36:30. | :36:33. | |
departments will have, as a primary objective, the effective | :36:34. | :36:35. | |
implementation of an industrial strategy. I hope the ministdr can | :36:36. | :36:42. | |
demonstrate otherwise. A further key way in which effective government | :36:43. | :36:46. | |
coordination can be demonstrated is through smarter procurement. There | :36:47. | :36:52. | |
may be a tension between departments securing goods and services at the | :36:53. | :36:54. | |
cheapest cost and considering the use of British-based products which, | :36:55. | :37:01. | |
at times, maybe more expenshve. It is often falls economy to bty | :37:02. | :37:05. | |
off-the-shelf from overseas at the long-term expense of an effdctive | :37:06. | :37:11. | |
British manufacturing sector. The announcement this month that the | :37:12. | :37:13. | |
holes in replacement Trident submarines are to be built with | :37:14. | :37:17. | |
French deal at a time when the steel industry has pushed to the brink of | :37:18. | :37:22. | |
extinction shows an acute f`ilure of industrial policy. I am not | :37:23. | :37:26. | |
endorsing for one moment thd idea of protectionism. That insulatd | :37:27. | :37:30. | |
domestic companies from the harsh realities having to compete in the | :37:31. | :37:36. | |
global economy on cost, and innovation and dooms those companies | :37:37. | :37:40. | |
to obsolescence. Given the great success story of many parts of | :37:41. | :37:45. | |
British manufacturing, why hsn't every single public organis`tion's | :37:46. | :37:50. | |
fleet using Nissan cars built in Sunderland or Vauxhall vans built in | :37:51. | :37:54. | |
Luton? How is the procurement process is nurturing British | :37:55. | :37:57. | |
industry and how will a proper industrial strategy ensure that | :37:58. | :38:00. | |
becomes the case? In a similar way, this government... | :38:01. | :38:07. | |
I'm very grateful for him, but he is just stated that he was not stalked | :38:08. | :38:15. | |
about protecting users. But then he's outlined a protectionist | :38:16. | :38:23. | |
position, that we should be buying British products. Procurement can | :38:24. | :38:28. | |
end junior proper prosperitx. But I would warn my honourable frhend | :38:29. | :38:32. | |
wait to you hear what I havd to say next. He will have spasms. @nd that | :38:33. | :38:40. | |
is about the link between a proper industrial strategy, and foreign | :38:41. | :38:43. | |
takeovers. And how the statd could intervene to perhaps limit the range | :38:44. | :38:54. | |
of foreign takeovers. In her speech, the Prime Minister stated, "A proper | :38:55. | :38:57. | |
industrial strategy wouldn't automatically stop the Brithsh sale | :38:58. | :39:04. | |
of businesses to foreign onds,. ." I welcome that, I think one of the | :39:05. | :39:09. | |
virtues of Britain is its openness, and the fact that this lends itself | :39:10. | :39:14. | |
to dynamism and the willingness to innovate new products. That | :39:15. | :39:17. | |
ultimately leads to better competitiveness. But I think there | :39:18. | :39:22. | |
is a risk that in this country, we sell off the crown jewels. @nd that | :39:23. | :39:28. | |
is detrimental. We are at the heart of a dynamic and connected global | :39:29. | :39:32. | |
economy. But we are at greater risk of investment, affecting Brhtish | :39:33. | :39:37. | |
industry, being made follow way from these shorts by parents overseas. | :39:38. | :39:42. | |
Indeed, within days of the Prime Minister entering number ten it was | :39:43. | :39:47. | |
announced that Softbank was buying Cambridge -based, that does not | :39:48. | :39:55. | |
require a bailout from the state, this was a successful British | :39:56. | :40:00. | |
company in the growing glob`l tech revolution. If we stepped in to | :40:01. | :40:09. | |
defend in this instance, it is difficult to see when they would be | :40:10. | :40:13. | |
applied. Let me just finishdd this point. But every instance of | :40:14. | :40:18. | |
unwelcome takeover, there are numerous examples of takeovdrs where | :40:19. | :40:22. | |
industrial capacity was movdd offshore. Such as Kraft's t`keover | :40:23. | :40:28. | |
of Cadbury. What are the crhteria of this betting in an intervenhng? That | :40:29. | :40:36. | |
is music to my ears. I workdd as a young man, leading architect | :40:37. | :40:43. | |
company, to be taken over not by a normal company, but nice colpany | :40:44. | :40:50. | |
that is part of the Communist government of China. What is this | :40:51. | :40:55. | |
company doing about it? I h`ven t had any thing. That is a fahr point, | :40:56. | :40:59. | |
and it gets the heart of wh`t we think about foreign takeovers. I am | :41:00. | :41:03. | |
conscious of, Leeds wanting to make their own statements. -- colleagues | :41:04. | :41:11. | |
wanted to make their own st`tements. I would like to finish, whether it | :41:12. | :41:16. | |
is individual sectors or technologies is something which is | :41:17. | :41:20. | |
lit yet to be articulated bx the government. There seems to be a move | :41:21. | :41:24. | |
away from a sectorial appro`ch but there was no clarity in terls of | :41:25. | :41:28. | |
what the criteria will be. Ht is obvious that the government is not | :41:29. | :41:32. | |
clear what an industrial strategy looks like. Starting with a bank | :41:33. | :41:39. | |
piece of paper gives the select committee an opportunity to | :41:40. | :41:43. | |
contribute meaningfully. But does not provide much certain se`t of the | :41:44. | :41:47. | |
firm is working hard to provide wealth and prosperity for this | :41:48. | :41:51. | |
country. And 70s what they'd cry out for at the moment. It is a privilege | :41:52. | :42:03. | |
to buy low. -- to follow. The words industrial strategy struck fear into | :42:04. | :42:08. | |
the heart, it brought back that era of excessive government invdntion, | :42:09. | :42:14. | |
government picking winners, but usually that where declining, and | :42:15. | :42:18. | |
government unnaturally strategic industry. Policies that stifled | :42:19. | :42:28. | |
competition, I will give wax... The most interventionist governlent in | :42:29. | :42:31. | |
Europe, where it comes to industry is Germany,, which is also the most | :42:32. | :42:40. | |
successful. It very much depends how you would define intervention, and | :42:41. | :42:43. | |
we make come onto that later this afternoon. The meet, the ch`llenges | :42:44. | :42:48. | |
of the 21st-century, in particular in a post-Brexit Britain, industrial | :42:49. | :42:55. | |
strategy should be about thd government creating an ecosxstem, or | :42:56. | :43:01. | |
the environment where interdst geek can exceed, and therefore ensuring | :43:02. | :43:07. | |
our country has the skills ,- environment where industry can | :43:08. | :43:13. | |
exceed. Are the ones that wd boost and seek to promote. When wd talk | :43:14. | :43:19. | |
about the environment, we almost inevitably talk about | :43:20. | :43:22. | |
infrastructure. One of the achievements of the previous | :43:23. | :43:26. | |
government, was even a time when we have to pay down the deficit, the | :43:27. | :43:32. | |
key factor in economic growth potential. We have seen public | :43:33. | :43:37. | |
sector support, rightly, ard all types of development over the years. | :43:38. | :43:43. | |
The role and the implementation of the National infrastructure | :43:44. | :43:47. | |
committee which has allowed some look across the sectors of getting | :43:48. | :43:53. | |
away from the previous approach has had a great impact. But, as the | :43:54. | :43:57. | |
chairman of the select commhttee pointed out, and edge into | :43:58. | :44:01. | |
commitment for the government must speak not how we achieve success by | :44:02. | :44:07. | |
how we deliver. And that is about making the government and | :44:08. | :44:14. | |
intelligent client. Our ability to specify design, -- or inability Has | :44:15. | :44:20. | |
meant much higher project m`nagement costs and throughout that the | :44:21. | :44:26. | |
Treasury optimism bias has hacked to be increased. With the procdss of | :44:27. | :44:31. | |
driving into the infrastructure projects authority, some of those | :44:32. | :44:35. | |
skills about deliver mint of smart book your mint, we will be `t a | :44:36. | :44:42. | |
reduced the cost costs -- about deliver Riemann of smart | :44:43. | :44:46. | |
procurement. We need to get the private sector much more involved. | :44:47. | :44:50. | |
If anyone travels across thd rest of the world to use roads and bridges | :44:51. | :44:54. | |
that privately run, and it doesn't make them any less useful. H gently | :44:55. | :45:04. | |
say to the Minister, I hope he will push his colleagues this show that | :45:05. | :45:07. | |
we will see an appointment `t the new Minister for infrastructure And | :45:08. | :45:12. | |
preferably with responsibilhty in this House and not any other place. | :45:13. | :45:19. | |
More over, the departure from the European Union will allow as a | :45:20. | :45:26. | |
couple of fortune is possibhlities, amongst what I think some whll see | :45:27. | :45:32. | |
as a difficult time. The EU procure liquid fuels as some of the most in | :45:33. | :45:35. | |
Orissa bureaucratic anywherd in the wealth. Getting when of those will | :45:36. | :45:43. | |
undoubtedly help small industry and the supply chain. Equally, state aid | :45:44. | :45:49. | |
has been a way of reporting as well as supporting investment. Wd no | :45:50. | :45:54. | |
longer have to apply by these rules. I hope the Minister will sax later | :45:55. | :46:00. | |
that he is except the challdnge that that will bring Allred. On the point | :46:01. | :46:07. | |
of state age, it in my constituency state aid helps those company and | :46:08. | :46:12. | |
will create more jobs and more jobs on jobs. It seems our leader Chris | :46:13. | :46:18. | |
situation and we would be wdll rid of bit. -- it seems as ludicrous | :46:19. | :46:27. | |
situation. To ensure that the UK is at the forefront not only of | :46:28. | :46:32. | |
oversight but also competithon. If the movement of labour is to be | :46:33. | :46:36. | |
restricted then there is gohng to be an acute skill shortage in this | :46:37. | :46:42. | |
country. Some of the ways of curing that, are to be locked that | :46:43. | :46:49. | |
urgently. One, what we need to do more of is major infrastructure | :46:50. | :46:55. | |
projects. We already have academies in place to deal with these skills | :46:56. | :47:01. | |
we have lost. For example the Cross rail Academy. We would do wdll to | :47:02. | :47:07. | |
continue to push that sort of thing all with the recent spate of | :47:08. | :47:14. | |
devolution report recommends that creation of those pipelines on a | :47:15. | :47:21. | |
regional basis to identify where the opportunity exists so that training | :47:22. | :47:28. | |
can be invested in. In the longer term, the government should urgently | :47:29. | :47:36. | |
be thinking about the knowlddge to 14 to 18-year-olds that academic | :47:37. | :47:41. | |
skills are not the only reqtirement for success in life. Some of the | :47:42. | :47:47. | |
other skills, why not have `n NVQ which works alongside GCSEs and | :47:48. | :47:52. | |
A-levels so we see people bding attracted into engineering. Equally, | :47:53. | :47:56. | |
I think it would be possibld for the government to encourage universities | :47:57. | :48:00. | |
to set up outreach project hs to teach Bian and the theoretical, the | :48:01. | :48:08. | |
application of stem sciences. - to teach the answer the theoretical. | :48:09. | :48:13. | |
Consider some of the possibhlities that are going to be open to us | :48:14. | :48:19. | |
almost inevitably sovereign debt is chosen for projects. What, `ctually | :48:20. | :48:25. | |
other countries look at the possibilities in the privatd sector, | :48:26. | :48:30. | |
sovereign bonds, the UK still seems to be suspicious of that. It seems | :48:31. | :48:35. | |
to me that we should be in courage in both the UK pension industry and | :48:36. | :48:41. | |
other industries. But equally the government should explore the | :48:42. | :48:48. | |
ability to set up regionallx -based infrastructure and regional industry | :48:49. | :48:54. | |
bonds. Or indeed set up reghonal equity schemes. This could be the | :48:55. | :49:00. | |
new popular capitalism, and it could be the that I think could bd give | :49:01. | :49:12. | |
people to invest in your cotntry, you can invest in your region and | :49:13. | :49:15. | |
you can invest in that country's ticks test. Just say that the | :49:16. | :49:21. | |
Scottish Government has alrdady set up a Scottish investment bank | :49:22. | :49:25. | |
managed by Scottish enterprhse which has significantly raised thd level | :49:26. | :49:29. | |
of equity investment in small businesses. I'm delighted to hear | :49:30. | :49:34. | |
that I'm sure they will also want to take the opportunity to raise a | :49:35. | :49:39. | |
sovereign wealth on to others as well. Now we can do this on a beach | :49:40. | :49:46. | |
in basis. Finally, there was the challenge in any infrastructure | :49:47. | :49:49. | |
policy about what the government needs to do in times of setting | :49:50. | :49:54. | |
around the machinery of govdrnment support. The national infrastructure | :49:55. | :49:59. | |
is equates to strategic adv`ntage to this country. The Minister `lready | :50:00. | :50:04. | |
had me say about the need to ensure that the IPA delivers as a smart | :50:05. | :50:09. | |
client to the government. Btt equally the government should look | :50:10. | :50:14. | |
at some of the machinery it already has in place and sweat that Miss | :50:15. | :50:22. | |
unary. -- sweat that machindry. Finally, universities and g`udy seen | :50:23. | :50:33. | |
so many incubators set in place but now, there are many around the | :50:34. | :50:44. | |
country, Cambridge, Cross ldads and across the North, Manchester, who | :50:45. | :50:52. | |
won some Excel raters, so when you have had that phase, you have been | :50:53. | :50:56. | |
in the incubator, you have had support and then you are left to | :50:57. | :51:01. | |
drift. This is where universities can play a big role in putthng | :51:02. | :51:04. | |
forward some of those Excel elated to the next phase of growth. I'm | :51:05. | :51:09. | |
hoping that in that, we've talked a lot about picking winners, H think | :51:10. | :51:17. | |
the government needs to enstre that universities focus on areas of | :51:18. | :51:21. | |
comparative advantage in those Excel raters. I know that the Minhster, | :51:22. | :51:26. | |
with his hat on this afternoon and the University hat on this | :51:27. | :51:30. | |
afternoon, will make that point to them. Thank you, Mr Deputy Speaker | :51:31. | :51:40. | |
and I certainly look forward to both this debate hearing other | :51:41. | :51:44. | |
contributions and taking part in the enquiry. In October 2015 in light of | :51:45. | :51:49. | |
the problems of the UK steel industry I asked of a minister if | :51:50. | :51:54. | |
she regretted the government's lack of an industrial strategy. She said, | :51:55. | :51:58. | |
you could have had all the strategies in the world and it | :51:59. | :52:00. | |
wouldn't have made any diffdrence. We can add this to the list of | :52:01. | :52:06. | |
topics that the new Prime Mhnister and the honourable member dhsagree. | :52:07. | :52:12. | |
I would like to welcome the Prime Minister's decision to impldment an | :52:13. | :52:14. | |
industrial strategy and recognised that merely because it is this the | :52:15. | :52:19. | |
cold doesn't mean you shouldn't bother trying. -- merely because it | :52:20. | :52:23. | |
is difficult doesn't mean you shouldn't bother trying. Only | :52:24. | :52:28. | |
victors done properly can it increase productivity. -- only if it | :52:29. | :52:32. | |
is done properly. We need as questions about what sort of | :52:33. | :52:35. | |
industrial strategy the country requires, what are the most | :52:36. | :52:38. | |
effectively visit the government have to improve economic growth | :52:39. | :52:47. | |
When should we get out of the way of business and when should we get | :52:48. | :52:52. | |
involved? We also need to consider timescales, this is a woody | :52:53. | :52:57. | |
dimension, when can we realhstically expect the White Paper or a Green | :52:58. | :53:00. | |
paper on this industrial strategy? We need to bear in mind that even if | :53:01. | :53:06. | |
it does at the end quarter next year that we need to get to a | :53:07. | :53:10. | |
realisation, that is only three years until the next general | :53:11. | :53:14. | |
election. And then we reflect on the Commons that has already bedn made, | :53:15. | :53:19. | |
that where constituency makhng policy and then moving away with it | :53:20. | :53:22. | |
with the fashion of the govdrnment's time. It is going to be even more of | :53:23. | :53:29. | |
a challenge, with coordinathng Brexit at the same time. So whilst | :53:30. | :53:33. | |
we don't yet have a White P`per we have had speeches and letters that | :53:34. | :53:38. | |
set out some of the areas that he thinks some industrial strategy | :53:39. | :53:42. | |
needs to cover. He notes thd need for a long time sustained approach | :53:43. | :53:46. | |
to policy-making as well as the development of a policy fralework | :53:47. | :53:52. | |
that provides a stable the business. I don't disagree with this, | :53:53. | :53:57. | |
certainly many businesses in my constituency have made long,term | :53:58. | :53:59. | |
investment plans in the asstmption that they would have unfettdred | :54:00. | :54:03. | |
access to the largest market in the world. I'm sure that they would | :54:04. | :54:06. | |
appreciate knowing sooner or later if they will have equal rights to | :54:07. | :54:10. | |
trade in Europe with their competitors. Of course this point | :54:11. | :54:15. | |
was highlighted really clearly by the Japanese government when they | :54:16. | :54:18. | |
said uncertainty is a major concern for an economy. They also wdnt on to | :54:19. | :54:23. | |
note that they had invested actively in the UK and was | :54:24. | :54:37. | |
seen to be as a gateway to Durope. This investor certainty is vitally | :54:38. | :54:41. | |
important. Of course, Brexit has shown how incredibly diffictlt it is | :54:42. | :54:43. | |
to implement a long time strategy thousands of years enough to win | :54:44. | :54:46. | |
Strand a change in fortunes of ministers and government. A focus on | :54:47. | :54:48. | |
evidence level policy making could provide some balance. | :54:49. | :54:54. | |
However even with evidence hn favour of a policy more needs to bd done to | :54:55. | :54:59. | |
make sure that policy is implemented. Look at airport | :55:00. | :55:02. | |
expansion in the south-east of England. We no evidence exists that | :55:03. | :55:06. | |
it needs to happen to support businesses right across the UK. -- | :55:07. | :55:13. | |
we know that. Yet we still do not have a decision on which runway to | :55:14. | :55:17. | |
build or extend, so this link between timescales, vital | :55:18. | :55:22. | |
infrastructure and decision,making needs to be recognised. We know that | :55:23. | :55:25. | |
the decision has been delaydd for political reasons and it is a prime | :55:26. | :55:29. | |
example of political priority is getting in the way of sensible | :55:30. | :55:33. | |
industrial policy. We could also mention the green investment bank | :55:34. | :55:37. | |
based in my Edinburgh West constituency. Plans were made to | :55:38. | :55:43. | |
sell that to the private sectors and these examples do not develop a | :55:44. | :55:46. | |
long-term sustained approach to policy-making and I hope thdy are | :55:47. | :55:49. | |
considered when the strateghes put together. The Minister has `lso | :55:50. | :55:53. | |
highlighted the need to build on and reinforce the UK's existing | :55:54. | :55:58. | |
industrial strengths whilst also developing a local approach the | :55:59. | :56:04. | |
strategy. Noble sentiments hndeed. With the stated commitment to | :56:05. | :56:07. | |
localism and the desire to build on existing areas of strength, perhaps | :56:08. | :56:11. | |
the Minister will look again at some of the mistakes made by his | :56:12. | :56:16. | |
predecessor. I and others wdre disappointed to see funding reduced | :56:17. | :56:22. | |
to tackle climate change and emissions. Whether it was the | :56:23. | :56:26. | |
cancelling the proposed storage plant in Peterhead, the cuts to | :56:27. | :56:29. | |
efficiency schemes or the whthdrawal of support for onshore wind | :56:30. | :56:32. | |
generation, the Government demonstrated neither a local | :56:33. | :56:37. | |
approach nor desire to build on one of Scotland's undoubted economic | :56:38. | :56:42. | |
strengths. This disregard for local and long term policy considdrations | :56:43. | :56:46. | |
and the failure to support national and regional economic strengths has | :56:47. | :56:49. | |
greatly impacted the Scottish Government's efforts to harness the | :56:50. | :56:53. | |
country's natural advantages. This in turn puts at risk attempts to | :56:54. | :57:02. | |
generate Scottish energy nedds by renewables by 2020, of reaching that | :57:03. | :57:09. | |
target. From one full day, 000% of Scotland's energy needs werd met by | :57:10. | :57:14. | |
that power, potential gluttons - a glimpse into the potential future | :57:15. | :57:19. | |
that could be supported with industrial strategy from thd UK | :57:20. | :57:23. | |
Government. Another example of short-term policies taking priority | :57:24. | :57:26. | |
over economic games would bd the Post study work Visa in Scotland, | :57:27. | :57:33. | |
highly popular route for ovdrseas graduates from Scottish universities | :57:34. | :57:36. | |
to stay in the country. Manx people who had this these contributed a | :57:37. | :57:40. | |
great deal to the Scottish dconomy and wider society. University | :57:41. | :57:45. | |
Scotland conservatively esthmated Scotland lost out on at least ? 54 | :57:46. | :57:50. | |
million of revenue between 2012 and 2015 as a direct result of the | :57:51. | :57:56. | |
scrapping of this Visa routd. Scottish politicians in this chamber | :57:57. | :57:59. | |
have repeatedly declared thdy would like more control over immigration | :58:00. | :58:04. | |
policy in Scotland and a return of the post study work Visa. Scotland | :58:05. | :58:09. | |
has shown its commitment to helping those in need by finding holes for a | :58:10. | :58:13. | |
third of all Syrian refugees who have settled in the UK in the last | :58:14. | :58:17. | |
12 months. The long-term economic benefits of such a policy or | :58:18. | :58:21. | |
obvious, the political will exists and the local need is there. Finally | :58:22. | :58:24. | |
I would like to touch on thd idea suggested by the Minister as well of | :58:25. | :58:29. | |
the need for an upgrade of corporate government in this country. The last | :58:30. | :58:32. | |
backbench business debate in this place was around the issue with BHS | :58:33. | :58:39. | |
and Sir Philip Green, and corporate governance was a topic brought up a | :58:40. | :58:43. | |
number of times, but I would like to point out the focus for too long has | :58:44. | :58:50. | |
been on financial profit without a reflection of ethical values, and | :58:51. | :58:53. | |
Professor Christopher Hodges of Oxford University has led some of | :58:54. | :58:59. | |
the thinking in this, how ilportant that improved corporate govdrnance | :59:00. | :59:01. | |
which leads to more ethical business practice can help move everxthing | :59:02. | :59:06. | |
forward. To sum up, there is often attention at the heart of industrial | :59:07. | :59:09. | |
strategies between horizont`l policies cutting across all sectors | :59:10. | :59:14. | |
and the vertical policies that focus on specific sectors. Prioritising | :59:15. | :59:19. | |
specific sectors can see thd wider sections offer and if nothing is | :59:20. | :59:23. | |
prioritised at all the strategy runs the risk of being unfocused and | :59:24. | :59:30. | |
unsuccessful. In evidence stbmitted to the Business, Innovation and | :59:31. | :59:36. | |
Skills Committee, it was st`ted that in a fast-moving digital economy the | :59:37. | :59:39. | |
Government should not seek to manage innovation but instead should seek | :59:40. | :59:44. | |
to create conditions which promote innovation. If all other sensible | :59:45. | :59:48. | |
ideas fall foul of political pressures then I hope this one | :59:49. | :59:52. | |
principle will remain. On b`lance, I welcome this Government's commitment | :59:53. | :59:56. | |
to industrial strategy and H appreciate it is difficult `nd I | :59:57. | :59:59. | |
hope this will not only lead to greater economic growth and | :00:00. | :00:02. | |
productivity in the future, but will also see some of the mistakds of the | :00:03. | :00:11. | |
last Government rectified. Thank you, Mr Deputy Speaker, and it is | :00:12. | :00:14. | |
with some trepidation I risd to speak in a debate raised by my | :00:15. | :00:18. | |
honourable friend for Warwick and Lemington. Last time I did so I | :00:19. | :00:21. | |
think I persuaded the Government only to accept the first of his | :00:22. | :00:25. | |
three cause social valuable but he kindly asked me to go on thd bill | :00:26. | :00:29. | |
committee. Then it was vastly expanded by civil service into | :00:30. | :00:32. | |
something of a Christmas trde. On this occasion I hope it will perhaps | :00:33. | :00:36. | |
be different but of course ht was a great pleasure to serve on that | :00:37. | :00:39. | |
committee. Competition on the merits is a perfectly reasonable industrial | :00:40. | :00:44. | |
strategy for the Government to adopt. It is one that creatds the | :00:45. | :00:48. | |
most wealth and has been proven to lift people out of poverty. I would | :00:49. | :00:52. | |
encourage any member and anxone listening to look at the website | :00:53. | :01:00. | |
Human Progress, and bite sized snippets, which illustrates how well | :01:01. | :01:03. | |
strong property rights, freddom to contract within a market economy not | :01:04. | :01:10. | |
only facilitate production but engage other social forces, which | :01:11. | :01:13. | |
are healthy. Social cooperation through that mechanism of | :01:14. | :01:17. | |
competition in the market. Other mechanisms have always brought about | :01:18. | :01:23. | |
poverty and misery. The Govdrnment's domestic policy should be to lower | :01:24. | :01:29. | |
anti-competitive market distortions and it is on that concept I wish to | :01:30. | :01:34. | |
focus my remarks. Anti-compdtitive market distortions are adversely | :01:35. | :01:40. | |
affect economies and contribute to high costs. If we reduce distortions | :01:41. | :01:46. | |
in the UK and indeed in the world, according to the Institute's | :01:47. | :01:50. | |
productivity simulator, we can see a significant increase in productivity | :01:51. | :01:55. | |
and public welfare. One of the great problems with domestic suggdstions | :01:56. | :02:00. | |
is that they increase the ldvel of anti-competitive market distortions | :02:01. | :02:02. | |
and that could lead to highdr costs and push more people into poverty. I | :02:03. | :02:14. | |
would like to offer a taxonomy of ACMDs, the effect of | :02:15. | :02:16. | |
anti-competitive market distortions on global markets, where thdy | :02:17. | :02:23. | |
classify those distortions hn the six areas. I offer these, Mr Deputy | :02:24. | :02:29. | |
Speaker, not as a menu from which interventionists might clock their | :02:30. | :02:33. | |
preferred action, but as a description of those areas where | :02:34. | :02:37. | |
governments take policy chohces which in fact push people into | :02:38. | :02:42. | |
poverty by prejudicing compdtition. The first and most obvious, take one | :02:43. | :02:47. | |
distortion, Government laws or practices which eliminate | :02:48. | :02:49. | |
competition completely. Exalples would include local content | :02:50. | :02:53. | |
regulation, which eliminates foreign production from competition, or | :02:54. | :02:59. | |
perhaps capital adequacy regulation, about the banks exiting the market. | :03:00. | :03:10. | |
This produces monopoly or ... Type two, practices are laws which lessen | :03:11. | :03:15. | |
competition. These make markets less competitive but do not necessarily | :03:16. | :03:22. | |
foreclose competitors in thd market entirely. They elevate... If you | :03:23. | :03:26. | |
will Loughney. They elevate the costs of certain companies. I will | :03:27. | :03:34. | |
give way. -- if you will me. I thank the honourable gentleman for giving | :03:35. | :03:38. | |
way. Would he accept there hs a middle way in which the Govdrnment | :03:39. | :03:42. | |
can encourage competition? We have seen this in the superb cat`pult | :03:43. | :03:46. | |
centres which I think are an example of industrial strategies th`t work, | :03:47. | :03:51. | |
that by offering prizes for solutions to technical problems you | :03:52. | :03:53. | |
actually create the ecology you want to see? In a free market it should | :03:54. | :03:59. | |
be a prophet, one which one is allowed to keep and invest hn | :04:00. | :04:05. | |
further production. I do not wish to bore the honourable gentlem`n but I | :04:06. | :04:09. | |
think I I get 2.5 I will turn to the competition authorities. -- I think | :04:10. | :04:16. | |
by the time I get to the fifth point. Examples would include | :04:17. | :04:19. | |
distribution laws that incrdase costs for certain suppliers, still | :04:20. | :04:27. | |
in the type two. He has indhcated generously that reading frol this | :04:28. | :04:33. | |
fascinating paper is perhaps not the most fascinating speech for him so I | :04:34. | :04:36. | |
will cut it down. You can continue and look at the third type, | :04:37. | :04:39. | |
distortions applying differdnt rules to different firms. You would have | :04:40. | :04:43. | |
thought in a society governdd by the rule of law that no one would stoop | :04:44. | :04:47. | |
so low and yet they do. Othdr countries around the world, | :04:48. | :04:50. | |
particularly I am afraid India and the Philippines, have such | :04:51. | :04:54. | |
regulation. Paper format, distortions largely caused by state | :04:55. | :04:58. | |
owned enterprises, including Government privileges in licensing | :04:59. | :05:05. | |
-- type four, distortions. Distortions relating to the abuse of | :05:06. | :05:10. | |
regulatory process. The fifth type, largely due to action or in`ction by | :05:11. | :05:15. | |
competition authorities. Thdre are a couple of areas described in some | :05:16. | :05:19. | |
detail which I happily will share about where competition authorities, | :05:20. | :05:23. | |
either by act of omission or commission, failed to properly | :05:24. | :05:29. | |
promote competition. Type shx is distortions caused by | :05:30. | :05:32. | |
anti-competitive state aid or support, giving firms subsidies and | :05:33. | :05:37. | |
other things that may or max not be anti-competitive. The point is this, | :05:38. | :05:42. | |
Mr Deputy Speaker. It is well known now in academic literature that | :05:43. | :05:47. | |
various categories of government intervention make us Pooler, they | :05:48. | :05:51. | |
can be subjected to a taxonomy, their costs can be estimated, and... | :05:52. | :06:02. | |
-- they make us poorer. I apologise to the honourable lady if she does | :06:03. | :06:06. | |
not like my language. I havd worked for Ofcom but the honourabld | :06:07. | :06:09. | |
gentleman is suggesting a l`ck of competition is always the f`ult of | :06:10. | :06:12. | |
Government, either by doing something or not doing it. Does he | :06:13. | :06:17. | |
not recognise it is possibld and indeed it is what the liter`ture | :06:18. | :06:22. | |
shows that companies, by acting in these ways and capturing thd market, | :06:23. | :06:26. | |
are themselves responsible for lack of accommodation? As many as are of | :06:27. | :06:28. | |
the opinion, say 'aye'. To the contrary, 'no'. I am very grateful | :06:29. | :06:31. | |
to my honourable friend off the Treasury committee -- yes, H am very | :06:32. | :06:37. | |
grateful. I certainly have read my Adam Smith but not the way he has | :06:38. | :06:40. | |
and cannot quote the passagd he has in mind. I will see to the | :06:41. | :06:43. | |
honourable lady that I most certainly did not suggest it is only | :06:44. | :06:47. | |
due to Government. I think she has applied her own ideas about what I | :06:48. | :06:50. | |
stand for the come to that conclusion. I will certainlx read | :06:51. | :06:55. | |
Hansard very closely tomorrow to see if I suggested that. I am stggesting | :06:56. | :07:02. | |
in a taxonomy of six differdnt categories of anti-competithve | :07:03. | :07:07. | |
distortions, in this journal, two of those and two of those subc`tegories | :07:08. | :07:10. | |
relate to mistakes which can probably be seen to be made by | :07:11. | :07:14. | |
competition authorities. Thdy are not perfect. No human institution is | :07:15. | :07:18. | |
perfect, including competithon authorities. The point I wish to | :07:19. | :07:22. | |
make is we are going through a process of becoming more opdn to | :07:23. | :07:26. | |
trade, as we should. Seeking comparative advantage, seekhng to | :07:27. | :07:31. | |
supply new markets, indeed seeking to buy from new markets in order to | :07:32. | :07:34. | |
drive down prices. But what we will find, in the experience of trade | :07:35. | :07:39. | |
negotiators I have consulted, if we go and speak to nations whose main | :07:40. | :07:45. | |
product is agriculture, and the largest segment of their economy is | :07:46. | :07:48. | |
farming, we will find we cannot do a deal with such nations if wd take | :07:49. | :07:54. | |
agriculture off the table. For example, the extent to which we | :07:55. | :07:58. | |
subsidise it. Whilst we must make sure agriculture is well looked | :07:59. | :08:01. | |
after within the expectations the Government has set, and makd sure we | :08:02. | :08:05. | |
continue to supply food, wh`t we cannot do is go and negotiate with | :08:06. | :08:10. | |
other nations if we, ourselves, are substantially distorting our own | :08:11. | :08:14. | |
domestic markets in such a way that they cannot hope to compete with us. | :08:15. | :08:20. | |
The point I wish to impress upon the Government is there is substantial | :08:21. | :08:23. | |
literature on this point, that it is conceivable both domestic and global | :08:24. | :08:26. | |
productivity could be radic`lly improved for the long-term by | :08:27. | :08:32. | |
bringing forward would suggdst a productivity and consumer wdlfare | :08:33. | :08:35. | |
act, which entrenched in Brhtish law with the very best of competition | :08:36. | :08:41. | |
policy in order to deal with market distortions. | :08:42. | :08:48. | |
It is good to follow the Honourable member for Wycombe as well. I hope | :08:49. | :08:57. | |
to speeches are complimentary. Can I thank the Honourable member for | :08:58. | :09:00. | |
Warwick and Leamington, it was good of him to bring this debate and | :09:01. | :09:05. | |
buried generous of him to bty me to co-sponsor the debate. I thhnk it is | :09:06. | :09:11. | |
an extremely timely debate `nd his opening speech served the tone of | :09:12. | :09:15. | |
the debate to come very well indeed. I want to focus on the fact that the | :09:16. | :09:23. | |
industrial strategy is a contested term, one that some members on both | :09:24. | :09:28. | |
sides struggle with, becausd almost every government who tried hmplement | :09:29. | :09:33. | |
one in the post-war period has come up across one kind of difficulty or | :09:34. | :09:38. | |
another. I would like to sax that it is quite simple if we focus on the | :09:39. | :09:42. | |
strategy side of what we nedd to deliver and I think the str`tegy | :09:43. | :09:47. | |
side of what needs to delivdring is the bit that many businesses want | :09:48. | :09:52. | |
the most. And it is the bit that the government in various different ways | :09:53. | :09:56. | |
has often failed to deliver. It is actually quite simply is iddntifying | :09:57. | :10:01. | |
with clarity where you are `nd spelling out with clarity where you | :10:02. | :10:05. | |
want get to. The bridge that leads the two together. -- and thd bridge | :10:06. | :10:12. | |
that links the two together. I didn't use the word long-term there | :10:13. | :10:20. | |
you will notice. It is alwaxs a mistake to spell out exactlx how | :10:21. | :10:23. | |
long this type of journeys going to take. Because different parts of the | :10:24. | :10:28. | |
strategy will take different periods of time. Businesses need cl`rity and | :10:29. | :10:35. | |
it needs consistency. Two examples from government, not just this | :10:36. | :10:40. | |
government but previous govdrnments on clarity and consistency that | :10:41. | :10:47. | |
would inform the House. Exalples we need to avoid going forward, I start | :10:48. | :10:53. | |
of a contemporary example, we are on the business select committde | :10:54. | :10:56. | |
received a letter from the Secretary of State for is but... At the moment | :10:57. | :11:08. | |
I think it stands for a gadget that does it was wet lettuce. In his | :11:09. | :11:18. | |
letter, two members of the business select committee, the Secretary of | :11:19. | :11:21. | |
State says the following about the industrial strategy that he will | :11:22. | :11:26. | |
unfold, "Many of the key colponents of our industrial strategy will not | :11:27. | :11:32. | |
be about particular industrhes or sectors, but it will be cross | :11:33. | :11:36. | |
cutting it will be relevant to people and businesses across the UK, | :11:37. | :11:42. | |
the people as consumers and employees and as businesses and | :11:43. | :11:47. | |
investors and drivers of growth It will also respond to the size, to | :11:48. | :11:53. | |
seize the opportunities presented by the transformations we are faced | :11:54. | :11:58. | |
for, transformations that wd are faced with input from bars 06, both | :11:59. | :12:04. | |
domestically and as we exit the European Union and in wider global | :12:05. | :12:11. | |
trends" I'm sorry Minister, but that is a mission statement not ` | :12:12. | :12:19. | |
strategy. It encompasses dolestic, nationwide, international, global, | :12:20. | :12:22. | |
every aspect of business yot are going to have a strategy for. Every | :12:23. | :12:27. | |
business whether it is but self-employed Albright the way up is | :12:28. | :12:30. | |
going to be incompetent one strategy. I think that will be | :12:31. | :12:36. | |
wonderful to see how all of that can be incompetent one delivery. I | :12:37. | :12:40. | |
support the notion of industrial strategy and hope it can be | :12:41. | :12:44. | |
delivered, but at the moment with this kind of starting point I start | :12:45. | :12:49. | |
to share sympathies with thd member of Bedford in his scepticisl that I | :12:50. | :12:53. | |
would never have imagined I would before. An example from the last few | :12:54. | :12:58. | |
governments, an example of the industrial partnership approach by | :12:59. | :13:07. | |
Vince Cable. In 2014, the Coalition government, under his leadership, | :13:08. | :13:14. | |
introduced "An industrial partnership which brings together | :13:15. | :13:18. | |
employers from across an industry sector to lead the developmdnt of | :13:19. | :13:24. | |
skills, with a focus on growth and competitiveness. There are currently | :13:25. | :13:29. | |
eight partnerships covering creative, nuclear, digital, energy | :13:30. | :13:32. | |
and efficiency, science and tunnelling. " It goes on to say that | :13:33. | :13:40. | |
all of these will be funded by Doctor March 2000 17. Unfortunately, | :13:41. | :13:47. | |
the funding for this progralme was caught in September 2000 and 15 Not | :13:48. | :13:53. | |
two months after Vince Cabld left office. I asked a Parliamentary | :13:54. | :14:03. | |
question last week, and the question was, to ask the Secretary of State | :14:04. | :14:10. | |
the business energy and indtstrial strategy. That is -- the Secretary | :14:11. | :14:21. | |
of State and said that it w`s not possible and to the question. This | :14:22. | :14:24. | |
and says there's more than lany of the real answer is that I'vd had | :14:25. | :14:27. | |
from Mr Barman overtime, thdy are not prepared to implement the | :14:28. | :14:33. | |
strategy. -- that I have had from this department overtime. Wd don't | :14:34. | :14:39. | |
even know if any strands of previous strategies will be taken forward. | :14:40. | :14:43. | |
What this means to businessds who are in the front line, is that in | :14:44. | :14:48. | |
the last two years, we have had a very clear set polio approach to a | :14:49. | :14:56. | |
business strategy by one Secretary of State -- and very secret`rial | :14:57. | :15:05. | |
approach. And now we have one where we have a department with industrial | :15:06. | :15:10. | |
strategy in the name. This changes all over a two-year period `nd | :15:11. | :15:15. | |
businesses have to respond to this kind of profound change in ` rapid | :15:16. | :15:23. | |
space of time. Competitive larket just caution is regime uncertainty, | :15:24. | :15:27. | |
where exactly the Phnom and in that he outlines causes business to make | :15:28. | :15:33. | |
less profit than you alreadx ward. -- exactly does the nominal and that | :15:34. | :15:39. | |
he outlines. And sure he wotld agree with me that we were both w`nt | :15:40. | :15:42. | |
government to do more at thd right things. I think more of the right | :15:43. | :15:48. | |
things are, I think there ndeds to be a focus on what business creates | :15:49. | :15:53. | |
growth and generate tax one top What is it that they need in order | :15:54. | :15:57. | |
to support their businesses, many don't need help from governlent but | :15:58. | :16:01. | |
all of them are affected by government policy in one wax or | :16:02. | :16:05. | |
another because every busindss uses infrastructure in one way or | :16:06. | :16:10. | |
another. Whether it is internet all modes of transport. So government | :16:11. | :16:15. | |
policy doors impact is Mrs, what ever businesses they are. Gdtting | :16:16. | :16:20. | |
that strategy right is at the absolute core of where we go | :16:21. | :16:25. | |
forward. What did businesses want from government? Is the one thing | :16:26. | :16:36. | |
that links all of them, is skills. At this point, it is good to have | :16:37. | :16:43. | |
the skills minister in here responding on behalf of his | :16:44. | :16:49. | |
department... Sorry you are not the skills minister, I beg your pardon. | :16:50. | :16:55. | |
I apologise. So, I'm grateftl that the Minister is here, who is split | :16:56. | :16:59. | |
between departments and can answer to this cross cutting part of his | :17:00. | :17:04. | |
breed. But, skills is the one thing that does cut across every single | :17:05. | :17:12. | |
business. Is it conceivable that by moving skills away from the | :17:13. | :17:16. | |
Department of business, that business will have a larger voice in | :17:17. | :17:21. | |
the House. I think it is inconceivable. A couple mord points | :17:22. | :17:28. | |
they briefly, what is it th`t the government can do, that bushnesses | :17:29. | :17:31. | |
can't do? There are many thhngs government can do and I hopd this | :17:32. | :17:36. | |
answer the previous gentlem`n's point, that others can't. How can | :17:37. | :17:46. | |
government inspire businessds in the future? Secondly, let's look back to | :17:47. | :17:51. | |
2000, where Tony Blair and Bill Clinton stood up and announced the | :17:52. | :17:55. | |
mapping of the human genomics. This is something back to countrhes, two | :17:56. | :18:00. | |
governments could achieve on a scale of any individual business could not | :18:01. | :18:06. | |
do. All of the innovation that has spread from that single gesture by | :18:07. | :18:10. | |
two governments, has spawned many many industries since, in academia, | :18:11. | :18:16. | |
in the private sector, in pharmaceuticals. These of anything | :18:17. | :18:20. | |
that businesses need to be looking to, going forward. These ard the | :18:21. | :18:23. | |
kind of things that governmdnts can do as a strategy and I look forward | :18:24. | :18:26. | |
to the Minister responding accordingly. Thank you, I speaking | :18:27. | :18:33. | |
relatively early on in the debate brother at the end, I want to signal | :18:34. | :18:36. | |
that the government doesn't intend to have the last end. -- Elhana and | :18:37. | :18:46. | |
the debate rather than at the end. Must be built on strong foundation | :18:47. | :18:52. | |
of engagement, discussion, careful consultation across governmdnt and | :18:53. | :18:55. | |
indeed across the country. They shouldn't be imposed from one | :18:56. | :19:02. | |
street. As the industrial strategy is under development, now is not the | :19:03. | :19:11. | |
time to set out detailed pl`ns of approach. We expect to publhsh a | :19:12. | :19:16. | |
discussion paper around the time of the Autumn Statement. Then, a | :19:17. | :19:24. | |
response from the government in the New Year 2017. New Year, in the New | :19:25. | :19:32. | |
Year. Autumn Statement, this year. Let me give honourable membdrs a | :19:33. | :19:37. | |
broad overview of the context in which we are developing the | :19:38. | :19:40. | |
industrial strategy and a flavour for some of the principles that | :19:41. | :19:47. | |
guiding is as we do so. I w`nt first of all, to thank honourable members | :19:48. | :19:56. | |
for Warwick and Leamington, hoses and Portslade, Edinburgh West, | :19:57. | :20:00. | |
Hartlepool was securing this debate and making such powerful | :20:01. | :20:06. | |
contributions Ali on. -- holers and Portslade. The UK has delivdred a | :20:07. | :20:12. | |
huge amount over recent years in terms of growth and employmdnt. | :20:13. | :20:17. | |
Unemployment has fallen frol 8% in 2010 to 5% now. Employment has | :20:18. | :20:22. | |
climbed from 70% to 74% of the same period. A faster rate of employment | :20:23. | :20:27. | |
broke then France, Germany or the US. But at the Prime Ministdr has | :20:28. | :20:30. | |
made clear, our economies and working perfectly | :20:31. | :20:45. | |
Games are not always shared across the country into many peopld are | :20:46. | :20:48. | |
losing out. We want an economy that works for everyone. Happily, yes. To | :20:49. | :20:50. | |
his catalogue of statistics would he remind those that exports h`ve | :20:51. | :20:54. | |
flatlands of the last five xears? Are export performance is one of the | :20:55. | :20:58. | |
features of our economy that we are seeking to improve to an industrial | :20:59. | :21:02. | |
strategy and I'm looking forward to explaining a bit more how wd will do | :21:03. | :21:06. | |
this. The UK currently has the second lowest product it puberty -- | :21:07. | :21:17. | |
productivity. Closing halfb`ck that would add ?250 billion of the | :21:18. | :21:21. | |
economy. A proper industrial strategy can play at key role in | :21:22. | :21:34. | |
that. Indeed, yes, happy to. Like him I concerned about our low | :21:35. | :21:38. | |
productivity, Willie now affect that factor in this is cheap labour, it | :21:39. | :21:44. | |
wages are low it doesn't encourage companies to invest to make their | :21:45. | :21:48. | |
companies more efficient. Wd have a history of driving down wagds and | :21:49. | :21:56. | |
keeping wages at two low a level. Wages higher large correspond.. | :21:57. | :22:03. | |
What is important is we increased the average skills level in our | :22:04. | :22:08. | |
workforce so we have a skills -based that is globally competitivd and | :22:09. | :22:11. | |
able to command the wages in a market economy that we want people | :22:12. | :22:15. | |
to have. A government that fails to look ahead and make the right | :22:16. | :22:20. | |
long-term decisions on fund`mentals like tax, infrastructure, rdsearch, | :22:21. | :22:26. | |
education and skills is one that has abdicated responsibility. Stch | :22:27. | :22:29. | |
plans, as I've said, the choir that we take away not a partisan approach | :22:30. | :22:38. | |
but one that seeks common ground. And want to thank them against the | :22:39. | :22:45. | |
doing so. So, a bit more in detail about the principles guiding our | :22:46. | :22:50. | |
approach to industrial strategy Firstly, developing a proper | :22:51. | :22:54. | |
strategy takes time. It is not something that you drop out | :22:55. | :22:58. | |
overnight. We need to in gate with their wide range of organis`tions | :22:59. | :23:03. | |
and people to design a strategy that can have real impact. That leans | :23:04. | :23:07. | |
engaging with members of thd House of Commons including through the | :23:08. | :23:11. | |
select committee 's welcome enquiry on industrial strategy and ht means | :23:12. | :23:15. | |
spending time over the coming months engaging with businesses of all | :23:16. | :23:22. | |
sizes and from all sectors. Engaging with investors, local leaders and | :23:23. | :23:24. | |
consumers so we can also reflect their views and build on thdir | :23:25. | :23:27. | |
knowledge and experience. Otr industrial strategy will be | :23:28. | :23:31. | |
necessarily wide ranging but it should not be at the expensd of | :23:32. | :23:35. | |
clear focus. I would like to say a few words about where we will be | :23:36. | :23:38. | |
concentrating our efforts. Festival is building up an -- festiv`l | :23:39. | :23:46. | |
building up an proven strengths This country has no shortagd of | :23:47. | :23:53. | |
them. Our powerful record on science and innovation, only Americ` with a | :23:54. | :23:56. | |
much bigger population has lore of the world's top university, Nobel | :23:57. | :24:03. | |
prizes, registered patent. The UK has the most productive scidnce base | :24:04. | :24:09. | |
in the G-7 and has actually overtaken the US to rank first among | :24:10. | :24:15. | |
comparable science... A key measure of the service quality. This is | :24:16. | :24:22. | |
important, science research and innovation are important to our | :24:23. | :24:25. | |
future and must be at the core of any effective strategy for the | :24:26. | :24:26. | |
long-term. I will give way. I thank thd | :24:27. | :24:39. | |
Minister for giving way. Dods he agree with me? He is talking about | :24:40. | :24:44. | |
the research Centre, sciencd and technology, but does he not | :24:45. | :24:46. | |
recognise in leaving the EU we face a huge risk to that sector `nd will | :24:47. | :24:50. | |
you speak about what his Government will do in the face of thosd risks? | :24:51. | :24:57. | |
Our research base, Mr Deputx Speaker, is globally compethtive. | :24:58. | :25:00. | |
Organisations and scientists from around the world are keen to | :25:01. | :25:04. | |
collaborate with institutions in this country. Collaborations with | :25:05. | :25:07. | |
institutions in the UK from around the world have some of the highest | :25:08. | :25:13. | |
impact of any science undertaken anywhere in the world. We are | :25:14. | :25:18. | |
desired, desirable partners for collaboration and I have evdry | :25:19. | :25:20. | |
expectation that with the stpport of the Government we will conthnue to | :25:21. | :25:26. | |
be globally competitive as ` science power in years to come. We `re also | :25:27. | :25:30. | |
competitive, not just in schence, as I was saying, but also at the | :25:31. | :25:34. | |
cutting edge of industry, for example in advanced manufacturing. | :25:35. | :25:38. | |
In the UK almost 1.6 million cars were produced in 2015, up 4$ on | :25:39. | :25:46. | |
2014, and it almost 60% since 2 09. The honourable member for H`rtlepool | :25:47. | :25:53. | |
at why the Government did not solely procure cars for its fleet lade by | :25:54. | :25:57. | |
Nissan in Sunderland? I just would like to point out to him th`t we | :25:58. | :26:01. | |
make cars that are fantastic all over the country, and the Prime | :26:02. | :26:06. | |
Minister herself drives, I believe, a Jaguar XJ built in the West | :26:07. | :26:14. | |
Midlands, so there is no nedd to buy them from just one place in the | :26:15. | :26:17. | |
United Kingdom, because we can buy them that a globally compethtive and | :26:18. | :26:21. | |
built in the UK in a vast ntmber of locations. Surely the Minister is | :26:22. | :26:26. | |
aware that actually we have a net deficit in trade in automothve | :26:27. | :26:29. | |
products. We assemble car p`rts brought in from the rest of the | :26:30. | :26:35. | |
world. The honourable member might recall there was a point in the last | :26:36. | :26:41. | |
Parliament, I think about in 20 3, when this country became a net | :26:42. | :26:46. | |
exporter of cars for the first time since 1975, when the last L`bour | :26:47. | :26:50. | |
Government nationalised British Leyland, so it was thanks to the | :26:51. | :26:56. | |
automotive policies that thhs Government and its predecessor, the | :26:57. | :26:59. | |
coalition Government, have procure that has taken the car industry in | :27:00. | :27:03. | |
the UK to hate it has not enjoyed since the early 1970s. Like the | :27:04. | :27:09. | |
minister I think that British motoring has a brilliant future but | :27:10. | :27:16. | |
would he not accept we do wdll in export markets outside the TK but we | :27:17. | :27:22. | |
do very brutally inside the EU because -- we do very poorlx inside | :27:23. | :27:32. | |
the UK. -- inside you. I thhnk we import more than four times from | :27:33. | :27:36. | |
Germany what we exporter. I thank the honourable member for hhs | :27:37. | :27:40. | |
observations and I will look at those statistics he mentiondd - | :27:41. | :27:46. | |
what we exporter from Germany. I will make progress then I whll give | :27:47. | :27:51. | |
way. OK... I hope he will join me in celebrating this country's | :27:52. | :27:55. | |
excellence, not just in manufacturing, but in research in | :27:56. | :28:00. | |
Formula 1, at the number of teams we have, being the world's second | :28:01. | :28:05. | |
biggest manufacturer after the United States. Members are far too | :28:06. | :28:10. | |
downbeat. I think we do rather well. I welcome interventions but when | :28:11. | :28:14. | |
members drop down to five mhnutes, they will understand, would they? | :28:15. | :28:24. | |
Minister? And another sector of success is science and technology. | :28:25. | :28:28. | |
Science and manufacturing are of course not the other parts we can | :28:29. | :28:32. | |
point to with excellence. Wd can point to accountancy, law, | :28:33. | :28:35. | |
consulting and creative indtstries which also set the global standard. | :28:36. | :28:39. | |
We have worked hard over thd years to make Britain one of the best | :28:40. | :28:42. | |
places in the world to start and grow a business. We are cre`ting a | :28:43. | :28:47. | |
business environment that stpports growth and encourages long-term | :28:48. | :28:49. | |
investment as well as a dyn`mic economy with open and competitive | :28:50. | :28:54. | |
markets. This includes backhng business by cutting corporation tax | :28:55. | :28:58. | |
to 17% by 2020, slashing thd red tape by a further ?10 billion, and | :28:59. | :29:04. | |
major investment in the infrastructure and research. The | :29:05. | :29:06. | |
question is how to make the most of this. Not starting from scr`tch | :29:07. | :29:13. | |
Previous industrial strateghes have seen success in particular sectors. | :29:14. | :29:18. | |
There our challenge is to btild on our competitive partners and to | :29:19. | :29:20. | |
support the sectors which c`n drive growth in the future. This hs not | :29:21. | :29:24. | |
about choosing winners, as honourable members have urgdd it | :29:25. | :29:28. | |
should not be, nor about propping up a failing industries are brhnging | :29:29. | :29:32. | |
back old companies from the dead. We must be open and ready for new | :29:33. | :29:36. | |
competitors and indeed open to welcome new disruptive industries | :29:37. | :29:40. | |
that may not exist anywhere today but which will shape our lives in | :29:41. | :29:44. | |
the future. It is about identifying the industries that are of strategic | :29:45. | :29:47. | |
value to our economy and supporting and promoting them through policies | :29:48. | :29:54. | |
on trade, tax, infrastructure, skills, and training. It is also of | :29:55. | :29:58. | |
course hugely important we take a local approach to strategy. | :29:59. | :30:01. | |
Governments are fond of quoting national figures and I quotdd some | :30:02. | :30:06. | |
myself already relating to dconomic growth, profitability and | :30:07. | :30:08. | |
employment, but the truth is that it does not exist in the abstr`ct, | :30:09. | :30:13. | |
economic growth, but happens in particular places, when a btsiness | :30:14. | :30:17. | |
is set up, takes on more people or expands its production. The places | :30:18. | :30:20. | |
in which businesses operate or a big part of determining how well they | :30:21. | :30:27. | |
can do. We must strengths of areas across the country including the | :30:28. | :30:29. | |
Midlands engine and the northern powerhouse. And that we havd a | :30:30. | :30:34. | |
strong framework in place to do this, for example through local | :30:35. | :30:38. | |
enterprise partnerships or `s the honourable member for Wimblddon | :30:39. | :30:42. | |
mentioned, through our network of universities and our enterprising. | :30:43. | :30:46. | |
Through our innovation audit across the UK, led by local areas, we are | :30:47. | :30:51. | |
mapping the research and innovation strengths and infrastructurd to | :30:52. | :30:55. | |
identify and build on our areas of greatest potential in every region. | :30:56. | :31:00. | |
Too often these strengths ottside of the Golden Triangle of London, | :31:01. | :31:05. | |
Cambridge and Oxford are ovdrlooked, and through our Catapults, centres | :31:06. | :31:09. | |
of excellence based throughout the country, we are supporting | :31:10. | :31:11. | |
innovation where UK businesses have the potential to be world ldading | :31:12. | :31:17. | |
and address local disparitids in productivity, helping all p`rts of | :31:18. | :31:19. | |
the country to contribute to national success, which is key to | :31:20. | :31:24. | |
our planning and a cornerstone of our approach. What is needed in each | :31:25. | :31:27. | |
place is different and our strategy must reflect that. This is why, Mr | :31:28. | :31:32. | |
Deputy Speaker, many of the policies and decisions that form our | :31:33. | :31:35. | |
industrial strategy will not be about particular industries or | :31:36. | :31:39. | |
sectors but will be crosscutting, for us to succeed in the future we | :31:40. | :31:43. | |
need the right infrastructure, roads, rail, broadband and lobile, | :31:44. | :31:46. | |
to connect businesses to thdir workforce. We have new infr` | :31:47. | :31:50. | |
structure like Crossrail about open, but we still have laws that are | :31:51. | :31:55. | |
bottlenecked, trains that otr overcrowded, and broadband that | :31:56. | :31:58. | |
needs to be upgraded. We also need to see an upgrade in our skhlls | :31:59. | :32:02. | |
base. We need to have a rishng generation of young people better | :32:03. | :32:07. | |
educated than those of our competitors, but also better | :32:08. | :32:10. | |
trained. In schools we have announced ?67 million for the next | :32:11. | :32:16. | |
five years to recruit and train an extra 2500 maths and physics | :32:17. | :32:20. | |
teachers and the upscale exhsting teachers. We need to make stre | :32:21. | :32:24. | |
vocational education, espechally in engineering and technology, plays a | :32:25. | :32:27. | |
more prominent role in our country than it has for many years now. We | :32:28. | :32:32. | |
need a modern system of corporate governance as well. The Prile | :32:33. | :32:35. | |
Minister has already made clear we will look at this, including further | :32:36. | :32:40. | |
reforms on executive pay is part of the Government's work to buhld an | :32:41. | :32:43. | |
economy that works fairly for everyone, not just the privhleged | :32:44. | :32:48. | |
few. Thank you. Coming up to seven minutes to get everybody in. Thank | :32:49. | :33:01. | |
you, Mr Deputy Speaker. I al pleased to participate in this very | :33:02. | :33:03. | |
important debate and I congratulate the honourable member not jtst on | :33:04. | :33:05. | |
securing it but on what he said as well, which was excellent. British | :33:06. | :33:08. | |
industry has suffered too long from neglect and diminution and H am | :33:09. | :33:10. | |
pleased the Prime Minister has chosen to reintroduce the tdrm | :33:11. | :33:13. | |
industrial strategy, one I cannot recall gracing our political ears | :33:14. | :33:17. | |
for a long time. The Prime Linister is also suggesting the statd must | :33:18. | :33:19. | |
have a role in promoting thd managing of our economy and ensuring | :33:20. | :33:24. | |
it is healthy and strong and serves the citizens well. The statd simply | :33:25. | :33:28. | |
cannot stand idly by and let the markets do their worst and H am | :33:29. | :33:31. | |
pleased the era when that w`s too often the case now seems to be | :33:32. | :33:36. | |
coming to an end. I have to say I have differences with the honourable | :33:37. | :33:40. | |
member for Whickham who in lany ways I admire and like, but I am a | :33:41. | :33:45. | |
Statist and he is not. Some years ago I tried to press the new leader | :33:46. | :33:50. | |
leader Labour leader to intdrvene but might request fell on ddaf ears | :33:51. | :33:57. | |
and I was told it sounded too much like socialism. We have allowed much | :33:58. | :34:03. | |
of our manufacturing sector to weather and reduced -- I trhed to | :34:04. | :34:11. | |
press the new Labour leader. We have allowed an enormous deficit to | :34:12. | :34:15. | |
emerge above all in manufacturing and primarily with the union wood | :34:16. | :34:21. | |
European Union. The pot-mac has been persistently overvalued -- with the | :34:22. | :34:26. | |
European Union. We know at last have some relief with the deprechation of | :34:27. | :34:29. | |
sterling since the referendtm and already the economy is beginning to | :34:30. | :34:35. | |
benefit. I look forward to renewed growth in manufacturing and to our | :34:36. | :34:39. | |
trade deficit reducing. The former governor of the Bank of England said | :34:40. | :34:44. | |
this month that Britain was borrowing 5% to 6% of GDP a year | :34:45. | :34:49. | |
simply for imports. Prosperhty that was an illusion borrowed from the | :34:50. | :34:54. | |
future. Fine, if you wanted a Mercedes-Benz or to buy a holiday in | :34:55. | :34:58. | |
Spain, but it did nothing for British industry. The former | :34:59. | :35:01. | |
director for Europe at the HMF said the idea Britain is in a crhsis or | :35:02. | :35:05. | |
on its knees before the exchange rate vigilantes is ludicrous and | :35:06. | :35:09. | |
that the UK economy is rebalancing amazingly well, to use his words. We | :35:10. | :35:13. | |
should all welcome more of that Manufacturing based in Brit`in has | :35:14. | :35:17. | |
bright prospects provided the exchange rate is kept at sensible | :35:18. | :35:23. | |
level. Experts will rise and import substitution will see UK products | :35:24. | :35:28. | |
booming. There will probablx be an effect at first until goods diminish | :35:29. | :35:30. | |
and quantitative effect pickle but that will not be long in coling I | :35:31. | :35:36. | |
have already suggested to some of our motor manufacturers that they | :35:37. | :35:38. | |
would now do well to expand supply chains in Britain and reducd their | :35:39. | :35:49. | |
proportion of imported components. Written, we should not forgdt, is | :35:50. | :35:53. | |
itself a massive market to which our own producers should be supply more. | :35:54. | :35:57. | |
I want to press the Governmdnt further in this direction rdgarding | :35:58. | :36:00. | |
our industries. May I urge them to give serious thought to the creation | :36:01. | :36:05. | |
of the National economic development Council, and the little ones for the | :36:06. | :36:10. | |
various sectors. This was an agent of what was then called indhcative | :36:11. | :36:14. | |
planning, bringing together representatives of business, | :36:15. | :36:18. | |
Government and trade unions. Hardly socialism, set up as it was by | :36:19. | :36:22. | |
Edward Heath's Government, but it did valuable work and could do so | :36:23. | :36:25. | |
again. There is much we need to do to make our industrial strategy | :36:26. | :36:30. | |
long-term success but an exchange rate that is appropriate is vital | :36:31. | :36:33. | |
for that. Can I say one mord thing? The euro is proving to be a | :36:34. | :36:37. | |
disaster, particularly for southern Europe. Its future, fingered as -- | :36:38. | :36:45. | |
future, thank goodness, is there in series don't. Weaker countrhes are | :36:46. | :36:54. | |
held to it at a falsely low,level, crippling for them and disadvantages | :36:55. | :36:58. | |
for others. It would be better for those European economies and for | :36:59. | :37:03. | |
herself for them to be allowed to move -- and disadvantage for us The | :37:04. | :37:07. | |
end of the euro would be good news for all of us and especiallx British | :37:08. | :37:12. | |
industries. Outside the EU we will indeed be free to use Smart | :37:13. | :37:15. | |
procurement for British indtstries and to use state aids as we see it. | :37:16. | :37:23. | |
If that is protection, I welcome it. I congratulate my honourabld friend | :37:24. | :37:26. | |
for securing this important debate on a key aspect of the Government's | :37:27. | :37:30. | |
policy programme. May I beghn by welcoming the creation of the new | :37:31. | :37:33. | |
committee on industrial str`tegy which will put science, technology, | :37:34. | :37:37. | |
innovation and experts at the heart of the agenda? I also welcole the | :37:38. | :37:45. | |
speech at the Royal society in July, with new industries as a kex part of | :37:46. | :37:49. | |
industrial strategy. Mr Deptty Speaker, my argument today hs that | :37:50. | :37:53. | |
only by embracing the fourth industrial revolution as part of the | :37:54. | :37:56. | |
industrial strategy can be truly achieve our potential as an | :37:57. | :37:59. | |
industrial power in the 21st century. This unprecedented fusion | :38:00. | :38:04. | |
of technologies that blows the traditional boundaries betwden the | :38:05. | :38:09. | |
physical, traditional and bhological Spears is already transformhng | :38:10. | :38:12. | |
societies around the world hncluding our own -- spheres. It is | :38:13. | :38:16. | |
accelerating and we need to break through new products and ardas such | :38:17. | :38:22. | |
as artificial intelligence, driverless cars, drones, 3-D | :38:23. | :38:25. | |
printers, to name a few. Thdse have already captured the imagin`tion of | :38:26. | :38:30. | |
the British public and now the attention of our policymakers. | :38:31. | :38:33. | |
Mastering and leading the fourth industrial revolution should be at | :38:34. | :38:36. | |
the heart of the industrial strategy for our own country. What is clear | :38:37. | :38:47. | |
from the experiences of othdr nations is that countries that are | :38:48. | :38:49. | |
best able to take advantage of this new revolution or those with nimble | :38:50. | :38:51. | |
economies and supportive governments. Low taxes and dight | :38:52. | :38:53. | |
competitive regime. I am pldased the Minister confirmed in his rdsponse | :38:54. | :38:55. | |
therefore that the Government will continue to focus on pro-enterprise | :38:56. | :38:59. | |
and pro-renovation policies that make Britain a world leader when it | :39:00. | :39:02. | |
comes to starting and growing a business and exporting to the world. | :39:03. | :39:05. | |
In addition, I would like to offer the House three suggestions. As he | :39:06. | :39:10. | |
and his ministerial colleagtes develop their industrial strategy | :39:11. | :39:14. | |
for this century. Firstly the economic benefits of the fotrth | :39:15. | :39:16. | |
Industrial Revolution must be shared throughout the country and not just | :39:17. | :39:18. | |
concentrated in London. That stimulate growth innov`tion | :39:19. | :39:32. | |
outside the M25. I see local enterprise partnerships as key | :39:33. | :39:40. | |
partners. Madam Deputy Speaker, I welcome the Chancellor's | :39:41. | :39:43. | |
announcement in Birmingham of the additional hundred million pounds to | :39:44. | :39:47. | |
extend the biomedical catalxst. And the extra money for univershties | :39:48. | :39:52. | |
across Britain. These are wdlcome and forward steps. I also bdlieve | :39:53. | :39:58. | |
that research UK and innovate UK, government backed body should also | :39:59. | :40:02. | |
continue to ensure that thehr work and funding are truly national. | :40:03. | :40:07. | |
Secondly, the government should use its power to buy British, the | :40:08. | :40:12. | |
advanced economies such as Hsrael already played key role in helping | :40:13. | :40:17. | |
new sectors and industries developed. Our government should do | :40:18. | :40:22. | |
the same. The news that our Ministry of Defence have launched a new bond | :40:23. | :40:25. | |
to promote defence innovation is very welcome and a good exalple of | :40:26. | :40:31. | |
that department is to follow. Lastly, we should continue to invest | :40:32. | :40:37. | |
in industry. This should include a new stage of fibre-optic broadband | :40:38. | :40:46. | |
roll-out and five G internet. As the industrial revolution gathers pace | :40:47. | :40:48. | |
that we in Britain should elbrace and encourage it is part of our | :40:49. | :40:53. | |
industrial strategy. I look bullet to sharing with the Ministrx my | :40:54. | :40:58. | |
thoughts in a paper that I've written in the coming months just | :40:59. | :41:01. | |
before the autumn statements which I hope he will be up to combat me on. | :41:02. | :41:08. | |
-- I look forward to the Minister. We in Britain should embracd and | :41:09. | :41:11. | |
encourage it. Throughout our history Britain has adopted a proud | :41:12. | :41:19. | |
innovation approach. We havd never allowed is about the future to hold | :41:20. | :41:23. | |
back our economic or social progress. We soon realise, that cars | :41:24. | :41:32. | |
must be preceded by a man c`rrying a red flag. And just as we have done | :41:33. | :41:41. | |
in centuries gone by, this new wave of technology can certainly bring | :41:42. | :41:45. | |
about substantial benefits, the greater productivity, new jobs to | :41:46. | :41:49. | |
more choice for consumers to be new goods and services. If we ddliver on | :41:50. | :41:54. | |
all of those things as part of a new industrial strategy, more jobs, more | :41:55. | :41:57. | |
productivity, more choice, then we will have certainly had the limit | :41:58. | :42:01. | |
and created an economy that works everybody and a country that works | :42:02. | :42:05. | |
on everybody. -- we will have certainly created. It is ironic that | :42:06. | :42:13. | |
we discussed the industrial strategy foraging the debate on the scandal | :42:14. | :42:17. | |
of the collapse of BHS. Espdcially given that one of the government's | :42:18. | :42:24. | |
edging pillars is, new culprit government structured including | :42:25. | :42:27. | |
consumer and employee representation on boards." Just a shame thhs | :42:28. | :42:33. | |
strategy wasn't in place before Philip Green got his grubby mitts on | :42:34. | :42:40. | |
BHS. The government's plans to have a strategy comes as we face a post | :42:41. | :42:46. | |
Brexit proximate of being ott of the single market. The uncertainty | :42:47. | :42:50. | |
caused by the decision to ldave the EU and the Tory's lack of a plan, | :42:51. | :42:56. | |
seriously damage the planning capacity. When one tries ascertain | :42:57. | :43:02. | |
exactly what the UK Governmdnt's industrial strategy actuallx is it | :43:03. | :43:07. | |
appears to be one needs to be somewhat of a sleuth becausd even | :43:08. | :43:10. | |
the Liebig research team had a challenge in that excellent | :43:11. | :43:15. | |
predebate packs as they alw`ys are excellent. -- even the libr`ry | :43:16. | :43:23. | |
research team. Which providds clues as to how the government's | :43:24. | :43:29. | |
industrial strategy will promote. Well, we have limited inforlation | :43:30. | :43:32. | |
and only a few clues but between as I feel we can cobble somethhng | :43:33. | :43:37. | |
together. We know a bit helpful failings of the Prime Minister's | :43:38. | :43:41. | |
predecessor. He and his cabhnet presided over complete failtre of | :43:42. | :43:48. | |
long-term strategic planning. Low wage growth, increased soci`l, | :43:49. | :43:55. | |
regional and gender inequalhties. An output per worker basis UK | :43:56. | :44:00. | |
productivity is 20% below average of the rest of the G7 countries. UK | :44:01. | :44:05. | |
workers have suffered the bhggest fall in real workers between 20 0 | :44:06. | :44:15. | |
and 70,000 15. Dropping a shocking 10.4%. That is a shocking condition | :44:16. | :44:19. | |
given our workers' rights and conditions are under threat as we | :44:20. | :44:24. | |
leave the EU. We have seen the carbon capture projects scr`pped. | :44:25. | :44:32. | |
Renewable energy screens catght in a patient grandstand to loans, and | :44:33. | :44:36. | |
that is all before the UK f`ces leasing access to the EU research | :44:37. | :44:41. | |
funding. -- bob or the UK f`ces losing accident. Many other | :44:42. | :44:50. | |
honourable members talk abott losing EU funding, if we replace ET funding | :44:51. | :44:56. | |
with British funding, we sthll make ?10 billion profit by not p`ying | :44:57. | :45:00. | |
into the budget. Cellular c`n just do that. Event was a simple love | :45:01. | :45:07. | |
that -- surely we can just do that. -- if only it was as simple as that. | :45:08. | :45:14. | |
Coming on the steel sector, in England and Wales is crying out for | :45:15. | :45:19. | |
support but the government was flat-footed in its response. In | :45:20. | :45:22. | |
contrast the Scottish Government worked tirelessly, our First | :45:23. | :45:27. | |
Minister said she would leave no stone unturned and that is dxactly | :45:28. | :45:31. | |
what she is, how government and the Scottish steel has forced it. So | :45:32. | :45:37. | |
what next for industrial strategy, we are all wondering and wahting? | :45:38. | :45:43. | |
When the Prime Minister cre`ted the new Department of business dnergy | :45:44. | :45:47. | |
and industry strategy, she brought together significant governlent | :45:48. | :45:55. | |
strategies into one. It is good to see a news status, even if ht's only | :45:56. | :46:00. | |
in name. But of course therd are two areas that have fallen off the | :46:01. | :46:04. | |
departmental name, innovation and skills. I would have asked the | :46:05. | :46:07. | |
Minister if you would give le a summary of his focus on those, he | :46:08. | :46:11. | |
did touch on those issues, H would reiterate the point that it is | :46:12. | :46:15. | |
Michael that we continue to focus on these areas. We -- that it hs vital | :46:16. | :46:24. | |
that we continue to focus. Hnsures women and people of all backgrounds | :46:25. | :46:28. | |
across our society are welcomed and included in workforce. We nded to be | :46:29. | :46:33. | |
seriously more ambitious about a diverse workforce. Because hn March | :46:34. | :46:38. | |
this year the equality and human rights commission published a | :46:39. | :46:41. | |
damning report that said th`t women are being held back by the boys | :46:42. | :46:45. | |
network. It stated that nearly a third of the UK's biggest companies | :46:46. | :46:53. | |
rely on old networks. Most roles are not advertised our top board is the | :46:54. | :47:02. | |
main male and white. -- our top board to remain male and whhte. More | :47:03. | :47:09. | |
than 60% have not met a voltntary target of 25% female board lembers. | :47:10. | :47:15. | |
On that point, I wonder if ly honourable colleague agrees with me | :47:16. | :47:19. | |
that the recent studies that came out about the motherhood penalty of | :47:20. | :47:23. | |
a particular concern and nedds to be tackled? I agree with my honourable | :47:24. | :47:29. | |
friend and I thank you for that intervention. These are isstes that | :47:30. | :47:33. | |
transcend party politics, I know that the Conservatives are doing | :47:34. | :47:37. | |
their best, but unfortunately it is not good enough. In 2012, 2013 014 | :47:38. | :47:46. | |
fewer than half of the comp`nies increased their female board | :47:47. | :47:49. | |
representation. The equalitx and human rights commission said the | :47:50. | :47:52. | |
problem was particularly actte executive roles when I'd be quoted | :47:53. | :47:58. | |
of the FTSE 100 companies h`d no female executives at all on their | :47:59. | :48:02. | |
boards join the time covered by the study. Despite the fact that there | :48:03. | :48:07. | |
were no longer any all mail boards in the UK FTSE on did companies the | :48:08. | :48:15. | |
headline progress of Britain headline companies was maskhng the | :48:16. | :48:20. | |
realities. Closing the general pay gap, should also be a key priority | :48:21. | :48:24. | |
because skills and innovation must also be at the heart of the UK | :48:25. | :48:29. | |
Government's approach to industrial strategy. A statement released by | :48:30. | :48:35. | |
the Prime Minister outlined that matters of apprenticeship and skills | :48:36. | :48:37. | |
are now going to be under the jurisdiction of the Departmdnt for | :48:38. | :48:50. | |
Education... In total with business, science, education and clim`te | :48:51. | :48:56. | |
change is. In this shift, rdmoving apprenticeships and skills on | :48:57. | :48:59. | |
matters of industrial stratdgy may lead the governments to shift focus | :49:00. | :49:04. | |
on gender. We need certaintx that that will not happen. We have seen a | :49:05. | :49:09. | |
strong focus on Scotland in these areas as a lot of the Scotthsh | :49:10. | :49:14. | |
Government's labour market strategy. It will double the number of | :49:15. | :49:19. | |
accredited living wage employers by next autumn. And provide ?200,0 0 to | :49:20. | :49:25. | |
business in the community. The strategy also encourages innovative | :49:26. | :49:29. | |
ideas on how to bring busindss and government together to form a fairer | :49:30. | :49:36. | |
more inclusive society. In the subject of employee participation, I | :49:37. | :49:39. | |
welcome the remarks about pttting employees on company boards. I hope | :49:40. | :49:47. | |
that the Prime Minister on hs that commitment. I look big supporter of | :49:48. | :49:53. | |
employees contributions, in particular cooperatives. | :49:54. | :49:58. | |
Cooperatives are beneficial to employees and businesses. I hope | :49:59. | :50:01. | |
that the Minister intends to follow through to that promise. I wonder if | :50:02. | :50:07. | |
he will look at the application of cooperative companies. I've spoken | :50:08. | :50:11. | |
to a number of companies who are concerned, such as John Lewhs, that | :50:12. | :50:15. | |
they are being treated unfahrly under the apprenticeship levy. I | :50:16. | :50:22. | |
will wind up my remarks I s`ying, at this early-stage letters relember | :50:23. | :50:28. | |
what divides a fair industrx is investing in a diverse skilled | :50:29. | :50:31. | |
workforce, from apprenticeship to pension. Encouraging innovation from | :50:32. | :50:38. | |
the bottom of the workforce to the top of executives, this govdrnment | :50:39. | :50:45. | |
needs to get a grip. I would like to start by congratulating my | :50:46. | :50:49. | |
honourable friend the Member for Warwick and Leamington of sdcuring | :50:50. | :50:53. | |
this afternoon's debate. I would like to focus my contribution of one | :50:54. | :50:57. | |
of the points the Minister lade about the role of local bodhes in | :50:58. | :51:02. | |
the delivery of industrial strategy at a regional level. From mx | :51:03. | :51:07. | |
perspective the government's focus on industrial strategy and hts | :51:08. | :51:11. | |
continued support the regional development, areas outside London, | :51:12. | :51:16. | |
is welcome news in my consthtuency and incredibly patent timing. The | :51:17. | :51:21. | |
Clay chewing the power stathon is a real blow of their and a re`l | :51:22. | :51:30. | |
turning point. The decades we had an economy based on the energy the | :51:31. | :51:36. | |
industry. And this was for ` very long time the main source of | :51:37. | :51:40. | |
employment, the closure of the power plight is the end of this industrial | :51:41. | :51:46. | |
heritage. -- the closure of this power point. -- the closure of this | :51:47. | :52:01. | |
power station it is home to one of Amazon's the dominant centrds. The | :52:02. | :52:06. | |
redevelopment of the site prevents opportunity to develop its strategic | :52:07. | :52:10. | |
vision which creates long-tdrm sustainable local economy and create | :52:11. | :52:17. | |
skilled jobs and opportunithes. In creating a strategy there is also | :52:18. | :52:23. | |
any to consider up of that land sites that will become available for | :52:24. | :52:28. | |
development in the coming ydars including a site which is ctrrently | :52:29. | :52:34. | |
owned to JCB have systems and also our land that could be developed | :52:35. | :52:37. | |
once the flood defence schele has been completed. I think there was a | :52:38. | :52:43. | |
need and opportunity to cre`te an more strategic plan. I'm calling on | :52:44. | :52:52. | |
all the relevant bodies including the two local enterprise | :52:53. | :52:56. | |
partnerships, not just to look at the site in isolation but in the | :52:57. | :53:01. | |
context of the land sites. This vision in my view also needs to | :53:02. | :53:06. | |
ambitious and strategic, taking account of the growth of new | :53:07. | :53:08. | |
industries and My concern is there is a re`l danger | :53:09. | :53:19. | |
that we fall into a trap of just more of the same end this is where I | :53:20. | :53:22. | |
believe the Government's industrial strategy can help us scope `nd | :53:23. | :53:29. | |
important new vision. Indeed the minister and my honourable friend | :53:30. | :53:36. | |
made reference to innovation. This was the heart of innovation in the | :53:37. | :53:39. | |
energy industry. I mentioned before in the House that if you look at | :53:40. | :53:44. | |
that they are in different colours of brick. They were trying to decide | :53:45. | :53:48. | |
which was the most likely to blend into the countryside and thdy failed | :53:49. | :53:55. | |
completely, but going back to innovation, it is ideally placed to | :53:56. | :53:59. | |
host new industries including digital and technology industries. | :54:00. | :54:09. | |
There is indeed a crossover there where fibre-optic broadband and the | :54:10. | :54:12. | |
National Grid meat, which m`kes the area uniquely placed to host data | :54:13. | :54:16. | |
centres as well as an innov`tion Hub. The Minister also menthoned | :54:17. | :54:21. | |
advanced manufacturing, somdthing the region has a real strength in. I | :54:22. | :54:27. | |
am fortunate to have such companies in my constituency and I hope we can | :54:28. | :54:31. | |
build on companies like this. But this is not to say we should be | :54:32. | :54:37. | |
turning our backs on our endrgy heritage and only this mornhng a | :54:38. | :54:41. | |
member of the business, energy and industrial strategy committde, we | :54:42. | :54:47. | |
met the stakeholders from the industry making the point of the | :54:48. | :54:52. | |
importance of the sector. Whth the closure of coal-fired power stations | :54:53. | :54:57. | |
there is a desperate need for gas power stations as I part of our next | :54:58. | :55:10. | |
energy sources. -- as part. The chair of the Select Committde made | :55:11. | :55:14. | |
the important point earlier on. Industrial strategy needs to be | :55:15. | :55:20. | |
cross departmental. I have raised issues before with ministers about | :55:21. | :55:24. | |
the cumbersome process for securing planning for a on sites where there | :55:25. | :55:30. | |
have been coal-fired power stations. I would really ask that minhsters | :55:31. | :55:37. | |
from the business, energy and industrial strategy departmdnt to | :55:38. | :55:44. | |
review this with their colldagues from DCLG. The redevelopment of | :55:45. | :55:51. | |
Rugeley is a once in a generation opportunity I believe this hs | :55:52. | :55:58. | |
strategic and visionary, and bold and ambitious and creates a home for | :55:59. | :56:01. | |
successful and innovative btsinesses which creates real skilled jobs and | :56:02. | :56:07. | |
opportunities for the next generation. I believe and industrial | :56:08. | :56:11. | |
strategy which has productivity at its heart encourages and | :56:12. | :56:16. | |
entrepreneurship and innovation and creates opportunities for young | :56:17. | :56:20. | |
people and could provide thd framework to ensure that locally we | :56:21. | :56:27. | |
create an exciting future for Rugeley. Thank you, Madame Speaker, | :56:28. | :56:41. | |
I have spent a lot of days of the chamber and it has been | :56:42. | :56:47. | |
constructive. I learned the word oligopoly today, so I feel H am | :56:48. | :56:52. | |
learning things. What I havd not yet learned is what industrial strategy | :56:53. | :56:56. | |
is. Everybody in the entire room has come up with a different idda for | :56:57. | :56:59. | |
what they think an industri`l strategy is and should be. So I am | :57:00. | :57:03. | |
not going to break with this but will tell you what I think `n | :57:04. | :57:08. | |
industrial strategy should be. As you would expect me to say, oil and | :57:09. | :57:15. | |
gas should be top, front and centre of the UK Government's industrial | :57:16. | :57:20. | |
strategy. It is without question the most important industry in the UK. | :57:21. | :57:29. | |
Over the five years up... From 008 to 2013 the average revenue was ?9.4 | :57:30. | :57:34. | |
billion from that industry. That does not include all of the economic | :57:35. | :57:38. | |
benefits to the wider econolic areas that the UK Government has `lso | :57:39. | :57:44. | |
seen. This industry is not having the best of times at the molent The | :57:45. | :57:49. | |
oil price is low, we are struggling, losing jobs, things are not all that | :57:50. | :57:54. | |
fun in Aberdeen in the north-east, which is why it is even mord | :57:55. | :57:57. | |
important that this Governmdnt commits to ensuring that oil and gas | :57:58. | :58:04. | |
is right up there in the industrial strategy. We have got a really | :58:05. | :58:12. | |
bright future in the oil and gas industry but what we need to do is | :58:13. | :58:16. | |
ensure particularly that people in this place understand what hs | :58:17. | :58:20. | |
happening in the industry and take positive action to ensure wd have | :58:21. | :58:25. | |
that long-term future. In tdrms of the future and how things look going | :58:26. | :58:31. | |
forward, we have got the absolute gold standard in Aberdeen chty and | :58:32. | :58:35. | |
Aberdeenshire and actually hn the UK as a whole. We are the gold standard | :58:36. | :58:40. | |
for the oil industry across the world. People look at the UK, C us, | :58:41. | :58:46. | |
and say, if this technology is used in the UK then it will be used | :58:47. | :58:51. | |
across the world, which is brilliant. They think it is the gold | :58:52. | :58:54. | |
standard and we should do that and that is absolutely the case and this | :58:55. | :58:59. | |
Government needs to ensure that going forward... We will be taking | :59:00. | :59:02. | |
oil out of the North Sea for a long time yet, without doubt. People can | :59:03. | :59:06. | |
discuss exactly how many billion barrels of oil are left but, you | :59:07. | :59:10. | |
know, everyone agrees there are billions of barrels of oil left We | :59:11. | :59:16. | |
need to ensure that going forward we maximise the amount of oil we | :59:17. | :59:20. | |
produce from the North Sea. We need to ensure going forward that our | :59:21. | :59:25. | |
supply chain companies are supported, supported to continue to | :59:26. | :59:28. | |
do the brilliant work they do in the UK and also the brilliant work they | :59:29. | :59:34. | |
do exporting. We are an export industry. In Aberdeen in 2003 we had | :59:35. | :59:40. | |
the fourth highest number of patent is per head of population for any | :59:41. | :59:44. | |
city in the UK. Not quite the highest, but fourth highest. We have | :59:45. | :59:47. | |
done an amazing amount of innovation in our city, an amazing amotnt of | :59:48. | :59:51. | |
work, and we are absolutely recognised as a centre of | :59:52. | :59:55. | |
excellence. It is impossibld to understate how valuable this has | :59:56. | :59:59. | |
been to the UK Government treasury. We have paid for years taxes to the | :00:00. | :00:04. | |
UK Government Treasury and we will continue to do so for years, but... | :00:05. | :00:12. | |
We need to ensure we get UK Government support now. We need to | :00:13. | :00:15. | |
ensure companies are incenthvised to invest. If companies stop investing | :00:16. | :00:21. | |
we will not see that bright future in the industry and some colpanies | :00:22. | :00:26. | |
now are struggling with cash flow issues and the UK Government needs | :00:27. | :00:32. | |
to ensure they are inspiring confidence in the industry by | :00:33. | :00:35. | |
ensuring private equity people are investing, ensuring that banks are | :00:36. | :00:40. | |
keeping the investment in there We need to make sure that the TK | :00:41. | :00:45. | |
Government in this industri`l strategy expresses its confhdence in | :00:46. | :00:49. | |
the future of the oil and g`s industry. This is really important | :00:50. | :00:54. | |
for Aberdeen, the north-east and the wider UK. There are so many indirect | :00:55. | :00:58. | |
jobs in oil and gas and we need to keep those. I want to see a couple | :00:59. | :01:01. | |
of things on things mentiondd earlier. -- to see a couple of | :01:02. | :01:07. | |
things. The issue of apprentices and the young workforce. In Aberdeen we | :01:08. | :01:12. | |
have a thing called Develophng The Young Workforce North-east, a | :01:13. | :01:15. | |
brilliant piece of work linking industry with schools. This is | :01:16. | :01:19. | |
something that arose from the report about developing the young workforce | :01:20. | :01:23. | |
in 2014 that was presented to the Scottish Government and we `re | :01:24. | :01:26. | |
making really positive moves on this and it has widely been welcomed and | :01:27. | :01:29. | |
recognise and I think this would be something that would be good for the | :01:30. | :01:35. | |
UK Government to look at and incorporate in their industrial | :01:36. | :01:37. | |
strategy. Thank you for listening and please make sure oil and gas is | :01:38. | :01:43. | |
top of industrial strategy. Madame Deputy Speaker, it is a gre`t | :01:44. | :01:47. | |
pleasure to follow the honotrable member for Aberdeen North, `nd to | :01:48. | :01:52. | |
congratulate my friend, the member for work and Leamington, for | :01:53. | :01:57. | |
securing the debate. I will apologise to other members for not | :01:58. | :02:00. | |
being here for a number of speeches. I hope I do not repeat what has been | :02:01. | :02:06. | |
said. Not likely. LAUGHTER | :02:07. | :02:08. | |
I know there is little chance of that. George Brown, the noble Lord | :02:09. | :02:17. | |
Heseltine, Mandelson, and Vhnce Cable, into this hallowed sdries of | :02:18. | :02:22. | |
greats we should now add thd name of the Minister, the honourabld member | :02:23. | :02:26. | |
and his colleague, the Secrdtary of State, as the people who will | :02:27. | :02:30. | |
champion industrial strategx for our country. We can certainly... There | :02:31. | :02:38. | |
are no two better minds in this How's that we could apply to the | :02:39. | :02:45. | |
task. My concern, Madame Deputy Speaker, is that we are sending our | :02:46. | :02:50. | |
best brains out in pursuit of a nonsense -- two better minds in this | :02:51. | :02:54. | |
House. As the member for Abdrdeen said, we do not know what industrial | :02:55. | :02:58. | |
strategy is and no one has defined it. The Minister has not yet | :02:59. | :03:01. | |
published what the industri`l strategy is, and when I learned this | :03:02. | :03:06. | |
I raised my hands in prayer, because for as long as the Government cannot | :03:07. | :03:09. | |
define what it is, it will keep itself out of a great deal of | :03:10. | :03:14. | |
trouble indeed. Because as soon as it defines what it's industrial | :03:15. | :03:17. | |
strategy is, people are going to start to disagree with them. Because | :03:18. | :03:22. | |
the phrase industrial stratdgy is that wonderful grab bag of good | :03:23. | :03:28. | |
ideas. There are loads of ideas in industrial strategy. Every single | :03:29. | :03:31. | |
one of them good, Madame Deputy Speaker speaker. Never one hs a bad | :03:32. | :03:36. | |
idea, because if they were ` bad idea they would not be allowed into | :03:37. | :03:40. | |
the industrial strategy. Thd industrial strategy, in that, all | :03:41. | :03:44. | |
our winners, because of course nor industrial strategy will pick a | :03:45. | :03:48. | |
loser. The Minister will always say yes because with an industrhal | :03:49. | :03:53. | |
strategy you can never say no. So I hope very much the Minister will | :03:54. | :04:00. | |
maintain this rather reticent approach to an industrial strategy | :04:01. | :04:03. | |
so that he can continue to be friends with all members across the | :04:04. | :04:09. | |
chamber and not upset any, because it is hard first of all in ` phrase | :04:10. | :04:12. | |
industrial strategy for the Minister to find what is industry? Is | :04:13. | :04:18. | |
financial services and industry As the member for Warwick conjtred up | :04:19. | :04:23. | |
in his opening speech, it is about manufacturing... What is strategy? | :04:24. | :04:27. | |
Strategy is the pursuit of ` goal. But what is the goal for an entire | :04:28. | :04:33. | |
economy? If there is one, what on earth is the role of the Government | :04:34. | :04:37. | |
to tell everyone what it is? That went out in the 1940s and 50s with | :04:38. | :04:42. | |
Soviet planning. I know my friend has no interest in returning to | :04:43. | :04:48. | |
those days, but unfortunately he may unwittingly in his endeavours | :04:49. | :04:51. | |
encourage others on opposithon benches to think that the good old | :04:52. | :04:55. | |
days of centralised socialism are back, and I know he would not wish | :04:56. | :04:59. | |
to be a fellow traveller on that journey to despair at all. | :05:00. | :05:05. | |
Industrial strategy, we are told, is positive because it thinks `bout the | :05:06. | :05:11. | |
long-term. That is what shareholders do. We think about the news cycle, | :05:12. | :05:22. | |
we think about the election cycle, we have to make sure in fivd years | :05:23. | :05:27. | |
we seek real action. When wd speak about consensus in other cotntries | :05:28. | :05:31. | |
we have to recognise consensus in this country is built differently. | :05:32. | :05:34. | |
Consensus comes in this country from the competition of ideas and one set | :05:35. | :05:41. | |
of new ideas then being accdpted by the other party. The Conservative | :05:42. | :05:46. | |
Party under Margaret Thatchdr, promoting a reduction in thd power | :05:47. | :05:50. | |
of trade unions and liberalhsing markets, was accepted by thd | :05:51. | :05:54. | |
subsequent Labour Government. The Labour Government's move for the | :05:55. | :05:58. | |
national minimum wage and rdgulation in terms of discrimination hn the | :05:59. | :06:01. | |
workplace was accepted by the coalition Government. This hs how we | :06:02. | :06:06. | |
build consensus. But it is not compatible with an expectathon that | :06:07. | :06:10. | |
you can set an industrial strategy which stands for all time. Linister, | :06:11. | :06:14. | |
you will be here, I am sure, until you get promoted, but at sole stage | :06:15. | :06:18. | |
maybe in 20 years' ten opposition will be getting ready to take power, | :06:19. | :06:24. | |
and in that stage in the long term it may be picked apart -- 20 years' | :06:25. | :06:30. | |
time the Opposition will be getting ready. There might be good hdeas he | :06:31. | :06:37. | |
and his colleagues would like to look at, however. If we are to be | :06:38. | :06:41. | |
successful, as the honourable member was mentioning, we have to promote | :06:42. | :06:44. | |
innovation. Innovation is promoted by lowering taxes. By ensurhng our | :06:45. | :06:51. | |
markets are flexible, and I would see by looking very carefully at | :06:52. | :06:56. | |
regulatory sunsets, so that incumbents cannot use regul`tion to | :06:57. | :06:59. | |
defend themselves against insurgents. Corporate governance | :07:00. | :07:05. | |
needs to be looked at seriotsly as we have spoken about in a previous | :07:06. | :07:11. | |
debate. I commend the Government, the former Chancellor, the right | :07:12. | :07:15. | |
honourable member for pattern, for his productivity plan, not | :07:16. | :07:20. | |
necessarily because it was specifically about projects, but | :07:21. | :07:25. | |
because for the first time ht did concentrate on something Government | :07:26. | :07:29. | |
can do on strategy which is helpful particularly in infrastructtre. -- | :07:30. | :07:38. | |
the honourable member for T`tton. We need to know we are very poor at | :07:39. | :07:42. | |
implement in the decisions we make, and I recommend that for thd | :07:43. | :07:46. | |
Minister to look at again. The Prime Minister has rightly said the UK | :07:47. | :07:49. | |
should be at the forefront of free trade and here is something I will | :07:50. | :07:56. | |
clearly agree on. Free tradd is something the UK does best. We need | :07:57. | :08:00. | |
to ensure we have the appropriate protection against dumping but also | :08:01. | :08:03. | |
need to be on the front foot of lowering our tariffs. We ard leaving | :08:04. | :08:05. | |
the European Union. That is a major event for all of our | :08:06. | :08:16. | |
economy, so I do understand that the government should want to h`ve a | :08:17. | :08:21. | |
view on that and understand what actions it needs to take in the | :08:22. | :08:25. | |
short term, to assistance to this transition to a better and stronger | :08:26. | :08:34. | |
future. But, each of those things, are what government would do anyway. | :08:35. | :08:39. | |
We don't need to have a dep`rtment of industrial strategy to do that, | :08:40. | :08:47. | |
or to improve skills, or to change the law about governments on our | :08:48. | :08:56. | |
boards. We don't need the phrase industrial strategy, I am worried | :08:57. | :09:00. | |
for the Minister that as he put shoes this phase of industrhal | :09:01. | :09:04. | |
strategy he will be setting the government before the fall, and I | :09:05. | :09:08. | |
for one will want to support the government its endeavours so that | :09:09. | :09:13. | |
doesn't happen. Thank you, `lways glad to be tail end to Charlie. | :09:14. | :09:20. | |
Fortunately in this situation, my book on industrial policy is | :09:21. | :09:23. | |
published next month so may save time and send it to the Minhster. | :09:24. | :09:30. | |
There is no generic industrhal policy, I accept that, the lembers | :09:31. | :09:35. | |
the Bedford was correct in that But that is industrial strategy in the | :09:36. | :09:39. | |
here and now and the definition is, it is what the state doors to | :09:40. | :09:44. | |
provide competitive advantage to companies in that state, and a DD | :09:45. | :09:48. | |
not do that other states will help their companies and wipe yotrs out. | :09:49. | :09:55. | |
-- if you do not do that. The UK has had a landline explores the last | :09:56. | :10:01. | |
five years. I put this to the Chancellor of the Exchequer | :10:02. | :10:05. | |
yesterday he said, lack of demand, yet Germany's export road bx a | :10:06. | :10:11. | |
third, held by the German government. A German governlent that | :10:12. | :10:19. | |
taxes its industry hired thdn here. The United States, generations of | :10:20. | :10:24. | |
productivity growth, funded by investment in its defence | :10:25. | :10:27. | |
industries, flowing through into the public, sorry private sector. So you | :10:28. | :10:32. | |
can not divorce picking winners where the state comes in. It is a | :10:33. | :10:38. | |
partnership whether state b`cks up its own industries, particularly its | :10:39. | :10:42. | |
companies. And gets out the way where it needs to. But it h`s to be | :10:43. | :10:48. | |
that partnership. I would lhke to do something strange. Which is to | :10:49. | :10:52. | |
support a government policy of the last five years which I originally | :10:53. | :10:56. | |
were about but the more I h`ve researched it the more I thhnk is | :10:57. | :11:04. | |
really successful. It is thd catapult centres, what they do is we | :11:05. | :11:08. | |
put public money into centrds where we put the technology which small | :11:09. | :11:11. | |
companies cannot buy their own and they can use it. That helps provide | :11:12. | :11:16. | |
competitive advantage and whether catapult centres provide colpetitive | :11:17. | :11:20. | |
grants and challenge companhes to come up with solutions to problems. | :11:21. | :11:26. | |
That works, that is the solttion, it is not about picking winners but | :11:27. | :11:30. | |
creating the competitive environment in giving the resources. If you do | :11:31. | :11:36. | |
not do that, other countries will. A simple example is, there is a very | :11:37. | :11:42. | |
close correlation between exports as a percentage of GDP and how much | :11:43. | :11:49. | |
each country depends on our entry -- our entry the countries that have a | :11:50. | :11:59. | |
higher share of exports is orders of magnitude higher than what we spend. | :12:00. | :12:03. | |
It is because their governmdnt and the Ministry -- military put money | :12:04. | :12:09. | |
into that. The honourable mdmber far haven't made a very good pohnt about | :12:10. | :12:14. | |
the role of the military. I found a statistic, at the moment, the RAF | :12:15. | :12:27. | |
has 475 Ek last built in Brhtain, for the first time a majority of its | :12:28. | :12:33. | |
aircraft have been bought from abroad, 507. I tried a the number of | :12:34. | :12:38. | |
British made planes by incltding the Spitfires in the Battle of Britain | :12:39. | :12:45. | |
fight. If we buy Boeing and we let Lockheed and bowling use thdir | :12:46. | :12:49. | |
technology, we cannot survive. We have to use the weight of the state | :12:50. | :12:55. | |
behind companies. That is what the industrial policies about. Finally, | :12:56. | :13:00. | |
the budget for the catapult centres is about 600 million year, ht sounds | :13:01. | :13:06. | |
a lot, except that if you look at a comparative similar organis`tion in | :13:07. | :13:11. | |
Finland, it is about 75% of the UK's spent. So actually the UK's spent is | :13:12. | :13:18. | |
peanuts. Will some of it be wasted, yes, but some of it will produce the | :13:19. | :13:22. | |
new ideas and technology th`t we need. What a pleasure it is to | :13:23. | :13:30. | |
follow my honourable friend, as he was talking, I wrote down the | :13:31. | :13:38. | |
following "In till I read mx honourable friend East Lothhans but | :13:39. | :13:43. | |
I have some sympathy with the honourable members from Bedford and | :13:44. | :13:49. | |
Aberdeen North. " one of thd problems with nearly every | :13:50. | :13:55. | |
contribution or both then, the honourable member for Edinbtrgh | :13:56. | :13:59. | |
West, is that nobody has sahd what to me would be critical in `ny thing | :14:00. | :14:04. | |
that calls itself the stratdgy, and that is what is the purpose. What is | :14:05. | :14:08. | |
the purpose of this thing wd call an industrial strategy? I am as for me | :14:09. | :14:18. | |
the it purpose of industrial strategy at the end of the day would | :14:19. | :14:23. | |
be to help propel economic growth for the purpose of supporting the | :14:24. | :14:28. | |
well-being of people. That light not be shared by everyone here, and | :14:29. | :14:32. | |
don't know bits shared even by my honourable friend from East Lothian, | :14:33. | :14:39. | |
but may I want a frame might view remarks around that assumpthon of | :14:40. | :14:45. | |
what the purpose is. I enjoxed the opening of the honourable mdmber | :14:46. | :14:49. | |
when he led the debate of a bit of a historic review of past efforts of | :14:50. | :14:55. | |
industrial strategies. But, also pleaded to us to look to thd future | :14:56. | :15:01. | |
in the new context. I was also interested in light of lookhng at a | :15:02. | :15:04. | |
historically, to hear some words from the honourable member for with | :15:05. | :15:11. | |
Kim, where he indicated that he had read the works of Adam Smith. - | :15:12. | :15:22. | |
with Kim. The home of Adam Smith, is my constituency so I thought I might | :15:23. | :15:29. | |
venture at use words to continue their education of the honotrable | :15:30. | :15:34. | |
member. Smith was catastrophically wrong about the labour theory of | :15:35. | :15:38. | |
value, Annie is much to answer for, but I look forward to hearing your | :15:39. | :15:47. | |
remarks. I wish you wouldn't mix your words, say it how you really | :15:48. | :15:53. | |
feel! What I'm going to say, well I do feel Adam Smith has some | :15:54. | :15:57. | |
relevance is that he argued that critical to growth was the division | :15:58. | :16:02. | |
of labour in society. With specialisation, what we might call | :16:03. | :16:06. | |
today the importance of havhng the kind of education and skills that | :16:07. | :16:11. | |
allows others to promote innovation, change is that is what spurs growth | :16:12. | :16:17. | |
in the longer term. I think in that matter he was absolutely correct. It | :16:18. | :16:22. | |
is because of that thinking, thinking of the importance of | :16:23. | :16:26. | |
continuing to drive forward with new technologies and new thinking that | :16:27. | :16:31. | |
it is utter madness that thhs government palled out of ond of the | :16:32. | :16:37. | |
biggest world leading research products in the carbon capttre | :16:38. | :16:40. | |
products in the North east of Scotland. -- that the government | :16:41. | :16:47. | |
pulled out. That indicated that turning your mind away for what | :16:48. | :16:55. | |
would be fundamental to economic growth. The other thing the Adam | :16:56. | :16:59. | |
Smith said that I approve of, is that there is a role the st`te | :17:00. | :17:07. | |
integration that -- I rolled the state intervention. Insuring there | :17:08. | :17:15. | |
was a kind of education in society which supports that society | :17:16. | :17:19. | |
educationally and socially. We cannot leave education and skills to | :17:20. | :17:22. | |
the marketplace, we have to make sure that that is taken card of I | :17:23. | :17:31. | |
was interested to, if we talk about the importance of technologx, it | :17:32. | :17:34. | |
would strike me as one of the problems we've had historic`lly is | :17:35. | :17:38. | |
that we have plenty of people who are universities who are able to | :17:39. | :17:43. | |
come up with great technology logical ideas, great innovations, | :17:44. | :17:48. | |
but some of these will take many years to be able to reach the | :17:49. | :17:53. | |
marketplace. Private sector investment seems best when ht is | :17:54. | :17:58. | |
either at or near the marketplace. The problem has been very often the | :17:59. | :18:04. | |
gap between the idea and brhnging it to through issuing and that is where | :18:05. | :18:10. | |
I think the need for things like the role of the Scottish investlent bank | :18:11. | :18:14. | |
for example, I think that is what the honourable member for E`st | :18:15. | :18:18. | |
Lothian was hinting at two hn the valuable work that the capital | :18:19. | :18:22. | |
centres are doing. Being able to attract different forms of funding | :18:23. | :18:27. | |
for things that may take tile to reach the marketplace. I was | :18:28. | :18:31. | |
interested to in the remarks that people were making about thd | :18:32. | :18:35. | |
situation that we face becatse of Brexit and the challenge th`t it | :18:36. | :18:44. | |
presents to us. The governmdnt's response chaotic gazetteers, is | :18:45. | :18:50. | |
driving down confidence. -- chaotic as it is. It reminded me of what | :18:51. | :19:03. | |
Keynes argued, he argued th`t the principle the tenant of the level of | :19:04. | :19:08. | |
private investment is not the rate of interest or the level of | :19:09. | :19:16. | |
aggregate demand but the st`te of business confidence. One of the | :19:17. | :19:19. | |
things we seek, whether it's the reaction to quantitative easing | :19:20. | :19:27. | |
or... I listen to you with great interest as I always enjoy xour | :19:28. | :19:32. | |
speeches. What, when it comds to the question of the EU, confidence has | :19:33. | :19:37. | |
been driven down, would he not accept, by those who lost the | :19:38. | :19:41. | |
argument and the vote const`ntly saying it is going to be terribly | :19:42. | :19:46. | |
damaging and an economic disaster when, in fact, it is actually | :19:47. | :19:53. | |
proving to be quite benefichal. Well, I would take some isste with | :19:54. | :19:58. | |
your observations there. We were on the opposite sides of the argument | :19:59. | :20:02. | |
that regard but I think surdly the honourable member would agrde that | :20:03. | :20:08. | |
the government's response to the voters in chaotic. We are no further | :20:09. | :20:12. | |
forward for months later thdn we wear at the time as to what the | :20:13. | :20:16. | |
government means by Brexit, and how it is going to take that is doing | :20:17. | :20:23. | |
nothing else apart from driving down confidence in business. I dhd once | :20:24. | :20:27. | |
take up too much time, let le turn to one server issue that was raised, | :20:28. | :20:32. | |
which I think is important hn the generals fear of education. It was | :20:33. | :20:38. | |
mentioned by one of the honourable members about the importancd of the | :20:39. | :20:45. | |
post study work Visa. I would add to that, not just the post study work | :20:46. | :20:51. | |
Visa but that he was entrepreneurial Visa where we need to encourage | :20:52. | :20:57. | |
people from overseas to comd into this country to help us drive up the | :20:58. | :21:02. | |
levels of business investment and innovative ideas. I was intdrested | :21:03. | :21:08. | |
reading and essay of a friend of mine, Professor David Simpson, just | :21:09. | :21:14. | |
a few weeks ago and in that he says that one third of successful | :21:15. | :21:19. | |
business start-ups in California between 1980 and 2000 wear from | :21:20. | :21:24. | |
people who had comment from either India or China. Matic how wdll we | :21:25. | :21:32. | |
need, not only in Scotland, to attract people here, the best minds | :21:33. | :21:36. | |
here to help drive forward the economy, to be setting off ` is | :21:37. | :21:41. | |
against that cannot be in anyone's interest. It cannot be in the | :21:42. | :21:45. | |
interest of any thing that we might call an industrial strategy. Thank | :21:46. | :21:57. | |
you, it is a real pleasure to speak or the opposition on this ddbate. To | :21:58. | :22:05. | |
follow so many interesting `nd provocative and informative | :22:06. | :22:09. | |
contributions. I haven't agreed with all of them or all of all of them | :22:10. | :22:17. | |
but I have been pleased to listen to them. I particularly want to | :22:18. | :22:20. | |
congratulate the backbench business committee on bringing forward this | :22:21. | :22:28. | |
debate, and to single out the contributions the opening | :22:29. | :22:32. | |
contribution of the Member for Warwick and Leamington, who spoke so | :22:33. | :22:39. | |
eloquently. And so compellingly on the importance of industrial | :22:40. | :22:42. | |
strategy. And also the contributions of the members for Holburn haven't | :22:43. | :22:49. | |
who also sponsored the recent debate on the fourth industrial agd and the | :22:50. | :22:53. | |
Member for Hartlepool who chairs the select committee. I think it is | :22:54. | :23:00. | |
absolutely crucial that this House shows that the nation and the world | :23:01. | :23:04. | |
And we can build an economy and society we want. One that rdflects | :23:05. | :24:19. | |
our values as a nation and what we want for the next generation. I | :24:20. | :24:23. | |
would say that was the purpose of industrial strategy labour, is | :24:24. | :24:30. | |
calling for an industrial strategy which is based on our values, that | :24:31. | :24:37. | |
means the principles we hold dear, equality, democracy empowerlent the | :24:38. | :24:42. | |
value of labour and economic liberation guiding the direction of | :24:43. | :24:48. | |
a growing economy we need an industrial strategy geared towards | :24:49. | :24:53. | |
stable jobs towards tackling the great challenges of our timds, such | :24:54. | :24:59. | |
as climate change and towards narrowing the gap between the haves | :25:00. | :25:04. | |
and the have-nots. Working from first principles we can put together | :25:05. | :25:11. | |
mission goals for a new economy and developed the industrial strategy | :25:12. | :25:16. | |
that delivers them. From buhlding a green future to closing the gender | :25:17. | :25:22. | |
gap, from balancing the economy beyond the financial servicds to | :25:23. | :25:27. | |
tackling youth unemployment industrial strategy can contribute | :25:28. | :25:30. | |
to addressing these great challenges. And they strategy is | :25:31. | :25:37. | |
necessary, the market alone is not provided the answers. We have not | :25:38. | :25:41. | |
left it. Without an industrhal strategy the market has not been | :25:42. | :25:45. | |
allowed to deliver the economy that we want. It has given no respite to | :25:46. | :25:52. | |
those that have seen their community is staffed through austeritx, feel | :25:53. | :25:56. | |
people who will never have ` well-paid job, or in their own | :25:57. | :26:01. | |
house, hourly is clear that. Out of those subjected to Coney and | :26:02. | :26:06. | |
conditions in warehouses such as sports direct. -- those subjected to | :26:07. | :26:13. | |
Coney and conditions. We've seen an increase of precarious work, high | :26:14. | :26:18. | |
cost of living, the market has failed all but a privileged few at | :26:19. | :26:23. | |
the top of our society. Which the Minister did not seem to recognise | :26:24. | :26:30. | |
but then the Tories have not had an industrial strategy since the 1 50s. | :26:31. | :26:36. | |
Their time in government ovdr the last six years would be to be pitied | :26:37. | :26:41. | |
if it hadn't actually ruined the lives of so many people. Let me give | :26:42. | :26:46. | |
just one example many of my constituents, stand, live in fear of | :26:47. | :26:54. | |
the rise of the robots, the back of result in fewer jobs. I no research | :26:55. | :27:00. | |
shows 25% of workers could see the majority of their work autolated in | :27:01. | :27:05. | |
the next ten years. I want this government to be proactive, and use | :27:06. | :27:13. | |
technology to help create more jobs for people across the country yet | :27:14. | :27:16. | |
sadly the science and technology committee has condemned the | :27:17. | :27:22. | |
government board the complete lack of absence of the strategy on | :27:23. | :27:28. | |
digital. The Conservatives claimed in 2010 they would restore balance | :27:29. | :27:34. | |
between sectors of our economy, but manufacturing is on the samd levels | :27:35. | :27:43. | |
it has been every year sincd 20 2 -- since 2007. Instead, they h`ve | :27:44. | :27:49. | |
starved our communities with their austerity agenda, an agenda which is | :27:50. | :27:54. | |
now apparently forgotten. Btt I know that my constituencies, and merit an | :27:55. | :27:59. | |
apology for what they have had to suffer in the name of austerity | :28:00. | :28:06. | |
And, unfortunately, this will be nothing in comparison to thd impact | :28:07. | :28:13. | |
of the hard Brexit, that we see the three Brexit tears into doing to | :28:14. | :28:21. | |
implement. We've seen the l`ck of strategy for our industry through | :28:22. | :28:26. | |
the disintegrating and fraglenting of our industrial support | :28:27. | :28:28. | |
infrastructure innovation, for example has been of slab, promoted | :28:29. | :28:36. | |
by at least three separate bodies. There have also have the catapults. | :28:37. | :28:43. | |
This government is starved regions outside of London by apologx and | :28:44. | :28:46. | |
regional development agencids by no replacement for them. Each | :28:47. | :28:55. | |
industrial age needs leadership from government, Harold Wilson s`id in | :28:56. | :29:01. | |
his famous 1960s white heat of technology speech that "Innovation | :29:02. | :29:05. | |
is driving was in a new dirdction, but we need leadership to elbrace | :29:06. | :29:11. | |
the changes and to ensure that that direction is for the benefit of | :29:12. | :29:17. | |
those all, because group has a direction" that was with thd third | :29:18. | :29:22. | |
industrial revolution and wd now need leadership more than ever as | :29:23. | :29:27. | |
the next wave of technological change shoes are breaking over us. | :29:28. | :29:34. | |
-- the next wave of technological change are breaking over us. We | :29:35. | :29:40. | |
would welcome the late coming of this government to understanding the | :29:41. | :29:45. | |
importance of industrial strategy, but unfortunately as my honourable | :29:46. | :29:50. | |
friend the Member for Norwich South said earlier, the Tories have shown | :29:51. | :29:54. | |
time and time again that whhlst they can talk the talk they cannot walk | :29:55. | :29:59. | |
the walk. Since the Prime Mhnister took office she has ignored the news | :30:00. | :30:05. | |
for it digital and industri`l strategy, it is the current Bill | :30:06. | :30:09. | |
passing through the committdes in nor is the opportunities thd digital | :30:10. | :30:14. | |
revolution could provide, btsinesses in Britain. And it has resulted in | :30:15. | :30:20. | |
very real neglect as has bedn mentioned, one of our tech success | :30:21. | :30:26. | |
stories, arm Holdings in Calbridge was sold to Japanese investors | :30:27. | :30:31. | |
without any reassurances on job security for the 3000 peopld who | :30:32. | :30:36. | |
work there. What the Ministdr like me to give way? No! OK. Acttally | :30:37. | :30:46. | |
assurances were given the ntmber of jobs would increase. I am glad to | :30:47. | :30:54. | |
see them minister making a contribution to support our | :30:55. | :30:58. | |
industrial strategy, but thd fact is that we have seen the insurdr | :30:59. | :31:04. | |
answers that were given, for example in the case of Cadbury 's and craft | :31:05. | :31:10. | |
that the assurances need to be concrete if we are to actually see | :31:11. | :31:15. | |
their benefits. And we need to have the powers to say do so. Those | :31:16. | :31:25. | |
assurances are legally bindhng. I'm glad that than a minister h`s seen | :31:26. | :31:33. | |
fit again to intervene. I look forward to those assurances being | :31:34. | :31:36. | |
proven and I look Because this strategy is ond of | :31:37. | :31:55. | |
incompetence for Britain's industrial future. There is no | :31:56. | :32:00. | |
vision for business, for how business can bring about a lore just | :32:01. | :32:07. | |
society, on energy, on materials, on manufacturing, on food and drink, on | :32:08. | :32:13. | |
agriculture, on the process industries, biotech, steel, Tech, on | :32:14. | :32:20. | |
the creative industries. It is for us in the Labour Party to provide | :32:21. | :32:24. | |
the leadership we so much nded on industrial strategy. Thank xou, | :32:25. | :32:32. | |
Madame Speaker. I am pleased to follow the Shadow minister. I was | :32:33. | :32:36. | |
very much enjoying her speech until it all seemed to go a bit wrong | :32:37. | :32:42. | |
toward the end. Where I finhshed listening is where she said she | :32:43. | :32:46. | |
welcomed the Government's initiative to have industrial strategy. I am | :32:47. | :32:53. | |
also grateful to the Backbench Business Committee for provhding | :32:54. | :32:59. | |
this, providing this time for this debate, and everyone who has had the | :33:00. | :33:04. | |
opportunity to speak. I takd from the honourable member for Aberdeen | :33:05. | :33:08. | |
North what she said and how is she introduced her speech, which was to | :33:09. | :33:12. | |
say that basically everybodx had a different interpretation about what | :33:13. | :33:17. | |
industrial strategy was all about. I don't think there is anything wrong | :33:18. | :33:21. | |
with that. I think that is the purpose of this debate. For everyone | :33:22. | :33:27. | |
in this chamber who has indhcated that wish to speak to be able to | :33:28. | :33:31. | |
give their take on an industrial strategy. I suppose I would go back | :33:32. | :33:35. | |
one step further, although H would look forward to reading the book | :33:36. | :33:40. | |
written by the member for E`st Lothian when it finally comds out. I | :33:41. | :33:45. | |
am sure it will be selling `round the corners. | :33:46. | :33:46. | |
LAUGHTER But until that does I would | :33:47. | :33:54. | |
recommend that anybody read the book by Lawrence Freedman, history on | :33:55. | :33:57. | |
strategy, and we speak about definitions, and I think thd | :33:58. | :34:02. | |
definition of strategy, which I also think is very important, is the most | :34:03. | :34:10. | |
precise definition I have come across, to get the furthest with the | :34:11. | :34:17. | |
mostest, and I don't think that is a bad foundation for this deb`te to go | :34:18. | :34:21. | |
ahead. I would also just like to refer to my very good friend the | :34:22. | :34:28. | |
honourable member for Bedford, I think and I am sure the House will | :34:29. | :34:36. | |
agree with me, was enjoying this speech far too much. To put a | :34:37. | :34:41. | |
spanner in the works of othdrwise consensual and positive deb`te, with | :34:42. | :34:48. | |
his desire to hold to the philosophy of really a free for all. And let | :34:49. | :34:57. | |
everything... Everything is for the best, in the best possible words. I | :34:58. | :35:02. | |
hope he will come round to welcoming the pragmatic opportunity... You | :35:03. | :35:10. | |
seem like a dreamer. The pr`gmatic opportunities this initiative, | :35:11. | :35:17. | |
through the minister and his words, a policy that is being formdd, and | :35:18. | :35:22. | |
discussion papers are being written. We are again going to be able to | :35:23. | :35:28. | |
have our say, I would hope, and this will come back to the House for for | :35:29. | :35:33. | |
the debate, but again I would imagine all members would agree with | :35:34. | :35:38. | |
me that it is better to be having this debate is now when we can. . I | :35:39. | :35:44. | |
will give way. I much enjoydd honourable member's speech `nd agree | :35:45. | :35:48. | |
with what he is saying now, but the point has not really been answered, | :35:49. | :35:52. | |
my point, that low wages and flooding the market with chdap | :35:53. | :35:57. | |
labour does not actually help investment - it actually kedps | :35:58. | :36:00. | |
productivity at all levels `nd if we are going to see seriously high | :36:01. | :36:04. | |
investment in modern technology we need to raise wages and stop | :36:05. | :36:07. | |
flooding the market with chdap labour. I will thank him for that | :36:08. | :36:13. | |
final intervention, but I would suggest that a proper and Phil | :36:14. | :36:21. | |
industrial strategy when it looks at issues like productivity will take | :36:22. | :36:26. | |
these issues into account -, full industrial strategy. I thank all | :36:27. | :36:29. | |
honourable members from both sides of the House and would also like to | :36:30. | :36:37. | |
pay my appreciation to the chair of the business, energy and industrial | :36:38. | :36:41. | |
strategy committee for the work that committee is taking on this issue at | :36:42. | :36:48. | |
the moment. The question is that this House has considered industrial | :36:49. | :36:50. | |
policy. As many as are of the opinion, say 'aye'. To the contrary, | :36:51. | :36:57. | |
'no'. I think the ayes have it. The ayes have it. We now come to motion | :36:58. | :37:04. | |
number two, relating to the intelligence and security committee | :37:05. | :37:13. | |
of Parliament. Minister to love .. Madame Deputy Speaker, I beg to move | :37:14. | :37:16. | |
that the honourable member for Newbury on the right honour`ble | :37:17. | :37:20. | |
member for Dylan be appointdd to the Intelligence and Security Committee | :37:21. | :37:22. | |
under section one of the Justice and Security Act 2013 in place of the | :37:23. | :37:29. | |
right honourable member for Rutland who ceased in accordance with | :37:30. | :37:34. | |
paragraph 12 B to be a membdr of the committee when he became a linister | :37:35. | :37:38. | |
of the Crown, and a member who has resigned is a member of the | :37:39. | :37:42. | |
committee in accordance with paragraph 13 A in that act. On the | :37:43. | :37:51. | |
order paper. As many as are of the opinion, say 'aye'. To the contrary, | :37:52. | :37:55. | |
'no'. I think the ayes have it. I beg to move this House now do I | :37:56. | :38:03. | |
join. Thank you, Madame Deptty Speaker. I am grateful for the | :38:04. | :38:08. | |
opportunity to address this topic today, of great importance to my | :38:09. | :38:12. | |
constituents, to London and indeed to the whole South East of Dngland. | :38:13. | :38:17. | |
Southern rail access to Heathrow is a welcome proposal to connect areas | :38:18. | :38:22. | |
that lie to the South of He`throw to the airport by rail. However it is | :38:23. | :38:26. | |
not just about getting people to their aeroplane on time, but the | :38:27. | :38:30. | |
scheme has the potential to transform public transport provision | :38:31. | :38:33. | |
and regenerate areas with some of the highest levels of deprivation, | :38:34. | :38:37. | |
not just in London but in the country. In the nearby words in my | :38:38. | :38:40. | |
constituency, where this development would take place, over 30% of | :38:41. | :38:50. | |
children live in poverty. To me it is scandalous, Madame Deputx | :38:51. | :38:53. | |
Speaker, that the world's btsiest airport is not connected to South | :38:54. | :38:58. | |
London and the whole of the South, and for want of a few kilomdtres of | :38:59. | :39:00. | |
track linking Heathrow... | :39:01. | :39:13. |