BHS — House of Commons, 2016-06-06
Topic: Labor
Anna Mary Soubry (Conservative, Centre-right): I should like to make a brief statement on British Home Stores. The House will remember that, on 25 April, I made a statement after BHS entered administration. The administrators, Duff & Phelps, tried to sell BHS as a going concern with a view to retaining all the stores and as many jobs as possible. I understand that it had talks with a number of interested parties. As reported last week, the administrators have now concluded that process. Although offers were received, none was sufficient to enable a deal to be completed, and they have had to take the decision to wind the business down. That will be devastating news for workers at BHS and their families, and for those businesses that supply BHS. Our thoughts are with all of them. That follows the sad news received by Austin Reed workers on 29 May that only a partial sale of that business was possible, with the remainder being wound down over the course of June A number of questions have properly been raised about how BHS found itself in that situation. The proper authorities—the administrators, the Insolvency Service and the pensions regulator—are already looking into these matters. I am clear that any wrongdoing will be taken very seriously and I will return to that later in my statement Our focus now is to support all those affected and to get people back into work as quickly as possible. While we await the administrators’ plans for winding down the business, I can inform the House that Jobcentre Plus has been in contact with them and is preparing a range of support to assist staff. Jobcentre Plus is on standby to go into BHS stores and directly advise affected staff of their various options. Already, teams are centrally tracking vacancies in the retail sector and will ensure that BHS branches are aware of any vacancies in the area Jobcentre Plus stands ready to deploy its rapid response service in acknowledgment of the scale of the job losses. The service has a strong record of helping people at very distressing times. It can offer workers support, including help with job searches, CV writing and interview skills. It can also help to identify transferable skills and skills gaps linked to the local labour market. It can help with training to update skills and learn new ones, and gaining industry-recognised certification will improve employability. It can give help to overcome barriers to attending training, and securing a job or self-employment, such as childcare costs, work clothes and travel costs I can inform the House that the Department for Work and Pensions has written to major retailers asking them to consider what opportunities they can offer the workers and local areas affected as the situation becomes clearer this week. DWP will also monitor the impact of redundancies locally on a continuing basis, and will provide additional targeted support to any areas that are particularly badly affected. I assure the House that we will do everything in our power to support workers and their families through this difficult time—not just BHS workers, but those made redundant by Austin Reed On the wider issues, on 3 May, the Business, Innovation and Skills Secretary instructed the Insolvency Service to begin its investigation into the extent to which the conduct of the directors of BHS led to its insolvency and/or caused detriment to its creditors. The Insolvency Service cannot give a running commentary on its investigations, but I know its work is well under way. I am clear that if evidence is uncovered that indicates that any of the directors’ conduct fell below what is expected, action will be taken. This can include applying to the courts to disqualify the relevant parties from being a company director for a period of two to 15 years. If there are any indications of any criminal wrongdoing relating to BHS, we will ensure that the relevant investigatory body is informed Members will be aware of considerable concern about the BHS pension scheme. The BHS schemes are in a Pension Protection Fund assessment period. The test is whether the schemes’ funds are sufficient to allow each scheme to buy annuities that will pay members at least PPF-level benefits. If it cannot, the scheme will transfer to the PPF and compensation will be paid. The PPF aims to resolve these issues as quickly as possible PPF compensation is generally 100% of the pension in payment for anyone over the scheme’s normal pension age at the date of the insolvency, and, for everyone else, 90% of the accrued pension, subject to a maximum cap The Pensions Regulator is currently undertaking an investigation into the BHS pension scheme to determine whether it would be appropriate to use its anti-avoidance powers. This means that if the regulator believes an employer is deliberately attempting to avoid its pension obligations, leaving the PPF to pick up its pension liabilities, the regulator may intervene and seek redress from the employer—and, if I may say so, Mr Speaker, rightly so. There is a clear process that must be followed and this can sometimes take a considerable amount of time. When it becomes appropriate to do so, the regulator will consider issuing a report of its activities in this case. We will examine its findings closely As I said on 25 April, retail is a vital sector for the United Kingdom economy and the Government are committed to it, which is one reason why I will be meeting key retailers this Thursday with ministerial colleagues from other Government Departments. The news of the BHS closure is a huge blow, but as a whole the retail sector is resilient. There are now 3.1 million retail jobs in the United Kingdom, up by 83,000 since 2010 and almost back to record pre-recession levels High streets remain a crucial part of our local and regional economies, creating jobs, nurturing small businesses and injecting billions of pounds into our economy. A recent report by the Association of Town Centre Management found that town centres contribute nearly £600 billion to the economy each year. That is why we continue to support the British high street. We reduced corporation tax and I am so pleased that we announced the biggest ever cut in business rates in England, worth £6.7 billion over the next five years, which will of course benefit small businesses in particular I know little of this will be of comfort to BHS workers facing an uncertain future, but I assure them and the House that the Government will do everything within their powers to get every affected worker back into a job as soon as possible. I commend the statement to the House.