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Oral Answers to Questions
(10 years, 1 month ago)
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Jesse Norman (Hereford and South Herefordshire) (Con)
1. What steps he is taking to support small contractors in military procurement.
The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)
I recognise that small businesses are an important source of innovation and flexibility in meeting defence and security requirements. I am determined to help small and medium-sized enterprises access defence opportunities, including standardising and simplifying our procurement systems, so from this month we are minimising the use of pre-qualification questionnaires and increasing use of standard contract templates for low-risk requirements of under £100,000.
We are regularly making progress on these and other SME initiatives, but we also need to inform the SME community that it is getting easier to do business with the Ministry of Defence, which is why we publish the SME action plan on the gov.uk website and why I am undertaking a series of regional visits to talk to SMEs, such as the excellent event that my hon. Friend hosted in Hereford on 6 December 2013.
Jesse Norman
I very much thank my hon. Friend for that reply and for the extremely encouraging news that he has described. There are a large number of specialist defence suppliers in my constituency in Herefordshire. They provide vital new technologies and training for the troops, but they often face huge and apparently unnecessary mark-ups and delays forced on them by the requirement to be part of prime contracts. What can the MOD do to help these companies compete more fairly?
Mr Dunne
I agree with my hon. Friend that SMEs have an important role to play across defence procurement, but in particular in new technologies and in training. That is why the Government are committed to increasing the proportion of our annual spend on SMEs. Last year that rose to 15% by value of all spend, with some £1 billion spent directly and £2 billion spent indirectly through larger prime contractors, but the proportion of new contracts is even greater with over a third of all new contracts placed with SMEs in each of the last three years.
Mrs Madeleine Moon (Bridgend) (Lab)
Devolved Administrations and their arm’s length agencies often have very close relationships with their SME community. What discussions is the Ministry of Defence having with the devolved Administrations to make sure defence contractors based outside England also have an opportunity to bid?
Mr Dunne
Of course defence, and therefore defence procurement, is not a devolved matter and therefore the work the Ministry of Defence does is primarily with industries right across the country. I have undertaken events in Scotland and I am looking forward to an event in Wales in due course later this year.
Angus Robertson (Moray) (SNP)
May I wish you a very happy St Patrick’s day, Mr Speaker, and no doubt MOD Ministers will be pleased to put on record their appreciation for the increasing co-operation with the Irish defence forces?
In a parliamentary answer on 3 October 2011 the MOD admitted that out of 6,000 SME contracts with the MOD, only 50 contracts were in Scotland, which is 0.83%, just under 10 times less than Scotland’s population share. When will the MOD answer my question on SME spending across the UK by region, which was tabled in January?
Mr Dunne
As I have said to the hon. Gentleman previously, we do not believe it is relevant to look at the location of where we procure equipment. We want to procure the best equipment for our armed forces from the best place. Scotland of course has a significant share of much of our spending, not least through the aircraft carrier contracts, which I saw for myself last week, and much of that defence work would be at risk were Scotland to vote yes in the referendum in September.
Mrs Emma Lewell-Buck (South Shields) (Lab)
2. What discussions he has had with the Chancellor of the Exchequer on staff pay and conditions in the new DE&S model.
The Secretary of State for Defence (Mr Philip Hammond)
We have agreed with Treasury Ministers that Defence Equipment and Support will be established as a bespoke central Government trading entity from 1 April this year, with the necessary freedom to operate, including freedom, within very broad limits, to set the pay and conditions of its civil service staff.
Mrs Lewell-Buck
I thank the Secretary of State for that response, but bearing in mind that bringing private skills into Defence Equipment and Support is likely to create a two-tier work force and, if handled badly, could demoralise an already hollowed-out department, will the Secretary of State update the House on what discussions he has had with employee representatives and trade unions within Defence Equipment and Support regarding changes to employees’ pay and conditions?
Mr Hammond
There have been discussions with the trade unions and there will of course be further discussions with the trade unions as DE&S-plus develops its pay model, but we do have to face the reality that this part of the public service is very much commercial-facing. It deals with commercial bodies and it interacts and exchanges staff with commercial contractors, and we have to be able to pay competitive rates and we have to adopt competitive employment practices if we are to get the best deal for the taxpayer and the best deal for our armed forces.
Jack Lopresti (Filton and Bradley Stoke) (Con)
Does my right hon. Friend agree that reforming defence procurement is a key step in driving better value for money for the defence budget, and will he join me in paying tribute to the staff of DE&S in my constituency, especially those involved in the draw-down of kit and equipment from Afghanistan?
Mr Hammond
The staff at DE&S at Abbey Wood perform an extraordinary range of functions and play a vital part in this new whole-force concept. It is about how the armed forces work together, regulars and reserves, with civilian employees of the Ministry of Defence—whom I am happy to put on the record in the House today are not pen-pushers, as some parts of our media would have us believe, but vital components of our defence infrastructure.
Alison Seabeck (Plymouth, Moor View) (Lab)
The Secretary of State is ever the optimist, but he will know that staff in DE&S and industry need certainty, and nothing in the changes to DE&S fits that description. His Department still has not confirmed the arrangements to bring the managed service providers into the business. He talked about the flexibilities and freedoms being broad—they are not in the public domain yet, and April is almost upon us. Is he not cutting it just a little fine?
Mr Hammond
No. The contract notices for the procurement of the managed service providers will be published shortly. We are finalising the terms of the memorandum of understanding between the Treasury and the MOD, but the broad parameters have been agreed. The freedoms will be very broad, but there will be some constraints, as I hope the hon. Lady would expect. There will be an overall envelope of resources for operating costs, which will be subject to a downward trajectory over time, representing efficiency. Within that envelope, there will be very broad freedom to tailor pay and conditions to the requirements of the marketplace.
Sir Tony Baldry (Banbury) (Con)
Did the shadow Secretary of State for Defence not say in December of last year that we all wanted to see the best of the public sector alongside the best of the private sector? If everyone is in agreement on this—from the shadow Secretary of State for Defence to Lord Levene—it must be a good idea. Presumably, the only really important thing here is ensuring value for money for taxpayers.
Mr Hammond
My right hon. Friend is exactly right: it is about ensuring that the armed forces get the kit they need and have been promised when they need it, and that the taxpayer gets a fair deal. By creating DE&S as a trading entity with freedoms and flexibilities to enter the marketplace and hire the people it needs to do the job properly and effectively, we will ensure that outcome.
Sarah Newton (Truro and Falmouth) (Con)
3. What progress his Department has made on its planned increase in the activity of reserves in Cornwall.
The Minister for the Armed Forces (Mr Mark Francois)
I know my hon. Friend is concerned about the future of reserves in her constituency following the proposed relocation of D company, 6th Rifles, and I welcome her strong interest in this issue on behalf of her constituents. I understand that my predecessor, my right hon. Friend for South Leicestershire (Mr Robathan), gave her a commitment that we would look closely at this decision, but that examination is not yet complete.
Sarah Newton
I thank my right hon. Friend for that response. We have had good news in Cornwall about more RAF reservists being stationed at RAF St Mawgan, but the continued uncertainty about the future of The Rifles in Cornwall is a major concern. People in Cornwall want to support their country and to have the opportunity to serve as Army reservists. May I therefore urge my right hon. Friend to make a speedy, and the right, decision to enable people to serve from Truro?
Mr Francois
I stress to my hon. Friend that we are not closing the Truro Army Reserve centre, which will remain the home of elements of both medical and logistics units, as well as supporting local cadet forces in any event. However, I do understand the strong historical attachment The Rifles have to Cornwall, so I hope to be able to give her a clear answer on this matter in the near future.
Dan Jarvis (Barnsley Central) (Lab)
Whether people are seeking to join the reserves in Cornwall or in any other part of the country, everyone I talk to says it is still taking too long from the point at which they express an interest in joining the reserves to the point at which they are subsequently enlisted. What is the Minister doing and what more can be done to speed up that process, so we can get more people serving in the reserves—in Cornwall and in the rest of the country?
Mr Francois
I am glad to be able to say to the hon. Gentleman, whom I know in view of his past service takes a close interest in these matters, that we have reduced some of the bureaucracy in the process—we have simplified the forms and some of the medical procedures—and we launched a new recruitment campaign in January, the benefits of which are beginning to feed through. The process was too bureaucratic; it is less so now, and it is beginning to work.
Sir Nick Harvey (North Devon) (LD)
May I urge the Minister, when considering the move of The Rifles from Truro to Barnstaple, to recognise that the Army Reserve centre in Barnstaple is the only opportunity for people to participate in the Army Reserve, covering an area from west Somerset down to North Cornwall? If we are to achieve the targets we set ourselves nationally for increasing the size of the reserves, it is very important that people in all communities, however rural, have a realistic opportunity to participate in the reserves.
Mr Francois
I understand the point being made by the hon. Gentleman, a predecessor of mine in this job. We are looking to grow the Army Reserve in Cornwall and in Devon, and indeed across the whole United Kingdom.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
4. What assessment he has made of the effectiveness of military assistance provided to civil authorities during recent flooding.
The Secretary of State for Defence (Mr Philip Hammond)
The MOD’s ongoing support to the civil authorities has been significant and achieved real effect on the ground, with a peak of about 5,000 personnel from all three services available to provide everything from sandbagging to aerial reconnaissance. We provided assistance to nine county councils and five unitary authorities. We are now in the recovery phase, with 220 service personnel still engaged. Once the task is complete, we will work with the civil authorities to assess in detail our armed forces’ contribution to the overall national response and to look at how the contribution of the armed forces to civil resilience can be enhanced and accelerated in future emergencies.
Dr Coffey
I thank my right hon. Friend for that answer. I bring to the House’s attention the honourable membership of the Institution of Royal Engineers that I hold because I am a Member of Parliament for a constituency with Royal Engineers in it. Will he join me in congratulating the Royal Engineers on their work across the country, not only in helping to fix the problems, but in being involved in the emergency checks, which means that we are able to get around the entire country in just a matter of weeks?
Mr Hammond
I am happy to join my hon. Friend in congratulating the Royal Engineers on the role they have played. There is a continuing detachment of Royal Engineers inspecting thousands of flood defences around the country, triaging them so that the Environment Agency can target its specialist engineers on those most at risk.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
One reason why civil authorities may be reluctant to call in military assistance is the full costing regime in the MOD. Has the Secretary of State considered introducing a marginal costing scheme, which would make that interaction easier for all the parties concerned?
Mr Hammond
The hon. Lady is understating the case—one of the reasons most certainly is fear of what the costs will be. The MOD’s position is clear: we would like to do more to support the civil authorities, and we want to make sure that the defence budget is neither advantaged nor disadvantaged from doing so. That implies a full marginal costing recovery regime, and I have written to my colleagues at the Treasury suggesting that we look at a change to the regime to make the situation much clearer to the civil authorities in advance.
Miss Anne McIntosh (Thirsk and Malton) (Con)
May I add my congratulations to RAF Linton-on-Ouse and the neighbouring Royal Engineers who have helped in both the vale of York, and Thirsk and Malton during previous floods? On the funding, I understand that one reason why civil authorities were slow to take up the offer from the military was precisely the issue of who was to pay. Will my right hon. Friend explain to the House from which budget the payment will be drawn?
Mr Hammond
In almost all cases—perhaps I can say in all cases—the net additional cost of military operations that is recoverable from authorities that have lead responsibility under the Civil Contingencies Act 2004 will be 100% funded under the Bellwin formula, in accordance with the statement that the Secretary of State for Communities and Local Government made to the House about the increase in the percentage recovery rates to 100% to cover this emergency.
Mr Robert Buckland (South Swindon) (Con)
5. What plans he has to increase employment opportunities for the spouses of armed forces personnel.
The Parliamentary Under-Secretary of State for Defence (Anna Soubry)
We know that one of the most important factors in enabling spouses to enter employment is making sure that good child care provision is available at a good cost. In addition to the measures that the Government have taken to help all workers, I am pleased to tell the House that £20 million of the LIBOR funding announced by the Chancellor in the autumn will specifically go to help the provision of child care facilities for service families, particularly the infrastructure. We also have a number of excellent schemes to encourage people to go into employment and to support them to set up their own businesses, as well, of course, as the corporate covenant.
Mr Buckland
I thank my hon. Friend for that answer. May I commend to her the work of the social enterprise Recruit for Spouses, which is doing so much to challenge outdated perceptions of military families always being on the move and to engage with businesses to unlock the potential of armed forces spouses? Recruit for Spouses is based in Wiltshire, and it does a lot of work in both Wiltshire and in Swindon.
Anna Soubry
As it happens, I have heard of Recruit for Spouses and I know that its aims are admirable, and of course we support all such projects. That is one reason why I mentioned the corporate covenant: it is very important that businesses recognise the real benefits they get when they employ people who are married to our excellent service personnel, because their spouses tend to be as good.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Is the Minister not living a little bit in the 20th century rather than the 21st century? It is not just child care that spouses need, but a tailor-made system that allows them to use their enormous talent for a productive purpose. Could she not do something more adventurous? We are talking about not trailing spouses, but people who give a great deal to this country under enormous stress.
Anna Soubry
I am sorry, but I do not think that the hon. Gentleman heard what I said. I will happily go into more detail. We have programmes in place with the Royal British Legion Industries and the university of Wolverhampton, which run workshops specifically for spouses on finding jobs and on helping them to start businesses, so, on the contrary, I am far from living in a previous century. I do not underestimate the issues. I have spoken to various families’ federations, which told me in no uncertain terms that child care costs and the availability of good provision are absolutely critical. The hon. Gentleman should welcome my announcement of £20 million of LIBOR funding. I do not think that he matched that when he was in Government.
Graham Evans (Weaver Vale) (Con)
19. As a graduate of the excellent armed forces parliamentary scheme, I have had the privilege of learning about all aspects of military life, including the ability to settle in one location thus enabling military spouses to find and to keep down regular employment. What estimates has my hon. Friend made about whether the return of British troops from Germany will help increase the opportunity for spousal employment in the future?
Anna Soubry
That is a good question. We believe that the return of units from Germany offers a major opportunity for more service families to lead more stable lives, and we also know that that is important. It is vital that Government, local authorities, employers, the Army and the other services work together and plan carefully. A good case in point is the great work that is being undertaken by Rutland county council and its partners. Let me give one quick example of that. Its latest initiative is to hold a job fair at Kendrew barracks next month.
Mr James Gray (North Wiltshire) (Con)
6. What recent progress he has made on the Army 2020 proposals.
The Minister for the Armed Forces (Mr Mark Francois)
The Army remains on track to implement Army 2020 structures in accordance with the announcement made by the Secretary of State on 5 July 2012.
Of particular note is the fact that all units have now been assigned to the new reaction force, adaptable force or force troops; regular and reserve units have been paired, in line with the move to a fully integrated Army; and future unit locations have been confirmed, taking account of the return of units from Germany to the United Kingdom.
Mr Gray
The Defence Committee’s report into Army 2020, which was published last week, expressed grave concerns about the reduction to 82,000 soldiers, the way in which that figure was arrived at and the fact that the Army was informed of it rather than consulted about it. When the Minister for the Armed Forces opened our report and read it, did he have even the slightest momentary frisson of worry that he might—just might—have done the wrong thing?
Mr Francois
I have a frisson when I open any Defence Committee report. It is worth taking into account the fact that the report has only recently been received and the implications of its recommendations are being reviewed by the respective staffs. We will be providing a full response to the report in the normal way in May 2014. It is clear to me that the Army’s response to the challenges posed by the end of combat operations in Afghanistan and the move to a UK base force remains fully valid.
Mr Andrew Love (Edmonton) (Lab/Co-op)
In that Select Committee report, Sir Peter Wall, the Chief of the General Staff, says that Army 2020 was financially driven. Does the Minister agree with that? Furthermore, will the shortfall of 8,000 not lead to capability gaps? If so, what will he do to plug those gaps?
Mr Francois
As my right hon. Friend the Defence Secretary has said on numerous occasions, the Ministry of Defence and the armed forces cannot operate oblivious to the country’s fiscal position. However, we and the Army are quite clear that Army 2020 represents the best answers to the challenges, fiscal and otherwise, the country faces and is best placed to help us address the future.
Mr John Baron (Basildon and Billericay) (Con)
Events such as in Crimea and the South China sea remind us of the need for strong defence. Has the time not now come for a fundamental reassessment of how much we spend on our armed forces? That figure should be increased even if white elephants such High Speed 2 have to be sacrificed along the way. We may have the fourth or fifth biggest defence budget, but we rank nearer 30th when it comes to deploying troops overseas, which is nonsense given the extent of our global interests.
Mr Francois
My hon. Friend might want to turn up to Treasury questions in the near future and ask the same question. In the meantime, as he mentions overseas deployments, he might be interested to hear that last week I visited 2nd Battalion the Royal Regiment of Fusiliers in Cyprus, in which I know he takes a strong interest. I can report to him and the House that despite difficult circumstances its members are in good order. The planning for the merger of the two regiments of the Royal Regiment of Fusiliers is almost complete and a number of soldiers in the 2nd Battalion have expressed interest in remaining in the Army. We are seeking to facilitate that wherever possible.
Mr Kevan Jones (North Durham) (Lab)
In paragraph 32 of its recent report on Army 2020, the Defence Committee stated:
“We were…concerned to hear that it was the Ministry of Defence’s Permanent Secretary who told the Chief of the General Staff the future size of the Army under the Army 2020 plan.”
Will the Minister say what exactly the role of the Chief of the General Staff was in determining the size of the Army? Why was it left to the permanent secretary to inform him what the size of the Army would be under Army 2020?
Mr Francois
Decisions about the overall size of the armed forces are ultimately taken by Ministers, but the Army 2020 plan was designed by the Army, and it is the Army that has the primary responsibility for implementing it. While we are on the subject of advice, one thing we will not do in trying to grow the Army and the reserves is follow the example of the previous Government, who thought that it was a good idea, for growing the Territorial Army, to threaten not to pay its members for turning up for training.
Andrea Leadsom (South Northamptonshire) (Con)
7. What progress he has made on using funding from LIBOR fines to benefit former and serving military personnel.
Andrew Stephenson (Pendle) (Con)
9. What progress he has made on using funding from LIBOR fines to benefit former and serving military personnel.
The Parliamentary Under-Secretary of State for Defence (Anna Soubry)
The short answer is that a great deal of progress has been made. As Members will know, in December 2012 the Chancellor transferred £35 million from fines levied on the banks following the LIBOR scandal. The whole of that £35 million has now been allocated to almost 100 projects that will provide support to members of the armed forces community. In addition, we can now look forward to the £40 million recently announced for the veterans accommodation fund, the £20 million about which I have already given details and, in perpetuity, £10 million each year for our service charities.
Andrea Leadsom
I am grateful to my hon. Friend for her answer. Will some of the money from the LIBOR fines be used to deal with the awful mental illness that comes to those who have lost loved ones in conflict, and to help the families of those who have suffered mental health problems after spending time overseas in conflict areas?
Anna Soubry
I am happy to confirm that Cruse Bereavement Care, a wonderful charity that comforts bereaved people—not only service families but anyone who has lost someone—has received £500,000 of LIBOR funding. An additional £2.77 million has gone to Combat Stress, and SSAFA has a number of projects that have benefited, to the tune of £2 million. I hope that shows that we take this work very seriously.
Andrew Stephenson
Finding the right accommodation for veterans who have been wounded or injured is an important part of upholding the duty we owe them for their sacrifice. What assistance is the Ministry of Defence providing to ensure that veterans with a housing need are properly supported?
Anna Soubry
As I have explained, £40 million of LIBOR funding has been set aside specifically for what we are calling the veterans accommodation fund. It will make a big difference, and is available to fund the building of purpose-built accommodation and the purchase or refurbishment of existing housing. The bid criteria have been published and the fund is open for applications now.
Thomas Docherty (Dunfermline and West Fife) (Lab)
8. What recent assessment he has made of the economic effects on west Fife of the Queen Elizabeth class carrier programme.
The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)
The carrier programme as a whole is estimated to have sustained about 10,000 jobs across the UK, 4,000 of which are based in Scotland. Although we have made no specific assessment of the impact on the hon. Gentleman’s constituency, to the end of January the Ministry of Defence had spent about £2.3 billion on work billed to the programme by BAE Systems on the Clyde, and by Babcock at Rosyth. I was pleased to visit Rosyth last week to see the progress of the work on the Queen Elizabeth carrier, which is on track to be flooded up in July. The initial bow sections of the Prince of Wales carrier are dockside, ready for assembly to start later this year.
Thomas Docherty
I am grateful for that answer. Is the Minister aware that Babcock commented last week that if Scotland votes yes it would be highly unlikely that my constituency dockyard would get further orders for maintenance work from the MOD? Is that why the Scottish National party has admitted that there would be significant job losses at Rosyth in the event of independence?
Mr Dunne
The hon. Gentleman will not be surprised to learn that I keep an eye on press cuttings relating to all defence procurement matters. The in-service support solution for the Queen Elizabeth class carriers is still in development and will not be decided until next year, but much support will be delivered at the base port and on deployment at sea. I think, however, that the hon. Gentleman was referring to depth maintenance and refit, and the security implications of that work being undertaken in a non-sovereign dock outside the UK would need to be carefully considered. Several dry docks in the UK are physically capable of accommodating such ships outside Scotland.
Jason McCartney (Colne Valley) (Con)
10. What discussions he has had with his counterparts in NATO member states in preparation for the NATO summit in September 2014.
The Parliamentary Under-Secretary of State for Defence (Dr Andrew Murrison)
My right hon. Friend the Secretary of State has had a range of discussions with his counterparts in recent months in relation to the NATO summit in Wales this September. Most recently he discussed the summit and its possible content with fellow Defence Ministers at the NATO defence ministerial in Brussels on 26 and 27 February. The Wales summit falls at a crucial time for partners as they contemplate a post-2014 future and the importance of the transatlantic alliance. It is also a great opportunity to showcase the best of British to our allies and partners.
Jason McCartney
As an active member of the NATO Parliamentary Assembly, may I ask what plans there are for parliamentarians from the 28 member nations—to engage with the NATO summit later this year?
Dr Murrison
We look forward to members of the NATO Parliamentary Assembly playing an active role, and we are exploring what that might mean. May I say how pleased I am that the hon. Member for York Central (Hugh Bayley) is president of the Assembly? The Prime Minister has appointed my hon. Friend the Member for Bournemouth East (Mr Ellwood) as his parliamentary adviser on the summit. I know that my hon. Friend is working hard, and I look forward to working with him on the preparations.
Mr Speaker
The hon. Member for Bournemouth East (Mr Ellwood) has already approached me about an event that he wishes to stage, so he is going about his duties with great conscientiousness, and I hope to be able to assist him in his endeavours.
Mr Russell Brown (Dumfries and Galloway) (Lab)
With the threat of cyber-attack and espionage rising substantially, will the UK play an active part at the summit in pushing for NATO-wide cyber-capability?
Dr Murrison
The hon. Gentleman is right to raise that point. He will know that the UK’s preparations are reckoned to be far advanced, but he will also understand that cyber-defence is a sovereign capability. However, it is important that supranational institutions such as NATO ensure that their own systems are protected from cyber-attack.
Sir Menzies Campbell (North East Fife) (LD)
May we have an assurance that if there is any discussion of Ukraine at the NATO summit, careful attention will be paid to the defence anxieties of Latvia, Lithuania and Estonia about what appears to be the emergence of a Putin doctrine, not least because of the close proximity of Kaliningrad to all three countries?
Dr Murrison
The right hon. and learned Gentleman is right to raise the concerns of the Baltic states, which are nervous at the moment. Of course, they are covered by article 5, so they have a particular relationship with NATO that is not enjoyed by Ukraine.
Paul Flynn (Newport West) (Lab)
Does the best of British that we are hoping to show to the delegates include the best of Newport, which is a wonderful habitat for the conference? Will the conference arrangements be such that the delegates will have plenty of time to see and enjoy the robust personality of Newport and its beautiful hinterland?
Dr Murrison
The hon. Gentleman is a doughty advocate for the area that he represents, and he is absolutely right that the summit is an opportunity to show off Newport and Wales in general. It will clearly be great to showcase our military, but the summit is also a great opportunity for Wales.
Vernon Coaker (Gedling) (Lab)
There is, rightly, broad consensus on both sides of the House that military action in Crimea is not an option, but will the Minister confirm what contribution the UK has made to NATO in response to the Ukraine crisis, and what role our forces have played in NATO training exercises in Europe? Will the matter be discussed up to and including at the autumn summit?
Dr Murrison
The hon. Gentleman knows of the strategic concept in relation to NATO and what it implies. He will also be aware of our contribution of the E-3D airborne warning and control system aircraft that is currently deployed to make sure that we have situation awareness in Poland and Romania. We are, of course, open to requests from NATO, in relation to what we might do on collective security, but he knows very well the implications of article 5. The importance here is to de-escalate, not escalate.
Vernon Coaker
I thank the Minister for that considered reply. It is the Opposition’s view that we must be prepared to ask serious questions about the UK’s role in NATO and about the security of our allies, including those in the Baltic states and eastern Europe. Does the Minister agree that the forthcoming summit should discuss how NATO can best protect our own security, as well as that of our allies? Is it not clear that one of the most important discussions up to and at the autumn summit must be about the future long-term strategic direction for NATO following the present crisis?
Dr Murrison
The agenda is primarily a matter for the Secretary-General of NATO, not for the host nation, although it is probably true to say that the host nation traditionally has a role in trying to suggest and shape the agenda for summits on its soil. The hon. Gentleman might expect us to be considering what NATO means post-2014. He would probably expect the transatlantic alliance to be debated at some length, and what will happen with regard to Afghanistan and NATO’s involvement in that country. I suspect that all those things will be important and top of the agenda in Cardiff, but it is important to note that this is primarily a matter for the Secretary-General.
Mr Dominic Raab (Esher and Walton) (Con)
11. What steps he is taking to strengthen the armed forces covenant.
The Parliamentary Under-Secretary of State for Defence (Anna Soubry)
We continually review areas where we can make a difference, from home purchase schemes and health care to transition and increased pupil premiums in schools, and our approach is making a difference right across the armed forces community. Upholding the covenant is not a matter just for the Government; it is the responsibility of the whole of society. Charities, employers, local authorities and individuals are all asked to recognise members of the armed forces community and give them the respect, support and fair treatment that they so richly deserve.
Mr Raab
A 2012 survey showed that one in five of our armed forces received abuse back home, and 6% were victims of violence. I do not think we need to legislate for new offences, but is my hon. Friend satisfied that the police properly investigate all allegations, and has she considered with other Government colleagues the case for raising the sentence for criminal violence harassment where it deliberately targets serving British troops?
Anna Soubry
As my hon. Friend will know, different offences relating to violence have different sentences attached to them. I do not think there is a case for raising those sentences overall, and the sentencing guidelines make it clear that if somebody is assaulted by virtue of their being in the armed forces, that is clearly an aggravating feature and as a result, in simple terms, the perpetrator receives a higher sentence—and rightly so.
Andrew Gwynne (Denton and Reddish) (Lab)
In opening, the Minister rightly mentioned transition. Given the concerns about members of the armed forces’ transition that were highlighted in the recent review by Lord Ashcroft, which of his recommendations will the Ministry of Defence be taking forward?
Anna Soubry
We are considering all the recommendations in Lord Ashcroft’s report. On balance, it was a positive report, and it shows what many of us know—that when our personnel transit out of service, they do so extremely well. They are more likely to find a job than other members of society, because of the remarkable skills that they have, often as a result of the experience that they gained as members of our military. On balance, things are working well, but that does not mean that we cannot do more. We are looking at that report and at improving things, and much of the work I am doing leads to that.
Mr James Arbuthnot (North East Hampshire) (Con)
On Thursday, my right hon. Friend the Secretary of State for Defence announced that the Service Complaints Commissioner would become an ombudsman, for which the existing commissioner, the excellent Dr Susan Atkins, and the Defence Committee have been calling for years. Does the Under-Secretary agree that this very welcome move will mean that the complaints system will be both quicker and fairer, and will help to bring in more aspects of the armed forces covenant?
Anna Soubry
Absolutely. I completely agree with my right hon. Friend in his assessment of the benefits of this new system. As he says, Dr Susan Atkins has welcomed this greatly, and may I use this opportunity to pay tribute to the great work she has done? I notice that the Royal British Legion also welcomed these changes. The new system will do exactly as he says: it will help to speed things up, and where there has been maladministration the service complaints ombudsman will not shirk from making recommendations to the Defence Council, and we will see huge improvements.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
12. What progress his Department has made on its procurement of three new offshore patrol vessels from BAE Systems.
The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)
We are in negotiations with BAE Systems for the contract to build the three new offshore patrol vessels announced in November. As part of these arrangements, only last Wednesday, during a visit to Scotstoun, I announced that the MOD had committed £20 million to this programme, with the award of a contract for long-lead items, such as engines and gearboxes, which need to be ordered in advance. The main investment decision is due in coming months and construction work of the vessels is due to begin this autumn.
Oliver Colvile
Will my hon. Friend also set out the timetable for the building of these frigates and ships, and say a little about when the base porting announcement might be made?
Mr Dunne
I thought that my hon. Friend might be interested in the base porting announcement. As is normal practice, we will make the announcement around the time of the main gate investment decision, which, as I have already said, is likely to be this autumn. I am sure that he will advocate strongly his constituency interest, but I have to advise him that other hon. Members will be doing so as well.
Sir Edward Leigh (Gainsborough) (Con)
13. What effect the Army 2020 review has had on the operational capability of the armed forces.
The Minister for the Armed Forces (Mr Mark Francois)
Under Army 2020, the Army will be equipped to face future threats after more than a decade of enduring operations and will remain capable of operating across the full spectrum of military capability, either at home or overseas.
Sir Edward Leigh
The Minister said earlier this afternoon that the MOD cannot be “oblivious” to the country’s fiscal position, but the Treasury cannot have it both ways. If it insisted that the Army had to suffer dangerous cuts in a non-strategic review in 2010, surely in 2020, when the economy will be growing, the Army, in a dangerous world, is entitled to share in the proceeds of growth.
Mr Francois
Again, my hon. Friend tempts me to stray into what are perhaps Treasury matters. It is evident that the Ministry of Defence must live within its means, as must all other Departments. There is no national security without economic security. That said, we believe that with Army 2020 we have a credible and realistic plan, and we are determined to carry it through.
Mr Julian Brazier (Canterbury) (Con)
Does my right hon. Friend agree that while many of us would like to see more emphasis on and funding for defence within the money available, the rebalancing brings us into line with all other English-speaking countries? May I further report that my local TA battalion has recruited as many people during the last two months as during the previous 10, because at last the pipeline is starting to come unblocked?
Mr Francois
On behalf of the whole House, I am delighted to receive my hon. Friend’s positive report. We do believe that we can meet the target. The reserve forces when I served in the 1980s had 75,000 men and women under arms. I have to believe that now, with a larger population, we can get to 30,000 trained, particularly as we start with 19,000 trained now. Put another way, it would require a net increase of only about 20 in each of the 650 parliamentary constituencies in this country across a period of four years. I believe that is eminently achievable and, backed by initiatives such as the corporate covenant to get employers’ support, we are getting on with it. We will deliver this programme.
Martin Horwood (Cheltenham) (LD)
14. What steps his Department is taking to support conflict prevention; and if he will make a statement.
The Parliamentary Under-Secretary of State for Defence (Dr Andrew Murrison)
Together with the Department for International Development and the Foreign and Commonwealth Office, the Ministry of Defence is a full partner in the delivery of the July 2011 building stability overseas strategy, and uses a multi-departmental approach to prioritise UK activity in upstream conflict prevention and stabilising fragile and conflict-affected states around the world in association with partner nations.
In addition, the Ministry of Defence has developed the international defence engagement strategy jointly with the FCO. Published in February 2013, this sets out how the Ministry of Defence can contribute most effectively to the building stability overseas strategy, as well as wider overseas Government objectives.
Martin Horwood
I welcome the Ministry of Defence’s involvement in the strategy. Security sector reform is one of its key elements with regard to conflict prevention. How do we ensure that, by building capacity among local security forces, we do not inadvertently enable repression and repressive tactics among those organisations, and that we instead make people feel safer in those countries?
Dr Murrison
My hon. Friend will be aware that, when taking training to countries we partner, we put a great deal of effort into instilling what might be called the “moral component” of warfare very directly into what we teach and into what we inculcate in them. That is a very strong part of our overall offer. We can never guarantee that the people we train will not go on to do terrible things, but we can reduce the chances of that happening and make sure that the ethos we are rightly proud of in our own armed forces is exported to others.
Dr Julian Huppert (Cambridge) (LD)
21. The Minister spoke about multi-departmental work, but may I press him on multilateral work? What is he doing to make sure that a priority of work with NATO and the European Union is a focus on conflict prevention?
Dr Murrison
My hon. Friend takes a great interest in this and will be aware of the large number of military and civilian missions that the European Union has mounted: there are 16 in all, four of which are military. My hon. Friend will be aware of the EU training mission to Mali—EUTM Mali—and EUCAP Nestor. It is very important to understand that in all of these scenarios we have to work with partners, meaning NATO first and foremost, but other partnerships where it is expedient to do so.
Katy Clark (North Ayrshire and Arran) (Lab)
15. What recent progress his Department has made on its response to the internal radiation leak aboard HMS Vanguard; and if he will make a statement.
The Secretary of State for Defence (Mr Philip Hammond)
Let me make it clear to the hon. Lady that there has been no issue with the reactor on HMS Vanguard or, indeed, any of our submarines. I announced to the House on 6 March that there had been a small fuel element breach in the naval test reactor at Dounreay, but that did not lead to a leak of radiation from the reactor circuit.
Katy Clark
I thank the Secretary of State for his answer. What assessment has he made of whether the reactors on all Vanguard and Astute-class submarines will last the full lifetime of the submarines?
Mr Hammond
As I explained to the House when I made my statement, the purpose of the naval test reactor at Dounreay is to run the reactor hard and flat out, as it were, ahead of the operational reactors on the submarines, to see what happens as they approach the end of their planned life. The reactors on board our submarines have nothing like the percentage fuel burn that the reactor at Dounreay has now experienced, so we are looking at something that has developed at a much further advanced stage of the life of the reactor. We have, however, taken the decision, on a precautionary basis, to refuel HMS Vanguard during her planned deep-maintenance period. Once the reactor at Dounreay is decommissioned, it will be examined in detail and we will then have much greater evidence of what has caused the issue and be able to make sensible decisions about the future.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
Will the Secretary of State advise whether and when the Commodore at Clyde naval base was alerted to a potential issue with the reactors of the Vanguard submarines, and whether, no matter whose responsibility it was, he would have expected the relevant local authorities— namely Argyll and Bute and West Dunbartonshire councils—to be alerted?
Mr Hammond
If there had been any health and safety risk or any risk to the environment, I certainly would have expected the relevant local authorities to have been notified, but there was none at any time. The Scottish Environment Protection Agency has a written agreement with the MOD that allows it oversight of these matters in military bases in Scotland. If it had thought there was any risk at any time, it would have notified the necessary civil authorities.
Mr James Gray (North Wiltshire) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Defence (Mr Philip Hammond)
My first priority remains the success of our operations in Afghanistan. Beyond that, my priorities are maintaining budgets in balance, developing our reserve forces, reinforcing the armed forces covenant and reforming the defence procurement organisation so that our armed forces can be confident of being properly equipped.
Mr Gray
The people of Wiltshire love the Army and will welcome the 4,000 soldiers who are shortly due to return there from Germany, but we also love Stonehenge and the mysterious mists and swirling druidical mysteries that surround the stones. Will the Secretary of State look carefully at reports that houses to be built to house the 4,000 soldiers will block off the rising sun at the summer equinox, and if they do, will he make sure that it does not happen?
Mr Hammond
My hon. Friend is right to highlight the importance of preserving important sites such as Stonehenge and of having a careful approach to the design of any development that might impact on them. I, too, have seen the press articles to which he referred. I am happy to reassure him that although Larkhill is an important element of our strategy for accommodating troops returning from Germany—we intend to invest about £800 million in the area to accommodate 4,300 service personnel—no decision has been taken about the location of additional service accommodation. A public consultation is about to close, and organisations such as English Heritage have very clearly expressed the issues that he has raised. We will make a decision in due course.
Yvonne Fovargue (Makerfield) (Lab)
Although we welcome the events in France and, indeed, around the UK to commemorate the 70th anniversary of D-day in 1944, does the Secretary of State not agree that it would be appropriate to hold a national event in London at that great symbol of sacrifice, the Cenotaph, to provide a real focal point for remembrance here?
The Parliamentary Under-Secretary of State for Defence (Dr Andrew Murrison)
I share the hon. Lady’s concern that we should mark the 70th anniversary appropriately and, indeed, that we should learn the lessons of the past in this respect. I know that considerable work is under way to make sure that the 70th anniversary in France is a huge success, and that veterans and their carers who want to go are supported in returning to the beaches to commemorate this huge anniversary. On anything more than that, we will have to wait and see, but the important thing is to make sure that veterans and carers who want to go can do so in the manner they wish.
Sir Edward Leigh (Gainsborough) (Con)
T2. An attack on one NATO country is an attack on all of them. Can we therefore thank God that Ukraine never did join NATO, because otherwise we might now be involved in a European war?
Mr Hammond
As the Under-Secretary of State for Defence, my hon. Friend the Member for South West Wiltshire (Dr Murrison), has already said, the status of Ukraine is quite different from the status of NATO countries—NATO countries enjoy the article 5 guarantee, which protects and assures their security—but we are doing everything we can to reassure our NATO allies about the protection that we offer. I am able to advise the House this afternoon that we have taken the decision this morning to offer NATO UK Typhoon aircraft from late April to augment the Polish contribution to the NATO Baltic air policing mission. I hope that will provide reassurance to our NATO allies in the east.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
T6. In thinking about the importance of learning from the past, has the Secretary of State read “Why England Slept”, a little book by John Fitzgerald Kennedy? It is about Britain not being prepared in the 1930s for what was going to happen in Germany. Does he think that England, or Britain, is sleeping now, with an uncertain and unpredictable presence in the east of Europe?
Mr Hammond
I have not read the book, but I have said consistently in this House and elsewhere since I came into this post that we should not forget Russia’s very significant rearmament programme. Russia remains a major military force on the continent of Europe, and its interests are not always aligned with ours, as we have seen only too clearly over the past few weeks.
Dr Julian Lewis (New Forest East) (Con)
T4. Much as no one wishes to see the cold war return, do not recent events between Russia and Ukraine indicate that this is not some flight of fancy, but that it really could happen, and does that not mean that we must be extremely careful never to let down our nuclear or conventional defence guard?
Mr Hammond
What those events do show is that we have been right throughout in maintaining the need to continue with a strategic nuclear deterrent as the ultimate guarantor of Britain’s sovereignty and freedom of action. The world is a very uncertain place, while the time horizons for the provision of military equipment are very long, and we are looking forward 40 or 50 years in the planning. The events of the past months and years show that it would be a very brave man indeed who said that there would be no threat to our sovereignty and independence over that time horizon.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
T7. Last week, the Under-Secretary of State for Defence, the hon. Member for Ludlow (Mr Dunne), admitted that he had wasted £50 million on the Cipher cyber-security project. This weekend, we heard that the NATO website and other websites came under attack following the recent actions in Ukraine. Will the Minister give us a timely assessment of the UK’s and NATO’s cyber readiness, particularly with regard to the situation in Ukraine?
The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)
The Cipher contract cost the MOD £46 million. Work under the contract ceased in June of last year at the end of a protracted assessment phase, which concluded that the project would not meet the full defence capability requirement at value for money for the taxpayer. I remind the hon. Lady that the contract was placed in November 2008. It is a classic example of the legacy of out-of-control procurement contracts that we were left when we took office in May 2010.
Mr Crispin Blunt (Reigate) (Con)
T5. To pick up the theme from the hon. Member for Huddersfield (Mr Sheerman), between 1935 and 1939, defence expenditure doubled in response to the deteriorating security situation in Europe. Does the Department do any contingency planning to determine how our defence capability could be improved rapidly if there was a greater call on our nation’s defence resources?
Mr Philip Hammond
As I have said before in the House, part of the outcome of the strategic defence and security review in 2010 was that we should focus, while consolidating our armed forces, on our regeneration capability in case the need arose, or the resources became available, for capabilities or scale of operations that we do not have.
John Woodcock (Barrow and Furness) (Lab/Co-op)
We were delighted that the Secretary of State and his Australian counterpart made it through the Barrow fog to visit the shipyard on Thursday to announce major new infrastructure investment to make the Successor programme possible and the cutting of steel on the seventh Astute-class submarine. Did his conversations with the company and the work force on that day maintain his confidence that the leak in the test Vanguard reactor will not affect the build of the Astute programme?
Mr Hammond
I am not sure that I discussed that matter with the work force at Barrow, although I did have some interesting conversations that reassured me greatly about their commitment to the programme. We are clear that the incident at Dounreay will not have any impact on the progress of the Astute or Successor programmes.
Andrew Rosindell (Romford) (Con)
T8. Will the Secretary of State join me in paying tribute on St Patrick’s day to all the Irish citizens who currently serve in Her Majesty’s armed forces and the 100,000 who sacrificed their lives in the British armed forces during the first world war? Does he agree that our defence partnership with Ireland would be immensely strengthened if it considered joining NATO?
Dr Murrison
My hon. Friend will know that we are working closely with the Republic of Ireland to ensure that our period of shared history is commemorated appropriately. Today, we are operating with troops from the Republic of Ireland in Mali. He will know that the UK and Ireland stand shoulder to shoulder in EUTM Mali. It is a strengthening relationship and one that has great promise.
Steve McCabe (Birmingham, Selly Oak) (Lab)
As the Secretary of State says, procurement times are long. Joint Helicopter Command has indicated that it requires a new fleet of Apache AH-64E attack helicopters for operational use by 2020. Has that contract been signed yet?
Mr Dunne
If the hon. Gentleman is familiar with the AgustaWestland contracts, he will be aware that last month the Secretary of State announced a contract for the sustainment of the existing Apache fleet for the next five years. Thereafter, we are looking to introduce a contract that will take the effective use of the helicopter up to 2040. Discussions on how we should go about procuring that sustainment upgrade are under way.
Mr Tobias Ellwood (Bournemouth East) (Con)
T9. In Budget week, will the Defence Secretary join me in commending Britain’s improved economic outlook, thanks to the Chancellor’s stewardship, which potentially gives rise to finding the annual £65 million required to run the second aircraft carrier? Does my right hon. Friend agree that operating two carriers would strategically extend and involve Britain’s diplomatic military influence in a manner not seen for a generation?
Mr Philip Hammond
I am happy to join my hon. Friend in congratulating the Chancellor on the remarkable recovery in Britain’s economic prospects. He knows well my own view, which is that having invested £3 billion each in building our carriers, it would look strange if we did not make every possible effort to find the relatively small amounts of money that will enable them to be operated, so that we can have a set of doctrine based on the continuous availability of a carrier at sea.
Mrs Madeleine Moon (Bridgend) (Lab)
The Secretary of State gave a written statement saying that the armed forces complaints commissioner is now to become an armed forces ombudsman. Will he explain why an announcement of such importance to the House and the armed forces family was not made on the Floor of the House, rather than through The Times and through a written statement, as that would have given us far greater awareness of what was going to happen?
Mr Hammond
May I suggest to the hon. Lady that, as many of her colleagues have clearly understood, if Members wish to pursue a written statement further, they always have the option of asking an urgent question?
Sir Gerald Howarth (Aldershot) (Con)
Given that Russia has effectively annexed Crimea, in contravention of the Budapest agreement signed by Britain, the United States and Ukraine in 1994, and that it continues to threaten eastern Ukraine, what consideration has my right hon. Friend the Secretary of State, or indeed NATO, given to mounting maritime exercises in the Black sea so that a message may be sent to Mr Putin’s Russia that any attack on Odessa would be a step too far?
Mr Hammond
We are clear that a graduated response to these unjustified actions by Russia is necessary, but it should be a diplomatic response in terms of economic and trade sanctions. Meetings are ongoing today across the European Union to try to agree the best way to deliver that response.
Dan Jarvis (Barnsley Central) (Lab)
There is no doubt that the late Corporal McLaughlin of 3 Para demonstrated outstanding courage during the battle for Mount Longdon in the Falklands conflict of 1982. We know that a citation was put forward by his commanding officer, but it was apparently not considered by the MOD. Given that new evidence now casts doubt on the reason it was not considered, would it be reasonable for Ministers to look at the detail of the case and satisfy themselves that an injustice has not been served on Corporal McLaughlin, his unit and his family?
The Minister for the Armed Forces (Mr Mark Francois)
I have been to the Falkland Islands and visited the battlefield at Mount Longdon. Having done so, I can appreciate what a remarkable feat of arms it was for that assault to have taken place and to have succeeded. I fully acknowledge the hon. Gentleman’s regimental links in all of this, but as he will know, the decision to give individual military awards is not a matter for Ministers of the Crown. Such things are examined through well-established procedures, and it is not down to Ministers to take individual decisions.
Mr Henry Bellingham (North West Norfolk) (Con)
Is the Secretary of State aware that some Scandinavian armies are not allowed out after dark? This pernicious human rights culture is already infiltrating our armed forces. What will he do to exempt our armed forces from human rights laws?
Mr Philip Hammond
There are issues about the encroachment of judicial processes into the operation of the armed forces. A number of cases currently before the courts, or pending, could have a significant impact, and we are watching them closely. We are clear that once we commit our armed forces to combat, they must be able to carry out operations without fear of constant review in the civil courts. If we find that the current cases develop in a way that makes that difficult, we will come back to the House with proposals to remedy the situation.
Bingo Duty
Dr Thérèse Coffey (Suffolk Coastal) (Con)
It is my pleasure to present a petition signed by 220 people that was arranged by those who enjoy bingo at Palace Bingo in Felixstowe. I thank Vivienne Warren for organising the petition.
The petition states:
The Petition of the people of Suffolk Coastal,
Declares that the bingo industry is currently subjected to bingo duty at 20% whereas most other forms of gambling are taxed at 15% and further that the Petitioners believe that bingo venues offer a pleasant and safe environment for people to come together and enjoy themselves.
The Petitioners therefore request that the House of Commons urges the Government to reduce bingo duty from 20% to 15% so investment can take place in the bingo industry modernising premises and creating jobs.
And the Petitioners remain, etc.
[P001332]
Speaker’s Statement
Mr Speaker
It is my sad duty to have to report today to the House the death, at the age of 88, of the right hon. Tony Benn, who served in this House from 1950 with only very modest interruptions until 2001, representing over that period of half a century two parliamentary constituencies, Bristol South East and Chesterfield, the first for 30 years and the second for approximately 17 years. Colleagues in all parts of the House will remember Tony Benn very well. For my part, I believe he was a man of deep socialist principle, of great integrity, and of demonstrable passion and compassion; a brilliant parliamentarian, a brilliant platform speaker, and a brilliant diarist. The House will also doubtless know—I can recall for Members’ benefit—that, when he left the House, alongside, at the time, only Sir Edward Heath, Tony was granted the freedom of the House. It was a freedom that he exercised. I think it is right that a book of condolence should be established, and it has been—it sits in the Library and is there for Members, staff of the House, Members’ staff and others to sign.
I thought it might perhaps also be convenient for the House to know what arrangements are intended by me and by the usual channels to acknowledge Tony’s contribution. On Wednesday, there will be an opportunity for the Prime Minister and the Leader of the Opposition to pay tribute to Tony, and on Thursday, after Question Time, a tributes session will be opened by the Deputy Prime Minister and responded to by the deputy Leader of the Opposition. There will then be an opportunity for Back Bench Members to record their own recollections and impressions of Tony Benn. The intention is that that set of exchanges will be wound up by the shadow Leader of the House and by the Leader of the House. At what is, in particular for the family, a very sad time, a difficult time, a time of trauma and a time for grief, I hope that we collectively want to extend our condolences to Tony’s children, two of whom, Hilary and Stephen, I can see in my line of vision, to all his grandchildren—it is a privilege to see Emily present today—and to all members of the family.
Points of Order
Toby Perkins (Chesterfield) (Lab)
On a point of order, Mr Speaker. I thank you very much for what you have just said. I wonder if you might assist me and my hon. Friend the Member for Bristol East (Kerry McCarthy) in making our constituents aware that books of condolence lie in Chesterfield Labour club and Bristol city hall. We know people want to make their comments known and hope they provide some comfort to the family.
Mr Speaker
I am grateful to the hon. Gentleman. He has effectively advertised his own point. It will be on the record and I am sure he will be taking further steps to ensure that people are aware of those important facts.
Bill Wiggin (North Herefordshire) (Con)
On a point of order, Mr Speaker. I am sure that, should it have been my father you were speaking about, I would have been delighted with your very kind comments.
On a completely unrelated matter, sadly, last Thursday, I raised a point of order about Members who shout “Aye” and then vote no, and vice versa. Mr Deputy Speaker was kind enough to repeat your judgment. Subsequently, at least three witnesses have come to me to say that they have seen hon. Members ignoring that advice. I have not named them and would not do so because I have not warned them, but I wonder what you would like me to do, Mr Speaker. Should the witnesses write to you?
Mr Speaker
I was not present at the time, but I am advised by a very high—even bewigged, dare I say—authority that the matter was dealt with at the time, and that there is no particular merit in going back over the incident, as far as I am aware. However, I say to the hon. Gentleman that Members are free to write to me at any time if they feel that there has been an impropriety or a breach of protocol. The matter should be treated on its merits. It is the case—[Interruption.] Order. It is the case that vote should follow voice. That is a very long-established principle. Vote should not go in opposition to voice.
Mr Speaker
The hon. Gentleman is gesticulating in an eccentric fashion, but we will come to him in a moment.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Further to that point of order, Mr Speaker. It is helpful to have your ruling on the record, but the matter was most certainly not dealt with, because we were advised to wait for the recorded vote to be made available. Your ruling is clear, but one wonders what the situation is now for those who called a vote in false circumstances.
Mr Speaker
I thank the hon. Lady for what she has said. I know that she always seeks to be helpful to the House, and I always listen to her.
Dr Lewis
Further to that point of order, Mr Speaker. I apologise for my eccentric gesticulations, but one cannot change the habit of a lifetime. I speak as one who, within living memory, may have been guilty of that practice in getting what we considered to be a rather important vote on Syria on the record. If it is decided that the practice is unsuitable and should never be repeated, when there is an important Back-Bench debate on which there needs to be a vote to make the public well aware of the opinion of the House, and the Government choose for technical reasons to advise everyone to abstain, are there other mechanisms available that would enable that vote to be called?
Mr Speaker
For a moment I thought that, not for the first time, the hon. Gentleman had foxed me. I am sorry to disappoint him, but his point is not quite as powerful, or his inquiry as penetrating, as he imagined. The short answer to his question is yes. There is a simple mechanism by which a Member who is anxious to ensure that the will of the House is tested can see to it that it is, and that is the mechanism of putting in Tellers. That is a different matter from registering a vote in opposition to what the voice has said.
Mr Speaker
The hon. Member for New Forest East (Dr Lewis) says that he did that once before, but I think he was operating under cover at the time.
Mr Dennis Skinner (Bolsover) (Lab)
Further to that point of order, Mr Speaker. The hon. Member for New Forest East (Dr Lewis) has got form. He is the last person who should talk about doing things for other reasons. He joined the Labour party many years ago because he wanted to protect a so-called Labour MP who, when he next came to Parliament, crossed the Floor of the House and joined the Tories. The hon. Gentleman has got form.
Mr Speaker
There are only two responses to the hon. Gentleman. First, lots of us have got form. Secondly, he has made the point conclusively for me that it is time to move on.
Robert Flello (Stoke-on-Trent South) (Lab)
On a point of order, Mr Speaker. This morning, Sir David Higgins announced his proposals on High Speed 2, which include the suggestion that there should be a station at Crewe. That completely ignores the excellent proposal advanced by Stoke-on-Trent city council that would save £5 billion and bring services to Manchester seven years earlier. Has the Secretary of State for Transport given any indication that he will come to the House and explain why Sir David Higgins has apparently ignored the recently concluded consultation and introduced proposals that completely fail to take into account the other sound suggestions that have been made?
Mr Speaker
I thank the hon. Gentleman for that point of order, to which there are two responses. First, the observations by Sir David in his report will be the subject of ongoing debate, and probably dispute, for a long time to come. I make that point, within the boundaries of what the Chair can say, with some personal feeling.
Secondly, I know that it is the Secretary of State’s intention to make a statement on that important matter. Initially, I believe he had intended to make an oral statement to the House today, but it may have come to the hon. Gentleman’s notice that the Secretary of State is engaged elsewhere, and quite unavoidably would not be able to make that statement at this time. I am hopeful, however, that he will soon make it.
Business without Debate
Pensions Bill (Ways and Means) (No. 2)
Pensions Bill
(10 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:35 - The House divided: - Ayes: 274 / Noes: 198 - Question accordingly agreed to.
17:50 - The House divided: - Ayes: 214 / Noes: 277 - Question accordingly negatived.
Mr Speaker
I must draw the House’s attention to the fact that financial privilege is involved in Lords amendments 1, 3, 9 to 13, 15 to 23, 27, 29 and 32 to 38. If the House agrees to them, an appropriate entry will be made in the Journal.
Clause 2
Entitlement to state pension at full or reduced rate
The Minister of State, Department for Work and Pensions (Steve Webb)
I beg to move, That this House disagrees with Lords amendment 1.
We are on the home straight of the Pensions Bill. It has been all the way through this House and their lordships’ House, and we have come back to it today to deal with amendments that, with one exception, make it a better Bill. I am grateful to my noble Friends Lord Freud and Lord Bates who, from the ministerial Benches, took the Bill through another place. I am also grateful to all my colleagues who have contributed to the Bill, and to peers on both sides of the House of Lords who have made insightful contributions and improved the Bill in a number of ways.
We have made a number of amendments in response to concerns raised by noble Lords, so I emphasise that our decision to ask this House to disagree with their amendment 1 is exceptional. Indeed, that is the only amendment with which we are asking the House to disagree, so I hope that we will be seen to have taken a constructive approach and that we have sought to improve the Bill on a cross-party basis wherever possible. For reasons that I will explain, however, we ask the House to disagree with this amendment.
As the House will know, access to the national insurance system through employment is dependent on earning above the lower earnings limit, which is currently £109 a week or, expressed annually, £5,668. People earning above the lower earnings limit but below the primary threshold of £149 a week receive a credit and do not pay national insurance but effectively build up national insurance rights. The issue raised by Baroness Hollis in another place related to the position of people who have more than one job, none of which, by itself, results in their paying national insurance but whose wages, if added together, would be above the lower earnings limit. It was suggested that there was apparent unfairness, because someone with a single job that pays £120 a week would get a year of national insurance, whereas someone with two jobs, each paying £60 a week, would not.
We are grateful to Baroness Hollis for raising the issue. We will set out the extent to which we think the issue is significant, the extent to which we think there is evidence for it and how the Government plan to address it. We ask the House to disagree with the amendment, but we accept the principle that we need a pensions and national insurance system that is fit for the modern age. Crediting and various other issues have evolved and need to evolve to reflect the fact that we are dealing with a changing labour market. I want to share with the House some examples of how that has happened and will continue to happen. One particular example is the introduction of universal credit.
At present, there is a set of low-earning individuals who do not get credits. When universal credit is fully in place and they come within its scope, they will receive credits. Potentially, some will be the very same people we are talking about in relation to the amendment. The House may not be aware that the introduction of universal credit will bring an estimated 800,000 additional low-earning households into the scope of crediting. That demonstrates that the Government are not complacent about the changing labour market, or the position of low earners and their access to the national insurance system. This is a concrete and substantive way through which people will gain access in future.
I understand the concern of Baroness Hollis that people might miss out on a qualifying year for national insurance. Why does that matter? If they were repeatedly to miss out on qualifying years, they might fail to build up a full single-tier pension. That requires 35 qualifying years, bearing in mind that these are years of contributions or credits. However, the mere fact that I have used the phrase “35 qualifying years” demonstrates the first reason why the problem might not be as significant as one might, at first sight, imagine. An 18-year-old might, for the sake of argument, have a 50-year working life, or possibly slightly more. Of that 50 years, only 35 years need to be qualifying years for a full single-tier pension. That person could, therefore, spend 15 years doing multiple small jobs—which is exactly what the noble Baroness is concerned about—and it would not make a jot of difference to their single-tier pension entitlement.
We do not know how many people spend how many years in this situation, and that brings me to one of my central points: we do not have the evidence base to know the scale of any potential problem, let alone to rush to solutions, which is what the amendment does. We have cross-sectional data. On the basis of surveys, we know how many people report having multiple jobs in any given year. We know what the wages are and we can have a stab at aggregating them. What we do not know very reliably is how that changes over time: whether the people who in any given year have multiple small jobs are the same people the next year and the next year. If it is just a transient phase that happens for a few years of someone’s working life and does not happen again, it may be entirely irrelevant to their state pension position.
Sheila Gilmore (Edinburgh East) (Lab)
This matter came to my attention through a constituent who was in exactly this position, and the Minister will be aware that I raised it in Committee. The amendment is an enabling amendment rather than a prescriptive amendment, and even if there are only a few people who will be in that position, is it not worth making provision for them? Not everybody will necessarily enter the labour force at 18, particularly with greater further education and so on, so reaching 35 years might be quite difficult for some people. If there is a small number, as the Minister keeps telling us, I do not understand the objection to the amendment.
Steve Webb
I am grateful to the hon. Lady who, as she says, has shown an interest in this issue. There will be an issue of proportionality in any change. We estimate that perhaps 50,000 people might at any given point be doing multiple small jobs that together take them over the floor, but do not on their own. If, for most of those people, this happened for a few years and did not happen again, and it was relevant to the state pension for only a handful of people, should we legislate for that handful? It could happen and it probably does happen to some people, but to make well-informed policy the Government ought at least to assess the scale of the problem.
In particular, we should not rush into specific solutions. The amendment advocates a specific model, but I believe that we must begin by identifying not just the number but the types of people who are doing multiple part-time jobs of this kind. For instance, are they people with children? Is that why they are doing such jobs? If they have children under 12, they will receive credits under the general system.
We must match our data on multiple small jobs with data from other sources. We must look at longitudinal as well as cross-sectional data in order to gain a sense of the scale of the problem and the types of people affected, rather than legislating for a single solution. We believe that the amendment is technically flawed for a number of reasons, but we certainly think that rushing to amend the Bill in order to give ourselves power to do something that we might or might not want to do because it is one possible solution to a problem whose scale we do not know would be premature.
Sarah Newton (Truro and Falmouth) (Con)
Is it not especially important to enable women to juggle caring for young children with part-time employment? Will the Minister reassure me that the great improvements that we have made in relation to credits will continue, so that women will retain the flexibility that so many of us really appreciate when our children are young?
Steve Webb
My hon. Friend is right. It is important to attribute value to the time that people—both men and women—spend at home bringing up young children, and I can reassure her that years spent doing that will count in full as qualifying years towards a single-tier pension. For the first time, more or less, since the introduction of the system—at least, since earnings-related pensions were introduced— those years will count just as much as years spent running a FTSE 100 company. A year is a year, and a qualifying year is a qualifying year.
The provision will apply to anyone who is looking after a child under 12 and entitled to child benefit—well, it is slightly more complicated, but that is the basic idea—and to anyone who is caring for an elderly relative and receiving carers allowance, or, in certain cases, caring for more than 20 hours a week. There is, rightly, a network of credits which bring people into the system. Those will remain, and, in many respects, will become more valuable in the single-tier context.
Sheila Gilmore
The Minister advanced exactly the same arguments on Second Reading and in Committee. He said on those occasions that he did not have enough information. Given that we last considered the Bill several months ago, may I ask what steps he has taken to obtain the information that he feels is needed?
Steve Webb
We have increased our earlier estimate of the number affected from about 20,000 to about 50,000. In 2010, the last Government reduced the scope of what used to be known as home responsibilities protection by reducing the upper age of children being cared for following the end of child benefit and not being covered by credits from 16 to 12, and that has slightly increased the number affected by our proposals. We also made a technical change in starting credits for 16 to 18-year-olds. Those two factors, combined with more recent data, give us an estimate of 50,000. So we have updated our estimates, but, as the hon. Lady says, we need to take the matter further. Although we do not accept the amendment, we do accept the need to build an evidence base, and I will explain in a moment how we plan to do that.
Steve Baker (Wycombe) (Con)
The Minister is demonstrating that for low-paid people the system is currently so complicated that they cannot tell whether or not it is worth working an extra hour. Will he make it simple for me? If the amendment were adopted, would low-paid people be worse off in that year while they were earning?
Steve Webb
The honest answer to the question is that because there is not enough information in the amendment, we do not know, but that might be so.
Let us take the example of someone with two jobs paying £75 a week, who does not currently pay national insurance. If the two sums were added together to make £150 and national insurance were levied on that basis, that person would then have to pay national insurance. Such people might turn out not to need the qualifying year, because they would already have 35 qualifying years. As the hon. Gentleman says, a set of people could be worse off if the amendment were interpreted to mean what we assume that it means. It may merely mean opting in for a credit, which would be a free entitlement and would therefore constitute pure gain, but in that case there would be a different unfairness. We would have people who did a single job at £150 a week who had to pay NI and somebody else who had two jobs paying £75 a week who did not have to pay NI but got a free year of national insurance. My hon. Friend highlights an important point, and I am grateful to him.
Sheila Gilmore
Does the Minister feel that there is a technical problem in including such people, however small a group he thinks they form, because he seems to accept that people might end up not making up the 35 years towards a pension?
Steve Webb
We have always been clear that there will be people who will not make the 35 years, particularly those who come into the country later in life, for example, but the link between multiple mini-jobs and not making the 35 years, which we are talking about here, is unclear at best. We simply do not know whether it is a transient phase for people or whether they are in a recurring pattern. Again, I counsel the House against rushing to policy conclusions in amendments that are not accurately drafted rather than saying, “Let’s get the evidence base together.”
As well as undertaking to update our own figures, we are happy to commit to a literature review of what is known about this end of the labour market, making sure we have access to all the available data. We are also content to convene what we have grandly called an analytical stakeholder forum—that is three words of jargon in one go, so it must be impressive. The point of that is to pick the brains of those who study this end of the labour market, and we will be very pleased to benefit from the insights of the noble Baroness Hollis, with whom I have already had an informal conversation about this matter. I should stress that she would like us to retain Lords amendment 1 to avoid misrepresenting her views. We are very keen to gain her insights and those of economists and others who study this end of the labour market to try to establish what more we might be able to find out through existing data and whether any further work needs to be done.
It seems to us that we need to take a step-by-step approach, rather than rushing to policy conclusions as the amendment would. If we found that there were lots of people in this situation and that something must be done, even the something that must be done might not be the thing proposed in this amendment, and it seems a bit odd to pick one option, which as far as we can see is a sort of opt-in crediting option, when there might be others. For example, one might think that lowering the lower earnings limit might be a better solution. That would reduce the number of people in this position because their combined wages would be more likely to be above that floor. It would not necessarily require an opt-in process, and it would be simpler. That might therefore be a better solution; there might be others. We might relax the rules on voluntary national insurance contributions and the deadlines for payment. One can think of a whole raft of solutions, but if we are not clear about the scale of the problem, the groups affected and the permanence or otherwise of the situation, putting just one such provision in primary legislation—giving ourselves a power we might not use through what is, at that, an ambiguous amendment—does not seem to us to be the way forward.
Let me try to draw these threads together, because we have a lot to get through. We are concerned that the amendment itself is unclear, and I have run through a number of reasons why, such as the reference to the lower earnings “level”, not “limit”, and the reference to “income”, not “earnings”. National insurance liability is based on earnings, so the wording would have to be thus changed. The lower earnings limit figure is currently a weekly figure, whereas the amendment refers to an annual figure. Of course, all these things could normally be tidied up, but we do not have the opportunity to do so because if the House accepts the amendment, that is it: it is the end of the parliamentary process, the Bill becomes law and a deeply flawed amendment is on the statute book.
It is unclear exactly how the amendment is meant to work. As was said earlier, would people have to opt in and get credited, or would there be a duty on Her Majesty’s Revenue and Customs to combine these incomes and then levy national insurance, which might be to the detriment of some? There are a great many issues to be examined, but it is not our view that we should not look at them. We should, and as I said at the outset I absolutely accept the principle that we should have a system of pension rights and national insurance that reflects the current labour market, rather than the one in existence after the second world war. We are making a number of changes in that regard, but as I have said, the amendment as it stands is flawed in a number of respects and ambiguous in others. It rushes to a single solution to a problem whose scale and nature we simply are not year clear about, so we believe that—
Steve Webb
A poetic conclusion was nearly reached; but before I conclude I give way to the hon. Lady.
Sheila Gilmore
I understand that the Minister is anxious not to rush to a conclusion, but can he tell us what time scale he has in mind?
Steve Webb
We envisage updating our own estimates by the summer and would be very happy to do that, and bringing together experts and trawling through the related literature in the latter part of this year. We do not want to kick this into the long grass. If we concluded that further data-gathering was needed, and it was qualitative rather than quantitative, that would take some time, but well-informed evidence-based policy making sometimes does take time, frustrating though it may be, and that is the approach the Government wish to take.
I urge the House to disagree with the Lords in their amendment 1.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
I shall of course be disagreeing with the Government’s disagreement with Lords amendment 1.
Let me begin by putting the amendment and the labour market issues it pertains to into some context. Since 2008, only one quarter of the jobs created in this country have been permanent. There are hundreds of thousands of short-hours contracts and, according to some figures, approximately 1 million zero-hours contracts, in addition to other non-standard job patterns. Some 40% of all jobs are not the permanent, full-time positions that we traditionally associate with the UK labour market. That context is important to bear in mind: the Minister rightly referred to the need for the pensions system to keep up to date with changes in the labour market, and that is the reality of the labour market we are now all living with and working in.
Steve Webb
For the avoidance of doubt, I think the hon. Gentleman will find that the record shows that I did not say there were 17 logical flaws in the amendment. I said that there were 17 logical flaws in leaping from the assertion that there are lots of zero-hours jobs nowadays, to this amendment. My point was that it takes an awful lot of logical assumptions, all of which are false, to get to the amendment.
Gregg McClymont
Of course Hansard will tell this story, but it was a short quote and I think I managed to get it down correctly. If the Minister is saying that it was not that there were 17 flaws in the amendment, I am sure the whole House is delighted to have that clarification.
Let us probe a little further into the Minister’s argument. He says that on the Government’s estimates only about 50,000 people are affected, that there should be no “rush to solutions” and that the amendment is flawed technically for many reasons—but perhaps not 17. He says that the Government need to build their evidence base on the issue. Interestingly, he said that the Office for National Statistics has urged caution about the notion of an upsurge in zero-hours contracts. His point was, and the ONS’s point is, that it might be that individuals are more aware that they are on such a contract than that the upsurge has been so great. If that is the case, it does not negate the point that there are a significant number of these sorts of contracts around, and that has significant implications for a state pension system based on contribution.
I asked the Minister about the 17 logical flaws, but his argument also was that we do not know enough to go forward with an amendment to solve the problem. However, he also said he understands that the average zero-hours contract gives an individual between 15 and 20 hours of work a week. Is that his estimate or is it based on research? In a world where we are not precisely aware of the figures involved, there is a danger of bandying around our own figures without a relevant citation.
What situation are we trying to deal with through this amendment? As I said, we have an increasingly fractured and insecure labour market, and the question is whether individuals in that labour market and the pension system relating to that market are appropriately structured and linked. The amendment, introduced effectively in the other place by Baroness Hollis, seeks to deal with what is, on any measure, a significant problem. We welcome the fact that the Bill brings 4 million self-employed individuals into the state pension without an employer’s contribution, and of course those self-employed people pay £2.70 a week. The amendment’s thrust is that we need a similar approach for short-hours workers. The Minister rightly said that this is not just about zero-hours contracts; it is about the insecurity of short-hours working in the labour market more broadly and matching that up effectively with a universal state pension—the Minister is keen on that.
Susan Elan Jones (Clwyd South) (Lab)
I have been listening to my hon. Friend and to the Minister, and I was alarmed by the Minister’s statement that people on zero-hours contracts “could” be okay, be that to do with their working arrangements in other areas or the fact that they may work a sufficient number of hours. That implies that they also might not be okay.
Gregg McClymont
As usual, my hon. Friend makes a pertinent intervention.
There is an issue to address and the question is how to do it. The Minister suggested that Baroness Hollis’s amendment, which my colleagues and I agree with, prescribes a specific solution, but of course it does not; it is a permissive amendment. As the Minister, using that fertile mind of his, started to think about different solutions, one could see the point of the amendment even more: to give him and his colleagues in the Department for Work and Pensions the authority to think carefully about how to solve this problem. He gave a number of ideas as to how it might be solved, which was when we particularly saw the function of this amendment. It would bring the best minds in the DWP together to deliver a solution, and it would remove the need for subsequent primary legislation. So, by his own words, the Minister gives succour to the amendment.
The amendment has a clear purpose: it is a permissive amendment to enable the Government more finely to match the state pension reform that the Minister is introducing with the nature of the modern labour market. He talked about estimates of the number of individuals involved. As he will know, Baroness Hollis has come to a different conclusion about the number affected and is very clear that the universal credit, which he mentioned, will not help the largest group—single people—nor, usually, will it help women without younger children or households where the joint income, including the man’s income, floats them off universal credit altogether. She calculates the number of individuals affected as being 250,000, which is a very different figure from the one the Minister gives. Universal credit, which he said would ameliorate the problem, will not help single people, women without younger children or households where the joint income, including the male income, floats them off universal credit. It is important to put that on the record. If a significant number of people are affected by this and if the Minister wants to make the state pension as universal as possible, as the Opposition believe he does, it would seem sensible for him to accept a permissive amendment allowing him to go forward on the basis of his thoughts about the various ways in which this might be taken up by the Government and to get cracking on it. The fundamental point is: why should those who, through no fault of their own, are in short-hours working or zero-hours contracts—those various kinds of flexible employment contracts—be denied the benefits of a full state pension?
The Minister said that the problem is not as significant as Baroness Hollis has suggested and that someone would need only 35 of 50 years in the labour market to qualify, but the issue is that where people spend significant parts of their life on these contracts, what is meant to be a universal state pension does not necessarily become one.
Steve Webb
I sense that the hon. Gentleman is concluding. The amendment is flawed in a number of respects. For example, it refers to a lower earnings level, but there is no such thing. Does he not have any qualms about the fact that if his vote were to succeed, he would be putting flawed legislation on to the statute book?
Gregg McClymont
The Opposition’s view is clear: the issue of job insecurity, of short-hours working and of zero-hours contracts is a significant problem for the pensions market and, specifically, for the state pension. In that context, it seems wise to us to allow the Minister to crack on with solving this problem. I have confidence that he will ensure that this amendment, if agreed to by the House, provides the basis for matching up the state pension with people on these insecure and flexible employment contracts. On that basis, we disagree with the Minister’s disagreement, and we intend to support the Lords amendment.
Sheila Gilmore
Having been with this Bill from the outset, I remain disappointed, given the answers that the Minister gave to my interventions, that we have not made any substantial progress on resolving this issue. It will be predominantly women, although not necessarily entirely so, who will be disadvantaged. In other aspects of the Pensions Bill, the Minister has said how important it is that people will now build up their own entitlements for their own individual pensions. Being able to get a derived pension from a spouse, a deceased spouse or an ex-spouse will disappear from the system. We discussed that issue at considerable length during the passage of the Bill. Indeed the Minister has majored on this whole issue of people having their own individual entitlement.
Steve Webb
Let me respond briefly to the debate. On the issue about the typical number of hours worked by someone on a zero-hours contract, I said 15 to 20 from memory, but the exact figure is 20 hours. The ONS estimates that the average number of hours worked by people on zero-hours contracts in 2013 was more than 20 hours. There is a danger that when we hear the words “zero hours” we assume that it means there is no money coming in. However, it simply refers to the number of hours guaranteed under the contract. Lots of people with zero-hours contracts are building up full qualifying years.
Gregg McClymont
Of course the Minister will be more than aware that averages can hide a multitude of sins; I am sure he accepts that.
Steve Webb
Yes, I do. The point is that 20 hours on a minimum wage would get someone above the lower earnings limit. If half of everyone on zero-hours contracts are doing more than 20 hours, we can immediately say that they will qualify, and those doing slightly fewer hours will also qualify. The link between zero-hours contracts and multi mini-jobs, which is the subject of the amendment, is, at best, unclear. In extremis, it could be that no one on a zero-hours contract is even covered by this amendment, if they have only one job at a time and no other job. We do not know and nor does the hon. Gentleman. Our sequencing is evidence first and policy next; the Opposition’s is the other way around.
The hon. Gentleman refers to the emerging labour market, and chose 2008 as his base because that enabled him to get a figure that worked for him. However, let me bring him right up to date. In the past year, the number of women working full-time increased by 270,000 while the number of women in two jobs, which is germane to the amendment, decreased by 25,000. The suggestion that there is some sort of inexorable rise might be wrong. If we were to update our figures, we might find that the number has continued to go down. There is a whole raft of statistics I could give the hon. Gentleman, but to assume that this is a vast issue and that the numbers are inexorably rising is far from the case.
The case of the hon. Member for Edinburgh East (Sheila Gilmore) is that even if only one person were in this situation, we should fix it, but there is an issue of proportionality here. To set up the lightest touch crediting regime based on past precedent would probably cost about £1 million and more than £1 million to run. One must always ask the question—as least we do on the Government Benches—about value for money. That is why we need to know how many people are affected, who is affected and the best way to deal with the issue.
Finally, when the hon. Gentleman was asked whether he cared about putting flawed amendments in the Bill, he essentially said that he did not; he simply wanted to make a political point. That is regrettable. As legislators, we are voting today on legislation. This is not an Opposition day debate where he can make a point. This is deciding what goes into the law of the land. I am rather disappointed that he feels that it does not matter if an ambiguous and unclear amendment, which uses terms that have no meaning in reality, should just go in the Bill, so that he has the chance to have a vote and put out a press release. That is obviously where he is coming from. I regret that, and urge the House to disagree with the Lords amendment.
Question put, That this House disagrees with Lords amendment 1.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss Lords amendments 3, 12, 13 and 19 to 27.
Steve Webb
Following that brief moment of disagreement with their lordships, I am pleased to say that we encourage the House to agree with all other Lords amendments to the Bill. Some amendments in this group were initiated by the Government all on their own, while others are constructive amendments that we tabled in response to concerns raised by noble Lords and others. That shows our willingness to improve the Bill when we think that valid arguments have been made.
Lords amendments 19 and 21 will affect the spouses of service personnel. In the context of our motion to disagree with Lords amendment 1, which was tabled by Baroness Hollis, it is appropriate to say that Lords amendments 19 and 21 respond to a concern that she helpfully raised during the Commons Public Bill Committee’s oral evidence sessions about the position, under the single-tier state pension, of wives of service personnel who have served overseas.
Lords amendment 21 places a duty on the Secretary of State to legislate for a new retrospective national insurance credit for spouses and civil partners of armed forces personnel who accompanied their partner on postings outside the UK from 1975-76 onwards. We promised to think about the matter as long ago as last June—have we really been considering the Bill for that long?—after it was raised in our oral evidence sessions. As we know, the single-tier pension is essentially based on one’s own record of national insurance contributions and credits, rather than a derived entitlement from a partner. However, that creates a problem for women who were posted overseas with their husband and, for entirely legitimate reasons—because, say, they did not speak the language of the country they were in—were unable to work, or could not build up national insurance rights because of their role supporting their husband.
It is right that we take action for that group. There is a cross-Government commitment in the armed forces covenant to removing the disadvantages caused by military life, and we recognise the difficulty that spouses and civil partners would have faced in maintaining their national insurance record while on an overseas posting. Their prospects of securing employment during the posting would have been significantly hampered by language barriers, for example, and they may have been unable to accrue UK qualifying years while abroad. Since last June, we have worked closely with colleagues in the Ministry of Defence to devise a workable solution, and we are pleased to offer an approach that addresses this unique difficulty faced by the service community.
Under the Lords amendments and subsequent regulations, credits will be available for people who reach state pension age on or after 2016. Those credits build on the prospective credits in place from 2010-11, and help to ensure that people will not be prevented from gaining a full single-tier pension, even if they are in the now rare situation of having spent their entire working life accompanying their spouse abroad. The detailed design of the scheme, including the application process and information on when applications may start to be made, will be set out in regulations. Although it is difficult to give a precise figure, we estimate that about 20,000 people could benefit from the credits. Lords amendment 19 is a technical measure to accommodate the retrospective credits in the calculation of an individual’s foundation amount.
Lords amendment 2 deals with the issue of a statutory override for protected persons. The single-tier pension means the end of contracting out, so employers will have to pay more national insurance. The Bill provides for a statutory override to allow employers to change future contribution levels or accrual rates in order to recoup that increased national insurance when they would otherwise be prevented from making changes by their scheme rules. During the Bill’s passage through this House, the Government consulted on whether protected persons should be within the scope of the statutory override. We think that a relatively small group of individuals—perhaps 60,000—are affected.
The responses to the consultation were polarised, as employers wanted the flexibility to apply the override, while trade unions and others representing employees did not. We took the balanced judgment that we should honour promises made at the time of privatisation—promises that, in many cases, were subsequently confirmed by Ministers when legislation providing for pension protection was enacted. Lords amendment 2 makes it explicit that the statutory override cannot be used in relation to protected persons. Regulations will specify the details of who is considered to be a protected person, but the intention is to include all the people set out in our consultation response, especially rail workers, including Transport for London employees, and workers in the electricity, coal, and nuclear waste and decommissioning industries.
The group includes several technical amendments. Lords amendments 20 and 22 amend the Social Security Contributions and Benefits Act 1992 to make it clear that funds for paying the single-tier pension are provided by national insurance contributions, and that references to “benefit” include the single-tier pension. Lords amendment 23 repeals redundant provisions in the Marriage (Same Sex Couples) Act 2013, while Lords amendment 24 removes a redundant reference in legislation to the contracting-out compliance standard. Lords amendment 25 deals with the application of the statutory override to shared-cost arrangements. Lords amendment 26 is a response to a recommendation made by the Delegated Powers and Regulatory Reform Committee. It removes the power to create exceptions to the limit on the amount that employers may recoup under the override. The Bill originally allowed regulations to be made to create exemptions to the limit to deal with unconventional funding arrangements, but we are now making provision for such a power in primary legislation under Lords amendment 25.
In response to points made by the Delegated Powers and Regulatory Reform Committee, Lords amendments 12 and 13 provide that several regulations under the Bill will be subject to the affirmative procedure, rather than the negative procedure. Lords amendment 13 specifically provides that frozen-rate regulations should be subject to the affirmative procedure on every use.
Lords amendments 3 and 27 create a new class of voluntary national insurance contributions—class 3A. As the concept of the contributions was introduced in the other place, it is worth my spending a moment explaining more about it, as the House has not yet had the chance to consider it. The new class of contributions will allow pensioners to top up their additional state pension. It will be available to people who reach state pension age before the introduction of the single-tier pension on 6 April 2016. Details of the scheme, including the pricing, the maximum number of units and the administrative processes, will be set out in regulations. We will make details of the prices available shortly, but they will be set on an actuarially fair basis using the latest longevity figures. We envisage that the scheme will open in October 2015 and run for 18 months. It will help groups who have only modest amounts of additional pension, if any, such as women and the self-employed whose social and economic contributions were not captured in the state earnings-related pension scheme and are not fully reflected in the state second pension.
The scheme has just two simple entitlement conditions: first, a person must reach state pension age before 6 April 2016; secondly, they must be entitled to a UK pension. Even if someone has the full 30 qualifying years for a full basic state pension, they will not be debarred from paying class 3A contributions and boosting their state pension because they will be buying additional state pension, not basic state pension. I stress that that distinguishes the contributions from class 3 national insurance contributions, which fill gaps in the basic state pension.
We intend to cap the amount of additional pension payable as a result of class 3A at about £25 a week. As that extra pension will be additional state pension, it will be uprated according to the consumer prices index. The pension will be inheritable and people will be able to defer it in line with existing rules. More details of the scheme will be announced shortly, but the main regulations will be subject to the affirmative procedure, so Members will have the opportunity to debate the detail.
We have undertaken research and polling to gauge interest in the scheme. We expect to publish more information on likely interest and take-up shortly after the Budget, but our first poll suggests that 14% of pensioners might be interested. People’s ability to pay class 3 voluntary national insurance contributions to cover gaps in their contribution record for the basic state pension will be unaffected by the introduction of class 3A. We will put in place administrative arrangements to ensure that individuals who apply to pay class 3A contributions are made aware that they should first check their eligibility to pay class 3 contributions. People will need to consider whether making class 3A contributions is the best option for them. We believe that class 3A will allow some people to boost their state pension income with a secure, inflation-proof income that has the added advantage of survivor benefits.
I hope that the House, like their lordships, will support the Lords amendments. They improve the system for military wives and offer protection for protected workers. They tidy up several technical aspects of the Bill and, for people reaching state pension age before April 2016, introduce a new option of paying voluntary national insurance to top up their additional state pension. I commend the Lords amendments to the House.
Gregg McClymont
I do not intend to detain the House too long on this group. On Lords amendment 2, I welcome the Government’s decision. The issue of individuals with protected status in pension schemes that were nationalised has been significant, both for the House and for the people concerned. Those with protected status are a group of approximately 60,000 individuals employed on the railways, including by Transport for London, and in the electricity, nuclear waste and decommissioning and coal industries. They are protected because they were given guarantees by the Government of the day when the industries were privatised. On Report, the official Opposition made clear their view, and tabled an amendment that aimed to remove these protected schemes from the scope of the provisions on the statutory override as it pertains to the new flat-rate state pension and the end of contracting out.
I welcome the Government’s decision on the continued protection of these schemes. I pay tribute to my hon. Friends, the trade unions, and others with whom Members have worked closely to make the case. It is a good example of how a case properly made, and a Government prepared to listen to the detail and the reality, can produce an outcome that we all welcome.
Grahame M. Morris (Easington) (Lab)
My hon. Friend is making excellent points, and I thank him for his efforts to prosecute the case. Does he agree that the principle of trustee consent is an important one that we should honour?
Gregg McClymont
I thank my hon. Friend for his intervention and for his work on the issue. As he knows, we tabled an amendment to clause 24 in Committee on this issue. We welcome the decision to accept Lords amendment 2, a concessionary Government amendment moved on Report.
Let me say a little about Lords amendment 21, another concessionary Government amendment moved on Report, which will place a duty on the Secretary of State to make regulations to allow service spouses and civil partners who are due to reach state pension age from 6 April 2016 to apply for national insurance credits for periods during which they accompanied their spouse abroad. I agree with the Minister that the amendment will strengthen the armed forces covenant and remove some of the disadvantages that the armed forces community may face in comparison with other citizens. I add to the Minister’s tribute to Baroness Hollis for her work in ensuring that the provision was included in the Bill.
I look forward to the provisions in Lords amendment 3 being taken forward by the Government. I look forward also to the pricing of those provisions. It will be striking to see what take-up there is of the offer to procure more state pension for people who retire before the new flat-rate state pension is brought in. On that note of consensus, we welcome this group of amendments.
Grahame M. Morris
I, too, will not detain the House for long, but there are a few points that I wish to place on record. I thank the Minister for meeting the trade unions on a number of occasions, and the Department for its active engagement in the consultation exercise.
I shall not rehearse the arguments about the importance of maintaining trustee consent, which were made by my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) from the Front Bench. The workers concerned are those in former nationalised industries, including coal mining; electricity transmission workers; workers in Transport for London and the train operating companies; and workers in the nuclear waste and decommissioning industries. An important principle is at stake, and I am grateful to the Minister for accepting the Lords amendments. As was pointed out, it is important that we have ongoing discussions, and I hope that the Minister will commit to that. If he would engage with the trade unions, which have undisputed expertise in this area and could assist the Department in the drafting of the regulations, that would be much appreciated.
Steve Webb
I am grateful to both hon. Gentlemen who have spoken for their constructive responses. The amendments relating to protected persons have been welcomed, and I am grateful for that. I welcomed the opportunity recently to meet the hon. Member for Easington (Grahame M. Morris) and his colleagues from the relevant trade unions. I am pleased to assure him that we will be happy to have that ongoing dialogue when it comes to drafting the regulations that will implement these changes. As he knows, we take the view that a statutory override is not a statutory override if trustees have the power to block it. We differ on this point—I understand that—but we are imposing a substantial cost on employers, and we believe that they need to be able to recoup that. We hope and believe that many will do so in a constructive and collaborative way, with engagement with trustees and others.
The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) mentioned what might loosely be called the army wives provisions. As he says, they are an attempt to do right by our armed forces personnel and their families, and again, the measure seems to have attracted wide support. I am grateful for the support from across the House for these amendments from their lordships, which we accept. I commend Lords amendment 2 to the House.
Lords amendment 2 agreed to.
Lords amendment 3 agreed to, with Commons financial privileges waived.
Clause 37
Automatic Enrolment: powers to create general exceptions
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this we may consider Lords amendments 5 to 8, 9 and amendment (a) thereto, 10, 11, 14 to 18 and 28 to 38.
Steve Webb
We move to the final group of amendments and, as I mentioned earlier, we urge the House to agree with their lordships in all of them. For reasons that I shall explain, we do not accept Opposition amendment (a) to Lords amendment 9.
I shall run through the categories of amendment before us. I shall deal at the end with the charges and disclosure amendments, where there appears to be the remaining lack of agreement. I apologise in advance for the fact that it might take me a moment or two to work my way through the amendments as some of them are quite technical, but at this stage in our proceedings it is important not simply to nod these measures through. In some cases quite substantive changes were made in another place—welcome changes, we believe, but they are ones to which this House should give proper scrutiny.
I shall begin with amendments 5 and 6 and then 4, which relate to automatic enrolment. It is worth putting it on the record that automatic enrolment is already a huge success story, with 3.2 million people now enrolled. I had the pleasure last week of visiting Upton Park to meet someone who I am told is the three millionth person to be automatically enrolled. I have my doubts, but one never knows. I have to declare in some sort of register somewhere that I was given a West Ham shirt with the squad number 3 million on the back, which may be my transfer fee—I do not know. We have certainly reached an important stage in the process. It is one of the almost unsung success stories of this coalition Government to implement automatic enrolment in an effective way, to see more than 3 million brought in and to have very high levels of staying in—of the order of 90%—which means that getting on for 3 million people are now in workplace pensions who were not in such pensions just a couple of years ago. All the signs are that this will continue to be a success.
But ongoing success is dependent on being able to learn as we go and to make changes where necessary, and amendments 5 and 6 are tabled in that spirit and relate to defined benefit schemes. In general, DB schemes are high-quality pension schemes provided by employers who take pensions seriously, and we would not want employers to feel that they could not use a DB pension scheme for auto-enrolment because of some technicality or because in some way we provided a higher hurdle for a DB pension scheme to be used for automatic enrolment than for a defined contribution scheme. Amendments 5 and 6 allow for simpler alternative quality requirements for employers providing good quality DB schemes.
The amendments will allow DB schemes to meet either the existing test for money purchase schemes, or a test based on the cost of future accruals. More work has to be done on adding the detail in regulations, and we look forward to working with our stakeholders on that. The simpler tests will help those employers providing good schemes to meet their automatic enrolment duties. This is important because of the end of contracting out. Contracting out itself had a set of standards that schemes that wanted to contract out had to meet, and once contracting out has gone and those standards have gone we can use the opportunity to set simpler equality requirements for employers wanting to use DB schemes. I hope that that will be welcomed by the House.
Also in the context of making automatic enrolment work, amendment 4 relates to the power to ensure that employers do not have to enrol individuals for whom it makes no sense. We tabled a clause at the beginning of the process that would give us the power to exclude a small group of people where it would not make any sense for employers to have a legal duty automatically to enrol them. For example, employers said to us that they had employees who were high earners or who had exhausted their lifetime tax limits and had some protected or enhanced status who were asking not to be put into a pension scheme because that could jeopardise their tax status, and having been auto-enrolled they would have to opt out straight away. That would be a waste of employers’ and employees’ time. If they failed to opt out, they could lose valuable tax protection, which would create unnecessary bureaucracy for the employer and hassle for the employee, and we do not want to do any of that when it comes to auto-enrolment.
We always envisaged that we would exclude tightly defined and limited categories of employees from the auto-enrolment duty. Following consultation, we have now indicated specifically which groups of people those are. I have mentioned those with tax protection status and another would be those on the brink of retirement or leaving. Someone might have said that they were about to leave the company, but the legal requirements on automatic enrolment or re-enrolment meant that the firm had to put them in the pension scheme, perhaps days before they left. Clearly, we do not want to bring automatic enrolment into disrepute. We do not want firms to be required to do things that are not common sense, that have a cost to the firm, perhaps create hassle for the individual and are unnecessary, and we always envisaged that the exceptions would be limited in scope.
Gregg McClymont
I know the Minister believes that God is a Liberal, but does he really have to be so pious?
Steve Webb
I usually sound grateful to the hon. Gentleman for his interventions, but I am not sure I am for that one. There is a bit of a pattern here. Labour has already called one vote on an amendment that was flawed, but it decided to vote for it anyway in order to make a point. I am explaining why amendment (a) is flawed, even according to the terms of what the Opposition want it to achieve, and it is obvious that the message has hit home, given the tenor of the hon. Gentleman’s response.
Richard Graham (Gloucester) (Con)
On the charges that will be outlined later and the requirement for them to be disclosed, how does the Minister envisage that process being taken forward? Will there be a consultation? Within what sort of time frame does he imagine the charges being outlined?
Steve Webb
I am grateful to my hon. Friend who, as chair of the all-party group on pensions, has great knowledge and expertise on these issues. We need to take forward the matter in partnership with the FCA. As he knows, the Pensions Regulator regulates defined benefit and occupational defined contribution schemes, while the FCA works on group personal pensions, for example, but we want to make sure that, as far as possible, parallel regulations apply to both. We will, indeed, consult on exactly what should be included. We certainly want to get a move on with it all, so we will move as fast as we can, but we want to do so in partnership with other regulatory bodies. I hope that that offers him the assurance he seeks.
Gregg McClymont
I rise to speak to amendment (a), but let me start with Lords amendment 4. In Committee, the Opposition argued strongly that clause 37, as drafted, was far too widely drawn and left a possibility that those with an agenda to exempt smaller businesses from auto-enrolment could do so. We therefore welcome the Government’s concession. Among the Minister’s rather curious language, he said that I “got very excited” and that there was “almost universal cynicism” from the Opposition, but within that odd framing he has actually accepted what we said in Committee. That is very welcome, because it makes the Bill better.
Let us think about amendment (a) in the context of the wider debate. The issue of costs and charges for pensions has shot up the political agenda for obvious reasons. If the Government are enrolling millions of people into a pension scheme for the first time, they had better make sure that the schemes are all value for money.
Steve Webb
I agree that the Government had better make sure that the schemes are value for money. Why, therefore, did Labour not legislate for that when it could have done so?
Gregg McClymont
The Minister made that point in his speech, as he has done repeatedly, and he has now put it on the record again. Let me pick him up on something he said. In what has become his quite common style, he suggested that it was rather peculiar to give the Secretary of State powers to ensure that transaction costs are disclosed. However, he must be aware—in fact, he alluded to this—that the FCA already has powers to require transparency of transaction costs, but has never exercised them. Making the Secretary of State responsible does not mean that the Government should not use the FCA’s expertise. Indeed, the Government’s amendment states that the Secretary of State must consult the FCA when setting transaction costs for those pensions over which he wishes to retain responsibility, so why could the same model not be maintained for contract-based pensions? Of course it could be so maintained.
On the Minister’s suggestion that it is somehow peculiar in his world to list the transaction costs that must be disclosed in amendment (a), I have to tell him that we used Lord Lawson’s amendment in the House of Lords, where it was commended by Members on all sides, including by the Government spokesman, Lord Freud. [Interruption.] The Minister is mumbling, but he suggested that the amendment was peculiar, although Lord Lawson’s amendment was along exactly the same lines. I am afraid that the Minister is disagreeing not just with the Opposition, but with Government Members.
Let me say a little about our additions to Lord Lawson’s list. I make it very clear that our list of transaction costs is the same as that tabled by Lord Lawson in the Lords, with two additions—transaction costs in underlying funds; and interest on client cash balances or profits from stock lending retained by the fund manager. The reason for including such additional transaction costs is that it needs to be strongly signalled to the body setting the rule—whether the FCA or the Secretary of State—that those items should be declared.
Let us remember that the Investment Management Association has deliberately failed to include those items in its draft statement of recommended practice. Amendment (a) should be discussed in that context, not the diversionary trail thrown up by the Minister. It is important that transaction costs in underlying schemes are disclosed because a transparency regime can otherwise easily be bypassed by any fund manager that operates multiple funds. The fund receiving moneys can simply use them to purchase units in another house fund. The IMA SORP recognises that the fixed charges in underlying funds should be reported, but it fails to apply the same principle to transaction costs, which is why they are laid down in the amendment.
The House should be aware of the wider context. The Government have previously left it to the fund managers’ trade association to decide what, if any, transaction costs should be declared. The IMA has put forward a draft statement of recommended practice, which would require fund managers to declare some transaction costs in their annual accounts. The SORP must be agreed by a Government quango called the Financial Reporting Council. The concern that the SORP failed to include significant types of transaction costs led a cross-party group of MPs and peers to write to the FRC to say that it would be inappropriate for it to agree to a statement of transaction costs that omits significant types of transaction costs. That was widely reported at the time. It is common knowledge that a number of critical submissions were made to the FRC. Unusually, those submissions were not released at the end of the consultation period, and we still await them.
Gregg McClymont
I am always delighted to hear from the hon. Gentleman, but I must make progress.
It is worth adding that the FCA sits on the working group that reviews the IMA’s SORP.
To put the SORP of the IMA—the fund managers’ trade association—in context, the Government refused to accept Labour amendments in Committee and on Report that specified a non-exhaustive list of transaction costs that needed to be made transparent. The noble Lord Lawson then made it clear that the Government’s position was not acceptable. He said that it was like putting the fox in charge of the hen coop. He added that there is a reason why fund managers meet in Monte Carlo and pension fund trustees meet in Manchester. That was the context in which Lords amendment 9 appeared. Lord Lawson, who sits on the Government Benches, made it clear that he agreed with the Opposition, rather than the Minister, who has failed to get to grips with the disclosure of transaction costs. That is the context in which this debate has been taking place for the past year and a half.
Lords amendment 9 does not state which transaction costs will be included. It gives the Secretary of State the right to include
“some or all of the transaction costs”.
It also allows the Secretary of State to not require full transparency in contract-based defined contribution schemes—those that are provided by insurance companies —if the transparency regime is “equivalent”. Lord Freud, speaking for the Government, emphasised that those words were intended to ensure that no costs were missed and that they were not an attempt to water down the regime for contract-based DC pensions.
Lords amendment 9 removes the responsibility to set transparency rules for workplace DC pension schemes from the Secretary of State and gives that power to the FCA. The FCA does not currently require the publication of transaction costs for workplace pension schemes. Its view is that any transparency requirements should be identical to those for retail investment products.
Richard Graham
Is not the key point that is under discussion whether the list of charges to be covered should be included in the Bill? We agree that there are many issues of detail, especially on the transaction side, that should be consulted on. The Minister has said that that will happen. The hon. Gentleman has not answered the central question of why the list should be included in primary legislation.
Gregg McClymont
The answer to the hon. Gentleman’s question is that nobody who looks at this matter reasonably can have confidence that the Government will deliver the disclosure of any transaction costs. The only reason we have the inadequate Lords amendment 9 is that there was a rebellion among Conservatives in the House of Lords that was supported by Cross Benchers. Before that, the Government had no intention of disclosing transaction costs, as far as one could see. To answer his question, amendment (a) is a way of ensuring that the Government deliver what they say they want to deliver.
To sum up, the Government have brought forward in the Bill a hard, fast, rapid wind-up of the state second pension. If that is to be successful for those who can no longer accrue into the state second pension, there must be similarly speedy action to ensure that there is an adequate, meaningful pensions cap as quickly as possible. Alongside that pensions cap, all transaction costs must be disclosed. Before the campaign by the Opposition and, more recently, Lord Lawson, the Government had been very slow to get to grips with the disclosure of transaction costs, never mind the pensions cap. The intervention of Lord Lawson has led the Government some of the way down the necessary path towards ensuring that there is disclosure of transaction costs, but they have got to that stage only because of the threat of a rebellion in the other place.
Steve Webb
I will respond briefly to the hon. Gentleman. However, I suspect that he decided to press for a vote on amendment (a) a good deal earlier this afternoon, so I do not think that anything that I say will have the power to change his view.
For the record, the hon. Gentleman seems to be confusing a power and a duty. He says that the FCA has the power to require transparency, but it has not done so. If he reads Lords amendment 9, which I encourage him to do, he will see that it states in subsection (2):
“The FCA must make”.
That is the bit that he wants to take out—the bit that requires the FCA to do the thing that he wants it to do—so his amendment (a) is incoherent. Instead, he would give the duty to the Secretary of State, but the Secretary of State does not have the same powers as the FCA over the schemes that it regulates. The hon. Gentleman wants to take the duty away from the body that has the sanctions and give it to somebody who does not have the sanctions. That would not achieve what he wants to achieve.
Gregg McClymont
Will the Minister confirm that the Government’s amendment states only that
“some or all of the transaction costs”
should be disclosed? Will he put that clearly on the record?
Steve Webb
The text of Lords amendment 9 is before the House. The whole point is that we want all sorts of pension schemes—those that are regulated by the Pensions Regulator and those that are regulated by the FCA—to ensure that there is effective disclosure. His amendment (a) is defective because it would take the duty away from the FCA, which regulates one category of schemes, and give it to the Secretary of State, who does not have the sanctions to enforce the very thing that he wants to happen. I know that he does not care that his amendment is flawed, because he wants to make a point, rather than to pass good law, but for the record, his amendment would fail to achieve what he says he wants.
The hon. Gentleman said that the noble Lord Lawson, who has made a valuable contribution to this debate, came up with a list and that we should therefore have a list. Of course, the noble Lord Lawson did not pursue his amendment because he accepted that we did not need all the detail in primary legislation. If the hon. Gentleman lists the name of a charge in primary legislation, all it would take is for the ever-inventive investment industry to give it another name and we would need regulations anyway. Including a list would achieve nothing.
The hon. Gentleman asked about the words “some or all”. To clarify, the intention is to require full disclosure of all costs and charges. The reason for that wording is that it will future-proof the legislation—something that he has called for—by providing the flexibility to deal with new costs as they arise. That is all that we are trying to do by using that wording.
Gregg McClymont
I thank the Minister for that clarification. Has he spoken to the FCA and asked what its view is about the disclosure of all transaction costs? Does it support that?
Steve Webb
The hon. Gentleman will know that the FCA is regulated by Ministers from the Treasury, rather than the Department for Work and Pensions. However, I have met the FCA on a number of occasions, as have my Treasury colleagues, and we have corresponded on these matters. We are agreed that there should be full disclosure, as under the terms of the Bill, of all categories of pension scheme that are covered by the legislation.
The hon. Gentleman avoided the question I asked on an intervention. His amendment (a) appears to contradict what he has said in the past, and it brings transaction costs into the scope of any potential charge cap. That was not his policy this morning, but it appears to be his policy this afternoon. Quite how he would set such a cap when we do not have the data on transparency is beyond me. Clearly, amendment (a) is not about how the law of the land should be written; it is simply about making a political point and doing so rather badly. On that basis, I urge the House to reject amendment (a), and to agree with Lords amendment 9.
Lords amendment 4 agreed to.
Lords amendments 5 to 8 agreed to.
Amendment (a) proposed to Lords amendment 9.—(Gregg McClymont.)
Question put, That the amendment be made.
Payment Scheme (Mesothelioma)
(10 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department for Work and Pensions (Mike Penning)
I beg to move,
That the draft Diffuse Mesothelioma Payment Scheme Regulations 2014, which were laid before this House on 3 February, be approved.
It is a pleasure to move these regulations on the Floor of the House. We had good debates on the Mesothelioma Act 2014, which allows us to move the regulations we need to ensure that the payments go to those who need them so much. The debates in the House and those with my noble Friend Lord Freud in the other place were incredibly valuable. I should like to place on the record my thanks to the late Paul Goggins. Paul campaigned for many years for the compensation for which these regulations make provision. It is a fitting tribute to him that I listened to him so much that we have moved to the figure of 80%, as I will say later in the debate.
We have debated these provisions, but it is good to mention at the start that the Act and the regulations continue to refer to 75% average civil compensation payments. I announced to the House on 6 March that, because the scheme administrator contract was let, and because we will stay within the 3% of the levy to employers, I am able to raise the percentage from 75% to 80%. I will introduce further regulations later, but I did not want to delay in any shape or form the compensation that is so badly needed.
Stephen Phillips (Sleaford and North Hykeham) (Con)
Will the Minister confirm that, now we are moving to a scheme that will have an 80% compensation rate, 80% will apply to all claimants, including those who make their application under the regulations, on the face of which is the figure of 75%?
Mike Penning
My hon. and learned Friend is absolutely right. I was going to say that, even though the regulations are being debated today, all those eligible for the scheme will get 80%. It is important that people do not get one or another of the figures. It will be 80% across the board.
Ian Lavery (Wansbeck) (Lab)
I am pleased with the increase from 75% to 80%. Will there be an opportunity in the near future to review the legislation to increase it from 80% to 100%?
Mike Penning
No, because I have to stay within the agreed 3% of the levy. The important thing, as we said throughout the deliberations on the Mesothelioma Bill, is to ensure that the cost is not passed on to new business. I have come under huge pressure not to raise payments to 80%, because of the risk to the levy. However, because we managed to let the contract to a reputable organisation, we have been able to raise payments to 80% without putting the fund at risk.
Although we will review the legislation, we will not raise payments to 100%. If nothing else, the hon. Gentleman has been consistent in pushing for 100%, and I fully understand why. I promised throughout the deliberations on the Bill that I would listen and that nothing was fixed in stone, but raising the level to 100% would push me, or whoever happened to be Minister at the time of such a review, too far.
Mr Gregory Campbell (East Londonderry) (DUP)
Everyone will welcome the move to 80%. Can the Minister give an estimate of the cash differential between 75% and 80% for potential beneficiaries?
Mike Penning
The move will take the payment up to some £126,000, which represents an extra £13,000. That is in addition to the payment of £7,000 for legal fees, which will be introduced in separate regulations. When Ministers promise the House that they will listen, it is important that they try to do what is requested of them. I stuck rigidly to 75%, because I was not confident that there would be enough money in the fund to increase payments to 80%, let alone 100%. However, I am now confident that there is enough capacity to move to 80%, so when the scheme starts—I hope that that will be on 6 April—all those affected will receive 80%, even though we have been looking at 75%
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
I am grateful to the Minister for his explanation, and I admire what he has done in getting us to 80%. In truth, compensation ought to be at 100%. Sufferers feel 100% of the injury, and the industry took 100% of the premiums at a time when it believed that it would often have to compensate for pleural plaques as well as for mesothelioma. I hope that the matter is not closed and there will be an opportunity to discuss it again.
Mike Penning
I would be amazed if we did not discuss the matter again, as we have done over the years. It would be right and proper for us to do so. If we raise compensation payments to 80%, many people will receive more than they would have done through a civil court. The payment is an average, so some people would have received less in the civil courts. By raising the level from 75% to 80%, we have ensured that more people will receive more than they would have done if they had found their employer or their employer’s insurer.
Mr Jim Cunningham (Coventry South) (Lab)
I apologise for being a little late. It would be interesting to know the difference in costs between payments of 80% and 100%.
Mike Penning
I will write to the hon. Gentleman with that information. We debated the matter at length at each stage of the Bill, and I reiterate that the key is to stick within the 3% agreement, which is not being passed on to new business. The House agreed when we debated the subject that to pass on costs to new business would be improper.
Kate Green (Stretford and Urmston) (Lab)
While we are on the subject, does the Minister accept that, as we discussed in the Mesothelioma Bill Committee, even if we maintained the levy at 3%, the Government’s impact assessment makes it clear that after four years it would at least be possible to raise payments to 90%?
Mike Penning
We looked at that extensively in Committee, but those figures are all based on assessments. When the four-year review comes up, we will look carefully to see what is in the pot, but it would be irresponsible of me or any Minister to stand before the House and commit to emptying the pot completely by going even further. By moving to 80% I have moved as far as I can, and a lot further than many wanted me to move. I promised to increase payment levels if I could, and I have done so.
Ian Mearns (Gateshead) (Lab)
The measure is not perfect, but we are greatly relieved that at last something is happening on behalf of sufferers all over the country. Has the Minister made any special provision for legal costs in the scheme?
Mike Penning
The hon. Gentleman must have been reading my notes, because I was just about to come to that. During the passage of the Bill, we made provision for payment of £7,000 for legal costs to all successful claimants, which will be made on top of the 80% payment. I was adamant that that £7,000 would go to the claimant or their families as the fund of last resort, and not directly to any lawyer. It is up to the individual to decide whom they appoint and how much they pay them.
We are looking carefully at the operation of the scheme and the website, and we think that many people will be able to make claims without the need for legal advice. If they can do so and they spend none of the £7,000, they will keep the money. If they spend part of it on legal fees, they will keep the remainder. It is important the moneys do not simply go off to lawyers as they have done in other, not dissimilar, schemes.
Steve Rotheram (Liverpool, Walton) (Lab)
I congratulate the Minister on the progress that has been made. Any progress towards the 100% that the Opposition believe to be justifiable is a step in the right direction. Can he assure the House that the legal payment of £7,000 will not be a pro rata payment, and that claimants will receive the full amount even if they do not use it all on legal advice?
Mike Penning
Let me try to be as blunt as I possibly can, which is not unusual for me. The £7,000 is theirs. Even though the money is targeted at legal fees, how claimants spend it is entirely up to them. As I have said, we are trying to make the application as simple as possible. If they spend none of the money—remembering that we are talking about a fund of last resort for those who have been unable to find their employer or their employer’s insurer, and that, sadly, the money will often go to the dependants and loved ones of sufferers of this terrible disease—they will be able to keep all of it. Others, including hon. Members and trade unions, will assist them to ensure that they are not ripped off. The important point is that the £7,000 is an additional sum on top of the 80%.
I know that some colleagues are disappointed that we have not moved to 100%. Some colleagues may also be disappointed about the cut-off date, which we discussed extensively during deliberations on the Bill. As I have said—the right hon. Member for Newcastle upon Tyne East (Mr Brown) will understand this as a former Minister—I did not want to delay compensation by breaking the existing deal. The regulations are in their current format to avoid delay and allow the scheme to start, we hope, in the first week in April. We want to help those who desperately need the funds quickly.
Grahame M. Morris (Easington) (Lab)
I congratulate the Minister and welcome his announcement that the level of compensation will be increased. We anticipate that there will be a rush of claims. If the fund is in surplus when that initial rush has been addressed and settled, will he give an assurance that the Government will look at using that money for other asbestos-related diseases or research?
Mike Penning
We expect there to be a surge, and that is why the scheme has received Government funding, which will be claimed back. It would be improper for me to make a commitment now about how any money that might be left in the fund will be used. However, we are working closely with the Department of Health and specialist research bodies. We are particularly focusing on the tissue bank, which is important in finding out why mesothelioma acts as it does so long after contact with asbestos; a gestation period of 40 or 50 years is not unusual.
If there is money in the fund when the review happens, whoever is the Minister at the time—I may still be in place; one never knows—will look at how best to use it. I am conscious that if I take any more praise from the Opposition, my reputation will be diminished enormously. With that in mind, I commend the regulations to the House.
Kate Green (Stretford and Urmston) (Lab)
I am very pleased to see the progress that has been made on the introduction of the scheme and, at risk of doing further damage to the Minister’s reputation, I should like to join colleagues from across the House in congratulating him on taking this further step towards ultimately, we hope, securing full justice for mesothelioma victims. I want to take this opportunity to pay tribute again to the many campaigners involved, especially the victim support groups and trade unionists, and to acknowledge that the uplift in the level of payments was pressed for in both Houses of Parliament and across all parties. I am grateful to the Minister for highlighting the contribution of our much-missed colleague and friend, Paul Goggins.
We are all pleased that the Minister has been able to bring this increase to the House. I note that he intends to achieve the increase in payments through negative regulations to be tabled immediately after the regulations before us come into force. On that basis, we are entirely happy to accept the motion before us tonight, although it is clear that the amount of scheme payments in schedule 4 do not represent the level of payments that we now expect to be made.
The Minister said that he had been able to achieve the increase in payments because of savings made on the administration costs. He will recall that I suggested doing exactly that in Committee on 12 March 2013, so I am pleased that he has been able to take up my suggestion. Will he give us a little more information about exactly where the savings have been found? We have discussed this before in Committee. The Government’s impact assessment told us last November that an uplift in payments from 75% to 80% of average civil damages would cost an additional £11 million in the first four years of the scheme, and an additional £22 million over the first 10 years of the scheme. It also stated that, with the payments set at 75%:
“The costs of the scheme are split between a levy of £371m on the insurance industry and £17m in government funding. This covers scheme payments direct to individuals (£261.4m), benefit recovery (£72.2m), applicant legal fees (£24.6m) and admin of £30.0m (including case legal fees of £24.2m, set up of £1.4m and running costs of £4.4m).”
The Minister will recall our extensive discussions in Committee about the detail of those admin costs, and about the legal fees within them. As the impact assessment shows, there are two sets of legal fees involved: applicants’ fees, at £24.6 million, and case legal fees, at £24.2 million. However, despite extensive discussion in Public Bill Committee—and despite what he has said tonight, which is reassuring—I am still unclear about the respective levels and purpose of the two sets of legal fees.
Claimants’ legal fees were set at £7,000 per case when the legislation was first introduced in the House of Lords, when payment was set at 70% of average civil damages. During the passage of the Bill through the House of Lords, the legal fees were reduced to £2,000 per case and payments increased to 75%. I think we understood that to be a quid pro quo. But later, during the Committee stage in the Commons, legal fees reverted to £7,000. The Minister told us that he had had discussions with the Association of Personal Injury Lawyers and felt £7,000 to be a reasonable figure after all. However, he also said that if cases could be conducted more cheaply, applicants would none the less receive the full £7,000. He has confirmed that again this evening, which we welcome. That did not cut much ice with the hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) in Committee. As a lawyer himself, he might be assumed to have some insight into lawyers’ thought processes in these matters. He suggested that if £7,000 was the assumed rate for the job, that would de facto become the tariff, whether it accurately reflected lawyers’ costs or not.
Now the Minister tells us that extra moneys have been squeezed out of the admin costs to fund a further, and very welcome, uplift in payments. Can he tell us exactly where it has come from? He has placed on record that £7,000 per head remains the sum allocated to applicants for their legal fees, and that if their actual fees fall short of that amount, they will receive the difference, in cash, up to £7,000. If there are no changes in the position in relation to applicants’ legal fees, can he tell us where he has found the additional £11 million, or £22 million, necessary to pay for the uplift in payments to 80%?
On the face of it, the extra money must come from a combination of the other admin costs. Will the Minister tell us what he now assesses the running costs and set-up costs of the scheme to be? Have those costs decreased since the impact assessment was conducted? If so, will he tell us by how much, and how that was achieved? Will he tell us how much is now allocated for case legal fees, as opposed to applicant legal fees? I am still struggling to understand what these encompass, but the Minister assured us in Committee that they would be incurred for the benefit of claimants. Will he therefore tell us whether the sum of £24.2 million in the impact assessment has now been reduced, and if so, by how much? What effect will that have on the handling of cases, and what impact will it have on claimants?
Will the Minister tell us whether the contract with Gallagher Bassett International, which is to administer the scheme, includes a profit element? I assume that it does. If so, is it included in the running costs? If the additional funds to meet payments at 80% have been found elsewhere, rather than from the costs I have just mentioned, will he tell us exactly where we should look? He has just told us that the levy on the insurance industry would remain at 3%. I had hoped that the Government’s commitment to maintain it at 3% would appear in the regulations, but it has not done so. Will he tell us whether payment at 80% remains affordable within a levy of 3%, during and beyond the first four years of the scheme?
Mike Penning
We have always tried to have a consensus, and I thought the shadow Minister knew that that was exactly what I had said. That is exactly what is going to happen, and I do not know why she is going over this old ground again. We went through all this in Committee, and she seems to be reiterating the arguments that she made at that time. We are talking about the regulations that are now before us, and we need to get through this tonight so that the compensation can be paid.
Kate Green
I am simply trying to understand where the additional £11 million has been found. It would be helpful if we knew that. We are particularly anxious that this should not have a detrimental effect on the way in which the scheme works for claimants. I know that the Minister does not want that to happen, but it would be helpful to understand how he can give us an assurance that it will not.
On some of the other aspects of the scheme, regulation 5 sets out the general duties of the scheme administrator, including a duty to take reasonable steps to publicise the scheme. Now that the administrator has been appointed, will the Minister tell us more about how that will be achieved? What discussions have taken place with the administrator to ensure the widest possible dissemination of information about the scheme to those who might have a claim under it, and what discussions are taking place with trade unions, victims’ groups and others to ensure the widest possible promotion of the scheme? Have health care professionals in the NHS been alerted to it, and will there be clear signposting to the application process?
I was pleased to hear the Minister say a moment ago that he expected applications to be accepted with effect from 6 April. However, there is nothing on the Department for Work and Pensions website explaining how people should make an application—or at least, there was no such information there two or three hours ago, when I last checked. The Minister will understand the importance of making that information available very quickly, given the poor prognosis of the disease. Will he tell us when he expects the application form to be available, and how claimants will be able to access it?
Regulation 5(4) requires the scheme administrator to ensure that there are sufficient numbers of suitably qualified persons to determine applications under the scheme. Will the Minister tell us more about the likely professional background and qualifications of those persons, and in particular about their independence and how they will be employed? Will they be employees of the scheme administrator, or might they work on a freelance basis? Is it possible that they could have a conflict of interest if they held other appointments or roles within the insurance industry at the same time? How would such conflicts be identified and dealt with, and how will the public and claimants be reassured of the independence of those employed to take decisions in the scheme?
I welcome the provisions in regulation 9 on time limits for applications. The Minister has made good on his assurance in Committee that applicants would have three years from the date of diagnosis or three years from when the regulations come into force if diagnosis is after 25 July 2012 but before they come into effect. However, there are concerns about time limits when we look at regulation 18.
Generally, if a claimant dies before the case is determined, a payment may be made to his or her personal representative in the event that they leave no dependants. This will, however, still leave a small group of mesothelioma sufferers without dependants who were diagnosed on or after 25 July 2012, but who died before they could make an application, for example because the forms were not available. In those cases, it is my understanding that no payment will be made to the deceased’s personal representative. That seems unjust. It has been clear in all our discussions that the Government’s firm intention is for claims to be met for anyone with a diagnosis after 25 July 2012, and it cannot be right that a small group, who otherwise would qualify, should be excluded. Will the Minister say what he intends to do to address that situation?
I welcome regulation 11, which sets time limits for the provision of additional information. That was a suggestion made by my noble Friend Lord Browne, in discussion with the Minister’s officials. I am very pleased that it has been taken on board. I must emphasise my continuing concern, however, that where information is needed from Her Majesty’s Revenue and Customs—a situation I raised in Committee and on Report—the problem of HMRC insisting on a court order to release the employment records of deceased claimants remains totally unresolved. This is a very serious matter, as it risks building in delay and costs for claimants accessing the scheme. On Report, the Minister assured the House that a suitable vehicle for dealing with this problem would be found in good time for the establishment of the scheme, and I recall that he responded positively to the suggestion of the hon. Member for Gainsborough (Sir Edward Leigh) that it could be dealt with in secondary legislation. There is, however, no sign of any such provision in the regulations before us. Indeed, as recently as 25 February, I received a letter from the Exchequer Secretary to the Treasury which suggests that the Government have made absolutely no progress whatever on the matter since we discussed it at the beginning of January. That is really concerning, given the imminent launch of the scheme. I hope the Minister will be able to update us on what urgent action the Government are taking.
I welcome the provision in regulation 18, which provides for the applicant to request a review of a determination—another of Lord Browne’s suggestions. I also welcome regulation 24, which adopts the suggestion of the hon. and learned Member for Sleaford and North Hykeham that in conducting a review, the administrator must ensure that anyone who had responsibility for the original determination will play no role in the consideration of that review.
I am disappointed that schedule 2 continues to include eligibility for payments under the Turner and Newall schemes as grounds for exclusion from access to this scheme. As the Minister knows from our discussion in Committee, this will leave a number of people considerably worse off than if they had been able to access this scheme. I had hoped he would have wanted to be as generous as possible to those sufferers, and I regret that he has not been able to do that.
Finally, may I ask the Minister to say a little more on a discussion that took place a few moments ago in relation to the review of the scheme? I welcome the commitment in regulation 27 to annual review of these regulations, but will he be absolutely clear that in addition there will be a full review of the scheme after four years? In Committee, he told us:
“It is very important that the insurance companies know that the 3% is there. In Committee in the other place, Lord Freud committed to a review at the end of the smoothing period, after four years, to see exactly how things were going…I will place that fact in regulations so that the Committee has confidence that a review will take place after the four-year smoothing period. At that point, we will have a much better idea of how much the levy collector is collecting. We may be able to spend that by increasing the percentage, or we may be able to do other things with it.”––[Official Report, Mesothelioma [Lords] Public Bill Committee, 10 December 2013; c. 77-8.]
That is important, since by my calculation an even more generous level of payment—at least 90% of average civil compensation—could be affordable within the proposed 3% levy after the first four years of the scheme. I had hoped the regulations would specifically provide for a four-year review to take place, but they do not. Will the Minister say why they do not and what his intentions are in that regard?
Let me sum up as follows: we warmly welcome the progress that has been made towards the establishment of the diffuse mesothelioma payments scheme and we certainly have no intention of delaying or opposing the regulations, but there remain a number of outstanding issues. I hope the Minister will be able to respond and offer further reassurance on them.
Tracey Crouch (Chatham and Aylesford) (Con)
I do not wish to detain the House long. As the Member who tabled the amendment on Report and put it to a vote, I was disappointed when the Government did not listen to the call to raise compensation to 80%. Members will therefore not be surprised to learn that I am delighted that progress has been made and that the Minister and his officials have managed to find savings, through the tendering process, to ensure that those who contract this dreadful and fatal condition receive the compensation they deserve.
It is worth reminding the House that mesothelioma is one of the worst diseases that anyone can contract simply by going to work. There is no reason behind having mesothelioma other than exposure to asbestos. Unfortunately, those who do contract it often die very quickly, leaving their dependants without the financial security that they would have hoped to have provided in any other circumstances.
The Mesothelioma Act 2014 provides compensation to those who are unable to get compensation via the civil claims process. Increasing the compensation level to 80% is the right thing to do. I know there is still disagreement across the House on the level of compensation, but there was consensus on an initial minimum compensation level of 80%. Other hon. Members may wish to increase that to 90% or even 100%. The perfect outcome would be 100%, but that is unachievable, and I believe that 80% is the right figure to settle on at this stage.
Following Report, many people across the country—not just in my constituency—contacted me to ask when the scheme would start and how they would be able to access it. Will the Government ensure that a “How to” guide is published on the website and is readily available for all victims?
Mike Penning
It is important that we make the scheme as simple as possible. There will be a direct link on the Department for Work and Pensions website to the administrator’s website. We want to make that as simple as possible so that, as I suggested earlier, in some cases the legal profession will not need to be involved. I urge colleagues and representative bodies to get the information out there. The administrators will do that, and we need to do that in constituencies where mesothelioma has blighted the lives of so many. All hon. Members across the House have websites, and they should use them to promote the scheme.
Tracey Crouch
I am grateful to the Minister for that response. It is very important that we make it as simple as possible for people to understand exactly how to access the scheme. As long as they are aware that it is a scheme of last resort, and have gone through the appropriate civil process, we can do what is best to ensure that victims and their families receive compensation quickly and fairly.
There has been good progress, and that is a fitting tribute to the late Paul Goggins. The issue of mesothelioma is wider than just compensation, although that is very important, and I will do my bit to continue to fight on many of the issues on which he made a start, such as better research funding to ensure that we find a cure; that is beyond the remit of the Minister’s Department. I recognise that the Minister has done an incredible job. He has not just listened to Members in all parts of the House, but ensured that the level was increased, and that those in the insurance industry settled for that. I will not say that they have welcomed that, or are happy with it, but they have settled for it, and they have not walked away from the scheme. It will provide valuable financial security for those who contract this dreadful disease.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
It is a pleasure to follow the hon. Member for Chatham and Aylesford (Tracey Crouch), and to find myself broadly on the same side of the argument as her. I particularly thank her for her kind words about Paul Goggins, who had many friends in all parts of the House, and who made a really significant contribution to our debates on the Bill and on the issue more generally. He is still sadly missed.
The Minister has stuck to the departmental briefing that was agreed with the Treasury, and to his original agreement with the insurance industry on the parameters of the scheme, so no one could reasonably criticise him for the way in which he has carried out his responsibilities; I hope that the Government Whips and the Leader of the House, who are listening, will find that satisfactory. Having spelled that out, I must add that the Minister has done everything that he could to help the victims of this terrible condition. I pay tribute to him for that work, and to Lord Freud for his work in the other place.
Above all, I pay tribute to the Minister for sticking with this issue, because not every Minister would have done so; it is not a popular issue in Whitehall. It may be appropriate for me to conclude the thanks that are due by thanking the civil servants in the Minister’s Department who have helped us to reach this point. Once the administrator of the scheme was established, some issues must have become clearer. It must have been easier to see whether an agreement could be reached on the vexed issue of whether the compensation level should be the 75% at which it stood at the end of the Bill’s Committee stage, the 70% at which it stood when it started life, or the 100% that I wanted, which always seemed out of reach in view of the parameters of the scheme. As I have said, the Minister stuck with this, and has brought us to 80%. I must say to him, “Well done.”
The Minister has also preserved the “3% or less” parameter on which the industry would no doubt have insisted. That is an industry figure, and there is some scepticism about it on the Opposition Benches. In the letter that he courteously sent to those who were members of the Committee, he said that he felt that it would be possible to keep the cost to less than 3%. I wonder whether he is able to tell us today how much less, and whether this scheme of last resort involves a trade-off between that and a yet higher compensation level for victims. It is early days, and I do not criticise the Minister. I have no reason to doubt his good faith in these matters; indeed, far from it. He has stuck his neck out for our side as far as one would expect any Minister to do. However, having seen the calculations produced by his Department, I should like to hear something about the period over which the costs will be spread. Perhaps he could tell us whether there is any prospect of taking the compensation rate in this scheme of last resort closer to the 100% that many of us think is justified.
We have had to sacrifice our wishes for an earlier start date for eligibility. Opposition Members still think that eligibility should start from the date on which the last Labour Government consulted on the introduction of a scheme of this kind. We believe that the consultation exercise, during which the Government made it clear that they were minded to legislate, raised legitimate expectations in the minds of potential applicants. I wonder whether there is room for a little more generosity within the scheme’s parameters. The cost of picking up the several hundred cases that I understand to be involved would be a one-off; continuing costs would not be incurred, because eligibility would have to fall between the start date advocated by the Opposition and the date on which the Government settled.
The Minister said that he wanted a clear-cut scheme that would be easy to access and would not put undue pressure on applicants. I welcome that, but applicants still have to demonstrate that they are eligible. It is up to them to show that there is not still an employer whom they can sue, or an insurer who has an obligation to pay compensation. That is a big responsibility to put on the shoulders of an applicant. I welcomed what the Minister said about the £7,000 and the legal costs, but someone who puts £7,000 in front of a claims farmer or a lawyer will be presented with a bill of about £7,000.
Ian Mearns
I agree with my right hon. Friend that proving that one has been susceptible to exposure to asbestos during a long and sometimes diverse career can be very tough. I know that a number of people who have succumbed to mesothelioma have not worked in heavy industry but have, for instance, taught in schools in which asbestos has been present. It is very difficult to prove exposure, because asbestos fibres often lie dormant in the lungs for decades.
Mr Brown
My hon. Friend and constituency neighbour is absolutely right. The effects of this horrible condition can be with a victim for decades, but once full-blown mesothelioma has been diagnosed, life expectancy is extremely short. It is no accident that the north-east of England is disproportionately represented on the Opposition Benches today, because we represent people who are in the older tranche of victims. I know that I do not need to explain this to the Minister. I am talking about people who worked in heavy engineering, shipbuilding and ship repair, people who sprayed carriages with asbestos, and thermal insulation laggers. Members of that generation were the victims of those industries. However, as my hon. Friend the Member for Gateshead (Ian Mearns) pointed out, the new victims will be teachers who have been scraping on asbestos-based boards, school caretakers and janitors who have breathed in asbestos from insulation that is flaking because it has not been properly lagged, and builders who have carried out occasional repairs without being properly protected against the asbestos that they were drilling into, and have generated dust.
Mike Penning
The right hon. Gentleman is right to say that there has been a disproportionate effect in the north-east in particular because of the heavy industry there, and to mention many of the organisations involved. However, in such cases it is relatively easy to trace the victims’ employers, because they are large companies in large industries. This scheme is intended to cover cases in which we cannot find the employers, and hence the insurers, who are legally responsible. That is why it is a scheme of last resort. As for the right hon. Gentleman’s other point, I think it is absolutely right for us to help, because the scheme will not work if a large number of people resort to it when they could have claimed elsewhere. We need to help them to obtain compensation from the source from which they deserve it.
Mr Brown
I agree with the Minister that in the public sector it should be easier to trace a responsible insurer, and indeed a responsible employer, but there is a rich history of subcontracting, even in the public sector, and not all these people have insurers who maintain liability. It is the missing insurer, as well as the missing contracting or subcontracting company, who generates the cases with which this last-resort scheme is intended to deal.
The Minister is right to anticipate more public sector cases in the future. I have asked the Department of Health how many mesothelioma cases were being dealt with in England by the Department, and that number of cases, as you of all people will well know, Madam Deputy Speaker, is a precursor to the number of compensation claims that there will be—if, that is, the injury was inflicted through work. The House will be distressed to learn that the number is still rising. The number identified by the Department is now over 7,000 a year, and that is not a very easy fit with the projection of the number of fatalities coming from the Department via the Health and Safety Executive.
Ian Lavery
With regard to public sector workers, 10,000 teachers died because of mesothelioma. Does my right hon. Friend agree that we have to look seriously at the impact on children in schools where asbestos is present? If an adult—a teacher or a caretaker—can get mesothelioma from being at school, what has happened to the kids?
Mr Brown
Like my hon. Friend, I stand up for every single individual who has been exposed to asbestos. This is an entirely preventable condition. Although I understand why in law we draw the distinctions we do, morally this is not right. We should set out to save each and every one of the citizens we represent from being exposed to this awful condition. That applies to young children, too. My hon. Friend will recall me referring to the young children who found a pile of asbestos just lying in a yard in Leeds, and who threw it at each other as if it were snowballs. Of course, the inevitable happened, and 40 years later they are coming down with mesothelioma, but whom do they sue?
Mike Penning
As I said on Report, I think, and certainly in the Committee stage of the Mesothelioma Bill, I hope this is the start of a fund of last resort in other areas as well. What the hon. Member for Wansbeck (Ian Lavery) and the right hon. Member for Newcastle upon Tyne East (Mr Brown) are alluding to is a public liability area, not liability for employers. It is absolutely right that we should try to protect everybody, but sadly I think I have gone as far as I can within the scope of the regulations and the scheme before us.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
It is a pleasure to follow the right hon. Member for Newcastle upon Tyne East (Mr Brown) who made, as usual, a very thought-provoking, good and balanced contribution. I would also like to associate myself sincerely with all the genuine and heartfelt tributes to our late friend and colleague Paul Goggins, who worked tirelessly on this issue—as I know he did on many others, but he was particularly involved with this issue for many years. As the hon. Member for Chatham and Aylesford (Tracey Crouch) said, this is a fitting tribute to him as well.
The scheme we are debating today is of course a step forward for victims of this disease, many of whom will for the first time be given recourse to compensation if the insurers of their former employers cannot be traced. There are, however, problems with this scheme which were highlighted in part from the outset, and indeed from the Second Reading of the Mesothelioma Bill onwards, and some of these problems are still with us. The hon. Member for Stretford and Urmston (Kate Green) detailed several of them.
First, the scheme, which was established under the Mesothelioma Act 2014, will apply only to the victims suffering from mesothelioma and will do nothing for those with other asbestos-related conditions, such as asbestosis. That seems fundamentally unfair. I hope that the Government will consider implementing similar schemes for all victims of asbestos-related diseases who are unable to trace the insurers of their former employers.
Secondly, it seems to me to be equally unfair that the victims who are eligible for compensation under this scheme will be able to claim not 100% of the average compensation claim but, rather, 80%. The individuals who will find themselves in a position to make a claim for compensation through this scheme will not only have been exposed to asbestos, but will also have had to go through the rigmarole of attempting to trace the employers’ insurers only to find that it cannot be done, thus they are being penalised for others’ negligence.
I also remind the Government that an individual is not usually alive for very long after being diagnosed with this awful disease. Yet still, dependants will be left with only 80% of the average value of a compensation claim after their loved one has passed away. Of course, until very recently the Government were determined that the victim should be able to gain only 75%. We heard that the Minister recently sent a letter stating that the figure has been raised to 80%, and we are grateful for that. We are grateful that he has moved on the issue, having heard representations, as the right hon. Member for Newcastle upon Tyne East said. I also understand that the letter specifies that applicants can now expect to receive average payments of about £123,000 prior to benefit recovery, as well as £7,000 towards legal fees.
We have heard from several Members this evening about the £7,000 for legal fees and the fact that people presume that lawyers will just take the money and do as little as they can. Speaking as a lawyer—I have been a solicitor and I am a barrister—I remind those who will have to claim that they are entitled to have the lawyer’s bill evaluated independently by a professional body and if it is found to be too much, the lawyer will pay it back. It is a straightforward procedure and will cost the applicant nothing. More often than not, these professional bodies are very strict in not allowing huge, unwarranted fees to go unchallenged.
I would argue that claimants should be entitled to 100% compensation, but it is easy to say that. I know the Government have worked hard and that the dead hand of the Treasury floats above us all, day in, day out, particularly those on the Treasury Bench. However, the Pneumoconiosis etc. (Workers’ Compensation) Act 1979—which I am proud to say my party, Plaid Cymru, was instrumental in introducing—did introduce 100% compensation. Indeed, Dafydd Wigley, then a Member of Parliament, together with another colleague, drove it through and had an understanding with the Labour Government that it should be introduced. My friend the noble Lord Wigley, as he now is, was instrumental in introducing the legislation before us in the other place, and I am pleased to say that it is coming to fruition. However, at the very least the scheme should follow the model of the Financial Services Compensation Scheme, which pays out 90% of the value of civil compensation claims to individuals exposed to asbestos before employer’s liability insurance was made compulsory in 1972.
Finally, the fact that claimants will be eligible for compensation under this scheme only if they were diagnosed on or before 25 July 2012 is arbitrary and will be desperately unfair on many. However, as was argued in both Houses in debates on the Mesothelioma Bill, it would surely make far more sense to allow all claimants to claim compensation if they were diagnosed during or before February 2010, when an initial draft of this scheme was first proposed, or when the consultation was proposed, as the right hon. Member for Newcastle upon Tyne East said. Just before the 2010 general election, the then Government began a consultation proposing that an employer’s liability insurance bureau should compensate all individuals with industrial diseases who were unable to trace their employer’s insurers. I am pleased that, in any event, that is now coming through. However, individuals diagnosed between these two dates are being left out of the scheme through no fault of their own, but simply because the Government did not perhaps expedite the scheme sufficiently.
I find it difficult to be hyper-critical, because I know that this measure will make a huge difference to many people, and broadly speaking we all appreciate that. However, the insurance industry could surely afford also to compensate those falling between the two dates, not least since the industry’s costs will be lowered, as it will not be entering into negotiations on a case-by-case basis, but awarding average compensation to claimants. I hope we can build on the progress thus far, in order, somehow or other, to compensate these people, who, as I have said, are being dealt with detrimentally for no good reason and through no fault of their own. After that long diatribe, I can say that there is no doubt that this scheme will assist many people, and I am sure we are all very grateful for that.
Mike Penning
Although some of this evening’s discussions were similar to those we have had previously, it was right and proper that many colleagues reiterated some of their concerns about the scheme and how it is going to work, particularly in respect of the regulations.
As we discussed at length during the passage of the Mesothelioma Bill, which is now an Act, there are different callings on the money in the pot—let us bring it down to basics. There were calls for us to go further back with the scheme, not only to when the previous Administration made the announcement, but even further; to move the compensation percentage from 75 to 80; to include others in the scheme, perhaps the wife, spouse or loved one of someone working in this industry who had contracted mesothelioma as a result of cleaning her husband’s overalls—I am not being sexist, but that was the environment at the time; and to be generous in other ways.
The right hon. Member for Newcastle upon Tyne East (Mr Brown) was kind enough to allude to the fact that I inherited the Bill. Lord Freud had done a fantastic job. When the Bill entered the Lords the compensation figure was 70% and he is the one who got the insurers around the table to come up with any scheme whatsoever—herding cats is probably a good way of describing it. I am sure that the Association of British Insurers will not like me saying that, but it is one of the reasons why, even when previous Administrations tried to do this—the right hon. Gentleman tried and so did Paul Goggins—it has taken so long. In the end we did a deal—let us be honest, we did a deal at 3% which would not be passed on to new business. We then started to frame where the money could go in the scheme of last resort.
Assumptions were made and some are still being made today, even though we have appointed a scheme administrator, which has cost us less—that was what the shadow Minister was asking about earlier. Assumptions were made about case legal fees—I am no lawyer, but my brief says that. Legal fees were highlighted by the shadow Minister and there are case legal fees that we now know we do not need, so we have saved money. I could have gone to 81% today, but that would have stretched the credibility of my honesty to the House and to the sufferers in terms of making sure the scheme is safe. A myriad different questions have been asked during our consideration of the regulations, but the crux of the matter is: how far could we go without putting the scheme at risk. That is why I have resisted some suggestions throughout our consideration, even though my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) rightly pushed me very hard. As the Minister, I had to stand firm until I knew how much money was in the pot—how much the scheme was going to cost us. So we are where we are.
Ian Lavery
Will the Minister assure the House that he will examine an anomaly outside the 3%: the situation of the people who receive 80% compensation but will have 100% of their benefits taken? Is it not right that anybody who gets 80% of what they should get should have to pay only 80% of the benefits back, too?
Mike Penning
I pay tribute to the hon. Gentleman for raising the issue again. I do not think there is an argument with the moral position, but the legal position is something completely different. When someone gets benefits—the right hon. Member for Newcastle upon Tyne East is nodding because he was dealing with exactly the same schemes—and then gets compensation, those benefits are reclaimed to the taxpayer. That is what happens across the board. I said all along that I would love to have paid 100%—my heart tells me that—but it has not been possible. I would like to have touched on a lot of the things that the right hon. Member for Newcastle upon Tyne East discussed in his speech such as groups of people outside the scheme. I would like to have dealt with those outside employee liability and with public liability. We talked earlier about young children in schools today who might inhale a tiny fraction of asbestos into their lungs and, 40 or 50 years from today, might get a preventable disease. It would be in their lungs and there is a possibility that they would get mesothelioma, which is terminal, and die within four to nine months.
Bob Stewart (Beckenham) (Con)
I apologise for my ignorance, but once a person has been diagnosed with this dreadful disease should they not go straight to a civil servant and say, “I have been diagnosed with this, what should I do? Can you please help me?” Is that the system that operates at the moment? If it is not, it should be.
Mike Penning
The motion is not carried. I appreciate that my hon. and gallant Friend has not been with us for all the debates on this, but I am afraid that that is not the case. This is a scheme of last resort. In most cases, people who get this abhorrent, horrible and preventable disease will be able to claim from their employer and thus their employer’s insurance. Employer’s liability insurance is compulsory. The stakeholder groups and the trade unions have been excellent over the years. I pay tribute not only to them but to Members across the House for representing people with mesothelioma, because it is a horrible and terminal disease. The employers who put those people into this position should be liable. This has to be a scheme of last resort.
Kate Green
Can the Minister say what progress he and the Government are making in order to obtain employers’ records from HMRC? He is right that most people will be able to make a claim against an employer, but they will need to be able to obtain those records to do so.
Mike Penning
The hon. Lady is absolutely correct, and we are still working with HMRC to ensure that that happens. If necessary, we will introduce legislation. However, at the moment, the Data Protection Act prevents us from doing that. I explained that in Committee. I am sure that that was never the intention, but it is one of the restrictions that the Treasury lawyers have had to look at.
I want to deal with a couple of issues quickly because I do not want to delay the House. Should beneficiaries of someone who qualifies under the scheme—not dependants or loved ones—get a payment? The answer is that they will not, because the scheme is designed specifically for the sufferers of this terrible disease, their loved ones and their dependants to allow them to get on with their lives.
On the £7,000 payment, we will look enormously closely with the Association of Personal Injury Lawyers, our own lawyers and the Ministry of Justice to ensure that no rip-offs take place.
Mike Penning
Bear with me for a second, because I need to make a tiny bit of progress on this.
The scheme is as simple as we can possibly make it. There is a huge amount of skill out there among the stakeholders who know this disease and the compensation scheme back to front. I think that quite a bit of the £7,000, if not most of it, will stay with the people who are claiming.
Ian Lavery
Does the right hon. Gentleman share my fears that once the £7,000 becomes common knowledge there will be claims farmers advertising in every paper up and down the country? Can the Minister say whether claims farmers will be able to claim part of that £7,000, or is it strictly for the legal profession?
Mike Penning
It is being paid directly to those who are beneficiaries of the fund, and it is for them to decide who they pay it to. When we introduced these regulations, I was absolutely adamant that the lawyers should not get direct payments from this scheme. I am not a lawyer and I have seen what happened before, but because everybody knows exactly where we are and how simple the scheme is I would tell the stakeholders and everyone else to shop around to make sure that they are not ripped off. There are decent lawyers out there even though there are some scallywags as well.
The four-year review, which the shadow Minister specifically asked for, is in place. This is an important set of regulations that will ensure that we get this compensation through as soon as possible. I have not been able to answer all the questions that have been asked this evening, but I will write to hon. Members, including those on the Opposition Front Bench, with the answers. I hope that the House will pass the regulations this evening so that we can get the compensation to those who deserve it so much.
Question put and agreed to.
Resolved,
That the draft Diffuse Mesothelioma Payment Scheme Regulations 2014, which were laid before this House on 3 February, be approved.
Business of the House
(10 years, 1 month ago)
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The Leader of the House of Commons (Mr Andrew Lansley)
I beg to move,
That at the sitting on Tuesday 18 March:
(1) proceedings on the motion in the name of the Prime Minister relating to Ukraine may continue for three hours and shall then lapse if not previously disposed of; and
(2) notwithstanding the provisions of Standing Order No. 16 (Proceedings under an Act or on European Union documents), the Speaker shall put the Questions necessary to dispose of proceedings on the motions in the name of Secretary Eric Pickles relating to Local Government not later than three hours after the commencement of proceedings on the first such motion; proceedings on those motions may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.
Last Thursday, during the business statement, I announced three items of business for consideration tomorrow, Tuesday 18 March. They are a general debate on Ukraine, the consideration of motions to approve statutory instruments on combined authority orders and the consideration of a motion on three EU proposals on criminal justice. The business motion before the House will control those proceedings.
The effect of passing the motion will be to allow three hours for the debate on Ukraine. It is an important debate and I am pleased that my right hon. Friend the Foreign Secretary will update the House during the opening of the debate before appearing before the Select Committee on Foreign Affairs tomorrow afternoon. The House has been kept up to date with statements, but it is important that there is also a debate so that we can hear from Members. I have provided Government time for that and we will continue to keep the situation of how the House is kept informed and can discuss such important issues under review.
The motion also allows for statutory instruments relating to combined authority orders to be considered for up to three hours. They are important orders that affect a large number of members and their constituents. I hope that the House agrees that it would be for the convenience of members for them to be debated together on the Floor of the House. If the motion is not passed tonight, those four motions would be taken separately for up to 90 minutes each. I do not think that that is a sensible way to proceed.
We will also debate a motion on three EU proposals on criminal justice for up to 90 minutes, as provided for under Standing Order No. 16. That business is therefore not directly covered by tonight’s motion as it is already governed by Standing Orders.
I commend the motion to the House.
Question put and agreed to.
petition
Dr Thérèse Coffey (Suffolk Coastal) (Con)
It is my pleasure to present a petition signed by 220 people that was arranged by those who enjoy bingo at Palace Bingo in Felixstowe. I thank Vivienne Warren for organising the petition.
The petition states:
The Petition of the people of Suffolk Coastal,
Declares that the bingo industry is currently subjected to bingo duty at 20% whereas most other forms of gambling are taxed at 15% and further that the Petitioners believe that bingo venues offer a pleasant and safe environment for people to come together and enjoy themselves.
The Petitioners therefore request that the House of Commons urges the Government to reduce bingo duty from 20% to 15% so investment can take place in the bingo industry modernising premises and creating jobs.
And the Petitioners remain, etc.
[P001332]
Transport Infrastructure (South of England)
(10 years, 1 month ago)
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Caroline Dinenage (Gosport) (Con)
I am delighted to have the opportunity this evening to raise the important issue of transport infrastructure in the south of England. In particular, I want to talk about the south coast, but the regional economy of the south is undergoing deep structural changes. Improved connectivity between our southern cities and better links to the capital are vital if we are to ensure that no one gets left behind as we move forward. The presence of international hubs such as Portsmouth and Southampton means that the south and, in particular, my region of the Solent act as a gateway to the world. Good transport links are therefore crucial to connect local firms with the rest of the country and international markets. Unfortunately, people in the south too often feel cut off from prosperity due to unreliable and overcrowded transport links.
The deep pockets of deprivation across the south coast will never be overcome while we have the second-rate transport network that we currently endure. Better connections would allow suppliers to reach more businesses, allow businesses to reach more customers, and allow customers to visit more towns to spend their hard-earned cash. In short, they would increase trade, create jobs and raise the living standards of people throughout the region. They are also vital if flagship Government projects such as the Solent enterprise zone, which is an attempt to breathe new life into the disused military airfield at Daedalus in my constituency, are to fulfil their economic potential and generate the employment and prosperity that are desperately needed. Such connections would help to spread investment and raise the living standards of some of the poorest people in the country.
I know that the Government fully appreciate the importance of transport and I am glad that they are committed to investing in major developments of our rail and road networks, which are welcome and cannot come too soon after decades of rising congestion and chronic underinvestment. The UK now ranks 24th in the world for the quality of our roads, so the £28 billion that is to be spent on the maintenance and enhancement of national and local roads is long overdue. However, our debates about transport seem to focus too often on two issues: the need to deal with crises in capacity in the capital; and the nebulous desire to rebalance the economy from south to north. That dangerously overlooks the real and immediate need to invest in the south of England at a time when it is undergoing huge economic changes.
It is often incorrectly assumed that the south of England is made up of leafy suburbs and rural shires that are untouched by poverty. Sadly, parts of the south suffer from shocking deprivation. In the town of Gosport, 19% of children live in poverty, and the proportion rises to 32% in parts of neighbouring Portsmouth. Gosport has less than half a job per working adult—it has one of the lowest ratios of people to jobs in the UK—which means that 20,000 people have to commute out to work every day along a single carriageway road. Given that we have low average wages, it is testament to my constituents’ strong work ethic that our unemployment rate is not significantly higher.
As both a peninsula and the largest town in the country without a train station, we are hugely reliant on our bus network. Unfortunately, recent commercial decisions to change bus routes risk cutting people off from prosperity, stifling aspiration and allowing pockets of poverty to deepen. Local people are not afraid to get on their bikes, as Gosport has the UK’s third highest regular bicycle use. Everyone is doing their bit to try to ease the congestion, but it is plainly insufficient to have a single carriageway on and off a peninsula.
Better connections are therefore no vanity project; they are essential to fighting the deprivation that is endemic in communities throughout the south of England, and even more important as a result of recent heavy economic blows. Following BAE’s decision to end shipbuilding in Portsmouth and the job cuts at Ford in Southampton, the city deal for Portsmouth and Southampton that the Government have announced is welcome, but to maximise the potential of that investment and subsequent business opportunities, we need to improve links between towns and cities in the south.
The distance between Portsmouth and Southampton is just 20 miles, yet at peak times that journey can take well over an hour by road. The journey by rail often takes the same time, as there are only two or three direct trains an hour. Inevitably, slow journey times and poor service frequency on the rail network mean that more and more people take to the roads, thus clogging up the already hideously busy M27. I have heard that it can be quicker for commuters in the extreme western end of the Solent to get to Portsmouth via the Isle of Wight, which involves taking two ferries, than by using the M27, which is clearly ridiculous. Such wholly inadequate connections are more than just an annoyance; they hold back business. A study by Atkins estimates that road congestion is already costing Hampshire around £400 million every year. More than that, it reduces the attractiveness of the area for future inward investment. Work by Solent Transport shows that without the necessary investment in transport infrastructure, the region could miss out on around 8,000 jobs.
The naval dockyard and the commercial port in Portsmouth are significant defence and economic assets to the UK, and the port of Southampton is seeing massive growth across all its key sectors. The port master plan has identified that cruise passengers through Southampton will increase 113% between 2005 and 2020, and container handling is forecast to increase 95% over the same period. In order to take full advantage of our great southern hubs, it needs to be easier to travel between these two cities.
It is also vital that we improve links between London and the south coast. It is often assumed that geographical proximity to the capital means fast connections, yet it takes longer to get from London to Portsmouth on the fast train than it does to get from London to Doncaster—a distance that is more than twice as far. These journeys are rarely pleasant, as both the trains and the stations are packed. Passenger journeys on South West Trains are up 22% in the past six years, and more people now go through Waterloo in three hours every morning than fly from Heathrow in an entire day. We need more trains on the line as well as more carriages on those trains to deal with the crisis in capacity. I join my hon. Friend the Member for Portsmouth North (Penny Mordaunt) in her call for an express train from Portsmouth to London every half-hour. This is an excellent idea that could cut journey times and relieve passenger congestion.
After decades of underinvestment, action to address the problems of nightmare roads such as the A32 is crucial. They were described by a Deputy Prime Minister in the previous Government as strategically unimportant, which does not do much for the morale and self-esteem of an area. Investment in the area would help my constituents who frequently feel cut off from the prosperity being enjoyed in other parts of the country.
At a meeting earlier today Hampshire county council transport team gave the green light to the Solent local enterprise partnership to bid for £90 million of Government funding in order to make desperately needed road improvements around Gosport and Fareham. I hope the Government will look seriously at this bid and understand that it is vital if we are to stand a chance of redressing decades of chronic underinvestment in our local transport infrastructure. This Government have a good record on investment for London and the north. We need to make sure that every part of this country has a modern transport infrastructure that is fit to face the challenges of the 21st century.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
I congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) on securing this debate. It follows on from an Adjournment debate that I was delighted to respond to last week when, as my hon. Friend pointed out, my hon. Friend the Member for Portsmouth North (Penny Mordaunt) made a number of salient points about transport infrastructure in the south of England. My hon. Friend the Member for Gosport clearly made the case tonight that this is a subject of great importance to her and her constituents, including businesses in the area. I am sure she will remember that when she launched her innovative suggestion that the HMS Daedalus site become an economic zone I was delighted to be with her and to support her on that first occasion, some 18 months ago. That campaign has been hugely successful and I shall comment on it later.
My hon. Friend the Member for Gosport is right that effective transport infrastructure is vital in supporting local communities, enabling people to access their workplace, and driving local economic growth, so it is right that we take time to debate these issues. She is right, too, to point out that, as many of us who are Members of Parliament for constituencies in London and the south of England know all too well, the south is not all leafy suburbs. As a man who was born and bred in Southampton, I am delighted that she raised the need for connections between Southampton and Portsmouth. They may have traditional rivalry in a number of things, but the links between the two great cities of the south need improving. I am pleased that the Government are clear that we need to invest in record amounts to maintain, upgrade and expand our road and rail infrastructure.
Bob Stewart (Beckenham) (Con)
I go to Southampton by train quite a lot and I totally support what my hon. Friend the Member for Gosport (Caroline Dinenage) says about the time that it takes to get to Southampton from London. If we had an express link, as suggested by my hon. Friend the Member for Portsmouth North (Penny Mordaunt), more people could get up to London and get more jobs, helping the depressed people of Portsmouth and Gosport.
Mr Hammond
My hon. and gallant Friend is right. I will comment on rail infrastructure in a few moments, but I want at the outset to set the debate in context.
The Government inherited not only a budget deficit but an infrastructure deficit. In doing what we are doing, we will improve the growth potential of the economy and boost demand. In total, between 2011 and 2014, we are investing £32 billion in roads, rail and local transport infrastructure, and between 2015 and 2021 we are committed to a funding plan of some £56 billion, which will be spread across the length and breadth of the country, including the south of England. We are also working with local authorities to ensure that that is being shaped by local priorities.
My hon. Friend the Member for Gosport was right to raise the issue of investment in rail infrastructure. We are committed to record levels of investment in the network, again supporting economic growth and jobs and delivering a greener and more efficient railway that is better for freight and passengers. During the next five years, Network Rail will be spending more than £38 billion running and expanding our railways. There are major infrastructure projects, as has been pointed out several times before, in and around London as well as across the country. A huge programme of electrification will provide faster and more reliable services on the Great Western main line, including some of those from Southampton to the north of England, and there is a £50 million capital contribution towards the redevelopment of Gatwick airport station.
I am clearly conscious that, as my hon. Friend the Member for Gosport pointed out, Gosport is the largest city not directly connected to the national rail network. She will know that different sections of the branch were closed from the 1950s onwards. Network Rail is identifying funding priorities for the Wessex route for the period 2019 to 2024, as well as the strategy beyond that. I know that my hon. Friend has an aspiration that the town will be reconnected with the national network, and I encourage her, as I did my hon. Friend the Member for Portsmouth North in an Adjournment debate last week, to engage with Network Rail. I will be happy to facilitate that contact. Just as I said to my hon. Friend the Member for Portsmouth North last week that I hope that in the near future there is the Mordaunt Flyer, I hope that there will be the Dinenage Dynamo in the near future from Gosport. My hon. Friend the Member for Gosport is right to mention the number of people who wish to travel to and from Waterloo. She will know that the Government, working with Network Rail, are ensuring that the Eurostar platforms will come back into use over a period of time, which will facilitate growth at Waterloo.
It is also important that the road network is fit for purpose, and the Government have already announced increased levels of funding to deliver improvements all around the strategic road network. That is a step change. As the Chancellor made clear in his statement in June last year, we will announce further infrastructure improvements and commitments during the next period. The Government will invest £28 billion in enhancements and maintenance of national and local roads. That includes £10.7 billion for national road schemes and £4.9 billion for local major projects. In addition, £12 billion has been allocated for maintenance on both the local and the strategic road network, which means that 26 new major Highways Agency projects will go ahead, subject to the usual value-for-money and deliverability requirements.
My hon. Friend the Member for Gosport is specifically interested in the south-east, where we have committed to delivering smart motorway schemes between junctions 9 and 14 of the M3 from Winchester to Southampton and between junctions 4 and 11 of the M27 from Portsmouth to Southampton and the A27 Chichester bypass, subject to the finalisation of options and consideration of the business case.
The smart motorway schemes will allow us to make maximum use of what we already have by delivering additional capacity through the conversion of the hard shoulder into an additional running lane. The schemes can be delivered more quickly and provide more real benefits than would be achieved through a conventional widening scheme.
The Highways Agency is also committed to an investment of more than £10 million in two pinch point schemes in the Solent area, on junctions 3 and 5 of the M27. Those junction improvements will help reduce congestion by increasing the capacity of the junctions, reducing the journey times experienced by most road users and improving safety at the junctions. I hope that will ensure that the sorts of delays my hon. Friend mentioned will no longer be experienced by those trying to travel on the M27 between Portsmouth, Gosport and Southampton.
My hon. Friend will be aware that the Highways Agency is currently conducting its route-based strategy process, which is, importantly, involving local stakeholders in the consideration of future priorities. Such strategies provide a new, smarter approach to investment planning across the network and will see much greater collaboration with local interest groups to determine the nature and need of future investment and to ensure that it follows local priorities.
We are in the process of producing a series of strategies for the whole network, a number of which cover the south of England, including the south coast central route, which includes consideration of the A27; the Solent to midlands route, which includes the M27; and the M25 to Solent route, which includes the A3 and M3.
The Highways Agency completed a series of local engagement events last autumn to help identify performance issues and future challenges. I congratulate stakeholders on their engagement in that process.
My hon. Friend will also know that we are committed to identifying and funding early solutions to the long-standing problems on the A27 corridor. Initially, there will be a feasibility study. The A27 corridor study aims to work with local interest groups to identify the opportunities and understand the case for future investment solutions on the corridor. The outputs of the route-based strategy work and the outcomes of the feasibility studies will inform the Department’s roads investment strategy, which is currently being developed and put together and which we have committed to publishing by the end of the year.
It is, rightly, widely recognised that the condition and efficiency of local road networks is an essential contributor to economic growth. Practically all journeys start or finish on those networks and they are relied on by local residents and local businesses alike. Responsibility for the maintenance and management of those networks lies with local authorities—in the case of Gosport, that is Hampshire county council—and it is essential that they spend money on that. Funding from the integrated transport block supports those networks, and from 2011-12 to 2014-15 the south-east and south-west will have received some £400 million for local transport schemes.
In addition, in the autumn statement of 2012 we introduced the local pinch point fund, which was designed to target local congestion and to ensure that we help facilitate the creation of jobs and the delivery of new housing. To date, the Department has awarded local authority funding of more than £266 million for 112 schemes across the whole of England, which, along with joint funding, will enable schemes costing more than £511 million to go ahead. One of the schemes being delivered by Hampshire county council is designed to ease congestion for road users in Havant and help to unlock the Dunsbury Hill farm development site, a key employment site between Waterlooville and Havant. Another scheme, which is being delivered by Southampton city council, will ensure that six key bridges in the city remain fit for purpose in the years to come.
Looking to the future, the Government have recently announced plans to create a local growth fund from 2015-16. The pot will be at least £2 billion a year until 2021, and all LEPs across the country—including the Solent LEP, which includes Gosport—will have the opportunity to bid for funding through their strategic economic plans, which are due to be submitted to the Government by the end of this month. Among other things, the fund will allow local people to identify and local authorities to prioritise infrastructure schemes that they deem essential for economic growth in their area.
I note that one of my hon. Friend’s particular priorities is to improve the traffic flow in her constituency. I urge her to work with the Solent LEP to consider the local growth fund as a possibility for funding schemes that will help deliver that priority.
Caroline Dinenage
I referred in my speech to the £90 million that Hampshire county council will ask the Solent LEP to make when it meets on Friday. That is all part of the scheme mentioned by the Minister, which is about looking at roads in the Gosport and Fareham area, including the A27 corridor, about which he has spoken. I very much hope that the Government will look very favourably on that bid.
Stephen Hammond
I obviously hear my hon. Friend’s plea. As she will know, a number of people will make such a plea.
I was going on to commend my hon. Friend, because the fact that the Solent LEP and Hampshire county council are working together will make their bid to the Government for a grant from this fund more powerful. From this Dispatch Box, as well as in writing and in one-to-one meetings, I have stressed to several colleagues that it is absolutely essential for the local economic partnership and the economic zone to work together, which will certainly achieve a higher priority in assessments. She is right that it is clear that a LEP’s agreement to a scheme ensures that it is most likely to be in the strategic economic plan, and although the process is competitive, it is of course likely that the strongest bids will receive the biggest slices of funding.
In conclusion, I again congratulate my hon. Friend on securing this debate. The powerful case that she has made tonight has reminded us of the importance of an effective transport network for the economy. As I have made clear, this Government are committed to, and have set out plans for, large-scale investments now and in the future to improve local and strategic networks both in rail and on the road and—importantly—across the whole of this country, including the south of England.
Question put and agreed to.
Ministerial Correction
(10 years, 1 month ago)
Ministerial CorrectionsRead Full debate Read Hansard Text
Private Education: Offences Against Children
(10 years, 1 month ago)
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Steve McCabe
To ask the Secretary of State for Education how many independent schools have reported to his Department in each of the last five years that a member of their staff has been convicted of a sexual offence.
[Official Report, 27 January 2014, Vol. 574, c. 396W.]
Letter of correction from Edward Timpson:
An error has been identified in the written answer given to the hon. Member for Birmingham, Selly Oak (Steve McCabe) on 27 January 2014.
The full answer given was as follows:
Mr Timpson
The National College for Teaching and Leadership (NCTL) has received referrals from four independent schools, relating to convictions for sexual offences, since it commenced its regulatory role on 1 April 2012.
Under the previous Government, there was no requirement for teachers at independent schools to be registered. Under our new NCTL regulatory system, teachers in independent schools must be registered and are therefore regulated by the NCTL.
The correct answer should have been:
Mr Timpson
The National College for Teaching and Leadership (NCTL) has received referrals from four independent schools, relating to convictions for sexual offences, since it commenced its regulatory role on 1 April 2012.
Under the previous Government, only registered teachers were considered by the regulator and there was no requirement for teachers at independent schools to be registered. Under our new NCTL regulatory system, all teachers, including those in independent schools are regulated by the NCTL.
Petition
The Appeals Process against the Sanctioning and Removal of State Benefits
Written Statements
(10 years, 1 month ago)
Written StatementsRead Full debate Read Hansard Text
City Deal
(10 years, 1 month ago)
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The Minister of State, Cabinet Office (Greg Clark)
Following the successful completion of the first wave of city deals in July 2012, with the “core cities” the Government committed to work with a further 20 cities and their wider areas to negotiate a second wave of city deals in October 2012.
I can today inform the House that the Government, businesses and civic leaders in Sunderland and South Tyneside have reached agreement on a city deal.
The Sunderland city deal, in partnership with South Tyneside, will support the future development of the new international advanced manufacturing park—a proposed 100 hectare development to the west of the Sunderland city centre that will house new automotive, logistics and offshore wind-manufacturing businesses. This development will build on the existing strengths of Sunderland and South Tyneside, supporting the vision for local economic growth as set out by the north-east local enterprise partnership and increasing private sector growth and employment.
The city deal also confirms the local and Government investment to construct the New Wear crossing, a key component of the Sunderland strategic transport corridor which will support the international advanced manufacturing park and the wider economic growth of Sunderland.
Alongside these agreements the city deal also includes local commitments to deliver the development of the former Vaux brewery site and to increase private sector investment in the skills of the local work force.
Through the development of the international advanced manufacturing park enabled by the city deal, Sunderland city council and South Tyneside council predict that, by 2027, 5,200 new jobs will be delivered. The New Wear crossing is predicted by the local authorities to enable up to 60,000 square metres of new commercial, office and housing development and create between 1,500 and 2,250 new jobs.
Deregulation Bill
(10 years, 1 month ago)
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The Minister for Government Policy (Mr Oliver Letwin)
At the Second Reading of the Deregulation Bill on the 3 February I intervened on the hon. Member for Brighton, Pavilion (Caroline Lucas) in relation to clause 47 to say that the Newspaper Society had not provided evidence to the Joint Committee on the Draft Deregulation Bill. I have since been informed that this statement was incorrect. While the Newspaper Society was not called to provide oral evidence to the Joint Committee, it did provide written evidence. This evidence, however, was not referred to in the Joint Committee’s final report.
Media organisations were consulted previously by the Criminal Procedure Rules Committee. However, in response to concerns expressed directly to me and at the Second Reading debate, I met on 11 February representatives of both print and broadcast media groups, including lawyers and union representatives. The meeting was also attended by the hon. Member for Hayes and Harlington (John McDonnell) as the secretary of the NUJ parliamentary group. At that meeting we agreed that our objectives were in fact the same and that we would work together to find a mutually agreeable amendment to the Bill. Some additional consultation is currently under way, I hope to be able to table such an amendment at Report stage.
Open Public Services
(10 years, 1 month ago)
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The Minister for Government Policy (Mr Oliver Letwin)
We are today announcing the publication of the annual open public services progress report for 2014. This document shows the significant progress made by the coalition Government in reforming our public services against the five principles of open public services, originally articulated in the White Paper of July 2011. The report will be available online and in the House Library.
Double Taxation Convention (UK/Belgium)
(10 years, 1 month ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
A second protocol to the double taxation convention with Belgium was signed on 13 March 2014. The text of the protocol has been deposited in the Libraries of both Houses and made available on HM Revenue and Customs’ website. The text will be scheduled to a draft Order in Council and laid before the House of Commons in due course.
Chemical Weapons Convention
(10 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Defence (Dr Andrew Murrison)
The UK’s chemical protection programme is designed to protect against the use of chemical weapons. Such a programme is permitted by the chemical weapons convention, with which the United Kingdom is fully compliant. Under the terms of the convention, we are required to provide information annually to the Organisation for the Prohibition of Chemical Weapons. In accordance with the Government’s commitment to openness, a copy of the summary that has been provided to the organisation outlining the UK’s chemical protection programme in 2013 will be placed in the House Library.
Higgins Review
(10 years, 1 month ago)
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The Secretary of State for Transport (Mr Patrick McLoughlin)
Sir David Higgins has today published proposals to build HS2 better and bring the benefits to the north sooner. The Government strongly support this ambition and welcome his report. HS2 is vital for the economic health of this country and our international competitiveness.
It was in this context that I asked Sir David Higgins, when he became chair of HS2 Ltd, to undertake a review on maximising the benefits of HS2 and managing costs. Given his experience on delivering the Olympics, there was no one better equipped for the role.
Sir David has carried out a robust and rigorous review of the cost estimates for constructing phase 1 and confirmed they are right. He proposes to use any savings to protect the contingency at this early stage in the parliamentary process and the project as a whole. The Government support that.
Sir David’s report also proposes to deliver benefits, particularly benefits to the midlands and the north, more quickly. The report sets out a clear proposal to accelerate construction so that the Crewe section of phase 2 would be completed by 2027, not 2033, and to build a new integrated hub station at Crewe. Therefore, I am commissioning HS2 Ltd and Network Rail to undertake work to allow both these proposals to be considered in detail as part of my consideration of the public consultation responses to phase 2.
Sir David also makes recommendations about connectivity in the midlands and the north. He says the key to improving this is to integrate decision making on HS2 with Network Rail’s decision making for improvements to the existing network during control period six (2019-2024). I am, therefore, commissioning HS2 Ltd and Network Rail to make recommendations before our response to the phase 2 consultation.
Our priority must be to get the benefits to the midlands and the north as soon as possible. Our proposals must stand the test of time and we must put our money where it will do the most good. Sir David is clear that he does not think the existing proposals for the HS2/HS1 link meet those tests. His report concludes that the link proposed in the High Speed Rail (London-West Midlands) Bill has not secured a consensus. The link requires too many compromises in terms of impacts on freight, passengers and the community in Camden. I, therefore, intend to take the necessary steps to remove the link from the Bill and withdraw the safeguarding of this section of the route as soon as possible. I will also commission a study into ways to improve connections to the continent that could be implemented once the initial stages of HS2 are complete.
I also agree with the report that more can be made of Euston station. It is a significant opportunity to maximise the economic potential of the line and regenerate a site that has been neglected. It is also a significant opportunity to generate private sector investment that can reduce the overall burden on the taxpayer. I will, therefore, ask HS2 Ltd and Network Rail to develop more comprehensive proposals for the redevelopment of Euston, working with the rail industry and the local community. This work should include proposals for the Euston Arch which should never have been knocked down and which I would like to see rebuilt.
HS2 is a project that will be built over many Parliaments and will serve people for many generations. We must design it carefully and build it correctly. The Government are keen to rise to the challenge and we hope that hon. Members on all sides of the House will do the same.
Copies of Sir David’s report have been placed in the Libraries of both Houses.
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Brougham and Vaux) (Con)
My Lords, welcome to the Grand Committee. If there is a Division, the Committee will stand adjourned for 10 minutes.
Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2014
(10 years, 1 month ago)
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Lord Freud
That the Grand Committee do consider the Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2014.
Relevant document: 22nd Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, in moving that the Grand Committee do report to the House that it has considered the Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2014, I will also speak to the draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2014. These two regulations increase the lump sum amounts payable under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 and the mesothelioma scheme set up by the Child Maintenance and Other Payments Act 2008. These new amounts will be paid to those who first satisfy all the conditions of entitlement on or after 1 April 2014.
These two schemes stand apart from the main social security benefits uprating procedure and there is no legislative requirement to review the level of payments each year. None the less, I am happy to increase the amounts payable for 2014 by CPI—that is, by 2.7%, which is the same rate as that applied to some social security disability benefits and the industrial injuries disablement benefit under the main social security uprating provisions which were recently debated in the House.
The Government recognise that people suffering from diseases as a result of exposure to asbestos or one of a number of other listed agents may not be able to bring a successful claim for civil damages in relation to these diseases. That is mainly due to the time lag between exposure and onset of the disease, which could be as long as 40 years. Therefore, we fulfil an important role by providing lump sum compensation payments to people suffering from certain asbestos-related diseases through these two schemes. These government schemes also aim to ensure that sufferers receive compensation while they can still benefit from it, without first having to await the outcome of civil litigation. Improved health and safety procedures have restricted the use of asbestos and provided a safer environment for its handling. However, the historic legacy of the common use of asbestos is still with us. That is why we are ensuring that financial compensation from both these schemes is available to those affected.
I will briefly summarise the specific purpose of each scheme. The Pneumoconiosis etc. (Workers’ Compensation) Act 1979—for simplicity I shall refer to it as the 1979 Act—provides a lump sum compensation payment to those who suffer from one of five dust-related respiratory diseases covered by the scheme and who are unable to claim damages from employers because those employers have gone out of business and who have not brought any action against others for damages. The five diseases covered by the 1979 Act scheme are diffuse mesothelioma, bilateral diffuse pleural thickening, pneumoconiosis, byssinosis, and primary carcinoma of the lung if accompanied by asbestosis or bilateral diffuse pleural thickening.
The 2008 mesothelioma lump sum payments scheme was introduced to provide compensation to people who contracted mesothelioma but were unable to claim compensation for that disease under the 1979 Act, perhaps because their exposure to asbestos was not due to their work. The 2008 scheme means that payments can be made quickly to mesothelioma sufferers at their time of greatest need. Under both schemes, a claim can be made by a dependant if the sufferer has died before being able to make a claim.
Payment levels under the 1979 Act scheme are based mainly on the level of the disablement assessment and the age of the sufferer at the time that the disease is diagnosed. The highest amounts are to those diagnosed at an early age and with the highest level of disablement. All payments for mesothelioma under the 1979 Act scheme are made at the 100% disablement rate—the highest rate of payment. Similarly, all payments under the 2008 scheme are made at the 100% disablement rate and are based on age, with the highest payments going to the youngest sufferers.
I would like to give some detailed figures on claims and moneys paid out under the two schemes before us today. In the last full year, April 2012 to March 2013, over 3,500 payments were made in respect of both schemes, totalling just over £53 million.
I know that the occurrences of mesothelioma are of particular concern to Members, with the number of deaths from mesothelioma in Great Britain continuing to rise. In 1968, 153 people died from mesothelioma. By contrast, over 2,000 deaths occur each year from that disease now. Mesothelioma is a fatal disease caused almost exclusively by exposure to asbestos. Those diagnosed with mesothelioma usually have a short life expectancy—generally between nine and 12 months—with the sufferer becoming severely disabled soon after diagnosis. This rise in the number of deaths reflects the long latency period of the disease, which can take decades to become apparent. Latest available information suggests that mesothelioma deaths will continue to increase to a peak of around 2,500 in 2018, and then start to fall—thus reflecting a reduction in asbestos exposures following its peak use in the 1960s and 1970s. Just under a half—47%—of payments made under the Government’s 1979 scheme are in respect of mesothelioma.
I remind noble Lords that immediately following this debate we will be debating the Diffuse Mesothelioma Payment Scheme Regulations 2014, and I would ask that any questions about that scheme, and how it interacts with these older schemes, be raised in that debate.
These regulations increase the levels of support through the government compensation schemes. I am sure that we will all agree that, while no amount of money can ever compensate individuals and families for the suffering and loss caused by mesothelioma, those who are suffering rightly deserve some form of monetary compensation. The government schemes go some way to ensuring sufferers receive it as soon as possible. It is a requirement that I confirm to the Committee that these provisions are compatible with the European Convention on Human Rights, and I am happy to do so. I commend the increase of the payment scales and ask for approval to implement them. I beg to move.
Lord Wigley (PC)
My Lords, I shall certainly follow the Minister’s suggestion that we leave consideration of the new mesothelioma provisions until the next debate, which makes a lot of sense. I shall want to contribute then, if I may. Perhaps I may ask a couple of questions particularly on the regulations made under the 1979 pneumoconiosis Act. In doing so, I welcome, of course, the upratings that are taking place. They should not lose their value as time goes on.
As the Minister and others may know, I have an interest in the 1979 scheme, particularly from the point of view of slate quarrymen. The issue was not, of course, related only to slate quarrymen; it also affected those working in the kiln and cotton industries, and a number of other conditions came under the purview of that Act. Over the period since 1979 there was initially a surge of applications, which reduced in 1986 to just 95. A decade later, in 1995, this had built up to 900, and was running at a level of 1,000 to 2,000 by 2002-03. I believe that some of the cases leading to that surge arose from coal-mining pneumoconiosis, which had not been covered under the coal-mining scheme—there was originally a tripartite scheme between the NUM, the NCB and the Government, in 1975, for that purpose.
I have been trying to ascertain the breakdown of the figures since 2002-03, and would be grateful if the Minister would give some undertaking on this. My colleagues in the House of Commons have been unable to get from the House of Commons Library the breakdown with regard to industry and to the regional spread of those cases. I imagine that the information must be available in the department because it was available 10 years ago. I hope that it might be possible, by letter or some other way, for this to be disclosed. It would be interesting to see how the pattern has changed from the point of view of the sustainability of the scheme itself, which is an important factor.
The second thing I want to ask the Minister is the breakdown of the figure that he has just given us for 2012-13. He mentioned 3,500 payments and £53 million. That figure covered both the 1979 scheme and the 2008 mesothelioma scheme. Presumably there is again some breakdown between those two at the very least, and perhaps the Minister is in a position to give it today, so we can see where this is going. There will be questions about the interplay of the schemes, but I am content to leave those until the subsequent debate.
Lord Alton of Liverpool (CB)
My Lords, like my noble friend Lord Wigley, I will reserve my remarks about the current 2014 scheme to the later orders. However, perhaps I can ask about the earlier scheme and take the Grand Committee back to remarks that the noble Lord, Lord McKenzie, made in 2010 when he was Minister. It is good to see him in his place. He said that the,
“differential in payments puts pressure on sufferers during already extremely difficult times. For example, many feel that they need to rush through a quick claim to the department in order to maximise compensation for their families. Some are too sick to make a claim before dying and therefore their families are able to claim only the lesser amount after the claimant's death. In addition, because mesothelioma is difficult to diagnose and the disease onset is rapid, some sufferers are not diagnosed until after death”.—[Official Report, 23/3/10; col. GC 355.].
This therefore raises the question of dependency and lump sum payments which, when the noble Lord, Lord McKenzie, was Minister, he said should be the same. He commenced the process of reducing the differential and both his remarks and the action he took then are to be greatly welcomed.
Each year since 2010, Members of both Houses have asked that the differential should be reduced and each year that has been rejected, due to economic circumstances. My question to the Minister is: as the economic situation continues to improve, at what point in the recovery will there be the trigger that will lead to the Government honouring the commitment to reduce the differential and in-life lump sum payments? Until we do that, it leads to three specific anomalies. First, the dependants are paid significantly less than in-life claimants; secondly, dependants’ age is cut off at 67, compared to 77 for in-life claimants; and thirdly, the 2008 scheme dependants do not receive the 10% enhancement.
Over the next 10 years, the Government are expected to receive some £71 million, less £17 million gifted to insurers, in additional recoveries under the terms of the Mesothelioma Act 2014. Could some of those additional funds be used to reduce the differential? As I will argue later, perhaps some of those funds could also be diverted towards research because once we have established what the causes and cures are, then we will not have a need for schemes like this at all.
Lord McKenzie of Luton (Lab)
I am grateful to the noble Lord, Lord Alton, for taking us back to those earlier days and the discussions we had at that time. I have the same question for the Minister: what progress are we planning to make on closing the gap between amounts paid to dependants and to sufferers? From recollection, the first task was to close the gap between the 2008 scheme and the 1979 scheme, but that gap between dependants and sufferers remains open still.
As I recall, the funding for the 2008 scheme was to come from recoveries of civil compensation claims. There was always a bit of a mystery about how you got those claims in what was meant to be a no-fault scheme, but there is no doubt that recoveries were made and that they funded the 2008 scheme. Will the Minister tell us the current recovery level and how it relates to the 2008 scheme expenses?
We have debated extensively the broader issue of the consequences of exposure to asbestos, and I am sure that we will come on to it in the regulations that we are to consider next. Will the Minister confirm that the HSE will switch on its awareness-raising campaign on asbestos? It ran a very effective campaign that was curtailed a couple of years back. My understanding is that it is going to be revived. If the Minister can confirm that, it would be very helpful. In doing so, will he tell us something about the funding for the HSE to make sure that it is not just a nominal effort but a really effective campaign? Asbestos is, sadly, still with us in too many parts of our infrastructure, and we need to keep messages going about all the risks of exposure to it.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for his explanation of these regulations, and I thank all noble Lords for their contributions. Like the noble Lord, Lord Wigley, I recognise that there is no statutory obligation to uprate these amounts, and therefore I, too, welcome the Government’s decision to uprate the pneumoconiosis and mesothelioma lump sum payments under the 1979 and 2008 schemes.
A number of the questions that I wanted to raise have been asked, but I want to return to one point, which was raised by the noble Lord, Lord Alton, and my noble friend Lord McKenzie, about the difference between payments made to applicants in life and those made to dependants under both schemes. The noble Lord, Lord Alton, explained the three points of difference between the two. As he reminded us, in 2010 my noble friend Lord McKenzie reduced the differential in lump sum payments between in-life claimants and claims from dependants, but there has been no further narrowing of the gap between the two. When regulations equivalent to those here today were before the Grand Committee on 7 March last year—with a very similar cast, I notice from Hansard—representations on this very point were made by the noble Lord, Lord Wigley, and the noble Lord, Lord Avebury, who is not in his place. In his reply on that occasion, the noble Earl, Lord Howe, to whom it fell to respond, said:
“Ministers have to balance competing priorities, and because of the current financial situation, it is our duty to ensure that all available resources are well targeted. As around 85% of payments made under these schemes are paid to those who are suffering from the disease, I believe that they are currently rightly targeted on the sufferer to help them and their families to cope while living with the stress that illness inevitably brings”.—[Official Report, 7/3/13; col. GC 314.]
I remind the Committee of the point that the Minister made in his opening remarks, which is, in fact, that people live for a very short time knowing that they have the disease. If people on average live only nine to 12 months after diagnosis, I wonder whether the Minister still feels that that argument for focusing resources holds water.
When the regulations were debated in another place on 7 March last year, the then Minister, Mr Mark Hoban, acknowledged the discrepancy and said:
“It is something that we need to keep under review, and if the resources are available, we will see whether we can introduce measures to do that. The point about the difference between payments made to a sufferer and to their dependants is well made”.—[Official Report, Commons, Delegated Legislation Committee, 7/3/13; col. 9.]
I have three questions for the Minister. First, will he tell the Grand Committee whether the Government have indeed kept this issue under review and, if so, what conclusions they have drawn? Secondly, will he tell the Committee what percentage of payments is currently made to dependants rather than sufferers? Finally, what estimate has the department made of the cost of narrowing further or, indeed, eliminating the differential between the two? I look forward to the Minister’s reply.
Lord Freud
My Lords, as ever, noble Lords have asked a set of sizzling questions, which I shall do my best to address, although they are getting so technical now, because we have gone round this subject so many times, that I think that I shall end up writing quite a bit of it out, if noble Lords will excuse me for doing so.
On the question from the noble Lord, Lord Wigley, on the breakdown of the figures for the latest year, 2012-13, there is a total of 3,180 cases due to the 1979 Act. That represents the bulk of the expenditure, at £43.6 million. The 2008 scheme figures are 500 cases and £9.6 million of expenditure. I think that we have the breakdown figures that the noble Lord requested from 2002-03 onwards, but not to hand; I shall need to write with them. I did not anticipate that particular run of figures. I think that that will tie up with the recovery figures for the noble Lord, Lord McKenzie, and how they relate to the 2008 figures. I think that I will tie that up—I shall aim to do some tables.
On the split between sufferers and dependants, again, I shall use the latest year. Under the 1979 Act, of the total the bulk were the sufferers—2,900 out of the total—and 280 were the dependants. With the 2008 scheme, 450 were sufferers and 50 were dependants. That testifies to the speed with which the money gets out, given the sad mortality expectation that we were discussing. I am in no position today to move much further on making any progress in closing that gap between dependants and sufferers, but it is something that we keep under review. Clearly, we have been looking very closely at this whole area over the past year, and we will keep it under review. That is the best that I can do, speaking today.
I hope that I have covered everything, except for the HSE questions, with the awareness-raising scheme. I will write on the actual cost of what it would be to close that differential on the figures that I have just provided, which will give a baseline on what we are keeping under review. I shall also need to write on the detail of the HSE awareness-raising campaign. I feel somewhat embarrassed that I have resorted quite so much to the written word. If there is anything else at all, I shall include that in the letter. These are two important schemes. I commend the uprating of the payment scales and ask approval to implement them.
Lord Alton of Liverpool
When the Minister comes to write his epistles to the Members of this Grand Committee, I wonder whether he will also be good enough to come back to us about the three anomalies that I specifically raised with him.
Lord Freud
Yes, my Lords. As I understand the questions, they concern, first, dependants being paid less, on which I have already committed; secondly, the age between 67 and 77; and, thirdly, the 10% enhancement. I shall be pleased to deal with those as well. With that, I ask for approval to implement the regulations.
Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2014
(10 years, 1 month ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That the Grand Committee do consider the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2014.
Relevant document: 22nd Report from the Joint Committee on Statutory Instruments
Diffuse Mesothelioma Payment Scheme Regulations 2014
(10 years, 1 month ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That the Grand Committee do consider the Diffuse Mesothelioma Payment Scheme Regulations 2014.
Relevant document: 21st Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I thank all those who worked so closely with me while the Bill was being considered by the House. We had a series of valuable debates and I am indebted to all those who followed and studied the Mesothelioma Act with such great dedication and focus on the detail. It was a collaborative act to get this legislation on to the statute book. Noble Lords will remember that there were quite a few significant adjustments made as a direct result of those debates. I was pleased to receive those ideas and to apply them in real time. Without the efforts of everyone the Act would be in poorer shape. To the extent that I did not do everything that noble Lords asked, I apologise, but I suspect that they all know how these things work.
As Members of the Committee will know, the problem of untraced employers or insurers in mesothelioma cases has for many years left sufferers and their dependants without recourse to the compensation that should be their due. It is a huge step forward that we now have concrete provision for those people who fall foul of the insurance industry’s market failure to keep proper records. The Act finally guarantees that they will be able to access payments that will support them in a most difficult and distressing time. The Mesothelioma Act represents a huge achievement and I hope that noble Lords will share my pride in that achievement.
We are here today to debate the substance of the regulations that dictate how the scheme will be run. I will briefly outline what the regulations set out but, first, I would like to mention the recent announcement that payments have been increased from 75% to 80% of the average civil damages. On 6 March, the DWP announced that payments would move from 75% to 80% and that this was possible because scheme administration costs were now confirmed to be lower than expected. This means that we can afford to pay people more while keeping to a levy of no more than 3% of employers’ liability gross written premium. I hope that noble Lords will welcome this good news.
This announcement posed a slight problem in timing. The draft regulations had already been laid in Parliament, including a payment tariff of 75%. I give my commitment that as soon as these regulations come into force a negative instrument will be laid to amend that tariff. For the purposes of today’s debate, however, I hope we can continue as normal.
The payment tariff is a schedule of these regulations and has no material impact on the substance of the regulations, which deal with how the scheme operates. To withdraw and relay amended draft regulations at this stage would simply rule out the possibility of having the scheme operational by April of this year. I know that noble Lords are sympathetic to the need to get the scheme running as soon as possible and I hope they are assured that our debates will not be affected by the increase in payments. I will of course share with noble Lords a copy of the revised table that we intend to bring forward with the higher tariff.
I come now to the reason why we are here: the regulations. These regulations deal with the duties of the scheme administrator and with the duties of the applicant. They set out details relating to making an application, how that application will be decided on, and the right to ask for a review and a subsequent appeal. They also deal with slightly more specific issues that may arise during the scheme’s running, such as repayments in the case of misrepresentation of information in an application and imposing certain conditions on a payment—for example, requiring it to be put into a trust fund for a person who cannot manage their own financial affairs. I am sure that we will go into much more detail on the key points during our debate but, before that, I hope to clarify a couple of possible questions and mention three points.
First, noble Lords who have kindly commented on draft versions of the regulations will notice that they no longer deal with the £7,000 contribution towards legal fees. I give an assurance that successful applicants will still receive a fixed contribution of £7,000 included in their payment. Following internal legal checks, we have removed mention of the legal fees payment and will instead include these in the regulations that deal with compensation recovery.
Secondly, I wish to mention the date of commencement. Regulation 2 explains that Regulation 7(2)(c) will not come into force at the same time as the other regulations. This is simply because that regulation refers to another enactment—the third parties Act 2010, which has not yet come into force. This does not affect the rest of the regulations or the commencement of the scheme.
Finally, I should like to give a little more detail relating to the chosen scheme administrator. The commercial process to select the administrator was a topic that occupied much debate in this House last summer. I assure noble Lords that a full and open tender process was conducted—indeed, I distinctly remember giving assurances on a number of occasions that that would be the case. Gallagher Bassett won the contract because, of all the bidders, it scored highest against the published commercial criteria. Gallagher Bassett is a claims-handling company well used to delivering government contracts and it has been carrying out personal injury claims-handling on behalf of the MoD for several years. I am confident that it will deliver the high-quality service that this scheme requires, and I am delighted that, as a result of its appointment, we are able to raise scheme payments.
I hope that I have helped a little here with my introduction, and I will endeavour to answer as many questions as I can as we have this debate. Of course, where I cannot do so from the Dispatch Box, I commit to write with a full account. I commend these regulations to the Committee.
Lord Alton of Liverpool (CB)
My Lords, the Minister has been generous in thanking Members of the Grand Committee for the work they put in when the 2014 Bill was being considered on the Floor of the House. However, it would be churlish at this juncture if Members of the Grand Committee did not pay tribute to the Minister for the work that he did tirelessly throughout. Although we had our differences on details of the Bill, we all committed to seeing it through its stages here and in the other place because we knew that this legislation was long overdue. It sets in place a scheme that will respond compassionately to people who are given a death sentence when they learn that they have mesothelioma. It is also based on justice, and I know through the contact that I have had with the Minister that he is always keen to see that things are dealt with expeditiously. He deserves warm thanks for the personal efforts that he has made. It is not easy to get legislation through Parliament, and he has done that deftly, while also working with the insurance industry. I think that all of us are sufficiently worldly wise to know that balancing all of those things at once is no mean achievement.
The United Kingdom, as we have heard, has the highest rate of mesothelioma in the world, with a further 60,000 people in the UK predicted to die from this disease in the next 30 years—as the Minister said, more than 2,000 people annually. The need is paramount constantly to urge greater attention to how we assist victims and keep focus on the insurance industry as well as how we better fund and pool research in finding causes and cures for this lethal disease. I was struck by a reply that the Minister gave to me in response to Parliamentary Question HL3144, where he said:
“The statistical model suggests an uncertainty range of 55,000 to 65,000 deaths on that estimate. However, the true uncertainty range may be wider as longer-range predictions are reliant on assumptions about asbestos exposures that cannot currently be fully validated”.—[Official Report, 19/11/13; col. WA194.]
We can add to that the trends in many of the developing BRIC countries, which are going through many of the same experiences that we have gone through, although the figures worldwide are not collected; in answer to another Question that I tabled asking for worldwide statistics, I was told that none were available. Given our own experience as the country with the worst rate of mesothelioma in the world, we should be at the cutting edge or, to mix my metaphors, in the driving seat in insisting that there is a collaborative global approach to this horrendous problem.
The Minister will be aware that I have tabled a Private Member’s Bill, the Mesothelioma (Amendment) Bill, on research. Today gives the Minister the opportunity to say whether the Government intend to facilitate the Bill’s progress and accept the principles that underpin it. The Bill mirrors the all-party amendment defeated here on a whipped vote by a mere seven votes, which was tabled again in the House of Commons by the late Paul Goggins and the Conservative Member of Parliament, Tracey Crouch. On 7 November, the Minister in reply to a Parliamentary Question recognised the importance of research, saying:
“As you are aware there is a cross-Government commitment to support more quality research into mesothelioma. The work that the Department of Health are taking forward on this issue is designed to encourage researchers to pursue projects that will hopefully benefit sufferers of this terrible disease”.—[Official Report, 7/11/13; col. WA69.]
Can we be told today how that work is progressing? Inter alia, I commend to the Minister Early Day Motion 995, moved by Tracey Crouch in another place, which has now been signed by more than 60 Members of the House of Commons. It says:
“That this House notes with concern that mesothelioma is an invasive form of lung cancer caused primarily by prior exposure to asbestos”.
It goes on to give the kind of statistics that I have just given and ends by paying tribute to the,
“great work of the former hon. Member for Manchester, Wythenshawe and Sale East, the late Paul Goggins, to raise the profile of the need for long-term investment into mesothelioma research; and calls on the Government to facilitate the establishment of a long-term sustainable mesothelioma research scheme funded by the insurance industry”.
I would simply add to that the point that I made in the previous debate. Given that some £71 million will come into the Government’s coffers in the next 10 years, less the £17 million that will be given to insurers, surely it will be possible to use some of that money to create a pound-for-pound research fund, where we work collaboratively with the insurance industry.
On the Floor of the House, I recently asked the noble Earl, Lord Howe, about a breakthrough in mesothelioma research which has taken place in Canada. In reply, he said:
“Mesothelioma is a devastating disease, and I certainly undertake to look at the material that the noble Lord has sent me”.—[Official Report, 27/2/14; col. 1005.]
This is probably the most hopeful small breakthrough that I have seen over the years that I have been following this and I wonder, having spoken privately, very briefly, to the Minister, whether he is in a position today to tell us what follow-up has been done by the Department of Health in looking at that breakthrough and what the initial conclusions are. Will he say whether his department and the Department of Health are not only collaborating across government in the United Kingdom but working with others to try, not to duplicate work that has already been done or to reinvent the wheel, to bring together the best practice and knowledge that there is worldwide?
Perhaps I may ask about a reply that the noble Lord gave to me to Parliamentary Question 14/5095, which concerned the extensive tables he produced for the House about the occupations of people who die from mesothelioma. In that reply he said:
“The latest available analysis of citizens dying from Mesothelioma in Great Britain is based on deaths between 2002 and 2010 at ages 16-74. Only the last occupation of the deceased is routinely recorded”.
It is not the last occupation that we need but the data on all the occupations that someone has had. If we are going to get any kind of idea about tracking the causes of mesothelioma we need to know where the hot spots are with this disease.
The Minister continued:
“It is important to note that, for those Mesothelioma cases that are caused by occupational exposure, the last occupation of the deceased which is recorded on the death certificate may not reflect the source of exposure due to the long latency of the disease.—[Official Report, 11/2/14; col. WA 122.]
That begs the question of what use are the tables in those circumstances. Would it not be better to acquire data that would help us?
I was about to turn to the Questions from the noble Lord, Lord Wigley, but as he is about to intervene, perhaps he will save me doing so.
Lord Wigley (PC)
I am grateful to the noble Lord for giving way. Given that it is the last employment that is detailed in the Written Answer, of which I have a copy, does that not camouflage any cases that may arise from the armed services? There are indications that the premises in which many members of the armed services live have asbestos. That raises the question of the incidence and whether or not those families are notified of the dangers with which they are living.
Lord Alton of Liverpool
My Lords, I did not have a chance to compare notes earlier with the noble Lord, Lord Wigley. He has a copy of my parliamentary reply and I have a copy of a reply that he was given on 11 February by the Under-Secretary of State for Defence, the noble Lord, Lord Astor of Hever. After a Written Answer from the noble Lord, Lord Astor, on 4 February, the noble Lord, Lord Wigley, asked about the accommodation of families working for the Armed Forces and whether those living in accommodation that is known to contain asbestos are systematically informed of that fact and the outcome of the regular inspections undertaken of such premises. I was struck by the reply:
“However these reports are not automatically made available to occupants”.—[Official Report, 11/2/14; col. WA 122.]
What value are such reports if they are not made available to occupants?
In reply to another Question asked by the noble Lord, Lord Wigley, about the prevalence of asbestos materials in Ministry of Defence buildings and married quarters, he received a reply saying that some are known to contain asbestos and that the ministry keeps a register of all buildings which are regularly inspected. Surely anyone living in such buildings has a right to know these things.
My noble friend Lord West of Spithead said to me recently—he said that it was perfectly proper for me to repeat this remark in public—that 10 of the cohort that were at Dartmouth with him died of mesothelioma. This relates to a Question that I tabled to the Ministry of Defence. I hope that the Minister will pursue this matter, not only with the Department of Health but with the Ministry of Defence. I asked about the number of annual fatalities caused by mesothelioma involving members of the Armed Forces. I asked what data are kept on the cause of death of former servicemen and what research it planned to commission into the incidence of mesothelioma among former servicemen. I received a long reply on 11 February but the first sentence states:
“Data on the number of annual fatalities caused by mesothelioma does not identify those who were former members of the Armed Forces”.—[Official Report, 11/2/14; col. WA 124.]
Again I ask the question: why not? These are people serving in our Armed Forces who are willing to risk their lives on our behalf. Surely we owe a duty to them to ensure that, if they are in any way being placed at risk as a consequence of exposure to asbestos, everything possible is done to avert that.
Lord Wigley
I apologise to the noble Lord, Lord Alton, for intervening when I did. It clearly shows that we have not been comparing notes, because he was coming on to the very point to which I referred.
Perhaps the Committee will indulge me for a moment if I refer to the debate that we had in this Room on 16 January when I referred to a good friend of mine, Peter Wolfe of Cork in Ireland. Within a matter of days of that debate, he died. He had learnt of his mesothelioma only a few weeks before Christmas. That underlines how quickly this insidious disease kills people. I was at his funeral in Cork on 27 January. That casts a shadow over my contribution to debates on these matters.
The fact that the scheme under consideration today has been set up is a very positive development for victims of diffuse mesothelioma who cannot trace their employer’s insurance. I, too, pay tribute to the Minister for his perseverance in responding to the points raised during the passage of the legislation. I was especially glad to discover earlier this month, and to hear the Minister reiterate today, that claimants under this scheme will be able to gain 80% of the value of compensation claims, up from the 75% threshold which the Government seemed determined to stick to during debates at earlier states. I understand that claimants can now expect to receive an average payment of £123,000 before benefits are recovered, together with £7,000 towards their legal fees.
However, in my usual Oliver Twist fashion, I remain to be convinced about why claimants under this scheme should expect any less than 100% of the average compensation award for this type of disease. Those suffering from diffuse mesothelioma will be in debilitating pain, yet the Government insist that they are limiting the amount of compensation that can be claimed in order to ensure that claimants exhaust all other avenues before coming to the scheme. Surely this is grossly unfair. In effect, it penalises victims of the disease for the negligence of their employers. For the purpose of comparison, it is worth noting that the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 scheme was designed to award 100% of the value of compensation claims to claimants and, as we debated a few moments ago, it is reviewed annually. Why victims of diffuse mesothelioma should not have the same recourse available to them is beyond me, but perhaps that is another battle to be won at some stage.
It is also astounding that claimants under this scheme will have 100% of their benefits recouped from the compensation that is awarded, even though they receive only 80% of the damages. Claimants will thus lose out financially even more, and the Government surely must look again at that aspect.
There were other problems aside from the amount of compensation to be awarded, which were likewise highlighted during the debates on the Mesothelioma Act—problems that have yet to be erased. Principally, it is at best short-sighted that the Government have decided to place an arbitrary cut-off date for eligibility under the scheme. A draft of this compensation scheme was published, as we all know, by the previous Government shortly before the 2010 election, and consultation closed in May of that year. The present Government made no announcement on taking the scheme forward until 25 July 2012, which is the date that they have set as the earliest time when a patient can have been diagnosed with diffuse mesothelioma for these purposes. Individuals who had the misfortune of being diagnosed between February 2010 and July 2012 thus fall between two stools through no fault of their own—a matter that we on all sides of this Committee have emphasised, as well as in previous Committees and in the Chamber during the passage of the legislation. Surely the Government must look at this again.
Furthermore, it is disappointing that the scheme is open only to individuals suffering from diffuse mesothelioma, which is only one of a number of asbestos-related conditions that can come about as a result of exposure to this deadly substance. I would welcome any clarity that the Government can give as to the steps that will be taken to protect the interests of those suffering from asbestosis and other asbestos-related lung cancers.
Finally, I know that many individuals will be grateful if the Government can confirm when people will be able to start making applications under this scheme. I am not sure whether the Minister mentioned that in his comments—I did not catch it if he did—but that would be useful.
Lord Howarth of Newport (Lab)
My Lords, I add my thanks to the Minister and congratulate him on achieving this legislation and bringing in these regulations. I thank him for his compassion, for the collaborative way in which he worked with noble Lords on all sides of the House, and for his strong determination to get to where we have now reached. It is a very significant achievement and he deserves our admiration and gratitude. Like other noble Lords, I am grateful to him for raising the level of compensation to 80% of average compensation awards. That is a significant improvement that will make a lot of difference to families when they find themselves in such dire need.
I want to ask the Minister just one question. Will he clarify that it is his intention that the overall value of the scheme should continue to be set at 3% of gross written premiums after the peak year for claims? He has told us that we are to anticipate perhaps 2,500 claims in 2018, after which the numbers may reduce—although the noble Lord, Lord Alton, told the Committee that it is projected that there will be another 60,000 cases over the next 30 years. There will continue to be a significant volume, and I put it to the Minister that it is important that that 3% of gross written premiums is not reduced in the years after 2018. We all hope that after a long period of Labour Government, starting in 2015, the Minister may still have an opportunity to play some part in these affairs. I appreciate that it is difficult for him to bind his successors but it would be helpful if he would say on the record that he, as the architect of this scheme, envisages that the employers’ liability insurers should continue for the whole future life of the diffuse mesothelioma scheme to have to provide 3% of gross written premiums. If that was the case while the numbers of claimants or beneficiaries of the scheme were falling, it would make it possible to move the level of compensation up from 80% towards, or perhaps to reach, 100%. That would be one very important possibility.
There are other good things that it would be possible to do were funds to remain available while the total number of claims fell. It would become possible to backdate the eligibility for the scheme beyond July 2012 to February 2010 or even further. It would also be possible—I tabled an amendment to this effect in Committee on the Bill—provided that the legislation allows it, which of course is questionable, to adapt the regulations to cover family members who themselves contract mesothelioma even if the person who was exposed to asbestos in the workplace did not personally contract the disease. We talked about the case of a member of the family—most likely the wife—who washes the overalls of the person who has been exposed to asbestos fibre in the work-wear and she contracts the disease. As I understand it, the Minister has still not been able to bring those people into eligibility. However, if we had a slightly less tight financial envelope, then, through keeping the 3% of gross written premiums to fund the scheme, it would be possible to help those people.
Of course, it would also be possible to mitigate benefits recovery. I know that the Minister’s department, for theological reasons, will set its face against that, but, as the noble Lord, Lord Wigley, said, it seems very hard and unreasonable to claw back 100% of benefits from people who are receiving only 80% of average compensation. So there would be further latitude there. There would of course be further latitude to provide additional funding for research, the case for which has been so consistently and eloquently made by the noble Lord, Lord Alton. Among the range of options, it would also be possible to extend the benefits of the scheme, or perhaps a newly created parallel scheme, to victims of other long-latency industrial diseases whom we want to help.
I do not know what sorts of permutations might be possible but one could envisage this range of possibilities, and I hope very much that this afternoon the Minister will at least be able to tell us that there will not be a tapering of the overall value of the fund. The industry having treated mesothelioma sufferers so very badly over many decades, it seems to me that it should not be let off the hook. I appreciate that the current generation of employers’ liability insurers are not the worst culprits, and perhaps not the culprits at all in individual cases, of the failure to honour the policies that were written. However, I think that the industry as a whole has to continue to bear its share of responsibility and—I know that this is the spirit in which the Minister has always approached this whole issue—we should do the very best that we can for people who at the moment the scheme is not intended to help but who it would become possible to help if we maintained the value of the fund past 2018.
Lord James of Blackheath (Con)
My Lords, I apologise for not having been present at the beginning of this debate but I should like to make two points, the first arising directly from what the noble Lord, Lord Howarth, has just said. Three per cent of premiums seems to be the wrong way to come to this issue. Three per cent of the total reinsurance value backing asbestosis would be a nice round sum. It is about £6 billion of my money that I put in from Lloyd’s of London, and it is much nicer to get 3% on that. That coming in each year would give a lot of leg-room.
My other point is that I have been keeping in close contact with the Royal British Legion on this. At present, it has 42 cases—although, rather ominously, it has said that it expects that number to fall very quickly to 38—where it is providing care at its own expense and at considerable cost. Will the Minister explain what the crossover would be between this scheme coming in and either taking out or supporting the British Legion? I am concerned that when this comes in, it does not result in a hiatus, out of which the poor sufferers get nothing at all, whereas now they get support from the Royal British Legion. We need to know with some clarity what will happen in that respect. Those are the only two points I would like to make on what I have heard so far.
Lord McKenzie of Luton (Lab)
My Lords, like other noble Lords, I join in praising the Minister for all his efforts on this Bill. Without his leadership, we simply would not have this legislation on which we can debate these regulations.
Lord Howarth of Newport
When I was praising the Minister, I wanted to say that, of course, he built on the foundations created by my noble friend. I hope that he will also accept the gratitude and praise of the Committee and everybody in a much wider community who have been concerned about the predicament of mesothelioma sufferers.
Lord McKenzie of Luton
My noble friend is too kind, but I am conscious of the fact that this Bill has been forged in very difficult economic circumstances, and it is a splendid result that we are where we are. Like others, I also welcome the increase in the level of payout. As I remember it, when we were discussing this during the passage of the Bill, there were two versions of the gross tariff: one from the ABI and one from the DWP. I think the difference between them was based on the projections of the age profile of those who contract mesothelioma. We focused on the higher, DWP, one. Will the Minister confirm that this is still the gross tariff that we are working to and that it will be 80% of that?
A number of noble Lords have raised the 3% of gross written premiums. I am not sure that I heard the Minister actually say that this is where the levy is going to start, and it will be helpful if he could confirm the position. I thought his expression was “within that 3%”, but it would be good to know when we will see the levy regulations and whether the expectation is that it will be fixed, initially, and thereafter, as my noble friend Lord Howarth said, at 3% of gross written premiums. Obviously, this is to the extent to which they did not produce more than a 100% payout.
The Minister confirmed that the legal fees at £7,000 per case would be paid on top of that. I am not quite sure that I followed the reasoning of how that will be dealt with in alternative regulations. I would appreciate it if the Minister reiterated what he said. The noble Lord, Lord Alton, has been steadfast on the issue of research. Will the Minister take the opportunity to tell us where he thinks the insurance industry now stands, and what the prospects are of getting extra funding from it one way or another?
I have a couple of technical questions. Can we have an update on the oversight arrangements? I do not think there is a specific reference in these regulations to the oversight committee and whether there should be any obligation on the administrator. I should say that the Minister has been true to his word in terms of the process of appointing the administrator of the scheme, but I do not think there is anything in these regulations which requires co-operation and engagement with the oversight committee. Perhaps the Minister will say how he sees that working.
There was an issue over Schedule 3 to these arrangements, which deals with the application. This sets out all the information that needs to be provided and includes the names of all the person’s employers and the description of the arrangements under which the person was engaged by each employer. One of the issues that cropped up just at the tail end of the Bill’s consideration in the other place was HMRC policy on work histories and the extent to which a court order is now necessary for HMRC to provide them. I hope that this issue has gone away, but I would appreciate an update from the Minister on that point.
On a smaller point, will the Minister clarify where the administrator can impose conditions on a claimant? I think we understand why that would be but, as I understand it, there seems to be some differentiation. Conditions can be imposed where a dependant is an applicant, but where the applicant is deceased and the payment goes to the personal representative I am not sure that the constraints or conditions on that payment would apply. Maybe that is not necessary because it would be the role of the personal representative to make sure that that was effectively dealt with. Can the Minister confirm that?
Finally, I just ask about the Ministry of Justice procedure for reforming mesothelioma claims. In a sense, the Government backed up what was originally proposed but paragraph 39 of their response to the consultation on these proposals states:
“The stated purpose of the Secure Mesothelioma Claims Gateway was to support the proposed Mesothelioma Pre-Action Protocol. As the Government has declined to take forward the MPAP supported by a fixed recoverable costs regime, the ABI will no doubt want to consider whether and how it would wish to take forward its proposal for funding and hosting a SMCG and how claimants and defendants might voluntarily make use of it”.
Could the Minister give us an update on that and what it means in the current situation?
Baroness Sherlock (Lab)
My Lords, I thank the Minister for his explanation of these regulations and all noble Lords who have spoken. I am reminded of what an effective Committee process we had during the passage of the Bill. The Minister must feel a certain sense of déjà vu that he is back here yet again being interrogated quite so effectively about the detail. I join other Members of the Committee in congratulating the Minister on pioneering this and pushing it through. I also thank my noble friend Lord McKenzie. I am grateful that my noble friend Lord Howarth included him for all his sterling work in getting this show on the road in the first place and helping to steer it through Committee.
It is very good to see the progress made towards the introduction of the scheme. I am very pleased by the decision to raise the level of payment to 80% of average civil compensation. I also place on record a tribute to all those who campaigned for a higher payment, not only Members from all sides of this House, including my noble friend Lord McKenzie and many Members of this Committee today, but also victims’ groups, trade unionists and Members of another place such as my honourable friend Kate Green and other MPs, including the late and still very much missed Paul Goggins, who was such a strong fighter on these issues. Many in this field will be very grateful.
Clearly, as we have heard, the amounts of scheme payments in Schedule 4 do not now represent the levels of payments we expect, but I thank the Minister for explaining that we may expect imminently some negative orders to come into force to affect that. The Minister said that the Government are able to increase payments because of savings in administration costs. We are indebted to my honourable friend Kate Green who suggested that in the Public Bill Committee in another place—something acknowledged by the Minister there—but it would be very helpful if the Minister here could explain to the Committee precisely where those savings were found.
The impact assessment produced last November indicated that an uplift in payments from 75% to 80% would cost an extra £11 million in the first four years of the scheme and an extra £22 million over the first 10 years. With payments set at 75%, it also stated:
“The costs of the scheme are split between a levy of £371m on the insurance industry and £17m in government funding. This covers scheme payments direct to individuals (£261.4m), benefit recovery (£72.2m), applicant legal fees (£24.6m) and admin of £30.0m (including case legal fees of £24.2m, set up of £1.4m and running costs of £4.4m)”.
To focus in on that, that impact assessment showed two sets of legal fees provided for: applicants’ fees at £24.6 million and case legal fees at £24.2 million. There was some debate as to what the case legal fees covered but the Minister in another place assured the Public Bill Committee that they were for the benefit of applicants. Originally, claimants’ legal fees were set at £7,000 a case, when payment was at 70% of average civil damages. During the passage of the Bill through this House, that payment rose to 75% and legal fees were reduced to £2,000 per case.
In the Public Bill Committee in another place, legal fees reverted to £7,000. The Minister there said that he had had discussions with the Association of Personal Injury Lawyers and felt £7,000 to be a reasonable figure after all. Crucially, he also said that if cases could be conducted more cheaply, applicants would none the less receive the full £7,000. We now know that extra moneys have been squeezed out of administration costs to fund this uplift but can the Minister explain where they come from? I presume that they do not come from a further squeezing of legal fees. He also confirmed—and this was very helpful—that £7,000 per head remains the sum allocated to applicants for their legal fees. Can he confirm for the record that, if the legal fees in some cases fall short of this amount, applicants will still receive the difference in cash up to £7,000?
Assuming that there are no changes in respect of the position relating to applicants’ legal fees, can the Minister tell us where the additional £11 million or £22 million to pay for the uplift has been found? On the face of it, it must have come in some combination from other administration costs. Can he also say what he assesses the running costs and set-up costs of the scheme now to be? Can he also tell us how much is now allocated for case legal fees as opposed to applicant legal fees? If those case legal fees have been reduced and, as the Minister in another place explained, they were to be for the benefit of applicants, will the applicants suffer in any way as a result of that? If the extra money is not coming from there, where is it coming from?
Can the Minister also confirm that payment at 80% is to be met within the planned levy of 3% on the industry, including in the first four years of the scheme? I will turn in a moment to the levy and the points raised by various noble Lords, but I want to talk briefly about a few other aspects of the scheme.
Regulation 5(4) requires the scheme administrator to ensure that there are sufficient numbers of suitably qualified persons to determine applications under the scheme. Does the Minister have any more information that he could share with the Committee about the likely professional background and qualifications of those people and, in particular, about their independence and how they will be employed? Will they be employees of the scheme administrator or might they work on a freelance basis? In particular, if they are freelance, is there any possibility that there could be a conflict of interest if they have other roles within the industry at the same time? The crucial question is: if that is the case, how will such conflicts be identified and dealt with so that the public and the applicants can be reassured of the independence of the people making the determinations?
I welcome the provisions in Regulation 9(2)(a) regarding time limits for applications. It makes it clear that applicants would have three years from the date of diagnosis or, if diagnosis is after 25 July 2012 but before the regulations come into force, three years from the date they come into force. However, there are still some concerns about time limits when we look across to Regulation 18. Generally, if a claimant dies before the case is determined, a payment may be made to his or her personal representative if the claimant leaves no dependants, but that still leaves a small group, admittedly, of mesothelioma sufferers without dependants who were diagnosed on or after 25 July 2012 but who died before they could make an application simply because the forms to do so were not yet available. I understand that they will be available from April, and perhaps the Minister could confirm that. In those cases, I understand that payment will not be made to the deceased’s personal representative. Can the Minister clarify that? If that is so, it seems unjust. It has been quite clear that the Government’s firm intention was for claims to be backdated to 25 July 2012 in all circumstances, but I should be interested to hear the Minister’s response.
I welcome Regulation 11, which sets time limits for the provision of additional information—a suggestion from my noble friend Lord Browne of Ladyton. I am sure that he will be very glad to hear it, and I shall make sure that I communicate the information to him. I am very grateful to my noble friend Lord McKenzie for raising the question about HMRC and the fact that it needs a court order to release the employment records of deceased claimants. This is really serious. I understand that a letter from the Minister to my honourable friend Kate Green in the other place suggests that progress was not being made very quickly on this. I look forward to hearing whether this can be resolved before the scheme is launched.
I also welcome the provision in Regulation 18 which provides for the applicant to request a review of a determination. That was another suggestion from my noble friend Lord Browne, about which I predict he will be even more pleased.
Finally, two important commitments made by Ministers do not appear in the regulations before us today. The first concerns the levy, which was raised by my noble friends Lord Howarth and Lord McKenzie and others, and, in particular, the absence of any reference at all to it in the regulations. I confess that I was a bit surprised about that, but I may have misunderstood where it is to be dealt with. Will the Minister explain whether there is a reason why the levy and the rate at which it is to be set are not included in these regulations? It is important that people are reassured that 3% is to be the amount, although if the Minister wants to adopt the formulation offered by the noble Lord, Lord James of Blackheath, I am sure we will all be very keen to hear that today.
Lord Freud
My Lords, I thank noble Lords for a highly informed debate and for the kind words that were addressed to me personally, which I appreciate. I thank the noble Lord, Lord McKenzie. Without the little present that he left me on my arrival, things would perhaps not have been sorted out with quite such alacrity.
A number of noble Lords asked about the timing. The noble Lord, Lord Wigley, was the first. Our intention is that applications will be accepted from April with the first payments in July. These regulations will come into force on 6 April, subject to this process. We intend to lay the negative instrument the next day, 7 April.
I shall now deal with research, on which we spent a lot of time. Noble Lords around the Room are very sympathetic to the point made by the noble Lord, Lord Alton, about improving it. That debate, which I shall not replay because it is a long and complicated situation, as noble Lords know, stimulated a substantial increase in research activity in this country on mesothelioma. I shall go through the four things that we committed to do. First, we set up a partnership to identify the priorities in research. A survey has now begun and is currently open, asking patients, families and healthcare professionals for their unanswered questions about mesothelioma treatment. The partnership will then prioritise the questions, and the end result will be a top 10 list of mesothelioma questions for researchers to answer. It is planned that that list will be ready by the end of this year, when it will be disseminated and work will begin with the National Institute for Health Research to turn the priorities into fundable research questions.
Secondly, the national institute will highlight to the research community in the spring of this year that it wants to encourage research applications in mesothelioma. Thirdly, the national institute’s research design service continues to be available to help prospective applicants to develop competitive research proposals. Finally, the National Cancer Research Institute has made excellent progress in planning a workshop for leading researchers to discuss and develop new proposals for mesothelioma studies. This event will take place on 2 May.
I know that we are not going along with the specific structures suggested by the noble Lord, Lord Alton, but I want him to feel that we are really pursuing this with energy, getting results and getting this focus within the structure of how research is managed in this country. Just because his specific proposals may not have been accepted, he should not feel that we have not taken his point thoroughly on board or that we are not grateful to him for keeping up that pressure.
Lord Alton of Liverpool
I urge the Minister to add a fifth point to his four other points with regard to the remarks that I made earlier about the importance of global collaboration through the World Health Organisation, also looking at best practice and innovations being promoted elsewhere in the world and the need to draw that information together. We may have the highest rate of mesothelioma in the world but many other countries face the same challenges as we do.
Lord Freud
That is a very powerful point from the noble Lord. I have not yet had a chance to talk to my colleagues in the Department of Health but I shall pick up that issue specifically.
On the suggestion as to where to spend the recoveries money, it is the same core point. There is a process for funding research, and it does not work to direct other moneys around in that mechanical way. The money will go into research as the right propositions come up. That is the reason why, fundamentally, we will not be able to provide support for his Private Member’s Bill. It is a difference not in aspiration but in the structures that we can accept. I know that he will be disappointed in that, but he may not be surprised.
The point that the noble Lord raised on the causes of mesothelioma and the last occupation is one that requires reflection, and I shall write to him on that particular set of points. I will also pick up the related point from the noble Lord, Lord Wigley, on the technical issue of the MoD advising tenants. On the noble Lord’s point about widening the coverage of the 2014 Bill, clearly we will continue to operate the 1979 scheme, but I have dealt in enormous detail with why we would not widen this scheme and why we are in no position to make any such commitments now.
Lord McKenzie of Luton
I gather that the noble Lord has moved off the research issue, but will he say whether there is any commitment from the insurance industry, the ABI, to continue contributing, as it has in the past?
Lord Freud
I have been in discussion with the insurance industry. There is currently no commitment to go ahead with its funding, but I do not think that this is the end of the story. We are still talking about various options.
Lord Alton of Liverpool
Before the noble Lord leaves that point, I do not want to return to the arguments that we had on the amendment that I moved in the House, but he will recall that the noble Earl, Lord Howe, in replying to those debates, made a number of substantive remarks about the important role that the industry was playing in supporting research into mesothelioma through financial contributions. If we had been aware at that time that the industry was not going to step up to the plate and provide those resources, I wonder whether some noble Lords might have voted in the way they did having been given those assurances.
I shall not press the Minister further today but I hope that he will return to the intervention from the noble Lord, Lord McKenzie, perhaps by writing to keep us informed about the progress he has made. Certainly, I know from my own meetings with the industry as recently as last week that it would much rather have a scheme where the cost is shared beyond the six companies that previously funded research. Those six companies feel that the whole burden should not just fall upon them.
Lord Freud
We are in danger of rerunning the debate. Clearly, we were not able to help the insurance industry to spread the burden using this mechanism, for complicated reasons which are on the record. Discussions are going on with those companies that have a sense that contributing to research is desirable and we shall see what comes out. On the question raised by the noble Lord, Lord Alton, about the extent of recoveries, over 10 years according to the impact assessment we are expecting £72.2 million.
In response to the leading and very clever question from the noble Lord, Lord Howarth—I would expect nothing less from him—we have committed to keeping the tariff under review and we will carry out a review of it after four years, once the smoothing period has finished.
Lord Howarth of Newport
Allow me to emphasise once again that it is imperative that the Minister, his department and successors maintain the pressure on the industry. We have just heard the noble Lord, Lord Alton, describe how there is no assurance that there will be continuing funding from the industry for research. We have seen the whole history of the neglect of the legitimate interests of mesothelioma sufferers by the employers’ liability insurance industry. Sadly, we cannot take it on trust. I am sorry that the Minister has not written that requirement of 3% of gross written premiums into these regulations—though I can perhaps understand why not. It would be very helpful and really the least that the Minister could do if he expressed this afternoon very strongly on behalf of the Government and mesothelioma sufferers his expectation that we will continue to have the substantial contribution from industry to fund this scheme and that he expects industry to continue to provide not less than 3% of gross written premiums after the moment of peak claims passes in 2018, for all the reasons that noble Lords indicated earlier in this debate.
Lord Freud
My Lords, I am not in a position to bind a future Government over what happens in four years’ time. However, as the noble Lord appreciates, there is now a context for that Government to take a view at the right time on what should happen beyond then. The figure we have at the moment, which is publicly on record, is 3%. In response to the question asked by the noble Lord, Lord McKenzie, that is based on DWP forecasts. Clearly, to that extent, we are committed to a tariff level. If those forecasts are wrong for one reason or another, there could be variation round that 3%. That is the best we can do to set the level today. However, when that process has gone through—we thought the right point for that was after four years because we will have done the smoothing and seen how it actually works and if people change behaviour as a result of the scheme—we will clearly know exactly what is happening. We can then have a much more specific forecast of expectations, once the scheme is in and has been rolling for some time.
Lord McKenzie of Luton
Are we to see some regulations come forward round the mechanics of that levy? There is an absence of a reference to that here, but that does not mean that that is the end of it. Something could come forward to explain how it must all work, who will be levied and on what basis.
Lord Freud
I am sorry but I am confused: Schedule 4 has the levy rates. That was also a question from the noble Baroness, Lady Sherlock, who said that they were not in there. There will be further regulations to come, and there will be negative regulations adjusting these figures.
Lord McKenzie of Luton
Schedule 4 sets down the tariff, which is based on the gross starting point, but presumably there is a separate starting point for the levy on the insurance companies. Is that going to come forth? On the four-year review of the tariff, must we not have regard to the fact that civil compensation claims are likely to rise over a period anyway because of changes in the claims process?
Lord Freud
Yes, that is one of the moving features here. We are moving the tariff up. We have committed to moving it up by CPI in this interim period. That is a sensible enough period after which to take a new look at where civil compensation has moved, if indeed it has, and to reset. However, at that stage other factors could also be looked at. Although the noble Lord, Lord Howarth, is enticing me in his skilful way, that is all I can say on the review. I am deeply impressed.
Lord James of Blackheath (Con)
The noble Lord, Lord Howarth, was enticing the Minister into a quicksand. We need to get this matter clearly understood. There is no such thing as a pot containing the premiums that were originally paid for this cover. All those moneys were taken by the companies who then went bankrupt. It is not there. The only pots that exist are the reinsurance pots. Basically, with our £6 billion liability, we took £3 billion to Zurich Re and £3 billion to Swiss Re, and that is where it stands today. If you go for those and can negotiate that they are allowed to reduce their balance sheet liability by the 3% you get each year, they will be very interested. However, you will not get the 3% and the reduction in their balance.
Lord Freud
My Lords, we are moving now into the arcana of the insurance industry, which the noble Lord, Lord James, knows better than anyone in the Room. When I first had discussions with the insurance industry, they centred around something that would have affected its balance sheets. It was a structure which went to the historic issues. However, for reasons that are too complicated to go into, they ended up with this scheme which, as the noble Lord, Lord Howarth, pointed out, affects the current writers of liability insurance, who may or may not be the villains of the piece. It is not perfect, but it is the best we can do. This is where we are.
To pick up on the point made by the noble Lord, Lord James, much as it would be attractive to go after reinsurers, we simply do not have the information to do so. Even the noble Lord, Lord James, I am sure, could not find that information.
Lord James of Blackheath
Do you want phone numbers, my Lords? They are there. They have the money and, in the case of the Swiss Re, it is backed by the Swiss Government, who have not yet gone bankrupt. They are working on it, but not yet.
Lord Freud
Noble Lords could go on about this, but I cannot.
On the other point made by the noble Lord, Lord James, about the crossover between the schemes supporting the Royal British Legion, I am not aware of the issue he raises, but I shall look into it for him.
On the point made by the noble Lord, Lord McKenzie, on the oversight committee, we are not legislating for that, but we have discussed the matter with the AVSG, the TUC, insurers, personal injury lawyers and accident insurance lawyers. We are agreeing with those groups how the committee could operate. We intend that it will look at various aspects of the running of the scheme, particularly in the early period. We envisage it considering complaints against the scheme, redacted claims and decisions. It will then send a report to the Secretary of State, who will include the issues raised by the committee in his published annual report. It will be quite transparent.
On the point made by the noble Lord, Lord McKenzie, about HMRC, we continue to work with other departments to seek a resolution to this issue. Regrettably, that is still ongoing work. We have encouraged the ABI to continue to engage with the MoJ as they look to improve the process for mesothelioma cases in regard to the portal.
In response to the question asked by the noble Baroness, Lady Sherlock, the reason we can increase the payments to 80% is because the scheme administrators have now been selected and the costs have been finalised. Those costs fall well below projected costs, and this allows us to increase the payments while keeping the levy the same.
In the November impact assessment the net benefit to lawyers was expected to be £2.69 million over 10 years. That has reduced to £1.6 million. The reason for this difference is that the original scheme administration costs used in all previous versions of the impact assessment assumed that some legal administration costs would benefit lawyers working on the scheme. These costs were estimated to be £23 million from successful cases, £1.7 million from unsuccessful cases and £1.2 million from ad hoc legal administration costs. Due to further understanding of the way in which the scheme will be administered, it is now recognised that these legal administration costs are not necessary, meaning that overall it is expected that lawyers will benefit by less. I can confirm that applicants will still receive the difference between the £7,000 and the legal costs, if there is a positive difference.
Baroness Sherlock
Before the noble Lord leaves that point, can he confirm that the figure that was previously £24.2 million has now either disappeared or is in single figures and that there will be no other loss or additional costs for the applicant as a result of those costs being taken out of the scheme altogether?
Lord Freud
Yes, I can confirm that. In the tendering process resulting in the appointment of Gallagher Bassett, the company was required to demonstrate that it had sufficient resources to process the expected volume of claims. We have reviewed its tender to ensure that it is accurate and realistic and have satisfied ourselves that it can deliver as part of our due diligence. The administrators will be employees of the scheme administrator. If the person with mesothelioma dies before an application can be made, their dependant can make the application. If the person dies after making an application but before a payment is made, the payment is made to their personal representative.
Baroness Sherlock
I thank the Minister for clarifying that point. I was talking about people who have died who do not have dependants. It seems that the Minister was saying that the personal representative can receive a payment even in the circumstances that I have described: when people were diagnosed on or after 25 July 2012 but had not made an application because the process was not available to them.
Baroness Sherlock
Can the Minister please explain why? These are people who the scheme is explicitly designed to cover. They simply had the misfortune to die before the Government had been able to put the scheme in place and give them an application form to fill in. Why should they be excluded?
Lord Freud
I think it is because they do not have dependants. However, I will write to justify what that difference is and why we have designed the scheme in that way. Our estimate is that the 80% payment will be within the 3%, but that is clearly based on our figures. As to the final question on the setup and running costs of the scheme, I cannot go into too much detail for reasons of commercial confidentiality. I will write carefully and provide as much information as I safely can.
Lord McKenzie of Luton
On one last point, can the Minister say when we are likely to see the levy rate because, presumably, if people are to start to make payments under the scheme, the cash will have to be obtained from the insurers? That will not necessarily be a straightforward process.
Lord Freud
It will be within the next Session. In the initial period the DWP will be putting in funding, so we do not have a funding issue because we are the underwriters of the scheme and are managing the smoothing process which, I can assure the noble Lord, is more complicated than it might appear to be from outside.
I am confident that these regulations will underpin a robust and fair scheme which all noble Lords agree has been needed for some time. This Government are committed to improving the situation faced by mesothelioma sufferers, and the establishment of the diffuse mesothelioma payment scheme is a huge achievement. I commend these regulations to the Committee.
Tax Credits (Late Appeals) Order 2014
(10 years, 1 month ago)
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Lord Newby
That the Grand Committee do consider the Tax Credits (Late Appeals) Order 2014.
Relevant document: 22nd Report from the Joint Committee on Statutory Instruments
Lord Newby (LD)
My Lords, I am pleased to introduce the Tax Credits (Late Appeals) Order 2014. It makes a small but important change to Section 38 of the Tax Credits Act 2002 to reinstate HMRC’s ability to accept late tax credit appeals. It inserts provisions to allow HMRC to treat a late appeal as made in time—that is, an appeal made outside the statutory 30-day time limit but within a further 12 months may be accepted in exceptional circumstances.
If a claimant disagrees with a decision made by HMRC—say, on a tax credit award—they can lodge an appeal within 30 days of the date of the decision. Since tax credits were introduced in 2003, it has been the policy intent that claimants can also lodge a late appeal in exceptional circumstances—for example, where a dependant died or they suffered a serious illness—within a period of 12 months after the normal 30-day time limit. Allowing late tax credit appeals where there is good reason to do so is consistent with the policy relating to the treatment of other appeals received by HMRC.
If there are no exceptional circumstances for lateness, HMRC will not accept the appeal. Instead, it will be passed to the tribunal, which will then make a decision as to whether to treat the appeal as made in time. This will be based on the tribunal’s wider view on whether it is fair and just to accept the appeal.
The defect that we are remedying today also carries across to the tribunal rules, meaning that tribunals cannot hear appeals made after the 30-day time limit either. The Tribunal Procedure Committee will similarly be remedying its rules to ensure that the legislation works as intended.
The defective legislation arose from changes made in 2009 to legislation applying to appeals in Great Britain in the light of the establishment of new courts and enforcement tribunals. HMRC and the MoJ introduced changes to their appeals legislation as a consequence of the transfer of the functions of the former special and general tax appeal commissioners to the First-tier Tribunal and Upper Tribunal tax chambers. An unintended consequence of the interaction of these legislative changes led to the legislation allowing HMRC to accept late appeals to lapse.
I should like to reassure the Committee about what has been happening since the lapse was discovered. We did not want claimants to be adversely affected by this lack of legal power, so HMRC has been accepting late appeals through its care and management powers, and judges are still deciding on a case-by-case basis. However, neither can do so indefinitely without this legislative remedy.
I should also explain that there is to be a change to the appeals process from 6 April this year. HMRC is introducing a new stage called mandatory reconsideration. When claimants dispute decisions, they will have to ask HMRC to conduct a mandatory reconsideration of the decisions before they can appeal, which they will then have to do directly to the tribunal. This is called direct lodgement. HMRC is introducing mandatory reconsideration to align the tax credits process to that already introduced by the DWP. As tax credits are to be replaced by universal credit over a period of time, it will help to provide consistency between the two departments around appeals. However, appeals to HMRC against decisions made prior to 6 April 2014 will be dealt with under the current flawed system.
This order remedies the flaw in the current legislation and legally reinstates HMRC’s power to accept late tax credit appeals. I commend the order to the Committee.
Lord Tunnicliffe (Lab)
My Lords, nobody could object to such a wholly rational and reasonable order. I shall just ask a couple of questions. When was the error discovered? I was going to go on and ask the Minister to set out the consequences of it, but I think that he said that there have been no consequences to individuals because the process rolled on and, in fact, the order merely legitimises the administrative process that is taking place. If so, that has obviously been handled in an intelligent way and my question as to when it was discovered is somewhat academic.
Lord Newby
Yes, my Lords, HMRC has been operating, as I said, under its care and management powers to accept late appeals as though there was no problem, as it were. The error was first discovered last May. There has been some discussion as to whether the change in the legislation was necessary, given that the whole system is changing from this April, but it was decided that it was, not least because late appeals in exceptional circumstances can be considered up to a year after the initial decision. So I can absolutely reassure the noble Lord that in the interim, since the problem was discovered, nobody has lost out. HMRC has been accepting late appeals through its care and management powers, and judges have still been deciding cases on that basis.
Guardian’s Allowance Up-rating Order 2014
(10 years, 1 month ago)
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Lord Newby
That the Grand Committee do consider the Guardian’s Allowance Up-rating Order 2014.
Relevant document: 22nd Report from the Joint Committee on Statutory Instruments
Lord Newby (LD)
My Lords, as I begin, it is a requirement that I confirm that the provision contained in the three orders and regulations before the Committee today is compatible with the European Convention on Human Rights, and I so confirm.
The two orders that we are debating increase by CPI the rate of guardian’s allowance, the payment made to provide support to those who look after a child whose parents are deceased. The regulations increase the maximum rates of the disability elements of tax credits—that is, the disabled child and severely disabled child elements of child tax credit and the disabled worker and severely disabled worker elements of working tax credit—in line with CPI. This decision was taken to protect those benefits that help with the extra cost of disability. The regulations also increase the earnings threshold for those entitled to child tax credit only, after which payments begin to be tapered away.
The regulations and orders before the Committee today protect the most vulnerable by ensuring that the guardian’s allowance and the elements of working tax credits and child tax credits designed to assist with the extra costs of disability keep pace with the change in prices. This Government have ensured that these elements of financial support paid to low-income and vulnerable households have kept pace with inflation and will continue to do so until the end of this Parliament.
Alongside the broader steps that this Government are taking to support hard-working families with the costs of living, these regulations and orders make sure that support for the most vulnerable in the tax credit system is protected, even in the context of tough decisions elsewhere. The Government’s approach is helping to secure the recovery now and for the longer term. I commend these regulations and orders to the Committee.
Lord Tunnicliffe (Lab)
My Lords, I commend the Minister for not making the classic mini-Budget speech before introducing these orders, as has been done on previous anniversaries. I shall also put my mini-Budget speech to one side and save us all a great deal of time. The two orders reveal the difference between us on CPI and RPI and I will not rehearse that. The explanatory memorandum to the final instrument, the Tax Credits Up-rating Regulations 2014, says that they will go up 2.7%. I casually spoke to my computer about this and in Regulation 2, the amendment of the Child Tax Credit Regulations 2002, the figure of £5,735 goes up to £5,850. My computer says that this is 2%. The next figure, of £6,955, goes up to £7,105. Sheer curiosity demands that I ask why this is more like 2% than 2.7%. I am sure that there is a cunning answer.
Lord Newby
My Lords, I am sure that there is a cunning answer. I am equally sure that I do not know what it is, so I am afraid that I will have to write to the noble Lord with my cunning answer.
Guardian’s Allowance Up-rating (Northern Ireland) Order 2014
(10 years, 1 month ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Newby
That the Grand Committee do consider the Guardian’s Allowance Up-rating (Northern Ireland) Order 2014.
Relevant document: 22nd Report from the Joint Committee on Statutory Instruments
Tax Credits Up-rating Regulations 2014
(10 years, 1 month ago)
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Lord Newby
That the Grand Committee do consider the Tax Credits Up-rating Regulations 2014.
Relevant document: 22nd Report from the Joint Committee on Statutory Instruments
Electricity and Gas (Energy Companies Obligation) (Amendment) Order 2014
Baroness Verma
That the Grand Committee do consider the Electricity and Gas (Energy Companies Obligation) (Amendment) Order 2014.
Relevant document: 22nd Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
The energy company obligation, commonly referred to as ECO, has a number of important policy objectives. These are designed to reduce the UK’s carbon emissions, which is essential to meeting the UK’s statutory domestic carbon budgets and helping to tackle fuel poverty, by requiring suppliers to install energy efficiency and insulation measures in fuel-poor households.
Energy bills and the cost impacts to customers as a result of ECO have been the subject of great debate in the past few months. As noble Lords are aware, my department launched a consultation on the future delivery of the scheme earlier this month. This included proposals announced by the Secretary of State. The proposed changes to ECO are designed to reduce the cost of the scheme and therefore bill savings to customers.
Before I go on to explain the technical changes, I would like quickly to illustrate the progress of the scheme in its first year. We have seen more than 500,000 households already benefiting from ECO support. In total, we have helped more than 200,000 low-income households through the affordable warmth obligation. We have helped 88,000 households under the carbon saving communities obligation, which focuses on low-income areas. That is more than 335,000 measures in total over ECO’s first year. These numbers are a testament to the success of the scheme in driving home energy efficiency. The scheme’s successful delivery is because of huge effort from a variety of stakeholders—including local authorities, industry and local government elsewhere—who all played a vital role. It is important that that success continues. However, it is also important to recognise that where improvements need to be made, we must make them. The information stakeholders told us that some technical areas need some change. That is the primary reason we consulted last year.
Going on to the range of technical amendments and updates, I will highlight two amendments to noble Lords. First, the provision to ensure that ECO measures can be installed in a period when a property is not occupied, commonly referred to as a void period, will enable ECO measures to be installed in a property when it is empty. We made this change because the existing rules constrained the ability to install more complex measures, such as large-scale retrofits. The amendment will remove the constraints and enable these measures to be installed. Feedback from stakeholders revealed that it is often best to carry out more complex work, such as solid wall insulation and whole-house retrofits, when a property is empty. The order clarifies the position on empty properties.
Secondly, there is provision for certain people in receipt of universal credit to be eligible for support under the affordable warmth obligation. Universal credit is the Government’s new benefit system, and it is important that the policy includes it so that people who should be eligible to receive help are not missed out. The order will allow recipients of universal credit to receive affordable warmth support in circumstances that reflect as closely as practicable the existing affordable warmth group criteria for recipients of other benefits. In addition to the amendments on void periods and the inclusion of universal credit, the order makes some more minor technical amendments, such as amending the scoring rules that apply to glazing measures so that suppliers can be credited with the full carbon savings from the installation of glazing measures.
We are harmonising ECO regulations as they relate to solid wall insulation with the latest requirements of building regulations. The order removes the requirement for solid wall insulation installed under ECO to reduce the U-value of a treated wall to a specified amount. The U-value measures the transmission of heat through the wall. As a result of this amendment, suppliers will simply need to meet standards required under building regulations.
We are making it easier to deliver district heating systems by removing the six-month rule to allow more time. Under the carbon emissions reduction obligation, a connection to a district heating system is eligible only if it is installed at the same property as hard-to-treat cavity wall insulation and solid wall insulation. Under the current rules, it must also be installed within six months of the wall insulation. This order removes that six-month rule for district heating systems. That is in response to concerns that the six-month limit could limit opportunities to deliver large district heating system projects. The change will help to facilitate the delivery of district heating systems.
We have also increased the flexibility for suppliers to receive credit for excess actions. That is because they have already been paid for by suppliers and consumers, and would otherwise be lost investment. With regard to the transfer of excess actions between obligated suppliers, Article 7 of the order inserts new Article 21A into the ECO order, which will allow suppliers to apply to the ECO administrator—that is, Ofgem—to transfer excess actions to another licence holder. The term “excess actions” is used in the legislation to describe work completed under energy efficiency schemes prior to ECO which were not needed to fulfil those schemes’ targets and have since been approved by Ofgem to be carried forward to ECO.
We are making some minor amendments to the definitions relating to parental responsibility to bring them in line with the legislation governing tax and credits. These amendments align the ECO order more closely with legislation governing benefits and tax credits, and will therefore make it easier for suppliers to check whether a person is eligible for affordable warmth support.
In conclusion, I believe that these amendments to the ECO order, while modest overall, will none the less be vital in ensuring that the scheme continues to progress as smoothly as possible, and I am supported in this view by the overwhelming number of positive consultation responses we received. I commend the order to the Committee.
Lord Teverson (LD)
I thank the Minister for that explanation. It is obvious that detailed regulations such as these need to be changed as a result of the experience of contractors and consumers. As the Minister said, when you want to make major changes to houses, it makes complete sense that they should be done during a period when they are unoccupied. It is common sense. If I were in that situation, whether I was the future owner or the contractor, that is exactly what I would want to do.
I also welcome the fact that district heating systems appear in the order. We do not have enough of them in the United Kingdom. We do not have sufficient infrastructure. I welcome anything that makes them easier, even if it is just changing the limits.
On getting distortions out of the market, the Explanatory Memorandum refers to contractors changing window panes instead of whole windows because the regulations state that you can do one and not the other. It is clearly ridiculous. It is the sort of distortion that we need to put right.
I have one question about excess works. I could not understand from the Explanatory Memorandum or from what my noble friend said why, given that this is public money, we want to pay energy suppliers—we might feel they are hard done by generally but, on the whole, we do not—for work that they have not budgeted properly for so there is an excess. I do not understand that. I understand that there may be some effect on the public purse through this, but I would be interested in an explanation of why this is so important. It is up to them to manage their works programme in conjunction with the Government’s programme which, on the whole, is pretty clear.
Baroness Worthington (Lab)
My Lords, I thank the Minister for her introduction to this order. Like the noble Lord, Lord Teverson, we welcome many things here. The order helps to clarify, simplify and tidy up a number of issues about the way the ECO order is currently implemented. I shall say a word about the broader picture, to which the Minister referred. Changes to ECO have been much talked about and were introduced as the Government’s attempt to reduce costs for bill payers.
It strikes me as odd that this is where the Government are choosing to focus. After all, measures to increase the energy efficiency of homes are one of the clearest measures we have for reducing bills. They may add to the incremental unit cost very marginally but, overall, people who have measures undertaken will see their bills fall, yet the Government have chosen to reduce the level of activity under ECO by extending it over a longer period—that is, for measures that do not relate to fuel poverty. We understand that the fuel poverty measures remain in place and are being extended to 2017, which is sensible. However, it seems that overall the effect of the Government’s policy on ECO has been to see a reduction in activity. We have certainly had representations from the insulation industry which is very concerned that the level of activity has dropped off precipitously.
I am sure we have an afternoon ahead of us in which we will discuss many issues, including gas pricing and fracking. All that will relate to this key topic of trying to keep bills affordable and making sure that we are decarbonising at least cost. In that sense, making ECO work more effectively is obviously a good thing.
I have a question on the excess actions credit. Perhaps I was unable to devote enough time to it, but I am not sure whether it is a kind of trading mechanism that enables suppliers to transfer overachievement to another supplier, whether it is a financial action between suppliers or whether it is something involving Ofgem and the Government. Perhaps the Minister can say a few more words about how it will work. I imagine the provision is there because some suppliers were expecting to be required to comply in full, and it was only when the Government rather hastily decided to extend ECO without increasing the level of activity that they perhaps found themselves with an overabundance of credit and are trying to find out what they can do with it. It would be helpful to hear a bit more about that.
On the other measures, I am pleased that the void period is being addressed, which seems entirely sensible. I want some reassurance from the noble Baroness that the provisions on giving credit to glazing and on changes to solid walls will not encourage less activity but that the right activity is being incentivised. I am sure that these orders are sensible.
Baroness Verma
My Lords, I thank my noble friend and the noble Baroness for their warm welcome of these minor changes to the legislation. As to their question about excess actions, perhaps I may first assure my noble friend that it does not involve public money. It is an activity that energy bill payers have already paid for. We do not want them to pay again. This amendment therefore helps to reduce or prevent that risk.
As regards the question around glazing, under current legislation—and I am sorry if I did not make myself clearer—suppliers receive only a partial score when they install a glazing measure. Policy officials received information that suggests that our scoring policy may inadvertently affect people’s choices about the measures that were right for their property. This amendment allows glazing measures to receive the full score for carbon savings. That will ensure that suppliers are encouraged not to deliver replacement panes, which do not fall into the definition, but to put in full replacement double glazing, which is far more effective at saving energy.
As regards the noble Baroness’s point about changing ECO, we had to do so because we, like her, want to ensure that bill payers—those who came back to us saying that they were finding difficulty—have some sort of mechanism to help them to reduce that burden. The Government listened carefully, and that is why we proposed the changes. We have not reduced the measures that we are going to take. In fact, we have extended the period, which enables us to carry out not only those measures but further measures. We must not be cynical about these matters. We listened carefully, we needed to respond, we have responded and all those who have responded have done so favourably. While we, of course, want to make sure that the measures are on track, we need to ensure that we are reducing carbon emissions and putting into place energy efficiency measures. We should see this in the round. The noble Baroness and I have often debated this issue. There has to be value for money in addition to all the other measures that need to be taken into account, otherwise those measures will not be taken up.
I reassure noble Lords that these amendments go a little further in ensuring that the energy efficiency measures that we are all keen on are taken up. I hope that I have reassured noble Lords enough for them to be able to commend the order.
Baroness Worthington
I thank the Minister. I will pick up on the point that everyone is in favour of these eco-changes. Is it the case that nobody from the insulation industry has made representations about the drop-off in the rate of measures being taken up?
Baroness Verma
Of course, there are difficult challenges. We are trying, through all the other measures, to reassure those industries that feared a drop-off that we have taken other measures to counter that drop-off. Whether we have done it in a way which is slightly blunter than we would have wanted, the important thing is that we have now come to part of the process where those business organisations which felt that there would be an impact are beginning to see, in the wider discussion, that they now have greater certainty that those measures will have the same sort of support that other measures were getting.
Renewables Obligation (Amendment) Order 2014
Baroness Verma
That the Grand Committee do consider the Renewables Obligation (Amendment) Order 2014.
Relevant documents: 22nd Report from the Joint Committee on Statutory Instruments, 34th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, the renewables obligation is the Government’s main mechanism for supporting renewables electricity generation in the UK. The obligation has been the subject of previous change, the most significant being the introduction of banding of support for different technologies in 2009.
The changes that I put before the Committee today are less radical. They are about offering renewable electricity generators a choice between support under the renewables obligation and the contract for difference, while protecting consumers by ensuring that no generation can receive support from two schemes at once. They are about strengthening the sustainability reporting requirements for biomass used for electricity generation.
The order introduces changes in two main areas: the transition away from the renewables obligation to the new contract for difference, and the move to greater carbon savings and increased sustainability of the biomass used. As noble Lords will be aware, the Government expect the new contract for difference to open for applications this autumn, subject to parliamentary assent and state aid approval. The renewables obligation will remain open to applications until 31 March 2017 to allow for a period of transition in which eligible new renewable capacity will have a choice between the two support schemes. The renewables obligation will then run for a further 20 years to support the capacity already accredited within it.
The changes within this order set out a straightforward process for applications for the renewables obligation during the transition period, when both the renewables obligation and the contract for difference will be open for applications. Renewable generators will be required to choose which scheme to apply for, and will declare as part of their application that they are not also applying for the alternative scheme. This declaration will be subject to checks through data sharing between Ofgem and the National Grid as the contract for difference delivery body.
Once a generator has applied for a scheme for a particular generating station or generating capacity, they will then not be able to withdraw that application and apply for the other scheme instead. However, if the application fails for any reason, the generator will then be able to apply for the other scheme. This process involves minimal administrative burden on both the generator and the scheme administrators, while giving consumers and the Government assurance that no capacity will be supported through both schemes.
This choice of scheme is open not only to new renewable generating stations but to additional capacity at existing stations where that capacity is more than 5 megawatts. Generators will also be able to apply for a contract for difference for additional capacity of this sort after the renewables obligation closure date.
These provisions ensure that generating stations already within the renewables obligation which have the opportunity to expand are able to do so, making efficient use of existing generating resources. For similar reasons, biomass and offshore wind stations accredited within the renewables obligation will also have the opportunity to enter some capacity into a contract for difference under certain circumstances.
The dual scheme facilities which result, with some capacity supported by the renewables obligation and some by a contract for difference, will be required to meter electricity generation and measure fuel usage separately under each scheme. Again, Ofgem and the contract for difference counterparty will work closely together to ensure that only the generation from capacity within each scheme will receive support under that scheme.
The Government will lay further statutory instruments before noble Lords in coming months to take forward other aspects of transition policy. These include a renewables obligation closure order, which will set the date of closure of the renewables obligation to new capacity and implement grace periods for that closure date. These grace periods have been developed partly in response to concerns raised by noble Lords during Energy Bill debates last year and are key to investor confidence during the transition period.
In addition, the Government intend to lay a consolidated version of the renewables obligation order before the House later on in the year, implementing some final elements of transition policy relating to biomass conversions and to the capacity market.
The Government are committed to achieving sustainable, low-carbon bioenergy deployment. The use of effective sustainability criteria forms a key part of the Government’s approach and is essential for the public acceptability of biomass.
The order strengthens the reporting requirements and introduces audit requirements for solid biomass under the renewables obligation. This will enable generators to familiarise themselves with the sustainability criteria and put appropriate compliance systems in place ahead of the Government’s intended introduction of mandatory sustainability standards in 2015.
Those changes will encourage the use of biomass that delivers genuine greenhouse gas emissions savings compared with fossil fuel use and is sourced from land that is sustainably managed, not from land with a high biodiversity value or carbon stocks. The main changes to the biomass sustainability criteria introduced within the order include reporting against a tighter minimum greenhouse gas emissions savings target for new dedicated biomass generating stations and preventing larger generating stations making use of the various default values for greenhouse gas emissions from solid biomass. In future, stations producing more than 1 megawatt will have to report actual values, and we encourage the use of the greenhouse gas calculation tool made available by Ofgem.
The order also introduces new sustainable forest management criteria for virgin woodfuel based on Defra’s UK timber procurement policy, UK-TPP, for central government. The current land criteria were designed with sustainable agriculture in mind, rather than forests. The UK timber procurement policy draws on established sustainable forest certification schemes that cover a range of environmental and economic issues relating to forests.
The forest management criteria also provide for bespoke evidence to be provided by generators to demonstrate compliance where forests are not certified by a recognised scheme. The land criteria for biomass that is not wood will remain in line with the land criteria set out in the EU renewable energy directive.
The order introduces new reporting requirements to provide greater detail about any non-waste wood that is used and where it has come from. This includes the name of the forest, the species of wood and the forest or land management practices that were used. There are also new reporting requirements on the previous use of land in the case of energy crops and the standardisation of the units that are used to report the volume and mass of the biomass.
The order will bring in a new audit requirement for generating stations over 1 megawatt that use solid biomass or biogas. This is based on the audit requirement that already applies to generating stations using bioliquids. It provides for an independent assessment of these stations’ performances against the sustainability criteria. The audit requirements have been brought more closely in line with similar requirements applying to transport biofuels under the renewable transport fuels obligation to provide greater consistency across schemes.
There are a number of exceptions from the reporting requirements and from the sustainability criteria for biomass fuels such as municipal waste, landfill gas, sewage gas and manure. That reflects their lower sustainability risks. Our intention is that the contracts for difference awarded under the first delivery plan period for bioenergy will follow the same approach as the sustainability standards set under the renewables obligation. Our aim is to ensure that bioenergy offers a genuine reduction in greenhouse gas emissions, that this reduction is cost effective, and that the biomass is produced sustainably and contributes both to our renewables target and to ensuring energy security.
Our sustainability criteria have taken into consideration the European Commission’s recommendations in its 2010 report. However, our approach departs from the Commission’s report in areas where we recognise the need for more robust sustainability criteria to help us to deliver our UK policy priorities of maximising the carbon savings from bioenergy, minimising the environmental risks and making best use of the biomass resource available, both for energy and non-energy purposes. Being robust also means being mindful of the need to develop criteria which are realistic, measurable and deliverable.
I understand that an order has been laid before the Scottish Parliament which introduces similar changes to the renewables obligation in Scotland on both biomass sustainability and transition. I also understand that the Northern Ireland Executive will bring forward an order introducing changes on biomass sustainability later on, as the contracts for difference will not be introduced in Northern Ireland until 2016.
I am sure that all noble Lords will appreciate the value and importance of offering a choice of scheme to the renewables industry during this important period of transition towards the contract for difference, and I therefore commend this order to the House.
Lord Teverson (LD)
My Lords, I will be very brief. In general, I welcome this order and thank the Minister for presenting it to us so well.
I want to delve into the question of the sustainability aspect, and how that ties in with European regulations. I note that on page 7 of the impact assessment, at the bottom of paragraph 4, it says,
“The EU mandated the sustainability criteria to be used for bioliquids and transport biofuels under the Renewable Energy Directive. However, the EU left the introduction of sustainability criteria for solid biomass and biogas used for electricity and heat to the discretion of each member state, subject to compliance with EU Treaty rules, such as the internal market”.
I would be interested to hear from the Minister, in very general terms, what other EU states are doing on sustainability. I would be interested to understand in particular whether, when power stations with biomass want to import biomass from another EU member state, we can insist—under the single market, which is mentioned there—that those products comply with UK standards as opposed to the originating EU state requirement.
Viscount Ridley (Con)
My Lords, I declare an interest in various forms of energy as detailed in the register, including both coal and forestry. I welcome what the Minister said about improvements to the requirements on auditing, sustainability and reporting, but I draw her attention to a report in the Mail on Sunday last weekend on exactly where the fuel for Drax biomass is coming from in the Carolinas. It is clear that whole trees are being logged for that. I draw her attention also to a report that came out last month from the International Council on Clean Transportation, which stated:
“Consistent with earlier studies, we find that pathways based on whole-tree logging in forests offer little or no climate mitigation over 50 years. We also show that reduced impact logging does not deliver GHG savings within 50 years. These bioenergy feedstocks are not good candidates from a climate policy point of view”.
I would just continue the debate with those points.
Baroness Worthington (Lab)
My Lords, I am grateful to the Minister for introducing these changes to the RO. They cover two issues: the non-duplication of being able to receive funding through both the RO and CFDs, which seems eminently sensible and an important tidying-up. On the sustainability of biomass, this is obviously a complicated issue, but I say in response to the comments made by the noble Viscount, Lord Ridley, that we have to keep a sense of proportion about this. There is a danger that we start to confuse the CO2 emitted from the chimney of a biomass plant with the fossilised CO2 that comes from the burning of fossil fuels. One is a function of the flow of biospheric carbon, meaning that trees absorb carbon while they are growing and then emit it when they are burnt. This has been happening since man crawled out of a cave and is not of the order of magnitude that we see with the fossil-fuel impact, whereby one is taking carbon stored over many millennia and releasing it into the atmosphere. I am glad that the noble Viscount made reference to the article in the Mail on Sunday because there is a real danger that we are slipping into a misunderstanding whereby we equate CO2 from a chimney with adding to the stock in the atmosphere. That would be regrettable, because biomass does not contribute in the same way as fossil fuels.
However, we are of course keen that all biomass should be sustainable and I think that we all agree that its best use is probably not in power generation but in the generation of heat. Therefore, CHP plants and use of biomass in district and smaller-scale heating is probably the most sustainable use. We also face the great challenge of reducing the carbon intensity of our power sector. There are sustainable sources of biomass out there from well managed forestry. We have used forestry to a far greater extent for paper production. While that is decreasing, we are now seeing an increase in use for energy to displace fossil fuels. That cannot be something that we want to stop; it is something that we want to manage, with good, strong reporting. It creates livelihoods; it creates income. Management of forests is a well established form of economic activity and we should not seek to stop it.
It strikes me as slightly odd that the Minister should state that municipal waste has a lower sustainability impact, because much of the calorific content of municipal waste comes from plastics, which are obviously a fossil fuel. I am trying to avoid the singling-out of biomass for special treatment when other forms of energy are not perhaps treated in the same way. It is true that biomass should be under scrutiny because it is a less energy-dense form of material and its upstream emissions can therefore have a disproportionate impact, but it is also true that we do not add on the life-cycle emissions to gas—LNG, for example, has a different carbon intensity if taken on a whole well-to-wheel basis from natural gas or fracked gas. We do not load our normal carbon accounting to those fuels, yet we do with biomass. I am arguing in favour of proportion and trying to get the balance right.
This is especially important in the UK as we consider how we are to meet our targets at 2020. I am sure that the demise of a couple of high-profile biomass projects—the Eggborough project and the REA’s dedicated biomass project—will not have escaped the Minister’s attention, both signalling that they are no longer seeking to pursue renewable options. That raises questions, because it means that we might be more reliant on more expensive forms of renewable power. It would be regrettable if that were the outcome: that an overzealous approach to biomass forces us into ever more expensive options. With offshore wind, we have the added cost of having to make sure that we have security of supply and back-up. Biomass has at least one very strong benefit, and that is its firm power. It can be stored, it is reliable and it will be there when the wind is not blowing and the sun is not shining. As I said at the beginning, we are keen that all biomass is sustainable, so we welcome the proposals. It is all about getting the proportion right and treating biomass fairly, relative to other sources.
I want to raise just one other issue. The noble Baroness referred to the fact that we have further changes to the RO coming forward. I have had representation from the Low Carbon Finance Investment Group that DECC has recently raised the possibility of introducing competition into the RO and that, in line with the desire to move towards competitive auctions in the CFD, it was mooted that we might require some form of competition in the RO. This would be a significant change and not one that would be welcomed, because it would almost certainly be retroactive in its application.
Therefore, I would like some reassurance from the noble Baroness that, although it has been put out that we might seek to do this to the RO, this is not the case. I am sure that it would significantly change the way in which the instrument operates to its detriment. Those are the comments that we see. This is an order that we welcome because it is tidying up, but it raises some concerns and I hope that the Minister will be able to make some reassuring statements.
Viscount Ridley
Before the noble Baroness sits down, I may have misunderstood what she said, but as far as an infrared beam is concerned, is there really a difference between a carbon dioxide molecule that came from burnt gas and one that came from burnt wood?
Baroness Worthington
No, absolutely not. It is about the flow, compared to the stock. I am sure that CO2 values differ throughout the year and a large part of that depends on how much foliage we have. CO2 is not permanently in the atmosphere, it is sucked in and out, depending on the atmosphere and the biosphere and how those interrelate. What we are doing with fossil fuel, as noble Lords will know, is extracting carbon that was once stored and releasing it very rapidly into the atmosphere, which is changing its composition. Concentrations in the atmosphere are now at record levels, touching 400 parts per million, and they have not been at that level for many hundreds of thousands of years.
Baroness Verma
My Lords, I am grateful for the support of all noble Lords—my noble friends and the noble Baroness—for the changes that we are making. A couple of questions have been raised that I will endeavour to answer quickly. My noble friend Lord Teverson asked if other member states were doing similar things, in line with our standards. We are aware that the Netherlands, Denmark and Germany are introducing their own criteria, but imports from the EU would be required to meet our standards here. We propose to notify these standards under the technical standards directive to ensure that we can insist that fuels used under the renewables obligation meet our standards. I think that should reassure my noble friend that we are maintaining our standards.
My noble friend Lord Ridley mentioned the Mail on Sunday article. Unfortunately I did not read it but will take my noble friend’s word about its content and the argument that biomass is dirtier than coal. We need to reflect that in all the debates we are having around bioenergy—biogas and alternative sources of fuel. We need to ensure that we work towards a cleaner availability of fuel. There will be debates either way, and we need to discuss it fully and properly.
It is absolutely right that there are questions still to be answered and which need a proper and thorough debate. I am sure noble Lords are all up for that debate but would say to my noble friend that the argument that biomass is dirtier than coal is only based on the model assumption that all wood removed from the forest, including the high-value, high-quality sawlogs used in energy, does not make it any dirtier. Perhaps that is a debate for another day.
The noble Baroness, Lady Worthington, asked about early RO closure and competition. My notes say that no decisions have been taken on any changes to the RO, and the Government would obviously seek to protect companies that have made significant financial commitments from the impact of any changes. However, we will have consultations on this and will invite comment on whether and how to make any changes that might affect stakeholders. I am sure we will reflect on that and then respond on that basis.
I thank noble Lords for their contributions. I will read Hansard very carefully tomorrow because we go into the extreme of technicality when I discuss anything like this with the noble Baroness, Lady Worthington. If there is anything outstanding, I of course pledge to write to all noble Lords. I think that we are seeing two very important changes today, the first on transition and the second regarding biomass, to encourage a greater delivery of carbon savings. On that note, I commend the order to the Committee.
Energy: Fracking
(10 years, 1 month ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Borwick
To ask Her Majesty’s Government what assessment they have made of the report by the Centre for Policy Studies, Why Every Serious Environmentalist Should Favour Fracking.
Lord Borwick (Con)
My Lords, I declare my interests, recorded in the register, in a land company and as a trustee of the British Lung Foundation.
I have, at my own cost, visited Williamsport, Pennsylvania, in the United States. It is widely known as the heart of “Frackistan”—a place where shale gas extraction is growing apace. What I saw in Williamsport is a new city built to service a new industry, and beautiful countryside that was still beautiful. Behind the trees might be the top of a drilling rig, but when we went to the production site, there were only a couple of acres of stones. Only underneath them could you see the plastic membrane put down to protect the environment from minute spills that rarely happen. Such rainwater as falls on those membranes is prevented from seeping into the ground. Instead, it is gathered and used in the production process. At the natural gas well we saw, there was nothing much higher than five metres. It comprised a Christmas tree, a compressor and a meter hut for measuring the wealth produced in that site and put into the major gas pipelines that eventually flow into homes and factories. I am grateful to Anadarko for letting me see its site, its safety processes and the enormous efforts it pursues to prevent pollution. Those guys are working hard and succeeding to make sure no harm occurs.
When you think about fracking—pumping water, sand and chemicals into shale formations far below the Earth’s surface—perhaps you might think that it would involve a great deal more machinery, equipment and land space. However, it reminded me somewhat of Winter Wonderland, an amusement park that stands in Hyde Park for a couple of months around Christmas. It is put up in one of the most protected and lovely green spaces in the whole country, but the point is that Winter Wonderland is temporary and goes away pretty soon. There is noise, there are lights and there is extra traffic, but they go away and you would not even know the site was there. The same happens with a shale site. Once the initial flurry is over, the actual production phase is pretty benign. The intrusion stops but the wealth carries on.
The air quality in Shanghai today is rated at 155. That means it is classified as “unhealthy” and:
“Everyone may begin to experience health effects”.
In Beijing, air quality has recently reached levels of 551—extremely dangerous. This matters in the environmental debate on shale, because that bad air is largely caused by coal. Extracting shale gas seems to be the perfect way to mitigate global emissions while stimulating global economic growth. As the paper by the Centre for Policy Studies suggests, shale gas technology should be advanced as rapidly as possible and shared widely, to cut emissions and improve air quality.
I have known Professor Muller, one the authors of the CPS paper, for some years. He is a scientist, not a politician. Professor Muller is a physicist of world standing, receiving distinguished teaching awards from Berkeley. He assesses facts and then comes to a conclusion. He does not try to make his work embrace preconceived ideas. Professor Muller co-founded the Berkeley Earth organisation at the University of California in 2010, to examine historical temperature records. He returned to the base data, to check them without the hot air of politics. After much work, he concluded that climate change exists and that the levels of change are quite small. He also concluded that the change was correlated enough with the rise in carbon dioxide to say that it is manmade.
After extensive work, Professor Muller has shown in this CPS paper that shale gas extraction will actually reduce emissions. After all, global warming is a global problem: a tonne of Chinese CO2 is as bad as a tonne of British CO2. It is global warming, not British warming. Crucially, extracting shale gas instead of burning coal will also reduce the amount of harmful particulate matter 2.5 in the air. PM2.5s are tiny dust particles that penetrate deep into human lungs. The presence in the air of PM2.5 causes people to die: 75,000 a year in the US and 400,000 a year in Europe. Its levels still go unregulated in the developing world and it currently kills more people annually than either AIDS, malaria, diabetes or tuberculosis. Shale gas offers an opportunity to cut massively PM2.5’s presence in the air. If extraction expertise were shared, we also could see a big drop off in CO2 emissions in the developing world.
There are many environmental concerns about shale but Professor Muller takes each one in turn and dispels them all. The first is that shale gas production depletes limited supplies of fresh water. However, shale extraction sites have lots of salty water reserves underneath, too. It is becoming standard, and cheaper, for brine to replace fresh water at all sites. Already in the US about half of the water used is brine.
The now famous short film “Gasland” highlighted another potential environmental issue—the “flaming faucets”. In the film the director, Josh Fox, is shown in the home of a landowner near a shale site igniting gas from a tap with a cigarette lighter. He later admitted that the taps were leaking long before shale extraction started.
Noted scientist Yoko Ono also chipped in with a series of adverts warning that,
“fracking makes all water dirty”.
The best way to combat pollution is to apply tight regulations and big penalties if any companies were to contaminate the Earth—much the same as happens now with companies supplying oil or natural gas.
Perhaps the most notorious environmental concern in the UK debate is that of fracking-induced earthquakes. The argument goes that if we start drilling under Blackpool, the whole of Lancashire will be rocking. However, let us not forget that earthquakes are recorded almost every day in the UK, and a brief glance at the list of the most recent events tells us that most of them occur at New Ollerton in north Nottinghamshire. It is a big coal-mining area. There was one there on Friday evening at 9.30 pm with a magnitude of 1.5, and across the UK there have been 38 in the past 30 days. The point is that energy extraction causes very minor tremors. In any case, the Government are ensuring safeguards that immediately stop extraction if tremors of 0.5 or more on the Richter scale are recorded. It may be that that level is too low because that is barely more than the shock felt from 10 Lords a-leaping.
Professor Muller has provided a robust environmental case for proceeding with shale extraction. However, he is not the only one. In 2012, the Royal Society and the Royal Academy of Engineering found that the health, safety and environmental risks of shale extraction can be managed effectively in the UK. We have a track record for extracting a lucrative natural resource with little environmental impact. For instance, people said that we would cause lots of environmental damage when drilling for oil in the North Sea but, with the right research and regulation, we managed it.
Rightly, the Government have promoted the power of localism. People should have the right to have a say on the factors that affect them locally. With drilling for shale, the community will certainly have a say. Those who are afraid should be reminded that the Health and Safety Executive and the Environment Agency can both put a stop to drilling, even if the council gives the all-clear. Throughout the planning industry, though, localism is limited by a duty to co-operate—one area’s localism must not ruin another area’s locality.
With shale, there will be a duty to co-operate within government—that is, among departments. The Treasury, the Department for Business, Innovation and Skills, the Department for Communities and Local Government, the Foreign Office, the Ministry of Defence and the Department for Work and Pensions should all work with the Department of Energy and Climate Change to get it done; they are all affected in some way. Energy security has an impact on the Foreign Office and defence. Europe imports about 30% of its natural gas from Russia, which has frightening implications. As Fraser Nelson remarked in the Telegraph:
“Of all the weapons in America’s arsenal, its new energy power is perhaps what the Kremlin fears most”.
Let us also remember that America’s shale revolution, which produces oil as well as gas, has allowed it to disengage from the Middle East.
The economic benefits could be extraordinary, which should interest the Treasury. There should be a surge in tax revenues and reduced costs in imports. As a deficit-cutting measure, it should be right at the top of the top of the list. For the DWP, shale gas extraction could create around 74,000 jobs, with geologists in Lancashire and mechanics in Sussex. Councils could see a surge in business rate revenue, too.
Shale gas is the sort of subject that this House excels at because it affects so many different government departments. The Select Committee report on ageing was another example of this. Our economics committee has been considering this subject, and I very much look forward to hearing its views. Perhaps there should be a Lords Select Committee study into the cross-departmental benefits of shale gas extraction, to ensure that this industry gets going as soon as possible.
Lord Lawson of Blaby (Con)
My Lords, I congratulate most warmly my noble friend Lord Borwick on securing this debate on a very important subject, and on the contribution that he has just made in opening the debate, which has covered all the ground that needs to be covered.
Although I am a member of the Select Committee on Economic Affairs in this House, and although we are in the process of producing a report on UK shale resources, I cannot speak for the committee; I can give only a personal view. The committee will be producing its report in due course and I hope it will be a useful one. On the whole I think that reports by the Economic Affairs Committee of this House have tended to be useful over the years, and I hope this will be another one. However, I cannot speak today for the committee. I speak personally.
I have been interested in the energy scene for a very long time. I think it is 33 years since I was appointed Secretary of State for Energy, and I have watched how the energy scene has changed and developed throughout those years and I have retained an interest in it. In all that time, I have never known any development that was as exciting, promising, game-changing and beneficial as this technological development, a mixture of horizontal drilling and fracking—the fracturing of the shale rock—which has enabled access to reserves of shale gas, and indeed, increasingly, as my noble friend said, shale oil. Geologists have known these to exist for many decades but it has only just been discovered—remarkably, as a result of small-scale enterprise, not by any of the big oil companies—how they could be accessed economically.
The amounts involved are massive. It used to be said that the world was running out of oil and gas, and that fossil fuels had a finite life. We now see a greater abundance than there has ever been of gas and oil, which produce the energy on which all our economies rely. That is of course in just this development, which is huge—massive. But other people are interested in the development of offshore coal bed methane. On a much larger scale of particular interest is Japan, which is doing a great deal of development on this front, on methane hydrates. That is a further stage for the future, but shale gas is here with us now. As my noble friend said, the recent troubles in Ukraine have pointed out not merely that this is of great economic benefit but that it has important geopolitical consequences. For Europe in particular, to be much less dependent on Russian gas cannot but be a huge geopolitical plus.
We are lucky in this country, because it is quite clear in the surveys done by the Geological Society that we have a particular abundance of shale resources—particularly, as my noble friend pointed out, with the Bowland shale in Lancashire and other parts of the north-west. The Government have said from time to time that they want to rebalance the economy, by which they mean having more activity and success in the north of England rather than simply in the south. That is where the shale gas is. However, we do not know how much of it is economic because virtually no drilling has gone on. My noble friend was absolutely right to point out the fallacies in a lot of the so-called environmental objections to fracking. Nevertheless, virtually nothing is happening, which is of great concern. We really will not know what we have in this country until we can do the exploration. Once we have done that and have an assessment of what we have, there will then be the question of whether to do the production. However, there has to be the exploration so that we can know what we have got.
Perhaps the biggest single problem at the moment is the question of environmental regulation. It is very important that there is a rigorous environmental system of regulation. I do not think that anybody questions that, but the system needs to be not only rigorous but clear and as speedy as is consistent with that rigour. Nobody could say that our system is clear; certainly, nobody could say that it is speedy. The Government and the agencies which are part of the Government—the authorities generally, including the Government—really have to get their act together. The present system is absurd.
As for the environmental objections, not only are they entirely without substance but you have only to go, as my noble friend has, to the United States to see that there is not an environmental problem. There is an environmental problem with windpower, which is despoiling large tracts of the British countryside. I know that beauty is in the eye of the beholder and that there are some who feel that the English countryside has been greatly enhanced by these forests of wind turbines. However, that is not a majority view and it is not a view that I share. It is reckoned that 10 square miles of fracking can produce as much energy as all the wind farms that we have in this country at present, and indeed more. My noble friend pointed out how small its footprint would be within those 10 square miles. I strongly support him in the Motion that he has brought before the Committee today.
Lord Teverson (LD)
My Lords, I, too, thank my noble friend Lord Borwick for introducing the debate, which has all sorts of strong international, let alone national, relevance at present—Ukraine has already been mentioned.
It is not often that I would almost entirely agree with a report from the Centre for Policy Studies. It is not necessarily a body of intellectual stimulation that I look to—I look more to Policy Exchange or even the IPPR—but in this instance, I think the report is on the whole excellent. For a start, it takes the whole issue of global warming to be important in terms of environmental pollution. It also deals with the fact that we have all sorts of pollutants now from the various ways that we create energy that cause real health problems in the short term. I was pleased to read that the most important policy action is to reduce energy demand and increase energy efficiency, so that we do not have to do as much of all this. That is the cheapest and best economic approach to this, although clearly, we know that we will always need energy in a global and national economy.
To me, from a UK perspective, shale is an important resource that should be developed. From the most basic point of view, our North Sea oil and North Sea conventional gas production is falling very rapidly. For our national strategic energy and economic needs, it can be at least a substitute. Not only that, as the noble Lord, Lord Lawson, said, we have one of the best environmental records in the world. We should not be afraid of the environmental aspects and threats of shale gas and oil; we need absolutely to ensure that we enforce the right standards. I have every confidence that that is possible for us to do that from our long and deep experience in that area and our very successful track record. However, we should be aware that we have doubly to make sure to begin with, because if we have a problem at the beginning of this exploration and exploitation, there is a serious reputational risk for the industry.
One of the main themes of the report—this is absolutely right—is that the most important thing that shale gas has done so far and should do for the future is to substitute for coal, which is an absolute no-no fuel in terms of environmental damage. The report is quite kind to the UK about coal. It points out strongly that with Germany now at 50% and the increasing coal capacity in China, despite all the renewables investment and everything else, in the UK over the past 18 months or two years, we have been at 40% in our coal energy production. Of course, most gas in this country is used for heating rather than for providing electricity. If shale gas means that we manage to reduce the wholesale gas price or at least hold it steady, which seems to be critical, that is a great thing for consumers and fuel poverty.
However, in the longer term, we have to remember that carbon is a problem. We cannot keep on pumping it out into the atmosphere at an increasing rate, however bad we are as an international community at solving that problem. So this has to be an intermediate, medium-term strategy, not a long-term strategy, unless the long-promised carbon capture and storage happens. I tend to be slightly sceptical in that area, but I am sure that the Minister will put me right on that, as I know that she has done and continues to do important work in that area, and there has indeed been progress.
It is not necessarily predictable how successful shale gas will be. We all hoped that Poland would push it forward—again for reasons of energy security, Gazprom and Russia—but, as I understand it, Poland has not been that successful in developing that fuel. So there is a risk and hence the need for exploration and pushing the project forward.
In terms of displacement, we found that coal has been substituted very benevolently and positively in the United States, but of course large amounts of that coal have come to our shores and been used as a substitute for conventional gas in electricity generation. That coal is going to go somewhere, even if we displace it from existing economies or where shale gas is strong. We need to have a strategy for that, and obviously I would suggest an international emissions performance standard which we would all need to comply with. However, that is not something which is going to happen too quickly.
On the environmental challenge, the quantity of water needed for the process is a genuine issue which we need to prove can be solved. I am not technically or scientifically competent to talk about the move to using brine, but it sounds promising and certainly something we need to make sure happens. Despite the floods we have had, particularly in my part of the world, I am sure that water shortages will come back to haunt us in due course. I welcome the report. Shale gas is important to this country and globally, but what happens to the coal that it will displace? That is a key issue.
The paper makes some important points about methane leakage, and I would be interested to hear what research the Government are undertaking into the value of methane leakage and what the quantities are.
On the energy security side in the macro area, once again we are in a position where our reactions to the Russian Federation on Ukraine and Crimea must be tempered by the fact that to a certain degree our hands are tied behind our back because of our dependence on Russian gas. It is to be hoped that shale gas might substitute for it in the medium term. The Nabucco pipeline project is seen as pretty much dead, but I would like to understand what Britain and her European partners are doing in terms of reconsidering how we transport conventional gas supplies to eastern and central Europe without going through Russian Federation territory.
The Earl of Caithness (Con)
My Lords, I thank my noble friend Lord Borwick for introducing this important debate. I must say that I was delighted to hear the speech of the noble Lord, Lord Teverson. There is clearly hope on the left wing of the coalition, so I recommend to the noble Lord more Centre for Policy Studies papers for bedtime reading.
I was fortunate enough to serve on EU Sub-Committee D, which published a report in 2012-13 entitled, No Country is an Energy Island: Securing Investment for the EU’s Future. We looked at energy in its widest sense, and it was alarming to realise just how dependent Europe is on imported energy supplies. Evidence to the committee showed that more than 50% of its energy supplies are imported. It is even worse from the UK’s point of view. In 2003 we were a net exporter of gas, but by 2025, a mere 12 years hence, we will be importing 70% of our gas. There has been a dramatic change, and we are slowly waking up to the energy crisis that is about to hit us even harder than the committee anticipated in its report 18 months ago.
We must also bear in mind the trilemma of the problem when considering the energy crisis. Not only do we want to produce low carbon energy, we want security of supply, which I will come back to, and we want to keep our energy cheap. That is a difficult policy for any Government to implement successfully.
We looked at shale gas, and there is no doubt that it is a potential asset in the armoury of a Government who wish to secure wide diversity of supply. I fully support that policy. We should not put all our eggs in one basket, and the supply base should be as broad as possible. However, I still agree with our committee’s report and recommendation: shale gas would not be a panacea for this country. Indeed, the Government in their reply to our report said, in paragraph 57, that,
“it should not be assumed that it will bring impacts comparable to those seen in the US”.
There is a good expectation from shale gas, but we should not think that it will be an instant solution.
The UK has an enormous amount of experience in drilling and wells. More than 2 million wells have been hydraulically fractured—or fracked—worldwide, mostly in the USA. From our point of view, shale gas is much the same as North Sea gas. We have more than 50 years’ experience of getting North Sea gas out of the ground. More than 2,000 wells have been drilled onshore in that time. There is a very good case for Britain taking the lead in developing shale gas in Europe.
As has already been said, what we require is strict regulation. Regulation for shale gas should be exactly the same as for other forms of conventional oil and gas drilling. I was therefore alarmed to read in the papers—of course I am very sceptical of anything I read in the papers and am glad that the Minister had not read the Mail on Sunday article because I would not trust that—that the European Parliament reduced the standards for shale gas in a recent discussion. Could the Minister update us on the situation in Europe? It is important that it is not perceived that shale gas gets any particular benefit.
Another bit of evidence given to us supports what my noble friend Lord Teverson just said: people in Europe expect Britain to take the lead on this. We are the experts. Poland will not fulfil its potential with shale gas until Britain gives the lead. There seems to be a blockage. Given our experience that I have just mentioned, we are the ones Poland is looking at to set the standards, regulations and monitoring so that it can follow. I totally agree with my noble friend Lord Lawson about the Ukraine and Russia. Russia, perversely, might have actually done a benefit to Europe. The EU reacts really well only when there is a crisis. It will now be faced with a massive energy crisis, and that might just shake it enough to get its act together and make progress in a field where it has dragged its heels.
A difficulty with shale gas is, of course, that it does not always appear in unpopulated areas. In fact, there is quite a lot of shale gas where the country is very densely populated. England is the most densely populated nation in Europe, with more than 400 persons per square kilometre. Up in Scotland, at home, we have 40 persons per square kilometre. Texas, where we hear of all this wonderful drilling in the central part of America, has 35 persons per square kilometre. So there will be an inevitable problem, and that has already shown up, particularly in the south of England.
Lord Lawson of Blaby
My noble friend is right about the relative population densities in the United States and United Kingdom, but in fact parts of the United States have a very high population density, and fracking has been allowed there and gone very successfully. High density of population does not matter. Even in the suburbs of Los Angeles it can be done and managed. The point my noble friend made is interesting but in actual fact does not prove anything.
The Earl of Caithness
My noble friend has just completed my paragraph for me. That is exactly what I was going to say. Despite the high density of population, it can be done and has been done very successfully. It is not surprising that when you live in an area where houses are expensive, you do not mind at all that there is industrialisation of the fine Scottish landscape with turbines but you will not have anything on your own doorstep. There has to be a way for the Government to get around that hurdle of environmental intolerance by some people in the south of England.
The noble Lord, Lord Borwick, mentioned air pollution. Paris has got such bad air pollution that cars now are being driven on alternate days.
The Earl of Caithness
Perhaps I may conclude because I allowed for interruptions. There has been a recent report, Are We Fit to Frack?. The reason these so-called wildlife bodies do not like fracking is that there might be cracks in the pipework. That is what regulation is about. Those people drive cars, which are hazardous. There also is lots of light pollution. People will probably object to the very good idea of building a new town at Ebbsfleet because of light pollution.
Viscount Ridley (Con)
My Lords, I declare my interests in various forms of energy as detailed in the register, especially in coal. I congratulate my noble friend Lord Borwick on this extremely timely debate. As he probably knew, today is the 65th birthday of fracking. Through the wonders of Twitter, I found out this afternoon that it was on 17 March 1949 in Archer County, Texas, and Stephens County, Oklahoma, that the first commercial hydraulic fracturing operation happened. During those 65 years, there have been extraordinarily few environmental problems. Ken Salazar, who was Secretary of the Interior in the first Obama term, recently said that,
“there’s not a single case where hydraulic fracking has created an environmental problem for anyone”.
He continued:
“We need to make sure that story is told”.
Obviously, the oil industry and the gas industry cause problems but hydraulic fracturing itself has not produced a single environmental problem.
This is a very good topic for a debate. Professor Muller’s report goes straight to the heart of an issue that is central to the environmental debate and it needs more attention. The issue is harm reduction and choosing the lesser of two evils rather than being frightened by a small risk, thereby allowing a larger risk to happen, or allowing the best to be the enemy of the good, as Voltaire put it. For example, the environmental opponents of genetic modification have, in effect, left us using more pesticides than other countries. That has been the effect of that campaign. The environmental opponents of nuclear power have left us using more coal than other countries, as well as particularly in Germany, Japan and other places.
The question is: what would happen if we do not develop shale gas? What would be the environmental impact of not developing shale gas? I ask the Minister to press her officials to take this approach to some of the questions; namely, to weigh up not just the risks of fracking but the risks of not fracking. In this case, as Professor Muller makes clear in the paper for the Centre for Policy Studies, it would mean both more air pollution, with damaging effects on people’s health, and more carbon dioxide emissions. There is no question about that. We have several years of experience and it is clear that the environmental benefits of shale gas development that were thought about a few years ago have been drastically underestimated, whereas the environmental risks have been greatly exaggerated.
As I have mentioned, the benefits include carbon dioxide reduction. As a result of the shale gas revolution, America’s energy-related carbon dioxide emissions are now back to 1994 levels and, in per capita terms, are back to 1964 levels. That is an extraordinary change, which is much faster than in any other country on the planet. We have mentioned urban air pollution. There is also an enormous opportunity now for natural gas vehicles, which are much cheaper to run, in the United States. Many commercial fleets are turning to natural gas vehicles, which can reduce urban air pollution. Not just the displacement of coal but the displacement of diesel is a great opportunity as well.
However, there is an enormous other potential benefit from shale gas: land-sparing; that is, using less land to produce energy. As we know, renewables, as a way of trying to do without carbon dioxide emissions, need an awful lot of land. To put this in perspective, if we were to use wind power alone to try to not just reduce but prevent an increase in global carbon dioxide emissions, we would have to build a wind farm the size of the British Isles every year. That is an extraordinary number.
It is not just land but the wildlife that goes with that land. There is a recent estimate that 82,000 birds of prey are killed every year by wind turbines in the United States. If you scale that back to the size of the UK wind industry, that means 16,000 birds of prey in this country. I suspect that the number is lower than that because we do not have migration corridors of the kind they have in the USA. There are also 150,000 bats. These are some of the creatures that could survive if we decided to stop building wind turbines and started working on shale gas instead. I mentioned in another debate this afternoon the possibility that we would not have to cut down forests, and all the pollution that goes with that.
As for the environmental risks and problems of fracking, I have found over the past few years that it is like chopping the heads off a hydra: every time you meet one objection, people come up with another. We have heard things like radioactivity might be coming out of fracked wells; that has now been buried. Most people now accept that the earthquakes are extremely small; much smaller, incidentally, than the earthquakes you get from hydropower, for example. As for water contamination, the myth has been well buried now that there has been serious aquifer contamination as a result of hydraulic fracturing, and if you have seen “GasLand”, you should also make a big effort to watch “FrackNation”, the film that answers it and puts it in perspective. The methane leakage question is very interesting. A recent study from the University of Texas puts the number at about 0.4%, which is extremely low. We should remember that coal mines leak more methane than that, so using and transporting coal actually generates a lot more methane and anyway methane levels in the atmosphere are not actually rising very fast; they are rising slower than predicted by the IPCC over the past two decades.
As for the issue of using chemicals in hydraulic fracturing, we put 99.5% water and sand down the hole, with a few kitchen sink chemicals, extremely diluted. This is put into rocks that are absolutely riddled with organic toxic chemicals. That is why we are going there: to get those toxic chemicals out. So it is a bit ridiculous to worry about that aspect of things.
Above all, it is worth bearing in mind that affordable energy is itself good for the environment. As McKinsey pointed out, America has had probably $250 billion of benefit from the shale gas revolution in the past three years. Think what you can spend $250 billion on—think how much environmental benefit you can buy with that.
Baroness Jones of Moulsecoomb (GP)
My Lords, I speak as a politician but also as a scientist, albeit in a slightly more esoteric area of science. I congratulate the noble Lord, Lord Borwick, on securing this debate. It has not done anything for my blood pressure. I am so constrained by time that I cannot answer all the points that have been made but I will cover a few, I hope.
First, on pollution, the European Commission and US research have identified significant pollution risks from leaking wells, including the contamination of drinking water by methane, heavy metals, radioactive elements and carcinogenic chemicals. There is also air pollution and noise pollution. Wildlife loss is a threat, although if we want to save more birds we should ban cats rather than wind farms. PM2.5 is a very nasty component of our air here in London and major cities in Britain. If we want to cut it significantly, we should cut traffic. I would be glad to hear noble Lords’ ideas on that. It is also hard to regulate away human error. It is incredibly difficult to make anything completely safe.
On costs, instead of investing in energy efficiency to reduce our bills, our Government are giving 50% tax giveaways to an industry forecast to have rising prices for decades. The Secretary of State for Energy, Ed Davey, warns that it would be really expensive if we were over reliant on gas. Furthermore, UK fracking is likely to be much more expensive than the US variety. Despite what Ministers claim, the experts at Deutsche Bank, Chatham House and Ofgem all predict that shale gas extraction will not bring down fuel bills, so fracking will not help the 1.5 million children growing up in cold homes in the UK.
There would also be lost opportunities. By undermining investment in offshore wind power, tax giveaways for shale gas will suppress development of clean renewable energy. That is exactly what we do not need. A reckless dash for shale gas could prevent clean electricity being supplied to 7.8 million homes and cost more than 40,000 clean energy jobs. That is really too much to bear.
Finally, on climate incompatibility, shale gas is likely to be burnt in addition to coal. Shale gas drilling and combustion are completely incompatible with UK climate change commitments. Replacing conventional fossil gas with shale gas to generate electricity would increase greenhouse gas emissions by up to 11%. A mixture of methane, a greenhouse gas much more potent than CO2, will further contribute to the dangerous climate change impacts of fracking and, finally, recent research suggests that replacing coal with gas may be worse for climate change in the medium term. So this environmentalist is not convinced.
Baroness Worthington (Lab)
My Lords, what an interesting debate we have had. I start by addressing the question put to us: should every serious environmentalist now favour fracking? I have read the report and found it very interesting, but I was left with an overriding impression that it was an excellent report in arguing against coal but not as persuasive in arguing in favour of fracking. In fact, I take issue with the title because, really, this was about gas, not about fracking and, as anyone who has studied the subject will know, fracking is as much about oil extraction as it is about gas. Certainly in the US it has led to a big increase in oil production. That has had interesting geopolitical consequences—I do not doubt that—but it is not an environmental move forward if you are starting to argue that oil is somehow a benign, low-carbon substance that we should move towards. So it is partial in its coverage of the issue of fracking by omitting to reference the fact that it is as much about oil as it is about gas.
I find myself in an interesting position whereby I support what the noble Earl, Lord Caithness, has said. I am very glad that he made the point that there is no way in which you can present shale gas or fracking as a panacea. You can point to the fact that it could have great benefits but you cannot say that it is the answer to everything. When I hear the noble Lord, Lord Lawson, speak with such passion for this subject—almost as much passion as he has for arguing that climate change is not real and that renewables are not worth it—I always wonder why that is. It must, I suppose, be a personal interest in the technology or an excitement about it. However, it is nice that we are having a debate in which the framing of this is that shale gas is needed to reduce carbon dioxide. Clearly, that is true; gas can have a significant bridging effect in helping us to tackle climate change.
Lord Lawson of Blaby
I am still not quite clear what the position is of the Labour Opposition on the development of resources of shale gas.
Baroness Worthington
If the noble Lord had given me a moment, I was going to come on to that. We have a very clear position: it has a role to play but we need a seasoned, mature and rational debate about that role. There is no point in overhyping it and claiming that it is going to be this great, wondrous change in how we use energy in the UK. We can all look to the US and say what an amazing experience they have had over there. When I was in Washington recently, I read an excellent book called The Frackers—I have been wracking my brain but I cannot remember the author—which I recommend to everyone. It is an inside account of how the fracking industry grew up in the US. I was left feeling admiration for its energy and enthusiasm, the amount of risk it was prepared to take and how many setbacks it went through. That these wildcat prospectors brought about a massive change in the US is absolutely true.
Do I think it could be replicated in the UK or Europe? Absolutely not. I am afraid that the conditions here could not be more different to those that led to the fracking revolution in the US. One can argue that they have helped to develop new technologies, which is absolutely right—horizontal drilling and fracturing are now new tools in the extractive industry’s toolbox—but will they be able to deploy them in the UK at scale and have the kind of impact that they have had in the US? I doubt it. There are very different factors: the way in which the US treats land rights, and it being an isolated market, meant that prices could plunge rapidly there, which they will not in Europe. We are connected to the global gas network and we have prices set for us on the global market in a completely different way to the US. I recommend reading the book, because it brings a dose of realism to the whole debate.
As to whether environmentalists could be persuaded to endorse fracking, it has a potential role to play. The key is for the industry to be upfront about why people are potentially opposed to it. It is often not about the pollution, the water or taps that might catch fire, but more to do with local objections. Again I find it ironic that we have a nation which cares deeply about what happens in its backyard. That is why onshore wind has been held back and why in the past we have seen great opposition to incineration in local communities. There will be the same reaction to fracking, I am afraid, and unless the industry is upfront and honest about that, it will be missing the point.
Perhaps this reference will not work very well in the House of Lords, but I heard recently that Bez from the Happy Mondays is now standing as an anti-fracking candidate. That says something about what popular public opinion thinks about this technology. Whoever was responsible for its PR has done a disastrous job; it is not the Government who are holding it back. The Government have given fracking tax exemptions and changed local planning to try to encourage it, so there will be money flowing. I am not saying it is bribery but it is encouragement. I still think there is going to be a great deal of unhappiness and opposition to this, and we have not even started. We have one or two test wells that have been sunk yet here we are talking about this as if it is a huge contributor of change in the UK. I severely doubt that.
As the noble Earl, Lord Caithness, pointed out, population density is important. In answer to the challenge from the noble Lord, Lord Lawson, in those areas of the US where population density is higher, there is great opposition. In the north-eastern states, where there is a huge reserve, some states have imposed an outright ban; others have taken it very slowly. This is because the population there are capable of standing up and objecting to it. They are largely wealthy, middle-class citizens who do not want to see their local environment disrupted. The noble Lord, Lord Borwick, said something that catches the point of this. Although these rigs may be temporary, an awful lot of them are needed because they are temporary. The fact that the industry has to keep disrupting people and moving on will mean that this will be slow to develop, if it develops at all.
Another thing that quite a lot of people will cite as a reason for their opposition is that the industry has been slow to acknowledge that it is still a fossil fuel, particularly if it is oil based. Even if it is cleaner gas, it is still a fossil fuel. The industry needs to be much more upfront about how this new influx of gas will be compatible with our climate change targets. That will have to be through embracing carbon capture and storage. I would love to see the shale gas industry acknowledge that its future will lie with carbon capture and storage and that all of the engineering expertise we have for extracting things out of the ground can be redeployed to putting it back underground so that we can make it safe. If that were part of the narrative, then we would see much less opposition than at the moment.
We have to be very cautious. This is not going to be fast. It could be 10 or 20 years before we really know. I am sure it is true that the UK could play an important leading role in the EU in establishing rules and regulations, but I hope that that is not the case. I hope that Poland moves ahead with this because, let us face it, Poland needs gas more than we do. I also hope it happens in China because, as the report rightly says, China has a huge demand for coal and we need to do everything we can to wean it off that polluting source of energy, not only in terms of carbon emissions but also in terms of human health.
However, the report fails to point out that China will develop nuclear power in a way that we in Europe can scarcely imagine. There are already 20 nuclear reactors in operation and 28 more are under construction. There will be 150 gigawatts of nuclear power in China by 2030. That is where the revolution will come from and I hope that that will happen alongside all the other things that China is doing.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, I thank my noble friend Lord Borwick for the measured and informed way in which he introduced the debate. He made a clear and eloquent case for the importance of shale gas development, including on why those who combat man-made climate change should support it.
Gas is a critical part of our energy mix. Our projections, and those of National Grid and others, show that we are likely to use almost as much gas in 2030 as we do today. Half the gas we use is for domestic heating and cooking and a quarter for industrial and commercial uses. These will be difficult to substitute.
I am glad that there was general acceptance, except by the noble Baroness, Lady Jones, that shale gas will play an important part in the contribution of gas to our energy needs. We all recognise that there is a long way to travel in order to be in receipt of those benefits. However, the debate has once again demonstrated that we need to have these debates. We need informed debates and to bust the myths that keep being generating around this issue. It was my noble friend Lord Ridley who said that you bust one myth and another crops up.
We import half of the gas we consume, and by the middle of the next decade, without shale gas production, it could be more than 80% as conventional gas production declines. The UK has invested in facilities to make sure that gas is easy to import, but we cannot be complacent. There is a compelling energy security case for shale gas development. There are economic benefits, as suggested by my noble friend Lord Borwick. The Institute of Directors published a study last year in which it estimated that a UK shale gas industry could support more than 70,000 jobs at peak production, with £3.7 billion of annual investment and significant tax revenues. The institute forecasts that production levels could reach a level of more than a third of the gas we consume today.
We support exploration activity to see what the actual commercial viability of UK shale is, but we are clear that we will allow only activity that is safe, sustainable and properly regulated. The UK has a strong regulatory system that provides a comprehensive and fit-for-purpose regime for exploratory activities, and we need continuously to improve it, as my noble friend Lord Caithness rightly said. The UK has more than 50 years’ experience of regulating the onshore oil and gas industry to draw on. This is supported by an authoritative review of the scientific and engineering evidence on shale gas extraction conducted by the Royal Academy of Engineering and the Royal Society in 2012. This concluded that,
“the health, safety and environmental risks associated with hydraulic fracturing … as a means to extract shale gas can be managed effectively in the UK as long as operational best practices are implemented and enforced through regulation”.
My department’s Office of Unconventional Gas and Oil will work closely with regulators, such as the Environment Agency in England, the Health and Safety Executive and industry to ensure that regulation is robust enough to safeguard public safety and protect the environment while imposing no unnecessary burdens of operators. We have also put in place appropriate measures to manage seismic risk. Of course, we would not proceed with shale development if it conflicted with our climate objectives.
A recent report by my department’s chief scientific adviser, David MacKay, and Dr Timothy Stone concluded that the carbon footprint of UK-produced shale gas would be likely to be significantly less than coal and lower than imported gas. The report made a number of recommendations further to mitigate any emissions from shale gas operations and the Secretary of State will respond positively to that report shortly.
I appreciate that there may be concerns about the impact on local areas, and it would be helpful briefly to explore them. A site will be smaller than a cricket pitch, and although it might produce shale gas for around 20 years, there will be certain periods when most of the activity takes place—for example, during set-up or in preparation for fracture. These operations should have broadly similar impacts on health, local amenities and traffic movements to those from existing onshore gas and oil extraction methods. Each application’s local impact is carefully considered via the local planning system. The industry has made a commitment to work with local communities to minimise the impact of shale gas and oil operations wherever possible and is researching methods and technologies that will reduce traffic movements to and from the site.
I am sure noble Lords will agree that it is important that local communities benefit from hosting shale gas developments. That is why we welcomed the package of benefits industry has announced. At exploration stage, £100,000 in community benefits will be provided per well site where fracking takes place, and 1% of revenues at production stage will be paid out to communities. Industry estimates that that could be worth between £2.5 million and £10 million for a typical producing pad. Each year, operators will have to publish evidence of how they have met their commitments. The benefits will be reviewed as the industry develops, and operators will consult further with communities. This is a new sector developing. My department is working hard to help people to understand the facts about shale gas, particularly with local communities.
A few questions were raised so I will quickly address them in the time I have left. My noble friend Lord Lawson said that we need to reduce regulation on shale. The Environment Agency has—
Lord Lawson of Blaby
I never said anything of the sort, as my noble friend should recall. I said we need rigorous regulation, but it must be clear and as speedy as the rigour allows.
Baroness Verma
I apologise for misrepresenting what my noble friend said—absolutely. The Environment Agency is developing a single application form for permits. In 2014, the Environment Agency will aim to reduce the time for low-risk activity from 13 weeks to approximately two weeks. I hope that that addresses the point raised by my noble friend. Of course, it is not about reducing regulation; we do not want to see regulation reduced, but we also do not want to see barriers where they do not need to be in place.
My noble friend Lord Teverson mentioned CCS projects. As my noble friend is aware, we were able to go forward with two of them at Peterhead and White Rose—the Drax project. The Government have committed £1 billion to CCS—a commitment from this Government to make sure that we are not lacking in ambition for CCS. My noble friend also mentioned dependency on Russian gas. I reassure him that only a small percentage of our gas comes from Russia. By and large we are better connected, with 50% being our own gas and a larger proportion of what is left coming from Norway.
Lord Teverson
I entirely realise that and was talking about a broader European perspective. Actually, we import a lot of Russian coal.
Baroness Verma
I think my noble friend will agree that that is a different debate.
My noble friend Lord Caithness asked whether shale gas was more leniently regulated at European level. I reassure him that shale gas is regulated in the same way as any other energy sector. A recent proposal in the European Parliament to require environmental impact assessments in all shale projects did not proceed. We welcomed this because we do not want minor impact drilling such as taking core samples impeded.
The noble Baroness, Lady Jones, said that fracking would cause water contamination and that there was evidence to prove it. We have seen no evidence. The Environment Agency is one of the most respected regulators globally, as are many of our regulators, and we would be careful to consider the advice that we were given by our regulators before we proceeded to do anything that would allow any kind of contamination. Hydraulic fracturing will take place more than 1,000 metres below groundwater level, where there are impermeable layers of rock which will stop the gas and fracking fluids escaping into the water.
The noble Baroness also touched on tackling cold homes and fuel poverty. The Government have done a lot to respond to those challenges and measures are in place to address the issues that she has raised. There is much more to be done but this Government have been very proactive about addressing the issues where the people who need help most and quickest are getting that help.
The noble Baroness, Lady Worthington, said that shale gas cannot be seen as a panacea. The Government have never suggested that shale gas is a panacea. We have said that it is important that we explore the possibilities that shale gas will bring because we need energy security. If shale gas is explored and exploited, it will become an important part of the energy mix. We all know that gas and oil will still play a large part in our wider energy mix.
I am not quite sure from the noble Baroness’s remarks that she understood her own party’s position on fracking. However, it would be unhelpful to close down the debate on the real benefits that shale gas can bring. I recommend that we have further informed debates because this debate has explored a number of arguments in this critical policy area. I look forward to those debates, but let us bring them forward as debates on fact, not on ideology. We need to reduce our dependency on external energy sources and ensure that the people of the UK have affordable energy and energy security but understand that the sector is properly regulated, can deliver all those things and can contribute towards our economic growth.
This has been an interesting debate. I am grateful to my noble friend Lord Borwick for raising it. I suspect that we will have many more debates on the issue.
House of Lords
Death of a Member: Lord Ballyedmond
The Lord Speaker (Baroness D'Souza)
My Lords, I regret to inform the House of the death of the noble Lord, Lord Ballyedmond, on 13 March. On behalf of the House, I extend our condolences to the noble Lord’s family and friends.
Personal Statement
Lord Flight (Con)
My Lords, last Wednesday, I asked a supplementary question about the Enterprise Investment Scheme. I realised only afterwards that I should have declare my registered interest as the remunerated chairman of the EIS Association. I should like to take this opportunity to make good that omission and to apologise to the House.
Food: Adulteration
(10 years, 1 month ago)
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Baroness Crawley
To ask Her Majesty’s Government what steps they are taking in the light of the findings by trading standards officers that a third of recent food samples were adulterated with other substances.
Baroness Crawley (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my interest as president of the Trading Standards Institute.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)
My Lords, we take the threat of food fraud very seriously. Following the horsemeat fraud last year, we have been working with industry and local authorities to improve our intelligence sharing to target sampling and enforcement better. The sampling carried out by West Yorkshire Trading Standards Service demonstrates the action being taken by local authorities across the United Kingdom to target known problem areas and in response to complaints. The findings are not representative of all food products.
Baroness Crawley
I thank the noble Lord for his reply. However, I do not think it reflects the seriousness of the food adulteration crisis across this country. Reporting of food fraud has increased by 66% since 2009, while the number of samples taken by local authorities has decreased by 26%. Call me old fashioned, but I like my ham actually to be ham and not poultry dyed pink or meat emulsion, whatever that is. I want fruit juice to be just that, and not laced with vegetable oil that is used in flame retardants. Of the 900 samples that were tested by West Yorkshire Trading Standards, one-third were not what they were meant to be. Does the Minister support the Elliott review’s interim report on the horsemeat scandal, which is highly critical of the current enforcement system’s ability to tackle food crime? What are the Government doing about the depletion of trading standards departments across the country, whose job it is to track down organised criminal gangs in the food sector?
Lord De Mauley
My Lords, I agree with much of the sentiment behind the noble Baroness’s question. In his interim report, Professor Elliott recognises that the United Kingdom has access to some of the safest food in the world, but we should not be complacent. We are working across government, and with the industry and local authorities, to improve our intelligence gathering and sharing, with the aim of improving protection for the consumer. Consumer protection is the key priority for the FSA and local authorities, and enforcement officers are working across areas, targeting those most likely to be at risk. During 2012-13, 86,000 food safety composition and authenticity tests were carried out. The FSA has increased the additional funding it provides to local authorities to support testing to £2.2 million this year.
Baroness Gardner of Parkes (Con)
Will the Minister tell us what the definition of “adulteration” is in this instance, and at what level something would be described as just a trace element or ignored in terms of adulteration?
Lord De Mauley
My Lords, casting my mind back to the horsemeat saga, I think we were looking at a threshold of 1%. May I take this opportunity to address another of the range of issues raised by the noble Baroness, Lady Crawley? She referred to the West Yorkshire Trading Standards Service. In a six-month period, that trading standards service reported on 873 samples, 331 of which received an adverse report from the public analysts, as the noble Baroness said. However, many of the issues found did not relate to food adulteration. For example, a large proportion were for labelling failures, such as foreign language-only labelling, while others were for exaggerated health claims. Nevertheless, it is true that a material proportion were for fraudulent purposes, such as meat substitution, and the West Yorkshire Trading Standards Service is taking action.
Baroness Meacher (CB)
My Lords, trading standards officers also very importantly revealed that substances labelled as not fit for human consumption are regularly sold to our young people and children as so-called legal highs. This is not a party-political point, but it is a very difficult area to deal with. In view of the failure so far of our policies to deal with this problem, will the Government’s review of policy in the area of legal highs look at a regulatory system with an enhanced role for trading standards?
Lord De Mauley
My Lords, very important though that subject is, I am afraid it is off the thrust of today’s Question.
Baroness Walmsley (LD)
My Lords, does my noble friend agree that if we taught children in school to cook from fresh ingredients, their healthy development would be much less susceptible to food fraud?
Lord De Mauley
My Lords, I do agree and that, indeed, is what is happening.
Lord Grantchester (Lab)
My Lords, this is fraud on a massive scale. It is made easier by this Government’s changes to the structure of regulation, which weakened consumer protection by fragmenting the responsibilities of the Food Standards Agency between different bodies. Will the Government recognise this mistake and revisit the decision?
Lord De Mauley
My Lords, I am glad that the noble Lord has given me the opportunity to answer that question. I have seen no evidence to suggest that the machinery of government changes had any material impact on the response to the horsemeat fraud incident. That incident was fraud on an EU-wide scale and had nothing to do with changes in responsibilities between UK government departments.
Baroness Howarth of Breckland (CB)
My Lords, the food chain is complex and long. As the Minister knows, it has been decided not to show all the countries of origin on meat labelling because the costs for small businesses would be too high. So how will consumers know what they are eating when they buy compound meat?
Lord De Mauley
The noble Baroness raises a very complex issue. Consumer protection continues to be the key priority for the FSA and local authorities. In recent years, tackling the problems in the food chain that can make people ill has been a priority. However, sampling programmes have continued to include the sampling of foods for mislabelling and adulteration. Although the number of tests carried out has decreased, enforcement officers are working to target areas most likely to be at risk.
Visas: Health Insurance
(10 years, 1 month ago)
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Lord Leigh of Hurley
To ask Her Majesty’s Government whether they have any plans to require visa applicants to have full health insurance.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
My Lords, we have no current plans to do so. The Immigration Bill that is before the House in Committee requires temporary migrants coming to study, work or join family members for more than six months to pay a health surcharge to ensure that they make a fair and proportionate contribution to the NHS commensurate with their immigration status. Overseas visitors will continue to be liable for NHS treatment charges.
Lord Leigh of Hurley (Con)
My Lords, I thank my noble friend the Minister. Does he agree with me that while the health service surcharge is welcome, at £200 it is a little inadequate, given that the National Health Service itself has calculated that the cost of providing services, even to people aged 15 to 44, is £700? More importantly, the proposed health service charge takes no account of a person’s illness, whereas if they were required to obtain insurance before they came to this country, that illness could be assessed and properly and fully costed. I am sure my noble friend will agree that it is no coincidence that out of 30 countries that provide comparable health insurance to the United Kingdom, only the UK and Ireland do not require certain migrants to have health insurance, which goes some way to explain the estimated health tourism bill of £2 billion.
Lord Taylor of Holbeach
My Lords, my noble friend to some degree misunderstands the reason for the surcharge, which is, as I have said, to ensure that temporary migrants pay a fair contribution towards the health service. It is not intended to be a full cost recovery but, none the less, it will raise in the region of £2 billion over 10 years. Visitors are not covered by this scheme and they will be liable for full cost recovery, which they may indeed choose to insure against.
Baroness Hamwee (LD)
My Lords, I suspect that health insurance for visa applicants would be extremely complicated to administer. Does my noble friend think that there might be something to be said for it if the Government go down the route recently recommended by the Migration Advisory Committee of auctioning about 100 visas a year, with a reserve price of £2.5 million, to get accelerated settlement in the UK? I sincerely hope that they will not go down that route.
Lord Taylor of Holbeach
My noble friend is tempting me to elaborate a policy into a direction in which the Government have no intention of moving at the present time. There is a review of health service charges going on. Currently the recovery of health service charges is a problem. The health service is not getting the income that it should be getting from health service charges, but my noble friend is right to say that the merit of this scheme covering temporary migrants is that it makes a significant contribution and is very simple to administer.
Lord O'Neill of Clackmannan (Lab)
Is the Minister aware that an inquiry is taking place at the moment under the auspices of the Science and Technology Committee to look at the dramatic drop in the number of overseas students engaged in science, technology and engineering subjects, and that one factor that has become quite clearly significant is the intimidatory character of the application of immigration rules, in particular this latest suggestion that there will have to be, over and above a very sizeable visa charge, a charge for health? This is having a deleterious effect on the number of PhD students, whom we desperately need in our institutions and who will make a continuing contribution to the British economy. It is a highly unsatisfactory way of trying to control inflation by imposing unnecessary and, as I say, intimidatory charges on a group of very attractive immigrants for Britain.
Lord Taylor of Holbeach
We have missed the noble Lord from our debates on these issues on the Immigration Bill. I assure him that the points he is making have been well made but the Government are quite clear that this does not put us in an uncompetitive position. Even the basic health insurance for a student going to Harvard is $958 and he might expect to pay $2,190 a year more if he wants full health cover. In Australia the annual payment would be £300; in New Zealand £325; in Canada £300. The actual cost of students in this respect is estimated by the Department of Health at £700 a year. This is not putting us at a disadvantage in the world market. We have the most excellent institutions here and I wish people would stop talking down our attractiveness as a place to study.
Lord Patel (CB)
On two occasions now the Minister has quoted the figure that a student would have to pay as £700. In reality, is it not true that we do not know the level of usage of the health service by students, and that the Department of Health is conducting an audit right now that will determine it?
Lord Taylor of Holbeach
I have some figures here in front of me. I respect the noble Lord and I think he would agree that we have had some good debates on this issue. The figures say that non-EEA students cost the NHS around £430 million per year, with an average cost per head to the NHS of more than £700 per year. Those are the figures that I am giving the House, and I am assured that they are authoritative.
Lord Naseby (Con)
Is my noble friend aware that these proposals are very broadly welcomed? Will he reassure the House that a proper monitoring system will be set up so that we do not reach the situation 12 or 24 months hence where we do not actually know what has happened?
Lord Taylor of Holbeach
During the course of the Bill I have agreed to report back to the House on how this particular element of it is working.
NHS: Midwives
(10 years, 1 month ago)
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Lord Harrison
To ask Her Majesty’s Government what steps they are taking to ensure that a sufficient number of midwives are trained, employed and retained by the National Health Service.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, this Government are committed to improving maternity care. That is why we have charged Health Education England with ensuring that training numbers meet service demand. By reducing attrition rates, record numbers of midwives will be available to the NHS. Since May 2010 the number of full-time equivalent midwives increased by around 1,800 to nearly 22,000. A record number of midwives, some 6,000, are currently in training. New midwife training commissions by HEE for 2014-15 number 2,563.
Lord Harrison (Lab)
My Lords, given that the Commons Public Accounts Committee believes that there is a shortfall of around 2,300 midwives and that the NSPCC has computed that number at 5,000, does the Minister acknowledge that we are beginning to get anecdotal evidence, certainly in Chester in the north-west, of maternity services under real pressure? With regard to maternity services, does he recognise that three out of four such services lack any trained mental health midwives to deal with perinatal mental illnesses, which I am afraid are associated with as many as 10% of all pregnancies? Will the Minister look in particular at the question of the training of midwives, where all too often the perinatal mental health services are left off the agenda?
Earl Howe
My Lords, I agree that in certain parts of the country maternity services are under pressure, but it is encouraging that the ratio of births per midwife has improved nationally. Indeed, since 2010 the number of midwives has increased by 4% and the number of births by 1%. However, the noble Lord is right to attach importance to mental health services. Improving diagnosis and services for women with pregnancy-related mental health problems is one of the Department of Health’s objectives for maternity care. That is why Health Education England has been tasked with working with partners to ensure that pre-registration and post-registration training in perinatal mental health is available to enable specialist staff to be available to every birthing unit by 2017.
The Earl of Listowel (CB)
Is the Minister aware of the excellent model of best practice at Chelsea and Westminster Hospital, where there is a mental health team working hand in hand with the midwives, and how important that is to retention? Is the supervision of midwives being looked at—whether they feel well supported and wish to carry on in the profession because they have a mentor who can support them?
Earl Howe
I thank the noble Earl for bringing the example of the Chelsea and Westminster to my attention. I am sure it is a model of good practice, as I know how good that hospital is. With regard to supervision, the noble Earl is right. This bears upon the whole question of midwife numbers, to ensure that we have enough midwives not only looking after women about to give birth and giving birth, but also to ensure good practice in our hospitals and midwifery units.
Baroness Manzoor (LD)
My Lords, I congratulate the coalition Government on two facts. One is that there are many more midwives than there were in 2010. The second, as my noble friend says, is that there are 6,000 more student midwives in training. There is, however, an issue regarding the attrition rates of student midwives leaving before the end of their three-year training. Can my noble friend state what the Government are doing to understand why the attrition rate is as high as one in four students leaving, and whether this information is being collected by exit surveys?
Earl Howe
My noble friend is right to draw attention to the attrition rate. NHS England is focusing on this very closely. It is not always possible to predict the attrition rate because midwives leave practice for varying reasons—for instance, to take a career break. It is, however, very important that the motivation of midwives should be maintained. There is a great deal of work going on to ensure that we do not lose highly qualified and skilled midwives from the NHS.
Baroness Wall of New Barnet (Lab)
Does the Minister accept that the issue is trying to work out how many vacancies there are? The ratio that is defined in the area depends on the hospital. For instance, Barnet and Chase Farm Hospitals, of which I am chair, has 30 births to one midwife, whereas in other parts of London it could be 28 or fewer. What we have tried to do, in looking at whether we should have a lower ratio, is work with the midwives’ associations. I think it is difficult to establish the number of vacancies because that ratio dictates what is paid for.
Earl Howe
The noble Baroness is quite right. Helping commissioners to reduce unwarranted variation in service delivery is one of the key roles of the maternity and children strategic clinical networks, as I am sure she is aware, which are being established and supported by NHS England. Clinical commissioning groups are responsible for commissioning maternity services locally, but they work with local authorities and in conjunction with provider partners to give assurance that processes and service specifications are in place which ensure that midwifery staffing is appropriate for the locality.
Lord Turnberg (Lab)
My Lords, the number of births has gone up by 25% in the past 10 years. The vacancy rate among midwives is about 11%. That is the long-term vacancy rate. There seems to be a problem with recruitment and retention. Despite the figures that the noble Earl has cited, we are in some difficulty.
Earl Howe
The noble Lord is right. We recognised that issue at the outset of the Government, which is why we were determined that the number of midwives in training should be increased. It is now at a record number of 6,000. The number of trained midwives is increasing—that is, full-time equivalent midwives practising in the NHS rather than just on the register. We are heading in the right direction, but there is a long way to go.
Baroness Finlay of Llandaff (CB)
Will the Minister assure the House that the report from the Royal College of Obstetricians and Gynaecologists on the unique learning environment of the labour ward has been addressed in the curricula and the learning environments by HEE? That report highlighted bullying by some senior midwives of junior and student midwives and of medical students, which was making the learning environment particularly difficult and stressful and accounted for some of the high attrition rates.
Earl Howe
The noble Baroness raises the extremely important issue of bullying. Bullying is not to be tolerated in any environment in the NHS. I am not aware of the extent to which Health Education England has factored that particular point into its plans. I would be amazed if it had not, but I will write to the noble Baroness with an answer.
Baroness Wheeler (Lab)
My Lords, does the Minister accept that the Public Accounts Committee report on maternity services was pretty damning, not just in terms of midwife shortages but on the lack of overall government accountability and strategy for maternity services, the increasing clinical negligence bill and substantial regional and demographic inequalities and variations in maternity care? What are the Government doing about this and when can we expect a coherent plan in response to these issues?
Earl Howe
The noble Baroness is right: the PAC raised a number of very important issues, many of which we agree need close attention. I have already mentioned the work that we are doing to improve recruitment and to reduce variation in the quality of services around the country. This requires more than just government; it requires all the arm’s-length bodies with an interest to pull together and, of course, local commissioners to do their bit as well.
Consumer Interests: World Consumer Rights Day
Baroness Hayter of Kentish Town
To ask Her Majesty’s Government what steps they are taking to promote consumer interests in the United Kingdom to mark World Consumer Rights Day on 15 March.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
The Government are tackling the issues that consumers care most about head on. We are bringing in strong reforms through the Consumer Rights Bill to give greater clarity to goods, services and, for the first time, digital content. On World Consumer Rights Day, my department, Citizens Advice and Ofcom highlighted issues around mobile phones. We received excellent press coverage, which helped to increase awareness and to inform people where to go to get help.
Baroness Hayter of Kentish Town (Lab)
My Lords, it was 52 years ago that President Kennedy said that every consumer should be protected against misleading adverts and unsafe and worthless products, and that consumers should be told how much interest they are being charged. Given that payday loan companies continue to charge excessive interest rates and that the Government have abolished the National Consumer Council, have allowed living standards to fall and have introduced a Consumer Rights Bill which, despite what the Minister says, consolidates rather than adds rights, what are the Government going to do to honour President Kennedy’s ambition?
Viscount Younger of Leckie
My Lords, well informed, confident consumers are vital to building a stronger economy. Our plans will mean that consumers can be confident of their rights in everyday situations and that businesses will spend less time working out their legal obligations when they get complaints from customers. Since 2011, we have streamlined and brought coherence to a landscape that was previously confusing and therefore inefficient for consumers.
Lord Wrigglesworth (LD)
My Lords, one issue which concerns many consumers and no doubt many in this House is the state of many of our pubs and the number of closures that are taking place. Does my noble friend not agree that many such institutions have come out of the tyranny of the brewers—I am sure that we can exclude Young’s brewery from that—into the even worse tyranny of highly geared pubcos? Will the Government take action to stop the exploitation of tenants by pubcos and the closure of some 26 pubs every week?
Viscount Younger of Leckie
My Lords, the Government value the pub industry and recognise the important contribution that pubs make to the fabric of local communities and to jobs and growth in the wider economy. We recognise that there are serious concerns about the relationship between pub-owning companies and their tenants. This is why we have published our consultation on a statutory code and an independent adjudicator for the sector: to enshrine the core principle that a tied tenant should be no worse off than a free-of-a-tie tenant. I cannot comment on the final proposals in advance of the government response to the consultation.
Lord Tomlinson (Lab)
Does the Minister accept that the rather optimistic Answer that he gave about consumer protection contrasts acutely with the Answer given earlier by the noble Lord, Lord De Mauley, to the first Question asked by my noble friend Lady Crawley? I invite him and the noble Lord, Lord De Mauley, to get together to make sure that we have an across-government policy so that both are telling us the same story.
Viscount Younger of Leckie
I regret that I was not in my place when my noble friend Lord De Mauley answered the Question, but I will take note of the noble Lord’s point.
Lord Whitty (Lab)
My Lords, I think that the Minister will agree that consumer rights and consumer interests are best served by having strong consumer bodies. In this country, as a result of the statutory instrument passed last week, that will now mean primarily Citizens Advice, and we wish it well in that task. However, will the Minister take this opportunity to respond more clearly to questions raised in the debate on that statutory instrument? First, does the redesignation by ONS of Citizens Advice as a public body in any way threaten its charity status, its independence or its ability freely to campaign? Secondly, will the Minister set out more clearly the totality of grant in aid from BIS to both Consumer Focus and Citizens Advice over the past five years, so that we can see clearly what resources are available in the new consumer landscape?
Viscount Younger of Leckie
My Lords, the answer to the noble Lord’s first question is no, but I would like to take this opportunity to clarify that Citizens Advice is a well recognised and trusted brand, which is why we took the decision to transfer the Consumer Direct service to it in 2012. We are establishing Citizens Advice as the publicly funded advocate for consumers. It will now be much clearer where the consumer should go to get help, and a faster and better-quality service will come forth to give consumers greater peace of mind.
Baroness Hussein-Ece (LD)
My Lords, what can be done about the plague of cold callers on consumers, including vulnerable people, who are constantly harassed by calls selling anything from car insurance to PPI—you name it, they want to sell it to you? Vulnerable people, including older people, are being absolutely plagued by that. I speak as someone whose 80 year-old mother receives four or five calls every day trying to sell her something. It appears that nothing can be done about it.
Viscount Younger of Leckie
There are some steps that consumers can take themselves—but, having said that, we are looking at this very closely. The first port of call, as I said, would be Citizens Advice. It will be in a much better position in future to give proper advice on that particular point.
Baroness Farrington of Ribbleton (Lab)
My Lords, will the Minister please go back to the supplementary question asked by my noble friend about payday loans? He responded that the ideal solution was well informed, well educated consumers. Surely, people who are under stress and in poverty ought to be protected from such rates of interest, rather than rely on the consumer to be able to investigate at a time of great stress in their lives?
Viscount Younger of Leckie
The noble Baroness is correct. Payday loans remain an issue, and we continue to liaise with colleagues in the Treasury to take steps to resolve that important issue.
Lord Grantchester (Lab)
In asking my question earlier today, I should have declared my interest as a milk producer. I regret my omission and apologise to the House.
Medical Act 1983 (Amendment) (Knowledge of English) Order 2014
(10 years, 1 month ago)
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Earl Howe
That the draft orders laid before the House on 30 January and 12 February be approved.
Relevant documents: 21st and 22nd Reports from the Joint Committee on Statutory Instruments, 31st Report from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 11 March.
Legislative and Regulatory Reform (Regulatory Functions) (Amendment) Order 2014
Viscount Younger of Leckie
That the draft order and code laid before the House on 22 January be approved.
Relevant document: 20th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 11 March.
Income Support (Work-Related Activity) and Miscellaneous Amendments Regulations 2014
(10 years, 1 month ago)
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Lord Bates
That the draft regulations laid before the House on 22 January, 3 February and 5 February be approved.
Relevant documents: 20th, 21st and 22nd Reports from the Joint Committee on Statutory Instruments, 29th Report from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 11 March.
Water Bill
(10 years, 1 month ago)
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Lord De Mauley
That the amendments for the Report stage be marshalled and considered in the following order:
Clause 1, Schedules 1 and 2, Clauses 2 to 4, Schedules 3 and 4, Clause 5, Schedule 5, Clauses 6 to 37, Schedule 6, Clauses 38 to 44, Schedule 7, Clauses 45 to 48, Schedule 8, Clauses 49 to 74, Schedule 9, Clause 75, Schedule 10, Clauses 76 and 77, Schedule 11, Clauses 78 to 80, Schedule 12, Clause 81.
Immigration Bill
(10 years, 1 month ago)
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Lord Rosser (Lab)
My Lords, immigration is a welcome and important part of British life. Our country’s success over the years owes much to the people who have come here from across the world and made it a better place. However, immigration can add to some of the existing pressures on communities, not least in the fields of housing and employment. The Bill, however, does not include any of the measures which we have been calling for and which would address some of these pressures.
Amendment 67 aims to end the practice among some recruitment agencies of excluding local workers. Many recruitment agencies are a great asset to the communities they work in, helping employers to find employees and potential employees to find work. However, there has been an issue whereby some employment agencies have effectively been taking on only foreign workers and excluding British people from their books. Over the past two decades, there has been significant growth in agency employment—a 500% increase between the mid-1980s and 2007. Migrants are now overrepresented within agency work, particularly at the lower end, with migrants from the EU’s A8 accession countries of 2004 constituting the largest single group of agency workers.
In certain sectors, such as the meat and poultry processing industry, there are examples of British workers facing difficulty registering for work, with some agencies supplying only migrant workers, generally eastern European nationals. While it is not illegal for agencies to choose to recruit from particular countries, any refusal to register an applicant because of their nationality is unlawful under the Race Relations Act and a breach of the Gangmasters (Licensing) Act licensing standards. The Equality and Human Rights Commission conducted a survey in 2010, and found that a third of agencies confirmed that they had acted unlawfully in sometimes supplying workers by judging which nationality the processing firm would prefer, or by responding to direct requests, often basing their actions on stereotypes about the perceived dependability of particular nationalities.
The idea that in core sectors of our economy some recruitment agencies should exclude local people, and make a virtue of being able to offer cheaper, more flexible, and allegedly more compliant staff than those available locally, is surely wrong. It is not fair on UK workers who as a result do not have the opportunity to compete for jobs, and it is not going to help us rebuild our economy. The only way action can be taken is for an individual to bring a discrimination case through an employment tribunal, or for the Equality and Human Rights Commission to bring about a compliance order, since recruitment agencies are not legally prevented from acting in this way. We need to strengthen the law so that agencies are not able to operate exclusionary practices—formally or informally—and then enforce it properly, with prosecutions of agencies that flout the law.
Amendment 69 includes provision for a realistic minimum fine for employing illegal immigrants. Illegal migration can lead to exploitation of migrant labour, unacceptable working conditions and undercutting of legal employment. That is not good for either the migrant or the domestic economy. It is against the law to employ illegal immigrants. There is a maximum fine for doing so, but it appears that there is no minimum fine set by legislation. The number of businesses fined for employing illegal immigrants has halved since 2010. UK dairy farms that have recently been found guilty of using illegal labour hired through gangmasters, where workers were being housed in poor accommodation previously used by animals and paid £400 to £500 less than the minimum wage each month, received a civil penalty amounting to £300 per worker. Our amendment would enable the Secretary of State to give an employer who is in breach of the Immigration, Asylum and Nationality Act 2006 a notice requiring the employer to pay a penalty of a specified amount which does not exceed the prescribed maximum and is not below the prescribed minimum.
Baroness Hamwee (LD)
My Lords, I have given notice of my intention to oppose the question that Clause 40 stand part of the Bill but, as I hope the Minister knows, this a way of probing the provisions in Clause 40 and of asking, simply, what the problem is with Section 18 of the Immigration, Asylum and Nationality Act 2006, which the clause would amend. In the Public Bill Committee, the Minister, Mr Harper, said:
“it can be difficult to recover the penalty”.—[Official Report, Commons, Immigration Bill Committee, 12/11/13; col. 317.]
I can see that Section 18, as amended, would make it easier for the Secretary of State, but that does mean that the recipient of a penalty is not going to be able to raise a defence. This is not a straightforward, simple debt. It seems that the very fact that it is not a fixed penalty indicates that there may be a range of circumstances in which the penalty is imposed, and some of those may involve mitigating circumstances.
Lord Avebury (LD)
I should like to ask a couple of questions about Clause 40. The Immigration Minister’s faux pas over the “wealthy metropolitan elite”, such as his predecessor who employed a cleaner from Nepal without checking that she had leave to remain, highlighted the inconsistency of people in senior positions of the Government being happy to employ non-EEA citizens themselves while desperately hanging on to the vain objective of reducing net immigration to below 100,000. That target was never within the realms of possibility and it should be scrapped, recognising that most components of immigration and all of emigration are outside the control of government. As the UK is doing relatively well compared with other European countries, we are an attractive destination for skilled workers from the rest of the EEA, and as my right honourable friend Vince Cable pointed out, we are benefiting from their contribution to our economy and in particular to the revenue from direct and indirect taxation that they bring.
However, we are right to deal with irregular migration from outside the EEA, and in particular the 500,000 of those irregular migrants who were lost by the UKBA and are still scraping a living in low-paid jobs—a few of them as cleaners and nannies. My question about Clause 40 is whether increasing the fines on employers who fail to check the credentials of their workers is going to be the answer. Can the Minister say whether the existing powers are being used to their full extent? In November 2012, when Tesco was found to have employed 20 non-EEA students for three times the number of hours allowed, the supermarket was fined £115,000, compared with the maximum of £200,000. In August 2013, the BBC found that since the original power to impose fines on employers was enacted in 2006, two-thirds of the £80 million fines imposed remained uncollected. The Home Office said that some fines might have been reduced or cancelled on appeal, or that some employers could have gone out of business or could have been asked to pay by instalments. How does making the penalty recoverable as if it were payable under an order of the county court, or the equivalent in Scotland or Northern Ireland, increase the probability that the money will be recovered? Can the Minister be sure that increasing the fines will not simply reduce the proportion of money that is recovered?
The Earl of Listowel (CB)
My Lords, I will briefly raise a concern that came to my attention when I was a member of Sub-Committee F of the European Union Committee some time ago. I heard from employers’ organisations in this country that they were very keen to have loose immigration policies. That was very understandable from their point of view. They would recruit migrants who were well educated and motivated and they might have felt that many of our population were not so motivated or well educated. I was concerned that there were not incentives for employers to train up, support and develop young people in this country, that those young people would just go on to benefits, and that a vicious circle would go on through the generations. I was therefore very pleased to hear the Prime Minister David Cameron say recently that his intention is to improve the education system—he feels that that is going a long way in the right direction—and to reform the welfare system so that more young people go into employment and there is not so much pressure on employers to recruit from abroad. It is tragic that so many young people waste their lives. I wanted to voice my happiness at hearing the Prime Minister express that commitment to our young people.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
My Lords, I thank the noble Earl for ending this part of the debate by giving me a chance to say that he is quite right to pick up on the Prime Minister’s commitment in this area. What is interesting about the speeches made by the noble Lord, Lord Rosser, and by my noble friends is that they, too, echo the sentiment on this issue within government at this time. As I reply to the debate, noble Lords will pick up the messages and echoes of that. Of course, some of what we have been talking about lies outside the provisions in the Bill. The noble Lord, Lord Rosser, would like to include certain provisions in it, but I hope I can persuade the Committee that what noble Lords seek might be best done through a comprehensive package of measures based on the work that is now going on.
Clauses 39 and 40 amend the existing legislation governing the sequence for objecting to and appealing against a civil penalty notice for employing illegal workers and how we may recover penalties where an employer fails to pay. My noble friend Lord Avebury was particularly keen to know how that would work. I will come on to that. Currently, an employer can exercise their right to object to a civil penalty and appeal simultaneously, consecutively or alternatively. Frankly, this is wasteful and unnecessarily expensive for all. Clause 39 simply requires an employer to raise an objection before a formal appeal. The objection process provides a fast and efficient means of reviewing penalties and can negate the need for an appeal to the court altogether. I am sure that noble Lords will see that as desirable.
Lord Rosser
My Lords, I thank the Minister for his reply and all other noble Lords who contributed to this debate. The Minister said that the type of sentiments I expressed in my contribution were not dissimilar to those of the Government. However, I still am not sure whether the Minister is anticipating, in any of the areas that I have covered, bringing anything back to this House before Report. He made a comment about formulating proposals shortly but I am not clear whether that meant in time for Report. It would be extremely helpful if he could clarify that point.
Lord Taylor of Holbeach
My Lords, to give matters proper consideration, it is unlikely that we will return to these matters on Report. However, legislation, including the slavery Bill, is likely to come before this House. There will be other opportunities where a change may occur that does not require primary legislation and which can be effected through secondary legislation. I have indicated that a work programme is going on in this area and I hope that noble Lords will accept that our objectives very much reflect the thinking that lies behind the amendments in the name of the noble Lord, Lord Rosser.
Lord Rosser
I thank the Minister for that response, although I am a bit disappointed that, apparently, nothing will come forward before Report. I am sure one point he would accept is that the world can be full of good intentions and measures that intend to be taken, but it is also about, first, whether those intentions are taken and in what form that counts and, secondly, if they are taken in an appropriate form, the extent to which they are enforced. That is one of the issues I raised in relation to the minimum wage and how effectively it was being enforced. Obviously, that issue no doubt will be discussed on other occasions.
I am not sure whether I should be pleased with the comments that the Minister made about the Gangmasters Licensing Authority on the basis that more areas of work might be coming under the terms of that authority or whether I should be concerned because perhaps a look is being taken at the powers and scope of that authority, and they might be diminished in the future. Perhaps he will give me an assurance that no one is looking in any way at diminishing the power and scope of the Gangmasters Licensing Authority in the light, I thought, of his reference to a triennial review.
Lord Taylor of Holbeach
I am happy to respond immediately to that request. As noble Lords will know, the triennial review looks at all public bodies and their effectiveness. The truth of the matter is that the Gangmasters Licensing Authority, despite comments that have been made in debate, has been remarkably effective at regulating a difficult area of exploitation. There are other areas which the noble Lord mentioned and we are looking to extend the role of the GLA or a body which can perform that function, without prejudging the issue, in such a way as to make sure that we cover more ground and not less. The powers will be adequate to ensure that the same sort of regulation that occurs in the agricultural sector occurs elsewhere where exploitation takes place.
Lord Rosser
I thank the Minister for that response. I will leave the matter in that context. Obviously, I will want to read carefully what the Minister has said in response and to look at the extent to which the specific concerns that we have raised in the amendments in this group are or are not being addressed by the work that the Minister has said that the Government are already undertaking. I know he agrees with me that, if we are to have a reasoned debate on immigration in this country, we need to address the concerns to which immigration can contribute, although not cause exclusively or solely, in housing and employment through exploitation of migrants by people who are not entirely scrupulous in their intentions and motives. Our doubts at the present time concern the extent to which this Bill, and the measures contained in it, will promote such a reasoned debate, certainly in employment and housing, hence the amendments in this group.
I thank the Minister for his reply and I will read carefully what he has said. I thank all other noble Lords who have contributed to this debate.
Lord Roberts of Llandudno
“Permission to work
After section 3(9) of the Immigration Act 1971 insert—“(10) In making rules under subsection (2), the Secretary of State must have regard to the following.
(11) Rules must provide for persons seeking asylum, within the meaning of the rules, to apply to the Secretary of State for permission to take up employment and that permission must be granted if—
(a) a decision has not been taken on the applicant’s asylum application within six months of the date on which it was recorded, or(b) an individual makes further submissions which raise asylum grounds and a decision on that fresh claim or to refuse to treat such further submissions as a fresh claim has not been taken within six months of the date on which they were recorded.(12) Permission for a person seeking asylum to take up employment shall be on terms no less favourable than those upon which permission is granted to a person recognised as a refugee to take up employment.””
Lord Roberts of Llandudno (LD)
My Lords, I will speak to Amendment 72 first, as that will explain why Amendment 71 is also necessary. Our progress as humanity has always been a continuous struggle to overcome discrimination and inequality. One can name Wilberforce, Lincoln, Pankhurst, Gandhi, Mandela and so many others who have contributed to ensuring that nobody suffers because of discrimination. All people are of equal value. The struggle continues. People are people wherever they are, and should be treated with respect and dignity.
However, there are some failed asylum seekers who cannot be returned home. At this moment, there are about 3,000 such people living in the United Kingdom. They cannot work. They have no access to benefits and would, in many cases, be destitute were it not for support from government and voluntary agencies. This Section 4 support from the Government is entirely separate from normal asylum support for people whose claims are pending. Under Section 4, a person will receive £5 per day, or about £36 per week. Out of this, they must pay for food, clothing, toiletries and other essential living needs. We are glad that housing and utilities are provided separately.
In April 2012, 779 of these 3,000 people were children and they are discriminated against in certain ways. For instance, the use of the Azure card is restricted to a list of certain shops and these are often the most expensive. So many of the smaller and less expensive stores, such as Aldi and Lidl, which could provide far more for those with Azure cards, are not included in the list. Whatever happens to my amendment, I hope that the Minister will at least tackle that issue, so that those places where people can get better value or a greater quantity for their money—including corner shops as well—can be considered.
Amendment 72 would allow for people totally trapped in the UK to survive. They would escape the absolute poverty to which Section 4 condemns them. It would also save taxpayers millions of pounds. To deny a person the right to work is to deny ourselves the contribution that that individual can make to our society. Our coalition partners speak of hard-working families. I would urge the inclusion of those whose one aim is to be a hard-working family. Last December, there were 23,000 of them who had the ability to earn a living. Can anything be more demoralising than having skills that you are not allowed to use, a family you are not allowed to support, or a country to which you would willingly pay your taxes, if only you were allowed? What evidence does the Minister have that the period before an asylum seeker can apply for a job would in any way be a threat if it were reduced from 12 to six months? What conversations have been taking place with the 12 European Union countries that have much lower limits than the UK? Why have we not signed up to the EU reception conditions, which reduce to nine months the period for which asylum seekers can be excluded from the labour market? That is not quite six months, but it is coming down.
Amendment 71 would allow those who have been waiting six months for a decision to claim the right to work. In December last year, the number of those waiting was 6,249, excluding dependants. We have a real opportunity here. We could reduce the burden on the taxpayer because asylum seekers who are able to work will no longer need to be supported by the benefits system. After all, we are living in times of austerity. Instead of being dependent, these people could contribute to the economy through taxes and consumer spending.
There is an understandable worry here in Parliament that allowing asylum seekers to work will blur the boundaries between asylum and economic migration. However, I suggest that a strong asylum system, which makes the right decisions the first time around, need have no fear of such a blurring of boundaries. I am sure that economic migrants making a spurious claim in order to access the UK jobs market would not be able to put in a claim credible enough to have the UKBA scratching its head for six months. An asylum claim with no real basis should not take six months to be rejected.
History shows that when new arrivals come to the UK, they contribute substantially to job creation in our country. A week ago tomorrow, the Centre for Entrepreneurs published a report entitled Building our Businesses, Creating our Jobs. Here, as in the United States, 60% of the top technology businesses were started by migrants. The next figure really astounded me: in the UK, 456,073 migrant entrepreneurs, representing 155 countries, started many of our industries. Our economy owes so much to migrants who are misunderstood and even reviled in some quarters—and it has always been so. In 1938 the Daily Express ran the headline: “German Jews Pouring into Britain”. These folk, who were escaping the Holocaust, were responsible for more than 50% of the new industries that helped the south Wales valleys to defeat the great depression at that time. We shall miss out in 2014 by denying their successors the right to work.
I should like an assurance from the Minister that the Government support the idea of the equality of all people. I should also like to see the evidence, if it exists, that other nations suffer because they allow asylum seekers to work after six months or sooner. Lastly, does he accept the fact that nearly 500,000 immigrants have been responsible for new businesses in the United Kingdom? The Bill can either continue the progress that I mentioned previously—helping a person to find his feet and grasp his opportunities—or it can be a backward step by keeping those who would enrich our communities idle and hopeless. When the time comes, I urge the Minister to support this amendment.
Baroness Lister of Burtersett (Lab)
My Lords, I thank the noble Lord, Lord Roberts, for tabling these amendments. I was pleased to add my name to them, not least because I was a member of the parliamentary inquiry into asylum support for children and young people, and I helped to launch a Freedom from Torture report called The Poverty Barrier: The Right to Rehabilitation for Survivors of Torture in the UK. Also, on a personal note, the noble Lord referred to the Express headline about German Jews pouring into this country. My father was one of those German Jews.
I shall start with the right to work. It is a human right enshrined in the Universal Declaration of Human Rights and incorporated into human rights law as part of the International Covenant on Economic, Social and Cultural Rights, which recognises,
“the right of everyone to the opportunity to gain his living by work”.
After the Second World War, TH Marshall wrote that in the economic field, the basic civil right is the right to work. The importance of this right, or rather the lack of it, for individual asylum seekers is brought out movingly in the report to which I have referred. The parliamentary inquiry talked about how asylum seekers who are not able to undertake paid work lose skills, how they are not able to provide a role model for their children, and the impact on their self-esteem, self-confidence and mental health. All this has a damaging effect on their children. According to the Freedom from Torture report:
“Many questionnaire respondents, and most participants in client focus groups, highlighted the importance to them of having permission to work while their asylum claim is decided as a means of supporting themselves and being self-reliant. Indeed, the lack of permission to work for asylum seekers was a major theme of discussion and the key change that focus group respondents called for, although they also recognised that many torture survivors are not well enough to work”.
The weekend before last, noble Lords may have read in the Guardian an interview with six refugees or asylum seekers with professional backgrounds. One of them was a senior government adviser from the Ivory Coast now living destitute in Birmingham. The article says:
“But for the moment, what makes her unhappy is the enforced idleness: the UK Border Agency stipulates, in emphatic capitals, in correspondence with her, ‘You are NOT allowed to work’”.
It goes on:
“‘Work is health,’ she says, taking off her glasses and rubbing her eyes. ‘I started working when I was 21. I am an active person. When you have nothing to do, you look on your situation and start to think. You say to yourself: “What am I doing? What will become of me?”’”.
If we were professional people who were forced to leave our home and seek asylum in another country, how would we feel if we were not allowed to contribute to the country that we wanted to make our new home?
Much of government social policy, whichever party is in power, is premised on the principle that paid work is the primary responsibility and the most important contribution that people make to society, summed up, as the noble Lord said, in the mantra of “hard-working families”. However, successive Governments deny asylum seekers the opportunity to make such a contribution for a whole year, even though the evidence shows that it helps integration. Home Office research shows that delayed entry to the labour market can cause problems even when refugee status is then granted, leading to high levels of unemployment and underemployment. It would appear, therefore, that the Government work on the assumption that asylum seekers will not be granted refugee status, so it does not matter to this society what the long-term effects of enforced idleness are. I hope I am wrong, and would be grateful if the Minister could disabuse me, but that is how it comes across.
As the noble Lord, Lord Roberts, said, the Government argue that to allow asylum seekers the right to work would blur the distinction between economic migrants and asylum seekers, and act as a pull factor. However, we are not calling for an immediate right to work: there would still be a six-month delay. In 11 other European Union countries, in both northern and southern Europe, asylum seekers are permitted access to the labour market after six months, or sometimes even less, of waiting for a decision. In all of those countries, except Sweden, fewer applications for asylum were received than in the UK, which does not suggest that it acts as a pull factor. The lack of impact on the number of applicants is confirmed by a recent study of OECD countries. If we do not allow the right to work, the danger is that asylum seekers who end up in the shadow labour market will face the kind of exploitation referred to earlier by my noble friend Lord Rosser.
I fear that Governments are often timid with regard to the rights of asylum seekers for fear of public opinion. However, surveys by the IPPR and the British Social Attitudes survey show that there is public support for allowing asylum seekers the right to work. The Joseph Rowntree charitable trust, in an inquiry into destitution among asylum seekers a few years ago, said:
“Overwhelmingly, giving asylum seekers the right to work was the favoured solution identified”,
by those who gave evidence.
On the question of destitution, the parliamentary inquiry of which I was a member found that the current asylum support system is forcing thousands of children and young people who are seeking safety in the UK into severe poverty. We were shocked to hear of instances where children were left destitute and homeless, entirely without institutional support and forced to rely on food parcels or charitable donations. This cannot be right.
Baroness Williams of Crosby (LD)
My Lords, my name, too, is attached to this amendment, and I very strongly support what my noble friend Lord Roberts and the noble Baroness, Lady Lister, have already said on this matter.
We have a very strange system in this country, under which an increasing amount of public expenditure sustains asylum seekers and people who are in detention but we do not enable ourselves or them to take any adequate steps to reduce that burden of public expenditure, nor to give the moral and responsible possibilities that detainees and asylum seekers very badly need. The noble Baroness, Lady Lister, put it very well: there is nothing more demoralising than stopping people from working and at the same time keeping them under various kinds of restraint and control.
I am a patron of the Gatwick detention centre. It is one of the most successful detention centres, for the straightforward reason that it has a very substantial group of volunteers who continually meet and talk to asylum seekers and others in order to sustain morale. They would certainly support what my noble friend Lord Roberts said about the steady demoralisation that occurs with every month that passes, when somebody is unable to contribute to their own family or their own well-being, or to find ways to work.
As the noble Baroness, Lady Lister, said, it really is not necessary. We are one of the few countries that creates such a long wait before somebody is given permission to work. In the course of that long wait, the sense of responsibility—the sense of obligation to the society where one is—begins to melt away, to the point where people become totally demoralised and have no strong sense at all of where their future lies or how they can make it better than it is at present.
There are two major motivations for asylum seekers. One is primarily individual: the woman who is escaping from something like female genital mutilation or the young man who is homosexual in a society that is passionately opposed to that. Those are individual motivations. But there are also among asylum seekers some who are seeking what one can describe only as universal values: the Aung Sang Suu Kyis and Nelson Mandelas who are seeking asylum because of what they have done in their own societies. Some of the finest people I have ever come across are asylum seekers who have fought for democracy in a tyrannical state or fought for freedom of speech in a state that does not permit it. We are constantly missing the contribution that they can make.
We all respect the very great commitment of the noble Lord, Lord Taylor, to trying to make things better for people in this situation. I hope that he will call on the Home Office to reconsider whether this strange policy of expensive detention followed by very long periods of almost complete loss of hope on the part of those who are detained or who are asylum seekers can be addressed in a more constructive way. The noble Baroness, Lady Lister, put it very well: it is really hard to believe that the combination of extreme poverty and detention is the best way we can find to deal with people who are genuinely seeking asylum.
I hope very much that the Home Office will consider softening its present policies somewhat in order to enable genuine asylum seekers to have the opportunity to work and to support their families on more than £5 a day. None of us would find it very easy to live on that kind of sum, let alone sustain and keep families and children on the tiny amounts of money that are made available by the state. Noble Lords referred to charitable contributions, and there are some charitable contributions. I can think of much better reasons for those charitable contributions to sustain the children of asylum seekers than because their parents are unable to work to sustain them themselves.
The Earl of Sandwich (CB)
My Lords, I, too, pay tribute to the noble Lord, Lord Roberts, for bringing this amendment back and for making a powerful moral case, and to the noble Baronesses, Lady Lister and Lady Williams, for supporting him.
This is not a new amendment. This amendment has been around a long time. We have waited a long time. The right reverend Prelate will remember that Christian Aid and the churches were backing this as a major campaign, and we have seen it again and again in different incarnations throughout various immigration Bills. Governments of both parties have decided more or less to ignore it. When I was on the Independent Asylum Commission, we recommended it. Governments do not like it because of the administration involved. This Minister may see this old chestnut coming back and may be able to address it in a new way. Perhaps he will consider the argument about assimilation that was made by the noble Lord, Lord Roberts. Genuine asylum seekers who want to belong to our society should be given encouragement after a minimum period, which in this amendment is six months.
The Minister heard the noble Earl, Lord Listowel, make the point about the motivation of young asylum seekers and how quickly they adapt, while the noble Baroness, Lady Lister, reminded us of the terrible phrase “enforced idleness” in that Guardian article. Surely if we recognise the contribution of migrants and asylum seekers, we should open up opportunities early on and increase the chances of their integration in future.
I am also sympathetic to Amendment 72 with regard to bail proceedings. Asylum seekers suffer a lot while awaiting bail, and as patron of the visitors at Haslar in Portsmouth I recognise very much what the noble Baroness, Lady Williams, said about the people who work with asylum seekers knowing about this. We must listen to them, because £36 a week is not a great deal.
Lord Lea of Crondall (Lab)
My Lords, in this debate there seem to be two conflicting policy desiderata in play. Judging by the very powerful speeches that have been made, lateral thinking seems to be required. The two pieces of policy analysis, pro and against, seem to be mutually exclusive, but I would hope that before the Bill is enacted some thought could be given to some sort of halfway house. That might seem to be a rather facile thing to say. However, there seems to be too much polarisation in the way in which this is being argued. Obviously, I cannot anticipate what the Minister will say in his response, but at the moment this seems to be a case of two ships passing in the night. On a point of such sensitivity, I hope that this does not continue quite in that form.
Lord Dubs (Lab)
My Lords, as has been said, this issue has been with us for a long time. I still find it hard to understand why we persist in saying to people, “You will be destitute because we want to make your life uncomfortable in the hope that you’ll go away”. I cannot think of any other reason why we have this policy. Surely it is humiliating to people who have skills and could contribute to our society for us to say to them, “No, you may not do that”. If any of us were in that position, what would we do? Would we be destitute or would we work illegally? I suspect that we would work illegally, and there are of course jobs like that to be found.
I do not recommend that people work illegally but I do recommend that people should not be put in the position where they have very little choice. This is a very unhappy situation for people. There would be no cost to public funds; indeed, if people had a job, that would benefit public funds because they would pay national insurance and income tax. No Chancellor of the Exchequer needs to be frightened of this. This is a point of simple humanity. For heaven’s sake, let us change the present policy.
Lord Hylton (CB)
My Lords, I support both amendments and congratulate the noble Lord, Lord Roberts, on tabling them. I am very impressed by the generosity of the British public in supporting both detainees and asylum seekers in many different ways—for example, the detainee support groups attached to almost every detention centre.
Regarding Amendment 72, is it the case that individuals have not been able to get to bail hearings simply because they are in extreme poverty? Bail hearings are one way of reducing the number of people in detention—and a good way, I suggest. The British public have shown their generosity by their willingness to provide bail in such cases.
Earl Attlee (Con)
My Lords, as the noble Earl, Lord Sandwich, pointed out, this is not a new issue. I am fairly sure that I have answered Oral Questions on it, and I do not recall experiencing any difficulties with the whole House. I would be happy to answer another Oral Question on this issue.
Baroness Lister of Burtersett
I hope the Minister is not suggesting that the survivors of torture who were interviewed in the study were not somehow genuine. These are people who had been seen by clinicians who were convinced that they had been through a terrible time. The trouble is that their status takes time to sort out. Even if they are eventually given refugee status, sometimes the worst problems begin then because they have not been prepared for it.
Earl Attlee
I did accept, in the last words I said, that some cases from certain countries can take a long time to determine, but in the case of the failed asylum seekers, they have failed to convince the courts that they have a good case.
Lord Avebury
My Lords, does my noble friend not recognise that there are probably hundreds of thousands of failed asylum seekers who cannot be returned to their countries of origin and who are left destitute in this country because they are unable to work? Does he not think that in those cases, such as the refugees from Iran who are not accepted back by their country of origin, it is ridiculous to allow them to fester here for years without work?
Earl Attlee
My Lords, they are failed asylum seekers, and it is their choice to stay in the United Kingdom.
Lord Avebury
No, that is not true. I am sorry, my Lords. I was talking about the people who cannot return to their countries of origin and whom the Home Office recognises are stopped from returning to their countries of origin by reasons of the decision of their state. In the case of Iran, for example, there are thousands of asylum seekers who are prevented from returning to their country of origin because the state will not allow them to.
Earl Attlee
My Lords, I accept that there are some people in the class that my noble friend describes.
My noble friend Lady Williams talked about supporting a family on £5 a day—I cannot recall exactly what she said—but the payment levels for asylum seekers with children are much higher. A family with two children receives approximately £170 per week. Accommodation is also provided, with utilities—electricity and gas—provided free.
Amendment 72 would make the support given to failed asylum seekers and persons on bail, known as Section 4 support, the same as the support given to asylum seekers—Section 95 support. This is inappropriate, as the types of assistance are different and serve different purposes.
The support that we provide to asylum seekers enables us to meet international obligations. However, there are no obligations routinely to assist failed asylum seekers, the vast majority of whom can reasonably be expected to avoid the consequences of destitution by returning to their own countries—although I am mindful of my exchange with my noble friend Lord Avebury. Exceptions are made only where there is an unavoidable obstacle preventing the person’s immediate departure; for example, if they are too sick to travel, need time to obtain a necessary travel document or have made further submissions relating to their asylum claim. These arrangements ensure that the individuals do not suffer inhuman or degrading treatment contrary to Article 3 of the European Convention on Human Rights as a result of being left homeless or without support.
We also use Section 4 to provide accommodation to persons released from immigration detention on bail. The provision of accommodation in this instance is solely to avoid the person being unnecessarily detained through lack of a suitable bail address. Section 4 cases are provided with a weekly allowance to cover their essential living needs provided they move into accommodation supplied by the Home Office. Existing legislation explicitly prevents the allowance being provided in cash.
My noble friend Lord Roberts referred to the limitation as to the retailers involved. In my personal experience, supermarkets provide better value for money than many corner shops. The value and flexibility of the allowance is rightly less than the allowances provided under Section 95. Section 4 support is a temporary fix for people who are not asylum seekers and in nearly all cases need to make arrangements to go home.
The noble Baroness, Lady Lister, referred to the situation in other European countries. She will be aware that these countries have different legal systems and that this country is a very attractive destination.
In answer to my noble friend Lady Williams, I fear that I will be unable to recommend to my right honourable friend the Secretary of State that she change the policy, for reasons that I have given. In light of these points, I hope that my noble friend Lord Roberts will agree not to press his amendments.
Lord Macdonald of River Glaven (LD)
Before the Minister sits down, will he respond directly to the suggestion made by the noble Lord, Lord Dubs, that the purpose of the present policy is to make life in the United Kingdom so unattractive for these vulnerable people that they leave?
Earl Attlee
My Lords, no. The purpose of the current policy is to deter economic migration, because people would be able to come here, claim asylum and after a while be able to work. With this policy, we can deter economic migration through the asylum route and therefore properly determine the genuine cases.
Baroness Lister of Burtersett
Will the Minister answer my question about the assurance given to Julian Huppert by the Minister in the Commons that he would look into the suggestion that it could be cheaper to have one asylum support system rather than two separate systems? Perhaps I may point out on the “corner shop versus supermarket” issue that not everyone has a supermarket in easy walking distance and that asylum seekers would not have the money to get to the supermarket.
Earl Attlee
The noble Baroness may make a valid point about the supermarket and the corner shop, but we are talking about operational details here. I will write to her if there is anything that I should add on that point. She may be right that to do what she suggests might make for a more economic system, but it would have the undesirable effect of encouraging a flood of economic migrants through the asylum route, which is why this Government and the previous Government have adhered to the current policy.
Baroness Hamwee
My Lords, perhaps I may add markets to the mix of supermarkets, corner shops and all the rest of it. The noble Earl might find that they are the cheapest of all, but cannot be accessed. I also put into the noble Earl’s mind, perhaps for the future, the therapeutic value of being able to work.
Earl Attlee
The noble Baroness makes an extremely important point. I am well aware of it, which is why asylum seekers are able to do voluntary work.
Lord Roberts of Llandudno
My Lords, I remind the noble Earl, Lord Attlee, of an answer he gave me some months ago when he said that the intention was to make it very uncomfortable for asylum seekers to stay here and to work here. If he looks it up in Hansard, he will remember that comment.
Do the Government accept the equality of people in this sphere? Do they accept that a child is a child, whether they are Welsh or Scottish—well, I must not say that after last Saturday? Children and families need respect. Is not this refusal to allow the parents to work after six months denying children and others that very status in society? Another question that I asked the Minister was: how many conversations have taken place with those European countries that allow asylum seekers to work after six months or less? Have the Government asked for the comments or experience of those countries? If they manage it, why cannot we?
Is not the whole issue that if we say no for another 12 months, it adds to the cost and to the listlessness and helplessness of a person who wants to work but is not allowed to work to support his family? I also ask that that list of Azure card shops should be expanded. If he or others go to those shops, they will see the difference in prices. A person who has £5 a day or £36 a week would find it far more comfortable to support the family in low-cost shops. Also, when will we sign the European reception directive, which other countries have signed but we have not?
Having said that, we will again return to the issue at Report. I am sure that, by that time, the Minister and others on every side of the House will see the reasonableness of what we are asking for now. With that caveat, I beg leave to withdraw the amendment.
Baroness Hamwee
( ) “Claim for asylum” has the same meaning as in section 94 of the Immigration and Asylum Act 1999 (interpretation of Part VI).
( ) An appeal is pending for the purposes of this section when it is pending under section 104 of the Nationality, Immigration and Asylum Act 2002 (pending appeal).”
Baroness Hamwee
I will speak also to Amendments 72B to 72G. The amendments take us to the clauses on driving licences. The first amendment, similar to one which I moved in respect of bank accounts on Wednesday, would allow people seeking asylum whose claim has yet to be determined—that is, there has not been a decision or an appeal is pending—to be able to drive. The period for which asylum seekers can wait is often considerably more than six months. I mention that in this context because non-EEA nationals are required to have six months’ leave to apply for a British licence.
I am concerned about the people in question seeing skills gradually tail away, not having the opportunity to integrate, not being able to volunteer—we have just been told that that is important, and indeed it is—to use their skill as a driver in a voluntary capacity.
Lord Avebury
My Lords, Clauses 41 and 42 prevent a person who is not lawfully resident in the UK from applying for a driving licence, and allow the Secretary of State to revoke the licence of a person who already has one, if he is not lawfully resident—meaning that he requires leave to enter or remain and does not have it. Under existing law, since March 2010 a person must have leave to remain in the UK for at least 185 days, ruling out the vast majority of unlawful residents—as indeed it should, because the possession of an identity document would help them to stay in this country when they are not entitled to. Asylum seekers, and those appealing against refusal of asylum, should not, however, be lumped in with illegal entrants. As long as their applications are not fully determined they are here lawfully; however, they would be caught by the 185-day rule. Most asylum seekers do not have cars, obviously, but for the few who do there is no reason that they should not continue to drive.
May I also ask about failed asylum seekers, a point I raised with my noble friend Lord Attlee in the previous debate? They cannot be sent back to their country of origin for one reason or another: generally it is because the country of origin refuses to accept them. I gave the example of Iran. My noble friend Lady Williams is also muttering in my ear about the many refugees from Zimbabwe who were stopped from returning to their country of origin for many years, with the full approval of the Home Office. Is the discretionary leave granted to them longer than 185 days? Would they be classified as lawfully resident? If they are allowed to work, as some of them are, it could be a severe disadvantage if they are not able to drive. As my noble friend the Minister will be aware, there are tens of thousands of people indefinitely stranded here because their country of origin—I named Iran and Zimbabwe but Somalia is another example—either cannot or will not accept them. Although their not being able to drive may not be the largest problem that they face, the Minister would send a glimmer of light into their lives if they could apply for a licence.
Baroness Smith of Basildon (Lab)
My Lords, I have just a couple of questions on this group. The noble Earl may recall that at Second Reading, one thing that I said we would do in examining the Bill was, to look at first, the evidence base for bringing proposals forward and the workability of the measures proposed and, secondly, the impacts—including the unintended consequences. I would find it quite helpful if the noble Earl could say something about the reasons why this clause on driving licences has been brought forward.
On the point about the revocation of driving licences I would presume that someone who is in this country, even if they do not have a legal right to be here, is taking quite a responsible attitude if they have a driving licence. It means that they would probably have insurance. If that driving licence is then revoked, their insurance will also be revoked. Does that not cause a significant problem for other drivers on the UK’s roads if they are involved in an accident with a car whose driver, because of the revocation, has no licence at that point and whose insurance will have been revoked as well? It would be helpful to hear whether any thought has been given to that.
In terms of looking at the problems on our roads for those who are not entitled to be here, if the noble Earl were to do a straw test of members of the public, I think the issue causing them the most concern would be that of foreign cars being in this country for what is obviously longer than the six months that they are entitled to be before they are reregistered. Their drivers commit numerous offences on the roads, knowing full well that no one is going to track them down or do anything about it. The Government are taking action to bring us into line with the Irish Republic on driving offences but no action seems to be being taken regarding other countries. Can the noble Earl comment on why that matter is not being dealt with while that of driving licences is? That would be helpful in trying to understand the purpose of this clause.
Earl Attlee
My Lords, perhaps I might say a few words about Clause 41. The ability to drive in the UK is an important aspect of the quality of life for many UK residents and a privilege extended to many lawful migrants. A UK licence is used not only to drive but to secure employment and a range of services, as often it is used as proof of identity. There is no reason why the privilege of a UK driving licence should be extended to migrants who come to the UK only for short periods, have no leave or are here unlawfully. The EU directives in this area already require member states to ensure that applicants for licences are normally resident in the state of application. Those who come to the UK only for short periods of less than six months, those who have no leave and those who are illegally present in the UK should not be able to obtain a UK driving licence. This has been the Government’s policy since a Written Ministerial Statement on 25 March 2010 by the then Secretary of State for Transport, the noble Lord, Lord Adonis. This policy has been adopted by the Driver and Vehicle Licensing Agency and the Driver and Vehicle Agency in Northern Ireland.
It is equally wrong that migrants who have obtained a UK driving licence and then overstayed their leave in the UK should be able to continue using that licence. There are no current powers to remove this privilege. Clause 42 will remedy this: it will provide a new power to revoke a UK driving licence held by a licence holder who is unlawfully present in the UK. It will also create a criminal offence to fail without reasonable excuse to surrender a revoked driving licence.
I turn to the amendments tabled in respect of Clauses 41 and 42. Regarding Amendments 72A, 72B and 72E, asylum seekers should not be able to obtain the advantage of a UK driving licence until granted leave. This would encourage economic migrants to misuse the asylum system to the detriment of genuine asylum seekers. I fear that I can be no more helpful than I was for the previous amendment. Driving is indeed an ideal route to employment for migrants, but only when they have acquired the right to be here. My noble friend Lord Avebury again raised the issue of failed asylum seekers who cannot go home. It may be a difficult issue, but it is not a good reason for agreeing to open the floodgates to encourage asylum seekers.
The Government do not intend to seek blanket revocations of driving licences and asylum seekers complying with the immigration process who already hold a licence will not generally face this sanction. Refugees will be able to obtain a UK driving licence provided they meet the relevant requirements.
On Amendments 72C and 72F, the grant of a licence is currently, and will remain, an administrative process. A person refused a licence on the grounds that they do not satisfy the residency requirements may make representations to the Home Office or reapply for the licence with the relevant proof of identity. Allowing a right of appeal direct to the courts against a decision not to issue a licence will simply drive up costs for all involved.
Turning now to Amendments 72D and 72G, an appeal against a decision to revoke or grant a licence is not the appropriate place to consider the merits of an immigration claim. This should be done via an immigration route for which appropriate appeals mechanisms already exist. It is not appropriate to allow a court hearing an appeal to consider a change of circumstances following revocation. For the affected person, the easiest and cheapest remedy is to apply for a new licence having obtained the necessary immigration leave.
The noble Baroness, Lady Smith, talked about the difficulty of a motorist having no licence, resulting in the motorist having no insurance either. I agree with the circumstances described. The police will not necessarily detect this by checking the automatic number plate recognition system, under which uninsured drivers can be detected; I have seen that happen. I accept that it will be detected only if the police actually stop the motorist in question, but that is an unintended consequence and there is little that can be done about it.
Baroness Smith of Basildon
I thank the Minister for that helpful explanation. Does this not then fall into the category of unintended consequences? The noble Lord says that the only time it will come to light is if the police stop the vehicle for some other reason. That is not the only time it will come to light. If that driver is involved in an accident in which they are at fault, the other driver will be unable to claim any compensation or on their insurance. The UK driver, going about their lawful business, will be disadvantaged by such a policy.
Earl Attlee
I agree with the facts as described by the noble Baroness. She will of course be aware of the Motor Insurers’ Bureau scheme, which provides cover where someone has an accident with an uninsured motorist.
Baroness Smith of Basildon
Can the noble Earl assure me that the Government have been in contact with the Motor Insurers’ Bureau, and that it would in fact cover those kinds of circumstances, where the Government withdraw a licence and therefore insurance from somebody who had been insured?
Earl Attlee
My Lords, the situation is no different from that of a young tearaway motorist who loses their licence because they are banned, and then continues to drive without insurance. It is just another category of someone who is driving illegally.
I have listened carefully to what noble Lords have to say, but I have to stand my ground and hope that my noble friend will feel able to withdraw her amendment in due course.
Lord Avebury
My Lords, can the Minister tell your Lordships how many asylum seekers who failed their appeals but are left here because of their inability to return to their country of origin there are? Can he say for what period they are granted temporary leave to remain? Is it more or less than 185 days?
Earl Attlee
My Lords, the noble Lord is asking me a detailed question about failed asylum seekers who cannot go home. I will gladly write to him with full details.
Baroness Hamwee
My Lords, on the first of my amendments the noble Earl said that he could not be any more helpful than he had been previously on the same issue in a different context. I thought that he had been quite helpful, so I suppose that I had better go back and reread that.
Baroness Hamwee
The Minister might have added to the list of items for Report. I will look at what he has said. For the moment, I will say only that I very much regret the turn that the language of the debate has taken this afternoon, with floodgates, and the conflation of asylum seekers and economic migrants. However, we are not debating that, so I will not test the Committee’s patience by taking that further. I beg leave to withdraw the amendment.
Baroness Hamwee
Baroness Hamwee
My Lords, this is a short amendment, which asks a short question. Schedule 7 deals with immigration advisers and immigration service providers and includes paragraphs about fees for registration. Paragraph 3(2)(b) will write into the legislation provision for the waiver of all or part of a specified fee in particular cases. The Explanatory Memorandum to the Bill indicates that the Government “plans”—that is the word used—to use the power to require the Immigration Services Commissioner,
“to waive the registration fee in relation to advisers who do not charge for their services”.
My amendment would put in a waiver in the case of an applicant which is a charity or a non-profit making organisation.
Of course, I do not disbelieve what is in the Explanatory Memorandum, but I would like to have the assurance in the legislation that the small charities and non-profit making organisations, which I suspect limp from one week to the next—I do not say that at all disparagingly—and could use a great deal more funding than they have, can know that they will not be charged for registering to give the advice which many of them so helpfully give. I beg to move.
Earl Attlee
My Lords, I hope that on this occasion I can delight my noble friend Lady Hamwee on this amendment.
Amendment 73A seeks to define the organisations which will benefit from an exemption from paying a registration fee to the Immigration Services Commissioner. I can assure the Committee that there is no intention to add a financial burden to charities, voluntary organisations or other non-profit making organisations that offer immigration advice and services.
The Government understand that if these organisations were to be charged a fee, these measures could restrict the ability of such organisations to provide services and this would have an impact on the availability of free immigration advice for those not able to pay. The intention is to continue the principle of exempting advisers who do not charge a fee for services from paying the OISC a registration fee. The discretion conferred on the commissioner in the original clause in the Bill will be consistent with the discretion that currently exists in determining exempt status.
The current application process for exemption requires the commissioner to examine the type of organisation, its status as a non-profit making organisation and its charging policy. The actions will continue to be carried out and will be part of the new registration application process.
Subject to parliamentary approval, the Government will lay an order, as provided by paragraph 3 of the schedule, to specify that those organisations which do not charge for services will not have to pay fees when they apply for registration or reapply for registration. The Government do not want the Act to include a definition of organisations not required to pay a fee because such a level of detail is not necessary for this legislation and such definitions could be open to interpretation in a manner not intended. I hope I have satisfied my noble friend and that she will feel able to withdraw the amendment.
Baroness Hamwee
My Lords, I am grateful to my noble friend. When I see the statutory instrument, I may be delighted. I beg leave to withdraw the amendment.
(c) the court gives the Secretary of State permission under subsection (4B).(4B) This subsection applies if the Secretary of State—
(a) makes the relevant decisions in relation to an individual in a case which falls within subsection (4A);(b) makes an application to the court for permission to make an order.(4C) The application must set out how the deprivation is conducive to the public good and how the person, while having that citizenship status, has conducted himself or herself in a manner which is seriously prejudicial to the vital interests of the United Kingdom, and of the islands, or any British overseas territory.
(4D) The function of the court on the application is—
(a) to determine whether the relevant decision of the Secretary of State is in accordance with the law, and(b) to determine whether to give permission to deprive a person of citizenship in a case which falls within subsection (4A).(4E) In a case where the court determines that a decision of the Secretary of State in relation to the conditions set out in subsection (4A)(b) is not in accordance with the law, the court may not give permission under this section.
(4F) In any other case, the court may give permission under this section.”
Baroness Smith of Basildon
My Lords, Clause 60, on deprivation of citizenship, is very important and far-reaching. There are two groups of amendments on this issue. I shall make my main remarks on this group and make a couple of comments on the second group.
Clause 60 amends Section 40 of the British Nationality Act 1981 to enable the Secretary of State to deprive someone of their citizenship even if that would make them stateless, but only if the citizenship has been gained through naturalisation and the Home Secretary is satisfied that the deprivation is, in the words of a government new clause introduced by her in the House of Commons,
“conducive to the public good because the person, while having that citizenship status, has conducted him or herself in a manner which is seriously prejudicial to the vital interests of the United Kingdom”.—[Official Report, Commons, 30/1/14; col. 1026.]
Currently, the law allows the Home Secretary to deprive a person of their citizenship status for two reasons: first, if the person acquired it using fraud, false representation or concealment of a material fact; or, secondly, if the Home Secretary is satisfied that, in doing so, it is conducive to the public good and that the person would not be left stateless as a result. Clause 60 seeks to amend the second condition to, in the words of a Minister in the other place,
“ensure that individuals who are a serious threat to this country cannot retain citizenship simply because deprivation would leave them stateless”.—[Official Report, Commons, 11/2/14; col. 259WH.]
I question the word “simply” in that context. It would be helpful if the Minister could clarify whether there are any other areas of law in which we have different categories of citizens.
I know that everyone in your Lordships’ House without exception wants to do all they can to protect citizens from a potential terrorist threat and activity at home and abroad, and, indeed, recognises that we have international obligations in this regard as terrorism is a global threat. The Home Secretary, Theresa May, is aware of the seriousness of the issue before us today. She recognises that depriving an individual of their citizenship,
“is one of the most serious sanctions a state can take against a person”—[Official Report, Commons, 30/1/14; col. 1038.]—
and we agree with that. This clause was tabled just 24 hours before Report stage in the other place, with no prior consultation, let alone explanations or agreement, and a very truncated debate. Parliament has had little opportunity to scrutinise this measure, which has massive consequences and implications both for the individual and for the state, and for other countries.
We have tabled Amendments 74 and 79, which add a permission stage. Effectively, the Secretary of State would be required to seek permission from the court before making an order. I readily admit that the drafting is not perfect; we are not wedded to any specific wording here. However, we need a response from the Minister on the principle of oversight.
Clause 60 is a response to the judgment about Hilal Al-Jedda by the Supreme Court, which clarified that the Secretary of State could not withdraw citizenship from an individual if this would leave them stateless. For the Government to do so would lead to one of two scenarios. The first is that a former citizen would remain locked in the UK, unable to leave, work or receive any support, but the Government would still have obligations to that individual. In January last year, the Department for International Development published guidance on how a stateless person could apply for leave to remain in the UK.
The second scenario is that the former citizen, whom the Government consider to be engaged in actions prejudicial to UK interests, is left stateless in another country. I would be very interested to know what discussions the Government have held on this proposal with other countries, such as the USA or Germany, which have not given themselves the power to make other citizens stateless. The fight against terrorism is international and global. What are the implications for national and international security of allowing terror suspects to be loose and undocumented in whatever country they happen to be in when their citizenship is revoked? A number of issues arise from this clause. First, what will be the process for making an order under this clause? The Minister, James Brokenshire MP, has said that the process will,
“involve extensive research and understanding of an individual’s previous behaviour, any potential human rights issues and the threats that they pose to the UK. Officials from the Home Office and other Departments are consulted before the information is reviewed and a final decision made by the Home Secretary”.— [Official Report, Commons, 11/2/14; col. 259WH.]
The information provided by the department also suggests that the welfare of any children involved would be a consideration. Can the Minister provide further information or clarification on the specific grounds the Secretary of State would consider? Will the Home Secretary be able to take political considerations into account? Will she consult her Cabinet colleagues, for example, or will this decision be made on the advice and information from the security services? Obviously, with such a serious issue, there must be absolute certainty about the decision-making criteria. Accurate, factual information and risk assessments are of paramount importance.
I wonder whether the noble Lord could help me understand a particular case from 2011, which was brought to my attention by the Bureau of Investigative Journalism. It is the case of Y1. The witness statement from the deputy director of the Office for Security and Counter-Terrorism, on behalf of the Home Secretary, stated that the security service considered that Y1,
“presented a substantial risk to UK national security”.
He added that there was clear information that depriving Y1 of British nationality was conducive to the public good. However, he also stated that although they considered that Y1 presented such a risk, they also believed that,
“his detention had reduced the immediate risk he posed and judged that there may be more options for controlling that risk if Y1 were in the UK”.
That is a direct quote from the witness statement that was presented to the court. I read that as the security services wanting Y1 to be in the UK so that they can monitor his activities. They would be unable to do so if he were outside the UK and stateless. Following Y1’s appeal to the Special Immigration Appeals Commission, the judges reported that:
“Ultimately, the Home Secretary rejected the advice of the Security Service on the ‘management’ issue. Following consultation with other senior Ministers, the decision to deprive”,
him of citizenship “was made”.
I do not raise this to question the Secretary of State’s judgment, but I seek clarity on the process. That is why I added my name to the amendment in the next group, tabled by the noble Lord, Lord Pannick. Amendment 79C would require guidance to be published on the process to be followed. It seems to me that we need far more information on how the Secretary of State will make a decision.
Baroness Kennedy of The Shaws (Lab)
My Lords, my noble friend mentioned that I raised this issue at Second Reading with great concern about the consequences. As a result, I have received communications from a number of different, eminent international lawyers. One of them, Guy Goodwin-Gill, is a senior research fellow of All Souls, Oxford, Professor of International Refugee Law at the University of Oxford and a barrister. He and others take a very different view of this from that of the Government. The proposal to allow the Secretary of State for the Home Department to deprive a naturalised individual of his or her citizenship not only risks damaging the United Kingdom’s international relations, but also risks leading to breaches of international obligations and engaging the UK’s international responsibility. Moreover, deprivation of citizenship is not a viable alternative to the responsible prosecution of alleged criminal conduct. Citizenship is not a privilege, but a protected legal status. It is why, for example, the United States, Germany and other countries would not, under any circumstances, contemplate removal of citizenship. The answer to behaviour that we do not like and consider to be criminal is to prosecute it.
Deprivation, with all its consequences in the modern world, is equivalent to a penal sanction of the most serious kind, but imposed without a criminal trial, without a conviction, without close and open examination of the evidence, and without an effective opportunity of defence, contrary to the requirements of due process. From the perspective of international law, in particular, the re-introduction of previously repealed statutory provisions on deprivation resulting in statelessness is arguably inconsistent with Article 8(3) of the 1961 Convention on the Reduction of Statelessness. The deprivation of citizenship resulting in statelessness will engage the United Kingdom’s international responsibility where it violates the rights of other states. Just as my noble friend has asked, I also ask: what do other states make of our intention to do this? It is inconsistent with the United Kingdom’s other international obligations. As a matter of international law, the United Kingdom has no right to deport a person whom it has made stateless to any state which has not expressly agreed to admit the individual; nor does it have the right to refuse to readmit a former British citizen who has been deprived of his or her citizenship while present in another country. Deprivation of citizenship may engage a variety of European convention rights, and a person deprived of their British citizenship does not cease to be within the jurisdiction of the United Kingdom for the purposes of those rights.
Deprivation of citizenship is potentially inconsistent with obligations accepted by the United Kingdom under many different treaties dealing with terrorist acts, in particular, the obligations of investigation and prosecution in the fulfilment of which every other state party has a legal interest. Deprivation of citizenship will likely expose the conduct of the United Kingdom to close and critical scrutiny whenever a former British citizen seeks international protection from the United Nations High Commissioner for Refugees, or as a stateless person or convention refugee.
I wonder whether the Government have given proper consideration to the implications of this step. The proposal to allow the Home Secretary to deprive citizens of their status, even if it renders them stateless, is ill considered. Recent experience suggests that considerable wastage of public money is likely to result from attempts to defend the indefensible, for deprivation itself touches on just too many legal issues. Considered as an internal act, it is by no means clear what deprivation can achieve that the criminal law cannot. The criminal law is the proper process.
In addition, considerable harm will be caused to the United Kingdom’s international relations. The United Kingdom has no right and no power to require any other state to accept its outcasts and, as a matter of international law, it will be obliged to readmit them if no other state is prepared to allow them to remain. Likewise, and in so far as the UK seeks to export those who are alleged to have committed terrorist acts, it is likely to be in breach of many of those obligations which it has not only voluntarily undertaken, but which it has actively promoted around the world up to now, for dealing with international criminal conduct. We cannot speak with forked tongues on this.
Although the current state of international law may permit the deprivation of citizenship resulting in statelessness, at least in its internal form, certain limitations on this competence none the less follow when the act of deprivation takes on an external or extraterritorial dimension which, as we can see from the number of cases, is how we tend to apply it. We apply it to people who are abroad. In light of the above considerations, this implies among other things that no order of deprivation and no cancellation of passports or documents attesting to citizenship should be permitted with regard to any person not physically present in the United Kingdom, but that is precisely how the Government intend to use it. No person deprived of their British citizenship should be removed or threatened with removal unless another state has formally agreed to admit that person and the person concerned is willing to go to that state. These are the problems that faced President Obama with regard to some of the persons being held in Guantanamo Bay.
No order of deprivation should be made unless full account has been taken of family considerations, including the best interests of any children and their status in the United Kingdom. Due process requires an effective remedy and meaningful review of any order of deprivation. In particular, this requires that an appeal or review has suspensive effect, particularly in view of the concerns which courts have expressed regarding out-of-country appeals.
Lord Pannick (CB)
My Lords, I have added my name to several of the amendments in this group and have also indicated my opposition to Clause 60 standing part of the Bill. I share the concerns eloquently expressed by the noble Baronesses, Lady Smith of Basildon and Lady Kennedy of The Shaws. It is a matter for considerable regret that the United Kingdom, which has played so significant a role in the battle to reduce statelessness, should now, if the Government have their way, condone the creation of statelessness, even for people who have damaged the public good. Such people should be put on trial, punished if there is evidence of criminal offences and deported if there is a safe country to which they can be sent. However, to deprive them of nationality and thereby render them international outcasts is simply indefensible.
I share the views of the noble Baroness, Lady Kennedy, about the international law implications of what is proposed, but wish to focus on the practical consequences of what the Government are suggesting. Does the Minister accept—this is the crucial question— that if British citizenship is removed from a person in this country on public-good grounds, with the result that they are rendered stateless, it will make it much more difficult to remove that person to another state? Other states are less likely to accept entry by a person who is stateless than one who enjoys British citizenship. Does the Minister therefore accept that, far from contributing to national security, the exercise of Clause 60 against persons in this country will positively damage national security by making it more difficult to remove people who are a danger to the public good?
For this reason, it seems highly likely that Clause 60 will in practice only ever be used against people who are living abroad. Does the Minister agree that, if we strip a person of British citizenship while they are abroad, thereby rendering them stateless, there is a real danger that the country that admitted them temporarily will take urgent steps to remove them back to this country, since it will not wish to be responsible for a stateless person? It is surely highly likely that the United Kingdom will be told by the country where such a person is living that it admitted that person temporarily only because the individual had a British passport. The foreign country will surely say that, now that the passport has been taken away, the United Kingdom can have that person back. There will then be a dispute with the foreign state—and some such states are our allies—about our duty to re-admit someone who was admitted to it only because they presented a British passport that has now been revoked.
The noble Baroness, Lady Smith, has already referred to the opinion of Professor Goodwin-Gill that the United Kingdom would have an obligation in international law then to re-admit such a person. Even if there is a dispute about international law, this Government are plainly going to face considerable pressure from foreign states to re-admit such people to this country. I would be grateful for the Minister’s views on this: does he agree that Clause 60, far from assisting us to deal effectively with people who threaten the public good, will handicap this country, whether the person is here or abroad when the revocation of citizenship takes place?
Although I have added my name to a number of the amendments in this group, which I see as probing amendments, the problem with all of them, whether to secure judicial control or introduce a test of proportionality, is that they will still allow for the removal of citizenship, even though statelessness will result. My current view is that Clause 60 is so fundamentally flawed, so in breach of international law and so damaging in its practical consequences for the security of this country that it should be removed from the Bill. I am happy—and I am sure that noble Lords who have spoken and will speak in this debate are too—to meet the Minister in the short period of time before we return to this subject, as inevitably we will on Report this month, to see whether there is a possibility of making real progress on this very troubling matter.
Baroness Lister of Burtersett
My Lords, Amendment 76A in my name is, like Amendments 75 to 78 to which I have added my name, designed to mitigate the worst effects of Clause 60. However, like the noble Lord, Lord Pannick, and my noble friend Lady Kennedy, my preference is for Clause 60 not to stand part of the Bill, and we have heard very powerful reasons for why it should not do so.
Amendments 75, 76, 77 and 78 were recommended by the Joint Committee on Human Rights; first, to ensure that Clause 60 is compatible with international law obligations. This has been questioned by the JCHR, drawing on the opinion of Professor Goodwin-Gill, which has already been referred to, that the deprivation of citizenship should be,
“a necessary and proportionate response to the conduct in question”.
The JCHR noted that, in their letter to the committee, the Government said that they did not want,
“to rule out the possibility that deprivation of citizenship leaving a person stateless is necessary in the interests of the economic well-being of the country”.
The JCHR said:
“It is hard to imagine the circumstances in which such a serious measure could ever be necessary and proportionate for such a purpose”.
Will the Minister help us out and give an example of the kind of situation envisaged that would not anyway be covered by terrorism? Economic well-being does not seem to be a reason for taking away someone’s citizenship and making them stateless.
The JCHR said that the best interests of the child should be taken into account and, once again, issued a plea for this to be written into the legislation to ensure that they are,
“treated as a primary consideration”.
The committee also said that the legislation should not be retrospective, which is,
“an exceptional step which requires weighty justification”.
We were not persuaded that such justification exists. I note from a Written Answer on 10 February:
“There will be no time limit, but the conduct being considered must have taken place after the individual became a British citizen”.—[Official Report, 10/2/14; col. WA 101.]
Amendment 76A complements the JCHR’s amendments and has two purposes. First, it would ensure that the power in Clause 60 could not be used against someone when they are outside the country. This would help ensure compliance with obligations under international law and, as has already been noted, the JCHR, drawing on the opinion of Professor Goodwin-Gill, has questioned whether the clause is compliant. The committee said:
“We would be very concerned if the Government’s main or sole purpose in taking this power is to exercise it in relation to naturalised British citizens while they are abroad, as it appears that this carries a very great risk of breaching the UK’s international obligations to the State who admitted the British citizen to its territory”.
That point has already been made but it bears repetition. Will the Minister comment on this important legal point?
The JCHR also expressed surprise at,
“the Government’s refusal to inform Parliament of the number of cases in which the power to deprive of citizenship has been exercised while abroad”,
and made it clear that Parliament,
“is entitled to this information in order to assist it to reach a view as to how the new power is likely to be exercised in practice”.
I pay tribute to the tireless briefing that ILPA has provided to the committee throughout the passage of the Bill, although I fear we have not done it full justice. A freedom of information request submitted by ILPA elicited the information that, of five individuals stripped of British nationality in 2010, all were outside the UK. This has to raise alarm bells. Will the Minister give Parliament—and the committee—this information now?
At Second Reading, the Minister assured noble Lords:
“There is a safeguard of a full right of appeal”.—[Official Report, 10/2/14; col. 417.]
But how is someone who is forbidden to return to the country supposed to exercise that right of appeal? It will not be very easy. In practice that is probably a pretty empty assurance. What will be achieved apart from sullying the UK’s international reputation, as we have already been warned? Liberty suggests that the clause is based on a security fallacy, arguing that stripping someone of nationality abroad will in no way contribute to security at home. Those who threaten our security do not respect national borders; my noble friend Lady Smith has made a similar point.
Lord Roberts of Llandudno
My Lords, I will refer to Amendments 75 to 78 from the noble Lord, Lord Lester. They touch upon important points, including one made in the context of Clause 14 by the noble Baroness, Lady Lister, and myself.
The Government have an obligation to take into account the best interests of any child affected by their decisions. I accept that Amendment 77 must be understood in the light of the reply of the noble and learned Lord, Lord Wallace, to amendments tabled to Clause 14. He stated:
“We believe that the children’s best interests must be a primary consideration. … However, it is simply not the case that a child’s best interests will outweigh every other possible countervailing factor, including illegal immigration and serious criminality”.—[Official Report, 5/3/14; col. 1384.]
Amendment 77 seeks to put on the face of the Bill that the child’s best interests should be considered, no matter what the crimes of the parents might be. This remains true.
I support also Amendment 75, which seeks to limit the dangerously broad and vague power that the Home Secretary asks for. The lack of clarity was outlined to me in a Written Answer from the Minister, Lord Taylor, on 10 February, in which he stated:
“The Government does not wish to be overly prescriptive about the meaning of ‘seriously prejudicial to the vital interests of the United Kingdom’, as the circumstances of each case will be different. However we intend it to cover those involved in terrorism or espionage or those who take up arms against British or allied forces”.—[Official Report, 10/2/14; col. WA 103.]
He cited terrorism, espionage and taking up arms against British or allied forces as possible specific examples. I hope that all here will wholeheartedly agree that the Home Secretary should be obliged to consider whether the deprivation of citizenship is both a necessary and a proportionate response.
Ultimately, this debate will focus on the finer details of this clause, but we must also take a moment to consider whether the deprivation of citizenship is an appropriate response to alleged criminality or threats to security, given its considerable implications for international law. For this reason, I have put my name to the call made by the noble Lord, Lord Pannick, to oppose the clause in its entirety.
Although I have previously stated that I am not one who understands the law to any measurable extent, I remain a concerned citizen. I am deeply troubled that this provision could allow for the citizenship of millions to be removed, with slim chances of appealing.
Let us not forget the judgment of Chief Justice Warren ruling in the United States Supreme Court case of Trop v Dulles in 1958. He said that,
“use of denationalization as a punishment”,
means,
“the total destruction of the individual's status in organized society. It is a form of punishment more primitive than torture”.
I hope that the Minister will take these comments to heart in replying to the Committee.
Lord Macdonald of River Glaven
My Lords, if Clause 60 operates in accordance with the Government’s intentions, it is bound to increase statelessness in the world. The noble Baroness, Lady Lister, has already reminded the Committee of the words spoken by Hannah Arendt many years ago, that statelessness deprives people of the “right to have rights”. It brings about a bleak, hopeless status, or rather a complete lack of status, that the British Government should have no role in encouraging, first, because of the positively terminal impact that the imposition of statelessness is bound to have on the ability of the rightless to function in a way that is even remotely human in the modern world and, secondly, because it is clear that such an imposition as a policy measure can have no sensible part in a co-ordinated international effort to combat security threats. In fact, it appears to be the antithesis of such an effort, even in circumstances where it is precisely co-ordinated international effort that we need.
In fact, the unilateral imposition of statelessness is very likely to be directly unhelpful to those efforts because it carries with it the very real risk of breaching the United Kingdom’s international obligations to a country which has admitted a person on the strength of their lawful possession of a United Kingdom passport. Of course, such a country would absolutely have the right to return an individual directly to the United Kingdom, and what then? As the JCHR has observed, the United Kingdom would appear to have no absolute right under international law to require other states to accept its outcasts. In my view, therefore, this proposal is not only ugly in the sense identified so many years ago by Hannah Arendt; it not only associates the United Kingdom with a policy beloved of the world’s worst regimes during the 20th century; but it threatens illegal and procedural quagmire hardly compatible with the comity of nations, still less with solidarity between free countries in the face of terrorism.
Lord Brown of Eaton-under-Heywood (CB)
My Lords, I, too, have a fundamental problem with this clause. It has been suggested that it was added late to the Bill and designed to overcome the Government’s defeat in Al-Jedda, which was decided by the Supreme Court just last October, but in fact Clause 60 goes substantially further than merely reversing that decision.
Baroness Hamwee
My Lords, this afternoon’s speeches have reassured me that I was not misreading the clause when I ended up, time after time, in confusion—not just as to the principle, but as to the point. I would sum up my confusion with three questions to myself. If someone is stateless, it seems he may be allowed to remain in the country, so how is the threat diminished? Indeed, is not any threat increased because of the reaction of the individual and his community against the state’s action? Secondly, what happens to his dependants—are they not likely to become more of a burden on the state? Thirdly, is this one of those occasions when neither Parliament, concerned with the principle, nor the individual, at the sharp end of the practice, is able to challenge the decision—one of those occasions of “If you knew what I know”? We are not thought police, and I was reassured when I read in the clause a reference to a person having “conducted” him or herself in a prejudicial manner—but of course we cannot know about conduct any more than thought.
Like the noble Baroness, I read the report in the Independent today and I thought it a clear example of the impact on someone left stranded. I think he was served with the decision when he was transferring between planes: he was part way—as he would have said—home, and had to return to, I think I am right in saying, Waziristan. However, he was stranded: separated from his community and perhaps family—I do not recall—in the UK, but regarded almost as an outlaw, and, as he put it, in danger from those in Pakistan and Waziristan who regarded him with considerable suspicion. It is a very disturbing story.
Lord Taylor of Holbeach
My Lords, this has been a very thorough debate on a clause which, as the noble Lord said, we owe it to discuss thoroughly.
I start by adding some further perspective to the debate on the deprivation of citizenship. The measures in the Bill to deprive someone of citizenship can be used only against someone who has chosen, as an adult—not as a child—to naturalise as a British citizen. When choosing to seek British nationality they will have taken an oath, or sworn allegiance, to Her Majesty, and pledged their loyalty to this country. Despite this—
Baroness Kennedy of The Shaws
I know it is early in the Minister’s answer, but can I be clear: is he saying that this will not apply to persons who were naturalised when they were under 18?
Lord Taylor of Holbeach
It will not apply to people under 18. Such people are not able to apply for naturalisation; they can gain British citizenship through registration—in effect, through their parents’ presence in this country. Rather, this amendment to the existing law applies to people who have sought naturalisation. As I say, they pledge their loyalty to this country. Despite this, a small number of these individuals have chosen by their conduct to betray the values and laws of their adopted country. Therefore, in my view, it is only right that the Home Secretary can, in seeking to protect the security of the UK, deprive them of that adopted citizenship, and expect them to reacquire, or to acquire, their former citizenship of another country.
I remind the Committee that the Government already have the powers to deprive citizenship. Such powers have been operated by successive Governments. Listening to the debate at certain times, I got the feeling that the argument was that no Government should have the power to deprive citizenship. However, the clear argument in these amendments is not on that case but on whether the exceptional case of statelessness should be an exclusion from the Government’s powers in this pre-existing legislation.
These powers have their origins in legislation dating back to the First World War, when provision was made for the revocation of citizenship if a naturalised person was suspected of treasonable activities. Section 40 of the British Nationality Act 1981, which has been cited, allows the Home Secretary to deprive British citizenship in two scenarios. The noble Baroness, Lady Smith of Basildon, mentioned them. The first is where the person acquired it using fraud, false representations or concealment of a material fact, which essentially means that they used deception to obtain citizenship for which they were not eligible. In these cases a person may be left stateless. Are noble Lords arguing that they should not be deprived of citizenship in such cases?
The second scenario is where the Home Secretary,
“is satisfied that deprivation is conducive to the public good”,
and that the person would not be left stateless as a result. It is the second of these powers that Clause 60 seeks to amend by returning our position on deprivation action to that which existed as recently as 2003. These powers are provided for and permitted under international law by virtue of the UK’s declaration to the 1961 UN Convention on the Reduction of Statelessness and the domestic legislation that existed at that time. These powers are provided for and permitted under international law.
Baroness Lister of Burtersett
The Minister may be about to come to this point, in which case I apologise. However, I referred to the legal opinion of the Open Society Justice Initiative and Professor Goodwin-Gill. That raised a question over this whole matter and whether, the time having passed, we have in fact retained that power.
Lord Taylor of Holbeach
I would say that the Government’s position is that we have. The noble and learned Lord, Lord Brown of Eaton-under-Heywood, seemed to concur with that opinion. However, I was grateful for the noble Baroness raising that issue and I will take note of what she has said.
We should be clear that we are discussing in this context very serious cases where an individual’s behaviour has been seriously prejudicial to the UK’s vital interests. That is the definition. We expect the person concerned to reacquire the citizenship of another state and in most cases they can. It is not satisfactory that when dealing with such individuals the Home Secretary’s decision is at the whim of the nationality laws of other countries. These cases will be few in number and subject to the most careful scrutiny by the Home Secretary.
I turn to Amendments 74 and 79. It is not in dispute that any individual deprived of their citizenship, either under existing powers or as a result of this clause, would have the full right of appeal regardless of whether they were in the UK or overseas. Grounds for appeal can include both the legality of the action and the merits of the Secretary of State’s decision. Therefore the courts already have an important function in reviewing the Secretary of State’s decision on appeal. I cannot agree that it is appropriate or necessary that the court should have to give permission before the Secretary of State can issue a deprivation decision. Any such procedure would be impractical and out of step with any other immigration and deprivation decisions.
Baroness Lister of Burtersett
I am sorry to interrupt the Minister, but he seems to be moving on from the question of proportionality. I asked if he could give an example of where it could be envisaged that the economic well-being of the country being threatened might be the reason for depriving someone of their citizenship and making them stateless. The Joint Committee on Human Rights was surprised about this being a possible reason. Can the Minister elucidate with an example of where that might be the case?
Lord Taylor of Holbeach
The noble Baroness will have to allow me to write to her on that issue. The Government have responded to the report of the Joint Committee on Human Rights, so she may find that the answer is in there. If not, I will seek to provide her with that answer.
As I said, Clause 60 is consistent with the UK’s obligations under international law. As I have set out here, and as accepted by the JCHR in its recent report, this clause is in accordance with international law by virtue of the UK’s declaration upon ratifying the 1961 convention and the domestic legislation that existed at the time. There is therefore no question of the clause undermining our international obligations. We are adapting and responding to the threat that the UK faces, but acting within our international obligations. Amendment 76 would be an unnecessary addition to the Bill.
The noble Baroness, Lady Kennedy of The Shaws, and the noble Lord, Lord Pannick, asked if we were contravening international law by making people stateless. I have given the answer to that. As a party both to the UN Convention on the Reduction of Statelessness of 1961 and the UN Convention Relating to the Status of Stateless Persons of 1954, the UK is obliged to comply with the provisions of those conventions, which we would continue to do. If a person was recognised as a stateless person and inside the UK, they would have—as my noble friend Lady Hamwee rightly pointed out—protection against removal and a right to work and study. Depending on circumstances they may be granted access to public funds and be able to apply for a stateless person’s travel document. Those, therefore, are the facts: we would not seek to ride roughshod over those conventions that we have signed up to.
Baroness Smith of Basildon
I did not intend to intervene until the noble Lord had spoken, but there is a lack of clarity in what he has just said. It does not seem to be the same as what the Minister, James Brokenshire, said in the House of Commons. He said that special consideration may be given, and that if leave to remain or some other kind of leave to be in the country was given, conditions would be attached to it. He mentioned new conditions. Is that the noble Lord’s understanding, or is this something different?
Lord Taylor of Holbeach
I must say that nothing I have said implies that there may not be conditions. They are frequently imposed on people who may pose a threat to this country, and this case is no different. However, I have said that the right to protection against removal would be part of our obligation under the existing conventions, and we would not seek to do otherwise than honour those conventions.
On the challenge made by the noble Baroness, Lady Smith, about the question of deprivation action taking place only in the UK, that is the salience of Amendment 76A. The purpose of the new power is not to target naturalised people who are abroad, but to allow the Secretary of State to take timely action against individuals, whatever their location at the time the decision is made.
However, it is a fact that in some cases key information comes to light when a person is outside the UK. Indeed, often travel abroad to terrorist training camps or to countries with internal fighting is the tipping point—the crucial piece of the jigsaw—that instigates the need to act, given the potential danger that those individuals would present on their return to the UK. The Home Secretary therefore needs to be able to determine the most appropriate response and timings to deprive a person of citizenship, regardless of whether they are inside or outside the UK.
Lord Pannick
Can the Minister give the House an assurance that the Home Secretary will not deliberately wait until an individual is abroad before exercising Clause 60 powers?
Lord Taylor of Holbeach
It is up to the Home Secretary to determine when she exercises powers in the country’s best interests. As far as I can see that is a sort of non-question, because she exercises the powers at her discretion and will do so in the best interests of the country.
Nationality can be reacquired, says Amendment 76A. On that amendment, it is a reasonable requirement for those deprived of citizenship to acquire an alternative nationality quickly. However, often those individuals have little incentive to do so, and any arbitrary time limit imposed on the power would only provide an incentive to delay.
The purpose of this power is to ensure that the Home Secretary can protect the security of the UK, whether or not the individual can or has the inclination to avail themselves of another nationality. In considering deprivation cases, assessments will be made of all circumstances, including the right to another nationality, but statelessness of itself should not be an arbitrary bar to action.
Let us be clear: deprivation action is taken only against those individuals who meet the thresholds I have outlined. We do not, and cannot, take deprivation action against family members—husbands, wives or children. I hope that that reassures the noble Lord, Lord Roberts of Llandudno. It cannot be done on the basis of any relationship to the person being deprived. The Home Secretary has a statutory duty under Section 55 of the Borders, Citizenship and Immigration Act 2009 to,
“safeguard and promote the welfare of children”,
in respect of immigration, nationality and asylum decisions. That is a duty which we take seriously and there is no necessity to restate it explicitly in the context of Clause 60, as Amendment 77 seeks to do.
The noble Baroness, Lady Smith, asked specifically about the case of Y1. The judgment in that case from the Special Immigration Appeals Commission in November 2013 dismissed Y1’s appeal against deprivation. The Home Secretary is entitled to reach her decision on how to manage cases using available evidence as appropriate.
The noble Baroness asked about numbers and mentioned that 27 people had been deprived under conducive powers since 2006. These powers have been exercised by not just this Government but the previous Government. There have been appeals—15 individuals have appealed against the decision taken by this Government to deprive them of their citizenship. The majority of those appeals are ongoing but, aside from Al-Jedda, to which the noble and learned Lord, Lord Brown of Eaton-under-Heywood, referred, to date there has not been a successful challenge to a deprivation decision.
Some noble Lords are concerned that the proposed new power enables the Secretary of State to take account of behaviour carried out before the clause comes into effect. Surely it would be perverse if that were not the case. Such a position would not allow the Home Secretary to consider the full background to individual cases. We believe that those who naturalise to become British citizens should adhere to the values and laws that they swear an oath to maintain. As such, we believe that there is justification for making this power apply with an element of retrospection.
Noble Lords have challenged whether deprivation makes such people less of a threat. Deprivation is just one of a number of tools that can be used to disrupt the national security threat posed by certain individuals, either on its own or in conjunction with other immigration powers. By removing an individual’s entitlement to a British passport and to enter or remain in the UK, deprivation can help reduce the direct threat an individual poses to the UK—for example, by precluding him or her from involvement in the development of terrorist networks, the provision of terrorist support or training and the preparation of terrorist attacks on the UK.
It is important to remember that a person who could come within the scope of this new power would already be liable to being deprived of citizenship under existing powers. The only thing that prevents that now is that such a decision would leave them stateless—that is the difference that Clause 60 seeks to address—which is a fact that may become apparent only some way into the deprivation process. Therefore, we do not consider that an individual could have had a legitimate expectation that there would be no consequences of their behaviour. Again, I remind noble Lords that we are talking here about individuals who have committed acts that go to the heart of our national security.
In conclusion, this is a limited power that will apply to the most serious cases involving national security and those taking up arms against British or allied forces. The Secretary of State will continue to exercise her power with due consideration and within the existing safeguards for such cases. I have taken note of the points that have been made in this debate, and having time to go through the particular provisions of Clause 60 has been very worthwhile. I have noted the suggestion of the noble Lord, Lord Pannick, that between now and Report we have a meeting to discuss the implications of Clause 60. Indeed, I have noted the positive suggestions made by a number of noble Lords. In the mean time, I hope that the noble Lord will withdraw his amendments.
Lord Pannick
Before the Minister sits down, perhaps I could ask a question. He gave a very comprehensive reply—a very helpful one, if I may say so—but, unless I missed it, I do not think that he responded to the concern that, far from promoting the security of this country, Clause 60 will damage security. This is because the clause will make it more difficult to remove dangerous people, and make it more likely that dangerous people who are temporarily abroad will be sent back to this country because they no longer have a British passport. I wonder whether the Minister wants to say anything about those concerns.
Lord Taylor of Holbeach
That was of course a consideration in the discussions that led to the tabling of this clause. I think that I did address this point, in the sense that an individual who poses a threat to this country can have restrictions placed on them other than the deprivation of citizenship. I am sure the noble Lord will understand this point. I wish to make the point that this is a balanced judgment. The Home Secretary, who after all has to exercise powers within the law on this matter, believes that the law is deficient in this respect. She seeks to change it, and is doing so through this Bill. Knowing her, I do not think that she would make that decision if she felt that it would in any way weaken the security of this country.
Baroness Lister of Burtersett
I am sorry to ask the Minister yet another question. However, I asked a very specific question which was raised by the Joint Committee on Human Rights, and I do not believe that the Government have responded to our second legislative scrutiny report. If they have, the response has certainly not yet arrived on my desk. The question was: how many of those who have been deprived of citizenship in recent years have been abroad, and why will the Government not provide that information to Parliament? As the JCHR said, surely Parliament has the right to have that information in considering Clause 60.
Lord Taylor of Holbeach
The noble Baroness is right. I was getting muddled between the two responses. The second report has not yet been responded to; it will be. I hope that it can address some of the issues raised by the noble Baroness.
The noble Baroness, Lady Smith, referred to the question of whether there was some difference between what James Brokenshire said and what I said in my speech. Perhaps I can explain that by saying that where a person cannot be removed to another country, we would consider whether a discretionary granting of leave was appropriate. An option would be for the person to be placed on limited leave, with conditions such as regular reporting restrictions or the need to notify the Home Office before taking up work or study in a particular field. I hope that explains that there is no difference, and I think it backs up my supplementary answer to the noble Baroness when we debated the issue.
Baroness Smith of Basildon
I am grateful to the noble Lord for coming back to me on that point, but there are numerous other questions that he has failed to answer. He has not answered any questions about whether there are any other areas of law in this country that allow for two categories of citizenship. He has not told us whether there have been discussions or consultations with other countries to which British passport holders may travel—
Lord Taylor of Holbeach
On that first question, perhaps I could ask what the noble Baroness means by “two categories” of citizenship.
Baroness Smith of Basildon
In most countries, if someone is a citizen then they are a citizen. If someone is a natural born citizen of this country, their citizenship cannot be removed and they cannot be made stateless. Yet in this Bill the Government propose that if someone is a naturalised citizen of this country—as are Members of your Lordships’ House—they could have their citizenship taken away, even if they would be made stateless. I thought that that was clear, and that it was the point of what the Government sought to achieve.
Lord Taylor of Holbeach
Surely the categorisation is about naturalised British citizens and not about whether they are stateless. Therefore, this is in existence because it already exists in UK law.
Baroness Smith of Basildon
I think that the noble Lord is missing the point. My understanding was that if someone was a naturalised British citizen, he or she had all the rights and responsibilities of any other citizen. That is changed by this legislation. I was asking whether any other area of law is responsible. The noble Lord can come back to me on that. The position would be changed by this legislation because a naturalised citizen can be stripped of their citizenship and be left stateless. If I am correct in my understanding, a British-born citizen could not be left stateless. Only naturalised citizens could be made stateless by this legislation. Perhaps the noble Lord wants to respond to that.
Lord Taylor of Holbeach
I am afraid that there is a disconnect in our train of thoughts on this. I will write to the noble Baroness to explain exactly how this operates. The only change made by Clause 60 is that statelessness is no longer a reason why naturalised citizens should not be deprived of their citizenship. It is not a question of two categories of citizenship based on whether a person is naturalised or not.
Baroness Smith of Basildon
I think that it does and I will look to the lawyers on this issue. I also look forward to receiving the letter. Only naturalised citizens of this country could be made stateless. Natural-born citizens could not be made stateless by this legislation. However, I have other questions. I asked about consultation and discussions with other countries on the impact of people travelling overseas on a British passport and having their citizenship withdrawn. The noble Lord has not come back to me on that point. He has no more information on the 27 people. He has not come back on the issue of someone not being able to get citizenship in another country. We have the short-term answer but not the long-term answer. A number of questions remain unanswered.
The noble Lord is always very gracious and helpful in writing to noble Lords when he has not been able to answer questions. However, this clause has had very little scrutiny in Parliament. To have tabled it at the last minute, literally about 24 hours before Report in the other place, was disgraceful. It would have been helpful if all those answers had been addressed today to allow a full and proper debate. I am grateful to the noble Lord for writing to us but that is not a good principle when issues have not been debated in the other place. After the noble Lord has written, the only discussion that we will have will be at Report stage. I find that unsatisfactory.
Lord Taylor of Holbeach
If the noble Baroness had advised me in advance of the things she was uncertain of, I would have done my best to provide her with those answers. I have limited resources available to me at the Dispatch Box and a limited amount of time. I have suggested to the noble Lord, Lord Pannick, that it would be very useful if we could discuss this matter before Report stage. In the mean time, if noble Lords have any questions other than those that they have raised today, which I will address in writing, please advise me. It is important to get this legislation right. I believe in being able to scrutinise legislation in this House, in Committee and at all stages of a Bill.
I apologise for not answering all the questions but I have done my best. The noble Lord, Lord Pannick, advised me that he considered that my reply had been helpful. I seek to be helpful to the House.
Baroness Smith of Basildon
The noble Lord always seeks to be helpful. My point is a broader one of scrutiny and the lack of time available for discussion, but I would welcome any meeting. I also say that my resources are somewhat more limited than his. I sometimes felt that in his response we were having a slightly different debate. He was responding to a debate about deprivation of citizenship. Most noble Lords who spoke in today’s debate were talking about statelessness and its implications for the security of the UK. There was little argument that there might be a need at times for people to have their citizenship taken from them or revoked. That was understood. It is the changes being made by this legislation that would create a position of statelessness that cause the most concern.
The reason I say that great scrutiny is required is to establish evidence as to whether the measure is necessary. I thought that the noble and learned Lord, Lord Brown of Eaton-under-Heywood, was extremely helpful in his take on the measure before us. I also ask whether this measure achieves the objectives that the Government are seeking. The noble Lord and his party do not have a monopoly on wanting the citizens of this country to be safe and secure. I am sure that is the objective of every Member of your Lordships’ House. However, we do have to consider the wider impact and unintended consequences of any legislation that is brought before your Lordships’ House. There is much concern about the measure. Noble Lords have asked many questions and the opinions of respected and eminent lawyers have been quoted. That is because of concern that it does not achieve the objectives that the Government are seeking. Most importantly, it does not make the citizens of this country, or more widely, safer or more secure if people are deprived of citizenship in a way that makes them stateless.
I take on board entirely the comments made by the noble Lord. He was talking about individuals who have committed acts that are a danger to this country and that may involve terrorism. Why, if there is evidence of that, could it not be presented as evidence against those people? Instead, the Government want to make them stateless. There are consequences around statelessness that give rise to concern for public, national and international safety. I look forward to receiving further information from the Minister. The jury is still out on this. I have not been convinced that the measure proposed by the Government does what it seeks to do or is an appropriate way forward. I beg leave to withdraw the amendment.
Baroness Hamwee
“Reviews of deprivation of citizenship resulting in statelessness
(1) The Secretary of State must appoint a person to review the operation of section 40(4A) of the British Nationality Act 1981 (deprivation of citizenship), (“the independent reviewer”).
(2) The independent reviewer must carry out a review of the operation of the section in respect of each calendar year, starting with the first complete calendar year beginning after the passing of this Act.
(3) Each review must be completed as soon as reasonably practicable after the end of the calendar year to which the review relates.
(4) The independent reviewer must send to the Secretary of State a report on the outcome of each review carried out under subsection (2) as soon as reasonably practicable after completion of the review.
(5) On receiving a report under subsection (4), the Secretary of State must lay a copy of it before Parliament.
(6) The Secretary of State may pay to the independent reviewer—
(a) expenses incurred in carrying out the functions of the reviewer under this section, and(b) such allowances as the Secretary of State determines.”
Baroness Hamwee
My Lords, the Minister has just told the House his view on the importance of the scrutiny of legislation. I have never doubted that for a moment. However, I think he probably agrees that one needs to scrutinise the implementation of legislation as well. My Amendment 79A would do that. I think that the noble Lord, Lord Pannick, and I must have tabled our amendments within seconds of one another. When his was printed, I was glad to see that mine was very close to his, and I am glad that he has added his name to mine.
I do not claim credit for any originality of drafting. I have lifted it almost word for word from other legislation that provides for the involvement of the independent reviewer of terrorism legislation. As we are told in the information pack, although the Government do not want to be overly prescriptive about the phrase,
“seriously prejudicial to the vital interests of the United Kingdom”,
they envisage it covering those involved in terrorism or espionage or in taking up arms against British or allied forces. We will all have been impressed by the diligence, the terrier-like qualities and balance shown by the various reviewers who have held the post. I suspect that the current reviewer might undertake the work, whether he was asked to do so by legislation or not. Clearly, this issue is closely related to other legislation and to other steps which the Government might take in response to—or perhaps even before they need to respond to—a terrorism threat. If we are to have Clause 60, we need a clause such as this in order to provide for a review on a periodic basis, the provision of the review to the Secretary of State, and her laying it before Parliament. I beg to move.
Lord Pannick
My Lords, I have added my name to Amendment 79A on the role of the independent reviewer and I agree with everything that has been said by the noble Baroness, Lady Hamwee. I have tabled two further amendments in this group. Amendment 79C has the support of the noble Baronesses, Lady Lister of Burtersett and Lady Smith of Basildon, and the noble Lord, Lord Roberts of Llandudno. It would require the Secretary of State to set up a code giving guidance as to the practices to be followed in any case of deprivation of citizenship. Amendment 79D, which has the support of the noble Baroness, Lady Lister, and the noble Lord, Lord Roberts, would introduce a sunset clause, and I am hopeful that the noble Baroness, Lady Smith, may add her vocal support to the amendment.
There are real concerns about Clause 60, as we debated in the previous group of amendments. If we are to have Clause 60 at all, I think that we need all or some of these protective provisions—an annual review, a code of guidance and a sunset clause—to set out some criteria for the application of the clause and to ensure that Parliament can take an informed and periodic look at this matter in the light of the practical experience of the operation of the clause.
Baroness Lister of Burtersett
My Lords, I am pleased to support these amendments. I think that I have already said more than enough about Clause 60, but I could not help but notice that no one spoke in support of it other than the Minister, and so I see these amendments as a kind of absolute bottom line. If we are going to be saddled with Clause 60, I hope that the Government will see fit to accept these procedural process amendments as a kind of minimal response to the grave concerns that have been expressed across the Committee.
Baroness Smith of Basildon
My Lords, my comments are equally brief. I have added my name to one of the amendments, and I think that the idea of an independent reviewer and a sunset clause are reasonable and worth further consideration by the Government. Like our amendment, they would provide greater oversight, which I would have thought all parties would welcome. Perhaps I may add one point. It may be possible that an existing independent reviewer could fulfil the role, and I think that we would all be willing to discuss how that could best be achieved.
Lord Taylor of Holbeach
My Lords, after the passion of the previous group of amendments, I find this a little easier to respond to. The noble Baroness, Lady Smith, has made the point that there is a pre-existing independent monitor, and indeed my noble friend Lady Hamwee referred to the role occupied by John Vine. His role was set up under the UK Borders Act 2007, and he is able to monitor and report on the efficacy and effectiveness of functions relating to immigration, asylum and nationality. That includes the effectiveness of decision-making on deprivation of British citizenship, so it exists already.
This is not an annual review process, and I think that that is probably one of the things we disagree on. With all his independent inspections, the chief inspector is permitted to examine only individual cases for the purpose or in the context of considering a general issue. But it illustrates that in addition to the judicial scrutiny of individual cases—I have explained that the power of appeal still exists—Parliament has already agreed an independent inspection regime which covers nationality and hence the deprivation of nationality.
Throughout the passage of the Bill, the Government have stressed the serious nature of the cases that will be considered under this new power. Clause 60 itself carefully limits the uses of the power to circumstances where an individual’s behaviour meets a new, higher threshold of being,
“seriously prejudicial to the vital interests of the United Kingdom”.
This will ensure that the courts subject the strength of the Government’s rationale for deprivation to close and anxious scrutiny in each and every case. In this case, I do not believe a new independent reviewer is necessary.
There has been a lot of discussion regarding the requirement to publish guidance and how individual cases will be considered, evidenced and decided. As I have said, deprivation is nothing new—it has gone on under this Government and previous Governments. Established practice exists, and guidance is published for fraud and deception cases, for example. Every case is different and will have its own case-specific facts. The core requirement on officials is to assess evidence and circumstances, consult colleagues across government and carefully weigh the evidence before making a recommendation to the Home Secretary. This is central to all cases. The Home Secretary herself reviews and personally signs off all deprivation decisions. Beyond this, there is little additional detail that would necessarily be appropriate, given that matters in cases that will fall under Clause 60 will be to do with national security. More importantly, in every case, the individual will be told the reasons for the decision and there will be a statutory right of appeal to the courts in each case.
I will address the bid for a sunset clause in this matter. The Government have a responsibility to protect the public and to respond to threats, and this clause is aimed at dangerous individuals who abuse their British citizenship and threaten the security of the UK. As I have emphasised, the power will be used only against those who pose such a threat. However, it is impossible to predict as and when these threats will emerge and I do not believe it would be appropriate therefore to time-limit the clause.
As I have said, I hope we have an opportunity to meet between now and Report, and this will no doubt be one of those matters which could be discussed at that stage. In the light of these points, I hope that the noble Baroness will agree to withdraw the amendment and that other noble Lords will not press theirs.
Baroness Hamwee
My Lords, I did not have in mind the Independent Chief Inspector of Borders and Immigration but the independent reviewer of terrorism legislation—I plagiarised the provisions in current legislation on terrorism for this clause—who I think would be the appropriate reviewer to undertake the work. I am not suggesting a new reviewer. This would fit very well with, and ought to be reviewed by, the same person who considers the application of terrorism legislation. However, I do think that there should be a review and statutory provision for it. I am a little puzzled as to why the Government might resist what, in the circumstances of Clause 60, is an extremely mild proposition, but perhaps that is something that we can discuss following this stage of the Bill. I beg leave to withdraw the amendment.
Baroness Hamwee
“(a) after “immigration officer” insert “or designated person”;(b) after “lawfully” insert “and the basis of his entry including if applicable particulars of his visa”;(c) after sub-paragraph (1)(b) insert—“(ba) whether his immigration status has changed during his stay in the United Kingdom,””
Baroness Hamwee
My Lords, Schedule 8 provides for designated persons as well as immigration officers to undertake functions in connection with embarkation checks. The purpose of this amendment is not to question the designated persons but to seek, in a world where net immigration numbers and what individuals have been doing in this country before they leave it are so current, reassurance for the Committee. A section in the Immigration Act 1971 allows immigration officers who are dealing with embarkation to determine the identity of the individual, whether he entered the UK lawfully, whether he has complied with conditions of leave to enter or remain and whether his return to the UK is prohibited or restricted.
From time to time we have alluded to issues such as people coming here as students, then staying to undertake work. This may make the question about someone coming here as a student and then leaving when they leave not necessarily the right one to ask; the issues are a little more complicated than that. I am by no means proprietorial about the drafting and freely admit that it is probably rather clumsy; but assuming that the visa particulars are readily available to the immigration officer or designated person, I suggest that on exit from the UK there is a tie-up with these particulars and on whether the immigration status has changed during the stay here.
The broader question is whether the Government have given thought to whether the current powers are enough to marry up all the information with that which has been gained when the individual has come to the UK and whether they cover the issues that are a pretty hot topic on the question of net migration. I beg to move.
Lord Avebury
My Lords, this amendment has the effect of empowering the official examining a person embarking in the UK to establish what the basis of the embarking person’s entry to the UK was and the particulars of his visa if applicable. It also allows the official to establish whether the person’s immigration status changed during his stay in the UK.
The reasons for embarkation checks are to prevent offenders from fleeing abroad to escape justice and to identify those who were given limited leave to remain but failed to depart by the expiry of their leave. These reasons are wholly justifiable and we do not in any way question or dispute the necessity of embarkation checks; in fact we have called for embarkation checks as a means to verify that people leave the country when they are supposed to. We are already checking 90% of air passengers and 75% of all those leaving the country, and I am sure that my noble friend the Minister will be able to confirm that we are on course to reach 100% by some time next year. If he can be more precise about the date, I am sure your Lordships would like to have that information.
Baroness Smith of Basildon
My Lords, I have just a couple of queries relating to Schedule 8 on “Embarkation checks”. This obviously requires co-operation and action from the airlines.
I was a bit concerned to receive an e-mail and a briefing note from the British Air Transport Association expressing its concerns about the schedule—not about the principle or what it seeks to do but the way it could be achieved. It says that it has worked very closely with the Government to ensure that e-Borders is in place—it has invested in that—but it is concerned that it will not be able to use passenger data for e-Borders as a new system is being brought in. It is seeking assurances from the Minister about the action that is being taken to work with the UK airlines, which of course have responsibility. It is concerned about longer boarding times and, most importantly, the risk at borders, because it feels that introducing the checks at border gates will require unqualified customer service staff to take on the role of an immigration officer without having the training to do so. It also feels that in some airports there are physical constraints because there is not sufficient or adequate infrastructure to support the efficient and timely carrying out of the checks. It also mentions issues around cost.
My understanding is that the British Air Transport Association has put a proposal to the Home Office on how to address this and how it can meet the requirements of the legislation without incurring additional costs, delays, constraints or compromises in security, which is another concern. I would be grateful if the noble Lord could address those points, and tell us what discussions are ongoing at the moment and when the Home Office expects to reach agreement on this. My fear is that if the association says that it physically cannot undertake measures in the Bill, a very serious situation then emerges.
Lord Taylor of Holbeach
My Lords, this is an opportunity to discuss this development, which forms part of the strategy and is widely supported.
I am very pleased to have the support of my noble friend Lord Avebury on this issue. He asked whether he was correct in his assumptions. I can tell him that he is: for the vast majority of individuals, the embarkation checks will be quite simple and straightforward and the existing officials employed by ports and airlines will be trained to do this task using very limited examination. The checks will allow those who currently have a role in outbound passenger processes to be designated and trained to perform the basic checks to establish a person’s identity, to collect the data necessary to identify threats or persons of interest and to confirm departure, so it is only those who are of interest who would be dealt with. It is not intended that designated persons should exercise any other powers of an immigration officer, such as powers of search or detention.
The exit checks will allow us more easily to identify those who have overstayed their visas and will help us improve measurements of migration so that we have a sounder basis for policy-making. The Government are confident that Clause 61 and Schedule 8 as drafted will provide the full range of powers necessary to conduct embarkation checks at the border and to collect all the information necessary to deliver in full an exit check capability.
The noble Baroness referred to a briefing that she had had. I have not seen that briefing but we are working closely with airlines to ensure that those checks can be conducted with minimum if any delay. We want to control departures in the same way as we control people coming into this country. We have introduced a new system for general aviation, the collaborative business portal, which allows operators to enter their data online. We do not plan to use the embarkation check powers in the Bill for general aviation and general maritime operators. We are working with them on a co-operative basis to enable them to come up with solutions that deliver our objectives, and those discussions are going very well.
I was asked by my noble friend whether we would achieve 100% coverage of exit checks. As I say, our target date is April 2015 and we are still sticking to that. We will have the arrangements in place to enable checks on those who leave the UK on scheduled commercial air, sea and rail services.
The noble Baroness, Lady Smith, asked whether this would lead to long delays at ports. We see the checks as being important, but our aim is to integrate them within the grain of existing processes in order to minimise the impact on passengers at ports. We are introducing the powers in the Bill so that we do not need to use immigration officers to do this work but, rather, can use existing staff, properly trained to deal with this particular process.
Baroness Smith of Basildon
I think that that is the point I was making. One of the issues raised by air transport operators was that it would not be qualified immigration staff undertaking checks but rather customer service staff.
Also, I think the Minister said that there would be two dates. He said that all the exit checks would be in place by April 2015 but then said that the system would not be rolled out in every place. I am trying to understand whether this really makes our borders more secure, or whether the fact that unqualified customer service staff instead of immigration staff are undertaking checks will cause a problem.
Lord Taylor of Holbeach
Not at all. These are not customer service staff but designated persons who will have the authority to do the task of exit checks. They will be designated and trained to perform the basic checks required that will deliver the policy.
I do not think that I said that this would be rolled out. I said that we intended to have the checks in place by April 2015. That is the plan, and it is going according to plan. I hope that the Committee will accept that.
Baroness Neville-Rolfe (Con)
My Lords, will my noble friend comment as to whether this power will allow checks which might be appropriate in certain circumstances or whether the plan is to check the passport of every person leaving the UK? If I go to Düsseldorf, is British Airways in future going to be checking my immigration status? I think it would be helpful to have clarity as to the intention.
Lord Taylor of Holbeach
All I can is that if my noble friend is flying to Düsseldorf, she can expect to have her passport checked at that time. She will know that that is what is happening. There is no difference.
Baroness Smith of Basildon
I am sorry, but I seek clarification on this. Does that mean that those airlines already compliant with providing passenger data through e-Borders will still have to have these additional checks undertaken at the point of leaving the country?
Lord Taylor of Holbeach
We are working with the airlines to find ways in which the existing advance passenger information can be incorporated into these checks. The advance passenger information provides only so much information. It is very useful and gives names, but it does not necessarily give the details of the individual’s passport or any visa requirements on that passport. That is a matter for examination, and the designated staff will be in a position to check that material at the time the person leaves the country.
Baroness Neville-Rolfe
My Lords, I am sure it would be helpful to understand this in a bit more detail because now you put the detail of your passport online when you order your ticket. The passport is not checked, except very summarily, when you get on to the flight. It really is an understanding of how this is going to happen. It may be that you are going to put more advance information online when you buy your ticket. I am very supportive in principle of the measures, but I think the logistics are very important.
Lord Taylor of Holbeach
The logistics are a matter for detailed planning with the airlines. What the Bill does—what this schedule provides for—is give those people who are responsible for dealing with this work the powers which at present they do not have. Advance passenger information already supports electronic texts on a large number of outward-bound journeys. API will be part of the exit checks solution along with other options, including checks conducted and data collected at the port of departure. These matters are being discussed so that this can be done efficiently, but API is a contributory element of this provision. As to the detail of how it is going to operate in every form of transport—every airport, railway station and port—I cannot possibly say at this stage. The powers of this Bill give those who will be challenged to perform this task the right to conduct those checks. Otherwise the checks would have to be done by immigration officers and we do not consider that this is an appropriate role for the Border Force.
Baroness Hamwee
My Lords, this debate has gone well beyond my amendment. I am not entirely sure that I had an answer to my amendment, but perhaps my concentration lapsed. I beg leave to withdraw the amendment.