Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, I remind your Lordships that if there is a Division in the Chamber the Committee will adjourn for 10 minutes.
Housing: Leasehold Reform
Baroness Maddock
To ask Her Majesty’s Government what plans they have to reform leasehold legislation.
Baroness Maddock (LD)
My Lords, in preparing for this short debate I have, as usual, been grateful to the House of Lords Library for its research. I am also grateful to the Consumers’ Association’s Which? and to the liberal think tank, CentreForum.
The previous occasion on which I spoke about leasehold reform at any length was during the passage of the Commonhold and Leasehold Reform Act 2002. However, in 2014, further reform is still needed and is very much a live concern for the millions of people living in leasehold properties. The issue continues to be raised in both Houses of Parliament.
Leasehold is the norm for many people, particularly those living in urban areas. The majority of new homes being built are flats, bringing the whole matter of leasehold further to the fore. The current system vests too much power in the hands of freeholders. As a Liberal, I always want to devolve power to as many people as possible, so I want to see leaseholders having a proper say in the management of their homes.
What is the problem? England and Wales are almost unique in operating a system of leasehold tenure on many bought properties. The system is aimed mainly at the need to ensure the upkeep and management of communal areas and, sometimes, to enforce positive covenants affecting all the residents. CentreForum’s report, Reforming Leasehold for the 21st Century, described leasehold as a “quasi-feudal system”.
One of the biggest problems is that most freeholders do not manage the properties themselves but employ management agencies to carry out their duties. These agencies have no legal responsibility to the leaseholders, and therefore have very little incentive to provide a reasonable service. In addition, these management agencies face very little competition. If leaseholders are dissatisfied with the services provided by these agents, there is nothing that they can do unless they can persuade the freeholder to make a change. The right to manage is a little known provision which allows leaseholders to manage a group of properties without having to buy the freehold. However, it requires 50% of leaseholders to support such a move. CentreForum suggests that, to encourage the take-up of this system, service charges should include information about the right to manage.
Usually, leaseholders have little or no contact with the freeholder; everything is done through the agents. There is an option to take cases for change to the leasehold valuation tribunal, but it can be a very time-consuming process and there are issues around costs. One of the big problems that often face leaseholders is unexpected major works. Leaseholders can find themselves in severe financial difficulty simply because the owners—or, very often, the managers—decide, for example, to replace all the windows, with little notice or consultation, leaving leaseholders with an unexpected major bill.
Which? Money highlighted other areas of concern in a 2011 article based on consumers’ evidence. One such area was the cost of insurance. Which? Money had unearthed examples of leaseholders saving up to 60% on their insurance premiums simply by cutting out the middleman and arranging their own cover. There have been suggestions that managing agents take a cut on arranging insurance and that they are not interested in getting a good deal. There is a lot of evidence around this and I am sure that my noble friend Lady Gardner will highlight some of these issues. In short, however, a lack of transparency around charges and no independent regulation has meant that there is very little pressure on agents to give leaseholders a fair deal.
As I indicated in my opening remarks, more and more people are living in leasehold properties than ever before. In 2012, an estimated 5 million people were living in 2.5 million leasehold properties in England and Wales. An estimate of the total charges they are paying comes to about £2.5 billion. In the 10 years to 2012, the number of cases of dissatisfaction that leaseholders have taken to the leasehold valuation tribunal has increased by 400%.
Has anything been done to assist leaseholders? During the passage of the Enterprise and Regulatory Reform Act 2013, the coalition Government accepted arguments that stronger protection was needed for leaseholders. I am pleased that, as a result, all letting and management agents now have to belong to a recognised redress system—I expect the Minister will give us an update on that. Also, the Leasehold Reform (Amendment) Act 2014 became law last month. It was a private Member’s initiative that the Government supported, which removes the requirement for a tenant to sign any notice of claim to a new lease in person. This is particularly helpful to anybody with a disability.
I am also aware that the Government committed to spending up to £2 million every year between 2011 and 2015 on a tenant empowerment programme for tenants in social housing. The Minister will no doubt expand on this when she responds. I know too that the Government have asked the Office of Fair Trading to undertake a market study into property management services. However, it is very disappointing that the study will not include an assessment of the legal framework that underpins freehold and leasehold management arrangements in England and Wales. The study also excludes local authority and social housing; the reason given for this by the Government was, they said, because registered social landlords will be responding to the needs of residents. I wonder if that is really a good enough reason, particularly when you can now find—in new developments—private ownership, shared ownership and social housing all in one building. I will be interested in the Minister’s comments on this.
We should be particularly concerned about elderly leaseholders. Most sheltered housing developments are sold on a leasehold basis. What assessment have the Government made about how well this sector is functioning? There is quite a lot of anecdotal evidence on this subject but there is a serious lack of authenticated facts. I wonder how the Government are keeping track of what is actually going on in the area of leasehold.
What could we be doing now? The Liberal Democrats have supported the creation of a national register of landlords; without the knowledge of who is leasing property, it is very difficult to take action against rogue and dodgy landlords. We also need to create greater drive towards the use of commonhold, which was introduced more than 10 years ago, particularly given the make-up of our housing stock. The main problem is that commonhold is not available unless 100% of owners agree—this is, of course, difficult to achieve. During the passage of the 2002 Act, I supported my noble friend Lord Goodhart in his lead in moving that the threshold be reduced to 80%. Meanwhile, CentreForum has proposed that, in order to build a critical mass of commonhold properties and to establish the system as part of the norm, all new blocks of flats built after 2020 should be sold as commonhold. As I indicated earlier, we should definitely also have better promotion of and information about the right to manage for people living in leasehold accommodation.
Lastly, it would be good to look at helping leaseholders when they are charged by the freeholder when they want to make improvements. The freeholder can receive a second benefit from this because, invariably, the improvements increase the value of the property. When the lease is then renegotiated or sold at a higher value, the freeholder benefits. CentreForum has proposed that the right to charge for permission to make improvements should only be available when the freeholder can prove that the charge requested would reduce the value of the property.
This is an important area and my noble friend Lady Gardner will give us a lot more vital information about it. I am disappointed that people who I know care about this subject have not been able to be with us for this debate. I hope that, when the Minister responds, we will not hear too many excuses for why we cannot take action in this important area of property ownership.
Baroness Gardner of Parkes (Con)
My Lords, I have asked many Questions in your Lordships’ House but the only Question I have ever asked in all those years on which there was not a single supplementary from any part of the House was about leasehold. No one knew what I was talking about. As I came out into the Lobby after the Question a number of people came up to me and said, “I would have loved to have come in on your Question but I had no idea what it was about”. That is still the problem with leasehold: people really do not understand it until they are already caught up in it, particularly if they are caught up in it in the wrong way because they did not look at the lease before signing it or they were so thrilled with what they found that they put aside any worries about the future. However, it is important that we all begin to understand it more. It affects more than 5 million people, mostly in London but all over the country. Even in political terms, people should be aware that 5 million votes are worth having. It is important.
My interest is declared in the register: I have owned a leasehold flat for a good many years. I bought it for the day when I could not manage stairs—but I still have not got there. At the time, all those years ago, we had a residential porter who took any parcels, let people in and did all sorts of useful things. What happened? The head lessee became a person who was interested only in making a profit out of it. They decided that the flat which the caretaker was living in was too expensive for that money to be wasted like that, so they fired the caretaker and now have someone who comes in for two or three hours a day and the money from that is now in the head lessee’s pocket. There has been too much of this profiteering at the expense of residents in these blocks. For years we had a qualified building surveyor who would look at the block and decide what should be done. No one ever looks at it now and it is ready to disintegrate if they do not get something done pretty quickly.
Important issues arise all the time. There are more than 2 million leaseholders who pay, in all, over half a billion pounds annually in service charges. That is a lot of money. Who is holding the money and how secure is the fund? Many of these issues have now been addressed by the fact that we are to have a redress scheme. I ask the Minister to confirm that that will be in place soon. The process of implementation has been a bit slow when you think about how long ago we passed the scheme.
Transparency is perhaps the biggest problem for everyone. People do not know what they are being charged for and whether or not it is legitimately required. In the block to which I referred, where I have a flat, they organised a new insurance policy without consulting anyone. Whereas last year residents of flats had to pay an excess of £250 on any claim, this year the excess has gone up to £2,500. The head lessee, who had the policy, has renegotiated it without any consultation so that every tenant in the flats will be liable for so much money that he will have to pay very little at all because we will be paying for it in the £2,500—a tenfold increase. I think that that is very unreasonable.
In 2009, in supporting better regulation, the British Property Federation drew our attention to the fact that Sections 152 and 154 of the 2002 Act were due to be in force at that time. They are still not in force. I ask the Minister what is happening with those sections. They are protective provisions and, as they are part of our law, they should come into force.
Leaseholders are entitled to know how their money is spent and transparency is one of the major issues. Sir Peter Bottomley has done quite a lot in the Commons on this issue. People are entitled to ask questions and get answers that are honest and can be established. There have been too many occasions—cases on the record—where people have found that they are making payments for things such as service charges but half of that money goes into the pocket of the head lessee or freeholder, who has made a deal with or even owned the builders or insurance company used. It is all quite wrong that that sort of thing should be happening and that leaseholders do not get honest answers when they ask about it. It is all being covered up all the time.
In 2007, Mark Prisk—a previous Housing Minister—put down an amendment to the then Consumers, Estate Agents and Redress Bill. He talked about “rogue” and “unscrupulous” agents and how the industry,
“now handles over £12 billion of people’s money annually”—[Official Report, Commons, Consumers, Estate Agents and Redress Bill Committee, 24/4/ 07; col.191]—
and so on. I am therefore glad that, last year, we at least agreed the amendment to the Enterprise and Regulatory Reform Act which has brought in registration of managing agents. Although that will be very welcome, I ask the Minister to confirm that it is still online to come in this year. It really has been a fair time already. There are good agents but protection for leaseholders is at a pretty low level and, as I said, there is no protection until that comes in, along with a redress scheme, which will be very valuable.
As the noble Baroness, Lady Maddock, said, I am a great supporter of commonhold developments. Leasehold property exists only in the UK and Hawaii. It is therefore pretty rare, and I do not consider it acceptable. However, the point about the 100% requirement is that 100% of the people in an existing block of leasehold flats need to want to change. That is very wrong. I have had Parliamentary Answers from different Ministers at different times which say that, “Yes, it is wrong and it should not be; it is impossible”. They say it is impossible to get 100%, and I am quite sure that that is right. All you have to have is a rogue landlord paying one person to abstain or deny and you have lost your 100%. A simple majority would be all right, but even a bit more than that might be possible. There are so many of these blocks where people live overseas and getting hold of them is not easy.
Baroness Gardner of Parkes
My Lords, please excuse me if I repeat something that I said earlier because running in and out does not help. It is high time that we had a consolidation Act. Since 1985 we have had about a dozen new housing-related Acts—I have been in the House since 1981 so have participated in every one of them—and each one has changed parts of the previous one. It has reached the point where even solicitors specialising in these matters have to consult Act after Act to be sure of the present legal position. The law should be clear, simple and capable of being understood by ordinary people. The Government should ask the Law Commission to review all these property Acts with a view to consolidating them. It would be better for the country and better for everyone. However, the Law Commission does nothing unless the Government ask it to because the Government have to meet the costs. The Law Commission does nothing now under any other circumstances.
Having served on an industrial tribunal for 20 years, I am a great believer in the tribunal system. Something has gone very wrong with leasehold valuation tribunals since the basic £500 maximum that you were asked to pay has been changed to a £500 minimum to bring your case at all, and with possibly very heavy costs after that. We also have the practice, which I have mentioned in the House before, whereby, win or lose, the head lessee or freeholder charges his costs in the tribunal back to the leaseholders. That was never the intention. The intention was that a leaseholder would not normally have to meet any costs and this would be a basis on which everyone could present their own cases. There is now a new tribunal system, as from last October, and I think we will be hearing a lot of dissatisfaction about this very shortly.
Rereading Hansard from the time made me wonder where the leaseholder tribunals went so wrong. The intention was for this to be a simple and inexpensive system. I am really quite surprised to find problems because I drew attention to the possible dangers at the time and half those dangers have arisen. Leasehold property has really complex arrangements. I would like to see it abolished but, on the other hand, that is a long way off. Every little bit of progress helps and it is important that we press on and teach people more about what it is all about.
Lord McKenzie of Luton (Lab)
My Lords, I should draw attention to my interests, as recorded in the register, as the owner of a leasehold property.
I begin by congratulating the noble Baroness, Lady Maddock, on securing this debate, if not the usual channels on its timing. We might have been advantaged if we had enjoyed the benefit of the seminar kindly organised for next week by the noble Lord, Lord Best, although we should thank him for circulating the related information from Which?.
We should also congratulate the noble Baroness, Lady Gardner, on her continuing display of expertise and persistence in this area, and indeed on educating noble Lords, including me, over the months and years.
One of the recent questions posed to the Minister at the other end and reiterated today by the noble Baroness, Lady Gardner, was whether the Government have any plans to consolidate the current legislation relating to leasehold and commonhold interests. Given the plethora of legislation touching on these issues, this does not seem an unreasonable request. Of course, we have added to that legislation recently but in a helpful way through the Leasehold Reform (Amendment) Act, which has made easier the processes of collective enfranchisement and leasehold extension. Consolidation would not just be a matter of legislative tidiness; it could contribute to addressing one of the oft-cited bugbears about the sector, which is that it is complex—it has been described as quasi-feudal today by the noble Baroness, Lady Maddock—and is not always fully understood by those who engage in it or, seemingly, by their advisers.
We have also added to the body of law via the Enterprise and Regulatory Reform Act, mentioned by other noble Lords, concerning access to redress schemes relating to letting agencies and managing agents. This was successfully campaigned for by my noble friend Lady Hayter and others, and eventually accepted by the Government. Like other participants in this debate, perhaps I may ask the Minister to give us an update on where these matters currently lie. The redress schemes are not a substitute for proper comprehensive regulation but are a step along the way.
Our deliberations are also taking place in advance of the outcome of the OFT market study into residential property management services, including, I understand, circumstances where the freeholder is a local authority or a housing association. We support this market study and await its outcome later this year, but our preference would have been for a wider study to encompass letting agents and indeed an assessment of the legal framework which underpins freehold and leasehold arrangements in England and Wales. It is this legal framework and the intermediaries that it can engender which are the source of the problems that are oft-cited and have been referred to in our brief debate today.
The typical arrangements are familiar to us all. Leaseholders have the right to occupy and use a flat, including subletting, for the term of the lease. They would generally be responsible for everything within the four walls of the property. The structure, land and communal parts will be owned by the freeholder, who will typically meet the related maintenance and repair obligations and other services via a managing agent, with recharges to the leaseholders by way of a service charge. As we have heard, the managing agent has no legal responsibility to the leaseholders. These flows and relationships are at the heart of the debate that we are having today.
Of course, there are variations on these arrangements, with leaseholders collectively owning the freehold through a collective enfranchisement arrangement. Do the Government consider that there are any residual barriers to these rights being used effectively?
There is also commonhold, which has also been referred to—a system of ownership which allows individuals to own properties with common ownership in perpetuity and collectively to control their management. However, as Which? points out, this has not taken hold as a form of ownership. It muses that this may be because developers have an interest in both developing and then managing leasehold property. The 100% requirement for converting existing leasehold properties to this basis would seem unduly restrictive in practice. We support Which?’s desire for this issue to be covered by the market study.
Whatever the precise formulation, we know that the residential leasehold market is huge. The Association of Residential Managing Agents—ARMA—estimates that there are between 1.6 million and 1.8 million flats in England and Wales. Some estimates put that figure considerably higher: 5 million was the figure referred to before. Given the inexorable growth of the private rented sector and the buy-to-let market, those numbers look bound to increase. We have heard that currently leaseholders might spend in the region of £2.5 billion a year in service charges. In terms of market concentration, ARMA claims over 300 corporate members that, between them, manage around 900,000 flats. About a dozen members are national companies with major portfolios of between 20,000 and 100,000 units. These numbers illustrate why the market study is appropriate.
The scope of the study is about determining: whether managing agents and freeholders have the same interests as leaseholders in keeping down maintenance costs and buildings insurance, and how best value can be achieved; whether leaseholders can sufficiently influence the appointment of managing agents or the extent of their services; whether the market for managing agents is competitive and whether there are practical barriers to switching providers; whether the choice of contractors to provide services is influenced by financial commissions—with insurance in particular—and associated company agreements; and whether there are barriers to leaseholders exercising their right to manage their own property. It touches on a number of the key issues and effectively considers the extent to which the lack of statutory regulation can exacerbate market deficiencies.
A number of other important issues have been highlighted but are not covered. There is the broad issue of the advice that consumers get about owning leasehold property, especially around the length of the lease, the ground rent, restrictive covenants and how service charges are determined. Again, as Which? pointed out, it would be helpful if the market study covered the effectiveness of the leasehold valuation tribunal and the government-funded leasehold advisory service, particularly in circumstances where the number of cases before the tribunal has increased dramatically. Obviously, one clear way to improve standards in the sector—a matter we were working on before the last general election—is a regulatory regime for managing agents. At present, anyone can set up as a managing agent without any relevant qualifications or experience.
Perhaps the Minister could say why the Government consider that a satisfactory state of affairs. What are the problems for government in requiring all managing agents to meet minimum standards of competency and professionalism, to have to declare all commissions received and to follow a code of conduct, particularly on the issue of transparency, which has been raised? Would the Minister accept that that would be an effective way of tackling inflated service charges and challenge connected company exploitation? We should applaud the efforts of ARMA in introducing a voluntary scheme as a step along the way to statutory regulation.
The focus of my presentation so far has been on the relationship between leaseholders and freeholders and their responsibilities and obligations—effectively the leaseholder as the customer. It is impossible to consider comprehensively the issue of leasehold reform without reflecting on the private rented sector more generally where the tenant might be seen as the customer. These relationships will sometimes be between tenant and freeholder, and sometimes between tenant and leaseholder, and thereby governed to an extent by the lease. As the Government acknowledge, the private rented sector comprise some 16.5% of all households, amounting to some 3.8 million homes in England, including some 1.1 million families with children. It is bound to grow and play an important role in meeting housing need.
We want to see a private rented sector that provides decent, safe, and secure homes at a price that people can afford. However, at present too many landlords prey on vulnerable tenants and too much of the private rented stock is non-decent. This undermines the work of the majority of landlords who strive to do the right thing. That is why we wish to develop a national register of private landlords—it is good that we have common cause with the Liberal Democrats, at least on that—designed to assist local authorities in their work, as well as helping HMRC, for example, push back against tax evasion in this sector.
We know that the leasehold/freehold divide has been a source of tension over many years. It is true that legislation over the decades has improved statutory rights for lessees but there remain serious practical issues which regulation can and should address.
Baroness Stowell of Beeston (Con)
I am grateful to my noble friend Lady Maddock for securing this debate this afternoon. Although there have been very few speakers in today’s debate, we have covered quite a bit of ground. I will certainly do my best to respond to all the points that have been raised. However, I may need to supplement my response with a letter and I will do that if necessary.
The noble Baroness, Lady Gardner, estimated that there were about 5 million leasehold properties in England. The Government estimate 3 million, but that certainly makes up a significant proportion of the housing market. I should declare from the start that I am an owner-occupier of a leasehold flat and I understand, as someone living in a property that is part of this regime, that it can be a complex and technical legal system. I certainly recognise along with others who have spoken today that it can cause problems for leaseholders and freeholders alike. But not everyone who owns a leasehold property experiences a lot of problems. What is important is that we strike the right balance in a way that recognises and protects the rights and interests of both leaseholders and freeholders and that we make sure that these rights are kept up to date with changing realities without making things more complicated, burdensome or expensive.
As the noble Lord, Lord McKenzie, just acknowledged, where we can make changes that are perhaps small in and of themselves, we do so where we think that that will be beneficial to people. The most recent example was when the Government supported a Private Member’s Bill that cleared up an important anomaly. Until that Bill, leaseholders who were unable personally to sign certain legal forms could not extend their leases or take part in buying the freehold. That small change will make a big difference to many elderly or vulnerable people, who will be able to appoint someone to sign on their behalf in the future.
My honourable friend and colleague the Housing Minister, Kris Hopkins, is already aware of some concerns about the leasehold sector that have been raised with him by Members of the other place. He is keen to listen to concerns, hear what people have to say and explore whether there is any possibility of addressing problems within the sector. Today’s debate is timely and I intend to report back to him on the points that are raised.
In addition to responding to the questions that have been asked, I think that it is important to remind noble Lords what the Government have done and are doing to make sure that the system is working effectively, that it is—to refer to the point powerfully made by my noble friend Lady Gardner—simple to understand and that it delivers high standards and easy access to remedies when things go wrong.
First, perhaps I may highlight the complexity. It is important to remind noble Lords that to help leaseholders to navigate the leasehold system, the Government provide access to free, independent legal advice and information through the Leasehold Advisory Service. My noble friend Lady Gardner of Parkes, as well as my noble friend Lady Maddock and the noble Lord, Lord McKenzie, sought to draw some comparisons with commonhold. They highlighted what the Commonhold and Leasehold Reform Act 2002 offered as an alternative to leasehold for properties such as flats.
In the past few weeks, in answering different questions and responding to a couple of debates on this topic, I have studied more about this subject than ever before and have improved my understanding. It is important to make the point that, when buying a property or a home in a building that is shared with other properties, it is difficult to conceive of a system that will be perfect and address everybody’s competing needs and rights. Although commonhold certainly offers some advantages, it also has some disadvantages. When people own leasehold properties, it is possible for them to challenge some of the decisions which are put forward and which may affect them, whereas once you are in a commonhold situation, it is very difficult, if you are in a minority, to challenge decisions made by the majority of commonholders in that block.
My noble friend referred to conversion from leasehold to commonhold and asked why that has not happened so far. We do not have any plans to review the rule that requires a 100% sign-up to commonhold from the different property owners in a block. We think that that is right, and it was debated in great detail during the passage of the legislation. As someone who owns a property in a block, I feel that, if such a significant change were proposed, everybody with a property in the block would want the decision on it to be unanimous.
As we know, commonhold rather than leasehold is also available as the tenure for new constructions, but there has not been a great deal of take-up on that. One thing that I can claim a little credit for is that I have asked my department to press a bit harder, through the forum that it holds on a regular basis with the construction industry, in exploring why the industry is not pursuing commonhold as an option.
While I am on the subject of commonhold and conversions, I should respond to a point made by the noble Lord, Lord McKenzie, about barriers to collective enfranchisement. That is obviously a slightly different arrangement, going from leasehold to freehold. Collective enfranchisement requires a number of criteria to be met, but these protect the interests of both leaseholders and freeholders. We are not aware of any residual barriers to collective enfranchisement at present.
I move on to the costs associated with leasehold, which is often raised as a concern for leaseholders, and it has certainly been raised by noble Lords today, in the context of public sector—that is, local authority—landlords where people have bought a former local authority property. We have recently consulted on proposals to cap excessive service charges for leaseholders living in former local authority properties whose landlords—that is, local authorities—benefit from Decent Homes funding, and we will be responding to that consultation shortly. We certainly remain open and receptive to further proposals to make sure that public sector leaseholders have fair and reasonable charges. My noble friend Lady Maddock asked about the OFT market study on property management services and I can confirm that it includes management in local authority and other social sectors in its work.
We are running out of time rapidly. This is such a wide and diverse topic that I cannot do it justice in the time available.
On the quality of service provided through managing agents, codes of practice have to be approved by the Secretary of State, and my department is currently working with the Association of Retirement Housing Managers and the Royal Institution of Chartered Surveyors on updating the codes. We also support initiatives to raise standards and the quality of service across the residential leasehold management sector. We welcome the self-regulatory scheme being introduced by the Association of Residential Managing Agents to raise the professional standards of its members. We will be watching with interest to see how effective and successful it is.
On the right to manage, I say to my noble friend Lady Maddock that 4,000 right-to-manage companies are registered at the moment, but her point about raising leaseholders’ awareness of this option is interesting and I have taken particular note of it.
Transparency and the information that is available to leaseholders is an important issue, which was raised by all noble Lords. Where leaseholders do not already receive service charge information as a condition of their lease, they have a legal right to ask for a summary of the relevant costs from their landlord. However, some interesting points were made on transparency and I shall reflect on them further.
My time is up, but as I have a few minutes left and have some issues to address before the next debate is due to start—
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
For the information of the Committee, the next debate will start at 3 pm.
Lord Hunt of Kings Heath (Lab)
My Lords, we had a communication from the Government Whips’ Office that these debates were to be rolling, because of the vote.
Baroness Stowell of Beeston
My sincere apologies to the Committee. That is my mistake completely and I offer my apologies. I have gone over my time. There is a considerable amount more information that I can provide, which I will do in a letter to follow up this debate.
The key point that I want to make in conclusion is that, while we do not have plans to reform the legislation in this area, my honourable friend the Housing Minister is very interested in the concerns that are being raised and we certainly look forward to hearing further following the meeting that will be chaired by the noble Lord, Lord Best, which was referred to. I am grateful to all noble Lords for their patience today.
Abortion
(10 years, 7 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Knight of Collingtree
To ask Her Majesty’s Government what steps they intend to take to investigate reported law breaking by those carrying out terminations of pregnancies.
Baroness Knight of Collingtree (Con)
My Lords, normally, when a Bill has been debated, taken through Committee and approved by both Houses, it is signed by the Queen and becomes an Act. After that, those breaking it will face possible arrest, fines or even imprisonment—unless it is the Abortion Act 1967. I well recall its passage; there were firm reassurances that its strictures would not permit abortion on demand. Today, more than 7 million abortions later, we have exactly that. So much has the Act been watered down and its safeguards ignored that it is now being quoted to warn those who will soon vote on euthanasia. It is an apt comparison because both deal with life and death. The warning is that the triple lock of the Falconer Bill is modelled on the wording of the old 1967 Act and will turn out just as ineffective.
The Abortion Act is four pages long and contains only seven sections. At least four seem to be broken regularly, yet it is impossible to get details of investigations into this law-breaking or about any resulting prosecutions. Section 1 lists a vital condition on which abortion became legal: that two doctors must see and examine the patient and certify that the operation would be legal. The object of that was to ensure that—on such a serious matter as the death of a child—a second opinion had been sought and two doctors separately concurred. Last year, the NHS’s own inspectors found bundles of forms signed by doctors in 14 hospitals, certifying that they had seen and examined the patient. Their medical and independent judgment agreed that she met the conditions for a legal abortion. All these doctors lied. I understand that there were 76 of them. They had neither seen nor examined the woman; they and the doctors who subsequently performed the abortion broke the law. Falsifying official forms is perjury.
Never, until now, has it been acceptable to pass the job of dealing with law-breakers from the British courts to those representing the professions or trade unions of the very people breaking the law. The GMC dealt with that case, which would have been fine if it had just been a question of medical ethics but it was not—it dealt with the law of the land. The medical profession is now saying that since it thinks that a second opinion is unnecessary, it will not seek one. Surely it must be Parliament, not doctors, that decides what the law says. The Act is unequivocal: involving two doctors is its first condition. Nowhere does it give a proviso that any part can be ignored if anyone disagrees.
Section 1 also rules that no abortion is legal unless the woman’s heath or mental state would be at risk without one, or if her existing children faced physical or mental abnormalities of some kind if she did not have it. Are such judgments routinely made? I have met and talked to a number of girls who have had a termination. Not one has ever been able to tell me of tests or questions about that, or checks on their children’s likelihood to be made ill, mad or slightly mad. Very few of those I spoke to had any children at all.
Then there is Section 4, giving everyone the right to refuse to take part in an abortion if they have a conscientious objection. That is the law. The truth is that the NHS does not and will not employ any midwife who has such an objection. A very senior doctor in this House told me only last week that large numbers of them have emigrated. I have never heard even a whisper of any legal action against those who break Section 4. Why is that? The Act certainly does not deny a conscientious midwife the right to a job.
What investigations are being done on allegations and evidence that abortions happen because the unborn child is a girl? Last week, the Prime Minister stated firmly and clearly that that was illegal. If it is, surely checks should be going on into whether these reports are true. I wonder whether his statement was based on the words of my noble friend Lord Howe:
“Abortion on the grounds of gender alone is illegal … The Abortion Act is very clear on that point”.—[Official Report, 12/2/14; col. 639.]
I have checked the Act a number of times and all the amendments very carefully. There are no such words or clarity in the whole lot of them. It would amaze me if there had been, for none of us dreamed then that it would become possible to know the sex of an unborn child. The noble Lord, Lord Steel, would never have sanctioned gender abortions.
Abortion law surely lacks clarity on matters that need to be clear. Furthermore, it suffers from those who play with words to the extent that it permits terminations that were never intended to be legal. In no way do I seek in the debate this afternoon to discuss the right and wrongs of abortion—there are many different views in this House on that. I do not mean to go into any of that. All I ask is that the law, as passed by Parliament, should be clear and upheld. Surely that is not an unreasonable request.
Lord Gordon of Strathblane (Lab)
My Lords, I start by thanking the noble Baroness for securing this debate. She will forgive me if, for reasons of time, I am not more fulsome in those thanks. I also thank the staff of the Library, who have produced a very helpful briefing note.
Debates on abortion are fairly rare, for the obvious reason that they are seldom debates. Discussion is polarised between those who regard abortion as a form of retrospective birth control and those on the other side who regard it as a form of anticipatory infanticide—and never the two find common ground. I hope that today might be an exception, because I think we are all united that abortion for gender selection reasons is wrong—the question is what we do about it. The noble Baroness has already quoted the noble Earl, Lord Howe, and Ministers in the other place, and it is clear that the Department of Health has echoed that point of view. In fairness to the former Director of Public Prosecutions, who has so far refused to prosecute anyone, it is worth while quoting what he says in defence of the department:
“I am bound to observe that the limited medical guidance; the approach apparently endorsed by the HAS/1 form that an abortion can be performed without either medical practitioner having actual direct contact with the woman requesting an abortion; and the past practice of pre-signing HAS/1 forms present real difficulties in bringing a prosecution of doctors for failing to carry out a sufficiently robust risk assessment of their patients in cases such as these. Whether the current arrangements should be altered or tightened is, of course, a matter for others”.
I hope that we will discuss today how we can address those legitimate points raised by the DPP. It would be helpful if the Minister would indicate that the practice of pre-signing forms will be outlawed from now on, and confirm the figures as regards doctors actually seeing a patient before signing an abortion form. Questions on this issue were asked in the House of Commons by Sir Edward Leigh in successive months—I think on 13 January and 13 February. On one occasion he was told that only 46% of doctors had seen the patient in these circumstances. He was subsequently told that the Government did not have the figures because they were not available. Will the Minister clarify whether the figures are available?
I hope we are all in agreement that the real problem is that Section 1(1)(a) is so widely drafted that it permits abortion on demand. That was certainly not what the promoters of the 1967 Act wanted. However, on the other hand, some Members of the House of Lords may want that now, in which case I hope they will bring forward legislation and introduce that measure by the front door, not the back door.
Lord Ahmad of Wimbledon (Con)
I remind noble Lords that this is a time-limited debate and that all speeches should be limited to two minutes.
Baroness Barker (LD)
My Lords, I thank the noble Baroness, Lady Knight of Collingtree, for initiating the debate. This is a subject on which she and I hold very different views, but I admire the vigour with which she pursues her very strongly held convictions.
We are having this debate at least in part because of the ongoing campaign by the Daily Telegraph and the sting operations which it has mounted in support of that. Noble Lords will have seen the briefing from the Library. I think it is evident from that that the law is being upheld and that the DPP has yet to find a case where the law has been broken in this regard. It is also clear that the professional bodies—the GMC and the BMA—are dealing toughly with any professional about whom there is the remotest suspicion that they may not be upholding the law in full.
I want to make just one simple point. The NHS is under enormous pressure, particularly as regards maternity services. Given that, there is a legitimate question as to whether or not it is necessary to continue to require two doctors to authorise a procedure in this regard. I am not asking for the law to be changed on the basis of opinion but rather that research is done—that is, comparative research with regard to other countries where the authorisation of two doctors is required—to see whether scarce resources could not be used more effectively in advancing the healthcare of women and children. I am not asking for the law to be changed in any other respect. I think the other four criteria that have to be met should remain. I simply question whether, in this day and age, it is still necessary for two doctors to make that decision.
Baroness Hollins (CB)
My Lords, as a mother with daughters and granddaughters, I find it unbelievable that aborting on grounds of female gender is not explicitly illegal; it certainly seems discriminatory.
As immediate past president of the BMA, I quote its guidance that,
“it is normally unethical to terminate a pregnancy on the basis of fetal sex alone, except in cases of severe x-linked disorders”,
which, of course, affect the male foetus.
The Minister recently stated that updated guidance is being prepared for abortion providers to make it,
“abundantly clear that gender selection is illegal”.—[Official Report, 12/2/14; col. 639.]
However, guidance alone is not legally binding. The Royal College of Obstetricians and Gynaecologists’ clinical guidance on induced abortion notes:
“Services should identify issues which make women particularly vulnerable”.
The RCOG includes domestic abuse and gender-based violence here and goes on to recommend that women should be referred to appropriate support services. Do we know whether this actually happens?
In January, the Independent attributed a reduction of between 1,400 and 4,700 expected live births of girls in the UK to sex-selective abortions. The Minister has in a previous response questioned the statistical analysis of the data, raising doubt about the Independent’s conclusion that sex-selective abortions are being performed. However women’s rights groups such as Jeena International and Karma Nirvana, which represent some of Britain’s minority women, are clear that gender abortions are happening here in the UK and that numbers are far from insignificant.
The reports available suggest that this is predominantly a cultural problem. Does the Minister agree that analysing the data regionally and by ethnicity could alert us to areas of concern? Will the Minister advise whether the Government would consider changing secondary legislation by amending regulations, thus providing clarity about the illegality of this apparently growing practice?
The Lord Bishop of Leicester
My Lords, whatever our differing positions on the ethics of abortion, it must be a matter of widespread concern if there is the appearance of a long-standing gap between the spirit of the Abortion Act and the interpretation of the law. This is a matter of particular interest to many in the churches because of a theological commitment to the sanctity of human life, including potential human life.
Two particular areas of concern have been brought to my attention and I want to raise them briefly. The first is gender-selective abortion, which is a matter of great sensitivity, not least in cities such as Leicester, where I come from. Will the Minister help us by commenting on the implications of the press reports and indicating whether evidence to the effect that this is happening is available to the department?
Secondly, abortion on the grounds of serious handicap or disability is currently the subject of some renewed debate raising concern that it is contrary to the spirit of equality legislation as undermining the status and role of disabled people in society. Will the Minister comment on the concern that while foetuses are not afforded legal personhood the law on this is somewhat incoherent as foetal deaths prior to 24 weeks are classed as miscarriages but must be registered as stillbirths after that? Will he comment on the recommendations in last year’s report by the Pro-Life APPG on abortion on grounds of disability which included recommendations for either reducing the upper time limit on abortion on grounds of disability from birth to make it equal to the upper limit for able-bodied babies or repealing Section 1(1)(d) of the Abortion Act altogether?
Lord Mackay of Clashfern (Con)
My Lords, I am grateful to my noble friend for raising this debate. I want to deal very briefly with two points. First, I have seen it suggested that abortion on the ground of sex selection is lawful, or not unlawful, in this country. I do not believe that is correct. The law is quite clear that an attempt to procure abortion before the Act was unlawful and now the Act allows abortion to be lawful on four grounds, none of which is sex selection. Therefore it is absolutely clear that the law prohibits that as a ground of abortion in this country.
Responsibility for seeing that the law is observed in this area, as in other areas, is with the prosecuting authorities, including the police and the DPP. The DPP has drawn attention to difficulties in relation to the arrangements that have been sanctioned by the Department of Health in this connection. My noble friend Lord Howe may have some comment to make on that. I cannot see how a medical practitioner could pre-sign the form in a way that conforms with the statute. My noble friend said that the law is construed in such a way as to allow abortion on demand, but the law does not do that at all. It is quite wrong to suggest that the signing of the form could be done responsibly without proper knowledge of the situation of the patient at the time.
Baroness Rendell of Babergh (Lab)
My Lords, I thank the noble Baroness, Lady Knight, for introducing this debate. Worldwide, women are still not the favoured gender. When my husband was in the Royal Navy and was stationed in Hong Kong soon after the end of the Second World War, he saw the bodies of drowned baby girls floating in the harbour. This was long before the arrival of the cheap ultrasound machine which is imported from China to India. Two thousand female foetuses are aborted every day in India.
This is not new. Demographic statistics first collected in the 19th century in some Indian villages show that no girl babies were found alive. A girl is regarded as a drain on a family’s resources. Some are killed before or after birth to avoid paying a dowry when she would have married, and some because parents lose a potential pension when a daughter leaves her home to join her husband and she can no longer care for them in their old age.
There are now reports that sex-selective abortion is happening in the UK. A study by University of Oxford academics has suggested that Indian women in the UK were aborting more female than male foetuses between 1990 and 2005. That is so concerning that the Council of Europe has suggested that member states stop giving parents information on the gender of unborn babies until late in pregnancy. Such preference for sons over daughters has tipped the natural 50:50 balance in some ethnic communities.
Will the noble Earl give an assurance that the Government take this matter seriously and will he undertake to keep it under close observation, bearing in mind that unsafe abortion results in 47,000 deaths worldwide?
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I would also like to thank my noble friend Lady Knight of Collingtree for instigating this debate, but I am coming from a slightly different angle. At a time when medical science is advancing by the month and extremely pre-term babies who are born before 28 weeks are able, through intervention, to survive, we must maintain a respectful balance between terminations and live births.
Statistics from the World Health Organisation show that in England in 1995 the survival rate of very premature babies was 40% and in 2006 it was 53%. The survival rate increases by 9% for each week after 24 weeks. However, knowing these statistics will not diminish the anxiety caused to the mother whose baby has been predicted to be premature.
The issue of terminations on the basis of the predicted sex is a product of the advance of medical science. When I was pregnant, ultrasound scans were not routine. This meant that the baby’s sex was a wonderful surprise at birth. Nowadays, scans are routine and offered at 12 and 20 weeks. It is now possible to see what the sex might be. Some parents do not wish to be told, but others are told.
Perhaps a more ethical way would be not routinely to offer knowledge of the sex of the child except where medical reasons, certainly not social reasons, might require it. For some parents with a family of all girls or all boys, the temptation to know and perhaps terminate could be overwhelming. We should not put such temptation in their way.
As a society, we must maintain a strong balance where the survival of premature births is always ahead of the length of gestation at which termination can take place.
Lord Singh of Wimbledon (CB)
My Lords, as a Sikh, I am totally opposed to abortion on any grounds except that of real and serious danger to the mother’s health, and it is important that those who facilitate gender-selective abortions should be punished with the full rigour of the law. However, laws cannot create good behaviour; they can only define the boundaries of unacceptable behaviour. We must also look to education in tackling negative and outmoded cultural practices.
The Sikh religion is not a religion in which “thou shalt” or “thou shalt not” are strictly imposed; Sikh teachings are couched in terms of gentle guidance about what we should or should not do to lead a responsible life. One of the few exceptions is a total condemnation of female infanticide. Sadly, this was all too common in the India of 500 years ago and was linked to the inferior status of women throughout the world.
From the very start of the religion, Guru Nanak taught the dignity and complete equality of women. Sikh women have always been able to lead prayers and occupy any religious position. The 10th guru, Guru Gobind Singh, gave women the name or title Kaur—literally, “princess”—to emphasise their dignity and complete equality. A Sikh woman does not have to take her husband’s name but remains an individual in her own right.
Despite the clarity of such teachings, negative sub-continent culture for some, even in the Sikh community, leads to discrimination against women and girls. Perversely, it is women who are often responsible, with mothers lavishing extra attention on male children. Even in the West today, a new birth is frequently accompanied by a joyous cry, “It’s a boy!”. It is not so long ago that the birth of a girl to royalty was greeted as a national calamity, on a par with the loss of a test match.
We all have to work much harder to fight gender discrimination and gender prejudice through tighter laws and education.
Baroness Tonge (Ind LD)
My Lords, I, too, welcome the debate secured by the noble Baroness, Lady Knight. Whatever our personal position on abortion, I hope that we all want it to be carried out within the law. All providers of abortion services are tightly regulated and monitored by the Care Quality Commission, which makes unannounced inspections of all providers at least once a year. If doctors are carrying out abortion for any reason outside the law, they should be prosecuted. There is no question about that. Sometimes there may be a sound medical reason for an abortion to be carried out which, to a non-medical person, may appear to be outside the law. These cases, which are rare, should also be properly investigated. New guidelines are being drawn up by the Department of Health and they should clarify these cases, especially making it clear that abortion on grounds of sex alone is not legal.
I support the call by my noble friend Lady Barker for only one doctor to be involved. I do so because it seems to me that it would make the responsibility his or hers alone. There would be no buck-passing and it would make the law far easier to interpret, as well as making it better for the health service and for the patient.
However, attempts to criminalise doctors and prevent access to abortion services, which have recently been escalating in this country, must stop. The Abortion Act is there to prevent malpractice. Personally—I have to say this—I still think that a woman’s right to choose what she does in this situation should be sacrosanct. Whatever our personal point of view, like Queen Elizabeth I, we should not seek to look into other people’s souls or to impose our ethical stance or religion on others.
Lord Patten (Con)
My Lords, allowing sex-selective abortion would mean that the UK was sleep-walking into a full-blown eugenic society, flying full into the face of humanity and the gift of life. Gender-selective abortion, which is highly discriminatory against females, is not prohibited by any Act or any other legislative instrument nor, for that matter, would be abortion by selection on grounds of likely height, appearance or whatever, which forms of cosmetic abortion could follow.
Neither ministerial exhortation, codes of practice nor medical professional self-regulation will stop this. Only the Government can. Therefore, there is a very urgent need for secondary legislation to do the job—to make clear the illegality of all these practices—as the issue will surely blow up in the Government’s discomfort zone if it is not punctured soon, as the Prime Minister has pointed out and sensed, I believe.
Exactly the same goes for foetal pain at 20 weeks-plus, in relation both to the provisions of the Abortion Act and current legislation against the wilful infliction of pain contained in Section 134 of the Criminal Justice Act 1988, which enacts the UK’s commitment under the UN Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment. By sheer coincidence, I happen to have taken that Bill through all its stages in another place. Will my noble friend the Minister act on these two issues?
Baroness Flather (CB)
My Lords, I have looked forward to this opportunity to say some things that are very dear to my heart. First, millions of girl babies have been aborted in North India, and the difference between the numbers of girls and boys in two states, Punjab and Haryana, is ridiculous. In Punjab it is 10% and in Haryana it is 11%. Bearing that in mind, it leads us to the conclusion that this must never, ever be allowed in this country. Secondly, whatever the noble Lord, Lord Singh, says, Punjab is the homeland of the Sikhs. He once said to me, “What a pity the Sikhs don’t know how good their religion is”. It is a wonderful religion, but they do not follow it. There is a lot of discrimination, which is not unusual, as we know. In Gujarat, not so long ago—this is current, I am not talking about 500 years ago—they used to drown girl babies in buckets of milk saying that they were drinking the milk. There have been such terrible things happening in countries to get rid of girl babies.
I wrote to Jeremy Hunt, and I received a reply from Dame Sally Davies, the Chief Medical Officer, from which I quote two parts. The first is that, “The CPS concluded that the two cases did not provide a clear basis of finding for a gender-based abortion” and secondly, this part is in bold, “The law is clear that termination of pregnancy on grounds of gender alone is illegal and this decision does not alter that”. We can take comfort from that. We have had a bit of debate that should not have happened today about whether there should be abortion at all, or at what stage there should be abortion. I think that it is a woman’s right to have family planning and, if she does not want a baby, not to have it. It is a human right; women have very few human rights and this is an important one.
Baroness Perry of Southwark (Con)
My Lords, as we are so close to the end of the debate I will not try to repeat the excellent arguments that have been made, not least by my noble friend Lady Knight in her excellent introduction. It might be well to reflect for a minute on abortion itself and the experience of abortion. I have never forgotten one young woman of 18 years of age, whose boyfriend had insisted that she have an abortion because he wanted no part of a baby, telling me what it was like. I had tears in my eyes, as she had in hers, as she told me how the whole night before her abortion she had tried to talk to her unborn baby and explain to it why it was necessary that it should die and how awful she felt when the morning came and she had to say goodbye to the baby that she would never meet. That is the reality of the personal experience of abortion.
What struck me most, looking at the excellent statistical analysis that was given to us by the Library, was that more than a third of women who appear for an abortion are on their second, third or even more. Why is it that they are not given—at the first experience of abortion at least, if not earlier in their lives—better instruction about how to prevent a pregnancy in the first place? We have failed disastrously when there are so many ways of a woman exercising birth control. When we have a morning-after pill, why is it that so many women find themselves with unwanted pregnancies? This is perhaps a failure of what is done in school but it is also—it seems to me—crucially a failure of what happens when a young woman presents herself for the first time for an abortion. She should at least be given good instruction about how to prevent it happening again. In the wider discussion of the appalling custom of aborting little girls, we should think more on the general issue of abortion itself.
Lord Alton of Liverpool (CB)
My Lords, since the 1967 Abortion Act came into force on 27 April 1968, there have been more than 7 million abortions—around 600 every working day. I have some questions for the noble Earl.
As the law does not permit abortion on demand, and abortion was supposed to be a rarity, how in particular does the Minister explain the 66,000 repeat abortions last year—37% of the total—and the fact that, in some cases, individuals have had as many as nine repeat abortions? How does he explain that the majority of abortions are approved by doctors who have never even met their patients? Does he believe that Parliament and the law intended babies to be aborted after up to 40 weeks’ gestation on grounds such as having a cleft palate—breaking our laws on equality and discrimination? Does the noble Earl believe that Parliament wanted an estimated 4,700 girls to be aborted as just another choice, adding to the 160 million girls aborted worldwide?
Non-binding guidance is clearly not enough. Will he therefore amend the HSA1 and HSA4 forms to ensure that the two doctors required by law to authorise abortions only do so having directly asked whether the abortion is on the grounds of gender? On page 8 of its leaflet, Britain’s Abortion Law: What it Says, and Why, BPAS, which undertook 54,478 abortions last year with public money, asked:
“Is abortion for reasons of fetal sex illegal … ?”.
It then provides the answer, “No”. Why has the Minister not required BPAS to remove that advice? In a world in which we have such a low view of the intrinsic value of every life, what is being done to bring to book, using the Human Tissue Act, those National Health Service trusts that have been burning the human remains of aborted and miscarried babies to heat National Health Service hospitals?
These brief questions illustrate why the legislation needs, as the noble Baroness, Lady Knight, has told us today, careful review and amendment. Can the Minister think of a single comparable piece of legislation which has had such far-reaching consequences but has never been subject to post-legislative parliamentary scrutiny? Why does he think that is and will he ask the Secretary of State to consider allowing it?
Lord Campbell-Savours (Lab)
My Lords, we have half an hour left of this debate, and I wonder whether I could speak very briefly in the gap and ask a question.
Lord Popat
It happens that way in the Chamber, where we give four minutes, but not in the Grand Committee Room.
The Deputy Chairman of Committees (Baroness Andrews) (Lab)
I think we can allow the noble Lord to speak very briefly.
Lord Campbell-Savours
I want to ask this very simple question. It has been drawn to our attention by the noble Baroness, Lady Knight of Collingtree, that pre-signed forms have been found. Is it a breach of the law to sign those forms and, if it is, should prosecutions be brought in such circumstances?
Lord Hunt of Kings Heath (Lab)
My Lords, this is an important debate. I share the concerns of the noble Baroness, Lady Knight, about the Assisted Dying Bill, but I do not accept the link she has made between that Bill and the 1967 Abortion Act. I speak as someone who has always supported that Act, but I find termination on the grounds of gender to be absolutely abhorrent, and I hope the noble Earl can clear up the issue of the interpretation of the 1967 Act. Can he say whether he agrees with the interpretation given by the noble and learned Lord, Lord Mackay of Clashfern? As I understand it, the essence of what he said is that the 1967 Act permits abortions only under the specific circumstances as set out in that Act. Therefore, it does not allow for an abortion to be performed on the basis of not wanting a child of a specific gender. It would be very helpful if the noble Earl could really clarify that point.
I also want to ask about the decision of the independent prosecutors in the case mentioned by the noble Baroness. I well understand that the Attorney-General does not want to second-guess the decisions of the independent prosecutors and I have read the subsequent explanation of the Director of Public Prosecutions, but would like the noble Earl to clarify whether he thinks, in the light of that, that any further clarification is required. We have heard about the pre-signing of HSA1 forms. Can the noble Earl confirm that, following the investigation by the Care Quality Commission, those organisations that were found to be pre-signing those forms were ordered to stop this practice? Is he confident that providers are now complying with the Abortion Act?
Finally, does he agree that we need to challenge discriminatory attitudes towards women and girls and should not be frightened of that challenge? Will the Minister say what efforts the Government will make on education in this area and specifically among some communities in this country?
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, it is right for me to begin by thanking my noble friend Lady Knight for her powerful contribution to this important and emotive subject. I express my appreciation to all speakers in this debate. A large number of points have been made and questions have been asked, so I hope noble Lords will forgive me if I do not manage to answer all of them. I undertake to do so, in so far as I do not cover the points in my speech, in a subsequent letter.
The Abortion Act 1967 sets out the terms under which abortion is legal. Since it was passed in 1967, there has been a long-standing tradition that any legislation on this issue is put forward from the Back Benches and is subject to a free vote. I was asked by the noble Lord, Lord Hunt, and others whether the law needs clarifying in the light of events and the statement from the Crown Prosecution Service, which my noble friends Lady Barker and Lady Tonge asked about, making changes to the law. Clarification of the law remains a matter for Parliament, not for government. I say to my noble friend Lord Patten that there is no scope for secondary legislation to amend the grounds on which abortion takes place. It would be a matter for primary legislation.
It is vital for everyone, regardless of their views on abortion, to be assured that the law on abortion is operating as Parliament intended. This is particularly important for clinicians directly involved in certifying and performing abortions who need to know that they are operating within the law and for women seeking an abortion who need access to safe, legal, high-quality abortion services.
The Chief Medical Officer has written twice to all doctors involved in abortion provision to remind them of the need to make sure that they work within the law at all times. It is also important for doctors to be able to explain and evidence their decisions and to record how they have formed an opinion on whether grounds for abortion are met. A number of noble Lords, including my noble friend Lady Knight, raised the issue of doctors forming an opinion on grounds for abortion without seeing or examining the woman. Since the Abortion Act 1967 was passed, the law has required that two doctors certify in good faith that there are lawful grounds for any abortion, and that must be based on understanding the facts of a woman’s case whether or not they personally see or examine the woman.
My noble friend Lord Gordon asked whether we can provide figures for the number of abortions performed without a doctor seeing or examining the woman. I am advised that we do not have figures for that. The 46% figure quoted was wrong, I am sorry to say, and was withdrawn by the department. It is not possible to quantify the figure, but I can say to the noble Lord, Lord Campbell-Savours, that forms being pre-signed is a clear breach of the law and if it is found to be happening, a prosecution should be brought.
I can say to the noble Lord, Lord Gordon, that the Care Quality Commission will continue to cover this issue as part of its inspections and compliance action will be taken against any provider where there is evidence of pre-signing. The CQC has put in place information for its staff to help identify if pre-signing or other instances of non-compliance are taking place to make sure that they would be picked up during inspections.
My noble friend Lady Knight and a number of other speakers expressed concerns about gender-selective abortions, particularly the abortion of foetuses simply because they are female. My right honourable friend the Prime Minister has referred to this practice as “appalling”. The Government’s view has been clearly stated on many occasions—that abortion on grounds of gender alone is illegal. My noble friend Lady Knight stated that the Act is not clear on this point. I confirm to the noble Lord, Lord Hunt of Kings Heath, that the grounds for abortion are set out in the Abortion Act 1967. It is true that these grounds make no reference to gender. While there is an extremely limited number of circumstances in which gender may be a factor in considering other grounds—for example, a gender-related abnormality—the department has made a number of recent public statements through the CMO letters, Answers to Parliamentary Questions and media lines, stating our view that abortion on grounds of gender alone is illegal, and we firmly stick by that view.
Analysis conducted by the Department of Health indicates that birth ratios—that is to say, the ratio of boys born as compared with girls—in this country are within normal limits. This is true for the population overall, and is also true for births to women born abroad who now live in this country. This analysis was first conducted and published in May 2013. This is being updated and we intend to continue to conduct a similar analysis on an annual basis, because we regard this issue as extremely important. We are determined to monitor the situation regularly and remain vigilant. I am also aware that some individuals and organisations have offered anecdotal evidence of gender-selective abortions taking place. I urge anyone who thinks that the law may be being broken to contact the police with their evidence.
The noble Baroness, Lady Hollins, and the noble Lord, Lord Singh, may be interested to know that Department of Health officials recently met representatives from Gina International. The meeting was very useful and Gina International has been signposted to relevant organisations, including abortion providers, with which it can discuss its concerns. The meeting concluded that both sides share the same aims—namely, to spread the message that abortions on the grounds of gender alone are illegal.
The Daily Telegraph first brought this issue to light during its investigation in February 2012. I am aware that the announcement in September 2013 that the Crown Prosecution Service declined to prosecute two of the doctors involved in this issue has been disappointing for some. In explaining why it felt that prosecution was not in the public interest, the Crown Prosecution Service noted that it could be difficult to determine whether doctors had worked within the Act in forming an opinion in good faith. It felt that further guidance to doctors on this issue would be helpful for doctors themselves, as well as for any authority who may need to investigate an allegation of poor practice or lawbreaking. The department therefore intends to issue further guidance for doctors, which will set out the Government’s interpretation of the law on gender-selective abortions, as well as further information about reaching and recording an opinion formed in good faith. We intend to issue this guidance shortly.
I say to the noble Baroness, Lady Hollins, that we believe that the department’s analysis, which is based on birth registrations, is more accurate than the Independent’s analysis, which was based on household composition. The department’s analysis showed that birth ratios were within normal limits.
All abortion providers must be registered with the Care Quality Commission, and independent sector providers must also be approved by the Secretary of State for Health. In order to be approved, independent sector providers must adhere to the required standard operating procedures. There has been considerable concern that the consultation that the department has recently completed on updating these procedures has somehow changed the legal position on abortion. As I have highlighted, the legal requirements on abortion are set out in the 1967 Act. Nothing has changed. A response to the consultation will be published once all the responses have been analysed.
Lord Patten
My noble friend, for whom I am full of admiration in every way, has said that the law forbids abortion on grounds of sex selection, and forbids pre-signing. However, there has never been a successful prosecution or, indeed, a prosecution of any sort. It seems to me that nothing at all is actually being done.
Earl Howe
I shall copy all letters to all Peers who have spoken in the debate. My time is now running out but I know that concerns have been expressed, not least by the noble Lord, Lord Alton, about the way that foetal remains are sometimes disposed of. A recent investigation by the Channel 4 “Dispatches” programme examined this issue. The type of situations highlighted in the programme, where foetal remains were incinerated rather than buried or cremated in line with what the woman would have wanted, are totally unacceptable. Any such practices should cease immediately. A letter has gone to all trusts to make that point emphatically clear.
My noble friend Lady Bakewell asked about hospitals revealing the sex of the foetus at routine ultrasound scans. Disclosing the sex of a foetus is a local decision and should be based on clinical judgment about the certainty of the assessment and the individual circumstances of each case. It is not something that the Government can mandate from the centre.
My noble friend Lady Knight asked about the NHS not employing midwives who would not be willing to perform abortions. The Act allows professionals, including midwives, to opt out of participation in any treatment to which he or she has a conscientious objection. That conscientious objection should not be detrimental to the careers of health professionals. I think I am over my time.
Earl Howe
Sorry, I will carry on. The noble Lord, Lord Alton, made some powerful points about repeat abortions. We are working to reduce repeat abortions through promoting access to the most effective methods of contraception following abortion. Care pathways should be in place to contraceptive services following any abortion.
The noble Lord, Lord Hunt, asked about recording the sex of a foetus on the HSA4 form. We have no plans to record the sex of the foetus on the form. It is not usually possible to identify the sex of a baby until the second ultrasound scan, which takes place at around 18 to 21 weeks’ gestation. In 2012, nearly 98% of abortions were performed before 18 weeks’ gestation, so the gender of the foetus is not known for most abortions. I strongly agree with him that a challenge to attitudes and discrimination against women is a good thing. That is what our parliamentary system is based on. I will write to him further on that, as I will on the question of education.
I close by emphasising again that we are not complacent on these issues. We remain and will continue to be very vigilant.
Lord Popat
My Lords, I suggest we take a break for five minutes in view of the fact that we do not have all the speakers for the next debate.
EU: Money-laundering Directive
(10 years, 7 months ago)
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Lord Willoughby de Broke
To ask Her Majesty’s Government whether they support the inclusion of private trusts in the draft provisions of the Fourth Money Laundering Directive.
Lord Willoughby de Broke (UKIP)
My Lords, I am grateful for the opportunity to draw this matter to the attention of the Committee. I must start by declaring an interest. My farm, on which I scratch a living, is run under a parliamentary trust with trustees who are properly named and all the accounts are in order, as far as I know.
Having got that out of the way, I should say that this debate is about the amendment which the European Parliament recently passed in plenary session to support the amendments to the fourth money-laundering directive inserted by the European Parliament’s Economic and Monetary Affairs Committee. This recent amendment means that companies and, crucially, trusts will have to be listed in public registers in EU countries. This amendment goes well beyond the scope of the original draft directive published by the European Commission last year. That required privately owned companies and trustees of express trusts to maintain records of the identities of their beneficial owners. However, at that stage, the directive required the information to be made available to competent authorities and obliged entities only—that is, law enforcement bodies and persons conducting due diligence. The original draft did not envisage public registers and did not even mention trusts.
The important point to underline is that under the third money-laundering directive, which was implemented in UK law by the Money Laundering Regulations 2007, there is already a legal requirement to identify the beneficial owners of trusts, companies and foundations and their trustees. Indeed, HMRC already requires that any person concerned with the making of a settlement must make a return under declaration S218 stating the names and addresses of the settlor and the trustees of the settlement. The tax authorities already have all the tools they need to ensure compliance with those money-laundering regulations.
Individuals at law firms to whom I have spoken in preparing for this debate have repeatedly made the same point. The existing “know your client” rules—noble Lords will be familiar with the tedious requirement to produce your passport and utility bills when you do business with a company with which you have done business for 30 or 40 years—already make that point. All intermediaries, whether financial or solicitors, already have a legal duty to report to the authorities anyone attempting to use a trust for illegal purposes or they face a fine and even imprisonment. Those rules have been deemed completely adequate by successive British Governments who have never attempted to introduce this sort of intrusive law which is being put forward by the European Parliament.
Why are we now faced with this wholly unnecessary and intrusive directive? It is principally, I think, because of the ignorance and misconception about trusts in the rest of the member states of the EU whose legal systems are based on civil law, not common law. That encompasses 26 of the 28 members of the EU. Civil law countries do not have trusts in their legal systems, so they do not understand the centrality of trusts in English law. Oddly enough, it was a French legalist, Monsieur Pierre Lepaulle who, talking of trusts, wrote:
“The trust is the guardian angel of the Anglo-Saxon, who accompanies him everywhere, impassively, from the cradle to the grave”.
In the EU, there is a complete misconception of the use of trusts, evidenced by the very strong support in the European Parliament for this amendment. Trusts are seen as vehicles for tax fraud—corporate or individual—and as the preserve of the rich, thus a higher risk to Governments in terms of tax evasion.
The truth could not be more different. Trusts in England and Wales are mostly used in mundane and practical situations. Let me give some examples: the co-ownership of land, the administration of deceased estates, the protection of children during minority, the protection of vulnerable and handicapped people, retirement pension schemes and employee share-ownership schemes. Most UK charities are structures as trusts. According to the Law Society, there are well over 1.5 million trusts in Britain, so the requirement of this amendment for a national public register of trusts, their beneficiaries and trustees will have far-reaching and potentially damaging consequences.
The Englishman’s home has traditionally been his castle. This will no longer be true. This proposal will threaten individuals’ and families’ basic rights to confidentiality in their private affairs. Publicly accessible registers of private individual’s affairs can well present risks for those who are named in them, for example by being targeted by financial criminals. On that, I want to draw noble Lords’ attention to the “Panorama” programme on 28 February, called “Kidnapped, Betrayed by Britain”, in which the journalists on the programme investigated the disappearance in Dubai of a British businessman. According to that investigation the British authorities handed over thousands of pages of confidential documents to the Iranian authorities without informing the British businessman involved and ignoring the warnings that their actions posed a risk to his safety. He was kidnapped, disappeared and is presumed dead. Now, that is probably a little extreme but it shows that there are risks in making these registers public to anyone at all. The Latvian rapporteur who introduced this amendment said after the vote in the European Parliament that it was,
“a good day for law-abiding citizens, but a bad day for criminals”.
No, it was a bad day for individual freedom and a good day for Governments with their insatiable appetite for intruding into the private affairs of their citizens.
I understand that the Government oppose this amendment. Indeed, the Prime Minister wrote a letter on 13 November last year to—wait for it—his Excellency Herman Van Rompuy, President of the European Council, informing him that:
“It is clearly important we recognise the important differences between companies and trusts”.
He went on to say:
“I look forward to looking properly at the arguments around trusts and other legal arrangements”.
Judging from the vote in the European Parliament, that letter had about as much success as John Major’s letter to Jacques Santer’s Commission in 2000 on the working time directive. Both letters were instantly consigned to the waste paper basket. So much for our strong voice in Europe—more a muffled squeak—and our seat at the top table.
Could the Minister tell the House how the Government will deal with this matter when it comes to the Council of Ministers in May? Is he able to give some hope to the millions of people who will be affected by this measure, who use trusts routinely and legally, that their private affairs will not be open to any inquisitive individual at the click of a mouse? This amendment is unnecessary and intrusive. It should be consigned to the same WPB as our Prime Minister’s letters.
Lord Dykes (LD)
My Lords, I am tempted to think that the noble Lord, Lord Willoughby de Broke, is a little overanxious about this matter. That will perhaps come out later on in this debate. However, he made some points that I am tempted to agree with on the background to this. It is a very complex and vast area, and it has dragged on for quite some time.
The latest manifestation is the massive vote in the European Parliament in favour of really significant action in this regard. All member Governments are obliged to respond, and there will be meetings in May and subsequently. Eventually, I presume, the new directive will come from the Commission. That will take time to unfold. Most countries already have some clusters of cultures in these matters of declaration, tax information and all the rest of it. However, once again there is obviously a difference between the UK and Ireland and the others in these general matters relating to trusts. The trust is a particularly Anglo-Saxon vehicle, so one has to bear those things in mind when trying to formulate coherent legislation.
The will of the European Parliament cannot just be laid aside, as it were. The vote was very emphatic. It was not only the numbers but also what was said in both the committees and the debate in plenary, with great emphasis that there was now a need to take action in this field and to establish coherence and equivalence between what the EU does as a collective, the worldwide anti money-laundering legislation of one kind or another and the international move to try to get everybody dealing with these matters in a similar way. It is a vast world problem. The noble Lord, Lord Willoughby de Broke, spoke quite rightly of the very honourable trusts that there are, particularly for young people, and all the rest of that paraphernalia we have of legal protection and that background. None the less, the worldwide money-laundering offence is vast, as we know. Member Governments of the EU, as well as authorities elsewhere and the world institutions, are trying to deal with these matters and work together. It is understandable that new legislation is needed.
The United Kingdom already has strong legislation on this. To my mind, it would be very reasonable and essential for HMG to say that the directive provides the broad outline of background permissibility of the legislation, and then each country will introduce its own Bill, becoming an Act after that, in its own way. I live in France as well, so I declare that interest. The law there is extremely different, but none the less aims for the same things. The French have a deep suspicion of this offshore money that is laundered by criminals, terrorists and gangsters of one kind and another in highly organised large international movements of people, moving large amounts of money. That has to be taken care of and followed up vigorously and with energy.
I believe that trusts must be included. However, the Government, in one of the recent ministerial letters on the subject, said with some justification, rather along the lines of the Prime Minister’s letter, that the Government do not believe that trust registries would necessarily be an effective option in addressing the risk associated with trusts. So I think there is a case, to some extent. Not being an expert I have to put in phrases such as that to limit my own operational ignorance of the details of these matters, although I was a City person for many years and saw the nasty side of some of these things from a distance from time to time.
That is an important question and perhaps the Minister will be able to help us in this debate by saying how the Government would deal with the specific question of trust registries—in the sense already implicit in the draft legislative proposal from the European Parliament, with its massive vote backing it up, as we know, that one should provide in public the minimum amount of detail to give satisfaction in the sense of revealing that it is not laundered illegal money, if that can be done.
Equally, to leave out trusts would be wrong, because obviously lots of villains would immediately switch from companies to trusts. You have only to go to some of the many tax havens that our own empire, rather more than others, unfortunately left as a legacy—rather more than France, which quite rightly takes a very dim view of tax-exile territories. That is where these things occur. The banks themselves have worked on an international comparison and co-operative effort, which is gaining strength all the time, and now includes Switzerland, Luxembourg and Lichtenstein, to try to deal with illegal, laundered money. This is gangster and terrorist money and illicit illegal money of other similar kinds. That background is helpful, too, and I wish the Government well in eventually dealing with this matter in terms of domestic legislation.
Will the Minister help us with one or two points that arise from this legislation? On the question of trusts, it says:
“If the beneficial ownership information of companies but not trusts is made public, the latter will become—
as I suggested earlier—
“the default alternative means to undertake the same criminal activities which the new company rules seek to prevent”.
Is a specific mechanism possible to deal with that particularly immediate problem?
I agree very much with the MEP Judith Sargentini when she says that:
“If we had decided to leave trusts out of the scope of the new legislation, then it would immediately have made them the perfect vehicle for criminals wishing to avoid taxation and launder their illegal money through the financial system”.
When considering the eventual directive that will come out of this legislative proposal, which will take some time, it is necessary to deal with that important problem.
I am also concerned about the phenomenology of the risk assessment procedure and I would be grateful if the Minister could help us there, too. The Explanatory Notes state that the risk assessment should cover at least the following aspects: the overall extent of money laundering and the areas of the internal market that are at greater risk; the most widespread means used by criminals to launder in illicit proceeds; as well as the recommendation to the competent authorities on the effective deployment of resources. The evaluation, by the way, should be done every six months. That may be quite difficult to keep to, although I do not wish to sound complacent about this desperate international problem—we will see.
The document further asserts that, to keep everything in proportion and targeted, member states could adopt, or retain in force, stricter provisions in the field covered by this directive to prevent money laundering and terrorism financing, provided that such provisions are in full compliance with Union law. There will, of course, be variations in the national legislation of each member state.
I exclude the two Irelands from my next comment because they, again, would need different treatment, and there is a historical British taxation background in both those countries. However, the culture of the member states that came in in 2004 will be somewhat different in many cases from that of member states which joined the Union prior to 2004.
Finally, I quote again from the Government’s response contained in the excellent House of Lords Library briefing pack, for which I thank the Library staff. It states that,
“while the Government remains broadly supportive of the Commission’s proposals, there are a limited number”—
The Deputy Chairman of Committees (Baroness Andrews) (Lab)
I am so sorry to interrupt, but there is a Division in the Chamber. We will adjourn for 10 minutes.
Lord Dykes
I was just about to finish by asking the Government three quick questions. In the Minister’s letter of 13 December 2013, which I was referring to, the Government broadly supported the Commission’s proposals but a limited number gave cause for concern. I am deliberately not including the gambling points; I am leaving those out because I think that they are empirically rational and sensible. First, what does the Minister estimate will happen when the ECOFIN meeting takes place? What will be agreed? Presumably it will need far longer than that to agree the total package.
Secondly, would the Commission’s proposal discontinue third-country equivalence listing as established under the third money-laundering directive? That needs further explanation.
Finally, the Commission intends—this is in the Explanatory Memorandum of the European Parliament’s legislative proposal—to complement the current proposal by strengthening the EU’s repressive response to money-laundering. Consequently, there is a plan to propose criminal law harmonisation for this offence based on Article 83(1) of the TFEU. That also needs more explanation because there are arguments for and against that concept.
Lord Phillips of Sudbury (LD)
My Lords, this is an interesting debate and we should thank the noble Lord for introducing it. It concerns a series of issues that are still very much in the air because, as I understand it, the European Parliament has approved the directive but has made amendments to it. One of those amendments is of particular concern; namely, that the right of access to the information has been widened from “competent authorities” such as Governments and “obliged entities” such as banks, lawyers and so on to the general public. I think that the noble Lord, Lord Willoughby de Broke, is particularly concerned about it. I wanted to make that clear because there is a long way to go. Negotiations will be held between the Parliament, the Commission and the Council of Ministers, and then it will come here. Being a hoary old lawyer, I am cautious about being at all definitive until I see the final wording and have the opportunity to discover precisely what the disclosure requirements will mean.
I think that the noble Lord, Lord Willoughby de Broke, has somewhat exaggerated the potential breach of privacy. Charities, for example, are themselves public bodies. They comprise the biggest body of trusts in the country and, since they are essentially public bodies, there is no earthly reason why any aspect of their affairs should not be made public. However, I do accept the position with regard to family trusts. Here I should say that I spent several years during the late 1960s and early 1970s dealing with a great deal of family and business work that involved a considerable amount of trust work, particularly with what are called discretionary trusts. I am well aware of the background to those sorts of trusts and why they have a particular relevance, as has been explained to us.
However, I must also be plain. I am deeply concerned about the continuing decline in public trust which I am afraid is afflicting virtually every aspect of our establishment. Perhaps, mercifully, only the judiciary is free of public suspicion and mistrust. One institution after another has lost credibility. I need not go through all the institutions in our country, but it is necessary for us to remember that we ourselves have contributed to the decline in public trust through the events of a few years back, which the public have certainly not forgotten. That want of public confidence, if you like, is now being played on. I do not say this with any disparagement, but UKIP is definitely plugging into that sentiment, just as I believe Alex Salmond and his Scottish colleagues are doing north of the border.
I understand perfectly why there is disaffection and disconnection between the body politic and the ordinary citizen. However, one crucial, central element of that is corruption—using that word in its broadest sense—by big business, particularly among the banks, which frankly has been stupendous, and in the other areas I have touched upon. I want to see a radical attack on corruption, and anything that weakens the ability of the prosecutorial authorities to deal with this corruption must be remedied by us here in Parliament.
I am not as big a fool as to believe that passing laws is a substitute for achievement on the ground; indeed, in this area, I am afraid, the gulf between legislation and implementation is tragically wide, which is something that this House really has to concentrate on in the coming months and years, because what is going on is a farce. Look at Her Majesty’s Revenue and Customs: it had 96,000 staff in 2005 but by next year that will be down to 56,000. Even if you are inclined to believe that there is a great deal of inefficiency et cetera, that is way beyond anything that is at all compatible with the need of the country to see tax avoidance in particular, and fraud in general, dealt with.
Just before he retired, I had lunch with Richard Alderman, the former head of the Serious Fraud Office. He was almost crying into his soup, telling me that he had met one of his former senior staff the month before to find this gentleman bewailing the fact that he had left the SFO and rather wishing he was back rather than being employed by a firm of American lawyers in London at 500% of his salary. At the Serious Fraud Office, as at HMRC, the senior cadres of people are so far outgunned by their opposites in big business, particularly the banks, that it is not just David and Goliath, it is David without his sling against Goliath. It is not a joke. It is a scandal and we should be ashamed of it.
I want ultimately to see the fine print but at this moment I am definitely in favour of strict disincentives for fraudulent activities—money-laundering or anything else you can name—utilising the trust mechanism. I am too experienced a lawyer and know just how convenient the trust is in nefarious activities, precisely because it is informal, fluid and has little statutory law bureaucracy around it.
We all know that the extent of tax evasion has dispirited this country. In the excellent report put out by our colleagues in the Select Committee on Economic Affairs in July last year, Tackling Corporate Tax Avoidance in a Global Economy, the public were able to read about Amazon, Starbucks, Thames Water, Vodafone, Cadbury before being taken over by Kraft—would not its Quaker forefathers just fall out of bed?—and, of course, Google. Citing just the example of Google, the report tells us that in the years between 2006 and 2011 in the United Kingdom, it generated £80 billion of business and paid—can your Lordships believe it?—£16 million tax. It is conceivable that that was done legally but the truth is that most tax avoidance is fraudulent when done on a major scale.
What are we doing vis-à-vis foreign so-called investors? The crooks from across the world come to this country, but why do they come? It is on record, if noble Lords doubt it. Look at the Migration Advisory Committee report from February this year. The principal reason that the big crooks bring their black money to London is because it is safe here.
Noble Lords should consider, too, the rights that anybody who invests £1 million in government bonds for five years and spends 180 days a year in this country acquires. He or she, and their families, have indefinite leave to remain in this country, while knowing that they will not pay tax on their rotten money, because they make damn sure that they do not. They will not use lawful means, most of the time. The sort of people we are talking about are driving up central London property prices so that decent, ordinary Londoners cannot get near staying in London and have to get out of the city in order to live. That is all part of a world that we have to deal with, and part of dealing with that world is to attack trusts.
Lord Pearson of Rannoch (UKIP)
My Lords, I declare an interest in that I set up a family trust in 1984. It is on the point of expiry, so it is not much of an interest.
I intervene briefly to press the Minister for detail on a question put by my noble friend Lord Willoughby de Broke. In view of the letter from the Prime Minister that my noble friend quoted, can the noble Lord confirm that the Government remain unhappy with this latest intrusion by the EU into our national life? If that is so, will the Government advance the doctrine of subsidiarity? Does the noble Lord not agree that this sort of thing should be left to our national Parliament and that this would be rather a good opportunity to test that doctrine, useless though it has always proved in the past?
Failing that, what chance do the Government think they have of avoiding this directive? Could the noble Lord tell us, just for the record, whether the eventual decision will be taken by majority voting or whether the Government can, in fact, block it? I look forward to the noble Lord’s answers.
Lord Watson of Invergowrie (Lab)
My Lords, I am grateful for the opportunity to speak in the gap. I apologise for not having put my name down, but I was not sure I could be here this afternoon. The noble Lord, Lord Willoughby de Broke, alluded to the maxim of an Englishman’s home being his castle. Perhaps it is because I am not an Englishman that I do not completely subscribe to his views, but I do subscribe to the maxim that there is quite a lot to be said for having nothing to hide and therefore nothing to fear. I am concerned that he made virtually no mention in his remarks of the issue of money-laundering, and I thoroughly agree with the noble Lord, Lord Phillips of Sudbury, that it is actually a very important issue. Whether or not it is more important than trusts, I will leave for others to decide, but it is very important that we grasp this issue. I spoke at some length on this during the passage of the Financial Services (Banking Reform) Bill last year, as indeed did the noble Lord, Lord Phillips.
I see that the Government have committed to creating a public register of the beneficial ownership of companies. That is a step forward, but if beneficial ownership does not include trusts then, as I think the noble Lord, Lord Dykes, said, that opens up such an obvious route for criminals to avoid taxation and launder their illegal money in various ways through the financial system. That is surely something we must seek to avoid if at all possible. I note that the directive has strong support from the bigger EU member countries. I know that will not cut much ice with the noble Lords, Lord Willoughby de Broke and Lord Pearson, but it is none the less important, and I see that the resolution was passed very decisively when it came up for consideration.
I accept that a majority of trusts are set up for entirely legitimate purposes, but the small percentage which abuse the law can have, and often have had, devastating impacts. The opaque corporate ownership structures which are often used allow such crimes as money-laundering, tax evasion, sanctions busting, trafficking of arms, drugs or humans, terrorist financing, bribery and other forms of corruption. Those are surely not issues that we can treat at all lightly. If transparency around trusts is not guaranteed, their illegitimate use is likely to increase significantly, which is a big issue. A public register could distinguish between low and high-risk trusts, with the former being exempt, to avoid unnecessary regulation. Will the Minister give us his view on that point when he replies? I very much hope the Government will eventually support this directive.
Lord Davies of Oldham (Lab)
My Lords, I congratulate the noble Lord, Lord Willoughby de Broke, on introducing this debate. The degree of sharp interest shown by all noble Lords in this issue may have surprised him. Passion has been aroused, and so it should be. It is interesting that it has been identified that the evils that the Government should address are tax avoidance and money laundering. We were also greatly concerned about money flowing towards terrorist activities. That agenda has come very much to the fore over the past decade. If we are not concerned about those issues and whether our law is adequate to control them as best as it can, we are clearly not playing our full role in the public interest.
I congratulate the Government on the work done last year. It is quite clear that they are already committed to creating a public register of the beneficial ownership of companies and therefore a substantial part of the issue is being tackled. I am quite sure that all parties subscribe to that position, with the notable exception of the party that is exceedingly well represented in this Room but is not normally well represented in Parliament by elected Members. Although this issue is complex, the Government have made some considerable strides, and it is clear that we have a slightly more difficult issue, which the noble Lord, Lord Dykes, identified, because of our common law than is the case with countries on the continent. We will wrestle with these issues.
Trusts fit into a very distinctive and different pattern compared with organisations elsewhere, but the point is obvious. If trusts are not included in the legislation, they will become the default mechanism whereby all miscreants will carry on their practices. We know that they go on to a significant extent and that the wider public out there expects Parliament to tackle these issues once they have been revealed. It is therefore of the greatest significance that we keep the momentum up. I understand entirely the anxieties of the noble Lord, Lord Willoughby de Broke, but they are overwhelmed by the need of our society for protection against proven misdemeanours in the use of companies and trusts.
I should emphasise that this is not a new issue. Some people will defend freedom to the nth degree and say that you should not intrude upon private arrangements. Between $8 million and $10 million was secreted away in trusts by an individual, General Pinochet. I doubt whether many people in our country think that he was entitled to the privacy vouchsafed to him at that time; nor should we underestimate the dangers that are implicit in defective and ineffective law. That is why we have to tackle these difficult issues, and I am glad that noble Lords today have pressed the Minister with clear questions about the difficulties that have to be overcome.
It is clearly the case that people enter trusts, particularly family trusts, on the basis of an understanding of privacy. It may therefore be necessary for the Government to tackle trusts in more than one category: those that are capable of being used for nefarious purposes and those that clearly come into the common category of a very large number of people who are merely seeking to safeguard relationships in their family and their resources. However, there is no alternative. We particularly need international action because, whatever we do, if it is not carried out by other advanced economies, all our efforts will be insignificant. Automatic exchange agreements, which would leave the miscreants concentrating on the weakest link in the chain, the country that they identify as being least able to enforce such agreements and implement them, would be used. Financial tax laws are all voluntary. We have nothing that is compulsory, which is what this directive and the amendments are directed at.
I recognise that this is a complex issue and that the Minister is bound to indicate that there are areas in which it is more straightforward to act than in others, but we should bear in mind the strength of the majority opinion in this debate, which has been very forcibly expressed, that we cannot have a situation where the significant holders of real wealth are able to avoid their obligations to the wider public and to the consumers and nations that they serve. It is important that we have legislation that carries out the action that we all regard as essential.
Lord Willoughby de Broke
My Lords, some noble Lords, including the noble Lord, Lord Watson, and to a certain extent the noble Lord, Lord Davies, have missed the point that I was trying to make. There are already, under the Money Laundering Regulations 2007, absolute requirements on financial intermediaries and lawyers to report to the relevant authorities if they suspect that there is any illegal use of trusts. They already have the weapons; the idea that there is absolutely no legislation to deal with trusts is entirely misplaced.
Lord Newby (LD)
My Lords, I thank the noble Lord, Lord Willoughby de Broke, for introducing this debate and all noble Lords for their contributions. I will try to answer some of the broad concerns expressed and lay out the steps that the Government are taking to ensure the effective and proportionate treatment of trusts under the fourth money-laundering directive.
Proposals for the directive are aimed at improving the transparency over who owns and controls companies and legal arrangements, such as trusts. The World Bank estimates that between 2% and 5% of global GDP is subject to money laundering, with some estimates showing that global illicit outflows from developing countries dwarf the amount that they receive in official development assistance. Furthermore, the UN Office on Drugs and Crime estimates that less than 1% of that is currently being seized or frozen. Tackling these illicit flows was therefore a key priority for the UK’s presidency of the G8 last year. As the Prime Minister said at the October 2013 Open Government Partnership summit,
“transparency needs to extend beyond the public sector and into the private sector ... but there are also many wider benefits to making this information available to everyone. It’s better for businesses here ... developing countries ... and ... the more eyes that look at this information the more accurate it will be”.
That is why the UK has committed to establishing the world’s first publicly accessible registry of company beneficial ownership.
The EU’s fourth money-laundering directive is an opportunity to build on that momentum. The directive seeks to implement the revised standards of the Financial Action Task Force and the European Commission’s review of the implementation of the third money-laundering directive. We are committed to ensuring that the directive implements the FATF standards in full. As the Prime Minister wrote to European Heads of Government last year, our first collective step should be to mandate public central registries of company beneficial ownership as the benchmark for transparency of ownership and control. At the same time, the UK recognises that it is equally vital to prevent the potential misuse of trusts and similar legal arrangements.
The FATF sets the global standards to improve the transparency of the beneficial ownership of corporate and legal entities, including companies, and legal arrangements such as trusts. In setting those standards, the FATF recognises that preventing the misuse of trusts is critical but also explicitly recognises that trusts are different from companies. In particular, it is vital to understand that, unlike companies, common law trusts, such as those established under English and Welsh law, are not created by the state. Furthermore, trusts, unlike companies, are used for a range of purposes, such as benevolence, inheritance, protecting vulnerable people and family support. As such, the implications for privacy are far greater, and trusts therefore warrant different treatment.
Measures placed on trusts must therefore be different from those that apply for companies in order to be proportionate and effective. The Government support a mandatory requirement for trustees to know the beneficial ownership of their trusts. That, together with tax reporting to HMRC, to which the noble Lord, Lord Willoughby de Broke, referred, and future automatic exchange of tax information agreements, will offer more transparency on trusts than ever before. In particular, through automatic exchange agreements, financial institutions will report information to national tax authorities on trusts holding accounts with them where the beneficiary is a resident of a partner jurisdiction. That information is then automatically shared with the partner jurisdiction. There are already 44 signatories to this international standard on automatic exchange, which creates a web of information exchange that will provide greater transparency on trusts than ever before.
This approach provides a proportional and effective means of enhancing transparency on trusts holding financial assets, given that they pose the greatest money- laundering risk. The Government oppose the mandatory registration requirement for trusts, which, together with the creation of central registries of trusts, was recently adopted as the European Parliament’s position on the directive. Given the transparency afforded by automatic transfer of information agreements, we consider registration of trusts to be a disproportionate approach and, in particular, one which undermines the common-law basis of trusts in the UK. As such, we continue to work with other member states, civil society and the private sector to ensure effective treatment of trusts.
Beneficial ownership has proved to be the most contentious issue in discussions over the fourth money-laundering directive. We are under no illusions about the challenges ahead. Following agreement between member states, negotiations to reach a mutually agreed final text with the European Parliament are likely to be challenging, given the position adopted by MEPs, as has been described. I assume that among the small minority of those who voted against this directive was a full turnout of the British UKIP contingent.
What happens next is that we are working with the Council presidency and other member states to agree a compromise that would limit the scope of obligations on trusts to those holding financial assets, which the UK would satisfy through existing reporting obligations for trusts holding financial assets, domestic reporting requirements and automatic exchange of tax information agreements. Such a compromise would complement the UK’s advocacy of ambitious action on company beneficial ownership. Of course, such an approach would exclude, for example, wills from the implementation of the directive, as wills do not form that category of trust.
Negotiations are ongoing, and we expect the Greek presidency to seek agreement among member states over the next few months. The subsequent Italian presidency would then seek the conclusion of the directive during the second half of 2014, in co-operation with the European Parliament. In answer to the noble Lord, Lord Pearson of Rannoch, the decision in the Council will be by qualified majority vote.
A number of questions were asked of me—
Lord Pearson of Rannoch
Before the Minister leaves that point, it might be a good place to press him on the famous doctrine of subsidiarity. In view of the difference between our system and the other systems in Europe, would it not be a good idea to use subsidiarity?
Lord Newby
My Lords, the approach I set out would mean that we would have a different way of reporting the majority of trusts. Therefore, there would not be a common system across the EU. The Government’s view is that it is very important that, across all the EU, there is a requirement for both companies and trusts to be more transparently described than they are at the moment. That is why we put a huge amount of effort into pursuing the concept of the mandatory requirement on beneficial ownership of companies. We want to ensure that, as far as possible, information about trusts that could be problematic for money-laundering purposes will be more generally available. Our proposals would do that in respect of the UK without having a full mandatory register in the same way as we propose for companies. We accept that there is a difference in nature between the two, but we think we can have the best of both worlds by having that difference of approach between them.
In response to the question from my noble friend Lord Dykes, trusts would not become default alternatives to companies because there are the requirements to report financial information to HMRC and to pay tax where appropriate and also for the automatic exchange of information where the beneficiary is a foreign national.
Lord Phillips of Sudbury
Would the requirement on the trustees and trust extend to revealing who the beneficial owners are?
Lord Newby
I am not sure I can give my noble friend a definitive answer now. I may be able to, but in any event I will write to him about that.
My noble friend Lord Dykes referred to the challenges of making a risk assessment in this area. Of course, it is almost an impossible task. I do not think that the risk assessment is a key part of the process. We do it because we have a broad sense of what the risks are, without being able to get to the nearest pound or euro.
In answer to my noble friend Lord Phillips’ earlier question, I should have been clearer: the answer is yes.
My noble friend Lord Dykes also asked about third country equivalence. Commission proposals do not include provisions for listing of third countries as having equivalent money-laundering or terrorist-financing regimes. Under the third money-laundering directive, this proved to be a problematic process, and the white list of equivalent jurisdictions was difficult to keep up to date. The FATF peer reviews of member states heavily criticised this white-listing process, and we support the Commission’s view.
My noble friend Lord Phillips of Sudbury discussed the reductions in HMRC staff. It is not a question of whether they are more efficient at doing the same jobs. The truth is that the way in which we manage the tax affairs of the vast bulk of individuals and companies is now online. A huge number of staff whose jobs were essentially related to dealing with paper are no longer necessary. The reduction in staff is largely in response to changed circumstances. I remind my noble friend that we put in an additional almost £1 billion in this Parliament for staff working on tax avoidance and evasion. That has already generated several million pounds-worth of additional revenue beyond what we believe would otherwise have been obtained. There has been a change in gear, if you like, in the way that HMRC operates.
To sum up, given that my time is very brief, the UK is leading from the front on an agenda that places a practical emphasis on transparency and accountability. The Government are working to ensure that the EU shows similar ambition on what is a cross-border issue, with serious implications for developed and developing countries alike. We want the outcome to be fair and proportionate, but we also require it to be effective. That is what we are working towards and what I am optimistic that we will achieve.
Ukraine
(10 years, 7 months ago)
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Baroness Falkner of Margravine
To ask Her Majesty’s Government what is their assessment of the political situation in Ukraine.
Baroness Falkner of Margravine (LD)
My Lords, I start by thanking the several noble Lords who have taken a Thursday afternoon out after a long week to take part in this debate. I will not have an opportunity afterwards, so I thought that I would get in my appreciation of this fine attendance on an important matter here and now.
In 2014, as we look back on the centenary of the Great War, a plethora of new books reminds us that events can be overtaken by miscalculation compounded by misunderstanding. When tactics supersede strategy, an inevitability takes hold. Against the memory of those historic events, it is important neither to underestimate the events in Ukraine of the past few months nor to overstate parallels with the Cold War or other analogies. At this point, we cannot know where the invasion of Ukraine by Russia will lead us.
However, we can be sure of certain things: whether this is an act of historical significance is not in doubt. It has marked a change in the world order. In the past 20 years there has been a debate about the change in power politics, evidenced in the demise of bipolarity, with unipolarity and the US moving to hegemonic status after the demise of the Soviet Union. Alongside this has been the challenge to its neighbours posed by the rise of China and, in response, the US pivot to Asia.
The question in international relations scholarship in the past decade has been whether we are seeing the emergence of a multi-polar world, but one where essentially western norms and values have prevailed, with buy-in from emerging powers into “western” institutions, or whether we are living in “no one’s world”, as described by the American academic Charles Kupchan, where no single overwhelming power is dominant and norms are in a state of flux.
The events leading up to 27 February, when Russia invaded and seized Ukraine’s Crimean peninsula, seem to point in the direction of a passing of the old order, or indeed, in the words of the Economist, the forming of a disturbing “new world order”. The invasion of a sovereign country other than as an act of self-defence or under international humanitarian law, sanctioned by the international community, cannot be a light thing, even when carried out by a former superpower wielding a United Nations Security Council veto.
The excuses given by Mr Putin in drawing parallels with NATO actions in Kosovo are absurd. In Kosovo, there was grave and present danger of a severe humanitarian catastrophe after evidence of widespread ethnic cleansing in the immediate region. Attempts were made to seek consensus in the UN Security Council but, in the face of a Russian veto and after some deliberation, it was decided to take action through NATO.
Even more absurd are Russia’s claims that the Government in Ukraine are illegitimate and that, hence, Russia will not enter talks. In Ukraine, after months of ongoing protests against the elected Government and more than 100 people killed—mostly at the hands of state security snipers deliberately shooting to kill—it was the Parliament which, on 20 February, approved a resolution calling for a return to barracks of the military and a ban on firearms. Once the police and military conformed with the vote in Parliament, Mr Yanukovych and his allies decided that the game was up and fled to Russia. On 22 February, the President was deposed for abandoning his duties and an acting President was appointed. From that point, it took a mere five days for Russia to take Crimea.
This is not the first time that an elected Government have been driven from office, and it will not be the last. Only a deaf and blind leader can cling on to office when all around him see evidence of egregious corruption, human rights abuses and kleptocratic governance. Of course it is preferable that there be constitutional measures, such as votes of no confidence, to oust those who command no support, but the fact remains that Yanukovych lost the support of his own majority in Parliament.
I turn to the here and now and the consequences of the events of the past few weeks. The most immediate are for the people of Ukraine. They have 40,000 Russian troops massed at their border with full logistical back-up support for invasion, including military hospitals. The threat is palpable. According to NATO, a Russian invasion could be accomplished in between three and five days, with the potential to take Moldova and Transnistria as well.
Alongside that are Ukraine’s economic woes. Without deep and structural reform, and with sovereign default on the horizon, the EU offer of a $15 billion loan is welcome. Ukraine’s currency fell by 30% between November and late February, and the Government are now running out of funds to cover public employees’ salaries. Although it is entirely understandable for the IMF to seek to protect its funds from corruption by sticking to its stringent conditions and reform agenda, it is surely somewhat dangerous for the fund and the EU to dither while Russia destabilises the interim Government from within, as well as starving them of energy.
I hope that the Minister will be able to tell us what conversations the Government are having with the IMF about a speedy allocation of funds and whether the UK is having conversations with the German Government about additional bilateral loan guarantees by those countries within the EU which can give—a coalition of the more solvent, perhaps, rather than a coalition of the willing.
There is also the present question of the Ukrainian elections on 25 May. What arrangements are being drawn up with the OSCE for the elections, which are now only some five weeks away? There has been gnashing of teeth in European capitals about the Kerry-Lavrov talks. In my book, they are a welcome development. They are less neo-imperialism and perhaps more pragmatism. EU foreign policy co-ordination is still embryonic. I experienced that myself last weekend at the Königswinter conference in Cambridge, where my German colleagues took a rather different view. “Our histories are different”, they said, “hence the lack of an EU strategic Russia policy”.
For Ukraine, after the formation of a new Government, it is imperative that that Government build a consensus for enhanced protection for minorities and entrench it constitutionally with strengthened regional autonomy. It is a relatively new state, and centralised structures seldom work when there is significant diversity in the population. Alongside Ukraine, we, the international community, should not write off Crimea. There is a tendency among policymakers to write off a land grab by Russia. There is an element of fuzzy historical referencing accompanied by a shrug of the shoulders.
I make it clear that I am not advocating a NATO invasion to free Crimea, despite the illegitimacy of its referendum and return to Russia. There has been a change to the territorial integrity of a sovereign state by its neighbour. Should that situation be accepted unchallenged, it presages similar attempts across the world. There will be few countries with minority populations across borders which cannot but worry about the consequences that will flow from Crimea. So every instrument of negotiation from asset freezes to sanctions and a recalibration of hard power as deterrents must be employed to sanction the aggressor.
The costs will be borne by us all, the Russians as well as the EU states, but the upholding of international law through sanctioning an aggressor may be the lesser cost in the long run. If by demonstrating that there is a united response from the West a negotiation can indeed be brokered with Russia along the lines that Crimea be reinstated within Ukraine, with an agreement that Ukraine be not given NATO membership for a period, that would appear to be the minimum acceptable outcome.
In concluding, I return to my opening remarks about the importance of upholding international law. Assurances need to be credible to be worth the paper they are written on. One casualty of the Crimean invasion is that there is less confidence in the West’s assurances in a post-Crimea world. This will undoubtedly affect our efforts to curb nuclear proliferation but will also diminish the West’s standing in a host of other matters.
Without being slavishly pro-American, there are many in the UK and Europe who have regretted the US’s increasing isolationism. Indeed, it was notable that last week was President Obama’s first visit to Brussels since his first election in 2008. While we have welcomed the closer trade links to flow from TTIP and, belatedly, a new emphasis on EU-US co-operation across foreign affairs generally, the events of the past few weeks, too, have illustrated the importance of hard power as a deterrent. It is evident now that we cannot neglect any of these aspects of power politics; it is better to learn those lessons now than allow an orderless world to emerge. I look forward to the Government’s response to these challenges.
Lord Giddens (Lab)
My Lords, I congratulate the noble Baroness, Lady Falkner, on having secured this debate. The situation in Ukraine remains extremely dangerous. The prime risk in my estimation is probably not further Russian invasion, although no one can write that off, of course, but a scenario in which events get out of control in ways that no one intended.
For the people of Ukraine, this is a time of hope, yet the problems to be coped with are just awesome. “Hope for the best, but plan for the worst” is the motto adopted by Ukraine’s new Minister for the Economy. It will not be political reform alone but the interaction of political and economic change that will determine which of these outcomes is most likely.
Simon Tilford from the Centre for European Reform has made a telling comparison of the diverging economic fortunes of Poland and Ukraine during the past 20 years. The Polish economy in 1990 was only 20% larger than the Ukrainian economy, but by 2001-02 it was fully three times as big—a quite extraordinary statistic.
I want to argue that three basic structural dilemmas will have to be resolved during the next two or three years in Ukraine if there is to be political and economic stability. First, how will the economic shock effects of the IMF’s reform package be managed politically? That package involves radical public sector reforms, higher oil and gas prices and a swathe of job losses. There will be an awful lot of pain before there is any discernible gain, and somehow that will have to be managed. Secondly, the presidential election is in late May, as the noble Baroness has indicated. How can progress towards democracy be reconciled with technocratic control imposed externally, because that is how it is going to have to be? We have seen from the example of Greece how such a process fosters extremism even in established democratic states, and Ukraine is not, of course, an established democratic state—far from it. Thirdly, devolution from Kiev is certainly necessary, but how will it be achieved without stoking up the forces of separation in areas with a high proportion of Russian speakers?
As noble Lords know, the Russian version of federalism for Ukraine is intended to dismember the country. What role will the UK Government seek to play in helping to resolve these core dilemmas, without which substantial progress in Ukraine is impossible? Does the Minister accept that a more integrated EU foreign policy will be needed in future, going beyond that established in the Lisbon treaty? One of the main things that has changed is that there is now an arc of instability going all the way round from the top of the eastern border of Europe, through the Middle East and north Africa and going below north Africa. That situation was quite unanticipated and is going to involve quite a reorganisation of political leadership on the part of the EU and the US to cope with it. I welcome the Minister’s views on that.
Lord Chidgey (LD)
My Lords, I, too, congratulate my noble friend on securing this debate and giving us another chance to look at these issues, which are obviously very serious. Prior to the recent vote of the UN General Assembly condemning Russia’s invasion of Crimea, it transpired that several countries were threatened with retaliation if they voted against Russia. The resolution was passed by 100 votes to 11, with some abstentions, in spite of the threats of retaliatory measures, such as expelling migrant workers, aborting gas supplies or imposing trade bans. Afterwards, a spokesman at Russia’s UN mission denied any threats had been made, saying:
“We never threaten anyone. We just explain the situation”.
To me, that sounds like a Mafioso making you an offer that you cannot refuse.
At more or less the same time, Vladimir Putin’s previous chief economic adviser, Andrey Illarionov, tells us that Putin’s real aim is to create “historical justice” with a return to the days of Tsarist Russia, reconquering Belarus, the Baltic states and, of course, Finland. He warned that Putin protects what belongs to him and his predecessors—Tsar Nicholas II and Stalin.
So what are we going to do? I would like to make just two points in the three minutes that I have. First, I have to say that I agree entirely with our Prime Minister when in the Hague last week he said that it was our,
“duty to embrace the new technique”,
of shale gas to reduce dependence in Europe on Russian energy, calling it a “wake-up call”.
In our earlier debate in this House on Ukraine, I called for the UK to believe the science and not to be persuaded or dissuaded by the politics. Natural gas was the origin of the crisis in Ukraine. Russia keeps Ukraine and much of Europe dependent on gas at prices just low enough to disincentivise fracking of shale gas. State-run media and propaganda continually spread disinformation critical of fracking and supportive of opponents to the process. As the president of the Association of Liberal Democrat Engineers and Scientists, I can say that its position paper on shale gas is absolutely on the button. There is no doubt that for the foreseeable future gas has to be the fossil fuel of choice, producing less carbon dioxide per unit of energy than the others. We agree totally with the conclusion of the Royal Academy of Engineering and the Royal Society that,
“the health, safety and environmental risks associated with …fracking … 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”.
So I ask the Minister if she could confirm in her reply that the Government are poised to remove potential legal barriers to the exploration and development of shale gas deposits in the UK and that the proposed growth Bill, which I believe will be in the Queen’s Speech, will include measures to change trespass laws to prevent landowners denying access needed to assess prospective shale gas fields.
My second point is that the UK must act in the financial sector, not just in response to President Putin’s actions but to restore a somewhat tarnished international finance sector. There has been a stream of allegations from sources in Ukraine that corrupt officials and business people have been laundering their funds through the UK, yet asset recovery has been insignificant compared with the problem. As a director of the advisory board of Transparency International, I am aware that the UK’s banking sector froze less than 1% of some £30 billion that the Russian Central Bank estimates left Russia as the proceeds of crime between 2010 and 2014.
Our financial authority believes that between £23 billion and £27 billion has been laundered through the City of London each year. The Anti-Corruption Foundation in Moscow has revealed corrupt activities regarding the Sochi Olympics and the Transnet Pipelines company, alone worth more than £12 billion.
My final point is that major changes are required if the UK is to detect, freeze and seize the corruptly obtained assets that are flowing undetected through the financial system. Clean up corruption in the City and hit Putin and his cronies where it hurts.
Lord Judd (Lab)
My Lords, this is an important debate. We are grateful to the noble Baroness who initiated it and indeed for the very wise things that she said in her own observations.
I suggest that we see this terrible crisis as symptomatic and that we take a moment or two to look at history. The story of the struggle for identity in Russia has gone on for centuries. Is it to be a Western-orientated power when the prevailing language is French in St Petersburg, or are we to search for the soul of Russia, never quite identified, somewhere behind?
In that context, the role of the “strong man” has become crucial. In Russia there is a KGB elite exercising ruthless power, and consequently there is a lot of corruption. What is happening now is not new in human history: it is in part a great diversion to keep the Russian public distracted from the injustices and imperfections of their own society. We have seen this in the erosion of human rights, in the curbing of the freedom of the media and in the oppression of civil society.
What Putin did in Crimea is obviously wrong; it was a blatant breach of the international rule of law. It is difficult, though, and we must all confess this, to think of any referendum organised in any other circumstances in Crimea that would have resulted in a different conclusion. We have to accept that, and that takes us into deep waters. When we preach about the virtues of self-determination and the rule of law, we need a little humility because the world looks at us and says, “Hey, hang on a moment. What about Iraq? There was no specific UN Security Council resolution”, “What about Guantánamo Bay, which is still operating?”, and, “What about rendition, whose issues are still unresolved?”. Yet we go around preaching as though we were the centre of virtue in the world.
We need to get back to a sense of the international struggle together to reassert the importance and indispensability of human rights and the international rule of law. No matter how terrible this crisis, it may give us a good opportunity to start rebuilding together. But we will not do that by preaching; we will do it by dialogue, conversation and engagement. However, we must stand firm. It is clear that we cannot just have a breach of international law as has happened on the Crimean issue. If we then move on to talk about sanctions, though, for God’s sake do not let us posture in a hollow way that is not credible. We have to see the sanctions through, even if that means facing up to the issue of the southern pipeline.
The paradoxes are also strong, and they need to be frankly put to the Russians. I was deeply involved in the whole story of the north Caucasus. There, the Russian line was that self-determination was not acceptable and they ruthlessly repressed it. Now we suddenly hear from them that self-determination is central to any way forward. Again, we must examine our own record. We did not speak out strongly enough on the north Caucuses, so where is our credibility here? We also have to look at our failure on issues of human rights and civil society in Russia to be anything but rather muted in our comments.
We must stand firm, but in a context of somehow rebuilding some kind of dialogue. To those who say that it is simply a matter of telling the Russians what they must do, I say that as we are not going to invade Russia or to go to war with Russia, how the hell are we going to get this right in the long run if we do not get into some sort of mutuality? That means that if the Russians suggest that it is appropriate to think of federation, we do not automatically dismiss it because the Russians said it but, in the context of the ethnic challenges, look at whether we have to examine the proposition.
Lord Dykes (LD)
My Lords, I very rarely disagree with the noble Lord, Lord Judd. I agree very much with his exhortation that we should not carry on preaching. Time is very short, so all I have time for is to refer to some aspects of the historical past and the United States’ policy on this matter because there were faults everywhere in the long lead up to what has happened.
I congratulate my noble friend Lady Falkner on launching this debate. I would embarrass her by commending the thoughtfulness and restraint she has shown on this matter in recent weeks. John McCain and other people would probably like a third world war—perhaps that is an unfair comment on John McCain, but there are some people who would relish the idea. They are a tiny minority, thank goodness, and most people are being very sensible and empirically restrained on this matter.
If you go back to the end of the Cold War, there is a link with the United States and the inconsistency of American leadership in these matters. It is no good us being slavish supporters of everything the United States does. That has been a great mistake for Britain. I hope we will get away from it if we become once again a self-confident member of the European Union. At the moment, we are in transition from nervousness to panic about UKIP and all that, but we need to get our self-confidence back and be a strong, active member of the European Union.
NATO is taking the lead. I think what has been done so far has been correct. Russia has quite rightly been condemned, but the inconsistency in America has been there. When the Cold War ended, we saw the reaction to the end of the Soviet Union. The humiliation that Russians experienced at that stage was enormous, but instead of us being sympathetic to that psychologically and supporting Russia as a great world country, even if not a leading world power, we were very aggressive and critical about Russia and all its aspects, particularly Russian civil society, and said that there was nothing good about Russia. Everything was wrong there and suspect, although there are things to worry about, as my noble friend Lord Chidgey said. I think the Russians probably expected us to do the same as them. They folded up the Warsaw Pact. We carried on with NATO. I think Putin also expected that NATO would finish, but we found artificial out-of-theatre excuses to carry on with NATO. These things have to be accepted empirically and objectively. I am not talking down our Western cause because that is the priority for all of us.
When the promise was made to Gorbachev, and I think repeated to Putin and to Yeltsin as well, that there would not be a NATO country next to Russia, that solemn promise was breached by the West and NATO. These things are facts. You can imagine that someone with the personality of Putin would react in the wrong way, aggressively, to those things, but I hasten to add that that does not condone what has happened in Crimea. The referendum is a reality. We have to accept it. If Russia were foolishly to go further than that into new territories or attack Ukraine, it knows that that would be madness. We hope and pray that this is the end of this affair, so far. It is not easy to see how it will work out in the longer term. There may be a reconciliation between the more democratic Ukraine and Russia as the end result. That would be a very good result.
The inconsistency of American policy in the Middle East peace process has allowed 35 vetoes since 1967 and has allowed Israel, a wonderful country with wonderful people but a lousy Government, to disobey international law all the way through and get away with it. Quite rightly, Saddam Hussein was expelled from Kuwait after one year by the international community. However, Israel has been in the Occupied Territories for nearly 50 years and nothing has been done about it. People notice these things. There is an idea that John Kerry will suddenly come along and say, “Well, I hope you didn’t notice what happened before but we’re now going to solve it”, but there is now a complete vacuum. Netanyahu will not co-operate. You have to have a sensible Government. It is no wonder that young Israelis have gone to live in Berlin: they are fed up with the situation in Israel with its extreme policy. Therefore, the United States’ leadership has been weak and inconsistent. It needs to be better in the future and then it can claim to be perhaps not the exclusive leading world power but a very important country.
Viscount Colville of Culross (CB)
I, too, thank the noble Baroness, Lady Falkner, for obtaining this debate. I was the BBC “Newsnight” producer in Moscow during the fall of the Soviet Union and I have been back to both Ukraine and Russia many times since then. Therefore, I share your Lordships’ great concern about the events that have been taking place. However, it seems to me that one of the battles on which we really have to concentrate is for the hearts and minds of the Russian-speaking people of Ukraine. If we can build a country which is politically and economically stable, as the noble Lord, Lord Giddens, mentioned, it will be a country in which all its citizens, including the Russian speakers, will want to live.
For the past 20 years, Ukraine has been increasingly dysfunctional—a trend which has accelerated in the past three years as corruption has extended into almost every aspect of Ukrainian life and there has been a destruction of the rule of law. We now have to channel the energies released by the events in February to create a democratically accountable Government who are supported by an independent judiciary and an accountable police.
The Ukrainian Government have set up an anti-corruption body, which is trying to think about how to introduce transparency into government. It is going to need a lot of support from our Government and the Governments of the EU. Open government depends on publishing reliable data about expenditure and income. An open procurement policy makes it harder to hide bribes and overprice contracts. I have spoken to DfID, which obviously has the gold standard on this and is well known for leading the way in open government and open contracts. It said that it has had someone in Kiev assessing the situation and looking at what can be done. I should like to ask the Minister what else can be done to make sure that DfID’s expertise can be rapidly deployed to help the Government in Ukraine to establish themselves as transparent.
One of the worst areas of corruption has been the subsidising of domestic gas prices so that they are eight times cheaper than those charged to industry. As a result, it is estimated that last year alone $2 billion-worth of fraud was perpetrated as gas was diverted towards business, with businessmen pocketing the difference. As the noble Lord, Lord Giddens, said, the IMF package includes a 50% rise in the cost of Ukraine’s domestic gas, to take effect from May. This will hit many people on low incomes very hard. The country has an average income of $6,500 a year and, without some kind of safety net, I am concerned that the price hike is going to stoke discontent and inflame the eastern provinces in particular. Surely western Governments can contribute to any safety net to help to smooth this transition period while the price rise takes effect.
A transparent Government and business sector are important, but they go hand in hand with the implementation of the rule of law. Ukraine’s 1996 constitution emphasises the importance of the rule of law and specifically states that all citizens are subject to universally applicable laws. However, for the past 20 years these laws have not been implemented by either the judiciary or the police. The trend over the past few years of President Yanukovych’s rule has been to incorporate the judiciary into the executive arm of the Government. One of the country’s leading legal experts said that court decisions were decided by a phone call from the presidential administration.
The EU countries of eastern Europe have huge experience of transforming the judiciary from being an organ of government and the Communist Party to being independent. After major reforms of the institutions and personnel, the judges in much of eastern Europe are exercising impressive independence. Surely we should ensure that this experience is shared with the Ukrainians to help them to build similar institutions.
Likewise, anyone who has been to Ukraine, which I have, and has suffered from the corruption of the police—particularly the traffic police—will know that the corruption is universal. Nobody trusts the police. They are there for their own good and not for the good of the law. That, I think, is the view of most people in the country. It is interesting to look at what has happened in Georgia, where they fired all the police force at the basic level, re-recruiting from universities and training them. They looked really carefully at the hierarchy. That has been quite effective.
Democratic accountability cannot be imposed on Ukraine from the outside. The Ukrainian people have to come together and coalesce around a determination to build a country worth living in. We in the West can do many things to help and advise the Ukrainians in this long and difficult task. I urge the Minister to ensure that our Government do everything they can to help this process.
Lord Skidelsky (CB)
My Lords, I, too, congratulate the noble Baroness, Lady Falkner, on having secured this very timely debate, although I fear that my analysis will diverge from hers and, indeed, from that of most other noble Lords who have spoken—not from all of them and not from all their analysis, but partly.
I want to make three points. First, it is a serious mistake that the West has refused to concede any form of Monroe doctrine to Russia, even in respect of countries which until very recently formed part of the historic Russian state. That is completely unrealistic. Rather, it has actively sought to prise those countries from Russia’s orbit, using as its instruments NATO expansion and financial and logistical support for Russophobe movements in newly independent adjacent territories, not excluding those groups tainted with extreme nationalism and anti-Semitism.
The fact is that international law, of which we all speak and which we all of course support, is a necessary but not a sufficient condition of international order, and the West, which preaches it relentlessly, has ignored it whenever it has suited it to do so. I think that the West has never stopped to consider how its policies are viewed in Moscow, or indeed by most Russians, even those strongly opposed to the Putin regime. It is not just this one man who has power-mad ideas; his views on what western policy has been, certainly in the past 10 or 15 years, are strongly supported by most Russian people. I believe that the West made a historic mistake in not disbanding NATO after its work was done and replacing it with a new European security system which included Russia. These things are all coming home to roost.
Secondly, I have to ask what the purpose of sanctions is. Are they supposed to punish Russia for annexing Crimea or to deter it from future “escalation”? If the former, they are surely pointless, as the deed is done. Do the Government seriously expect that Crimea will be returned to Ukraine? It will not be. If the object is deterrence, what is it that Russia is to be deterred from doing? Can the Minister answer that without retreating into obfuscation?
The western response to the crisis casts Russia in the role of aggressor. However, I agree with Peter Lieven when he writes:
“The danger comes from the possibility of clashes between the Ukrainian nationalist and neo-fascist volunteers who led the overthrow of the previous government in Kiev and opposing Moscow-backed pro-Russian volunteers in the east of the country”.
In other words, the danger lies in the disintegration of the Ukraine state—a point that has been perfectly accurately made by other noble Lords. Peter Lieven adds that if they get out of hand, such clashes could lead to Russian intervention, war and the partition of Ukraine.
My final point is that, if we are seriously concerned to avoid such a disastrous sequence, we should not be calibrating our hard power instruments, as the noble Baroness, Lady Falkner, suggested, but working with the Russians to preserve a viable Ukrainian state. The Russians have presented their own ideas on how to do this, which should be seriously and urgently tested. Broadly, they propose a “neutral” Ukraine on the model of Finland and a federal state on the model of Switzerland. I think we have already had suggestions in this debate that have pointed in that direction. The first would exclude Ukrainian membership of NATO but not Ukrainian membership of the European Union. The second would aim to secure a new constitutional settlement through practical guarantees of minority rights. I will not go into that because I do not have time. Financial aid from both Russia and the EU would be conditional on Kiev’s acceptance of such a settlement.
Will such a sensible solution come to pass or will bloodshed, disintegration or something much worse come out of it? A sensible solution will probably not come to pass. I fear that we are too legalistic and moralistic to do what is required, but we can only hope for the best.
Baroness Morgan of Ely (Lab)
My Lords, the crisis in Crimea and Ukraine is probably the biggest security challenge we have faced in Europe for a generation. We hear from NATO sources that around 35,000 Russian troops are massed near the Ukrainian eastern border along with tanks and special forces. They have the logistical back-up to keep them there for some considerable time, and although we have heard recently that Russian troops are being withdrawn, we need to be on our guard to ensure that this is a significant pull-out of troops rather than a rotation of forces. Either way, we are a long way from seeing the end of this crisis and its consequences.
Putin’s speech on 18 March was unforgiving in its tone and aggression, but it is worth listening to it to gain an understanding of the sense that Russia needs to feel strong again and the humiliation that it felt after the break-up of the USSR. Of course, Russia would love to feel powerful again. Its initial moves to establish a new customs Eurasian trade bloc have been thwarted by the Ukrainian public, who made it clear that if there was a choice they would rather have a customs union with the EU. Russia has broken with the tradition that has developed since the end of the Cold War that assumes that disputes will be settled in Europe by diplomacy rather than military might. We were starting to be complacent in the belief that the only real currency of power in Europe was its economic rather than military might.
The crisis offers a test for two international organisations in particular—the EU and NATO. If they play it well, using deft and delicate diplomacy, we could see the situation settle. If they play it badly, it could have catastrophic consequences for Ukraine and the world.
The EU has now signed an association agreement with Ukraine promising co-operation and convergence over policy, legislation and regulation across a broad range of areas. Gradually and over time, therefore, the trade relationship between Ukraine and the EU—its second biggest trading partner after Russia and responsible for a third of Ukraine’s external trade—will be anchored in a market system that will insist on converging standards, both commercially and in terms of the values of the European Union such as democracy and the world of law. That pathway has started already. The EU loan was mentioned by the noble Baroness, Lady Falkner. I am very pleased that she initiated this debate, and I thank her for her insightful introduction. But in the long term, we should see economic stability in the country and the rule of law that the noble Viscount, Lord Colville, and my noble friend Lord Giddens talked about.
The EU has to act as one on the issue of Russia if it is to maintain any leverage. The energy vulnerability of the continent means that it can proceed only with extreme caution as 30% of its gas imports are from Russia. That is worth £60 billion to the Russian economy, so the EU has an important lever.
We do not need just to reset the energy market in the UK. We need to reset it in the EU as well. We have been talking about it for a long time. The initial energy debate in the EU started when Russia turned off the taps to Ukraine in the early 2000s. We have tinkered about with it, but we have not really taken the energy issue within Europe very seriously. This should be a call to action. However, we have to be very careful not to provoke Russia into isolation in Europe in the long term. Russia, understandably, does not want to feel hemmed in. That is why it is crucial that NATO desists from offering Ukraine full membership of the organisation. NATO promised Gorbachev, after German reunification, that there would be no future expansion to the east. That promise has been broken time and again. I am sure that many of the old Eastern bloc countries are quite pleased at the moment, especially those with Russian minorities, that that promise was broken, but we have to understand the importance of making sure that NATO does not welcome Ukraine as a full member.
In 2010, the Ukrainian Parliament voted to exclude the goal of,
“integration into Euro-Atlantic security and NATO membership”.
The two international organisations now need to show their mettle and their commitment to long-term stability in Europe in the forthcoming weeks. Yes, a strong message needs to be sent to Putin that tearing up international agreements and breaking international law is totally unacceptable and that there are and will be consequences, but we must be careful not to give any excuse for inflaming a situation that could lead to tragedy on our EU borders. If we manage that, we could end up with our ultimate goal: a democratic, open and liberal Ukraine, which is free from corruption and does not bully minorities, and a Russian neighbour that does not feel threatened by encirclement and will come to terms with the loss of empire. The Government continue to enjoy Labour support for the way they have handled this crisis so far.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)
My Lords, I start by thanking my noble friend Lady Falkner for organising this debate and for the opportunity to update the House once again on the political situation in Ukraine. I also thank the noble Baroness, Lady Morgan, and the Benches opposite for their support in what has been an incredibly difficult time in terms of ensuring that diplomacy succeeds.
As noble Lords are aware, this House last debated the ongoing crisis in Ukraine and Russia’s illegal and wholly unacceptable annexation of Crimea on 18 March, and I updated the House on 25 March in replying to a Question. Her Majesty’s Government, working in close partnership with the European Union and an incredibly broad range of allies from across the international community, have continued to take incremental steps to ratchet up the pressure on the Russian Government in response to their continued violation of international law. As my right honourable friend the Prime Minister said last week, their actions are a direct challenge to the rule of law around the world and should be of concern to all nations.
A great deal has been said in our debates about Russia’s motivation for the rapid illegal annexation of Crimea, Putin’s motivation and his view of Russia’s place in the world. Those matters have been discussed today. The noble Lord, Lord Howell, rightly said in a previous debate that Russia’s strategy belongs to the 19th century, not the 21st century. It cannot—it will not—go unanswered. However, our actions must, of course, be of this century: they must be measured, proportionate and always mindful of the need to encourage peace and stability rather than conflict. Our fervent wish for Ukraine, and for Russia, is that their peoples can live in a peaceful, stable and secure environment. Russia’s actions are achieving the opposite. Putin would have us accept that a historical mistake has somehow been corrected with the illegal annexation of Crimea and that it is the will of the Crimean people. However, this is not the view of Her Majesty’s Government or, indeed, of most of the free world. It was a land grab, achieved via a sham referendum under the threat of Russia’s military might. We must commend the Ukrainian Government’s restraint under such pressure.
I hear what the noble Baroness, Lady Morgan, said about Russia and isolation, but isolation in the global community is one of the levers that the international community has. The international community not recognising the illegal annexation of Crimea is a first step. A recent resolution at the United Nations General Assembly saw 100 nations affirm their commitment to Ukraine’s territorial integrity. Only a handful of nations voted with the Russian Federation against the resolution, including Zimbabwe, Cuba and the Democratic People’s Republic of Korea. I fear that Russian intransigence means that we must prepare for the long haul on this issue. We must show the strength of our convictions as a country, and with our allies, by maintaining our position and our actions. To this end, the Foreign Secretary met the Ukrainian Foreign Minister on 1 April to demonstrate UK support for Ukraine.
The European Council on 20 and 21 March announced further sanctions, bringing the total of those facing asset freezes and travel bans to 33. At the same Council meeting, the European Union, member states and Ukraine signed the political chapters of the association agreement, which again have been referred to today. That represents a very visible commitment on the part of the Ukrainian Government to a closer relationship with the EU, and to EU norms and values. For their part, the EU and member states’ signature of the association agreement represents their commitment to assist Ukrainian reform to make these aspirations a reality. To that end a proposal on a package of support potentially worth $14 billion to $18 billion will soon go to the IMF board.
NATO and Ukrainian Foreign Ministers met on 1 April in a further demonstration of international support for Ukraine. They agreed to suspend indefinitely all civilian and military NATO-Russia Council activity, except ambassadorial level dialogue and above. At this time of crisis it is absolutely right for us to step up activities that provide reassurance and confidence for NATO allies without provocation. NATO has worked hard to build a constructive relationship with Russia but Russia, through its actions in Ukraine, has forced us to step back from our previous level of engagement. As the Prime Minister made clear, it would be wrong for the G8 summit to go ahead in Sochi in June. G7 leaders will instead meet in June in Brussels, without Russia present. This demonstrates further the cost to Russia of its policy on Crimea.
It is tragic that Russia, so close culturally and ethnically to Ukraine and with whom it has shared so much history, should impinge on Ukraine’s sovereignty. We once more urge Russia, as we have done, to seek urgent ways to de-escalate the critical situation in Ukraine and to engage with the Ukrainian Government to address their concerns. We are concerned about the visit to Crimea by the Russian Prime Minister on 31 March, which was particularly unhelpful in relation to de-escalation. Solutions imposed at the point of a gun have no hope of resolving a crisis which can and should be resolved by diplomatic means. We are resolute in our determination to support the right of the Ukrainian people to make their—
Lord Skidelsky
Is the Minister really saying that the annexation of Crimea was against the wishes of the Crimean people and that, had they been free to do so, they would have overwhelmingly rejected it?
Baroness Warsi
What we have said consistently and in direct reply to that is that we cannot accept any referendum held with no preparation and down the barrel of a gun, without really an answer on that ballot paper to vote “no”, which were the two options given. If, in due course, there was a referendum appropriately held with the necessary constitutional backing in the right way that referendums are held, I do not think that anybody would dispute people having their right to self-determination. We are resolute in our determination to support the right of the Ukrainian people to make their democratic choices about the future of their own country. I think we would all agree that the way it was done was not acceptable.
Key questions to which noble Lords quite rightly returned are how we now frame our relationship with Russia and how to address Russia’s concerns about the intentions of the West. The crisis in Ukraine is the most serious test of European security so far this century. Russia’s actions cast a menacing shadow across the continent of Europe. Without swift and significant steps by Russia to de-escalate the situation, the Government remain resolute in determining that our relationship with Russia can be seen only through the prism of an illegal and ill-judged incursion into Ukrainian territory.
The actions we and our allies have taken are proportionate and it is clear that their impact is already being felt. Indeed, the noble Lord, Lord Skidelsky, asked about sanctions. The European Union has adopted unprecedented sanctions against Russia, including asset freezes and travel bans. Preparatory work is already under way for more far-reaching European Union sanctions, including economic and trade measures. These sanctions are a message and a warning to the Russian Government. We want Russia to enter direct talks with Ukraine and we will continue to work with our international partners to find a diplomatic solution to this crisis. These sanctions are a part of that.
The noble Lord, Lord Judd, spoke about the need for dialogue with Russia. We absolutely agree with that. The noble Lord is right: dialogue with Russia is key. We continue to engage with Russia to try to find a solution to the current crisis. My noble friend Lord Dykes said that we need to work towards a positive outcome. A positive outcome is an increase in democracy in both Russia and Ukraine. We are doing what we can to support that in Ukraine.
We continue to choose our actions with a long-term strategy in mind. As members of the EU, we have enjoyed the longest period of peace and stability in European history. Our NATO alliance has stood the test of time to become the most successful military alliance ever.
To echo the words of my right honourable friend the Foreign Secretary, we are not asking Ukraine to choose between Russia and the West. We are saying that Ukraine should be free to choose to strengthen links with either, both or neither, but only Ukrainians themselves can decide their future. However, we can give Ukraine the support that it requires. My noble friend Lady Falkner asked what conversations we had already had in relation to IMF assistance, for example. Ukraine and the IMF reached a staff-level agreement last week on a two-year standby arrangement, supported by the international community. That will potentially unlock $27 billion. The IMF contribution will be between $14 billion and $18 billion, depending on other bilateral and multilateral contributions. As I said earlier, the agreement is expected to go to the IMF board—the executive board—next week.
I think that the noble Lord, Lord Giddens, asked how IMF payments will be managed. I am sorry; I cannot read my own writing. We recognise that there will be pain in complying with the IMF conditions for assistance, including the need to increase domestic gas tariffs. The Government of Ukraine inherited a country in dire need of economic and political reform. The Government of Ukraine have committed to making this difficult reform and the UK and our international partners stand to assist in this. Of course, the conditionality of the IMF agreement is important because we know how many IMF programmes have in the past failed in Ukraine. Therefore, reform in relation to gas tariffs, governance and the financial sector are part of that package.
The noble Viscount, Lord Colville, asked about the role of DfID. The initial UK package of £10 million, which was announced a few weeks ago, is being put forward in co-ordination with DfID. We are working closely with international donors to see where expertise can best add value. DfID anti-corruption work is being done, in addition to the work being done by technical teams in Kiev, to identify where the UK can support energy and social reform sectors.
My noble friend Lady Falkner asked about arrangements for elections. The OSCE will monitor the Ukrainian elections which are due to take place on 25 May. About 100 long-term election observers are already in Ukraine. Short-term election observers will follow. The UK is contributing to the monitoring mission and is urging the Ukrainian Government to do all they can to ensure that the elections are free, fair and carried out in accordance with international norms.
The noble Lord, Lord Giddens, asked about devolution and Russian federalism. As I said, the future of Ukraine is for Ukrainians to decide. Russia should respect Ukraine’s sovereignty and not seek to impose systems of governance on it which are not agreeable to the Ukrainian people. I agree with the comments of my noble friend Lord Chidgey regarding work in relation to the energy sector. The Government are, of course, discussing plans on the exploitation of shale gas in the UK as we speak.
I agree with the noble Baroness, Lady Morgan, on the need for wider EU action. We task the European Commission to prepare measures which will bring far-reaching economic consequences if Russia takes any further steps to destabilise Ukraine and, by June, to produce a comprehensive plan to reduce Europe’s dependency on energy from Russia. However, I agree that more needs to be done, and it needs to be done quickly. My noble friend Lord Chidgey also spoke about corruption and tackling assets which could potentially pass through London. I have a comprehensive answer on that but, in light of the time, I will write to him giving a detailed response.
In conclusion, Russia does have a choice to make: to take the path of de-escalation or face increasing isolation and tighter sanctions. President Putin should take notice of the clear, united and resounding message emanating from every democratic Parliament, including, of course, the mother of all Parliaments here. I am grateful to noble Lords for their contributions in reinforcing that message today. Every diplomatic channel remains open. Nothing that has been done cannot be undone. We and our allies continue to urge Russia to show its strength in ending this crisis.
House of Lords
Payday Loans: Advertisements
(10 years, 7 months ago)
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Lord Mitchell
To ask Her Majesty’s Government what steps they are taking to reduce the number of payday loan advertisements watched by children.
Lord Newby (LD)
My Lords, payday loan adverts are subject to the Advertising Standards Authority’s strict rules. The ASA will not hesitate to ban irresponsible adverts. The Broadcast Committee of Advertising Practice is currently considering the issue of payday loan advertising on children’s TV and the potential implications for ASA regulation. The Financial Conduct Authority has introduced new requirements on payday lenders, including mandatory risk warnings and signposts on debt advice in adverts. It can ban misleading adverts that breach its rules.
Lord Mitchell (Lab)
I thank the Minister for the reply. Daytime television, my Lords, is deluged with advertisements for payday loans, many of them including fluffy puppets, catchy jingles and smiley people. Children see these advertisements and, not surprisingly, when family money is tight, they pester their parents to take out these loans. I intend to table a Private Member’s Bill to ban all advertising of high-cost, short-term loans until after the watershed. Will the Government support me?
Lord Newby
My Lords, I think it is right first to set out the scale of the problem. I am not doubting that there are issues, which is why the Broadcast Committee of Advertising Practice is looking explicitly at this matter. However, to set the issue in context, payday loan adverts in 2012 comprised 0.6% of TV ads seen by children aged four to 15, and, last year, all personal debt ads on children’s television amounted to 0.2% of total ad spend on children’s television. I am not saying that it is not an issue, but the number of ads being watched by children in this area is relatively modest—hardly more than one a week.
Baroness Benjamin (LD)
My Lords, payday loans are a form of grooming. So, to protect our children, should there not be an additional clause in the Advertising Standards Authority’s children’s code that refers to the scheduling of adverts that encourage potentially harmful lifestyle choices such as easy access to borrowing, including payday loans?
Lord Newby
My Lords, that is exactly why the Broadcast Committee of Advertising Practice is looking at this issue. We expect to hear from it in the next few months and there may be consequences for the ASA code. I have some difficulties about the use of the word “grooming” in this context. It has come to have a specific meaning in relation to sexual exploitation, and, whatever the problems with payday loans—and there are very considerable problems—they are not of that degree of difficulty.
Lord Davies of Oldham (Lab)
My Lords, the Minister has indicated that there has been a minor reduction over the past year, but the scale of payday loans is astonishing—and they are directed at children because that is a soft way to get at parents. Is this not something that we all ought to criticise and deplore, and on which we ought to expect authority to take action, because the only reason that daytime children’s television in particular is deluged with these loan advertisements is that it puts pressure on parents?
Lord Newby
My Lords, this Government have taken very strong action in respect of payday loans by giving the FCA very considerable powers in this area, which it has started to exercise. It is a sign of the times that yesterday DFC, one of the country’s three biggest payday loan providers, issued a profit warning and surrendered to a takeover, citing the tougher new regulatory regime. The weather is changing for payday loans.
Baroness Walmsley (LD)
My Lords, I appreciate that this is slightly to one side of the Question, but can my noble friend tell me whether any work is being done to find out how many advertisements for easy ways of gambling away your money are seen by children?
Lord Newby
My Lords, I do not have any specific response to that, except to say that the ASA is able to investigate any complaints about the effect of ads on particularly vulnerable groups, which potentially would include gamblers. Certainly, if you watch paid-for sport television, you get a very large number of ads for online betting, which I find distasteful—but, as with many things in life, there is an interesting argument to be had about the line between what is distasteful and what should be banned.
Lord Foulkes of Cumnock (Lab)
My Lords, it is a pity that the Minister has resorted to statistics to try to explain this away. All it needs is one of these very cleverly devised adverts to put pressure on children or to influence children to put pressure on their parents, who can ill afford to take out these loans. Will the Minister answer the question put by my noble friend Lord Mitchell: when he brings forward his Bill, will the Government give sympathetic consideration to supporting it?
Lord Newby
My Lords, when the noble Lord, Lord Mitchell, brings forward his Bill, the Broadcast Committee of Advertising Practice will have expressed a view on these loans. The Government will take very considerable account of what it says in forming their view about the noble Lord’s Bill.
Baroness Symons of Vernham Dean (Lab)
My Lords, children do not watch only programmes that are designed for them; in some households they watch programmes all day. Can the Minister tell the House what percentage of advertising in general across the schedule is advertising for payday loans?
Lord Newby
My Lords, I do not have that figure. I will write to the noble Baroness.
Lord Forsyth of Drumlean (Con)
My Lords, is there not a case for looking at daytime advertising? On the one hand, you have ads that are encouraging people to take out loans at very high interest rates and on the other you have people being encouraged to go on gaming sites. With hindsight, was it not a great mistake for the previous Government to abandon the principle with respect to gambling and advertising that we should not take any measures that stimulate demand?
Lord Newby
My Lords, it is a highly contentious issue and there are simply different views on it. As I said, personally I find those adverts distasteful, but that is not to say that I necessarily want to ban them all. One problem with a lot of adverts is that they encourage behaviour that might be thought to be irresponsible. There are a lot of ads on children’s TV for expensive toys and games that encourage children to say to their parents, “Can I have that toy and that game?”, which the parent cannot necessarily afford.
Prisons: Education and Training
(10 years, 7 months ago)
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Lord Ramsbotham
To ask Her Majesty’s Government what impact prison staff cuts have had on the provision of education, job training and substance abuse programmes in Her Majesty’s prisons.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, staff reductions have been made as part of the benchmarking reforms of public sector prisons. Benchmarking is the best means of delivering value for money for the public purse. It either increases purposeful activity or sustains current levels, and refocuses work and job training to enhance prisoners’ employment prospects on release. The Prison Service works closely with commissioners of substance misuse services and education to optimise the provision of these services to meet prisoners’ needs.
Lord Ramsbotham (CB)
I thank the noble Lord for that rather disappointing reply. Provision of and access to education and training are two key factors in any meaningful attempt to prevent reoffending. I cannot imagine that anyone responsible for the conduct of imprisonment could be happy about an Ofsted report which finds that, despite some prisons having state-of-the-art facilities:
“Training and education in prisons are very poor and are failing to support offenders into employment… In many prisons, training and education comes too far down the list of priorities for prison governors and other senior staff.”
Nor could anyone be happy about a London University Institute of Education survey which found that 62% of prison educators criticised the negative effect of payment by results on prisoners as learners, and on the overall quality of education. When prison educators are complaining and prison staff are speaking openly about the difficulties of getting prisoners to education due to cuts in staffing, I hope that Ministers are suitably concerned. Will the Minister please tell the House what steps are being taken to rectify the situation?
Lord Faulks
Many steps are being taken. Work is progressing on introducing a new mandatory assessment for all newly received prisoners by OLASS, the Offender Learning and Skills Service providers. This will ensure that all offenders receive a learning assessment focused on English and maths, rather than those who simply go on to learning. NOMS and its partners are working towards implementing better data about sharing arrangements. I should say that intensive maths and English courses are being piloted in prisons, based on a model adopted in the Army, particularly to address prisoners serving short sentences.
Baroness Corston (Lab)
My Lords, the Minister just referred to purposeful activity for those who are in our prisons. I know of one women’s prison where this activity is filling sandwiches for Pret A Manger. Is this the kind of purposeful activity to which he refers?
Lord Faulks
Purposeful activity covers a number of different areas: work, training, education, PE and programmes designed to tackle the causes of prisoners’ offending. Quite a lot of the emphasis on purposeful activity is to try to allow prisoners to engage in activities where they will have some prospects of work outside, particularly in the catering business. With great respect to the noble Baroness, who I know has great knowledge of these issues, that is in fact not out of step with where they might be able to find employment afterwards.
Lord Dholakia (LD)
My Lords, does my noble friend the Minister accept that prisons are overcrowded, and that controls and discipline are difficult to maintain? In fact, there has been an increase of 72% in calls on riot squads, and we have reached a high point in the level of deaths in custody. Under these circumstances, in order to ensure that prison’s objectives of education, training and jobs are not affected by cuts in government expenditure, would the Minister not agree that it is time for automatic inspections by HM Chief Inspector of Prisons?
Lord Faulks
Any violence or instability in prisons is clearly to be regretted. However, the noble Lord will be aware that assaults in prisons are at their lowest level since 2008, and the number of cases of escaping or absconding has reduced by more than 85% of what it was 10 years ago. I am afraid that I cannot accept that there are problems as a result of overcrowding. At the moment, although there is no room for complacency, matters are stable in the Prison Service.
Lord Wigley (PC)
My Lords, does the Minister recall the debate last Thursday in which it was mentioned that more than 5,000 IPP prisoners are being held in prison, two-thirds of whom are beyond their tariff, and that the main reason for this is the lack of training for rehabilitation? Given that this is costing more than £200 million a year, is it not penny wise, pound foolish to cut back on courses of that sort? Can the Minister give some assurance that these prisoners can have the hope of getting rehabilitation courses?
Lord Faulks
I well remember the debate and the prominent part which the noble Lord played in it. He will also recall the response that I gave him, which was that there was a considerable, co-ordinated effort to ensure that those IPP prisoners were enabled to engage in appropriate activities which would increase the likelihood of, although not guarantee, their release after hearing before the Parole Board. That is happening, and the Prison Service is well aware of the problem.
Lord Woolf (CB)
My Lords, on 1 April 24 years ago, if my recollection is correct, the British prison system was subject to a series of riots. A Conservative Home Secretary, now the noble Lord, Lord Waddington, asked me to make a report. Another Conservative Home Secretary, the noble Lord, Lord Baker, received that report and the House of Commons, with one exception, indicated that it accepted the recommendations, limited to 12, in that report. I am very pleased that a Government of whom the Conservatives are part have now focused on the importance of rehabilitation. Does the Minister agree that if you are going to have rehabilitation, it is very important, first, to control the numbers in prison and, secondly, to have the staff needed to cope with that number of prisons, for the reasons identified by the noble Lord, Lord Ramsbotham?
Lord Faulks
The noble and learned Lord is referring to the Strangeways report. I entirely accept that rehabilitation should be a key part of prison. The noble and learned Lord will recall that the transforming rehabilitation reforms mean that those serving short sentences for the first time will now be able to obtain support after leaving prison and will be enabled by means of resettlement prisons to have some continuity in the support that they receive inside and outside. I accept his general observations. It is a matter very much to be borne in mind.
Lord Howarth of Newport (Lab)
My Lords, whatever the Justice Secretary is now saying, is not the reality of the situation that his policy is preventing family and friends sending books to prisoners? Does not a state which treats its prisoners with gratuitous harshness and which seeks to suppress the life of the mind put itself and society to shame?
Lord Faulks
That is not strictly within the Question but entirely predictable. The Secretary of State has not banned books. Each prisoner is entitled to 12 books in their cell. The libraries in prisons are impressive. If the noble Lord would like to visit one of the prison libraries, that can be arranged with my department. It is a matter of great disappointment to the librarians that so many people have criticised the provision of books. What the Secretary of State is trying to do is prevent people sending in parcels that do not always contain books, or not exclusively books, to try to stem the real problem there is in prisons of drugs and other contraband, extremist literature and the like. We are not banning books.
Health and Safety Executive
(10 years, 7 months ago)
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Lord McKenzie of Luton
To ask Her Majesty’s Government what assessment they have made of the findings of the triennial review of the Health and Safety Executive.
Lord McKenzie of Luton (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and in doing so draw attention to my interest in the register.
Lord Bates (Con)
My Lords, Martin Temple’s triennial review of the HSE concluded that the functions performed by the Health and Safety Executive are required and that it should be retained as a non-departmental public body. He made recommendations concerning potential efficiencies and opportunities to raise income, and the Minister for Disabled People has asked the HSE to work on these. Other recommendations require further consideration, and we will respond more fully later in the year.
Lord McKenzie of Luton
My Lords, I thank the Minister for what I take to be a positive reply. The Minister will be aware that the report refers to the “nearly universal praise” for the HSE, which it considers a reflection on its,
“impartiality … independence … professionalism and technical competence”.
What assurances can the Minister give that any requirement placed on the HSE to increase its commercial income will not impair those vital attributes, and what more can the Government do to promote the excellence of the HSE and the UK health and safety system?
Lord Bates
I am grateful to the noble Lord for that question. I think that Martin Temple pointed out exactly that. He paid tribute to the work of the HSE, which it does day in, and day out, in maintaining safety standards. One reason why this country enjoys such high standards of health and safety in the workplace is because of the work of the HSE. It is of course necessary to ensure that its work is efficient and effective. For that reason, he suggested that the HSE focus its efforts on major hazard sites rather than those areas of relatively low risk. That is what it has been doing over the past couple of years.
Lord German (LD)
My Lords, one of the recommendations in the report is to delink the need to prop up the budget and fines for intervention. We have been here before with speed cameras, where there was a suspicion that police forces were increasing their budgets by overuse of speed cameras. How will my noble friend learn lessons from that, and from the recommendation in the report that fines for intervention should not be linked to propping up the budget of the HSE? What steps will he take to implement that?
Lord Bates
It is a good question. The point is that fines for intervention are where visits and inspections have taken place and problems have been found which have resulted in prosecution. In those circumstances, the view of the HSE and of the Government is that the taxpayer should not have to pick up the bill; the person who has not been fulfilling the obligation to implement the rules correctly should pay the price.
Baroness Donaghy (Lab)
My Lords, the Minister will be aware that the Health and Safety Executive played a key role on the Olympic construction site. Our country should be very proud that not a single person died as a result of that building work. Following on from the question of the noble Lord, Lord German, the independent report states that the link between funding of the regulator and income from fines is a “dangerous model”. How will the Minister ensure that the HSE’s integrity and independence will be protected?
Lord Bates
That is a very good point. I certainly endorse what the noble Baroness said about the Olympics. There were 46,000 people working on that site and to have not one fatality is exemplary. That gives me the opportunity to point out that that is one thing that the UK does extraordinarily well. Fatalities in the workplace are much lower in the UK, at 0.71 per 100,000 workers, compared to an equivalent rate of 0.81 in Germany, 1.57 in Italy and 2.49 elsewhere. That is an important record, showing that the HSE is working correctly with contractors in major projects, and this will ensure that that work continues in future.
Baroness Sherlock (Lab)
My Lords, one question raised in discussion of the review was the desirability of increasing commercial income for the HSE. Notwithstanding the Government’s view of that, will the Minister take this opportunity to assure the House that they have no plans to privatise the HSE?
Lord Bates
Yes, I can very quickly do that. There is absolutely no question of privatising the HSE, but Martin Temple, himself a businessman with a distinguished background in engineering and manufacturing, recognised that there were great opportunities, because the Health and Safety Executive is genuinely admired around the world. A lot of people are coming to look for good-will advice as to how to operate their systems, and I think it is absolutely right for the taxpayer that the HSE ought to be free to exploit those commercial opportunities to enable it to continue doing its excellent work around the UK.
Climate Change
Lord Harries of Pentregarth
To ask Her Majesty’s Government what is their assessment of the latest report of the Intergovernmental Panel on Climate Change.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, the Government welcome this expert and comprehensive appraisal of climate change impacts. Unmitigated climate change poses a risk to natural ecosystems, human health, global food security and economic development. A combination of adaptation and mitigation will help to reduce the scale of the risk. Even under all those scenarios, some risk will remain. The report represents a consensus of 310 scientific experts.
Lord Harries of Pentregarth (CB)
My Lords, I thank the Minister for her reply. Would she agree that the first way in which people are likely to experience climate change is through food—its shortage and its price? The report suggests that wheat yields over the next decade will go down by 2% and over two or three decades by 25%; fish stocks in tropical areas will be down by 40% to 60%. What intergovernmental institutions and organisations are in place to plan for this scenario? What role are the United Kingdom Government playing in that?
Baroness Verma
My Lords, the noble and right reverend Lord poses a number of serious issues that are facing us. As he is aware, the UK has a lead on many of these issues. We work very closely with our EU and international partners to ensure that all of us are signed up to trying to mitigate as much as we can the impact climate change will have on food, but—let us not be in any doubt—unless we bring forward processes, we will face huge difficulties in the future.
Viscount Ridley (Con)
My Lords, this latest report clearly states that the impact of climate change by the latter years of the century is likely to be less than 2% of global income and will be small relative to other factors such as economic development. Given that the co-chair of that report, Chris Field, is on record as saying that the really big breakthrough in this report is the new idea of thinking about management of climate change, would my noble friend agree that the time has come to congratulate my noble friend Lord Lawson, who has been saying exactly this for eight years? I declare my energy interests as listed in the register.
Baroness Verma
I am extremely grateful for my noble friend’s intervention highlighting the great work my noble friend Lord Lawson does in this field. However, as the noble Viscount will accept, I may not always agree with both noble friends. The report highlights the great risk of not doing anything. Whether you are sceptical of climate change or not, what we cannot allow to happen is to do nothing. It is really important, when leading scientists have produced evidence, that we respect that evidence and ensure that we respond to what is being told to us.
Lord Harrison (Lab)
My Lords, given that the noble Baroness recently replied to a debate on promoting a low-carbon economy, would she spell out the huge business opportunities that arise from promoting that low-carbon economy? What are the Government doing to help those opportunities arise?
Baroness Verma
The noble Lord is absolutely right. Of course, we have seen a real increase in the low-carbon sector; in the renewable sector itself we have seen since 2010 over £36 billion of investment come to the UK. It is a £3.2 trillion global marketplace out there, of which we have a fair share of £128 billion. There is much more to do. There are great opportunities. As last week showed, Siemens sees the UK as an ideal place for investment, by investing over £300 million in Hull.
Lord Roper (LD)
How will the results of the intergovernmental panel affect the position that the Government and their European Union partners are developing for next year’s framework convention conference in Paris?
Baroness Verma
My Lords, my noble friend knows of course that we work very closely with our European partners. We will of course push those that are slightly slower in coming forward in reducing their carbon emissions to do much better. We all need very ambitious targets. I hope that the conference will see that.
Lord Soley (Lab)
Is the Minister aware of the number of organisations asking for a single voice, or person, in government whom they can approach about, for example, taxation on different fuels, which does not take into account the advantages and disadvantages in terms of their impact on climate change? That is a particularly important point and the Government could move on it. Will the Minister listen to those many organisations that want a place to go in government with a single message about what government can do to relate to their need to improve performance?
Baroness Verma
The noble Lord is of course right to raise that, but I assure him that climate change is embedded in thinking across all departments.
Baroness Worthington (Lab)
In that case, my Lords, perhaps it might be time for the noble Baroness to comment on the fact that we have a climate change sceptic leading our environment department. How can that be?
Baroness Verma
My Lords, that would be unfair, given that the coalition Government have signed up to ensuring that we have made the largest investment in the green sector during our tenure.
Lord Lawson of Blaby (Con)
My Lords, en passant I express my gratitude to my noble friend Lord Ridley. If I may say so, the Minister is quite mistaken in suggesting that the alternatives are either decarbonisation or doing nothing. The IPCC report says very clearly, first, that climate change is far less serious than other changes affecting the world at present and, secondly, that the most sensible response is adaptation, something that, as my noble friend said, I have been advocating for the past six years.
Baroness Verma
My Lords, if my noble friend had listened to my original Answer, he would have heard that it was about adaptation and mitigation. They both work hand in hand, rather than either/or.
Lord Tyler (LD)
My Lords, my noble friend expressed appreciation for the contribution made by the noble Lord, Lord Lawson. Would she like to take this opportunity to say how much we appreciate the enormously hard work undertaken by the noble Lord, Lord Deben, and his committee?
Baroness Verma
Absolutely, my Lords. In this House we have experts from both sides of the argument, which is why it is crucial that when debates take place we hear and challenge both sides when we think that there is a challenge to be made.
Lord Brooke of Alverthorpe (Lab)
My Lords, would it conceivably help if the Minister could persuade some of the deniers to go down to the West Country and the Levels to help with the dredging and digging?
Baroness Verma
My Lords, what we have witnessed is a severe weather event. What we need to do is to have mitigation systems in place to ensure that those local residents do not have to suffer again as they have done.
Misuse of Drugs Act 1971 (Ketamine etc.) (Amendment) Order 2014
Lord Ahmad of Wimbledon
That the draft Order laid before the House on 5 March be approved.
Relevant documents: 24th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 31 March.
Immigration Bill
(10 years, 7 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Foulkes of Cumnock (Lab)
My Lords, before we consider this legislation, perhaps the noble Lord the Leader of the House or the government Chief Whip can explain why we are taking government legislation on a Thursday when we have been given four weeks for Easter and we will not be sitting for a week in which the House of Commons is sitting. Will she confirm that Prorogation will not take place until 21 May, as already announced, and not earlier as rumoured? This House is not here just to consider government legislation; it is here to debate the issues of the day and to hold the Government to account.
Baroness Anelay of St Johns (Con)
My Lords, the noble Lord, Lord Foulkes—I will get the pronunciation of his name right in the end. I beg his pardon; as he knows, I have been very punctilious in persuading others of the difference between Faulks, Foulkes and Fookes. The noble Lord raises several questions. First of all, he has been a Member of the House for a very long while. He will therefore know that the Companion sets out very clearly that, from the end of January, Thursdays are used for government business.
Baroness Anelay of St Johns
So it is of course a time when the Thursday debates come to an end. I have been extremely generous, as the House knows, in giving up government time on Thursdays to have debates. We have had more debates this Session than in any other in living memory. That has been welcomed by this House. On this occasion, we have legislation today at the express request of the opposition Front Bench and it is to accommodate that request that I have enabled legislation today and ensured that there will be no legislation next Wednesday, when debates will take place.
The noble Lord, Lord Foulkes, referred to Prorogation. He will also know that it is a long-standing practice in Parliament that the Prorogation date is not announced until government business has been secured. Therefore, I am afraid that I have to say gently to him that he is wrong to say that the Prorogation date has been announced by anyone—certainly not by me. I am always most cautious to keep to the conventions and the rules of this House. I ask the noble Lord to exercise his patience a little bit longer until I am able to give him accurate information.
Baroness Royall of Blaisdon (Lab)
My Lords, I do not wish to prolong this. Of course, the noble Baroness the Chief Whip is absolutely right about business on Thursdays—that is the norm and I completely accept that. However, there is some discontent on all Benches in this House about the fact that our recesses are prolonged this year, which does not enable this House to hold the Government to account as we would see fit. I do not wish to prolong this debate, but I feel it necessary to make that point because it is our duty as a legislative House to hold this Government and any other Government to account.
Baroness Anelay of St Johns
My Lords, the noble Baroness the Leader of the Opposition says that she does not want to extend the debate—that is a little ironic. I remind her that, as she is aware from discussions earlier this week, we were able to demonstrate that the number of weeks on recess has been consistent over the past three or four years. There is just one issue about the Scottish referendum, which is an unusual matter, and that has perhaps changed the timing. I do not have control over Easter or Whitsun. There is a perception perhaps held by some that there are more recesses than at other times. The figures simply do not bear that out. I suggest that the House is eager to progress with the work that it does well—the scrutiny of legislation—and I know that my noble friend Lord Taylor is keen that the House should address the matters of the Immigration Bill.
Lord Hannay of Chiswick
“Exemption to charges under Part 3
No restrictions on access to tenancies or charges for services under this Part shall apply to persons—(a) holding Tier 4 (General) visas sponsored by a recognised higher education institution, or(b) holding Tier 2 visas and registered in full-time undergraduate or postgraduate study at a recognised higher education institution.”
Lord Hannay of Chiswick (CB)
My Lords, this is the fourth occasion in recent weeks that the House has debated the cumulative negative impact that the Government’s immigration policy is already having, and is set in future to have, on the higher education sector, one of Britain’s most buoyant and valuable assets. Amendment 23 is designed to avoid that negative impact.
First, I will say a word or two about detail. I and my co-sponsors have not moved, as we did at the Committee stage, to exempt undergraduates and postgraduates from the streamlined appeals procedure. We listened to the arguments advanced by the noble and learned Lord, Lord Wallace of Tankerness, in Committee and concluded that the arguments for and against the new procedures were sufficiently well balanced, so far as students were concerned, to justify reluctant acceptance. We have also removed from the scope of the carve-out proposed in our current amendment the issues of bank accounts and driving licences to meet the points raised in Committee by the noble Lord, Lord Taylor of Holbeach.
I shall say a word now—I hope a final word—about the ways statistics on migrants are compiled in this country and then submitted to the UN, an issue highlighted again this week by the publication of the extremely worrying figures from the Higher Education Funding Council for England which demonstrated, yet again, that the optimism expressed by the Minister in previous debates was a bit wide of the mark. As the noble Lord said in his very welcome letter of 24 February, these statistics are already, since last year, disaggregated so that students can be distinguished from other migrants, even though the net migration figures are re-aggregated for the purposes of submission to the UN. However, we are not talking about the way in which the Office for National Statistics compiles statistics. We are talking about the public policy implications in our immigration policy for this category, which is already recognised, as I have said, as being distinct. On that, we are proposing an approach which has been vigorously promoted for several years by six Select Committees of both Houses.
I very much welcome what the report of the noble Lord, Lord Howell Guildford, on UK soft power had to say, which was identical to what was said by the other five committees which had already reported. This view has been supported by members of all three main parties and of none: quite simply, that we should remove full-time undergraduate and postgraduate students from the public policy impact of the UK’s immigration policy. That is what our main competitors—the US, Canada and Australia—are already doing. Doing that in the context of the Bill, as my noble and learned friend Lord Woolf made clear in the Committee stage debate, would send the most powerful message possible around the world that we want our higher education sector to be open to all who are qualified to benefit from it, without any new obstacles or disincentives being put in their way.
Baroness Williams of Crosby (LD)
My Lords, as one of the co-sponsors of this amendment, I will add a few further thoughts to the ones so ably mentioned by my colleague, the noble Lord, Lord Hannay. I completely bear him out that the history of higher education in this country for overseas students is one of the most remarkable success stories of any country in the world. For the past 20 or 30 years, we have maintained an astonishing magnetic appeal to young men and women coming from other countries, both within the European Union and far beyond it, to a greater extent than any other country in the world—although recently the United States has moved into first place in the league table of such countries.
The noble Lord, Lord Hannay, pointed out that, sadly, the United Kingdom has lost some momentum in attracting overseas students, and I will say a few words about that in a moment. First, I thank the Minister for the immense amount of work that he has done, his willingness to have meetings day after day and the huge amount of effort that he has put into them. I share the view of the noble Lord, Lord Hannay, that nothing would give us greater pleasure than to receive a response that would enable us not to proceed further with this amendment. However, there are still substantial questions out there to be answered.
I will therefore begin by saying that one of the troubling aspects of this situation, which is a relatively new one, is that in the past couple of years the standing of the United Kingdom as regards its acceptability to overseas students has been quite substantially damaged. As an example I will give the House the benefit of what the National Union of Students said about the extent to which overseas students see us as a welcome and welcoming country. It conducted a substantial survey of some 18,000 people in early January of this year and found that 51% of undergraduates from overseas—just over half—said that they had not found the United Kingdom a welcoming place in which to study. In some ways even more troubling is that, among postgraduates who have a degree and are now staying in the country particularly with a view to working to fund the completion of their qualifications, the number was as high as 66%. Two-thirds of postgraduates who responded to the survey said that they had not found Britain a welcoming country in which to study. That is substantially different from figures in earlier surveys, which showed that the United Kingdom was rated very highly as regards the welcome it extended to overseas students.
I will add two other rather hard things. First, many billions of pounds—the estimate is about £3.5 billion—have come into this country as the result of payments made by students to universities for the studies that they have made. Perhaps at least as significant in that context is that the attitude of postgraduates to work-study arrangements that are made is increasingly negative. Our work-study arrangements are now less generous than those of other countries such as Canada, Australia and the United States. I will give a figure for that shortly, but before I do so I will add one crucial fact.
I was for three years of my life the Minister for Education and Science. One thing that is not sufficiently recognised in this country is the extraordinary contribution made by postgraduates and post-doctoral overseas students to the remarkable scientific achievements of this country. In many cases scientific teams are heavily dependent on attracting outstanding young men and women from abroad to take part in our research teams, primarily directed at science and medicine. I could give many examples, but I will give just a couple. The remarkable achievements in connection with graphene in the past couple of years, which led to no less than a Nobel Prize, were the outcome of the work of mixed teams of our own people and people from overseas, and that was a very remarkable achievement.
I can give another remarkable achievement, in this case from the University of East Anglia, where a former student who became a postgraduate and continued to work in the field of medicine established that at least one of the regularly prescribed pharmaceutical products designed to deal with diabetes was in fact the source of more frequent heart attacks among diabetes patients than among people of the same age group. That gentleman made a huge contribution by revealing this in detailed scientific papers, as a result of which that particular pharmaceutical product has now been withdrawn and the effect it had on heart attacks among diabetic patients has ceased.
A third example is the remarkable building up of a huge history of China by a mixed team of people, in this case in the humanities, which shows in detail the way in which China has developed, the sources of its growth and the sources of its political difficulties right up to the present time. I will not go on, but any Member of this House who wants more detailed information will find an extensive list of the achievements by postgraduates from overseas, together with British graduates and post-doctoral students, which shows how important that group is.
I will say right away, therefore, along with the noble Lord, Lord Hannay, that we are very pleased that the Minister has addressed the very difficult question of landlords and tenancies and the question of accommodation. I share with the noble Lord, Lord Hannay, gratitude for the steps that the Minister has taken, which have been achieved with a great deal of hard work, innovation and determination to get an answer. We are truly grateful for that and, like the noble Lord, Lord Hannay, I hope that he will be able to confirm this morning that there has been an adequate extension of the plan for undergraduates to postgraduate and post-doctoral students.
Baroness Warwick of Undercliffe (Lab)
My Lords, as a co-sponsor of this amendment, I too add my support to the pleas made by the noble Lord, Lord Hannay. There is no need at this point to further persuade the House of the enormous benefits that international students attending our universities bring to their universities, their local areas and the country at large. To focus minds, I will present one fact: it was announced today in a report by Universities UK that the total economic contribution to the UK made by higher education exports in 2011-12 was £10.71 billion. To put that in perspective, the House of Commons Library estimated the economic contribution of the entire motor vehicle manufacturing industry at £10.4 billion. That is the scale of the industry we are discussing today.
I think that the Minister and the Government accept that analysis and generally want to encourage students from across the world to study here, which is to be welcomed. But the Government need to be particularly careful that these welcoming messages are not undermined by changes to the visa system that could be perceived as being unwelcoming towards international students. The survey conducted by the NUS, which was mentioned by the noble Baroness, Lady Williams of Crosby, highlights some worrying trends about the way the immigration system is perceived by the very people the Government want to attract.
Some of the measures in Part 3 have the potential to add to that perception. That is why I and other noble Lords tabled our amendment to remove students from these measures and to send a clear signal to current and potential students that they are welcome in the UK. While the Government are introducing new barriers to potential international students, reassurances overseas that the UK is open for business may ring a little hollow.
I have talked of perception and presentation because these are very real concerns when it comes to attracting international students and staff to the UK. However, there are a number of more practical concerns about the impact these measures could have on both students and staff. I want to follow on from the points made by the noble Lord, Lord Hannay, in introducing the amendment, all of which I support. Since this amendment was debated in Committee, the Minister has gone out of his way to provide detail on some of the measures in this part of the Bill, so I hope he will forgive me if I ask him to repeat and clarify some of these points now.
First, on the checks that landlords will be required to carry out before offering tenancy agreements, we should remember that many students coming to the UK will be moving out of their parents’ home, let alone their own country, for the first time. Assuming that the Minister’s Amendments 26 to 29 are accepted, many international students will live in accommodation that is exempted from the Bill, which is helpful. I am glad that the Government agree that the previous exemption failed to capture many students.
However, some students and, of course, the vast majority of international staff will still be moving into property in the private rental sector which is not exempted by the Bill. It is essential that students are able to secure accommodation in good time before their arrival in the UK. Similarly, academic staff at universities will want to make sure that they and their families have a roof over their head before they move here.
Tier 4 student visas can be applied for only a maximum of three months before the date of travel, so they are often received very close to the date that the student arrives in the UK. Students must be able to make at least conditional arrangements before they receive their visas. Will the Minister clarify that it will be legal and proper for landlords to enter into conditional arrangements with potential tenants who do not at the time of entering into that conditional agreement have a relevant visa and that this will be clearly communicated in any official guidance issued?
Secondly, only those without settlement rights will have to pay the NHS surcharge. Time spent on a tier 4 student visa does not count towards residency requirements for settlement rights. As other noble Lords have said, the Bill could result in the deeply iniquitous situation that an economic migrant who is later granted settlement may have to pay the charge for five years but a student who finds work and stays on here may have to pay for far longer—as long as 12 years in a row—if they studied at both undergraduate and postgraduate level.
With the noble Lord, Lord Hannay, I ask: will the Minister commit to addressing this unfairness when the secondary legislation is drafted? It is easily fixable by, say, limiting to five the number of years for which a person would have to pay the charge. There is provision in the Bill to at least have these charges applied fairly. Will the Minister commit to doing so?
I cannot end without supporting the plea of the noble Baroness, Lady Williams of Crosby, on behalf of postgraduate students. Those with a family are going to be hit really hard by the health charges. One has only to think of the number of our postgraduate courses that survive only because of the number of international students that we are able to attract to see the dangers if large numbers should fall.
I remain concerned that this Bill is part of a wider trend of immigration policy that could mean that the UK fails to capitalise on the extraordinary potential of its higher education sector. Even if the Minister is unable to commit to reversing this trend this afternoon, I hope that he will address at least some of the practical issues that I have highlighted today.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I listened with great interest to the debate on this amendment in Committee on 10 March. Unfortunately, I was unable to stay for all of it, although I read it carefully in Hansard, and so was not able to take part, but I would like to make a brief contribution today.
Winding up for the Opposition on that occasion, the noble Lord, Lord Stevenson of Balmacara—that demon of the squash court, as he keeps saying—had some fun at the expense of my noble friend Lord Bourne of Aberystwyth, when he said:
“I congratulate the noble Lord, Lord Bourne, on putting his head above the parapet. Although I think he picked up some of the arguments, I did not think his heart was entirely in it”.—[Official Report, 10/3/14; cols. 1607-08.]
I intend to put my head above the parapet this afternoon, and I have to say that my heart is entirely in it.
Overseas students make an exceptionally valuable contribution that enriches our university life, but as I shall explain, I have concerns about scale, about leakage at the end of courses, and various consequent impacts on our settled population. Further, I think the extent of the beneficial impacts, adduced by various briefings we have had, are somewhat overstated.
I begin by following my noble friend Lady Williams of Crosby in talking about the briefings we have had, some of which have been quite cataclysmic in tone. They suffer, in certain instances, from mixing absolute numbers and percentages. It is perfectly possible to have an increasing absolute number and a declining percentage. Indeed, if one looks at market share, as some of the briefings do, it is almost certain that the UK will have a declining market share in an era when global university education is rising rapidly in parallel with people in the UK wanting to study overseas. In addition, as the UK has a historically high level of overseas students and a relatively small population in world terms, our market share is almost certainly bound to be declining.
More importantly, there have been attempts, in my view, to ascribe all the changes in student numbers to the proposals that we are discussing in this Bill. This is fanciful. There is a host of other reasons that influence people’s decisions on where to study—of those, notably, cost. Indeed, there was an article in the Times yesterday with a headline that suggested changes in the system were deterring students, but when you got into the meat of the article it was actually about cost. The piece mentioned cost only in sterling or Euro terms, failing to take into account the other great part of the cost—changes in the exchange rate. A year ago $1.50 bought you £1; today you need $1.66, so if you are a dollar-based student you are facing an increase of 10% in the costs of studying here in the UK. As regards India, which is an even more important market, as many noble Lords have said, a year ago 83 rupees bought you £1; today you need 100—a 20% increase in costs to a student from India.
Lord Hannay of Chiswick
I am most grateful to the noble Lord for giving way, but I wonder whether he does not find it a trifle ironical that he is speaking from the Benches of a Government who have exhorted the country, correctly in my view, to succeed in what is called the global race, and above all to maximise the industries and services that we produce best. He has developed an extremely elaborate argument for saying that we must embrace declinism in the higher education sector and we must accept that it is not in our interest to go on growing this potentially extremely valuable resource. Is it not a bit contrary to government policy that one industry in this country should be treated as something that can be tripped up and hampered at every stage while all the others are being encouraged to develop?
Lord Hodgson of Astley Abbotts
I obviously have not made myself clear. I hope that I have made it clear that I am not attacking foreign students because I think that they have an important role to play. I said that, first, the Government’s proposals are not the key determinant of why people come to study here. The key determinant is the overall cost and, in particular, the cost in the currency of the country of origin of the student in question. Secondly, I question—I do not know—that the long-term economic benefits which have been adduced to having students here are not as great as they might be.
Lord Winston (Lab)
The noble Lord has talked about costs. Does he not agree that one of the great advantages of having overseas students in this country is the fact that they bring down the costs for internal students reading medicine and engineering in particular? Otherwise, our universities would have to charge them much more.
Lord Hodgson of Astley Abbotts
The noble Lord is right, but if what UK universities are saying is that they want to bring foreign students here to subsidise our university education system, that would be a clearer argument than the rather lofty arguments we hear that our duty is to do this because of our benefit to the world and because it is actually to our long-term advantage. If the noble Lord is saying that it is really all about money in the short term, fine—let us say that and be clear about it. I understand that as an argument and I am perfectly happy to accept its value.
Perhaps I may conclude. I repeat again for the noble Lord, Lord Hannay, that we should attract students to study here, but we need to do so with realistic aims in mind. In our very proper wish to do right by the world, we should not overlook the needs and indeed the rights of our settled population. That is why in my view the Government are right to take these measured steps. They are steps that I believe, and which the noble Lord, Lord Hannay, and the noble Baroness, Lady Williams, have acknowledged, have become more measured as the Government have responded to comments and criticisms as laid out in my noble friend’s letters of 12 March and 1 April. That is why I will be supporting the Government if the noble Lord, Lord Hannay, decides to test the opinion of the House on this amendment.
Lord Cormack (Con)
My Lords, I hope that the noble Lord, Lord Hannay, will not feel that he has to test the opinion of the House, but I can imagine that he has been to some degree sorely provoked to do so by the remarks of my noble friend. That is because there did seem to be an inherent contradiction in them. On the one hand he protests—I do not doubt his integrity for half a second—that he wishes to see foreign students come here in great numbers, while on the other he seems to be arguing that we should not push it too far.
I do not want to repeat what I said in Committee when I supported the noble Lord, Lord Hannay, but I will briefly refer to one thing that I touched on then. I have the honour of being a member of the senior common room at St Antony’s College, Oxford. As I told noble Lords last time, we have students from 73 countries there at the moment. It is an extraordinarily important centre for postgraduate education—not just in Oxford, not just in England, but in Europe and, indeed, the world. From all over the world students come. In common with students at other colleges and universities, many of them go back and play leading roles in their countries. Some stay and play leading roles in ours. Where would we be in medical science and many other disciplines if some of them had not stayed? I hate to think how many consultants there would be in some of our hospitals—excellent consultants—if it were not for the fact that foreign students had come here, been taught—no doubt inspirationally—by people such as the noble Lord, Lord Winston, and had stayed. We are protecting ourselves, as well as our image as a nation, if we encourage without inhibition and without qualification.
I was very taken by what the noble Lord, Lord Hannay, said, both in Committee and today, and by what my noble friend Lady Williams of Crosby said. However, I have also been extremely impressed by the diligent interest that my noble friend Lord Taylor has taken in these matters. He clearly listened carefully to the arguments advanced in Committee and has tabled a number of amendments today that will go a fair way towards meeting many of the concerns that were expressed in Committee. I thank him for that, and for the infinite patience and trouble that he has taken in talking to me and others, and in trying to recognise where we are coming from.
A word that cropped up many times in our first debate was “perception”, and it has been touched on again today. How are we perceived? Where I take slight issue, not with my noble friend Lady Williams of Crosby but with the National Union of Students’ report from which she quoted, is that my anecdotal evidence from St Antony’s, Hull, Lincoln and other universities with which I have a connection would not bear that out. Most of the foreign students to whom I have talked have always said that they feel extremely welcome here—and proud to be here. They are anxious to stay to complete their studies, and most of them are anxious to return to play a leading part in their countries or localities when they go back. The National Union of Students’ statistics, which of course I am not in a position to challenge, clearly depend upon the questions that were asked. I just wonder what questions were asked.
However, I am concerned not with the past or the present so much as the future. It is clear from the article from which my noble friend Lord Hodgson quoted, and from other reports in recent months, that there is a falling off in the number of students coming from certain countries. Of course my noble friend Lord Hodgson is entirely right to say that there are a variety of causes and reasons for this. Of course he is right to say that cost is a factor, but it is not by any means the only factor. What we have to be absolutely sure of is that students coming, or contemplating coming, from other countries still keep the United Kingdom very much at the top of their wish list. From talking to Professor Margaret MacMillan, the Warden of St Antony’s, who herself is a distinguished Canadian historian, it is clear that Canada and the USA are more attractive to many students who would hitherto have put the United Kingdom at the top of their list. I am concerned about that.
I very much hope that when the Bill becomes an Act of Parliament, as of course it will, we will have been able to inject amendments into it that will make it very clear that, in seeking to tighten up our immigration policy, we are not in any way setting our face against students. The Prime Minister himself has said on many occasions that foreign students are welcome here without any cap on numbers. I welcome that. I am sure there is not a single Member of your Lordships’ House who does not welcome that. But it is important that we prove that that is what we mean by the contents of the legislation that we pass.
I look forward very much to what my noble friend the Minister will say when he replies. I hope and believe that he will be able to give the sort of assurances that the noble Lord, Lord Hannay, sought in his speech. I hope that the House will be united in backing his amendment, secure in the knowledge that, supplemented by future regulations, the situation will be as we would wish it to be: namely, that any potential student, be he or she in India, any part of the African continent or anywhere else for that matter, will feel that not only are the doors indeed open but that the “Welcome” sign is above them.
Lord Sutherland of Houndwood (CB)
My Lords, in support of the excellent and measured speech of the noble Lord, Lord Hannay, and of the other signatories to this amendment, I offer not a speech but a quotation. It runs as follows:
“One of the biggest categories of ‘immigrants’ is overseas students—176,000 last year, over a third of the total. They are not immigrants but they are defined as such because they are here for more than a year … There has recently been a crackdown on the undoubted abuse of visas by some private colleges but the consequence of tightening the rules has been to drive away bona fide students, especially from India, to the US, Canada and Australia. Universities, and Britain, are poorer as a result”.
These are the words of the member of the Cabinet who runs the department that is responsible for universities: Vince Cable. They are not private; they were in the Evening Standard about two weeks ago. I quote them not to make mischief for the coalition Government, because I believe that the country has benefited from the strength of coalition government, but to say that here at the heart of government, the individual responsible for universities and their impact on this country is clearly at odds with what is happening in legislation today. I think that he is right and that his words bear repeating, which is why I happily support the noble Lord, Lord Hannay, and his colleagues.
Baroness Hamwee (LD)
My Lords, I am particularly pleased to follow a reference to my right honourable friend Vince Cable, who has been very energetic in spelling out the value, if I can put it this way, as an import and as an export, of overseas students. I have been worried, and have said so publicly, about the use of the phrase “the brightest and the best” in immigration policy, but I have to say that I did not read my noble friend Lady Williams of Crosby as wanting to cream off the brightest and the best; I do not think that was where she was going.
As has been said, we have a very good story to tell. We are curiously inept in some parts of the system at telling it. The word “perception” has been used, rightly, by a number of noble Lords. We should not get stuck on the overall immigration numbers without disaggregation, but I do not want to repeat all the arguments that I and other noble Lords have made.
I have just a couple of comments on this. I doubt that many people, even in this building, know that the Budget added to the funding of the Education is GREAT campaign, which seeks to attract international students to the UK, and that the number of Chevening scholarships supporting students from developing countries who come here to study is being tripled. I will let those two facts speak for themselves, and I hope they will add a little to the perception.
On tenancies I am very much with the noble Lord, Lord Hannay, and others. I want to make use of this Report stage to come back to some rather focused questions on those amendments.
As I understand it, the health levy or surcharge really is an integral part of the Bill. As the Minister will remind us, in absolute terms it is competitive, and I say that it is very good value insurance. Some anomalies and issues need to be followed up, and others have drawn attention to these. I am reassured by the fact that secondary legislation will, I hope, deal with the detail.
I welcome the student tenancy amendments which my noble friend the Minister proposes but, if I may, I will seek a little more assurance. I was concerned about the numbers and types of properties that students use as accommodation. Given the time, I will try to summarise on the hoof the understanding I have gained from Universities UK. I hope that noble Lords will forgive me. It is important to say that about a quarter of international students are likely to still be living in accommodation which is not within the categories specifically defined so far. The Minister has been very generous with his time in meetings and in correspondence, and he foreshadowed the amendment to the halls of residence test at the previous stage. I would have liked to have seen an exemption which focused on the people—the students—rather than on the property.
I am concerned about the term “nominated”, as are other noble Lords. I hope that my noble friend might be able to say that, although this term is used rather differently in other contexts, here it really amounts to “accredited”. I am sure that the Minister will spell out in his reply that there will be guidance, and there will be consultation on the guidance. Perhaps he might also state that, as well as the accommodation owned by a relevant institution, the halls of residence and the nomination for what we might understand to be a private tenancy, where a landlord is approached by a student and none of those three situations is in place, the landlord can in effect obtain the nomination from the university and come within that exemption.
I, too, am concerned about postgraduates and doctoral students, and I looked at the definitions brought into the Bill from the Local Government Finance Act 2012. I hope that my noble friend will be able to confirm that postgraduates and doctoral students fall within the definitions in that legislation. I hope he may also be able to set out the balance between studying and teaching within the work done by, let us say, a postgraduate student, many of whom also teach, that the Government will expect to see in order for the exemption to apply. I assume that research is regarded as study.
I hope—well, I assume—that the relevant orders following from the Bill will be made by the Home Secretary, because many Secretaries of State come within this whole picture. I have probably taken enough time, and the Minister is aware of my concerns. He looked slightly puzzled at my last comment, but I was thinking of the Secretary of State for Communities and Local Government, who makes the order about who is a student. It is a bit of a jigsaw.
The Earl of Sandwich (CB)
My Lords, I sense that the House wishes to come to a decision, so I shall be extremely brief in making a couple of points. The noble Lord, Lord Cormack, is always so reassuring and we think that he is going to bridge the gap which exists between the proponents of the amendment and the Government, but I fear that this is not the case. This is a serious disagreement.
I shall speak mainly about higher educational institutions in the widest sense. The noble Baroness, Lady Williams, said that she was concerned about the welcome that we are giving to students—the noble Baroness, Lady Warwick, reiterated that. We used to talk about a climate of disbelief in the Home Office a few years ago; now, I think that there is a climate of frustration, interference with and even prejudice against what I might call the lower order of colleges of education and those which are capable of offering places to bogus students, who have rightly to be returned. I am very concerned about the climate in this society that we have.
That gives me, however, an opportunity to say that the Home Office recognises its mistakes. It can correct its mistakes. I had an example only last week where a college in south London with five years of trusted sponsor status, which I have visited, was quite unfairly threatened with the loss of its licence through an association with one of these lower orders of bogus college. It recognised the mistake in the end, but I want to put over that it is a tough environment out there at the moment if you are one of those colleges. Many immigration officers are being put in positions of making educational decisions. I support the amendment; I hope that my noble friend will move it to a Division. The remarks of my noble friend Lord Sutherland were very timely, because this is after all a disagreement within the coalition. It was very welcome to hear the voice of Vince Cable. I am sure that he agrees, as does the noble Lord, Lord Hodgson, that the disaggregation of numbers, although it is not the subject of this amendment, has become almost a separate issue which we should come back to.
Baroness Benjamin (LD)
My Lords, I support the amendment in the name of the noble Lord, Lord Hannay. UK universities have worked tirelessly over the years to attract international students, including Exeter University, of which I am the chancellor so I declare an interest. We cannot sustain the level of financial support that universities require and will continue to require without international student support. We also benefit from those students’ academic and cultural contribution. Our country gains so much from these resources. Exeter benefits greatly from its international students, not just financially but also, because of where geographically we are placed, from the culturally diverse, rich mix that such students bring.
I congratulate my noble friend the Minister on all the concessions that he has made after hearing the concerns that many noble Lords have expressed. I thank him, too, for all the meetings that he has granted us. I also invite him to consider further the amendment in the name of the noble Lord, Lord Hannay, which would make a difference to the perception that those abroad have of us as a welcoming nation to international students.
Lord Stevenson of Balmacara (Lab)
My Lords, this has been a very good debate which, with one exception, has focused narrowly on the questions being posed in the amendments that we are considering. Of course, we have still to hear from the Minister on his amendments and I am sure that a lot is riding on them. The noble Lord, Lord Hodgson, was very kind to refer to our shared interest in squash. I am a little sad that we did not encounter one another on the squash court, because, given his positioning of putting his head well above the parapet and his heart very much in his game, I think that he would have been easy prey, certainly to be beaten by fair means. But if I was struggling, I think that I would have been able to lop his head off quite easily. In what was effectively a Second Reading speech, it was not at all clear which parts of the amendments the noble Lord was supporting or not supporting. I think that we missed that, and the noble Lord, Lord Cormack, put it very nicely when he explained what he felt about that.
Other than that, we have focused hard on the issues relating to students. The quotation given to us by the noble Lord, Lord Sutherland, should be very much in our thinking as we look at these issues. There is no doubt that we are talking here about perceptions. We are talking about whether, in aggregate, the work that the Government are doing through the Bill complements, supports or destroys the currently very effective system of higher education that we have in this country in relation to overseas entrants to and users of it—although the context is not that good given the row that there has been in the past couple of weeks about what is happening to the system of higher education as a whole, which I suspect has a long way to go.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
My Lords, I thank the noble Lord, Lord Stevenson of Balmacara, for his thoughtful contribution to the debate. I hope I can address the issues he has raised. We have had a good debate. We always have good debates on this subject. The House is not always in agreement with the Government’s position on issues, but I think we have come closer together as a result of the debate, the provisions of the Bill and the amendments that I have been able to bring forward today.
I do not want to sound boring, but I will reiterate the mantra that the Government’s objective is to attract the brightest and the best. There is no limit on numbers. We have to say that because it puts right at the top of the page what the Government’s policy is. We will go on, I hope, as we discuss this matter, and as I answer noble Lords’ questions, to demonstrate that the proposals in the Bill are not designed to dilute in any way that central policy.
We have had an interesting debate. I have had an interesting debate going on behind me between my noble friends Lord Hodgson and Lord Cormack. I know that they earnestly believe in the importance of the international student sector. I share that belief. It is a tribute to our education system and the talent of individual students who come here that we benefit enormously through our university sector. My noble friend Lady Williams of Crosby gave examples of outstanding academics who have benefited the world of knowledge and the world of medicine by their presence here in this country. They serve as exemplars of what our academic world is able to achieve. She has given me considerable detail which I am sure she will make available to other noble Lords should they wish to see it.
I turn to the Bill and to the amendments proposed by the noble Lord, Lord Hannay, and my own government amendments. In relation to tenancies, the Bill disqualifies individuals from renting property if they do not have leave to be here. Students will be able to evidence their immigration status simply by showing their biometric residence permits or visas to potential landlords. That is a simple and straightforward check. The Government have nonetheless given this issue further thought. As a result of our debates at Second Reading and in Committee, and as a result of meetings we have had outside this House, we have tabled amendments exempting student accommodation which is owned or managed by a higher education institution, all halls of residence, and any arrangement where the student has been nominated for the accommodation by their educational institution. I just want to emphasise that while the word “nominate” is something that those of us who have political lives associate with nomination papers and so on, nominating is just the naming of an individual as being a student at a higher education institution. That is all it is. It does not necessarily involve the university itself in any contract with the landlord or any renting arrangements that the student may be entering into. It is a form of vouching for the genuineness of the student’s immigration status. That is all. I hope that I have been able to express that in the plain terms that the noble Lord, Lord Hannay, asked for. I say further, and this is important too, that it applies to undergraduates— I think that would be understood—and also to postgraduates and to those completing their doctoral theses, so that all those who this House would consider to be students in the broadest definition of the term are included within this embrace.
The noble Lord raised three points that he wanted me to deal with. The first was the business of whether this extended to graduates. I have confirmed that that is indeed the case. Secondly, he asked whether this genuinely exempts the landlord. Yes, indeed; as long as he is satisfied by the nomination, then he has no need to conduct any further checks. If I may say so, this is rather analogous to the position of a person in a tied cottage. It has nothing to do with this part of the Bill but it is an interesting analogy in the sense that the person being employed can be vouched for and the landlord will have done the check on their employment in exactly the same way as the university will have done one on the engagement of the individual with the university itself. There is no contractual obligation on the university in respect of the tenancy that the individual student may be entering into. It is important to emphasise that as well. There is engagement, of course, but there is no contractual obligation.
Where a landlord wishes to rent to a student and does not want to check their immigration status documents, for whatever reason, they may make inquiries with the student’s educational institution and obtain this nomination. Nomination will be simply a confirmation of the student’s status, something that educational institutions already have to provide to students in order to prove exemption from the council tax. A suggestion made by my noble friend Lady Manzoor led us to explore this possibility. The term “nominate” is a broad exemption and it will allow higher education institutions to confirm that the student is exempt without being prescriptive about the form that this should take.
These government amendments will mean that landlords need not conduct an immigration status check as the educational institution will already have done so. The amendment removes the large majority of students from the scope of the landlords scheme. I also reassure noble Lords that the Government intend to make provision within the code of practice to allow landlords to agree a tenancy in principle with the students who have not yet arrived in the UK, allowing them to undertake a check of relevant documentation immediately before the student takes up occupation. In other words, it is possible for these arrangements to be made in advance of the student actually taking up their place at the university. A number of noble Lords had expressed concern on that point.
Perhaps I may park the landlord provisions and go on to talk about the health service surcharge—
Baroness Warwick of Undercliffe
Before the noble Lord does that, might I clarify whether what he is saying is in response to the point I made about a potential tenant entering into a conditional arrangement with a landlord? Is it legal and proper for the landlord to enter into that arrangement even though at that point, because of the time involved and so on, the potential tenant has not actually got their visa?
Lord Taylor of Holbeach
Yes, absolutely: that is the case. It is up to the landlord to decide whether they want to enter into a conditional arrangement. In university towns this is a frequent enough experience, is it not? They can check the nomination, which may say that the person has a conditional place at the university. That can be checked immediately the undergraduate or postgraduate arrives to take up the accommodation. We do not want to make this difficult. We want to make universities feel that this will help them as well as the students at their university.
I turn to the health surcharge—there are a number of landlord issues I might come back to but I want to try to deal with this as far as I can in order. I urge noble Lords to bear in mind that international students cost the NHS around £430 million a year and more than £700 a head. The NHS has limited funding and cannot sustain this if it is unsupported by those who use that service. The surcharge for students is just £150 a year. It is a very good deal. It is a fraction of the true cost to the NHS and just 1% of the cost of studying in the UK. There is no reason to believe that the surcharge will deter students from coming to the UK because it is set well below the price students pay for health insurance in our competitor countries.
I accept that international students contribute significantly to our economy, but such contributions do not exempt students from health charges in our competitor countries and there is no reason why they should do so here. Noble Lords will understand our reasoning in that regard. The NHS provides quality care to international students and their dependants for a wide range of health issues. I will speak more on the NHS services that international students have used, if noble Lords wish.
Baroness Williams of Crosby
I think the whole House recognises that £150 is a not unreasonable figure. However, there is a very specific and limited case for those in post-doctoral or postgraduate positions who bring their dependants with them. At that point the continuation of the charge, especially if somebody has taken work that enables them to pay national insurance and taxation, begins to feel much more like a burden than like a benefit. Does the Minister agree?
Lord Taylor of Holbeach
Indeed. My noble friend and I have discussed this in meetings. I take the point. It was made by the noble Lord, Lord Hannay, as well. I think he and other noble Lords understood that there will be secondary legislation that will define these issues. I am aware of the concerns expressed by noble Lords in this respect. My noble friend Lady Hamwee made the same point about the length of time that some individuals may pay the surcharge. I do not consider this a serious problem but I commit to considering it carefully before bringing forward the affirmative resolution order.
A number of other mattes were raised. My noble friend Lady Williams of Crosby asked about changes to work-study visas. We do not have any figures on this but she is quite right to point out that we have tried to facilitate this, just as through the graduate scheme we have tried to facilitate higher education and have worked with institutions.
She asked about slowness in the visa system. In fact, 93% of administrative reviews for overseas students—these applications are made overseas—are made within 28 days, so it is quite speedy. That is one reason we are looking to use the method of administrative review more generally in this respect.
I hope that I have satisfied the noble Baroness, Lady Warwick of Undercliffe, about the breadth of the accommodation amendment. Any undergraduate who chooses to use that facility by gaining a nomination from the university will get the accommodation that they need, and it is quite proper to take up a place in advance.
I was asked by a number of noble Lords about our general approach to working with universities. We have been working at ways to promote this country to students from overseas. It is something in which I believe, and I hope that I have been able to reassure noble Lords that with the considerable sums now being put to one side through the Budget to promote our education facilities to overseas students we have a good offer in place.
The noble Lord, Lord Sutherland, was very keen that the Government should demonstrate unity of purpose on this issue. I hope I have said nothing that discourages him from believing that we have a unity of purpose on this issue. I very much appreciate the work that the noble Earl, Lord Sandwich, does, in particular with the college in south London. He and I have had meetings on it. I know he had a meeting with officials last week, trying to reconcile them to the arrangements. This is not an easy area but we want to work with this sector.
I did not have the benefit of a university education. I went to work at 17 and it has taught me that there are huge benefits in university education. I believe in it passionately. I do not want to see other people denied the opportunities that our university sector provides. I hope that I have demonstrated my wish to engage with the sector and give it confidence that there should be no reason why a properly constructed immigration policy would be incompatible with our policy objective of encouraging the brightest and the best to come and study at our excellent universities. I hope, in the light of these points, that the noble Lord, Lord Hannay, will withdraw his amendment.
Lord Hannay of Chiswick
My Lords, I thank all noble Lords who in Committee and on Report supported the amendments put down in my name and those of the noble Baronesses, Lady Williams and Lady Warwick, and the noble Lord, Lord Tugendhat, whose absence today is entirely due to being in Athens on the business of the House.
I have drawn enormous comfort and support from the way in which each of the debates we have held has been lengthy, thoughtful and devoted entirely to the matter in hand. I contrast that with the fact that the other place, when it took this legislation, never actually got around to talking about students or higher education at all because they were so busy chasing Romanians and Bulgarians around the Chamber. That is perhaps a tribute to the way in which your Lordships’ House conducts its business. We do not miss out really important issues like that of students.
I have a brief comment—or perhaps two—on the contribution of the noble Lord, Lord Hodgson. He raised the question of whether universities were aware and made enough of the fact that foreign students help them subsidise domestic students. All I can tell him is that if he talks to anyone in the higher education sector, of course they all know that perfectly well. They know that a number of courses, particularly STEM courses, would simply not be maintainable without overseas student enrolment. However, the noble Lord will recognise that if we are trying to recruit overseas students, this is not a major sales point. It is not terribly wise to go around the world saying, “You may think your fees are a bit on the high side—but don’t worry, they are going to support British students”. I hope he will understand that one has to treat that with a certain amount of care.
Of course, the noble Lord is right about the exchange rate having extreme importance. I can only offer him the advice that Miss Prism offers Cecily in “The Importance of Being Earnest”:
“The chapter on the Fall of the Rupee you may omit. It is somewhat too sensational”.
Lord Hodgson of Astley Abbotts
I understand exactly what the noble Lord says, and I understand about the sales pitch. I assure the noble Lord, Lord Stevenson, that I am not going to make another Second Reading speech, but we in this House have got ourselves into a position where we are talking about what the Government are saying about visas and about “curbs”: that was the word used. In fact, what it comes down to when you read the detail is that the checks and balances that the Government are proposing to ensure that there is some recovery of costs are not the key issue. The key issue is the overall cost of the education, particularly in the currency of the country from which the student comes.
Lord Hannay of Chiswick
Well, I think Miss Prism probably had it about right.
Having considered the possibilities, I was struck by the fact that all three Front Benches are opposed to the amendment. The Official Opposition’s description of the reasons for which they were opposed to it holds about as much water as a colander; but let us leave that to one side.
I thank the Minister for his extremely considerate response, for the work he has done in the past few weeks, particularly on the issue of student accommodation, to try to meet some of the concerns that have been expressed, and for the very clear way in which he has replied to questions I and the noble Baronesses, Lady Warwick, Lady Williams and Lady Hamwee, raised in today’s debate. I found some that of the things that he said really helpful. They are on the record and that is very valuable indeed.
Before closing, I will make one point that is outside the scope of this debate. Within the next year, all three main parties are going to write their manifestos for the next election. It would not surprise anyone, I imagine, that there will be a substantial section on immigration in every one of those manifestos, because it is a burning issue of the hour. I make a plea that when they write these manifesto chapters on immigration, they make it quite clear that in the next Parliament they will not treat overseas students as normal economic migrants in terms of the Government’s immigration policy: that they will reflect and that they will respect the specificity of the higher education sector. Frankly, I do not think that they will lose a single vote if they say that, but they will save themselves an awful lot of trouble in the next Parliament. I hope that that plea will be heard and, in any case, I beg leave to withdraw the amendment.
Housing Benefit (Transitional Provisions) (Amendment) Regulations 2014
(10 years, 7 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
14:16 - Division on the Motion. - Ayes: 173 / Noes: 188 - Motion disagreed.
Baroness Sherlock
To move that this House regrets that the Housing Benefit (Transitional Provisions) (Amendment) Regulations 2014 are being introduced without Her Majesty’s Government’s full understanding of the numbers of those affected; regrets that confusion and uncertainty are being added to an already unjust policy; deplores that Her Majesty’s Government’s mishandling has resulted in households being unlawfully charged and further pushed into hardship; and regrets the likely disproportionate impact of the Regulations on the most vulnerable (SI 2014/212).
Baroness Sherlock (Lab)
My Lords, this Motion relates to an order brought forward by the Government to address a loophole that they have belatedly discovered in enacting what they call the social sector size criteria and everybody else calls the bedroom tax. The loophole means that people claiming housing benefit continuously for the same home since 1 January 1996 are exempt from the bedroom tax. It emerged recently, as noble Lords may remember from the discussion on a recent Urgent Question, that the group may be even wider as it may affect some people who have inherited this protection from a former tenant who enjoyed it.
People covered by this exemption have unlawfully had their housing benefit cut. When this matter was discussed in the other place, a number of examples of people affected were given. For example, there was a widower in Staffordshire suffering from mental health problems who had to find an extra £14 a week to stay in his home. There was a 56 year-old women from Rotherham with health-related problems who paid over £700 in additional rent, which we now know was unlawful. In Greater Manchester, a woman who cares for her granddaughter paid £200 extra in rent as a result of the bedroom tax, fell into arrears and was threatened with eviction from the home she has lived in for 26 years. Incidentally, Grandparents Plus notes that kinship carers like her are more likely to be affected by the bedroom tax, because they are older and more likely to have spare rooms, technically, because their children have grown up and moved on.
These people and many others like them are now due a rebate but, rather than apologise for the distress that they have been caused, the Government now want to apply the bedroom tax again to these people and thousands like them. Because local authorities in most cases do not have electronic records which go back to 1996, they are finding themselves having to waste time and money trawling through paper files looking for affected cases. Meanwhile, the Government have brought forward this order to close the loophole, despite having no idea how many people are affected by it.
The Opposition have tried very hard to find out how many people are affected by asking Ministers. On 13 January, the Employment Minister, Esther McVey, gave a Written Answer in the other place. She said simply:
“This information is not available”.—[Official Report, Commons, 13/1/14; col. 449W.]
On the same day, the Secretary of State for Work and Pensions told the other place that,
“the number is likely to be between 3,000 and 5,000”.—[ Official Report, Commons, 13/1/14; col. 577.]
The very next day, the noble Lord, Lord Freud, told this House that,
“the numbers involved in this anomaly are small and the amounts are modest”.—[Official Report, 14/1/14; col. 106.]
However, early reports coming from the ground suggested that the numbers could be rather higher than that. Therefore, under the Freedom of Information Act, the Opposition asked local authorities how many people they believed would be affected. The resulting figures already show that over 23,000 are likely to be affected, even though a third of councils have still to reply and many said that they could not give complete answers because they could not include housing association tenants. Not only is this a mess, but the Government seem to have no idea how many people are caught up in the mess.
We should not be surprised. The bedroom tax was a bad policy in the first place, incompetently executed, with the heaviest price being paid by the poorest and most vulnerable. More than 500,000 households have been hit. Two-thirds of those affected are disabled. Of those affected, 35,000 disabled people have had their homes specially adapted with, for example, wheelchair ramps, wider doors, stair lifts or accessible bathrooms. If they are forced to move, it is estimated that the cost of repeating those adaptations in new properties could reach £234 million.
Some 60,000 of those affected by the bedroom tax are carers. More than 200,000 families with children are affected. On average, people are paying an extra £14 a week—the equivalent of losing all of your child benefit for the second child. Most depressingly, so many of the problems predicted by noble Lords from all Benches during the passage of the Welfare Reform Act have come to pass. According to the National Housing Federation, on average two-thirds of tenants affected by the bedroom tax are currently in arrears; of those, three-quarters have seen their arrears increase since the bedroom tax came in. Of those tenants hit by the bedroom tax who are in arrears because they cannot make up the shortfall, 40% have been issued with a notice seeking possession.
The impact on landlords is also huge. Nearly three in five housing associations say that they have been affected by the bedroom tax either a great deal or a fair amount. That hides huge regional problems, as I know only too well. About 90% of housing associations operating mainly in the north-east and 80% in the north-west report that they have been significantly affected.
What a mess, and for what? What has been achieved by all this chaos and misery? Has the bedroom tax achieved its aims? Ministers have not been able to explain whether the policy is supposed to reduce overcrowding or to save money; it cannot do both. If tenants stay put and accept a cut in their benefits, the state saves money but no houses are freed up. If tenants are forced to move, no money is saved. The costings assumed that people would not move. During the passage of the Welfare Reform Bill, when the matter was voted on in this House on Report on 14 December 2011, the noble Lord, Lord Freud, explained the Government’s position, saying:
“The introduction of size criteria into the social rented sector from April 2013 is essential to reduce housing benefit expenditure”.—[Official Report, 14/12/11; col. 1300.]
So it was indeed about savings. The Minister explained that it would save around £500 million per annum.
I wonder whether those savings really are materialising as Ministers had hoped. Last Friday, Esther McVey was asked on a BBC Radio 5 Live programme how much money the Government had saved through this policy. She began by saying:
“It was never all about saving money”.
The interviewer interrupted just to ask how much it would save. She came back to the question. The interviewer asked her repeatedly whether there would be savings and how much they would be but could not get an answer.
There is now a real risk that the bedroom tax will end up costing more than it saves. Research from the University of York suggests that the policy could save significantly less than the DWP predicted. The National Housing Federation has said that the savings claimed by the Government are “highly questionable”, partly because those forced to move to the private rented sector will end up costing more in housing benefits. Housing associations say that tens of millions of pounds are likely to be lost through the build-up of arrears. I ask the Minister today to tell the House precisely how much of that £500 million savings per annum has been realised in the first year of the bedroom tax. After taking into account the cost of discretionary housing payments, the cost to local authorities and social housing providers and the payment of higher housing benefits to those who had to move, what is the net saving to the public purse? If it was not about saving money, as Esther McVey has said, what was it about?
The Government have since changed tack and claimed that it is about tackling overcrowding or dealing with the waiting lists. They say that people need to be pushed to move out if they have spare rooms so that others can have their houses. At various times, noble Lords from all Benches have pointed out that, in fact, many of these are not spare rooms, and, even if they were, there were nowhere near enough spare smaller properties available in the areas hit by the bedroom tax. Now we know what has happened. A recent BBC investigation showed that, after the first year, just 6% of tenants have moved.
This entire episode should shame this Government. Half a million people have been affected, most of them disabled, losing an average £14 a week from their already meagre incomes. Instead of bringing forward an order to make the bedroom tax apply to up to 40,000 more households, the Government should announce today that they will scrap this unfair, cruel and unpopular tax. I beg to move.
Lord Touhig (Lab)
My Lords, I thank my noble friend Lady Sherlock for securing this debate. Of all the Government’s reforms to welfare, it is hard to find another more cruel, more callous and more mean-spirited than the bedroom tax. The policy was dreamt up by people who have no need for housing benefit themselves and probably do not even know anybody who depends on it. While it may make sense in theory, in practice it is having a devastating effect on the lives of vulnerable people. Additionally, the very ideas and theory behind the policy are, I believe, wicked and wrong. Ministers have stressed that the policy is designed to fix a broken system of housing benefit and encourage behavioural change among recipients of housing benefit. This is sheer nonsense. The system is broken, though not because of the behaviour of those who use it; the cause is the housing stock itself. In England, there are 180,000 tenants underoccupying two-bedroom homes but only 85,000 smaller homes available.
The Catholic charity Caritas Diocese of Salford has been working with Michelle. She has three children and lives in a three-bedroom home. Originally she cared for her brother, who has now moved into supported accommodation. Her 13 year-old daughter now uses the so-called spare room. Michelle is trying for a home swap, looking for a two-bedroom home, but nothing is available. The £12 she loses each week means that she now regularly resorts to food banks. This is the reality of the bedroom tax. The only economy left for families to make is on food. When that cannot be done, they have to resort to food banks. In Merseyside, social landlords have referred 553 tenants to food banks.
The cost of the bedroom tax is horrific, but the attitude that it displays towards social housing is also wrong. No longer can people regard where they live as their homes. Housing benefit and social housing appear to be something that the Government begrudgingly provide. My local newspaper, the South Wales Argus, recently reported the story of Kevin Reeve, who has occupied the family home for 50 years and cared for his mother and father, who have both now sadly passed away. He is now underoccupying, losing between £35 and £45 a month and has been forced into trying to move.
The local housing association, Bron Afon, has catalogued the effects of this tax on the local community. It discovered that one person affected is a former solider suffering from post-traumatic stress disorder and depression. He lives with his daughter, who is hoping to go to university. They already underoccupy by one room. They are already cutting down on heating their home and eating. His daughter is now questioning whether she should go to university. He is resigned to trying to move. His current home is the one in which he raised his children, the home that he shared with his wife, who, sadly, has now died. He is proud of that home, and we should be proud of him, a veteran who has served our country. Is this the way we repay our servicemen?
The bedroom tax is another example of the chaos, confusion and poor implementation of chronically ill conceived policies by the Department for Work and Pensions. It is clear that this policy is unjustly penalising vulnerable people for something beyond their control. It is causing immense hardship and devastating people’s lives. It shows complete callousness towards those who rely on housing benefit. Many good people who rely on housing benefit feel that they live not in prosperity Britain but in poverty Britain, thanks to this Conservative and Liberal Democrat Government. Those responsible for this policy should hang their heads in shame.
Lord Taylor of Goss Moor (LD)
My Lords, I should first declare my interest as chair of the National Housing Federation, which represents the housing associations across England.
I will speak briefly, on a personal basis, to say that I cannot support the Government’s policy on this. I believe it was misjudged in the first place and we are rapidly seeing the proof in the pudding. I cannot support something that deprives people of money that, by any standards, they need—the Government do not give people more in benefit than they need to live on—when they have no option to move somewhere else because of the shortage of smaller homes. That is quite apart from the fact that to describe these rooms as surplus to need is in many cases simply wrong, and even if they are surplus today, they are often not surplus tomorrow. Therefore, for example, a family with young children will have to have those children live in a room together, but after a year they might need to live apart.
This simply does not make sense. I very much regret that the amendments in the name of the noble Lord, Lord Best, on this, were not passed, because that would have secured the Government some of what they wished but given a much fairer deal to individuals; for example by not removing the money if a reasonable alternative has not been offered to them.
However, the most fundamental reason—the proof of the pudding—is that this is not a saving to government any more than it frees up rooms. That is because of the huge cost to housing associations of having to work with individuals to help them, and the cost of the work and the money that the Government have had to put in to support individuals. It has removed capacity from the social housing sector to provide more homes. All of the money lost—and, frankly, the arrears that are being built up—will never be gained back from people who have no ability to pay it. That simply undermines the capacity to solve the very housing problem which the policy was theoretically meant to address but has failed to do.
Although my instincts are those of a team player, and my track record over a substantial period of time shows that to be the case, this is not something on which I can support my noble friends.
Baroness Nye (Lab)
My Lords, I completely share the views so ably put by my noble friend Lady Sherlock and my other noble friends, so I will be brief.
On the anniversary of the introduction of the bedroom tax legislation, the Government are trying to close by statutory instrument a loophole without any understanding of how local authorities can identify the people affected or the numbers involved. Instead of trying to close this loophole the Government should finally do the right thing and scrap the bedroom tax altogether, because as the Budget figures show, it will cost more money than it saves. According to the BBC, due to the lack of smaller accommodation only 6% of those affected have moved.
I know that the Minister will have heard these arguments many times before, but they bear repeating. He will have heard that the bedroom tax discriminates,
“against the most vulnerable in society”,
and that the Government have shown,
“a lack of appreciation of the housing requirements of children and adults with disabilities and care needs”.
Those words are not from this side of the House but from the motion passed by his coalition partners at their annual conference last year. I welcome the words of the noble Lord, Lord Taylor of Goss Moor, and I hope that more of his colleagues will join us in the Lobby this afternoon.
The one thing the Government have managed to do is to unite the noble Lord, Lord Tebbit, and the Liberal Democrats in the view that this bedroom tax will have damaging electoral consequences for both parties of the coalition. However, there are other voices, too. The chief executive of the CAB says:
“The Government’s solution to spiralling Housing Benefit costs is simply creating more problems. Thousands are being pushed into arrears, 96 per cent of people affected have no alternative smaller homes to move into and some housing associations”—
as we have heard—
“say they are being forced to demolish homes whilst 1.8 million languish on waiting lists”.
The United Nations says that the bedroom tax is taking a heavy toll on the most vulnerable and recommends abolition and that there is a,
“danger of retrogression in the right to adequate housing in the United Kingdom”.
The Chief Executive of the National Housing Federation has described the policy as an,
“unfair, ill-planned disaster that is hurting our poorest families”.
This retrospective “move or pay” tax simply is not working. For instance, in Merseyside more than 26,000 families are affected, but only 155 have moved. The Work and Pensions Committee has found that between 60% and 70% of homes affected by the change contained,
“someone with a disability and many of these people will not be able to move home easily due to their disability”.
It asked the Government to exempt anyone whose home had been adapted. Instead they are closing a loophole to bring more people into its remit.
Of the 660,000 people affected, two-thirds of those are disabled. The think tank Demos reports that £28 billion will have been taken out of disabled pockets by 2018 due to the cuts in DLA, ESA and housing benefit. Empty properties are increasing, in some areas by a third. In South Shields there are whole empty streets because people are afraid to move into larger houses.
If people end up in emergency accommodation, it costs the country more. But the human cost is huge, too. Grandparents cannot have their grandchildren to stay, so childcare arrangements are affected, and single parents are losing children’s bedrooms. Informal care arrangements for disabled people have come to a halt. A room is not a spare room when carers sleep in it, when couples cannot share a bed for health reasons, or when it houses vital medical equipment such as dialysis machines.
Now the Government have realised that they have been telling local authorities to take away housing benefit from people who were entitled to it all along, so they want to close that loophole. That will mean that local authorities will now have to spend more money and time trying to find out from their records—which go back to 1996 and which they may not have in electronic format—the identity of those people who qualify. It causes bureaucratic chaos and will lead to even greater chaos. This Conservative-led Government should be listening to what people—including their partners in the coalition—are saying, and scrap the whole sorry mess.
Baroness Lister of Burtersett (Lab)
My Lords, as the Regret Motion makes clear, we have to understand these regulations in the context of the impact of the bedroom tax.
My noble friend Lady Sherlock quoted Esther McVey on Radio 5. I will take us back to her rather wonderful interview on Radio 4, in which the interviewer had to drag out of her that the Government’s estimate is that only 8% of people had moved—a whole two percentage points more than the BBC estimate which she had been contesting. She was asked if she was disappointed. She replied:
“Well no, because it wasn’t that you had to move house”.
How is that consistent with her statement in debate in the other place? She said:
“The reason that we are putting these measures in place is that we want to ensure we make the best use of our social housing”.—[Official Report, Commons, 26/2/14; col. 311.]
In addition, how is it consistent with the constant refrain:
“How can we justify 1 million spare rooms when other people are sometimes crammed together in a room?”.—[Official Report, Commons, 24/3/13; col. 27.]
Can the Minister tell us exactly how many rooms have been freed up by this policy? As the Work and Pensions Committee report observed, it is,
“a blunt instrument for achieving this”
aim, and one that is causing hardship, as we have already heard from other noble Lords.
Why, then, have people not moved? As has already been said, it is partly because there is nowhere to move to. In the Independent, on 3 March, it was reported that,
“a severe shortage of smaller council homes across the country is being exacerbated by the right-to-buy scheme—leaving many victims of the bedroom tax with no choice but to accept reduced benefits”.
Also, many people do not want to move because they do not want to lose social networks that are very important to them—a point I have made over and over again in this House. We are not talking about housing in the abstract, but about people’s homes within communities that matter to them.
As Demos said, in a study it carried out on social ties,
“policies can serve to actively undermine the kind of self-help and mutual support that families engage in”.
One would have thought that that would be approved of by a Conservative-led Administration who believe in the big society. Reforms such as the removal of the underoccupancy penalty—dubbed the bedroom tax—have left people with a choice of either finding more money for rent from already stretched budgets or moving away from support networks that make life liveable for many.
We have heard about rising rent arrears, but they are only the tip of the iceberg. Earlier this week I attended the launch of a report by Community Links on the impact of the first year of so-called welfare reform—although I would call it social security cuts—in the London borough of Newham. The person presenting the findings pointed out that many people prioritise rent for fear of eviction. Therefore, there may not be rent arrears, but what other impact is it having on what people can spend on other essentials, and how many people are turning to payday lenders or, even worse, to loan sharks? That morning we heard tales of utter despair—the result of the cumulative impact of this and other benefit cuts such as council tax benefit.
The suggestion has been made: “Let them take lodgers”. Do we know how many people have taken on lodgers as a result of this policy? Some noble Lords who are following the Immigration Bill will know that later this afternoon we will talk about its residential tenancy provisions. Anyone who takes a lodger as a result of the bedroom tax will be turned into a mini-immigration officer and will have to check the immigration credentials of their lodger. Do we really want people on benefit being turned into mini-immigration officers to prevent illegal immigration?
The Minister, Esther McVey, pleaded that the BBC report showed how complex this is. I can suggest a simple solution: follow the policy of the Opposition—which I hope will very soon be the official policy of the Liberal Democrats—and abolish the bedroom tax.
Lord Beecham (Lab)
My Lords, I think I am the only serving, elected councillor who is likely to speak in this debate, unless the noble Lord, Lord Tope, in his declining days as a councillor—I believe he is standing down shortly—joins in to proclaim the new, belated Lib Dem policy on the bedroom tax. I bring a snapshot from Newcastle, where 5,400 households are affected, at an average cost to each of them of £13.47 a week. If paid, that represents around £3.75 million to be taken out of the local economy, so there is a knock-on effect, quite apart from the housing effect, on that economy. Just under one-quarter of those are working households, one-third have children and, as we have already heard, many have disabled people in them. In my own ward, there are 315 such households.
As has already been pointed out, it is not a simple matter to transfer into a smaller property. In Newcastle, we have 3,558 people seeking one-bedroom accommodation. The average number of available one-bedroom properties per year is 64. It would take a generation or more to accommodate those people. Some 615 are seeking to move down to two-bedroom accommodation. There is, admittedly, a slightly higher availability of this—all of 101 a year. Any effect on the private sector, which in Newcastle is largely taken up with students, will drive up rents. Landlords are increasingly reluctant to take tenants who are on benefits of one kind or another. This policy is not only cruel and inefficient; it is based on a complete misunderstanding—to put it generously—of what happens in the social housing market. It is damaging people’s lives.
I conclude with an anecdote about meeting a couple of people in their fifties—not in my own ward—who benefited from the decision which required the Government to effectively refund the amount paid because of the length of their tenure of the property. I was able to tell them they would be getting the money back but I also had to give the bad news that the Government were seeking to ensure that the money returned to them was spent on paying the bedroom tax. Here were two disabled people, living in a house for just under 30 years, with one of their grandchildren staying with them when I called. This just illustrates the cruelty and incompetence of the measure and I congratulate my noble friend on bringing this Motion of Regret.
Baroness King of Bow (Lab)
My Lords, when I saw that the Government were introducing an amendment to the bedroom tax, I mistakenly assumed they wanted to put right the wrongs visited on tenants by this unjust law. Instead, they want to close loopholes and increase the number of people victimised. As one housing expert said:
“This is a shambles caused by the DWP failing to understand the significance of their own legislation”.
This is an extraordinary failing by the Government that disproportionately burdens the most vulnerable, two-thirds of whom, as we have heard, are disabled. These people will have to wait for a Labour Government to abolish the bedroom tax—unless the Minister would like to tell us something quite unexpected today. One way that Labour will fund the reversal is to abolish the Government’s tax cuts for hedge funds. I have nothing against hedge funds—I want to see the City of London thrive because our economy depends on it. However, I do not want it to do so on the backs of the poorest and the disabled. I have rarely heard anything so perverse.
Austerity demands choices: choices reveal priorities. The Government’s priorities here are absolutely shameful. Why do they not concentrate on closing loopholes to end tax evasion by the richest instead of closing loopholes that hurt vulnerable people so much? I urge the Government to abolish this tax.
Lord Low of Dalston (CB)
My Lords, I realise that time is at a premium so I shall be brief and say just a few words. I remember very clearly, as will other noble Lords, the words of Lord Newton of Braintree who, to the great sadness of all, is no longer with us. In his intervention on Report during debates on what is now the Welfare Reform Act, he warned his colleagues in the Government that this would not last five minutes. Once people started realising what was happening and getting on to their MPs in droves, the Government would be forced to scrap it. It has not worked out quite like that but the bedroom tax is visibly unravelling before one’s eyes. It is not saving any money or freeing up any accommodation. My advice to the Minister would be to recognise when he is beaten. He has not a friend in the House. When you are in a hole the only sensible advice is to stop digging. I advise the Minister to recognise realities and run up the white flag.
Baroness Hollis of Heigham (Lab)
My Lords, in her powerful speech, my noble friend Lady Sherlock has explained our opposition to this statutory instrument. It brings more people into the bedroom tax which should be abolished. She has had support from all around the House today. The tax is disastrous. A previous Tory Government introduced and repealed the poll tax in the same Parliament. As the noble Lord, Lord Low, said, this Government should have the courage and decency to do the same.
You do, of course, need sanctions in social security to ensure, for example, that compliance with JSA work search is not voluntary. However, the bedroom tax—for the first time ever—falls on the innocent, disabled and vulnerable. They are punished when they have done no wrong: they simply occupy the house that the council allocated them. The Government have now said to them: move or pay. Most tenants can do neither. As my noble friend Lord Beecham said, tenants who want to move will be waiting three to four years. Arrears mount; single people or couples on the waiting list who want smaller accommodation will never get it; pensioners wanting to downsize cannot. As for overcrowding, outside London six times more families are underoccupying than overcrowding Just helping pensioners to move would sort it, with grace and consent. The bedroom tax destroys sound housing policy.
Will the Government, nonetheless, make their savings? No, because benefit cuts have been shunted on to tenants to become irrecoverable arrears. In Norwich, which has spent every penny of its DHPs, 60% of tenants affected by the bedroom tax are now in average arrears of £300 and mounting. Nationally, around two-thirds of affected tenants are in arrears. DHPs are utterly insufficient, short-term, and a postcode lottery, yet that is the policy on which the Minister, sadly, relies. Carers UK says that 75% of tenants trying to pay were cutting back on food, heating, medical supplies and mobility. The fragile economy of tenants collapses, as they turn to food banks, payday loans and loan sharks, with debts from which I doubt many will ever recover. The Government’s notional savings become tenants’ irreversible, irrevocable debts and, in the process, we destroy lives.
Fifteen per cent of affected tenants, nearly half of those in arrears, have already received eviction warning notices. What happens then? Do we evict tenants into the private sector—private landlords do not want them and it costs more—or into bed-and-breakfast accommodation which costs even more, or what? Should they be rough sleeping? What about children and disabled people? Through no fault of their own, there are people who cannot pay their rent because the Government have cut their benefit.
Instead, do we allow rent arrears to grow and in the process threaten the very viability of housing associations, as the noble Lord, Lord Taylor, said? We have offered the Minister three possible strategies to help because every defence of the bedroom tax is false. The first option is that the bedroom tax should not apply to disabled people, as the Work and Pensions Committee said only yesterday. Two-thirds of affected tenants are disabled. One may ask why. Adaptions, at a cost of £6,500 a property, become wasted. As regards space, the CAB has said that for disabled people that extra room for carers or equipment is,
“a lifeline as vital as a guide dog or a wheelchair”.
Finally, disabled people need the support of neighbours, as my noble friend Lady Lister said. We talk about social or community care and at the same time the Government seek to pluck disabled people out of the very communities that provide that social care.
The second option is that it should apply only to those who refuse an acceptable alternative offer. Following the remarks made by the noble Lord, Lord Taylor, I should like to know what the position of the Lib Dems is. Will they continue to support the bedroom tax in Parliament while campaigning on the doorstep simultaneously for its repeal? The third option is that the Government could treat social tenants like private tenants and apply the bedroom tax only to new tenancies. Any of those options would help.
We will go further. The Labour Party is pledged to repeal the legislation. It is the most wretched piece of social security legislation that I have known in 25 years in this House. But by then, in the summer of 2015 after the election, we will have seen hundreds of thousands of social tenants—our fellow citizens, most of them disabled and many with children—punished for occupying a house that was allocated to them. They would have been doing no wrong but are unable to pay or to move. They may be deep in debt and fearing, or perhaps experiencing, the loss of their home. How can we do this to them? It is grotesque.
Lord German (LD)
My Lords, I am the first to recognise a political device when it comes my way. Indeed, this is a political device to secure a wider debate on the spare room subsidy on the back of regulations which have already been made and have come into effect. I do not dispute the need for political devices or regret the use of political devices but it is clear that that is what is being used. I think I should start by clearly laying on the line our policy as Liberal Democrats. What was said at our conference and what we have heard today from noble Lords is the preamble. But two things are being called for: the first is a review and the second is to do with housebuilding.
More crucially than anything else, we want to see the effect that this policy is having in this country. As I understand it—my noble friend can tell me—the review of the policy is due to publish its initial findings soon. I always hesitate when the word “soon” is used but I know that my noble friend loves the word, so perhaps he will indicate whether it will be before the end of this Session, before the Summer Recess or whatever. It would be useful to know when we can have that information.
One would expect that a Labour Party that has designed its policy to abolish the whole thing—we could have a debate about that—will want to assert that a huge amount needs to be put right. But we need facts that stand up to such an assertion and to know exactly where we are. We need to know whether things need to be changed as a result of that independent review, which was put in place by the Welfare Reform Act. That is the position of my party.
Perhaps I may dwell on the issue of correcting secondary legislation, which is what the Motion is about. The unexpected consequences of legislation of the past must have affected all Governments. I could assert that an opposition party present today will at some time have had to use corrective secondary legislation for something which has appeared after primary legislation has been put in place. Perhaps my noble friend can tell me whether I am right or wrong.
There are problems with the 1996 legislation. Perhaps my noble friend can tell us whether it was designed for social sector tenants. The impact that we are talking about is with regard to social sector tenants but my understanding is that that original legislation was put in place particularly for private sector housing and as a protection for private sector tenants. Perhaps my noble friend can advise us whether something that was designed for a different purpose is producing unexpected and unintended consequences.
My second point concerns what is happening in local authorities. Although I do not have as many years of experience in local government as the noble Lord, Lord Beecham, I did spend quite a considerable amount of time in local government. I cannot recall whether I spent more or less time than my noble friend Lord Tope. I certainly remember that we had the use of electronic equipment in the mid-1990s when I was a city councillor. How many local authorities are having to resort to paper trails in order to find out the number of people affected by the 1996 legislation? Do some local authorities have up-to-date information? When there are assertions that between 3,000 and 40,000 people are affected, somewhere there must be reasoning behind those assertions. Do we expect to find the correct solutions and answers soon? Will we be able to find out very soon how many people are affected?
Will my noble friend reassure the House that local authorities are being reimbursed for the extra work that they are having to do to trawl through the paper trails where those records have not been kept electronically or have been lost? Now that the loophole is closed, I understand that there is now an issue relating to discretionary housing payments paid to people who were subjected to the extra charge between March 2013 and March 2014. People who were awarded DHP were awarded it on the basis that they needed it at that time. Can my noble friend reassure me that there will be no question of people having to repay it and that that discretionary housing payment remains in place?
Today, the noble Lord, Lord Touhig, gave an example of a case, which has been publicised, in Torfaen, the borough in which I live. I note that the Government made additional money available for discretionary housing payments to all 386 local authorities in this land and that only about 80 applied for money. In Wales, only Cardiff, Caerphilly and Conwy—it is very easy to remember them as the three “C”s—applied for discretionary housing payments and Torfaen did not. One can only assume therefore that local authorities which say that they do not need any more discretionary housing payment have enough to make available to people who have a need. I have a number of questions to ask those who support the case, which I read about in my local newspaper. Did those involved go to the local authority? Did the local authority turn them down for extra support, given that local authorities have enough money as they did not need to apply to the Government for additional money?
The second issue my party is concerned about is that of new homes. One of the problems that might come about as a result of this policy is the distortion as local authorities and housing associations decide to build more single-bedroom units. Can my noble friend give me any indication of what is happening in the housebuilding sector, not just in England but also in Wales? We could have a direct comparison with the record on housebuilding of the Conservative and Liberal Democrat coalition and a Labour Government. On that matter, can my noble friend tell me whether the Government’s target for building 170,000 new homes in England by the end of this Parliament in 2015 is still on track? Is it being matched in Wales by the Labour Government on the number of houses that they will be building as well?
Finally, I would like to ask my noble friend a question about the overall budget for housing benefit. The Labour Party, the Liberal Democrats and the Conservatives have all said that we have to try to contain the overall budget. In fact, in the other place all three parties voted in favour of the retention of that hold on the overall budget. Will the changes that have come about as a result of amendments to the secondary legislation affect the original estimates of expenditure on housing benefit, and how much, if at all, will this put up the bill for housing benefit in this coming year?
I have asked my noble friend a variety of questions. I would be grateful if he could tell us when “soon” means in terms of the first stage of the review of this policy.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, I will not test the patience of the House by going over ground that we have covered many times in recent weeks and months. On the general nature of the policy, one issue that is worth my dealing with is the recent BBC estimate that 6% of those affected by the spare room subsidy, or 30,000 people, moved during the first 11 months of its operation. Noble Lords opposite may see this as a sign of failure, but we do not. It is an example of the behavioural response that this policy is successfully driving. We have seen further evidence of this again today in the announcement by Housing Partners Ltd that in the past year it has increased by a quarter the number of successful mutual exchanges for social tenants. Its experience also shows that there is a steady supply of smaller one and two-bedroom properties available, which is at odds with some of the claims made today from the Benches opposite.
There are another couple of points on our general position that I have not dealt with before. One, raised by the noble Baroness, Lady Sherlock, and amplified by the noble Lords, Lord Taylor and Lord Low, was about money-saving, so let me be precise on that. We know, and have stated in our impact assessment, that some people could downsize, some could move into the private rented sector and others could get discretionary housing payments. However, savings remain estimated at £500 million per annum and this did not change in the Budget, so the party opposite will not be able to argue—unless it can persuade the OBR—that this policy should be got rid of on the basis of cost because that is not what the OBR has calculated.
On the point about kinship carers, they will be treated as foster parents where they do not have a child placed with them or the child is not treated as occupying their home. However, where a carer is responsible for a child and the child is therefore treated as a member of the claimant’s household, they will be treated the same as other claimants under the size criteria.
I shall restrict my remaining comments to the Motion and the amendment to the regulations, explaining first what these regulations do. The instrument amends paragraph 4 of Schedule 3 to the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006. These provide transitional protection for certain housing benefit claimants. The amendment removes the transitional protection from social sector tenants. This means that their housing benefit will be determined using Regulation 13 of the Housing Benefit Regulations 2006, which sets out the maximum rent in the social sector.
This transitional protection was provided for private sector tenants when local reference rent rules were introduced in 1996. These restricted the amount of housing benefit that could be awarded through private landlords charging high rents. Currently, fewer than 40,000 private sector claimants, mostly pensioners, are still covered by this protection. In answer to my noble friend Lord German’s question, it was never required by, or intended for, people living in social housing. Transitional support has already been provided for those affected by the removal of the spare room subsidy through discretionary housing payments. Unlike the loophole provision, this is available to those who claimed benefit after 1996.
Let me go through some of the specific issues raised about the loophole. My noble friend Lord German asked about numbers. The cost of the loophole will be so small that it will not impact on our forecast of housing benefit expenditure of £23.9 billion for the year. The claims that our estimates of the size are wrong are based on FoI figures that are at best speculative and at worst misleading. The claimants have 13 months to make their claims.
Regarding who will be expected to meet the costs—a question raised by the noble Baroness, Lady Nye, and my noble friend Lord German—these will be met by the DWP through the normal subsidy arrangements. At the moment, we have £2 million of additional administrative funding to distribute.
My noble friend asked whether those covered by the loophole who received discretionary housing payments would have to repay it. The answer is no; the award was made when there was a need and reimbursing the housing benefit would not change that.
Let me pick up the point on inheritance, which we dealt with at some length during that recent Urgent Question from the noble Baroness, Lady Sherlock. When a claimant dies, anyone living in a household who both takes over the tenancy and is awarded housing benefit within four weeks of the death can inherit the loophole protection. That was a process we already allowed for when we were looking at our costs. As my noble friend inquired, we are working on a major review of this for next year as well as an interim review, and I think I will stick with my “later this year” rather than “soon” at this point.
Turning now to what the Motion itself says, the noble Baroness’s Motion makes a series of unsubstantiated assertions. First, it states that the regulations cannot be amended without the precise number affected by the loophole being known. That simply is not true. It is not about numbers; it is a matter of principle. Parliament never intended that this transitional protection should apply to this group of claimants or to this policy. The regulations have been amended to restore that original policy intention.
Secondly, there is an accusation in the Motion of government confusion and mishandling. There is no confusion. As soon as the loophole was identified, we were clear that we would close it and that is exactly what we have done. Guidance was issued to local authorities. Arrangements were put in place to ensure that central Government met the costs of the loophole—both the benefit costs and the additional administrative costs.
The final claim in the Motion from the noble Baroness is that there is a disproportionate impact from the regulations on the most vulnerable. It is the loophole as it stood that was arbitrary and unfair. This transitional protection was never intended for this policy. As a result, it has protected a random group of claimants without a meaningful test or reason.
The removal of the spare room subsidy has now been operating for a year and it is working. The latest data show that the numbers facing a reduction in their housing benefit dropped by around 50,000 between May and November last year. Discretionary housing payments are funded and working: only £13 million of the £20 million reserve funding that we set aside has been allocated to local authorities. Revised DHP guidance was published yesterday, promoting longer-term awards where appropriate. The Court of Appeal has confirmed that the Government are meeting their human rights obligations and public sector equality duty. This year, we are saving about £490 million a year from the housing benefit bill.
In conclusion, the policy is working. The loophole has been closed. Arrangements are in place to support local authorities and those affected by the loophole. Finally, claimants have up to 13 months to make a claim that the loophole applied to them. For these reasons, this Motion should be withdrawn.
Baroness Sherlock
My Lords, I am in the unusual position of saying that I am not sure whether I agree with a single word that the Minister has just said. It was in fact the second most disappointing speech of the day.
The Minister has put forward three broad arguments. First, that it does not matter how many people are affected. But it matters to me, it matters to them and it matters to the local authorities, which have to deal with the mess that the Government have created.
Secondly, there is the question of savings. I noticed that the Minister failed to answer my question on what the net savings would be. Clearly, these savings are vanishing before us like a will o’ the wisp. The Minister also failed to explain how the savings remain the same, despite the Government having had to increase the money allocated for discretionary housing payments from £20 million to £190 million. The Government seem determined to ignore the costs and problems created for councils and other housing providers. If there is any doubt about that, let us remember that the National Audit Office said that the Government’s costings do not take account of,
“the full scale of potential impacts”,
and do not include the additional costs faced by local authorities. We have heard so much about those costs today from my noble friend Lord Beecham and the noble Lord, Lord Taylor.
There is then the question of overcrowding. As my noble friend Lady Hollis pointed out, this argument is frankly specious. There are not enough smaller homes to move into, a point underscored by my noble friend Lord Beecham, and where they are they are in the wrong places. They are not in the places where people are being asked to move. People have not moved because there is nowhere to move to. During the passage of the Welfare Reform Act, the noble Lord, Lord Best, and my noble friend Lady Hollis put an amendment to this House which said that the bedroom tax should not apply if someone could not be offered somewhere else to move to. The noble Lord, Lord Taylor, had the courage to vote for that amendment at the time and I commend him for his consistency. Other noble Lords did not and the government Benches voted it down. Let us not therefore pretend that what the Government are really worried about is overcrowded houses. They had every opportunity to correct that and they failed it.
We have heard so many powerful speeches today about the misery and desperation caused by this policy. If the noble Lord, Lord Freud, really believes that this policy is a success, I would hate to see what his failures look like. If he feels that he is getting the right behavioural effects, what are they? Are they in the family described by the noble Lord, Lord Touhig, who are not eating? Are they the families who are going without or giving up bedrooms needed by carers or disabled people? No: the handful of people who have moved are doing so out of desperation, not because they were responding to a behavioural stimulus.
I found the speech from the noble Lord, Lord German, very disappointing. I was delighted to read the reports of Tim Farron saying that the Liberal Democrats were going to withdraw their support for the bedroom tax.
Lord German
When I asked my honourable friend in the other House whether that is what he had said, he said that he had not. I have his speech with me and I can also tell the noble Baroness that my honourable friend was interviewed by ITV on this matter but that ITV news decided not to broadcast his comments because they did not substantiate the allegations that the noble Baroness is now making, nor did they substantiate what the Guardian had said. Both of those sources are incorrect; the source is here in front of me and I invite my noble friends to listen to it.
Baroness Sherlock
My Lords, I am very grateful for that clarification. I take from it that the Liberal Democrats are in fact supportive of the bedroom tax and I thank the noble Lord for making that clear. If I have got that wrong again, the noble Lord has a very clear way of demonstrating it. They can join us in the Content Lobby today and the nation will judge them by that. If enough noble Lords were willing to come behind us today to stand up and say that this House does not believe that this is a good policy, or that this cruel, vicious, unfair and inefficient tax should be allowed to stay, a start would be to regret these regulations today. I urge noble Lords to do that and if enough people do, maybe the Government will think again. Maybe this House could start a process that would lead to the bedroom tax being repealed in this Parliament. However, if the Liberal Democrats will not do that and the Minister will not relent, let the country be in no doubt: the Labour Government will repeal this when they come to office. In the mean time, let us send a message today. I beg leave to test the opinion of the House.
Immigration Bill
(10 years, 7 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:10 - Division on Amendment 53 - Ayes: 130 / Noes: 175 - Amendment 53 disagreed.
Baroness Hamwee
“( ) Before implementing a pilot scheme to preclude the making of a residential tenancy agreement to which a person disqualified as a result of immigration status is party, the Secretary of State shall—
(a) consult such persons as she considers appropriate as to the criteria to be applied in order to assess and evaluate the scheme;(b) lay before Parliament a report on the proposed criteria.( ) The criteria shall include the application of an equalities impact assessment.”
Baroness Hamwee (LD)
My Lords, this is the first amendment in a group also containing Amendment 25 tabled in the name of the noble Baroness, Lady Smith, along with several other amendments in her name. It is clear that there is widespread agreement that the provisions dealing with residential tenancies proposed in the Bill are complicated and risky—complicated in their operation and risky in the scope there may be for discrimination. However, I do not need to re-rehearse our previous debates today.
The Government have been very clear that—I am using a term that I hope will carry less baggage than some—the scheme will be tried out and tested in a single area from October this year, that formal evaluation will be produced, and that decisions on implementation more generally will be taken in the next Parliament on the basis of the evaluation via a negative resolution order. I have used pretty much word for word the language of my noble friend Lord Taylor in Committee on 10 March, which noble Lords can read in Hansard. Because I accept all that he said, I have therefore chosen to build on it.
It will be entirely obvious to the Minister what assurances I am seeking in my amendment: consultation as to the criteria to be applied to assess and evaluate the scheme. I acknowledge that I have of course pre-empted that consultation by reference to an equalities impact assessment. We can all think of a number of criteria, but we can also think of large numbers of organisations and individuals with expertise in the field who could helpfully have an input into the construction of the evaluation programme, and they should have an input. So my amendment proposes that,
“the Secretary of State shall … consult such persons as she considers appropriate”.
That is not a get-out because it is a well understood formula. I should say in parenthesis that I am glad that I have been allowed to say “she” of the Secretary of State and not “they”, which I understand is a new form of drafting that was imposed on me last week. The amendment would then require a report on the proposed criteria to be laid before Parliament, thus, if you like, hedging with precautions in advance. That is what the amendment is about. I hope that the Minister can reassure me that such arrangements as I have included in my amendment or others that are equally as reliable and transparent will be made. My amendment refers to a pilot scheme. I do not use the language of “phasing” or “rolling out” because I do not accept the implication inherent in those terms whereby, after the first application, further operation is unstoppable and that first application is to be in a single area.
I have two major concerns about the amendment of the noble Baroness, Lady Smith. It mentions,
“one or more pilot schemes”.
There could, therefore, be more than one pilot to start with, and we know that in the Commons the proposal similar to that made by those on the noble Baroness’s Benches would apply to a London borough, a local authority and a county in each of England, Scotland and Northern Ireland. Alternatively, it could mean successive pilot schemes, which is rather close to a rollout. I realised this morning that it is ironic that I am more sceptical about this than the Opposition Benches.
My second concern is that the detail of that pilot or pilots would be in secondary legislation because the noble Baroness’s amendments take out all the other clauses dealing with residential tenancies. Therefore, secondary legislation would have to deal with every aspect, every component and—importantly—every exclusion from the scheme. The legislation would have to come to Parliament in the context of a negative resolution order. There would be far less opportunity than we have had in successive stages of primary legislation to scrutinise the detail. In addition—this is a fundamental distinction—we have been able to discuss and arrive at changes, which is not something that one can readily do, if at all, with secondary legislation.
Therefore, a single pilot process—with codes of practice and exclusions, for example, for hostels, refuges and much other accommodation, including student accommodation—is a far less risky route. I am not given to quoting Members of the other House but my honourable friend the Member for Cambridge got it right when he said that if pilots were imposed on more than one area, if they went wrong, they would go wrong in more than one area. I beg to move.
Lord Rosser (Lab)
My Lords, I should like to speak to Amendment 25 and to our other amendments in the group that are consequential.
Before I proceed, the comment that I should like to make to the noble Baroness, Lady Hamwee, is that if, under the terms of our amendment, the Government got it wrong over the pilot, their chances of getting a further extension of their scheme—bearing in mind that we have called for primary legislation if that were the case—would of course be extremely remote. That would be an incentive for a Government who wanted to see their scheme extended to get the pilot right and to get it fair. For that reason, the noble Baroness’s objections to our amendments are, to put it mildly, a bit thin.
This debate relates to the part of the Bill on which we spent the most time in Committee, because many noble Lords had questions about how the provisions would work in practice. However, despite the time spent debating the Government’s proposals, a great many of the questions remained unanswered. We agree with the principle of making it more difficult for illegal migrants to rent property. In Committee, we proposed a new clause seeking to put in place a pilot to be undertaken before the provisions could be put fully into effect.
We have now tabled amendments that would remove the entire chapter and replace it with a power for the Secretary of State to undertake a pilot along the same lines. If the pilot is successful, the Government could then come back to primary legislation to implement it fully. Given the substantial number of concerns that have been raised about the detail of this part of the Bill, and the need to ensure that it works well and receives proper parliamentary scrutiny, this is an eminently reasonable proposition.
A range of organisations have expressed serious concerns about the impact of the proposals on landlords and residential tenancies. The vast majority of landlords—82%—do not support the proposals, according to a survey by the Residential Landlords Association. Giving evidence in the Commons, the chairman of the National Landlords Association said:
“It is going to impose an administrative burden on landlords who are not experts in immigration … The principle of checking identity is not so much the worry as the logistics of how that is done and understanding the documentation”.
In the same evidence session, the policy director of the Residential Landlords Association said that,
“we think that the Bill and its provisions are not workable and will not be effective in achieving the objectives set out”.—[Official Report, Commons, Immigration Bill Committee, 29/10/13; col. 43.]
Of course, one of the key concerns is whether these measures will be workable. The Government have published a draft code of practice for landlords. We asked a number of questions about this in Committee, including: who will be included in the provisions? How will tenants who have never rented out a property know about their obligations in relation to subletting? How will landlords familiarise themselves with, understand and recognise all the potentially relevant documentation?
We also asked questions about enforcement, including: how will it be established that a landlord had acted in breach of their duty? How will the fine be collected? Will provision be made for landlords who repeatedly break the law? Will Home Office staff become overwhelmed as a result of landlords using the telephone notification to the Home Office that they have conformed to the requirements in the Bill as a form of shield?
The Government’s replies on these points were, for the most part, very general and not very helpful. For example, on enforcement, it was stated that the provisions would be enforced,
“as part of the normal business of enforcing immigration law”,—[Official Report, 10/3/14; col. 1653.]
that they would be applied on a “light-touch basis”, and that the Government would be relying on landlords or agents to give evidence that they have complied with the prescribed requirements.
One thing we asked for in the light of these concerns was for the code of practice to receive greater scrutiny, and we are pleased that the Government have listened and require the code to be laid before Parliament and be made by order, but they should have gone further and at least made it subject to the affirmative procedure. We are also pleased by the Government’s commitment that the code will be ready before the first phase of the rollout begins.
A further concern, which we also heard about in Committee from many noble Lords, relates to the impact on vulnerable citizens, including victims of domestic violence, those with chaotic lifestyles, and pregnant women. We know that landlords already avoid renting to groups they perceive as higher risk, and given the difficulty in identifying documents and the potential liability for landlords, it is likely that landlords will want to be on the safe side and ask for a passport in every case, but many vulnerable people do not have a passport.
On this, again, the Minister’s answers were not particularly helpful. He said that the Bill provides,
“discretionary powers for the Secretary of State to authorise a tenant who has no lawful status to rent property”.—[Official Report, 12/3/14; col. 1798.]
How will that work in practice? There is a real danger that people, vulnerable people in particular, will either become homeless or be driven into the hands of unscrupulous landlords.
There is also widespread concern about the potential discriminatory nature of the proposals. These concerns have been expressed by a number of organisations, including Shelter, Liberty and the Catholic Church. We also heard them expressed in Committee. Again, we are pleased that the Government have listened and that the code of practice in relation to discrimination will receive greater scrutiny.
Lord Best (CB)
My Lords, I have been engaged with the landlord and tenant clauses of the Bill through all the stages of its passage through your Lordships’ House. In Committee, I tabled nine amendments covering the duty for landlords to consider the immigration status of their tenants and, as a result, have had meetings with the Minister, the noble Earl, Lord Attlee, and the key civil servants from the Home Office, together with representatives of landlords and tenants. These sessions have led to a series of clarifications and alterations to the Bill on which I will now comment.
We have already heard the welcome news on student accommodation, where, very helpfully, the Government have moved a long way. Another key ingredient in our discussions has been the issue covered by Amendments 24 and 25. This relates to a pilot scheme, trial or pathfinder, which representatives of both landlords and tenants see as essential before the new measure is applied more generally.
I pay tribute to the Minister for his concerted efforts to take on board the anxieties of those from the Residential Landlords Association, Crisis, the British Property Federation and others at our meetings. It would not be true to say that the requirement for landlords to check the immigration status of their tenants is welcomed. Landlords do not want an extra administrative task, with a hefty fine if they get it wrong. Those representing tenants’ interests remain convinced that the measure will make it even more difficult than it is already for anyone who might possibly be thought of as a foreigner to get a decent flat. However, these organisations are a good deal happier today than they were at the start of the process. A whole series of undertakings and expressions of intent has now been set out. Some of the changes will appear in the Bill through the government amendments brought forward today. Others will come in the details in secondary legislation and subsequent guidance and codes of practice, including in relation to potential discrimination.
I now have a long list of commitments and clarifications from the Government which, in combination, waylay a good many of the fears we have raised about this duty on landlords. I will now summarise the most significant of these, not least to enable the Minister to correct me if I am mistaken in any respect.
First, as we have heard, lettings to almost all students are taken out of the equation, including in private sector halls and also in houses and flats. Secondly, hostels run by charities and housing associations for homeless people are excluded, as are refuges for women fleeing violence, and accommodation for vulnerable people in immediate need. Thirdly, those leaving prison will be able to rely on much simpler paperwork to satisfy requirements than was feared.
Fourthly, only in exceptional circumstances will there be any need to check on tenants after they have moved in during the period of their tenancy. Fifthly, landlords will not have responsibility for checking on anyone else moving into the property after the tenant moves in, provided any additional occupier does not pay rent to the landlord.
Sixthly, the Home Office will have a hotline to deal with queries within 48 hours. After I expressed some disbelief that this would actually happen, I received reassurances that, if the Home Office fails to provide an answer within 48 hours on working days, the landlord can assume the verification has taken place and will not incur any penalty.
Seventhly, any organisation which wants to take responsibility from landlords for verifying the status of tenants can act as an agency. I understand that a number of bodies, including some that currently conduct reference and credit checks, have already made approaches to the Home Office. No doubt such agencies could do the job more quickly and cheaply than most local managing agents by becoming real experts in the process.
Eighthly, a consultative group chaired by a Minister will be created and will involve relevant bodies including the British Property Federation, Crisis, the Residential Landlords Association and others. This group will look at the secondary legislation, codes of practice, regulations, draft instruments and so on that relate to this measure.
Ninthly, with particular relevance to Amendments 24 and 25 that relate to one or more pilots, we now know that there will be such a trial in one area and that it will be big enough to provide for a proper evaluation. The consultative group will be fully involved to assess the impact of this new duty, and there will be no rollout of this measure before the evaluation is concluded and any consequent changes have been made to the arrangements. Finally, in any case there will be no rollout beyond the one trial area before the general election next year. All of these changes, and perhaps in particular the emphasis placed upon the pilot, trial or pathfinder scheme, have been well worth the effort in pursuing negotiations with the Home Office.
The position we are now in feels very different from where we came in a couple of months ago. This says something about the value of this House in raising concerns and, I believe, in improving the legislation and influencing the actions of government that will follow from the legislation. My guess is that the noble Baroness, Lady Hamwee, will receive the reassurances she seeks by her Amendment 24. It would be churlish of me to do other than express appreciation at this Report stage for the way in which the Minister has taken matters forward. Indeed, I look forward to joining colleagues on the ministerial consultative group that will engage with the trial run of the new regime.
Therefore I cannot, in all fairness, support Amendment 25 and those that follow in the names of the noble Baroness, Lady Smith of Basildon, the noble Lord, Lord Rosser, and colleagues. However, I am grateful for the consistent support of the opposition Benches for all the changes that now leave the Bill in much better shape in this regard.
Baroness Neville-Rolfe (Con)
My Lords, the debates on the landlord provisions in the Bill have been good. I thank noble Lords for highlighting a number of very important issues, including the noble Baroness, Lady Smith of Basildon, for her notion of the importance of workability for the scheme which we discussed in Committee. I also reiterate the appreciation of the Minister’s efforts that was expressed by the noble Lord, Lord Best.
I welcome the phased approach to implementation that the Minister has put forward in discussion. This will ensure that the system works in practice and is well communicated. I welcome the good length of time which has been left for the trial, the imaginative changes that have been made relating to students, and the various other commitments so elegantly summarised by the noble Lord, Lord Best. I would add the assurance that the Minister kindly gave in discussions we had, about a simple, useable website for landlords and tenants on the new rules.
However, it seems that the amendments would confine legislation to a pilot, so there would be no promise of legislation in this important area if the first phase worked, as we hope it will. That would strike at the heart of the Bill. Moreover, I think that my noble friend Lady Hamwee is wrong to highlight only the equality impact assessment. The burden on landlords, the way that enforcement works and the operation of the fines are also important considerations that we need to assess after the trial. For all these reasons, I encourage noble Lords to support the government amendments and to reject the other amendments before us.
Baroness Lister of Burtersett (Lab)
My Lords, in supporting Amendment 25 I will simply make two very brief points about what I hope the evaluation of the pilot will include. The helpful note from the Minister prior to today made clear that it will look at the impact on tenants, including the impact on vulnerable groups. I ask that children should be included among those vulnerable groups, given the fears about the implications for children’s rights under the UNCRC and about possible homelessness that have been voiced by the Joint Committee on Human Rights and others. There is also a possible knock-on effect on local authorities if, as feared, there is an increase in homelessness among families with children.
The second point refers to lodgers. I am not quite sure whether it was covered by the point made by the noble Lord, Lord Best, who mentioned landlords not having to check people who then move in. Will this include the tenants of landlords, or social tenants who take a lodger? Certainly in Committee it was said that they will be included. If they are included, it is very important that any pilot or any evaluation includes the impact on them. This could be a group of very vulnerable people, some of them affected by the bedroom tax, who take in a lodger in order to try to make up the shortfall from the bedroom tax. They probably do not think of themselves as landlords at all, and would then have to grapple with a long code of practice and act as mini-immigration officers. I fear that that may not work very well. Therefore, I hope that the evaluation will include that group.
The Earl of Caithness (Con)
My Lords, I had a number of concerns about this part of the Bill. The noble Lord, Lord Best, was absolutely right to say that landlords do not like it—I think that that was a point made also by the noble Lord, Lord Rosser. Well, of course, they do not like it, because it is asking them to do something, and nobody likes that—it does not matter what group it is.
The question we need to ask ourselves is: is what is now being asked of them fair and reasonable? The information that I have been given to help alleviate my concerns convinces me that the provisions now in the Bill are reasonable and will be made workable by the code of practice. I want particularly to thank my noble friend the Minister for his hard work in making certain that the concerns that have been raised by all sides have been taken into account as much as possible. It is never, of course, totally possible to alleviate everybody’s concerns, but what the Home Office has now said is very reassuring that this is a scheme which, although perhaps difficult in places, will be a practical solution.
If what is in the Bill is a practical solution, is what is before us in Amendment 25 any better? The answer to that, clearly, is no. I do not think that it helps the situation at all; it lacks definitions; and it would cause far more confusion than the Bill before us, as amended.
Baroness Benjamin (LD)
My Lords, I thank my noble friend the Minister for all his consideration, for meeting me and for his informative and constructive letter, which covered Kids Company’s concerns around young people who find themselves with non-immigration status. However, I would like to have put on record clarification around the residential tenancy provision, which is a tremendously important issue for this group and carries several implications for their well-being. Can the Minister confirm that the residential tenancy provisions do not apply in the case of a child with irregular status or any child who is under 18? If the young person, having turned 18, has applied for leave to remain in the UK and while the application is being determined, do the tenancy provisions apply? Finally, is the position the same in the provisions relating to bank accounts, which those young people will need in order to pay their rent?
Lord Hodgson of Astley Abbotts (Con)
My Lords, I made clear my support for the Government when I spoke on Amendment 23. Therefore, it will not surprise the House that I have some difficulty with the thinking behind this group of amendments. I shall not repeat my philosophical concerns, but where the matter comes to a sharp point is the position on overstaying and illegal migrants. We need to enforce immigration law. There is public concern about it. If we delay taking action, that public concern will increase and give rise to perhaps nastier people trying to ride that particular issue and gain publicity from it. I am interested in hearing how we minimise delays in moving this part of the legislation forward. When I heard the noble Lord, Lord Rosser, introduce Amendment 25 and how it could lead to a need for further primary legislation, it seemed to me that that could be a means by which the measure could be stopped altogether and the whole proposal would sink with all hands.
To a lesser extent, I have the same problem with the amendment in the name of my noble friend Lady Hamwee, which seems to add another cycle into the consideration of an issue which is very high on the public agenda. If we fail to address it, we will probably regret not having done so. I hope that my noble friend, as he has on other occasions having made concessions, will stick to his guns and make sure that we can move this secondary legislation forward in the very near future.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
My Lords, we have discussed at length and, I hope, to some good ends the important objective of this part of the Bill. I want to restate some of the background for the benefit of the House.
We are seeking in this Bill to control illegal migrant access to the private rented sector, because we have listened carefully to the public’s concern about the need to prevent illegal immigration. That follows on very neatly from the contribution of my noble friend Lord Hodgson of Astley Abbotts. To this end, the Government are committed to remaining firm on border controls, but we can provide a complete response to illegal immigration only if we work in partnership with those offering employment, housing and other services to deny the practical means of remaining to those without permission to stay.
The landlord provisions have been carefully drafted to deliver a scheme which works, which defines the differing responsibilities of landlord, agent and tenant, and which provides clear, robust safeguards for both landlords and vulnerable groups in need of accommodation. The drafting mirrors the existing civil penalty scheme for employers of illegal workers, which we know works well in practice. The proposed opposition amendment would sweep away these carefully constructed clauses and replace them with a pilot provision lacking the necessary detail and clarity.
I understand the desire of noble Lords to ensure that the landlords scheme is “workable” and that the provisions are tested and carefully evaluated. Indeed, it is our intention to adopt a carefully phased approach to implementation and to ensure that we get the guidance and support services absolutely right before considering wider implementation beyond the first phase. As we have made clear, decisions on further implementation will be taken after the general election during the next Parliament. I should make it clear to the noble Lord, Lord Rosser, that we need no further incentive to get this right than to deliver a policy which we consider is important for the control of illegal immigration to this country.
I am grateful to my noble friend Lady Hamwee for tabling her Amendment 24. The Government have given a commitment to a carefully managed, phased implementation of the landlords scheme. The scheme will be implemented initially, as has been said by noble Lords, following on from commitments that I have already made, in a single geographical area, and the Government have committed to a full evaluation of the first phase. Any decisions on a wider rollout will be taken in the light of the evaluation after the general election during the next Parliament.
My noble friend’s amendment is intended to be supportive, and I have considerable sympathy with the objectives behind it—my noble friend seeks reassurance on issues that I know concern her. As the House will know, I have been discussing the landlord provisions with my noble friend Lady Hamwee, the noble Lord, Lord Best, and a number of expert groups, including the Residential Landlords Association, Crisis and the British Property Federation. I completely share their concern that the scheme should be introduced carefully, with the benefit of advice and input from expert groups.
I can therefore inform the House that, following these discussions and in the light of the contributions that noble Lords across the House have made in debates on these provisions, we have decided to convene a formal consultative panel to oversee the operation and evaluation of the first phase. It will be chaired by a Home Office Minister. The panel will be established within the next few months and its full composition will be finalised once a decision has been reached on the location of the initial phase—we need local knowledge to support the group. I have invited the noble Lord, Lord Best, and a number of groups to join the panel. It will also include local representatives from the area covered by the trial. The panel will provide transparency, objectivity and the necessary degree of expert input for the first phase, the location of which will be determined and published before the House rises for the summer.
We expect to announce the location for the first phase at that time and will then indicate the principal proposed themes for the evaluation, leaving it to the panel to lead work on the development of specific evaluation measures and metrics. Of course, there are obvious areas that it would be sensible for any proper valuation to cover, as the noble Baroness, Lady Lister, made clear in her contribution, including the ease with which landlords and tenants can comply with the new checks and access the necessary guidance and support services. I hope that I can reassure the House that one objective of such an evaluation is to eliminate any impact on vulnerable groups or the incidence of unlawful racial discrimination by landlords. The desired objective, which lies at the bottom of the whole policy, is to deny rented accommodation to illegal migrants.
However, Amendment 25, proposed by the noble Lord, Lord Rosser, would remove the framework from primary legislation altogether and place it wholly in secondary legislation, lessening the degree of parliamentary oversight. That simply ignores the fact that the provisions have enjoyed the closest scrutiny in this Parliament. We have, as far as possible, placed details of the proposed scheme in the primary legislation, reserving the use of regulation-making powers only where necessary. The amendment would not provide a clear legal basis to operate new landlord duties, even as a pilot. It provides no mechanism for landlords to object or appeal against a penalty, rendering the new clause incompatible with human rights law. Neither does it provide transparency in the type of tenancy agreement to be exempt from the checking requirement.
The Bill makes those provisions clear in primary legislation, in the interest of providing certainty for vulnerable groups. The Government have worked closely with bodies representing landlords, students, the homeless and vulnerable and provided important safeguards in primary legislation. It would be understandable if they were concerned if those safeguards were no longer enshrined in primary legislation. The noble Lord, Lord Rosser, will know that the negative procedure provides for further scrutiny before any further rollout of the scheme.
The noble Baroness, Lady Lister, asked specifically about lodgers of social tenants. A social tenant who takes a lodger will be a landlord for the purposes of the scheme. The Home Office will work with social landlords to help their tenants understand their obligations.
Baroness Lister of Burtersett
The reason I raised the matter was to ensure that lodgers were included as part of the evaluation and, going back to the question of vulnerable groups, that children were specifically considered.
Lord Taylor of Holbeach
I hope that I made that clear. I think that the record will show that I said that that would form part of the evaluation.
Let us not forget that the amendment proposed by the noble Earl, Lord Listowel, on which we have not yet voted, but which I think the whole House welcomes, puts the welfare of children at the centre of the Bill in all considerations. So what I am saying includes children and vulnerable groups as part of the evaluation of the scheme. That is part of making it effective. I hope that that reassures my noble friend Lady Benjamin as well. Those with outstanding in-time applications will be allowed to rent. I have written to her on many points that she has rightly raised on behalf of an important sector of vulnerable people. I thank her for her correspondence.
Baroness Hamwee
My Lords, I was never going to persuade my noble friend not to use the words “phased” or “rollout”, but it is the substance rather than the language that matters, I think.
Like the Minister, I hope that the noble Lord, Lord Rosser, was not suggesting that the Government do not have an incentive to get this right. The noble Lord referred in his speech consistently to a pilot, but his amendment still talks about a pilot or pilots in the plural. As I said, one can read that as meaning either consecutive or concurrent—or possibly even both. Much of what the noble Lord said seemed to me to be an argument for what the Government are proposing, but I will thank him for one thing, because I am not normally called thin, so I am grateful for that. The matters for evaluation, to which two noble Baronesses have referred, are extremely important, and I was glad to hear the comments about them.
I do not want to take longer than another sentence or two, but I would say that the account given by the noble Lord, Lord Best, is the best evidence that I could have heard that the procedure that I seek is the one that will actually be followed, given the assurances from the Minister. I would say to noble Lords that I did not know that a formal consultative panel was to be proposed, and I am very glad to hear it. I beg leave to withdraw the amendment.
Lord Rosser
“Residential tenancies: pilot
(1) The Secretary of State may by order make one or more pilot schemes under which landlords in a designated area must not authorise an adult to occupy premises under a residential tenancy agreement if the adult is disqualified as a result of their immigration status.
(2) An order under subsection (1) may make provision about—
(a) the principles by reference to which the pilot (or pilots) will operate;(b) the circumstances under which a landlord may authorise an adult to occupy premises under the terms of the pilot (or pilots);(c) descriptions of persons to be identified as landlords for the purposes of the pilot (or pilots);(d) descriptions of applicable residential tenancy agreements for the purposes of the pilot (or pilots); (e) descriptions of persons disqualified by their immigration status from occupying premises under the pilot (or pilots);(f) applicable penalties for landlords in contravention of the terms of the pilot (or pilots) and enforcement of such penalties;(g) excuses available to landlords and appeals against penalties; and(h) the publication of codes of practice for landlords.(3) An order under subsection (1) must specify—
(a) the area or areas in respect of which the pilot (or pilots) operates;(b) the day on which the pilot (or pilots) comes into effect; and(c) the period for which the pilot (or pilots) has effect. (4) The Secretary of State must publish, and lay before both Houses of Parliament, a report setting out an evaluation of any pilot (or pilots) ordered under subsection (1).”
Lord Rosser
My Lords, we have a number of amendments in this group but we will not move any of them. In a sentence, although the Government have certainly not moved as far as we would like, we welcome that they have moved closer to our position.
Lord Taylor of Holbeach
“11A An agreement under which accommodation is provided to a student who has been nominated to occupy it by an institution or body of the kind mentioned in paragraph 11(2).”
Lord Taylor of Holbeach
“(6) The code (or revised code)—
(a) may not be issued unless a draft has been laid before Parliament, and(b) comes into force in accordance with provision made by order of the Secretary of State.”
Lord Taylor of Holbeach
My Lords, these amendments have been tabled in the light of comments made by the Delegated Powers and Regulatory Reform Committee. The committee recommended that the code regarding the prevention of discrimination should be laid before Parliament and then brought into force by negative resolution order. The Government accept this recommendation.
In relation to the code regarding general matters, the committee considered that this should be subject to no less a degree of parliamentary scrutiny than that which applies to the equivalent code relating to the employers’ civil penalty scheme. The committee further suggested that this code should be subject to the affirmative resolution procedure. We considered this carefully, but concluded that the negative resolution procedure would provide the appropriate level of parliamentary scrutiny. We have discussed this to some degree in the previous amendments. This code will provide technical guidance on matters of interpretation and practical operation, such as factors to be taken into account in establishing whether a residential tenancy agreement grants a right of occupation as a main and only place of residence and the factors to be taken into account in calculating the amount of a penalty that a landlord or agent should be liable to pay.
This is analogous to the equivalent code of practice relating to illegal working, which is brought into force by the negative procedure. For these reasons the Government believe that the new code should be subject to parliamentary scrutiny in a consistent manner. The amendment has been tabled accordingly. I beg to move.
Lord Rosser
I have only one brief comment to make; indeed, the Minister has already touched on it with his comment about the suggestions that have been made, in at least one case, that the affirmative procedure would be more appropriate. I am not quite sure why the Minister is arguing that he thinks that the negative procedure would be equally effective. If the Government believe that the negative procedure is just as effective as the affirmative procedure presumably they see no distinction between the two. Clearly there is a distinction. Clearly Parliament believes that the affirmative procedure is a more effective one, since it requires an affirmative resolution by Parliament in support of the proposition that the Government have made. Can the Minister put forward a more convincing argument than he has as to why they will not accept that it should be by affirmative procedure and why they think it should be by negative procedure?
Lord Taylor of Holbeach
I suppose we could argue about this for quite a long time if we chose to. I laid out consistency with the employers’ regulations, which are very similar in content. As I mentioned in the previous debate, the thing about the negative procedure is that it is open to any Member to bring the subject matter to debate in this House. Parliamentary scrutiny is not overridden. My hope is that it will be possible, by the time we get to this phase, that we will indeed have a situation where the House is well informed with the issues involved, well informed with the evaluation of the scheme, and well informed of the way in which the scheme is intending to work. I believe that at that point government and Parliament will be confident that they can proceed and that proper scrutiny has been provided. One would have to say that this has been very carefully considered by the Government and we have come to the conclusion that the negative procedure is the appropriate form of introducing this statutory instrument.
Lord Taylor of Holbeach
“( ) The code (or revised code)—
(a) may not be issued unless a draft has been laid before Parliament (prepared after considering representations under subsection (4)(b) and with or without modifications to reflect the representations), and(b) comes into force in accordance with provision made by order of the Secretary of State.”
Baroness Masham of Ilton
“Exemption of charging for primary medical services where charging is not cost-effective or poses a risk to public health
(1) Section 182 of the National Health Service Act 2006 (remission and payment of charges) is amended as follows.
(2) After subsection (1), insert—
“(2) Insofar as any regulations under section 175 provide for charges to be made for the provision of primary medical services, they shall include provision for the remission in full of any charge that falls below the minimum threshold of service cost.
(3) In subsection (2), the “minimum threshold of service cost” shall be the cost to the provider of primary medical services below which no charge is to be made for the provision of those services.
(4) Where regulations under section 175 provide for a charge to be made for the provision of primary medical services, the provider of those services may waive the charge where he or she considers that the cost of recovering the charge is not economical or where the consequences of charging may put the public health at risk.””
Baroness Masham of Ilton (CB)
My Lords, Amendment 52 is to do with public health protection. In Committee, the noble Baroness, Lady Cumberlege, spoke to this amendment, for which I was very grateful as unfortunately I had a long-standing commitment which I had to attend. The noble Baroness, like me, is passionate about health safety and knows that the Bill may cause danger to the health of the nation. Some people who have not paid the health levy may not seek help when they become ill because they fear being reported to the authorities and they may not have the money for tests and medication.
I am particularly concerned because, with the resistance to antibiotics and antivirals, diseases may be spread when people leave treatment too late. If they think they have to pay for medication, they will not go to primary healthcare for diagnosis. What will be the point?
As it is, it is very difficult to find some homeless people who need screening and I congratulate the organisation Find and Treat. I thank both Ministers for the recent meeting we had with the noble Lord, Lord Taylor of Holbeach, and the noble Earl, Lord Howe. It is important that departments work together over this complex matter with Public Health England. This amendment is to do with public health and cost-effectiveness.
I declare an interest as an officer of the APPG on Primary Care and Public Health and the groups on HIV and tuberculosis.
The purpose of the amendment is to provide an exemption from NHS charges where the cost of imposing and recovering a charge is not cost-effective or where the imposition of a charge constitutes a risk to public health. Doctors of the World supports this amendment, as do other health organisations.
In its response to last year’s consultation, the Royal College of General Practitioners made clear that it,
“opposes any change to the eligibility rules for migrants accessing GP services”.
Among the reasons given for its opposition were risks to public health and the imposition of new administrative burdens. Dr Mark Porter, the chair of the BMA council, has described the proposed charges as, “impractical, uneconomic and inefficient”. The Academy of Medical Royal Colleges emphasised in its response to the consultation that any proposals adopted,
“should not … create a bureaucratic process and burden that outweighs any tangible benefits”.
The amendment does not prevent charging but provides some flexibility within the proposed system to make it more cost-effective. The requirement to set a,
“minimum threshold of service cost”,
introduced in proposed new subsections (2) and (3) of Section 182 of the National Health Service Act 2006, achieves this. It requires the Secretary of State to stipulate a figure in regulations. If the cost of providing primary care falls below the stipulated figure, there is to be no charge. Similarly, if the provider of primary care considers that it will not be cost-effective to recover the charge, the provider may waive the charge. This would be achieved by the amendment in proposed new subsection (4) to Section 182 of the National Health Service Act 2006. Section 182 concerns exemptions from charges, including NHS charges to be made under Section 175, to which Clause 34(2) of the Bill refers. To this extent, the amendment responds to the concerns of the Royal College of General Practitioners, the BMA council and the Academy of Medical Royal Colleges. The Department of Health has acknowledged that,
“the administrative cost may outweigh the recoverable charges for frequently used but relatively inexpensive services”.
Baroness Hamwee (LD)
My Lords, I appreciate that the charging arrangements are not ones for this Bill. I simply want to say that many of the concerns voiced by the noble Baroness are ones that we share. We had amendments on issues around this at the previous stage, and we look forward to discussing how arrangements brought in by the Department of Health will be implemented. However, I realise that that is a matter for another day.
Baroness Williams of Crosby (LD)
My Lords, I very much hope that the Minister will have a deep discussion with his colleague, the noble Earl, Lord Howe, from the Department of Health, not necessarily about every single word of this quite lengthy amendment but about the general questions that it raises. I have in my hand a letter from the president of the Royal College of Physicians, Sir Richard Thompson, which was not one of those colleges mentioned by the noble Baroness, Lady Masham, but which raises serious questions about the public health implications unless we can look very carefully at them in the short while before Third Reading.
I think the noble Baroness, Lady Jay, who has played a crucial role in the whole area of sexual diseases, particularly AIDS, would bear out the argument made by Sir Richard. The major point he makes, and it is a very important one, is that there is considerable evidence that people who are invited to clinics, particularly the Doctors of the World Clinic in east London, to be tested for very dangerous and infectious diseases such as AIDS and drug-resistant tuberculosis—which is growing rapidly and now becoming a significant international threat to the good health even of people in relatively healthy countries such as our own—will see even relatively limited financial barriers as reasons not to attend. One of the prime difficulties is that when somebody attends a primary care facility, which is still generally available, or an A&E clinic and is referred on for testing to a hospital or another A&E clinic the real danger is that they will find this a reason not to attend. One has to accept that many people do not want to know what may be wrong with them. They are frightened of learning the results so any kind of hindrance is used as an excuse for not going.
The House will know, because it has had many discussions on infectious diseases and among its Members contains many experts in the field, the lethal consequences of people with AIDS or drug-resistant tuberculosis moving among the community where they live without being aware of the very serious, often lethal, consequences of passing on that infection. Sir Richard points out in his letter to me that one experience of that east London clinic is precisely that. There is a very rapid multiplying consequence of people not knowing what they have or knowing it and continuing to act as if they do not have to be treated. I simply plead with the House, from a non-partisan point of view, to look very closely at this amendment and consider what can best be done about it, in the interests of every citizen of this country and overseas visitors, to ensure that every possible step will be taken to ensure that highly infectious diseases are not passed on to innocent passers-by, friends or members of the family.
The Earl of Sandwich (CB)
My Lords, I congratulate my noble friend on speaking so powerfully on behalf of a vulnerable group. This is an important amendment. I spoke on this issue at Second Reading and I am sorry to have missed the Committee stage, when I think the noble Earl, Lord Howe, gave another response, but I am still not satisfied that the Government have taken a serious interest in this. When I spoke at Second Reading the report of Médecins du Monde seemed to me very compelling. Has the Minister seen it? The noble Baroness quoted several authorities and I will not repeat them but I think this has serious consequences, not only for that group but for the population at large, especially in the field of mental health.
Baroness Smith of Basildon (Lab)
My Lords, briefly, when we look at the Second Reading and Committee debates, one area of the Bill where there has been the least clarity for noble Lords is in trying to understand the implications beyond what are now Clauses 37 and 38. It is not necessarily the words of the clauses but some of the rhetoric that the Government have used in describing the Bill, such as “health tourism”. I know that there are expectations of what this Bill was going to do and concerns about the implications. I think there is an opportunity for the noble Lord. The noble Baroness, Lady Masham, is to be congratulated on bringing this forward to give some clarity to what is involved. I have had several e-mails and letters from organisations that are extremely concerned. They are not trying to scaremonger; they are trying to understand the public health implications.
In a meeting I had with noble Lord, he was very helpful in explaining that he did not feel that there would be any public health implications and that people who needed treatment would receive it at the point at which they needed it. However, I think a little clarity would be helpful. The two issues of the public health of the nation and cost-effectiveness have exercised your Lordships in looking at this matter. If the Minister can bring some clarity to the two issues raised by the noble Baroness, Lady Masham, it would be extremely helpful and perhaps helpful to the wider audience outside your Lordships’ House, who have genuine concerns and are trying to ensure that they operate in the best interests of public health and within the law. There is considerable confusion as to what that will be.
Lord Taylor of Holbeach
My Lords, I agree that this is a very useful opportunity to inform the House of where we are on this issue. The noble Baroness, Lady Masham, will understand that the provisions in the Bill are one thing and the wider provisions for implementing health service charging are another. We had a really useful meeting with my noble friend Lord Howe where a number of noble Lords present came to talk about this issue. I think noble Lords will agree he is very much focused on the full implications of any changes. I reassure the noble Earl, Lord Sandwich, that Médecins du Monde corresponds with me on a fairly regular basis so I know what its concerns are and unfortunately it was not at the meeting with the noble Earl, Lord Howe. If it had been I think it would have understood better the way in which the health service reforms were being taken forward. The other thing which it would certainly have picked up is that it is absolutely clear that treatment for infectious public health conditions is free to all and will remain so. We should just make that clear; I hope that it reassures my noble friend Lady Williams and the noble Baroness, Lady Masham.
As we discussed at length when we were talking about this issue, any exemptions from the NHS charging of short-term visitors and illegal migrants are not really a matter for the Home Office. This is not a provision that is being enacted in the Bill and is not a question on which the Home Office would make a decision. Exemptions are a matter for the Department of Health. I know that they are being considered very sensitively. Let us not forget that, within the devolved remit, while there is one United Kingdom for immigration purposes there are four national health services within the United Kingdom. It is not for me from this Dispatch Box to speak on their behalf. I have no wish to cause a constitutional crisis by inadvertently taking over responsibilities for which I have no responsibility.
My noble friend Lord Howe has agreed to meet again with noble Lords. I think that everybody felt that that was a helpful meeting. I want to keep everybody in the loop; I can act as a facilitator in this respect. When my noble friend’s department has developed more detailed proposals for reforming NHS overseas visitor charging arrangements—and it is that charging which is being looked at in particular, for people on short visits here—this will provide the appropriate time and context for discussions on the NHS charging arrangements for these groups.
Going back to the beginning, I confirm that treatment for infectious public health conditions is free for all and will remain so. I hope that that is a big reassurance. Given that reassurance, alongside our existing commitment that GP and nurse consultations will remain free to all and that that is not limited to the first consultation, I hope that the noble Baroness will indeed withdraw her amendment. I look forward to having further discussions with her and my noble friend Lord Howe in the future.
Baroness Masham of Ilton
My Lords, I thank the Minister and all who have supported the amendment. What is confusing is that Clauses 37 and 38 cover the new charges and restrictions of healthcare access in this Bill. Therefore, it is surely an immigration and health matter. Therefore, unless there is a combination working together on this complex matter, there will be confusion and people may fall through the net. I hope that I have helped to get the message across that public health and protection are vital, especially when dealing with vulnerable people. I beg leave to withdraw the amendment.
Lord Rosser
“Recruitment agencies: local workforce
In section 5 of the Employment Agencies Act 1973 (general regulations), after subsection (2) insert—“(2A) The Secretary of State may by order prohibit United Kingdom based agencies, as defined in this section, from including only people not ordinarily resident in the United Kingdom as their clients.””
Lord Rosser (Lab)
My Lords, I am moving again an amendment which we moved in Committee which we consider to be key and ought to be in the Bill. Clauses 43 and 44 deal with the issue of work and would, first, streamline the processes by which an employer can object to or appeal against a civil penalty by requiring employers to raise an objection to the Secretary of State before making an appeal to the civil court. Secondly, it would make it easier to enforce unpaid civil penalty debts in the civil courts.
Immigration is a welcome and important part of our life and our country’s success over the years owes much to the people who have come here from around the world and have helped to make it a better place. However, we are all aware of the fact that immigration can bring with it certain pressures and certain difficulties for our communities. The Bill does not include any of the important work-related measures which we have been calling for, and we tabled a number of amendments for Committee stage as a means of raising these issues. Amendment 53 has the aim of ending the practice of some recruitment agencies excluding local workers.
To state what I hope is obvious, many or most recruitment agencies are a great asset to the communities in which they work, helping employers and potential employees find work, and keeping local economies in particular ticking over. However, there has been a problem with some employment agencies effectively taking on only foreign workers and excluding British people from their books.
That has become more of an issue because, over the past couple of decades there has been a significant growth in agency employment; I understand that the figures show a 500% increase in agency workers between the mid-1980s and 2007. A look at the figures shows that migrants are increasingly overrepresented within agency work, particularly at the lower end, with A8 accession country migrants constituting the largest single group of agency workers. In some sectors—the meat and poultry processing industry, for example—there are examples which have come to light of British workers facing difficulty registering for work with some agencies which exclusively supply migrant workers, generally eastern European nationals.
We have the evidence of the Equality and Human Rights Commission, which conducted a major survey in 2010 and found that one-third of agencies confirmed that they had acted unlawfully in sometimes supplying workers by judging what nationality the processing firm would prefer, or responding to direct requests often based on stereotypes about the perceived dependability of particular nationalities. There has been the example of an organisation advertising cleaning services with a message saying that it has a thorough vetting system for all its cleaners, and then going on to say that they all come from Poland and that several of them have had extensive cleaning experience in the United Kingdom. In 2010, we had the case of a British supermarket supplier accused of discriminating against local workers after insisting that new recruits had to speak fluent Polish. The firm, I believe, was one of Asda’s biggest suppliers—it was not Asda itself—and it maintained that the requirement was necessary to ensure that all employees could understand the same instructions. The condition was included in an e-mail advert sent out on behalf of the firm and dispatched to hundreds of potential applicants on that particular agency’s books. The advert read:
“Immediate factory work available! If you are available or have any friends available, work is starting tomorrow for induction training. Ongoing factory work (meat production) for 4-5 months, shifts are 7am-5pm or 9am-7pm. Transport provided. Applicants must speak Polish”.
The latter sentence would appear to indicate that it was asked for a certain category of potential employee, since I do not know that Polish is spoken very much in this country, apart from among Polish people.
Lord Hunt of Chesterton (Lab)
My Lords, I would like to reinforce that point. In the previous election in Stoke, I found people complaining bitterly that you had to speak Polish and that all the health and safety instructions were in Polish in certain factories. There are other such stories, so it is a serious point.
Lord Rosser
I thank my noble friend for that helpful intervention. The idea that, in core sectors of our economy, recruitment agencies should exclude local workers and make a virtue of being able to offer—this is often the reason it is done—cheaper, more flexible and allegedly more compliant staff than those available locally is surely wrong. It cannot be fair on UK workers who do not have the opportunity to compete for those jobs, and it is certainly not going to help us rebuild our economy.
As I understand it, currently the only way for action to be taken is for an individual to bring about a discrimination case through an employment tribunal or for the Equality and Human Rights Commission to bring a compliance order. That is because recruitment agencies—or, rather, the recruitment agencies concerned; I do not want to suggest that it is all of them—are not legally prevented from acting in this particular way. We need to strengthen the law so that agencies are not able to operate such practices, either formally or informally. If this kind of practice is going to continue, then we need to start enforcing that law properly, with more prosecutions for agencies that flout discrimination laws. That is why we have tabled this amendment again on Report. In replying to this point in Committee, the Minister, on behalf of the Government, acknowledged that,
“there is a problem with a small number of unscrupulous employment agencies that source labour exclusively from overseas, particularly eastern Europe”.—[Official Report, 17/3/14; col. 19.]
I believe the Minister said that he was “sympathetic” to the aims of the amendment. I am not sure that sympathy, although welcome, is really enough because sympathy does not put right what is surely a wrong that ought to be rectified.
Our amendment gives the Secretary of State the power,
“to prohibit United Kingdom based agencies, as defined in this section, from including only people not ordinarily resident in the United Kingdom as their clients”.
It is an order-making power, and the principle that it is seeking to establish is clear. If the Government are sympathetic to the terms of the amendment, it would of course be open to them to set out more of the detail in the order to ensure that it achieves its aims. Alternatively, if the Government accept the principle of our amendment, they could come back with their own amendment at Third Reading if they do not agree with its specific wording. Of course, we had an example of that happening very recently with the Defence Reform Bill, where an amendment was discussed on Report. The Government clearly did not like the wording but they accepted the principle and came back with their own amendment at Third Reading, which was duly carried. So that is a very recent example of the Government saying that they agree with the principle of an amendment, perhaps do not like its wording and agree to come back with their own wording at a later stage in the Bill, in this case Third Reading.
Therefore I say, simply, that there is a problem, and, as I understand it, the Government recognise that. This amendment gives the Government the opportunity to act now to rectify this problem by either accepting this amendment or, if they do not like its wording, by agreeing to come back with their own amendment on Third Reading to address the issue I have raised. I beg to move.
Baroness O'Neill of Bengarve (CB)
My Lords, I have enormous sympathy with the intention of this amendment. It is entirely wrong that local people in particular, but also many other people resident in this country, should be bypassed in the recruitment process and not even have the opportunity to seek work. I declare an interest as chair of the Equality and Human Rights Commission already referred to. We have done some work in the past on the meat-processing industry, where such practices were found—not prevalent, but found. We intend also to do some work on the cleaning industry.
However, I am not sure that the amendment as it stands will address the problem adequately. That is to say, it refers to recruitment agencies located in this country. It could very readily be bypassed simply by subcontracting with recruitment agencies elsewhere. Also, there are occasions where we wish to enable employers to recruit overseas exclusively. Think of schools that seek native speakers to teach French. They probably want to be able to advertise in France, to French students, and we do not wish to prohibit that. I will just echo the point that, if the Minister thinks something can be done, it will not be through this amendment as it stands. However, the avoidance of both unfair discrimination and the appearance of it is surely an important issue.
Lord Taylor of Holbeach
My Lords, I am pleased that the noble Lord, Lord Rosser, has brought this back, and it has been very useful to hear from the noble Baroness, Lady O’Neill of Bengarve, about her take on this issue. She raises some of the subtle things at the edge of any blanket restriction that might be made.
I said right at the beginning when we debated this issue in Committee that the Opposition and the Government are not very far apart at all in this area. It is a matter of time and place rather than the detail of the amendment. I think the noble Lord, Lord Rosser, accepts that the amendment may not be quite perfect. I cannot commit to come back on this issue at Third Reading. There is likely to be an announcement very shortly on this whole issue, so it would be more appropriate to wait until that announcement has been made, as it will make clear what the Government’s position is. I do not think that the Opposition or any other noble Lords will find themselves very far from the Government on this issue.
To look at where we are, the Government are committed to protecting the rights of UK workers. We have said that, and as I said in Committee, the Government have already taken tougher action against abuse of the national minimum wage, both as regards its enforcement and by increasing the financial penalty for breaches. We are taking a more robust approach to the employers of illegal workers, including through a doubling of the maximum civil penalty to £20,000, which has now been approved by both Houses.
We are ensuring greater collaboration across Government to increase our “enforcement reach” and the range of sanctions that can be brought to bear against exploitative employment practices. Furthermore, the Government have commissioned a report by the Migration Advisory Committee into the causes of low-skilled migration and its social impacts.
That is why we are trying to look at the bigger picture. The amendment identifies a particular problem—and I acknowledge that it is a problem—but there is a bigger picture: why is so much of migration into this country in low-skilled jobs? We know that the social impacts of this cause concern across wider communities. We are taking action to prevent abuse of our public services and benefits systems by migrants, including those who come from the European Economic Area. As I have said previously, employment levels have risen, since this Government came into office, by 1.3 million, of which 78% is accounted for by UK nationals. However, I recognise there is a problem with a small number of unscrupulous employment agencies that source labour exclusively from overseas, particularly eastern Europe, and subject their workers to exploitative conditions. We have to acknowledge that.
We are sympathetic to the intentions behind this amendment but, as it stands, it would not achieve its aims at all. It will need very careful review because an agency could evade its scope and be in the clear simply by signing up a single UK recruit. That will not address the problem which the noble Lord has brought to the attention of the House. The ordinary residence test is very weak and easy to pass. However, more does need to be done to tackle such unfair recruitment practices, a view which I think noble Lords generally share. Ministers are actively considering how best to protect British workers from this type of discrimination and, as I have said, the House may expect announcements to be made very shortly on this issue. In the light of the points I have made, I hope the noble Lord will agree to withdraw his amendment.
Lord Rosser
I am disappointed by the Minister’s reply. In Committee, he said that,
“more should be done to tackle these types of unfair recruitment practices. Ministers will actively consider how best to protect British workers from this type of discrimination and we will seek to bring forward proposals shortly”.—[Official Report, 17/3/14; col. 19.]
We do not seem to have made any progress at all. The Minister is clearly not prepared to pick up what was inherent in my suggestion: that I would be happy to withdraw my amendment if he gave a commitment to come back with the Government’s own amendment at Third Reading.
Baroness Hamwee
I appreciate that I have not spoken in this debate but colleagues around me are confirming what I heard, which was that the Minister told us—for my part, I rather fear it—that we might hear shortly from the Government. Never in the years I have been in this House have I known “shortly” to be as short as a week or two. I have been listening carefully and I understand the problem, which everyone who has spoken on this has acknowledged. I wonder whether to have come back at this stage or be prepared to come back within a couple of sitting days, as it would be at Third Reading, would do justice to the severity of the problem that has been articulated.
Lord Rosser
Perhaps I may remind the House what I also said, which was that the Minister used the word “shortly” when we discussed it in Committee. This is not the first time that he has said “shortly”. I think that shortly is a rather longer period of time than the noble Baroness has just suggested. The other issue is that the Government have no doubt given much time to considering the provisions in the Immigration Bill as a whole. It is surprising that they do not appear to have given the same priority to the issue addressed by the amendment about the activities and practices of some recruitment agencies which do nothing to enable us to have a reasoned debate on immigration in this country. I think the Minister knows that that is an issue. We need to address today’s problems now and not at some unspecified time in the future, which really is all that the Minister has been able to say. I therefore wish to test the opinion of the House.
Lord Roberts of Llandudno
“Permission to work
(1) The Immigration Act 1971 is amended as follows.
(2) After section 3(9) (general provisions for regulation and control) 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, full employment with a job for every person has been the ideal of every party here over generations. When I look at the Labour Benches I remember people such as Keir Hardie and those who, in 1908, wanted their party to be one which united the workers of the world:
“Workers of the world, unite!”.
Then, of course, being on these Benches, I remember the name—as a Welshman would—of David Lloyd George, who in 1928 published his “Yellow Book”, followed by We Can Conquer Unemployment. Looking at the Conservative Benches, we know that only last week George Osborne said that the aspiration was that every person should have a job and that we should have full employment.
Every person has potential. They have skills and dreams, so I suggest that it should be our direction in this House to make sure that we enable as many as possible of those dreams to be fulfilled. We should not shatter those dreams. Even those who are asylum seekers among us—they, too, have hopes and dreams. They are people just like us. There are 6,200 asylum seekers lawfully present in the UK who, because of present regulations, are denied that right—and more often than not, it is not their fault. It is because of the backlog of applications. So they get perhaps £36 a week, which is half the minimum amount recommended for UK citizens, and they are given an Azure card which forces them to buy their goods in the more expensive stores rather than the cheaper ones and the corner shops. Even if nothing else happens as a result of this debate, I hope that the Minister will look at the state of the Azure card. People should be able to buy their goods in the most competitive places.
Of course, some people will turn to crime or, like the Morecambe Bay cockle pickers, who were not asylum seekers, will have to work for £1 an hour. Those Chinese workers were caused to take on employment that destroyed their lives. I suggest that the present situation is not fit for purpose. What can we do? We can keep people in poverty and destitution for 12 months, which is the present statutory period. I would remind noble Lords opposite that it was in July 2002 that the term was increased from six months to 12 months. However, we could change the period—and, indeed we are the only European country not to have done so. We could reduce it to six months, and that is all I am asking for in this amendment.
There is no evidence whatever that doing this would blur the boundary between economic migration and asylum or that it would act as a pull factor. Other European countries do not find that to be the case. Also, there is no evidence that such a change would lead to unfounded claims. A pilot would show that. I have a Private Member’s Bill which requests this change, and possibly it will have to be reintroduced in the next Session of Parliament. I hope that the Minister will accept the amendment I am moving today—or, if not, that I will be assured of the Government’s encouragement if this proposal is presented in the form of a Private Member’s Bill in the coming Parliament. I beg to move.
Baroness Lister of Burtersett
My Lords, I am pleased to speak as a co-sponsor of Amendment 54, and I shall recap briefly the case that was made in Committee. The right to work is a human right enshrined in the UN Declaration of Human Rights and the International Covenant on Economic, Social and Cultural Rights. Social policy in this country is premised on the importance of paid work as both a primary responsibility and the primary contribution that people can make. I drew attention to the damaging effects on asylum seekers and any children, and I cited evidence from a cross-parliamentary inquiry into asylum support for children and young people, of which I was a member, and a Freedom From Torture report which showed the hardship resulting from the policy of not allowing asylum seekers to take paid work for 12 months.
During the debate the Minister challenged the noble Baroness, Lady Williams, when she talked about people having to live on £5 a day by pointing out that families with children receive more than that. However, my understanding is that in 2013, 80% of applications for asylum were made by single adults, so the figure of £5 a day is in fact the typical sum on which someone has to live. That sum has been frozen since April 2011, and I wonder whether the Minister could explain the justification for freezing the level of support provided for one of the most vulnerable groups in our country. I also wonder whether he would be able to live on £5 a day, because I could not.
The Earl of Sandwich
My Lords, the noble Lord, Lord Roberts, has one of the most prophetic voices in this House. He can see so far ahead of us that he can see someone in government accepting his amendment—just over the horizon but not yet. I am most impressed by his fortitude because this is an issue at which all the refugee agencies and people working with refugees have looked again and again. They have presented evidence that still has not convinced the Government because they have not got rid of the backlog. As soon as they have got rid of the backlog they will seriously look at this kind of proposal. They are therefore worried about the consequences of opening up what they see as an economic draw. I do not do so and I am absolutely convinced that the noble Lord is right about this, but these are things to come.
Perhaps I may again bring in the issue of assisted voluntary return that we discussed on Tuesday, when the Minister kindly responded to a question about why it was being withdrawn, because it is very pertinent to this subject. He kindly also offered to write to me about that. I formally accept the idea that he writes to me fully.
The Earl of Listowel (CB)
My Lords, I cannot resist speaking on this because I so admire what the Government are doing in encouraging people in this country into work: the work of the noble Lord, Lord Freud, and the Secretary of State on the introduction of universal credit. We may have concerns about the details of this policy but I think we all recognise that it is vital to encourage people off benefit and into work wherever possible.
I have a very long-standing acquaintance who, unfortunately, has mental health problems. I know him very well indeed. Thanks to the fact that he is taking benefit, he is obliged to work in a charity shop for half a day, four days a week. While this is very much against his wishes, he is being obliged to have contact with other human beings, which, I think, is a way to his recovery. I have to reflect on how deeply demoralising it must be for these people not to be allowed to work and what the consequences may be for their children to have their parents becoming depressed because they have nothing useful to do in their lives.
I hesitate to come in without being better informed about this particular debate, but I have a great deal of sympathy with what the noble Lord, Lord Roberts, and other speakers have said, and I hope the Minister may be able to offer some comfort to them.
Baroness Hamwee
My Lords, in answer to the noble Earl, Lord Sandwich, we need prophets and optimists, and I am glad that we have at least one.
I very much support what my noble friend has been urging us so consistently to do: for reasons of integration; for individuals to keep up skills and be able to practise their English in the context of work; and, of course, for the financial reasons that the noble Baroness has dealt with. Most of all, work is valuable for self-respect and mental health. I do not put the two situations on a par with one another but clearly we all value working: there are a lot of noble Lords in the Chamber this afternoon, and who have been in this building, who could probably have been taking advantage of what I understand has been quite nice weather outside but have chosen to spend the day working.
Lord Hussain (LD)
My Lords, when the Government brought in this law, withdrawing the right of asylum seekers who have been here for more than six months to work, I do not know what they intended to achieve, or what they have achieved so far by having that law. It does not prevent any people coming into the country. It is not an immigration issue at all. We are talking about people who are already in this country, asylum seekers whose applications are being dealt with. Through no fault of their own, their applications are taking longer than six months. We are still saying that they should not be able to work.
This law drives people into deep poverty. They are more vulnerable to exploitation. They should have a right to work, like everyone else, and they should be able to feel proud that they are not living on handouts but working for their families. This is one good thing that the children can be proud of as well. Therefore, the amendment moved by my noble friend Lord Roberts should be supported. I support it. I hope that the Minister will look into this and be sympathetic to the cause of the asylum seekers.
Baroness Manzoor (LD)
My Lords, I briefly add my support because, although I have listened very carefully to the argument made by the Minister, I genuinely do not understand why people should not be allowed to work for perhaps six months because of the backlog of cases. Perhaps there should be a time limit, so that if someone has not heard about their case then they have the right to work. However, we must think very carefully about what the implications of that may be. As was said by the noble Baroness, Lady Lister, maybe something should be put around that to keep the criteria very visible to the Home Office.
Earl Attlee (Con)
My Lords, I think the whole House will admire the heroic efforts of my noble friend Lord Roberts of Llandudno for making just one more try at this issue. I have listened very carefully to the arguments in favour of allowing asylum seekers to work if their asylum claim is not determined after six months instead of the current period of 12 months. I am not convinced that it is sensible. In the Government’s view, the proposed change clearly creates a risk that some people will make unfounded asylum claims in order to take advantage of the more generous employment opportunities. Indeed, the amendment as drafted would enable the person to take any employment of their choice, rather than be restricted to those on the shortage occupation list published by the Home Office.
I agree with my noble friend and with the House about the importance of being able to work. Although paid work might not be permitted except in certain circumstances, voluntary work is allowed, as I explained on the previous occasion when we debated this. My noble friend and the noble Baroness, Lady Lister, talked about the level of support provided. I remind the House that two levels of support are provided, to cover asylum seekers and failed asylum seekers. The noble Baroness asked me to justify keeping the support rate the same since 2011. The Government conducted a full review of asylum support levels last year, in June 2013. The review concluded that the payment levels were adequate to meet essential living needs. They are only to meet essential living needs.
Many noble Lords asked why we do not let failed asylum seekers work so that they can support themselves. It is important to maintain a distinction between economic migration and asylum. Failed asylum seekers, whose further asylum-related submissions have been outstanding for at least one year, may apply for permission to work. This is in line with our obligations under the 2003 EU reception conditions directive. We have considered the merits of reducing this threshold, but such a reduction could encourage those who are not genuinely in need of protection to enter the asylum system for economic reasons.
The noble Earl, Lord Sandwich, asked about the assisted voluntary return package, and my noble and learned friend Lord Wallace of Tankerness said that he will write to the noble Earl on this point. In answer to the noble Baroness, Lady Lister, the desirability of the UK as a destination for economic migrants is not in doubt; one only has to look at some of yesterday’s newspapers. The Government have been successful at reducing non-EEA net migration but EEA migration remains high, as those who benefit from EU free movement come here looking for work. We are dealing with the imbalances in European migration. Throwing open access to the labour market as proposed by this amendment would send the wrong signals, and damage the significant progress this Government have made in controlling migration.
Baroness Manzoor
Surely the Home Office would be able to tell the difference between an economic migrant and an asylum seeker. That is why it has the caseload.
Earl Attlee
My Lords, if they are a genuine asylum seeker, in some cases it will be easy to determine that they have a good case. Once asylum is granted, people are able to work straightaway. However, if the case is difficult, possibly because the asylum seeker has made it difficult, unfortunately it takes considerably more time to determine the application.
As I was saying before my noble friend intervened, we do not believe that it is worth taking a risk with the progress that we have made so far. It is true that some asylum claims take too long to consider, but the Home Office is addressing the issue. In year 2012-13, 78% of claims received a decision within six months.
It may be generally true that unfounded claims can be considered faster than other claims, but they still need to be considered individually, which takes time and resources. Consideration of these claims therefore slows down consideration of genuine claims, at the expense of people who need international protection.
The current policy strikes the right balance. Asylum seekers are provided with support and accommodation if they are destitute. If their asylum claims are undetermined after 12 months for reasons outside their control, they can apply for permission to work. This is a fair and reasonable policy and we should keep to it. In the light of these points, I hope that my noble friend will feel able to withdraw this amendment.
Lord Roberts of Llandudno
I thank the Minister for his reply and say how terribly disappointed I am, even though we have brought this issue up time and again, that that there is no movement whatever on the part of the Conservative Front Bench. I note that the Labour Front Bench has not intervened in this debate and am also very sad for that; I wish that it would join us in this campaign. I will not test the feeling of the House today, but I propose to bring forward a Private Member’s Bill again in the next Session of Parliament. I therefore, most reluctantly, beg leave to withdraw the amendment.
Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2014
(10 years, 7 months ago)
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Lord Taylor of Holbeach
That the draft order laid before the House on 31 March be approved.
Relevant document: 25th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
My Lords, the Government are determined to do all they can to minimise the threat from terrorism to the UK and our interests abroad. Additionally, it is important that we demonstrate our support for other members of the international community in their efforts to tackle terrorism wherever it occurs. We propose to add Ansar Bayt al-Maqdis (ABM), which is also known as Ansar Jerusalem; Al Murabitun; and Ansar Al Sharia-Tunisia (AAS-T) to the list of international terrorist organisations, amending Schedule 2 to the Terrorism Act 2000. This is the 14th proscription order under that Act.
Section 3 of the Terrorism Act 2000 provides a power for the Home Secretary to proscribe an organisation if she believes that it is currently concerned in terrorism, as defined by that Act. If the statutory test is met, the Home Secretary may then exercise her discretion to proscribe the organisation. In considering whether to exercise this discretion, the Home Secretary takes into account a number of factors. These are: the nature and scale of an organisation’s activities; the specific threat that it poses to the United Kingdom and to British nationals overseas; the organisation’s presence in the United Kingdom; and the need to support other members of the international community in tackling terrorism.
Proscription is a tough but necessary power. Its effect is that a listed organisation is outlawed and is unable to operate in the United Kingdom. It is a criminal offence for a person to belong to, invite support for or arrange a meeting in support of a proscribed organisation. Additionally, it is an offence to wear clothing or carry articles in public which arouse reasonable suspicion that an individual is a member or supporter of a proscribed organisation.
Given the wide-ranging impact of proscription, the Home Secretary exercises her power to proscribe only after a thorough review of the available relevant information and evidence on the organisation. This includes open source material, intelligence material and advice that reflects consultation across government, including with the intelligence and law enforcement agencies. The Home Secretary is supported in her decision-making process by the Cross-Whitehall Proscription Review Group. Decisions to proscribe are taken with great care by the Home Secretary and it is right that the case for proscribing new organisations must be approved by both Houses.
Having carefully considered all the evidence, the Home Secretary believes that ABM, Al Murabitun and AAS-T are currently concerned in terrorism. Noble Lords will appreciate that I am unable to comment on specific intelligence, but I can provide a brief summary of their activities. ABM is an al-Qaeda-inspired militant Islamist group based in the northern Sinai region of Egypt. The group is said to recruit within Egypt and abroad and aims to create an Egyptian state ruled by Sharia law. ABM is assessed to be responsible for a number of attacks on security forces in Egypt since 2011. The attacks appear to have increased since the overthrow of the Morsi government in July 2013. The group’s reach goes beyond the Sinai, with the group claiming responsibility for a number of attacks in Cairo and cross-border attacks against Israel. ABM has undertaken attacks using vehicle-borne improvised explosive devices and surface-to-air missiles. Examples of attacks for which the group has claimed responsibility include: in September 2013 an attack on the Egyptian Interior Minister in which a UK national was seriously injured; an attack on a police compound in Mansoura on 24 December 2013, killing at least 16 people, including 14 police officers; and an attack on a tourist bus in which three South Koreans and their Egyptian driver died on 16 January 2014.
Al Murabitun resulted from a merger of two al-Qaeda in the Maghreb—AQ-M—splinter groups that are active in Mali and Algeria, the Movement for the Unity and Jihad in West Africa—MUJWA—and Mokhtar Belmokhtar’s group, the Al-Mulathamine Battalion, which included the commando element “Those Who Sign in Blood”. The merger was announced in a public statement in August 2013. Al Murabitun aspires to unite Muslims from the Nile to the Atlantic and has affirmed its loyalty to the al-Qaeda leader Ayman al-Zawahiri and the emir of the Afghan Taliban, Mullah Omar. Al Murabitun’s first statement threatened France and its allies in the region and called on Muslims to target French interests everywhere. Belmokhtar has announced that he will not continue to lead the group in order to allow a new generation of jihadist leaders to come to the fore. Reports indicate that the new commander has fought against the Soviet Union in Afghanistan in the 1980s and the international intervention in Afghanistan.
Although the group has not claimed responsibility for any terrorist attacks since the merger, both precursor groups have participated in a number of terrorist attacks and kidnapping for ransom during the past 13 months. Belmokhtar’s group was responsible for the attack against the In Amenas gas facility in January 2013 that resulted in the death of more than 30 people including Britons. In May 2013 the two groups targeted a military barracks in Agadez, Niger and a uranium mine in Arlit which supplies French nuclear reactors. The suicide attack in Agadez resulted in the deaths of at least 20 people.
Despite previously separating themselves from AQ-M, citing leadership issues and the desire to expand their control, both precursor groups continued to co-operate and fight alongside AQ-M fighters in Mali and other regions of West Africa. This activity has continued since the merger.
The Sahel region continues to see high threats of kidnap and terrorist attacks. Hostages are currently held in the Sahel and surrounding regions, which includes Algeria, Cameroon, Libya and Nigeria. The Canadians designated Belmokhtar’s group in November 2013 and the US designated it in December 2013, specifying Al Murabitun as an alias.
Ansar Al Sharia-Tunisia—AAS-T—is a radical Islamist group founded in April 2011. The group aims to establish Sharia law in Tunisia and eliminate western influence. Between 5,000 and 10,000 individuals may be attracted to rallies organised by the movement. The group is ideologically aligned to al-Qaeda—AQ—and has links to al-Qaeda affiliated groups. It is reported that the group announced its loyalty to AQ-M in September 2013.
AAS-T’s leader, Seif Allah Ibn Hussein, also known as Abu Ayadh al-Tunisi, is a former AQ veteran combatant in Afghanistan. He has been hiding following the issue of a warrant for his arrest relating to an allegation of inciting the attack on the US embassy in Tunis that killed four people in September 2012.
Salafists believed to have links with AAS-T are assessed to be responsible for the attacks in October 2011 on a television station and, in June 2012, an attack on an art exhibit. AAS-T is assessed to be responsible for the attacks on the US embassy and the American school in Tunis in September 2012. The Tunisian Government believe that AAS-T was responsible for the assassination of two coalition assembly members: Chokri Belaid in February 2013 and Mohamed Brahmi in July 2013.
Additionally, elements of the group are believed to have been involved in the attempted suicide attack, in October 2013, at a hotel in a tourist resort in Sousse where a significant number of British tourists were staying. More than 400,000 British tourists visited Tunisia last year. The Tunisian Government listed AAS-T as a terrorist group in 2013 and the US did so in January 2014.
Subject to the agreement of this House and the House of Commons, this proscription will come into force on Friday 4 April.
In conclusion, I believe it is right that we add Ansar Bayt al-Maqdis, Al Murabitun and Ansar Al Sharia-Tunisia to the list of proscribed organisations in Schedule 2 to the Terrorism Act 2000. I beg to move.
Lord Rosser (Lab)
My Lords, this is a serious issue. The order that the Minister has moved was agreed in the House of Commons yesterday and, as he has said, if it is agreed by this House today it will come into effect tomorrow. I thank him for the letter that he sent to my noble friend Lady Smith of Basildon on 31 March, which set out the case for the proscription of the three groups named by the Minister, and he has of course repeated that case in moving the order today. This is an issue of national security, and we are happy to accept the Government’s assurances on the basis that all three groups seem to have been involved in terrorism at the highest end of seriousness, including some directed at our citizens and allies.
There are, however, two points that I wish to raise about the issue of proscription, though not specifically about the three groups in question; as I indicated, we are happy to accept and agree the order. I am sure that the two issues will not come entirely as a surprise to the Minister. As I understand it from what was said in the Commons yesterday, there are apparently 52 international and 14 Northern Ireland-related terrorist organisations that are already proscribed, and I gather that between 2001 and the end of March last year 32 people have been charged with proscription-related offences as a primary offence in Great Britain and 16 have been convicted, so there are a number of organisations on the list.
I am sure that the Minister will not be too surprised if I say that it appears that one organisation is not yet on the list: Hizb ut-Tahrir, which is of course the one that the Prime Minister said when he was leader of the Opposition that he thought ought to be banned. It is not clear why after all this time that organisation has not been proscribed if apparently, in the Prime Minister’s view, the case was so clear-cut a number of years ago when he announced his personal view of what he would do. I would be grateful if the Minister could throw any light on that, purely in the sense of whether this organisation is likely to be banned or not. What are the Government doing on this at the moment? Have they come to the conclusion that it does not require to be banned, or is it after all these years an issue that they are still considering? They seem to be taking a remarkably long time to come to a conclusion.
The other issue that I would like to raise, and it is the final one that I want to talk about, is the issue of de-proscription. This was raised in the House of Commons yesterday but I want to put a question about it to the Minister. Obviously we have a procedure for, quite rightly, putting organisations that are threats to national security on the list so that action can be taken. I have referred already to the figures that the Minister in the House of Commons gave about the number of organisations currently proscribed. My question about the issue of de-proscription is on the understanding that the only group that has ever been de-proscribed obtained that through judicial review. It is of interest to raise this issue because, according to the independent reviewer of terrorism legislation, the Home Office was at one point considering an annual review of the proscribed list to see which groups still met the criteria.
That independent reviewer suggests—I do not know whether it is true—that there is no current evidence of terrorist involvement, even in this century, for some proscribed organisations. According to the independent reviewer’s website, last summer the Home Office had compiled a list of up to 14 groups that no longer met the criteria for proscription and the independent reviewer has been calling for the annual review of proscribed groups to which I have referred and which it was claimed that the Home Office was at one point considering.
In conclusion, since it appears that the Home Office now wishes to go down a different road for de-proscription for individuals or organisations, why is it not in favour of at least a regular review of the proscribed groups to see if they still meet the criteria that necessitate their being on the proscribed list in the light of an apparent view—whether right or wrong—of the independent reviewer of terrorism legislation that a number of organisations on that list no longer meet the criteria for remaining on it?
Lord Taylor of Holbeach
My Lords, I thank the noble Lord, Lord Rosser, for his support for this order. I will do my best to answer his questions. As he said, there was a lengthy debate yesterday in the House of Commons where my honourable friend James Brokenshire presented this order for approval by that House. The noble Lord asked first about Hizb ut-Tahrir. Hizb ut-Tahrir has been considered by the Home Secretary. The Government have significant concerns about it and we are continuing to monitor its activities very closely. Of course, individuals are still subject to general criminal law. We will seek to ensure that the group and groups like it cannot operate without challenge in public places in this country. We will not tolerate secretive meetings behind closed doors on premises funded by the taxpayer. We will ensure that civic organisations are made aware of this organisation and groups like it, the names under which they operate and the ways in which they go about their business. I can comment no further on that organisation.
As the noble Lord will well know, de-proscription is by application. While we keep a watch—and it is quite proper that we do—on organisations about which we are concerned, it is up to organisations to apply for de-proscription. Under the current regime they can write to the Home Secretary and request that she considers that they should be removed from the list of proscribed organisations, and they should state the grounds under which they should be de-proscribed. The Home Secretary is required to make a decision on that application within 90 days. I hope the noble Lord will understand that there is a proper mechanism for dealing with de-proscription. However, it is not a proactive one. It is one made by application.
Lord Rosser
The noble Lord will accept that if you are not meant to be a member of that organisation at the time you apply it is a bit of risk applying for it to be de-proscribed—by definition you are almost admitting to be associated with the organisation that you are not allowed to be associated with.
Lord Taylor of Holbeach
That is the procedure, my Lords. That is the consideration that the Home Secretary makes. I think the noble Lord will understand that you do not get on the proscribed list without the Government having real concerns about the aims and objectives of the organisation. I ask the noble Lord to accept that assurance.
Lord Rosser
I hope that the Minister would accept that my comments have been prompted to some extent by what the independent reviewer has claimed. I do not know whether that is true or not, but a number of organisations on the list would apparently no longer meet the criteria. I am certainly not raising it in a flippant manner—this is an issue of national security. Frankly, however, if there are organisations there and the independent reviewer is questioning whether they still meet the criteria, the effectiveness of the list is surely a factor of the organisations on it being ones that should be on it.
Lord Taylor of Holbeach
Well, I am satisfied with the arrangements. On the question of incrimination, I can reassure the noble Lord that, in fact, if a person makes an application for a group to be de-proscribed, Section 10 of the Terrorism Act 2000 provides that evidence submitted in relation to de-proscription application is not admissible in proceedings against an individual for an offence under that Act. I hope that reassures the noble Lord to some extent about the self-incrimination process of writing to the Home Secretary to apply for de-proscription.
Finally, proscription is not targeted at any particular faith or social grouping but is based on clear evidence that an organisation is concerned with terrorism. We are satisfied that the three groups about which we have been talking today meet that statutory test and it is appropriate in each case for the Home Secretary to exercise her discretion to proscribe the group. The proscription of ABM, Al Murabitun and AAS-T demonstrates our condemnation of the activities of these groups and our support for the efforts of members of the international community to tackle terrorism. On those grounds, I commend the order to the House.
Tobacco: Packaging
(10 years, 7 months ago)
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Lord Tunnicliffe (Lab)
My Lords, I note that we are about to have a Statement but we do not have a Minister. May I encourage the noble Lord to move that the House do adjourn during pleasure for five minutes for the Front Bench to get itself a Minister?
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
This is a just-in-time delivery, if I may say so.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, with the leave of the House I shall now repeat a Statement made earlier today by my honourable friend the Minister for Public Health in another place on standardised packaging of tobacco products. The Statement is as follows:
“With permission, Mr Speaker, I wish to make a Statement about the publication of Sir Cyril Chantler’s report on the standardised packaging of tobacco products.
Smoking kills nearly 80,000 people each year in England alone. One out of two long-term smokers will die of a smoking-related disease and our cancer outcomes stubbornly lag behind much of Europe. Quite apart from the enormous pressure this creates on the NHS it is a cruel waste of human potential. Yet we all know that the vast majority of smokers want to quit and, even more tragically, we also know that two-thirds of smokers become addicted before they are 18. As a nation, therefore, we should consider every effective measure we can to stop children taking up smoking in the first place.
That is why, in November last year, I asked Sir Cyril Chantler to undertake an independent review as to whether or not the introduction of standardised packaging of tobacco is likely to have an effect on public health, in particular in relation to children. Sir Cyril has presented his report to me and to my right honourable friend the Secretary of State, and we had the benefit of a personal briefing from Sir Cyril yesterday, in which he highlighted the key conclusions of his review.
Having reviewed Sir Cyril’s findings, I was keen to share this important report with the House without delay, as I recognise the significant interest that many Members have shown in this issue. I will of course place copies in both House Libraries. The evidence has been examined, the arguments for and against have been thoroughly explored and their merit assessed by Sir Cyril, who also visited Australia in the course of his review. I asked in particular that the report focus on the potential for standardised packaging to have an impact on the health of children.
It is clear that smoking is a disease of adolescence and we know that, across the UK, more than 200,000 children aged between 11 and 15 start smoking every year. In other words, around 600 children start smoking in the UK every day. Many of these children will grow up with a nicotine addiction that they will find extremely difficult to break. That is a tragedy for these young people, their families and for the public health of our nation. Sir Cyril points out that if this rate of smoking by children were reduced even by 2%, for example, it would mean that 4,000 fewer children take up smoking each year.
Sir Cyril’s report makes a compelling case that, if standardised packaging were introduced, it would be very likely to have a positive impact on public health and that these health benefits would include health benefits for children. The Chief Medical Officer, Dame Sally Davies, has read Sir Cyril’s report and sent me a letter with her initial views. Dame Sally said:
‘The Chantler review only reinforces my beliefs of the public health gains to be achieved from standardised packaging’.
I have placed copies of Dame Sally’s letter in the House Libraries. Importantly, the report highlights that any such policy must be seen in the round, as part of a comprehensive policy of tobacco control measures. That is exactly how I see the potential for standardised packaging to work in this country.
In the light of this report and the responses to the previous consultation in 2012, I am therefore currently minded to proceed with introducing regulations to provide for standardised packaging. However, in order to ensure that that decision is properly and fully informed, I intend to publish the draft regulations, so that it is crystal clear what is intended, alongside a final, short consultation, in which I will ask, in particular, for views on anything new since the last full public consultation that is relevant to the final decision on this policy. I will announce the details about the content and timing of that very shortly but would invite those with an interest to start considering any responses they might wish to make now. The House will understand that I want to move forward as swiftly as possible, and Parliament gave us the regulation-making powers in the Act.
Finally, I should like to pay tribute to the excellent job that Sir Cyril and his team have done in preparing such a thorough analysis of the available evidence on standardised packaging of tobacco products. I believe the report will be widely acknowledged both for its forensic approach and its authoritative conclusions. We want our nation’s children to grow up happy and healthy and free from the heavy burden of disease that tobacco brings. I commend this Statement and Sir Cyril’s report to the House”.
That concludes the Statement.
Baroness Wheeler (Lab)
I thank the Minister for repeating the Statement. I also take this opportunity to place on record the Opposition’s thanks to Sir Cyril Chantler and our congratulations on his excellent review of the public health evidence. We welcome much of what the Minister said, but I am sure that we share with other noble Lords who have long campaigned on this issue our frustration at the prospect of yet another consultation—albeit on regulations—especially when Sir Cyril's review is so clear and unequivocal about the impact that standardised packaging would have.
We know that the case for the introduction of standardised packaging is, as ever, urgent. The cost to the NHS of treating diseases caused by smoking is approximately £2.7 billion a year. Two-thirds of adult smokers took up smoking as children. One in two long-term smokers dies prematurely as a result of smoking-related diseases, and more than 200,000 children take up smoking every year in the UK. As Sir Cyril says, if we can reduce that figure by even 2%, that is 4,000 fewer children taking up smoking every year. For that reason, we strongly welcome the confirmation in Sir Cyril’s review of what public health experts have been arguing for some time—namely, that standardised packaging makes cigarettes less attractive to young people and could help save lives.
Sir Cyril's remit was to consider whether standardised packaging would lead to a decrease in tobacco consumption. Does the Minister not accept his clear conclusion that,
“standardised packaging would serve to reduce the rate of children taking up smoking”,
and that it could lead to,
“an important reduction … on the uptake and prevalence of smoking and … have a positive impact on public health”?
Of course, this is something that all the previous evidence reviews showed. Indeed, Sir Cyril states:
“My overall findings are not dissimilar to those of previous reviews”.
Did not the Government’s own systematic review in 2012, which Sir Cyril describes as “extensive and authoritative”, conclude that standardised packaging is less appealing than branded packaging, that it makes the health warnings more prominent and that it refutes the utter falsehood that some brands are healthier than others?
All the royal colleges and health experts, including the Royal College of Paediatrics and Child Health, the BMA and the campaigning health charities are united on this. The majority of responses to the Government’s own consultation also favoured it. Does the Minister therefore finally accept that there is an overwhelming body of evidence in favour of standardised packaging and that there can be no excuse for further delay?
The House will know that Labour has long called for the immediate introduction of standardised packaging. However, for every step we took in government on smoking and tobacco, the tobacco industry fought us all the way and then took a new approach. As my noble friend Lady Thornton put it when we recently pressed for amendments introducing standardised packaging to be included in the Children and Families Bill,
“we are talking about whether we are prepared to allow the over-powerful and wealthy tobacco companies to gain their next market for the profits they need to make from tobacco products … They can exist only if they continue to recruit young people to tobacco addiction so that they have their next generation of smokers”.—[Official Report, 20/11/13; col. GC 404-05.]
Do the Government not accept that the failure to take action on this issue under the Children and Families Bill was yet another missed opportunity? After Labour banned tobacco advertising, manufacturers developed increasingly sophisticated marketing devices for their packaging. We know that they spend millions every year on design testing to lure in new, young smokers. The question is: why have we had to wait so long for action on standardised packaging? Does the Minister accept the impact that further delay will have? More than 70,000 children will have taken up smoking since the Minister announced the review, and today he announced yet another consultation. The Government have already had a consultation, which reported less than a year ago. What do they expect to change?
At the time of announcing Sir Cyril’s review last November, the Government promised to issue regulations if they could be persuaded by the case made by Sir Cyril. Now they say that they are persuaded that he has made a “compelling case”—so why the further consultation and inevitable delay? Is this another attempt to kick the matter into the long grass, and can we be reassured that there will not be another government U-turn on this issue? How many more children will take up smoking before the Government make a decision and act? Does the Minister not accept that it is the clear will of both Houses of this Parliament to proceed with standardised packaging without further delay?
Earl Howe
My Lords, I am grateful to the noble Baroness for her welcome of Sir Cyril’s report. I share with her my admiration for the thoroughness with which he tackled a task in a short space of time, considering how much work he had to do.
Sir Cyril has produced a compelling report, and I urge noble Lords to take the opportunity to read it; it is extremely readable, as well as persuasive. As I said, he has made a compelling case on the public health evidence. However, to make robust policy in this area, it is essential that we follow a careful process. I understand the noble Baroness’s impatience to make progress on this issue, and we share that desire. However, we have to look at everything in the round if we are to make policy that is considered and well thought through. We have to give everybody who has a stake in the decision an opportunity to make their case. Therefore, I cannot stand here now and say that the Government will definitely proceed to make regulations. We must now take stock of Sir Cyril’s report and look at it alongside the other, non-health-related issues that need to be considered.
On that issue, we will hold a six-week consultation to ensure that our decision is properly and fully informed by any further relevant views and, very importantly, that it will be capable of withstanding the greatest scrutiny, including in the courts. The noble Baroness was absolutely right to mention the strong potential for matters of this kind to end up in legal action; the Australian Government are already in the courts on this issue. We want to be able to demonstrate to all stakeholders that the process has been fair and thorough and that we have moved at a pace that is reasonably rapid but which at the same time enables us to develop robust policy.
The consultation will include draft regulations for consideration. Far from this being a repeat of the previous consultation, it will enable people to look at the precise proposals that would be contained in regulations, if approved by Parliament. The timing of the consultation will be announced shortly and details provided on the Department of Health website. As to when we will bring in regulations, should the Government make a final decision to go ahead with standardised packaging, we would need to consider the timetable. However, our aim would be to make the regulations before the end of this Parliament. I hope the noble Baroness will accept that, far from kicking the issue into the long grass, as she put it, we have every intention of doing the opposite.
I believe that I have addressed most of the noble Baroness’s questions and points, but I shall write to her if there is something I have missed out.
Baroness Tyler of Enfield (LD)
My Lords, I strongly welcome Sir Cyril’s report, which is an extremely thorough piece of work. The central message from it is crystal clear and compelling; the introduction of standardised packaging would reduce the number of children and young people taking up smoking. I look forward to reading the draft regulations and the consultation, which I hope will be short. I would be grateful if the Minister would confirm that he talked about six weeks. Does he agree that, if the Government introduce this, we are going very much with the grain of public opinion? A new poll, issued today by YouGov, found that 64% of adults in Great Britain support or strongly support plain, standardised packaging, with only 11% opposed to the measure.
Earl Howe
I am very grateful to my noble friend. I confirm that we intend to have a consultation period of six weeks. That is as long as we think it needs to be to enable everyone with an interest, both for and against this measure, to make their views known and to enable us to factor in any considerations we may not yet have had an opportunity to consider. Although I have not seen the YouGov report to which my noble friend refers, I suspect she is absolutely right that public opinion is moving in the direction that Sir Cyril has advocated, and that we are going with the grain of what most people think. Most right-thinking people want children to be protected from the harms of tobacco. I hope that we will have public opinion behind us, should we decide to go ahead with this.
Baroness Finlay of Llandaff (CB)
My Lords, like the noble Baroness, Lady Tyler, I strongly welcome this report. It is an extremely readable, clearly laid out and very balanced review. I remind the House that it is 60 years since the original Doll and Peto observations that tobacco was linked to an early death. Their follow-up study, 50 years on, showed that those men who smoked only cigarettes and continued smoking had a life expectancy 10 years shorter than non-smokers. There is a long history behind this.
Looking at standardised packaging, it is worth noting that, as this report has highlighted,
“the pack has become the main promotional platform for the tobacco industry to recruit and retain customers”.
As has been said, the evidence from Australia is that plain packaging gives the impression that the cigarettes are lower in quality and less satisfying than those in the previously marketed packaging.
I would like to ask the Minister about standardised packaging, which comes from having listened to the debate in the other place after the ministerial Statement. I am concerned that there may be scaremongering going on over jobs. This type of standardised packaging is complex packaging and anti-counterfeit measures require complex design and printing techniques which this country is extremely good at. Our printing and packaging industry probably is one of the world leaders in developing really good types of packaging where anti-counterfeit measures can be included.
It is of concern that the term “plain” is still being used, which is completely different from complex standardised packaging. HMRC inspectors are clear that they can detect counterfeit standardised packaging more easily than the current commercial types of packaging when those are counterfeited. I seek reassurance from the Minister that the regulations will include the inability for the tobacco industry to do what is being done in Australia. One or two extra cigarettes are included as a loss leader for the same price as a packet of 20 as a promotional activity to make the packet more attractive. I also seek reassurance that the standardised packaging will be standardised on the outside; that there will be a standardised number of cigarettes inside; and that there will not be the ability to include tempting extra gifts, whether that is cigarettes or anything else. Does the Minister have any idea when the six-week consultation that he outlined will start and when the completion date is likely to be?
Earl Howe
The noble Baroness has raised a number of important points. As regards the effect on jobs, this is exactly the sort of question that we want people to address when responding to the consultation. If there are legitimate concerns about jobs, we want to hear about them. We want to understand exactly what the concerns consist of and whether they are robustly supported by evidence. The noble Baroness drew attention to the word “standardised” and asked me whether by that term we intended it as an antithesis to the word “complex”. I would rather say that standardised is the opposite of branded because it is the branding that is in focus here. As she will have seen from Sir Cyril’s report, he makes some very powerful points about the effect of branding. He said that,
“industry documents show that tobacco packaging has for decades been designed, in the light of market research, with regard to what appeals to target groups. Branded cigarettes are ‘badge’ products, frequently on display, which therefore act as a ‘silent salesman.’ Tobacco packages appear to be especially important as a means of communicating brand imagery in countries like Australia and the UK which have comprehensive bans on advertising and promotion”.
The word “standardised” is intended to signify a commonality of rather bland packaging, subject of course to European Union rules. I am sure that the noble Baroness is aware that the draft tobacco directive makes provision for a number of features to be included in the packaging; for example, 65% of the surface area of a packet of cigarettes will need to comprise of warnings. The minimum size of a packet of cigarettes will go up to 20 cigarettes and packets of 10 will be illegal. Other provisions are designed to prevent tobacco companies from using their packaging in whatever way to entice people to smoke, which includes free gifts and other features.
Baroness Finlay of Llandaff
Before the noble Earl sits down, may I remind him that I asked about the timescale?
Earl Howe
I beg the noble Baroness’s pardon. It is a little early for me to be specific on that. I have been as specific as I can on the timescale in which we hope to introduce regulations, but I will need to come back to the noble Baroness on the timescale for their implementation.
Baroness Wall of New Barnet (Lab)
My Lords, I want to briefly add my congratulations on and support for the report, and to associate myself with the frustration that I think my noble friend on the Front Bench has portrayed. Many other people, including clinicians in my own hospital, are already seeing the effects of smoking on children as young as 11, which is very worrying.
I should like the noble Earl to think about two things. First, has the breadth and depth of the consultation been different from and wider than the previous consultation, which was not very long ago? Secondly, the noble Earl made a comment along the lines that we must make sure that we do not end up in litigation because we want to ensure the fairness of this. I must advise the noble Earl that consultation will never be strong enough to prevent litigation. We must do all we can to consult everybody, but we shall be waiting for ever if we wait for something that will prevent people pursuing litigation when they really do not want these things to happen. I am sure the noble Earl is aware of this, but please let this consultation not be so exhaustive that we include everything that will stop the courts taking up some of the issues.
Earl Howe
The noble Baroness makes a good point about litigation. My response is that if it comes to litigation, and of course we hope it will not, we will have the strongest possible defence against any accusation that we have somehow skimped or not taken account of evidence. In defence of the Government, I also point to the other measures we are taking to bear down upon the prevalence of smoking. The noble Baroness knows very well that we have had some excellent debates on smoking in cars, proxy purchasing of tobacco, and prohibiting the sale of electronic cigarettes to under-18s. I hope the good faith of the Government is not in doubt here and I share her wish to see progress made as swiftly as possible.
On the subject of the timetable, I did not make clear that while we believe that we have sufficient time to allow regulations to be introduced within this Parliament, we shall move to give both Houses our final decision on whether we are going ahead with this before the Summer Recess.