BHS — House of Lords, 2016-06-06
Topic: Labor
Lucy Neville-Rolfe (Conservative, Centre-right): My Lords, with your Lordships’ permission, I shall now repeat a Statement made in another place by my right honourable friend the Minister of State for Small Business, Industry and Enterprise, Anna Soubry. The Statement is as follows: "The House will remember that on 25 April I made a Statement to the House after BHS had entered administration. The administrators Duff and Phelps tried to sell BHS as a going concern, with a view to retaining all stores and as many jobs as possible. I understand that they had talks with a number of interested parties As reported last week, the administrators have now concluded that, 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. This will, of course, be devastating news for the workers at BHS and their families, and also for those businesses which supply BHS. This followed 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 been raised about how BHS found itself in this 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 this later in the Statement Our focus now is to support all those affected and 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 already been in contact with the administrators 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 on their options. Already, teams are centrally tracking vacancies in the retail sector and will make local BHS branches aware of any vacancies in their area Jobcentre Plus also stands ready to deploy its rapid response service in acknowledgment of the scale of the job losses. This is a service with a strong record of helping people at a very distressing time. It can offer workers support, including help with job searches, CV writing and interview skills; help to identify transferable skills and skills gaps, linked to the local labour market; training to update skills, learn new ones and gain industry-recognised certification that will improve employability; and help to overcome barriers to attending training, securing a job or self-employment, such as childcare costs, tools, work clothes and travel costs I can also inform the House that the DWP has written to major retailers asking them to consider what opportunities they may be able to offer the workers and local areas affected as the situation becomes clearer this week. The DWP will also be monitoring the impact of redundancies locally on a continuing basis and will provide additional targeted support to any areas particularly affected. I can assure the House we will do everything in our power to support workers and their families through this difficult time, not just for BHS, but also for those made redundant from Austin Reed I now turn to some of the wider issues. On 3 May, the Business Secretary instructed the Insolvency Service to begin its investigation into the extent to which the conduct of the directors of BHS led to the insolvency of BHS and/or caused detriment to its creditors. While the Insolvency Service cannot give a running commentary on its investigations, I know that the work is well under way, and I am clear that if evidence is uncovered that indicates that any of the directors’ conduct fell below that to be 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 also be aware of considerable concern about the BHS pension schemes. The BHS schemes are in a Pension Protection Fund assessment period. The test is whether or not the schemes’ funds are sufficient to allow each scheme to buy annuities which will pay members at least Pension Protection Fund-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 also currently undertaking an investigation into the BHS pensions scheme to determine whether it would be appropriate to use its anti-avoidance powers. This means that if the regulator believes that an employer is deliberately attempting to avoid their pension obligations—leaving the Pension Protection Fund to pick up its pension liabilities—the regulator may intervene and seek redress from the employer. 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 closely examine its findings As I said on 25 April, retail is a vital sector for the UK economy and we are committed to it, which is why I will be meeting key retailers in the coming weeks, along with ministerial colleagues from other government departments. While the news of BHS’s closure is a huge blow, the retail sector as a whole is resilient. There are now 3.1 million retail jobs in the UK, 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 Managers found that town centres contribute nearly £600 billion to the economy each year. We will continue to support the British high street. That is why we reduced corporation tax and announced the biggest ever cut in business rates in England, worth £6.7 billion over the next five years I know that little of this will be of comfort to BHS workers facing an uncertain future. But I can assure them and the House that this Government will do everything in their power to get every affected worker back in a job as soon as we possibly can. I commend this statement to the House" That concludes the Statement.