Lord Mitchell
Member of the House of Lords · Labour · United Kingdom
“In those days, no one quite understood the long-term dangers of radiation, and protection was rudimentary. For him, it was fatal. In 1998, he was diagnosed with acute myeloid leukaemia, which he knew was terminal. He told me, in his usual blunt way, “I know how this story ends and it is not pretty.”
“My Lords, on 9 October 2000, my parents-in-law, Jack and Ruth Lowy, committed joint suicide. He was dying and she had decided to accompany him on this last journey. Jack was born in Bratislava in what was then Czechoslovakia. The family were Jewish and following the events in Munich in 1938, they fled to Philadelphia.”
“My wife in particular sensed that they would carry out their wishes. After all, they were both intelligent people who had carefully thought this through. There was no one to support Jack and no one on hand to help Ruth in what must have been hell for her.”
“I cannot be certain about my mother-in-law’s motivation to join him, but they both knew that his own suicide at home could well run the risk of her being charged with committing a crime as an accomplice. What I do know is that had this Bill been law, she probably would have chosen life.”
“I always felt that the issue of antisemitism on campus did not emanate solely from the students. It also came from the laissez-faire attitude of the faculty.”
“We kept the brief tight, with no references to the Middle East; we judged that there was nothing we could do or say that could make any difference. Where we could definitely make a difference was through reference to our common UK experiences and our heritage. I think we made progress.”
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“HS2’s supporters portray it as a magical solution that will bring London and the north together: an accelerator of the northern powerhouse. As my noble friend Lord Prescott said, let us get on with HS3: that is where fast rail speeds really could count. Manchester to London in half the time? I will avoid cheap shots about waiting for taxis at Euston or Piccadilly, or traffic jams on the Euston Road. But I will say this: instead of selling the virtues of Manchester being better connected with London, how about getting Manchester better connected digitally with Shanghai or Rio—or indeed even Blackburn?”
“When it does, who would want to get up early in the morning, get to a station, get on any train—fast or slow—struggle for taxis, buses and tube trains at the other end, and repeat the exercise to get home late at night? Who would do that when the option is to have the same meeting at home or in one’s own office? When the HS2 debate started it was all about speed. When that failed to convince, it was all about capacity: passenger numbers that will continue to increase. But will they? For a time they will, but as the internet gets more powerful I am certain that rail travel will fall out of fashion and the digital alternatives will be chosen. If this happens, the Excel spreadsheets so beloved of those who support this project will begin to look pretty thin. I make one final point.”
“If we had that, we would be able to communicate with each other in an entirely different way: not over railway lines, but over fibre-optic lines, not at 250 miles per hour but at 180,000 miles per second. We already communicate with each other using Skype and FaceTime. These are still hesitant, but good enough. Video conferencing is used by large organisations. It is very expensive and you have to go into a dedicated room, but it is improving quickly and universal fast broadband will hasten it along. I have been criticised for this before, but I am a big advocate of holograms. I believe that with fast broadband we would be able to see people materialise in front of us on devices yet to be invented. This is not science fiction. It will happen.”
“The music industry, movies, taxis, books, manufacturing processes, medicine and television have all been subject to massive disruption. So why not rail travel? Look at where the research and development is going. Companies such as Google and Apple are committing billions to the design of driverless cars. These boys and girls do not mess about: they will get there. What will be the implications of driverless cars for all forms of rail travel? I do not know, but maybe we should factor it in. If it were my decision I would instead commit to another form of communication that is much more appropriate to the 21st century: blisteringly fast broadband connection throughout the country, in both rural and urban areas, offices and homes. It would be just like electricity: everyone connected, and connected fast.”
“I look at HS2 and all I see is a £50 billion project—at least, I thought it was £50 billion until this afternoon. I now hear that it is £56 billion, and a noble Lord on the other Benches talked in terms of £80 billion. Some £10 billion here and £10 billion there is serious money. Anyhow, I see this project as a potential white elephant. I see 20th-century technology for a 21st-century world. I see a project that is based on the assumption that the world will stand still, when the only thing that we know for certain is that disruptive technologies will continue to change the way we work, socialise and play. I live in the world of technology. I see constant miniaturisation, processing speeds that double every two years, industries being destroyed and new ones being created.”
“When HS1 opened in 2007, I hotfooted it to the stunning new St Pancras station, happy at last not to endure the embarrassment of trundling through south-east London and Kent prior to whizzing through France. I marvelled at the French TGVs and am totally in awe of the high-speed train from Madrid to Seville. I love high-speed trains. Therefore, noble Lords would have thought that I would be full of anticipation and jumping up and down waiting for HS2 to arrive. Well, 20 years from now I will be 92. God willing, I shall be on that train and, God willing, I shall be able to find Euston station. But I am not. I am against the project not for the reasons set out in the report before us, but because no account has been taken of what the world may look like in 2035, 2065, or indeed 2095.”
“My Lords, I, too, thank my noble friend Lord Hollick for introducing this debate and for chairing the committee which produced the report. Its conclusions are very brave and stand in opposition to the stated policies of most political parties. Having said that, I am not sure where my own party stands on this issue, but no doubt that will emerge in the mists of time. I take a slightly different view on this. I want to look at some of the assumptions that have been made about the revenues on this project: not just where they will be in 10, 15 or 20 years but where they will be over the next 80 years, because that is the length of the analysis that has been done on this project. When Eurostar opened in 1994, I was on my way to Paris within weeks.”
“Intern Aware, to which I pay tribute, has lobbied hard on this issue and I have much sympathy with this position.”
“They get away with it because people are desperate for good jobs and they want the kudos of good names on their CVs. In some ways it resembles the unpaid pupillage that used to exist in the legal profession. It was banned there; it now ought to be banned in the wider world. The Chartered Institute of Personnel and Development estimates that there are 20,000 unpaid interns. I bet that it is significantly more. The Sutton Trust says that the cost to a young person of being an unpaid intern in London is nearly £1,000 a month. A poll has said that 70% of the population say that unpaid internships are unfair and 65% of businesses want to end them. Many have suggested that the full minimum wage should come into effect after a four-week internship.”
“However, this amendment is concerned not with work experience but with internships, which often become quasi-employment or, indeed, actual employment. A couple of weeks ago, I read an article in the Sunday Times which highlighted a recruitment company that charges young people a fee of up to £3,000 to secure unpaid internships in the City. I have been present at a charity auction which raised tens of thousands of pounds by offering internships at a major fashion magazine. Such extreme examples illustrate the lengths to which people will go to spice up their CVs. The media, fashion, advertising, PR as well as high-tech and, indeed, our Palace of Westminster, are the prime offenders. They have bright young things working for them free of charge simply because they can.”
“They look at not just the quality of their degree or of the university they attended, but at the kind of person they are. Is he or she well rounded? Will they fit into the team? Do they have resilience? Can they articulate an argument? Will they make a positive contribution to the organisation? And perhaps the most important question of all: what is their employment experience? We on these Benches support internships, much as we support schools’ work experience. The relationship between schools and business needs to be much improved and there is nothing better than sixth formers spending time getting to understand the work environment. In such situations we understand that it is unrealistic to expect payment.”
“My Lords, in moving this amendment, I restate my interest as the chairman of Instant Impact, a graduate recruitment company. In speaking to her amendment in Grand Committee, my noble friend Lady Donaghy asked the Minister to respond to several questions. Some were addressed and some were not. I aim to push these points a little further. Whether we like it or not, intern experience is a key component of many CV statements. Competition for top jobs is fierce. In my time, I have looked at many CVs and found that each one seems to be more impressive than the last. Much time and energy are expended by a candidate to show himself or herself in the best possible light. In my day, you could wing it and hope that it would be all right on the night; today, that is no longer the case. These days, organisations look for the brightest and the best.”
“As I said, there is unanimity in the House on this issue, for which I certainly feel very grateful. I will of course withdraw the amendment.”
“My Lords, I thank the Minister for that reply. What she has said is certainly very helpful. If I detect the mood in your Lordships’ House at the moment, everyone seems very supportive of improving the situation regarding internships, ensuring that these young people are paid and taking the necessary action on it. I thank the noble Baroness, Lady O’Cathain, for the supportive comments that she made. She made a fair point about how the information will be gathered. I suspect that lots of companies are deluged with information; one more piece of information is probably not a good thing, but all the same, it has to be obtained otherwise decisions cannot be taken. The noble Lord, Lord Storey, has been very supportive on this all the way through. I thank him very much for that, and for the helpful comment from my noble friend Lady Morgan.”
“I should like to make one more comment. Later this afternoon we are going to be addressing the issue of government schemes to improve finance for small business. I have no doubt that the best way to improve SME finances quickly and effectively would be to improve cash flows.”
“According to the Institute of Directors, two-thirds of its members with fewer than 250 employees suffer from late payments. It is estimated that payments delayed over and above the contractual terms total—well, in my notes I have £40 billion but my noble friend Lord Mendelsohn says £60 billion. Whatever it is, it is a very large number. It is not just the supplier who suffers; it goes to the supplier’s own suppliers and to all the families who work with these companies that are now at risk. It permeates everything. In this amendment we seek to introduce a radical change. Where a late payment occurs, an automatic interest rate penalty will kick in at the Bank of England base rate plus 8%. I can promise that if there is an outstanding payment with interest rates clicking up at 10% or 11%, it will gain everybody’s attention and will be paid.”
“Heinz has doubled its payment terms—I wanted to say from Heinz 57 but it is not quite that—from 45 to 97 days, and the list goes on to include Monsoon, GlaxoSmithKline and Debenhams, to name just a few more. It is a common theme. These companies put the squeeze on their suppliers for two reasons. First, they want to accumulate as much cash as they can. That is understandable as they want to boost their balance sheets. More perniciously, they do it simply because they can. It is bullying. Many of us have run small businesses and we know all too well the perils of cash flow management. We know what it is like to sweat while waiting for our big customer to make the payment. That is what keeps us up at night and what this amendment aims to rectify.”
“My Lords, I start by coming back at what the noble Baroness, Lady Harding, has just mentioned. I know that she runs an exceptionally good company; I do not know what TalkTalk’s payment terms are, but I bet that they are good and that it pays on time. However, there are many people out there, including many large companies, whose behaviour is quite disgusting. We have seen in the past few months egregious examples of big customers stuffing their suppliers. I will give a few examples. Diageo, the owner of Guinness and Johnny Walker, recently informed its suppliers that it would extend its payment terms from 60 to 90 days. AB InBev, owner of Budweiser, Stella and Boddingtons, has extended its terms of payment to 120 days.”
“The press took up against it, and very quickly it backed down. Perhaps that is a good example of shaming some of these companies about what they do. However, the practice still exists and our amendment gives the Secretary of State power to prohibit a company requiring a supplier to make a payment in order to join that company’s list of suppliers. Even worse is the ability of companies to alter the terms of payments unilaterally. I have seen it personally in a family business and with suppliers to big retailers. A supplier fulfils all the terms of the contract and he waits and waits for a payment that never comes. Eventually the company contacts the supplier and says that payment could be made in a couple of days if only the supplier could accept a hefty discount. This is odious behaviour and in this amendment we seek to contain it.”
“My Lords, “pay to stay” and retrospective terms are examples of thuggish behaviour which large companies use to beat up their suppliers. I listened to what the noble Lord, Lord Cope, said on the previous amendment about suppliers having a choice about whether they want to supply large companies. I do not think it is quite that simple. The companies we are talking about—major supermarkets and the like—have tremendous power, and suppliers have no option but to supply them, so this is not a contest of equals but of David and Goliath, and in this case Goliath usually wins. As my noble friend Lord Mendelsohn said, just before Christmas Premier Foods, the maker of Mr Kipling cakes and Hovis bread, told suppliers that they could lose their contracts unless they made cash payments to remain suppliers. That time, it misjudged the mood.”
“We need the facts, and only an obligation on the Secretary of State will give us the information we require. I beg to move.”
“Metro Bank, Aldermore and others, such as Santander, are changing the landscape. Peer-to-peer lending has taken off and is becoming a major force. We, as I say, welcome these changes. The traditional banks have let down small business, and it is perfect that alternative sources are stepping into their shoes. We need, however, to know what is happening in the marketplace. So many questions are asked in your Lordships’ House on this issue, and the truth is that no one seems to know the answer. This amendment will place a duty on the Secretary of State to conduct a review of alternative forms of finance available to small business. This review will examine how the banking sector is catering to the finance needs of SMEs and how SMEs are being encouraged to use alternative forms of finance.”
“The Government throw money at us, and I have a choice: whether to deploy these funds on small businesses, which are risky and difficult and costly to analyse and administer, or else use the cheap funding to build my mortgage business where I can assess the risk, and it is easy to run”. It is also not what the figures show. More often than not, one quarter followed by the next quarter, the amount of funding extended by Funding for Lending has gone down. While all these government initiatives have been sputtering along, there has been a very acceptable growth in non-government schemes. The market for alternative finance has exploded, largely as a result of the paralysis of the high street banks, and we on these Benches think that that is to be encouraged. Challenger banks have made a very big impression.”
“My Lords, I have addressed your Lordships’ House many times to take the Government to task for the slow take-up of new schemes designed to provide finance to small and medium-sized businesses. My theme has been constant. There have been so many initiatives over the period of this Government that even I, who really ought to know about these things, am confused. If I do not get it, how can small businesses understand the options when they seldom have to deal with them? I have cited Funding for Lending as an example. I know that the Government think that it has been a resounding success, but that is not what I hear at the coalface. One banker said to me, “What am I to do?”
“Crowdfunding has been very exciting but many of the new challenger banks have been able to come into this because of the technology they are using. That is absolutely fantastic. I thank the noble Baroness for her comments and feel very reassured that the Government are working in this direction. The facts are really clear. Whether we are in government or not, I would like to be standing here in a year’s time having a conversation like this with the facts at hand. I beg leave to withdraw the amendment.”
“I thank the Minister for her reply. I thank the noble Lord, Lord Cope, for his insightful addition to what was said and on reflection I think that he may have a point on Clause 4. I also thank the noble Lord, Lord Leigh. He and I know each other well. I have never before heard the statement that he made but he has my email so he knows exactly where to send it. I also thank the noble Lord, Lord Myners—I find it very hard to say that and am tempted to say “my noble friend”—for making the comments that he did. I have always felt that the banks are, and act like, a cartel and that you cannot tell one from the other. It is really good that they are now starting to change and are being forced to change. If my particular area—digital technology—is making that happen, so much the better.”
“My Lords, I think the Minister is living in some sort of cuckoo land. Last Friday, I was in Plymouth, looking at some very interesting and exciting technology companies. Their biggest complaint is that the broadband they are getting is totally insufficient. A few months ago I was in Norwich, where it is the same story. If you go to Tech City, which is the hub of what we are doing in this country, you will find time and time again the complaint that we are not getting the speeds that are required. Can the Minister say when, instead of being complacent about what is happening, there will be some degree of urgency about improving coverage and speed?”
“I abhor the settlements and I think that the current Israeli Government are totally wrong in their approach to the Palestinians. I say to the noble Baroness, Lady Warsi—who is a friend—that I campaign against the settlements. But I have to say that resolutions to unilaterally back the creation of a Palestinian state are not the answer. What is the answer is negotiation between the parties for a just and durable peace. Three times Israel has offered a peace settlement based on 1967 borders, and three times the Palestinians have rejected it outright. Yet no matter how difficult or frustrating it may be, negotiation is still the only game in town.”
“In less than a year, Fatah was overthrown and Hamas took over. We know the outcome of that move. Were Israel to unilaterally withdraw from the West Bank, the results are entirely predictable. In just a heartbeat, Hamas would overthrow the PA, just like it did in Gaza, and just as its charter commands. Even more rockets would be targeted at Israel and even more tunnels would be built. This time they would be just a few miles from Tel Aviv and Jerusalem. For Israel, this would be suicide and it is simply not going to happen. Why would it contemplate another flawed withdrawal? Ever since 1967 I have supported a two-state solution. Even then, at the tender age of 24, I can remember saying that there is no such thing as a benign occupation.”
“They were behind World War II, through which they made huge financial gains by trading in armaments, and paved the way for the establishment of their state. It was they who instigated the replacement of the League of Nations with the United Nations and the Security Council to enable them to rule the world through them. There is no war going on anywhere, without them having their finger in it”. That leaves not much room for doubt as to exactly where Hamas stands and how it views negotiation. And do the words not sound familiar? Israel has initiated its fair share of unilateral withdrawals, all of which have come back to bite it hard. In 2000, it unilaterally withdrew from all of south Lebanon. Today, this land is run by Hezbollah, which is sworn to Israel’s destruction. In 2005, Israel unilaterally withdrew from all of Gaza.”
“The Palestinian people know better than to consent to having their future, rights and fate toyed with”. Finally, the highly relevant Article 22 says: “For a long time, the enemies—” by enemies, I think it means the Jewish people— “have been planning skilfully and with precision, for the achievement of what they have attained. With their money, they took control of the world media, news agencies, the press, publishing houses, broadcasting stations, and others. They were behind the French Revolution, the Communist revolution and most of the revolutions we heard and hear about, here and there. They were behind World War I, when they were able to destroy the Islamic Caliphate, making financial gains and controlling resources. They obtained the Balfour Declaration, formed the League of Nations through which they could rule the world.”
“My Lords, I, too, congratulate the noble Lord, Lord Steel, on securing this debate. It is not like me to quote from Hamas’s Covenant of the Islamic Resistance Movement , dated 1988, but I think it is highly relevant to this debate. After all, Hamas is an important and influential part of Palestine. So I will start with Article 11, which states: “The Islamic Resistance Movement believes that the land of Palestine is an Islamic Waqf consecrated for future Moslem generations until Judgement Day. It, or any part of it, should not be squandered: it, or any part of it, should not be given up”. Article 13 says: “There is no solution for the Palestinian question except through Jihad. Initiatives, proposals and international conferences are all a waste of time and vain endeavours.”
“The solution is not to discourage rich people from helping their children but to do a lot more to help clever kids who do not have wealthy parents.”
“RIBA expels members who use unpaid interns. UK Music says that interns should always be paid at least the national minimum wage. Lastly, the Times said in a recent editorial that the, “abolition of unpaid internships is worthy and desirable”. Under current national minimum wage law, an intern is entitled to pay only if they are working under a contract; of course, for a contract to exist it needs consideration. That means that if an intern receives nothing except expenses from their employer, the national minimum wage will not apply. The worst employers are exploiting this loophole and, under the law as it currently stands, there is little that can be done. The dice are loaded against those who cannot afford to take unpaid internships.”
“It really does not feature on the intern recruitment side. I also ask her not to suggest that HMRC has the powers to intervene and that it can hunt down any offenders. It is stretched to capacity, and anyhow it has other fish to fry. There are many organisations that support the four-week limit. Axa, a major insurance company, says that a four-week limit to unpaid internships will ensure a fair opportunity for everyone. Ernst & Young says that young people deserve to be paid for the work that they do on internships, and if they do not, it is reprehensible. The wonderful Charlie Mullins, the founder of Pimlico Plumbers, a small business—which is not so small these days—says that it is completely reprehensible for companies to expect interns to work without pay. The ACCA has asked for an end to unpaid internships.”
“I do not know the answer but I would bet that the number is much higher than most of us suspect. What happens if your parents do not have the contacts or are simply unable to fund you while you are working for nothing? I hope that the Government accept my noble friend’s amendment because we need more information about whether people are being exploited. If they are, I hope that the Minister will commit to looking at a four-week limit, as suggested by Intern Aware. I should like to hear the Minister’s views on this. I hope that she does not suggest—as the noble Lord, Lord Popat, did, when the noble Lord, Lord Storey, asked a Question in the House a few weeks ago—that we should refer to the Government’s Graduate Talent Pool for an answer. I have never heard of it and nor has anyone else I know.”
“I bet that many of us in the Room today have address books that other people would kill for. We have access to everyone who counts and, even if we do not, we have no problem in working the network to make sure that we get our children or grandchildren through the door. Some of us are able to fund our children if they do not get paid for their internship. After all, we can argue that it is the final part of their education and goes with the territory. As a result, whole swathes of our economy are riddled with unpaid interns. The media, fashion, advertising and the new social media companies recruit unpaid interns at will, simply because they can. As has been said, how many Members of Parliament or Peers in our own Palace of Westminster have unpaid interns working in their offices or their constituencies?”
“Today, the CV has become a rite of passage. It must be fine-tuned and honed, with not so much the right school, but certainly the right university and, without question, the right level of honours degree. The soft factors also count: sporting activity, cultural pursuits and charities supported. In a highly competitive world, whatever makes you stand out and interesting will help you to land the job you want. These days, young people need to include job experience on their CVs. They need to show that they have worked for a series of organisations and that they have become well rounded individuals. One of the ways that they do that is by becoming interns. To the wealthy and well connected, getting their sons and daughters into suitable internships is relatively easy.”
“Of course, in the Labour Party, we believe passionately that everyone should have an equal chance to succeed, no matter what his or her background may be, but the Conservative and Liberal Democrat parties are wedded to the same mantra: whatever our birth may be, each of us should have the same opportunity. When most of us were young and seeking our first jobs, it really did not matter whether we had worked as interns. Indeed, the term barely existed. Sadly, all that mattered was where the candidate went to school and, more importantly, where the candidate went to university. In my case, Ealing Technical College probably did not stack up too highly. A good degree was a help, but not a necessity. A gentleman’s third-class honours was still acceptable with a wink and a rueful smile. That was true then, but no longer.”
“My Lords, I support my noble friend Lady Donaghy’s probing amendment. I have to make a declaration of interests. I am chairman of a company called Instant Impact. The principal business of that company is the recruitment of graduates from universities, which is obviously close to what we are discussing today. “The condition of your birth does not determine the outcome of your life”. Those are not my words, but those of an unlikely source, US Republican Congressman Paul Ryan, a staunch right-winger and not one we would expect to support the nanny state. Who among us could disagree with that?”
“One word I did not hear—and I was listening very carefully—was “exploitation”. The feeling many of us have on this issue is that young people who are desperate to make sure that their CVs look good so that they can say that they have had the right experience are prepared to be exploited to make sure that their CV looks good. Many employers out there prey on them, and in many cases those situations where people are not paid can last for long periods of time. More than anything else, we want to address that.”
“Given the sensitive nature of this subject and the potential negative impact on UK plc, we feel that, if such a move were ever to be taken, it should be subject to public scrutiny and debate in Parliament rather than simply being a reserve power for the Minister to execute. Amendment 61ADC would ensure that new regulations made under the clause were targeted only at the bad pre-pack practice to which I have referred, which we all want to discourage, rather than applying more generally to all pre-packs. Amendment 61ADD digs at the Government’s policy of waiting to see whether the voluntary system works and then legislating for powers. Our amendment asks for the relevant powers to be legislated for within a year of the passing of this Bill. I beg to move.”
“Following an inquiry by the BIS Select Committee and the Graham review into pre-packs, the Government intend to create a reserve power under Clause 126(4) that: “The Secretary of State may by regulations make provision for … prohibiting, or … imposing requirements or conditions in relation to, the disposal, hiring out or sale of property of a company by the administrator to a connected person”, unless there has been a third-party scrutiny of the proposed sale. This power expires at the end of the period of five years beginning with the day on which the provision comes into force unless it is exercised during that period. Amendment 61ADB would remove the reserve power granted to the Secretary of State to prohibit pre-packs altogether.”
“To have a situation with some of these pre-packs where the shareholders do not lose, they just come back in another guise, seems wrong. I want the Minister to reassure us that the Bill really offers protection. Amendment 61ADA aims to clarify that the reforms are targeted solely at pre-packs. Clause 126 gives the Secretary of State a power to introduce regulations to address problems in relation to sales to connected parties in pre-packed administration.”
“I may be wrong about this but I believe that if there are parties that have legal claims against companies that then go into a pre-pack, some of those die at that point as well. I am not so sure that that is a good thing either. When you think about who gains from a pre-pack, first of all the lawyers gain—they always do—and the insolvency practitioners gain, as they always do. What I find hard, as a businessman who has set up lots of companies, is that the rules as I understand them—the rules of free enterprise and the capitalist system—are that if you put your money at risk and you invest in a company and you have shares and it does incredibly well, you benefit; but if it fails, you lose. To me, that is what capitalism is about.”
“When you think about who loses in a pre-pack, it is the creditors most of all, but the creditors are themselves companies and have their own creditors, their own employees and everything associated with those companies. When a company goes down and creates a pre-pack, the trail of creditors and their own creditors that are then affected badly causes a lot of people to lose their jobs. When I hear people saying that pre-packs are a really good thing because they maintain employment and maintain the company, maybe they do—and there are lots of good examples—but there are also the creditors that have been left behind, including HMRC itself, which have to deal with the issue that they are no longer getting the money that is due to them.”
“At Second Reading I referred to the situation where on Friday afternoon the company is Smith & Jones and by Monday morning it is Jones & Smith; it is the same people running it, with many of the same directors and maybe even the same bank, but the poor old creditors and maybe HMRC and a few other people have just been dumped in the mean time. This is a process that we really have to address. It has become a fixed process where people make these arrangements so that if a company is failing it is possible just to push a button and get rid of all the nasty bits and continue with all the good bits as if nothing had happened. We all know examples of where this has occurred.”
“My Lords, I will be dealing with this in place of my noble friends Lord Stevenson and Lord Mendelsohn. I will also address Amendments 61ADB, 61ADC, 61ADD and Clause 126 stand part. Pre-packs have become very much part of the discussions that we are having, and you read in the press about some of the activities that are occurring. The amendments that have already been made to the Bill help considerably but we want to raise some issues. We want to look particularly at the whole area of bad pre-packs and some of the things that have been happening.”
“I thank the Minister for her reply. We all know what we want in this: to make it work, to make it fair, and to make sure that the bad practice is removed and that there are barriers to it. I thank the noble Baroness, Lady Wheatcroft. The word that stuck in my mind was about “dubious” practice, and we have to make sure that that is removed. I am also grateful for the contributions by the noble Lords, Lord Flight and Lord Leigh of Hurley. I agree that we always have to be aware of the rule or curse of unintended consequences. I am sure that when the noble Baroness and her team take a look at what we have discussed today, they will come back on Report with all these points incorporated into the Bill—I hope. With that in mind, I beg leave to withdraw the amendment.”
“My Lords, as a champion of small companies half of me has a lot of sympathy with this amendment but the other half is worried. We define a small company as one that has a turnover of less than £6.5 million, a balance sheet of less than £3.26 million and fewer than 50 employees. The questions that have been raised today are: what is to prevent such companies from getting up to the activities we are seeking to prevent, and is size really the sole determinant of illegal activities? Maybe we should have a definition of a micro-company—a small, start-up company that has criteria much below the numbers I have given. We need to keep bureaucracy and red tape out of it, but it is quite clear that in the right hands a coach and horses can be driven through this and we need to have some degree of protection.”