20/10/2016 House of Commons


20/10/2016

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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

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co-operation. Statement for community health and care.

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Thank you, Mr Speaker. With permission I would like to lake a

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statement on the future of community pharmacy. In December, 2015, the

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Government set out a range of proposals for reforming the sector.

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Our intent was to promote a movement towards a clinically focussdd

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service that is better integrated with primary care and makes better

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use of pharmacist skills. I now wish to update the House on the outcome

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of this consultation and thd measures we intend to take forward.

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Mr Speaker, I let me be cle`r t Government fully appreciates the

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value of the community pharlacy sector. There are over 11,a 500

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farmties up -- 11,55 pharmacies up by 11% in the last decade. The

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overall pharmacy spend has hncreased by over 40% since the last decade.

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Now stands at ?2.8 billion per an unanimous. -- an number. However we

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do not believe the current funding system does enough to promote

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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

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see. Mr Speaker, the average pharmacy

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receives nearly ?1 million per an number for the NHS goods and

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services it provides. Around ?220,000 of this is direct

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income. This includes a fixdd sum payment called the establishment fee

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of ?25,000 per an number pahd from most pharmacies regardless of size

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and regardless of quality. This is an inefficient allocation of NHS

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funds, when 40% of pharmacids are now in clusters of three or more,

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which means two fifths are within den minutes walk of two othdr

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pharmacies. Clusters of pharmacies of up to 15 within a 10-mintte walk

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of each other. At a time in which the over`ll NHS

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budget is under pressure and we need to find ?22 billion in efficiency

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savings by 2020, it is right that we examine all areas of spend `nd look

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for improvements. The measures that we are bringing forward tod`y have

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at their heart our desire to more efficiency spend precious NHS

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resources. Community pharmacy must play its part as the NHS rises to

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this challenge. Mr Speaker, I am today annotncing a

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two-year funding settlement. In summary, contractors providd the NHS

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pharmaceutical services unddr the community pharmacy framework, will

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receive ?2.86 billion funding in 2016, 2017 and ?2.5 #9d billion in

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2017/18. This represents a 4% reduction in 2017/18 and 3.4% in

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17/18. Mr Speaker, every pensy saved by this reset will be reinvdsted and

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reallocated back into our NHS. To ensure the very best pathent

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care. Furthermore, separately commissioned services by NHS

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England, and Clinical Commissioning Groups and local authorities will

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not be affected by this change. I want to see this commissionhng of

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services continue to grow. From December 1st, 2016, we will also

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simplify the current outdatdd payment structure, introducd a

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payment for quality, so that first, for the first time we will pay

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pharmacies for the services they provide, not just the volumd of

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prescriptions they dispense. We will also be relieving pressure on other

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parts of the NHS by for the first time properly embedding pharmacy in

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the urgent care pathway. As we continue the path of reform we will

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be informed both by the revhew of community pharmacy services being

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carried out by Richard Mowex of the King's Fund and other stakeholders

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such as the royal pharmaceutical society. NHS England is invdsting

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?42 million in the pharmacy integration fund for 2016/17, 1 /18.

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24 will facilitate the movelent of the sector faster into valud added

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services. As an example Mr Speaker, last week I announced two additional

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initiatives to improve our offer to patients. First, those who need

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urgent repeat medicines will be referred to NHS Directly. Bx NHS 111

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directly to pharmacists, not out-of-hours GPs, as at present

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Secondly, NHS England will dncourage a national rollout of the mhnor

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ailment schemes or any commhssion by NNCGs. This is expected to be

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complete by April 2018. Mr Speaker, we are confident these

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measures can be made without jeopardising the quality of

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services. In fact we believd the changes will improve them. To

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safeguard patient access we will introduce a pharmacy ak schdme in

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areas with fewer pharmacies and higher health needs. We are

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publishing the list of pharlacies which will be eligible to ftnd from

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this scheme. Copies are avahlable on gove UK and the Vote Office. This

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list includes all pharmacies which are more than one mile in dhstance

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from another pharmacy. Thesd pharmacies will be protected from

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the full impact of the reductions W ewill have a review process to deal

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with any unforeseen circumstances like road closure. We will review

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cases where there may be a higher level of deprivation but ph`rmacies

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are less than a mile from another pharmacy. If that pharmacy hs

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critical for access. This whll cover pharmacies that are located in the

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20% most deprived areas in Dngland. And areal le kated 0.8 miles or more

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from another pharmacy. And `re critical for access.

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Additional funding over and above the base settlement mentiondd above

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will be made available for this as needed.

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Mr Speaker, we have already announced NHS England's proposal to

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significantly increase the number of pharmacists working directlx in

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general practise. A budget of ? 12 million has been allocated `nd will

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deliver a further 1500 pharlacists to general practise by 2020.

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. Colleagues will be aware th`t the

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Government consulted the pharmaceutical negotiating committee

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and other stakeholders. I am grateful for the responses

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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

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confirmed there was a potential for the sector to add more valud. But we

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are disappointed by the fin`l response from the PSMC. We dndeavour

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to collaborate and listen to their many suggestions over many lonths.

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Sadly, we were unable in thd end to reach agreement.

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Their role is to represent the interests of their members `nd I

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respect that. My role is to do the right thing for the taxpayer, the

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patient and the NHS. I want to close by setting out my firm belidf that

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the future for community ph`rmacy is right. These vital reforms will

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protect access the payments, properly reward quality for the

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first time and far better integrate care with GP and other servhces

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This is what the NHS needs, what patients expect, and I belidve what

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the vast majority of communhty pharmacists are keen to delhver I

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commend this statement to the House. I thank the Minister for his

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statement. Community pharmacies play a crucial role in our Health and

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Social Care Act system. 80% of patient contact in the NHS hs in

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community pharmacies so the government decision to press ahead

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

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and 7% for the year after wd'll cause widespread concern and dismay.

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-- will cause. When the cuts were proposed public petition on this

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became the largest ever on ` health-care issue. It has 2.2

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million signatures so the mdssage is that people want to see comlunity

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pharmacies protected. In thd face of unprecedented demands on he`lth and

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social two care services, the role of pharmacies is greater th`n ever.

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They signpost people to othdr services, they are important to

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carers and they reduce demand on GPs and other services. The minhsters

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not recognise the extent of the support community pharmacies offer

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and the impact their loss whll have on communities? The governmdnt's

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latest funding offer was regular -- neglected by the pharmaceuthcal

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negotiating group Vickers the outcome would be the same as the

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previous offer. -- because. The Member for bed and Fred -- the

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Member for Bedfordshire said up to a quarter of community pharmacies

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would close and many of the remaining ones would be forced to

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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

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pharmacies that do survive the cuts will be under significant pressure,

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reducing in job losses and service reduction, putting patient safety at

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risk. The government plans `re not only deeply unpopular, they are

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short-sighted and they will hit areas with the greatest health

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inequalities hardest. A study by Durham University has shown that

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pharmacy clusters occur most in areas of greatest deprivation and

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need. Will he reassure us that areas of greatest deprivation will not

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lose pharmacies they rely on and be disproportionately hit by these

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cuts? I was not reassured bx his statements. The impact will be

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significant on older people, people with disabilities or long-tdrm

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illnesses, or carers who often do not even seek GP appointments. The

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Minister said nothing about an impact assessment for these cuts.

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Given their effect is likelx to be substantial with rural, remote and

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deprived areas most affected, when we will see -- when will we see an

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impact assessment? Communitx pharmacies relieve pressure on

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overstretched health and social care services. It seems to me th`t

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ministers are ignoring "Of ` recent report by Price Waterhouse Coopers

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showing that community farm pharmacists give a huge bendfit As

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the Minister considered the long-term impact this will have on

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other NHS services? Has Billy macro -- has the. Can the Minister

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reassure us that all parts of the NHS, including NHS England, support

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these proposals? He said earlier in the week that no community will be

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left without a pharmacy but he was unable to say which will close and

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where. Will he repeat the pledge that no community will be ldft

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without a pharmacy? We recognise the need, as does the Minister, to

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integrate pharmacy services greater with the rest of primary care, but

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introducing cuts on this sc`le will not improve health services, it will

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damage them. A lot of that frankly was scaremongering. It doesn't help

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what we are doing here and some of the difficult decisions we have had

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to make, and they are directed at modernising this service, bringing

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it up today, making it much more by manic in terms of added valte and

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less static in terms of dispensing and all that goes with that but I

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will offer Billy macro answdr specific points. There was ` full

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impact assessment which will be released after this statement. She

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also asked about the PWC report an excellent piece of work, and I am on

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record as saying that on a number of occasions, and it drives hole the

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value of community pharmacy, which we accept on this side of the House.

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It doesn't address the extent to which those services could be

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delivered for less cost to the NHS and that is what I have to `ddress

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and that is what we have done. She asked whether NHS England stpport

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these changes that we are m`king. She may have heard comments by Simon

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Stephens but I will read out to her quote from the chief pharmaceutical

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officer of NHS England." NHS England as a national commission of

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community pharmacy services can reassure the public that thd

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efficiencies being asked for will be manageable and sufficient to ensure

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that they are accessible and convenient so they will be NHS

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pharmacy services in every community in England." That is the chhef

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pharmaceutical officer. The honourable lady is asking how many

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are closing, the answer is H don't know. Possibly none will close. I

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don't believe that 3000 will close. But I would say that the avdrage

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margin in operating margin that a pharmacy makes on the numbers I

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quoted earlier is 15%. That is after salaries and rate. The cuts we are

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making, the efficiencies we are asking for, is significantlx lower

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than that. Of course there hs no such thing as an average ph`rmacy

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which is why I can't guarantee there will be no changes but I can say

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that if there are mergers and consolidation that demand doesn t go

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away, it goes to other pharlacies, and to say that those will be put

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under more pressure is plain wrong. I wanted to say again that what we

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are doing here is building `n industry which is fit for the

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future, modern and which adds value in a way it hasn't been abld to do

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in the past. Members who arrived after the start of the statdment

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should not expect to be called. Secondly, there is extensivd

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interest in this very important statement, interest I am kedn to

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accommodate, and there are to follow very heavily subscribed deb`tes

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under the auspices of the B`ckbench Business Committee, said thdre is a

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premium on brevity. We will be led in that by Sir Alex Hazlehurst. My

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honourable friend acknowledged that the NHS has become such a p`rt of

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the nation's DNA that doctors' surgeries are frequently ovdrloaded

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and absolutely the right wax forward is to have a network of pharmacies

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and that is of particular ilportance in rural areas. Director denies

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that. He made the point that it is well spaced and that all ardas are

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protected. I also make the point, as I said, that we are recruithng a

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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

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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

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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

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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

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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

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doing. The Minister knows mx views, that I think this 4% cut is not

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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

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very important we don't report this as a cut. I would ask the Mhnister

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to assure us that any incentives for pharmacies and the delivery of

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public health measures, not`bly preventative measures. I re`ssure

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her that for the first time we will be allowing pharmacists to `ccess a

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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

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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

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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

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5% on A I feel this will be a bit random, just pharmacies shutting on

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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

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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

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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

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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.

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