My Lords, I thank my noble friend for his explanation of these regulations, which extend the powers to regulate that we agreed last year during our lengthy debates on the Corporate Insolvency and Governance Act for a further year, until April 2022.
We know from the report by our hard-working Secondary Legislation Scrutiny Committee that the power has been used only to suspend temporarily the personal liability incurred by company directors through wrongful trading. As my noble friend said, that has not been renewed, so I cannot see why a wide-ranging power of this kind needs to be extended—and extended for a whole year. If necessary, I would have favoured a more focused provision and a six-month extension.
It is dangerous to take too much power in regulations. I do not favour the method apparently adopted by the ancient Greek state of Locris, where proposers of law change stood with a noose round their neck, ready to be hung should the proposal be rejected. However, every burden placed on business and society makes someone poorer, and we need to outgrow the juvenile temptation to meddle, using strong, grown-up powers. Perhaps my noble friend can reassure me by outlining the circumstances in which he thinks he might need to use these powers.
From the Back Benches it has seemed that BEIS, the Minister’s department, has dealt with Covid relatively well. Instructed to bring in extensive controls on business, it tried its best to consult and find ways around problems like insolvency and access to business, retail, hospitality and other premises. Several sectors of the economy have kept working better than in the first lockdown. BEIS has also been a critical player in the success of vaccines, which, like all victories, has many fathers, to pick up an observation of President John F Kennedy.
However, the voice of business and economics has not been heard loudly enough. This is part of the reason that the programme of lockdown is far too lengthy. Each day of lockdown takes the country closer to a potential financial crisis, especially as bond yields start to move up. In what amounts to a reverse takeover, the objective of BEIS has become:
“Building a stronger, greener future by fighting coronavirus, tackling climate change, unleashing innovation and making Britain a great place to work and do business.”
There seems to be very little emphasis on the success of British businesses, large or small, which create the wealth and pay the taxes that finance hospitals, schools, transport and social care, let alone unfashionable causes like the police and defence.
In the wider health sphere, our approach to Covid has failed. Our handling of the epidemic, which is not the Minister’s fault, has undone years of progress in the NHS and threatens a decade of excess deaths. According to a left-wing think tank, IPPR, disruption to healthcare will be felt for 10 years. There will be 4,500 needless cancer deaths this year alone and doctors’ appointments are down by 31 million.
In terms of mass suffering, we need to add the impact of the pandemic on mental illness and social care. That does not allow for the agony of people, especially the elderly, being unable to see family and friends. Nor does it count the cost to the young unemployed or to those who have built up businesses only to see them go bankrupt—just visit the centre of a relatively prosperous town like Salisbury, my local town. This contrasts with the United States, which has been more confident, less fearful, kept its economy going well and is on course to match our record in vaccination in a few weeks’ time. Sadly, one has to conclude that it is a better friend to business, innovation and enterprise than we sometimes are.
In closing, I thank my noble friend for his letter of today and ask when we will be able to debate the changes to company law announced by the Business Secretary. As a non-executive company director who takes my responsibilities seriously and as an ex-company secretary, I am alarmed by these proposals. They seem bound to have the perverse effect of discouraging skilled people from taking positions on the boards of companies that need their help. Blaming business, as some seem to be, is not the way to rebuild confidence.
Indeed, unlike parts of government, business has done superbly during the pandemic—think of the food supply chain and the supermarkets, AstraZeneca, construction; think of the adaptability of and investment by pubs and restaurants still unable to open.
I am sure that the Minister will not wish to reply now, but I urge him to prepare a full impact assessment, not only of the benefits of these proposals but of all the risks and the costs including, perversely, the extra accountancy charges that businesses will have to pay. We need to think very carefully about these changes and consider what could be achieved by better enforcement of existing rules.
More broadly, we need an end to the fantasy that we can make things work perfectly by passing new laws. I know that my noble friend was a Brexiteer, and that a driver of Brexit thinking was getting rid of EU rules and ending Brussels bureaucracy—a cause I support. It would be unwise now that Brexit is finally secured to abandon this path.
4.44 pm